1. System Model of HRM
System composed of interrelated & interacting parts to achieve desired goals
System approach to HRM combines itself with business strategy
Many firms in developing countries are facing problems due to their traditional practices of managing people
The system, functions, components and objectives of modern organizations differ from traditional organizations
HRM system is linked with organization performance, organization structure and strategic objectives of the organization
Open system: consists of input-processing-output & feedback components
Operates within internal & external environment

2. External Environment Factors
HRM System
External Environment Factors
Government law & regulation, Union, Eco condition, Competitiveness,
Composition of the labor force, Geographical location of the organ, Tech.
Threats and Opportunities
Inputs
Human Energy & competencies
Organizational Plan
HR Plan
Mgmt Inventory
Job Analysis
Labour Market
Processing
Acquisition
Development
Ulitization
Maintenance
Outputs
Organizational related output
Employee related output
Feedback
Internal Environment Factors
Strategy, Goals, Culture, Nature of the task, Group work, Leader's style & experience
Strengths and Weaknesses

3. HRM System 1. Inputs of HRM
Human energy & competencies (physical strength, knowledge, skills, attitudes, experiences etc.)
Organizational plan (organizational goals, strategy, target)
Human resource plan (matches future HR demand with supply & indicates the HR requirements)
Management inventory (record of HR currently available in the organization)
Job analysis (specifies job requirements, job specifications)
Labor market (source of external supply for quality human resources)

4. HRM System 2. Processing of HRM
a. Acquisition
Ensures entry of right number of people at the right place at the right time in the organization
Consists of recruitment, selection & socialization
b. Development
Ensures proper competencies of employees to handle jobs
Analyzing development needs
Employee training
Management development
Career development
c. Utilization
Ensures willingness of employees for boosting productivity by doing jobs effectively
Consists of motivation, performance appraisal, compensation etc.
d. Maintenance
Ensures retention of competent employees in the organization
Labor relations (employer-employee relations & employee discipline, grievance handling)
Employee welfare (to promote employee safety, health, social security, etc.)

5. a. Organization-related outputs Goal-achievement
HRM System 3. Output
a. Organization-related outputs
Goal-achievement
Quality of work life (QWL) (Quality of relationship between employees & the total working environment of the organization.)
Mechanisms of QWL:
Learning & development
Recognition
Autonomy
Intrinsic/extrinsic rewards
Productivity
Profits
Readiness for change
b. Employee-related outputs
Commitment (achieved through trust, understanding, communication, loyalty etc.)
Competence (changes in the environment & assume new roles)
Congruence (related to goals, harmony between individual & organizational goals)
Cost effectiveness (high cost-effectiveness)

6. Forces in the internal environment are controllable by HRM
HRM System
4. Feedback
Provides information to redesign HRM inputs & processing based on output effectiveness
5. Internal Environment
Forces in the internal environment are controllable by HRM
Provide strengths & weaknesses
They are organizational goals, policies, structure, reward system & organizational culture
6. External Environment
Forces non controllable by HRM
Provide opportunities & pose threats
They are technology, politics/law, labour unions, economic forces, socio-cultural forces

7. Government Law and Regulation
Internal & External Environment of HRM A. External environment (outside the organization)
Government Law and Regulation
Affects organization directly
Decisions about hiring, promotion, diversity, evaluation, employment opportunity, discrimination, compensation, benefits regulation, safety laws etc.

8. Union An organization that represents the interests of employees
Shapes the HR policies & practices
Union representatives are included in major HR decisions
Recruiting, selection, promotion, compensation, etc.
Not restricted only to the blue-collar workers

9. Economic Conditions
Economic devt. of a country gives priority to the proper mgmt. of HR
Provides career & skill devt. opportunities
Local companies compete with foreign ones & thus local companies reform their work processes

10. Competitiveness
Effective workers?
Quality services or good?
New technology?
Lower cost products?
HRM can be a competitive advantage

11. Composition & Diversity of the Labor Force
Women
Minorities
Older Employees

12. Geographical Location of the Organization
Rural, urban area?
Kinds of workers available
Educational factors
Behavioral factors (attitudes)
Legal-political factors (stability, racists etc.)
Economic factors (structure, inflation, constraints on ownership etc.)
Socio-cultural factors

13. Technology
Technology is a major factor in deciding about HR policy choices
Use of sophisticated & efficient technology
Increased the quality & volume of the products/services
Reduced the price level
Coping with the technological environment demands for knowledge workers

14. B. Internal Environmental Influences
Strategy
What an organization’s key executives hope to accomplish in the long run
Selection of a particular HR strategy, policy & practice
Business firms differ in their HR strategy due to different business environment & competitive strategy

15. Goals The goals of organizations differ within & among departments
Differences in the importance of goals
E.g. profit goals are emphasized, HRM goals are paid only minimal attention

16. Organization Culture System of shared meaning held by members
A firm’s way of doing business
How it treats customers & employees
Autonomy of the departments
Degree of employee loyalty expressed
A common value system
Strong or weak culture?
Impact on the behavior, productivity, expectations of the employees
E.g. clear guidelines on punctuality, customer service etc.

17. Nature of the Task Degree of knowledge & ability to use IT
Degree of empowerment
Degree of physical exertion required
Degree of environmental unpleasantness
Physical location of work
Time dimension of work
Human interaction on the job
Degree of variety in the task
Task identity
Task differences & job design

18. Group Work
Directly related to the success of HRM activities
Work-group participation in designing & implementing HRM is essential

19. Leader’s Style and Experience
Experiences & leadership style of the operating manager affects HRM activities
Direction, encouragement, authority to evoke desired behaviors
Facilitates interactions that occur within work groups