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Unit 03 Human Resource Management

hnd in business management (ESOFT Metro Campus)

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Higher Nationals
Internal verification of assessment decisions – BTEC (RQF)
INTERNAL VERIFICATION – ASSESSMENT DECISIONS
Programme title Higher National Diploma in Business Management

Assessor Ms. Anushiya Internal Verifier Ms. Nisansala

Unit(s) Human Resource Management

Assignment title Report on Managing Human Resources

Student’s name Ravindra Kumar Kawshika.

List which assessment Pass Merit Distinction

criteria the Assessor
has awarded.
INTERNAL VERIFIER CHECKLIST

Do the assessment criteria awarded

match those shown in the Y/N
assignment brief?

Is the Pass/Merit/Distinction grade

awarded justified by the assessor’s Y/N
comments on the student work?
Has the work been
Y/N
assessed accurately?
Is the feedback to the student:
Give details:

• Constructive?
Y/N
• Linked to relevant
assessment criteria? Y/N

• Identifying opportunities
for improved performance? Y/N

• Agreeing actions? Y/N

Does the assessment decision need
Y/N
amending?
Assessor signature Date

Internal Verifier signature Date

Programme Leader signature
Date
(if required)

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Confirm action completed

Remedial action taken

Give details:

Assessor signature Date

Internal
Date
Verifier
signature
Programme Leader
Date
signature (if
required)

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Higher Nationals - Summative Assignment Feedback Form

Student Name/ID Ravindra Kumar Kawshika/E184377

Unit Title Human Resource Management

Assignment Number 03 Assessor Ms. Anushiya.

Date Received
Submission Date 09/07/2023 1st submission
Date Received 2nd
Re-submission Date
submission
Assessor Feedback:

LO1 Explain the impact of the role of HRM in creating sustainable organisational performance
and contributing to business success
Pass, Merit & P1 P2 M1 M2 D1
Distinction Descripts
LO2 Assess the contribution of HRM in recruiting and retaining talent and skills to achieve
business objectives
Pass, Merit & P3 M3 D1
Distinction Descripts

LO3 Examine how external and internal factors can influence HRM decision making in relation
to organisational development
Pass, Merit & P4 M4 D2
Distinction Descripts
LO4 Apply HRM practices in a work-related context for improving sustainable organisational
performance.
Pass, Merit & P5 M5 D3
Distinction Descripts

Grade: Assessor Signature: Date:

Resubmission Feedback:

Grade: Assessor Signature: Date:

Internal Verifier’s Comments:

Signature & Date:

* Please note that grade decisions are provisional. They are only confirmed once internal and external moderation has taken place and
grades decisions have been agreed at the assessment board.

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Assignment Feedback
Formative Feedback: Assessor to Student

Action Plan

Summative feedback

Feedback: Student to Assessor

I thank you for getting me through this hard assignment, I honestly always enjoy having
you as a lecturer and I appreciate how approachable you are. It means a lot to me that even
if you are busy you check in with how things are going, because you are always very kind,
patient, helpful and truly care about your students. And thank you for a fun semester miss.

Assessor
Date
signature
Student ravindrakumarkawshika90@[Link] 13/06/2023
Date
signature m

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Pearson
Higher Nationals in
Business
Unit 03: Human Resource Management
Assignment 01

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General Guidelines

1. A Cover page or title page – You should always attach a title page to your assignment. Use
previous page as your cover sheet and make sure all the details are accurately filled.
2. Attach this brief as the first section of your assignment.
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5. Allow 1” for top, bottom, right margins and 1.25” for the left margin of each page.

Word Processing Rules

1. The font size should be 12 point and should be in the style of Time New Roman.
2. Use 1.5 line spacing. Justify all paragraphs.
3. Ensure that all the headings are consistent in terms of the font size and font style (First level
16/bold, Second level 14/bold and Third level 12/bold).
4. Use footer function in the word processor to insert Your Name, Subject, Assignment No,
and Page Number on each page. This is useful if individual sheets become detached for any
reason.
5. Use word processing application spell check and grammar check function to help editing your
assignment.

Important Points:

1. It is strictly prohibited to use textboxes to add texts in the assignments, except for the
compulsory information. eg: Figures, tables of comparison etc. Adding text boxes in the body
except for the before mentioned compulsory information will result in rejection of your work.
2. Avoid using page borders in your assignment body.
3. Carefully check the hand in date and the instructions given in the assignment. Late
submissions will not be accepted.
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5. Excuses of any nature will not be accepted for failure to hand in the work on time.
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7. If you are unable to hand in your assignment on time and have valid reasons such as illness,
you may apply (in writing) for an extension.
8. Failure to achieve at least PASS criteria will result in a REFERRAL grade .
9. Non-submission of work without valid reasons will lead to an automatic RE FERRAL. You
will then be asked to complete an alternative assignment.
10. If you use other people’s work or ideas in your assignment, reference them properly using
HARVARD referencing system to avoid plagiarism. You have to provide both in-text citation
and a reference list.
11. If you are proven to be guilty of plagiarism or any academic misconduct, your grade could be
reduced to A REFERRAL or at worst you could be expelled from the course

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Student Declaration

I hereby, declare that I know what plagiarism entails, namely to use another’s work and to present it as
my own without attributing the sources in the correct way. I further understand what it means to copy
another’s work.

1. I know that plagiarism is a punishable offence because it constitutes theft.

2. I understand the plagiarism and copying policy of the Edexcel UK.
3. I know what the consequences will be if I plagiaries or copy another’s work in any of the
assignments for this program.
4. I declare therefore that all work presented by me for every aspects of my program, will be my
own, and where I have made use of another’s work, I will attribute the source in the correct
way.
5. I acknowledge that the attachment of this document signed or not, constitutes a binding
agreement between myself and Edexcel UK.
6. I understand that my assignment will not be considered as submitted if this document is not
attached to the attached.

