Human Capital Management

Human Capital Management

 What is human capital management (HCM)
• Human capital management (HCM) transforms the traditional
administrative functions of human resources (HR) departments—
recruiting, training, payroll,
compensation, and performance
management—into opportunities
to drive engagement, productivity,
and business value.

https://byjusexamprep.com/current-affairs/human-
capital-index-hci
Philosophy of Human Resource Management (HRM)

• The collection of tasks that go toward

finding, training, retaining, and using a 1.Technical Factor
2. Human Factor
group of individuals for the efficient
3. Leadership Factor
operation of organizational tasks and the
4. Corporate Cultural Factor
accomplishment of objectives is known as 5. Corporate Values Factor
the philosophy of human resource 6. Market Competition
management.

• It is the department inside an organization

that is responsible for hiring management
and giving the organization’s staff
guidance.

https://peoplemanagingpeople.com/strategy-operations/workforce-
planning/strategic-human-resource-management/
Using HRM to attain competitive advantage
Using HRM to attain competitive advantage

https://hrdailyadvisor.blr.com/2017/08/21/using-hr-competitive-advantage/
• For example, McDonald’s is one of the successful restaurant
because of their quality, service and cleanliness delivery to
customers and their well-trained crew and managers are the
reasons for their success.

• They followed a development structured. Their first stage of

training is Welcome meetings.

• Crew of McDonalds’ work shoulder to shoulder. Majority of their

training program is on the job where they practice how to behave
well with customers.

• They also attend class room based training program where they
learn how to maintain the quality and service.
• For them customer interaction is important and for that reason
they are focusing on “Hire the smile” where they can serve customer
with a smile.
• In Malaysia, people who are physically disorder can
work in McDonald’s.
• They train this kind of people so that they live better
live which is a grate initiative from them. Customer are
more comfortable with them in terms of giving orders.
• McDonald’s burger is popular all over the world
especially Big Mac burger and taste of that burger
attract customers co come and eat. And it also helps
company to gain competitive advantage.
• The most common is the cost leadership strategy. However, it usually brings worst results for all
competitors. Most organization decrease profit margins and cut profits. It is often followed by
several cost cutting exercises, and the leadership team loses its face in front of employees. The
innovative business has to avoid this strategy.

• Innovations can build a very strong basis for the sustainable development of the competitive
advantage. However, such an organization needs to change its processes, procedures, policies and
practices significantly. This strategy is the most demanding. It requires Human Resources to
change the way it works.

• A Differentiation strategy is based on a strategic mix of products and services that is not offered by
competitors. The organization connects services and products to create the unique experience for
the customer or client. This is another approach that can be used in Human Resources.
However, it is very difficult to bring a different experience in Human Resources.

• Last, the organization can choose the Operational Effectiveness Strategy. The firm does not focus
externally; it streamlines processes and procedures to be quicker and agiler than competitors.
This strategy brings results but it is very difficult to implement. The leadership team has to cross
many obstacles and employees are required to change their behavior.
Supported by cases and articles
 Case Study: SAP Shows How Employee Well-
being Boosts The Bottom Line

• SAP is one of the most successful companies in Germany.

• Since its inception in 1972, it has become a multi-national
enterprise software company with locations in 180 countries
and over four hundred thousand customers.
• An underlying contributor to its business success is its
commitment to employee well-being.
• SAP sees enhancing its workforce’s health
and quality of life as a core business
enabler.
• SAP’s Co-CEOs and board leadership see
employee well-being as a strategic
priority that is planned, measured and
improved upon because it contributes to
SAPs bottom line profits.
 Employee-Focused Programs

• SAP employees clearly love working for

the company, in part because of SAP’s
supportive workplace culture,
management, and well-being programs.

• Glass Door awarded SAP its 2019 Best

Places To Work Award, and named it the
“Number One Best Place to work” in
Germany. SAP has won employee awards
around the world, winning 175 awards in
2018 alone.
• The company also fosters a healthy workplace culture
through health and well-being awareness campaigns,
employee success stories, and by showcasing local SAP
initiatives around the world.

• Its Health Ambassador Network offers employee well-being

support and shares best practices within the company and
covers 90% of its global workforce.
https://www.forbes.com/sites/jimpurcell/2019/10/28/case-study-sap-shows-how-employee-wellbeing-boosts-
the-bottom-line/?sh=4679591b32a4
• SAP supports parents with daycare programs and on-site
childcare facilities in various locations and offers child
conferences and parent coaching classes.

• New parents can take up to 6 weeks of Paid Family Leave, and

mothers can reduce work schedules during their first 4 weeks
back to work after maternity and paid family leave with full
pay and benefits.
Organization of HR departments

For Complete Notes: https://workology.com/your-guide-to-the-hr-organizational-chart-and-

department-structuresstructure-
functions/#:~:text=The%20structure%20of%20HR%20that,and%20payroll.
 HR Organizational Chart And Department Structures
1. Functional Organizational Structure

A team structure that groups employees into different departments based on areas of expertise.
 2. Flat Organizational Structure

Flat organizational structures often have few, or no, people in middle management. It is literally flat.
Meaning there are less managerial layers, so employees and managers all work on a level playing
field. This is common in small companies and startups.
 3. Matrix Organizational Structure

A matrix organization is a company structure where teams report to multiple leaders. The
matrix design keeps open communication between teams and can help companies create
more innovative products and services.
 Other Organizational Structure Types

• – Divisional Organizational Structure. This is for

large enterprises and is combined with a divisional
organizational structure.

• – Network Organizational Structure. A network

organizational structure involves two or more
independent organizations partnering together in
some capacity for business purposes.

• – Team Organizational Structure. A team, or

team-based, organizational structure refers to the
business model that functions when groups of
employees collaborate on teams towards a shared
goal under the direction of one supervisor.