Student’s Signature: Date:

(ravindrakumarkawshika90@[Link]) (13/06/2023)

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Higher National Certificate/Diploma in Business

Assignment Brief

Student Name /ID Number Ravindra Kumar Kawshika / E184377

Unit Number and Title Unit 03: Human Resource Management

Academic Year 2023

Unit Tutor Ms. Anushiya

Assignment Title HR Case Study Review

Issue Date

Submission Date 09/07/2023

IV Name & Date

Submission format

Section A
The submission should be in the form of a 15 - minute group PowerPoint presentation (5 minutes
allocated for questions). The presentation slides and speaker notes should be attached together and
submitted as one copy. You are required to make effective use of PowerPoint headings, bullet points and
subsections as appropriate. Your research should be referenced using Harvard referencing system. The
recommended word limit is 1,500 to 2,000 words, including speaker notes, although you will not be
penalised for exceeding the total word limit.

Unit Learning Outcomes:

LO1 Explain the impact of the role of HRM in creating sustainable organisational performance and
contributing to business success.

LO2 Assess the contribution of HRM in recruiting and retaining talent and skills to achieve business
objectives

Assignment Brief and Guidance: Section A

While working as a management trainee in the Human Resources (HR) department of a chosen organization,
you have been asked to take part in reviewing the current recruitment and selection process to recruit a
Department Head for the newly implemented “HR Business Partners” Project of the HR department.
As the first step, you have to form a small team of (3–4 members) to research and understand the role of
HRM in creating sustainable organisational performance and contributing to business successes.
Then you are expected to review the existing recruitment process and suggest a more suitable recruitment and
talent retaining approach to achieve the goals of the “HR Business Partners” Project. Here, you are expected
to assess the contribution of HR department of the chosen organization in recruiting and retaining talent and
skills to achieve the overall objectives, Review the effects of the changing nature of the selected organisation
on the newly demanded human resources skills and knowledge to succeed in the new project, Examine how
HRM team should be performing in relation to the changing nature of the contemporary business needs.
The aim of your team is to successfully present the findings and submit an individual review report (by each

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individual member of the team).

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Submission format

Section B

The submission should be in the form of an individual written report. This should be written in a
concise, formal business style using single spacing and font size 12. You are required to make use of
headings, paragraphs and subsections as appropriate, and all work must be supported with research and
referenced using Harvard referencing system. The recommended word limit is 4,000–4,500 words,
although you will not be penalized for exceeding the total word limit.

Unit Learning Outcomes:

LO3 Examine how external and internal factors can affect HRM decision making in relation to
organisational development.

LO4 Apply HRM practices in a work-related context for improving sustainable organisational
performance.

Assignment Brief and Guidance:

The Human Resources (HR) department of a company of your choice is completing the annual HR analysis
of the organization. You are a newly recruited management trainee of this project who is expected to provide
a review report of the company annual HR analysis. With a brief overview introducing the chosen
organization, you are to explain the objectives of the HR function and the key roles and responsibilities. The
writing should then follow through and assessment of the approaches used in External and Internal Factors
which are influencing the organization and the influence of these factors on the decision-making process of
the company within the past year.

The report is expected to be further narrated through special attention provided on the HRM practices used to
improve sustainable organizational performance by reviewing the application of: Job descriptions, and
personal specifications, the process of recruitment and selection, the process of performance management and
the employee relationship of the firm. These approaches should be explained with specific examples. It is
also important to explain the benefits of employee relations and employee engagement, and comment on the
application of psychological contract, employee voice and engagement to reach out for highly competitive
advantages by applying the theories in to the practical scenarios of the chosen organization.
Examining and Applying various methods of HRM practices that can increase the organizational productivity
and profit will justify the importance of HRM. Managing “human” resources makes it essential to understand
the impact of legal and regulatory frameworks that need to be considered when making important Human
Resource Management (HRM) decisions. Further, you are expected to evaluate key factors affecting HRM
decision making to make valid recommendations on the HRM decision to reach organisational end
objectives.

The content will then finalize a complete picture of the annual HR analysis.

The review must be submitted as an analysis report on how External and Internal factors can influence HRM
decision making through application of various HRM practices to reach sustainable organizational
development and overall performance.

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Learning Outcomes and Assessment Criteria

Pass Merit Distinction

LO1 Explain the impact of the role of HRM in creating

sustainable organisational performance and contributing to
business success

P1 Explain the main areas M1 Compare areas of HRM to

of HRM in their contribution create sustainable
to creating sustainable organisational performance.
performance.

P2 Review the effects of the LO1 and LO2

changing nature of
organisations on human M2 Examine HRM in relation
resources skills and to the changing nature of the D1 Critically evaluate the
knowledge. modern business organisation.
strengths and weaknesses of
HRM in relation to creating
LO2 Assess the contribution of HRM in recruiting and retaining sustainable organisational
talent and skills to achieve business objectives performance and achieving
business objectives.
P3 Review relevant HRM
M3 Evaluate the use of HRM
practices in relation to practices in recruitment and
recruitment and retention of retention in relation to the
employees for the
importance of the labour
achievement of business
market.
objectives.

LO3 Examine how external and internal factors can affect HRM
decision making in relation to organisational development

D2 Evaluate key factors

M4 Discuss the key external
P4 Investigate the external and and internal factors that affect affecting HRM decision
internal factors that affect HRM decision making, using making to make valid
HRM decision making to relevant organisational recommendations
support organisational examples to illustrate how they
development. support organisational
development.

LO4 Apply HRM practices in a work-related context for

improving sustainable organisational performance.

P5 Apply HRM practices in D3 Determine strengths and weaknesses

M5 Illustrate how the of HRM practices to make
a work-related context, using application of specific HRM recommendations for improving
specific examples to practices in a work-related sustainable organisational performance.
demonstrate improvement to context can improve
sustainable organisational sustainable
performance. Organisational performance.

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Assignment Brief and Guidance:

Section A

Section B

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Grading Rubric

Feedback
Grading Criteria Achieved

P1 Explain the main areas of HRM in their

contribution to creating sustainable 41 – 45
performance.

P2 Review the effects of the changing 46 – 47

nature of organisations on human resources 90 – 91
skills and knowledge. 22
P3 Review relevant HRM practices in
relation to recruitment and retention of 47 – 49
employees for the achievement of business 28 & 36
objectives.
P4 Investigate the external and internal
factors that affect HRM decision making to 49 - 51
support organisational development.
P5 Apply HRM practices in a work-related
context, using specific examples to
51 - 53
demonstrate improvement to sustainable
Organisational performance.

M1 Compare areas of HRM to create 53 – 55

sustainable organisational performance. 27 & 32

M2 Examine HRM in relation to the

55 – 57
changing nature of the modern business
23
organisation.
M3 Evaluate the use of HRM practices in
57 – 60
recruitment and retention in relation to the
33 - 34
importance of the labour market.
M4 Discuss the key external and internal
factors that affect HRM decision making,
using relevant organisational examples to 60 - 63
illustrate how they support organisational
development.
D1 Critically evaluate the strengths and
weaknesses of HRM in relation to creating
64 - 68
sustainable organisational performance and
achieving business objectives.
D2 Evaluate key factors affecting HRM
decision making to make valid 68 - 70
recommendations.
D3 Determine strengths and weaknesses of
HRM practices to make recommendations 71 – 73
for improving sustainable organisational 38 - 39
performance
M5 Illustrate how the application of
specific HRM practices in a work-related
63 - 64
context can improve sustainable
organizational performance.

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OBSERVATION RECORD

Learner name: Ravindra Kumar Kawshika.

Qualification: BTEC Level 4-HNC/HND Diploma (RQF)
Unit 02: Role of marketing and its relationship with functional units of an
Unit number & title:
organization
Description of activity undertaken

Assessment criteria targeted

How the activity covers the requirements of the assessment criteria (this does not confirm achievement of
assessment criteria or confer an assessment decision)

Learner name: Ravindra Kumar Kawshika.

ravindrakumarkawshika90@[Link]
Learner signature: Date: 13/06/2023
m
Assessor name:
Assessor signature: Date

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WITNESS STATEMENT

Learner name: Ravindra Kumar Kawshika.

Qualification: BTEC Level 4-HNC/HND Diploma (RQF)
Unit number & title: Unit 02: Role of marketing and its relationship with functional units of an organisation
Description of activity undertaken (please be as specific as possible)

Assessment criteria (for which the activity provides evidence)

How the activity covers the requirements of the assessment criteria, including how and where the activity took place
(this does not confirm achievement of assessment criteria or confer an assessment decision)

Witness name: Job role:

Witness signature: Date:
Learner name: Ravindra Kumar Kawshika.
ravindrakumarkawshika90@gmail.
Learner signature: Date: 13/06/2023
com
Assessor name:
Assessor signature: Date:

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Contents
Executive Summary…………………………………………………………...…………….16

Acknowledgement…………………………………………………………………..………17

Section A………………………………………………………..…………………….…….20

HRM and the Scope of HRM……………………………………………………………..…41

HRM Functions of LOLC………………………………………………………………..…..43

Nature of Organization on HR skills and knowledge……………………………….……….46

HRM practices to Recruitment and Retention of Employees…………………………….….47

Internal & External Factors of HRM Decision-Making……………………………….……..49

HRM Practices In Work-Related

Context…………………………………………………….51

HRM in relation to the changing nature of

LOLC…………………………………………….55

HRM practices of the labour

market………………………………………………………….57

Key External & Internal Factors that effect HRM Decision Making with Examples…………
60

HRM practices for Sustainable Organizational Performance…………………………..

…….63

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Strengths & Weaknesses of HRM in Sustainable Organizational Performance………………

65

Key Factors effecting HRM Decision-

Making……………………………………………….68

Section B………..………………………………………………………………………….…73

Executive Summary.

HR policies encourage people to exercise a degree of choice on how and how well they do
their job. In other words, they help induce employee discretionary behaviour which makes
people work better and improve performance. This happens because the HR policies and
practices develop positive employee attitudes or feelings of satisfaction, commitment and
motivation. This study examines what factors affect employee attributions to HR practices in
relationship with HR satisfaction and organizational outcomes. As a result this study gives a
better insight in how employees individually perceive HR practices and what kind of attitude
or behaviour they will display when these practices are made distinctive.

This research demonstrate how the HR practices are perceive by employees. If employees are
satisfied they are willing to display behaviour that is beyond expectations and is neither
described nor rewarded by any formal reward system.

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Acknowledgement.

I would like to thank my lecturer Ms. Anushiya for the valuable advice and supervision she
has given me in the writing of this assignment. I would also like to thank The Manager
Human Resource Department of LOLC Group who helped me providing with expertise
knowledge to my assignment and special gratitude to thank Mr. Nadeesh Thanuja Manager
Operations who give the overall knowledge about the company system.

And I like to thank my friend who have helped me make this assignment. Last not the least; I
would like to thank my parents for always being my inspiration.

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Tables of Figure.