Case study on Org Str: Amazon, Netflix –

https://www.studysmarter.co.uk/explanations/business-studies/business-case-studies/organisation-design-case-study/
 Amazon follows a tall hierarchical corporate
structure
• Online retailer Amazon has grown to be the
biggest provider worldwide in the field of e-
commerce.
• Amazon revenues grew from $8490 million
USD in 2005 to $232,887 million USD in
2018.
• The success of Amazon emerged from the
rapid rate of digitisation and was also
influenced by its organisational structure.
 There are three key components of Amazon's
organisational structure
• 1. A global hierarchy - This means that
Amazon's CEO Jeff Bezos makes
strategic decisions and has control over
the entire organisation.

• All senior executives have to report

directly to the CEO, which allows Jeff
Bezos to be in direct control of all the
departments of organisation in terms of
its functions, product lines, divisions,
and service.
• 2. Global groups based on functions - Amazon structures the
organisation in a way that senior-level executives make up an
independent group

• 3. Geographical divisions have their subdivisions - Amazon's

organisational structure incorporates geographical divisions based on
physical locations.
• Netflix has functional groups for the
organization's online and offline operations;
• At the top, the CEO takes control of the entire The key functional groups of Netflix
organisation and senior executives at the next CEO
hierarchical level have to report directly to the •Legal
CEO. •Talent
•Finance
• The organisation incorporates geographical •Product
divisions to manage various regional markets; •Content
• Netflix incorporates divisions in product and •Communications
operational types.
Roles of HR managers
Very important cases: https://ag.hawaii.gov/cpja/files/2013/01/WVpt4.pdf
 10 Most influential HR professionals
in India
• 1. Ajoyendra Mukherjee:
• Ajoyendra Mukherjee is the Executive Vice President
and Head of Global Human Resources at TCS. He plays a
crucial role in ensuring that the 300,000 professionals
working at TCS are functioning continuously and are
able to tackle the daily challenges of the industry.

• As an HR professional, he has been taking the initiative

to build a skilled and highly talented workforce. He has
played a key role in getting a number of awards for
Talent Management for TCS
• Nandita Gurjar is the Senior Vice President and Head of HR at Infosys.
She headed the HR department at Infosys BPO.
• Her performance has been very appreciable in leveling up the HR
department as the business grew to US$250 million with 16,000
employees, five offices in India, and six global offices.
• She joined Infosys in 1999 and established the Learning and
Development unit to train employees and set benchmarks for growth
and development.
• Nandita is a member of the World Economic Forum – Global Advisory
Council on New Models of Leadership. She has been listed as one of the
Most Powerful Women in India and has been awarded the Human
Capital Business Leader of the Year Award.
• 3. Saurabh Govil:
• Saurabh Govil is the President and Chief Human
Resources Officer at Wipro. He leads all of Wipro’s
Human Resources functions and reposts directly to
the CEO.

• He is accountable in his capacity for enterprise-

wide talent management, workforce retention, and
learning and growth programs. Saurabh, from
XLRI, Jamshedpur, did his Master’s in Human
Resources.

• He is a member of the Advisory Board of SHRM

India and a speaker at NASSCOM’s HR summit.

https://catking.in/10-influential-hr-professionals-india/
• Leena Nair is the Hindustan Unilever Ltd Executive
Director- HR. She is an MBA in Staff Administration
& Industrial Affairs, and an XLRI, Jamshedpur gold
medallist.

• Leena joined HLL as a Management Trainee in 1992.

She was working as Madras Factory Personnel
Manager, Taloja Personnel Manager, and HO
Personnel Manager.

• She was promoted to Strategic Growth Strategy

Manager in 1997 and eventually in April 2000 became
HR Manager-Detergents. Leena Nair was appointed
General Manager— HR HPC in October 2004.
 Contemporary issues and practices in HRM

• #1 COMPLIANCE WITH LAWS AND REGULATION

• #2 MANAGEMENT CHANGES
• #3 LEADERSHIP DEVELOPMENT
• #4 WORKFORCE TRAINING AND DEVELOPMENT
• #5 ADAPTING TO INNOVATION
• #6 COMPENSATION
• #7 UNDERSTANDING BENEFITS PACKAGES
• #8 RECRUITING TALENTED EMPLOYEES
• #9 RETAINING TALENTED EMPLOYEES
• #10 WORKPLACE DIVERSITY

Activity: https://atlasstaffing.com/blog/10-todays-common-human-resource-challenges/
 Changing concept of HRM in India and in the globe

• The Challenges Today’s organizations are facing:

1. Environmental Challenges
2. Organizational Challenges
3. Individual Challenges
Environmental Challenges
• Environmental challenges refer to forces external to the firm that are largely beyond
management’s control but influence organizational performance.

Important environmental challenges today are:

• 1. Rapid change,
• 2. Work force diversity,
• 3. Globalization,
• 4. Legislation,
• 5. Technology
• 6. Evolving work and family roles,
• 7. Skill shortages and the rise of the service sector
 Rapid Change
• Many organizations face a unstable environment in which change is
nearly constant.
• If they are to survive and prosper, they need to adapt to change
quickly and effectively.
• Human resources are almost always at the heart of an effective
response system.

• Example : Succession Planning

1. *Refer case study – Resistance to change
2. https://indusedu.org/pdfs/IJRMEC/IJRMEC_1042_16125.pdf
• https://saylordotorg.github.io/text_leading-with-cultural-
intelligence/s09-01-case-study-1-resistance-to-cha.html

• Imp: HR Case studies

• https://www.icmrindia.org/case%20volumes/Case%20Studies%20in%
20Human%20Resource%20Management%20Vol%20I.htm