Figure 1 Scope of HRM...........................................................................................................42

Figure 3 Welfare of Employees...............................................................................................44
Figure 2 Mangerial Functions of HRM....................................................................................44
Figure 4 Employee recruitment & retention,..........................................................................48
Figure 5 Level of Growth........................................................................................................50
Figure 6 Use of technology......................................................................................................50
Figure 7 Digital empowerment................................................................................................54
Figure 8 Financial services.......................................................................................................54
Figure 9 Research and innovation............................................................................................55
Figure 10 Technological advancement.....................................................................................61
Figure 11 Capital Resources....................................................................................................63
Figure 12 Organizational financial position.............................................................................71
Figure 13 HRM Process...........................................................................................................74

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Contents of tables.

Table 1 Pros & Cons of Internal Resources.............................................................................48

Table 2 Pros & Cons of External Resources............................................................................49
Table 3 External Internal Factors affecting HRM decision making.........................................50
Table 4 Pros & Cons of Job analysis........................................................................................53
Table 5 Pros and Cons of HR Planning....................................................................................53
Table 6 Pros and Cons of Performance evaluation..................................................................53
Table 7 Pros and Cons of Training & Development................................................................53
Table 8 Pros & Cons of best practice approach.......................................................................58
Table 9 Pros & Cons of Best fit approach................................................................................59
Table 10 Strengths and weaknesses of HRM Practices............................................................71
Table 11 Strengths & Weaknesses of T & D............................................................................72
Table 12 Strengths & weaknesses of performance management.............................................73
Table 13 Strengths & Weaknesses of Hrm...............................................................................89

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Section A

Speaker Notes - Good morning everyone. I’m Nethmi Isanka and she is my team member
Kawshika. And we are going to discuss about Human Resource Management.

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Speaker Notes - What is HRM? HRM is the process of finding, selecting, delegating &
managing employees. And Human Resource is a general term for HRM.
So next to talk about the functions of HRM. They are;

 Recruitment & Hiring.

 Onboarding & ongoing training and development.
 Managing employee and employer relationships.
 Creating a rewarding company culture.
 Overseeing disciplinary action.

Speaker Notes – So talk about some advantages & disadvantages of HRM. Such as;

Advantages

1. HR Planning.
2. Hiring workforce.
3. Retaining employees.
4. Hiring Candidates.

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Disadvantages.

1. Improper development programs.

2. Costly setup.
3. Insufficient information

Speaker Notes – Now let us look how the changing nature of organizations on Human
Resource skills & knowledge. First one,

Strategic thinking and business knowledge.

HR professionals need to strengthen their strategic thinking skills and understand the
organization’s business objectives and difficulties.

Technological skills.

As businesses adopt digital transformation, HR professionals need to be knowledgeable in

data analytics and HR technologies.

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An explanation of the HRM introduction is provided well.

Changing nature of HRM Practices described but not reviewed.

Speaker Notes – Now let us look over how HRM affect the nature of the organization.

Objectives.

The role of HRM is to ensure alignment between the organizations board of strategic goals &
objectives and its HR objectives.

Organizational culture.

The term organizational culture describes the shared principles, norms, traditions & conduct
inside a business. The culture is shaped & influenced by HRM.

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Speaker Notes - So LOLC Finance is our selected company.

Speaker Notes – So to discuss about the company, it is the largest non-banking financial
institution in Sri Lanka & it is recognized for offering innovative, useful financial solutions to
meet the needs of its customers.
To talk about the history of the company, years ago the first leading solution portfolio in Sri
Lanka was introduced to a market by a company with a strong eye for the future & a broad
vision. This company’s name was Lanka ORIX Leasing company.

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Speaker Notes – To talk about the vision & mission of the company.

Vision: We believe in an inclusive financial service that requires client advocacy and
stewardship, a passion for leading-edge solutions and the delivery of services that exceed
customer expectations.

Mission: Our mission is to help set the industry standard in Non-Bank Financial Services. We
reach out to all Small and Medium Enterprises and provide them with affordable and
convenient Financial Services tailored to their specific needs.
Now let us look into the product and services of the company.

Products: The company offers a range of profits sharing investment opportunities to the
country. Such as,
 Consumer loans.
 Commercial loans.
 Agriculture loans.
 Rapid loans.

Services: Also, this company offer a range of services as well. They are:
 Customer protection.

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 Customer experience.
 Risk management.
 Use of digital technologies.

Speaker Notes - The HR department in LOLC takes care of employee motivation and
wellness, compensation, benefits, recruitment, organizational development, safety, employee
relations and training. The LOLC HR department plays a strategic role in business
management and the implementation of workplace.

The strengths are –

• Prioritize Learning and Department.

• Advocate for Employees.
• Understand compliance.

The weaknesses are –

• Ignore the finance part.

• No strategic foundation.
• Less customer-focused.

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Speaker Notes - The HR Functions of LOLC.

a. Job analysis and design obtain all the information about jobs and determining what
the tasks, duties and responsibilities of them, is done by Head of Department. For
example, Marketing, Finance and IT.

b. Further procedure of HR Planning including forecasting demand for employees is

done by the HR Department of LOLC Group. The company hardly faces surplus of
employees because of their strict procedures of hiring.

c. Performance Evaluation, Branch manager maintains spreadsheets including that

employee – performance related data. At the end of the month Managers appraise
performance by the results; So, LOLC mainly use Results Appraisal Method.

d. Training and Development, Technical Skills Development Trainings are also held by
LOLC. Induction related training is their primary training program.

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Speaker Notes - Recruitment process of LOLC is done by HRM Department of Head Office,
associated with each department of subsidiary company which has employee needs.
Employee needs of Branches are informed to the relevant department of company by the
Branch Managers. There are two types of Recruitment Process as Internal Recruitment and
External Recruitment. Internal Recruitment in the LOLC Holdings are the employees who
have completed 2 years of existing position. And the external recruitment includes:-

• Referrals.
• Advertising.
• Job Hunters.

Selection Process in LOLC applies for external hires only. Hiring managers are responsible
for conducting timely, effective interviews of qualified candidates. The HR department is
available to advise hiring managers on interview techniques and final candidate selection. A
candidate evaluation form will be completed for each candidate interviewed and will be used
to make a final candidate selection.

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Speaker Notes - Human Resource Management, or HRM, is the practice of managing people
to achieve better performance. For Example, if you hire people into a business, you are
looking for people who fit the company culture has they will be happier, stay longer, and be
more productive than people who won’t fit into the company culture.

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Speaker Notes – So as the competitor organization we have selected NDB Finance as it is the
main competitor for LOLC.

Speaker Notes – So to introduce the competitor company, this company was established in
1979 & there are 2949 employees working in this company. As per the other companies this
company also has different types of employees such as chief managers, senior managers,
managers, deputy mangers, associate managers, executives and so on……

The vision is – The driving force for a financially empowered Sri Lanka.

The mission – To be the catalyst in the financial services industry by creating superior
shareholder value and contributing to the national development through the empowerment of
individuals with innovative financial solutions delivered by an inspired and dedicated team
committed to excellence.

And the history of NDB Finance, this company is established is established in accordance
with the national development bank of Sri Lanka Act no. 02 of 1979 & also it was re-
registration in accordance with the companies Act no. 07 of 2007

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Speaker notes - The product & services of the company. This organization offers a variety of
products and services such as accounts, credit card offers, loans, leasing, remittance, mobile
banking, e-statement and so on…

Now let us look into the strengths and weaknesses of the company.

Strengths.

The Company’s HR department has a good ability to find and hire bright people,
guaranteeing that the firm has selected the right people for the right roles.
The company's HR division has put in place efficient training and development programs to
improve workers' abilities, output, and career advancement.

Weaknesses.

Non-performing assets (NPAs) are the company's main area of weakness.

NPAs typically stand for loans that cannot be repaid. This obviously results in financial losses
for the business.

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Speaker Notes – Now let us look into the HR functions of NDB & How they operate.

Recruitment & Selection.

As a result, resources are distributed to achieve NDB goals, maintaining a balance between
costs and revenue while keeping expenses and revenues under check. To further these
objectives, HR recruits, develops, and inspires employees.

Training & Development.

This improves bank workers knowledge, skill development and job enrichment which in turn
lowers the attribution rate and boosts the job retention.

Performance management.

To determine NDB’s operational results and their overall financial conditions measures their
assets quality, achievement of their objectives & capital adequacy.

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Speaker notes – So now let us discuss about the Recruitment & Selection of the company.

Job analysis.

Job analysis provide detailed information about the duties, responsibilities, and tasks
associated with a specific job, as well as the necessary education, training and experience.

Job description.

The company clearly defines the job and its requirements, it attracts candidates who are
genuinely interested in and qualified for the role.

Advertising the role.

The bank has access to a wide range of advertising channels including job boards, company
websites, social media, professional networks, and industry-specific platforms, via which it
may get in touch with individuals from a variety of backgrounds and demographics.

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Speaker notes –

Screening candidates.

By screening applicants, NDB Bank can promptly evaluate a vast pool of applicants. The
bank uses specific screening criteria, such as qualifications, relevant experience, and critical
competencies.

Conducting interviews.

NDB Bank obtained additional information about the candidates in addition to the
requirements and application documents. Through in person or online encounters ,problem-
solving abilities.

Carrying out tests and assessments and selecting the successful candidate.

Through tests and evaluations, candidates’ skills and talents can be evaluated objectively.
These exams are designed to evaluate a candidate’s knowledge and skills in specific
competencies.

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Speaker Notes - There training & development team, together with the strategic business unit
arranged for their staff to be trained on Gender Sensitivity. LOLC E-Learning platform
extends the opportunity to employees to learn at their own pace with no interference to their
work responsibilities.

This empowers the employees to take control of their own development through training.
NDB Training and development platform will have modules published in terms of soft skills
to operational and technical related subject matter plus various other materials on articles
published by employees of NDB.

The student has clearly compared the two organizations in terms of the HRM Practices

Changing nature of the HRM practices of the selected organization practices were not
examined

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Speaker Notes - Recruitment and selection practices in LOLC applies marketing principles
to the recruitment process find and attract better candidates by generating awareness of
LOLC Brand with their industry & promoting job ads effectively via channel. It includes
building informative and engaging carriers’ pages for LOLC.

Recruitment & Selection in NDB plays an important role to ensure workers performance and
positive organizational outcomes. Long before they can build a finance recruitment strategy,
they need to complete a finance recruitment strategy audit.

A finance recruitment & selection strategy is an empowering tool for those hiring in a
competitive market like LOLC and NDB.

Recruitment and selection practices of the selected organization were not reviewed

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Speaker Notes – LOLC encompasses advertising strategies, processes, and technologies that
enable recruiters to reach the right people at the right time and to build a steady pipeline of
talent.

NDB’s main goal is attracting potential candidates, job advertising does a lot more than just
that. From aiding in your day to day recruitment process to enhancing the employer brand
value, job advertising is an all-encompassing solution. The similarities are mention above.

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Speaker Notes – Sustainable HRM contributes to developing an influential organizational

culture, job security, flexibility and competitive advantage.

Organizational Culture affects all aspects of the business, from punctuality and tone to
contract terms and employee benefits.
Increased job security can help employees be more productive in their roles. Feeling secure
can also provide motivation as they want to grow in their roles or career with a company.
The purpose of having a competitive advantage is to distinguish a company from its
competitors by offering something different and of superior value to its customers.

Weaknesses could include things such as bad reputation in the employment market, attracts
and retain workers or lack of training resources.

Bad reputation harms client and investor trust, erodes the customer base and hinders sales. A
poor reputation also correlates with increased costs for hiring and retention which degrades
operating margins and prevents higher returns.

Employees who have not been trained properly will produce less work and at a lower quality.
This type of work often leads to errors, quality issues and time lost repeating activities.

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Strengths and weakness of the selected organization described but not critically evaluated

Speaker notes – Now let us look into the recommendations of both the companies .

LOLC main goal is attracting potential candidates, job advertising does a lot more than just
that. From aiding in your day to day recruitment process to enhancing the employer brand
value, job advertising is an all-encompassing solution. LOLC can keep up – to – date
accounting records, ensure customers pay on time and have a clear business plan.

NDB concerns is to just select the candidate who are referred by existing employees’
company will become constrained to look for more quantitative employees from labor
market. Using a financial technology platform to streamline and simplify many different
processes is one effective strategy for improving NDB’s overall financial health.

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Speaker Notes - This is the end of our presentation. Thank You!

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HRM

HRM is a management function concerned with promoting and enhancing the

development of work effectiveness and advancement of the human resources in an
organization. These are achieved through proper:

Planning.
Organizing.
Directing.
Controlling.

Of all the activities related to –

Procurement. Development. Motivation. Compensation.

Of all employees to attain the goals of the organization. Sustainable HRM contributes to
developing an influential organizational culture, job security, health promotion, flexibility,
participative leadership, sustainable competitive advantage, and work-life balance.

Scope of HRM.

The health, wealth, and prosperity of employees are all the responsibility of HR. Building a
healthy work environment and motivating the employees at each step also comes under the
scope of human resource management. This include non-monetary amenities like medical,
canteen, or other recreational areas.

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Figure 1 Scope of HRM.

History of LOLC.

This company was Lanka ORIX Leasing Company (LOLC). From the onset, LOLC’s
prowess within the financial services sphere helped the company identify a lacuna in the
industry – the lack of financial solutions reaching grassroot level entrepreneurs and
individuals. The company was founded as LOLC Finance Company Limited in 2001. In
2003, the company changed its name to Lanka ORIX Finance Company and commenced
operations. Lanka ORIX Finance Company became a public company in 2011 with its listing
on the Colombo Stock Exchange.

As Sri Lanka’s largest non – banking financial institution, LOLC Finance is renowned for
delivering innovative and real – world financial solutions that meet the needs of our
customers. Backed by the strength of the LOLC Group, we have become a trusted name in
the industry, ensuring your dreams become reality, no matter the shape or scope. LOLC
Finance PLC is a premier licensed finance company in Sri Lanka with its own unique
identity. As one of the flagship entities of LOLC Group, we have remained focused on

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bridging the gap between aspiration and achievement based on the foundation of
uncompromising quality, total customer satisfaction and unparalleled financial expertise.
HRM Purpose in LOLC.

The Human Resources Management is responsible for managing the work and skills of
employees and they also plan and strategies various ideas and techniques for the effective
functioning of LOLC. They also maintain the productivity and profitability ratio of the
organization. They also assure positive mindset to the employees by providing healthy and
positive environment and surroundings to the employees. There are two types of HR practices
used by the Human Resources Management, hard and soft practices in order to provide
directions to the employees so that business objectives can be achieved[ CITATION Aus20 \l
1033 ].

For improving the performance of the organization and employees; they regulate various
theories and concepts so that they can easily make control over certain things in the
organization. And on the other side, they also motivate and encourage the employees by
which the employment engagement towards the organization can be increased. Soft HRM
practices are mainly adopted by the HR department so that they can easily empower
employees.

HRM Functions of LOLC.

o Recruiting and Hiring New Individuals.

The HR department is responsible for the taking interviews and for the whole selection
process. They set various criteria and recruitment of skills for making selection of the new
employees. They are responsible for identifying the staff storage in the organization and then
conduct the selection process.

o Providing Training and Developing Skills.

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For improving the skills and knowledge of the employees the Human Resources Department
is responsible and plays a major role in providing proper training and coaching to the
employees so that they can easily develop their knowledge according to the organization’s
norms and conditions. For providing training they conduct various training program and
seminars[CITATION Kar19 \l 1033 ]

o Managerial Functions of HRM.

The organizations management is responsible to direct, organize and control various activities
and tasks. They are responsible for planning various strategies and innovative ideas. They
need to manage various tactics and strategies in order to maintain the growth and
development of the organization.

o Performance Appraisal of Employees.

The HR department is also responsible for making appraisals according to the performance of
the employees. They need to check daily-to-daily feedbacks of the employees; on the basis of
that criteria they can easily manage providing rewards a promotion to the employees.
[ CITATION Has16 \l 1033 ].

o Welfare of Employees.

The term welfare of employees means to satisfy the employees by providing environment
that is healthy and positive. The Human resources department adopt those rules and
regulations which can be easily understood by the employees so that they can adapt them in
order to improve their performance and skills.

o Maintaining the Record of Employees.

LOLC has large numbers of employees working in their organization, because of this they
have to maintain the employees record that is their joining date, per annum salary and total
working hours in the organization.

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Figure 3 Welfare of Employees.

Figure 2 Managerial Functions of HRM.

Strategic HRM.

Strategic human resource management involves developing and implementing strategies for
attracting, retaining, motivating, and managing talented individuals who contribute to the
organization’s success. HRM also includes policies and practices designed to ensure fairness
in employment relations.

Strategic human resource management aims to achieve a competitive advantage by creating

value for customers, shareholders, employees, and other stakeholders. The term “strategy”
refers to the organizations overall plan of action to create value. It is not just one thing; it is a
combination of many things, including:

1. Actions are taken by the organization to meet customer needs.

2. Policies and procedures used to manage the organization.
3. Processes used to produce goods or services.
4. Marketing activities used to sell products and services.
5. Financial decisions made to fund operations.
6. The technology used to support business processes.
7. People-related issues such as recruitment, selection, training, compensation,
benefits and performance management.

Organizational change can create the need for the HR department to focus on staffing issues.
Organizations undergoing rapid growth may need to add more employees, so HR may have to
focus on expanding its recruitment base or structure compensation programs to attract more
talented workers. HRM influences employee awareness, behaviour, attitudes, organizational
culture, and leadership skills development. There is a positive relationship between HRM
practices and CSR to the environment. The broader span of work, brought about by changes

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in organizational structure, also creates new demands, including: Increased complexity of

work – Workers need to know more, not only to do their jobs and tasks, but also to work
effectively with others on teams.

Nature of Organization on HR skills & knowledge.

Together, the vision, mission, and values statements provide direction for everything that
happens in an organization. They keep everyone focused on where LOLC is going and what
it is trying to achieve. And they define the core values of the organization and how people are
expected to behave. Developing a vision and mission statement is crucial to the success of
community initiatives. This statement explain the groups aspirations in a concise manner,
help the organization focus on what is really important, and provide a basis for developing
other aspects of your strategic plan.

Business leaders and hiring professionals have an old saying that sums up the proficiencies
needed for employment: Hard skills will get you the interview; soft skills will get you the job.
Indeed, both hard and soft skills play an equal role in employment. Hard skills requirements
necessary to properly perform a job, while soft skills help employees cope and react to
situations. When they offer employees hard skills training, they are providing them with the
tools necessary to learn and strengthen specific capabilities needed to carry out job functions.

For example:- Hard skills help identify the candidates who are good on paper, whereas soft
skills indicate which of these candidates are good in person, too. This means that we need a
good mix of hard and soft skills in every employee so that they can be successful in their role.

The concept of best fit and best practice are two well-known approaches to HRM. The best fit
perspective claims that HR strategy become more and more efficient when it is linked to its
environment of the business. It explores the close link between strategic management and
HRM by assessing the extent to which there is a vertical integration between an organizations
business strategy and its HRM policies and practices. Best practice approach claims that
certain ‘best’ human resource practices would result in enhanced organizational performance,
manifested in improved employee attitude, lower level of absenteeism and turnover, higher

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level of skills for higher productivity, enhanced quality and efficiency. That is why the best
practice model is also referred as high commitment models.

Both approaches aim to achieve high performance in organizations. These models could be
classified as matching models because of their common aim is to match the human resources
strategy with that of the corporation. The best fit school of SHRM focuses on the fact that
close alignment between organizational strategy and other systems is respected. All
organizational systems must start with business strategy because it specifies what the
company wants to accomplish, how it wants to behave, and the kinds of performance and
performance levels it must demonstrate to be effective.

The best practice theory acknowledges also that importance of business strategy on
performances. Both approaches believe that HR practices should be complimentary. Thus,
both concepts need employees in order to achieve its goals. Therefore they both have staffing
and hiring strategies and procedures. Recruiting, testing, selection and staffing are considered
in the two systems.

HRM practices to Recruitment and Retention of Employees.

Employee recruitment is vital to ensure that the organization grows. However, that doesn’t
mean you should be asking just anyone to join the team. Not only is a dedicated and well-
planned recruitment strategy critical to reaching out to the right people and finding the best
candidates, but it can also ensure that they’re excited to join the team and are properly
onboarded. Once you recruit and hire the right prospects, its then time to retain them. High
employee retention rates are a solid testament to just how great working for your organization
is. This not only results in motivated and hardworking employees but also rewards the
organization with a positive and attractive reputation.

Both recruitment and retention are important to the growth and success of the organization.
Recruitment allows you to carefully identify the talented individuals that will make up your
team, and retention allows you to hold onto those talented individuals for the long run. Make
the big picture of organizational success, employee retention of skilled talent is much more
beneficial and cost-effective than trying to consistently acquire new team members. This

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because exhausting your resources to find new employees isn’t worth it if they don’t stay for
a long enough period of time to add value to the organization.

Hone your
onboarding
approach
Create an
Build employee
Trust recognition
program
Better
Employee
Recruitment
Conduct & Retention
exist Use the
interviews right tool for
when performance
employee management
leaves Make your
organization
a great place
to work.

Figure 4 Employee recruitment & retention,

Specially, HRM practices consist of training and development, career development,

compensation and benefits, and performance appraisal. Employee retention refers to the
various policies and practices which let the employees stick to an organization for a longer
period of time. An efficient human resource practices can lower the level of employee
intention to leave, thus will increase retention level. Human resource management practices
can improve organizational performance through:

1. Developing a psychological contract.

2. Increasing motivation and commitment.
3. Increasing employee skills and extending the skills base.
4. Providing employees with extended responsibilities so that they can make full use of
their skills.

Pros of Internal Resources. Cons of Internal Resources.

Costs. Limited bandwidth.
Control. Limited expertise.
No conflicts of interest with candidates. Limited networks, reach, and talent pool.

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Table 1 Pros & Cons of Internal Resources.

Pros of External Recruitment Resources. Cons of External Resources.

Network and reach. Costs.
Specialized expertise. Potential conflicts of interest with
candidates
Recruiting expertise and resources. Control.
Table 2 Pros & Cons of External Resources.

Internal and External Factors of HRM Decision-Making.

Hr departments play an important role in such areas as workforce planning, employee and
labour relations, training and development and legal compliance within their organizations,
because it is not directly involved in the production of goods and service, HR may be seen as
a separate function apart from the day-to-day operations of a business. Yet, an effective
human resources department can make a real difference to the organization’s success. An HR
department typically encounters a number of internal and external factors as part of its
function.

External Factor. Internal Factors.

 Available Labour Pool.  Level of Growth.

Perhaps the main function of HR An internal factor that impacts HR is the

department is to maintain adequate staffing company’s rate of current and projected
levels though workforce planning. One growth. Companies experiencing aggressive
external factor that influence the ability to growth and rapid expansion ma requires its
recruit qualified candidates is the labour human resources department to focus on
market availability, which is affected by recruitment and staffing. More stagnant
unemployment rates, number of qualified companies may place a greater focus on
workers in the reasonable commuting efforts on employee retention and
distance and, in some cases, the availability improving the company’s culture and
of applicants with specialized skills such as workplace environment through upgrading
nursing or technology. An organization job descriptions and enhancing
might have difficulty identifying and compensation and fringe benefits programs.
attracting suitable candidates, especially if Downsizing companies may have to take

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the same skill sets are in demand throughout the regrettable decision to lose some of its
the industry. staff; a message that’s often left to Hr to
relay.
The company’s geographic location may
also be a factor if the labour pool is not
large enough in the immediate area. Then,
HR managers may need to focus their
recruiting efforts outside the region and pay
Figure 5 Level of Growth.
relocation packages as appropriate to
encourage qualified staff to take up a
position.

 Government Regulations.  Use of Technology.

Federal and state workplace laws and One of the key internal factors affecting HR
regulations are external factors affecting planning is the willingness for the HR
human resource management that require department and company management to
human resources to ensure the company is use technology to aid in certain key human
in compliance. Regulations can influence resources functions. For example,
how a company goes about hiring, training, companies that make greater use of tools
compensating and even disciplining its such as online benefits management, where
workers, and a misstep could result in employees can make changes to their
sanctions against the company or even benefits plans on their own, provide HR
lawsuits filed by employees, prospective workers with more time to focus on other
employees, vendors and customers. areas like recruiting or training and
employee development. This can free up a
An example:- The Americans with considerable amount of time and resources
Disabilities Act, which in many cases across the organization.
creates the need for companies to modify
their office configurations or provide other
reasonable accommodations for individuals
with disabilities.
Figure 6 Use of technology.

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Table 3 External Internal Factors affecting HRM decision making.

These external factors can be broadly categorized as the social and cultural, technological,
economic, political, and legal environments. While these external influences are often outside
the control of HRM, they often require action from HRM to address their effects on the
organization and its goals. Internal factors changes the nature of the firm’s operations will
affect the types and skill levels of its workplace,

Ex- 1. New international operations.

2. Increasing or falling profitability will affect the level of the required workforce and
terms and conditions.

HRM Practices in Work-Related Context.

HR best practices involve the strategic operations of HR. they form the foundation and
guidance for managing the company’s employees and should coordinate with the executive
business plan. Some examples of HR practices include: Setting the mission and goals of the
HR department. Human Resource manages the employee life cycle, including recruiting,
hiring, onboarding, training, performance management, administering benefits, compensation
and firing.

 HRM helps in resolving disputes among employees or between the management and
employees of an organization regarding policies and procedures, workplace behaviour
etc.

 HRM helps the company worker by providing the training program.

 HRM team organizes technical knowledge programs which enhance the workers skills
so that employees or workers can gain additional experience and can increase the
annual productivity of the organization.

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 HRM also provides support regarding employee rights and manages if any rights are
violated or not.

 HRM teams develop performance management systems where the performance of an

employee is recorded.

Examples to Improve Sustainable Organizational Performance.

1. Employee Retention.

Many big corporations boast of cool retention packages provided to their employees. And it is
now more a necessity and a part of best HR practices rather than a perk. For examples:-

 Pay competitive rates.

 Create career advancement opportunities.
 Encourage a healthy work-life balance.

2. Onboarding Process.

The first impression during an employee first day is extremely important for the onboarding
period. Managers should first inform their colleagues about a new employee coming and tell
them shortly about him/her. Another important thing is to provide a new team member with
access to all corporate programs, CRM and any internal policies and instructions. Finally, it
would be perfect to organize a small team building to get the team acquainted with their new
colleague. You’ll see that the next day your new employee will fell much comfortable and
will become a true team member. When the team works as one, they listen to each other,
brainstorm new thoughts, and come to brilliant ideas. For example:-

 Take time for introductions and ice breakers.

 Invite new hires to lunch.
 Stock up on their favourite snacks.

3. Compensation and Benefits.

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These are also important in HR practices. Before hiring people, a manager has to research the
market pay rates for the appropriate position and offer an employee the salary that is suitable
for corporate budgeting. An employee has to be informed with the salary for probation and
after probation periods. Probation can be determined as a trial period of new workers which
lasts for three months. After having successfully completed a trial period, an employee has to
get a higher salary and there must be certain KPI’s confirmed with the employee that they can
strive after to get bonuses. Sample package examples are:-

 Life Insurance.
 Stock Options.
 Overtime Pay

Pros and Cons of HR Functions in LOLC.

Pros of Job Analysis. Cons of Job Analysis.

Helps analysing T & D needs. Time consuming.
Creating right job-employee fit. Involve personal biasness.
Helps deciding compensation & benefits. Lots of human efforts.
Table 4 Pros & Cons of Job analysis.


Pros of HR Planning. Cons of HR Planning.
Building skills. Expense.
Increasing retention. Unpredictability.
Predictability. Illusion of certainty.
Table 5 Pros and Cons of HR Planning.

Pros of Performance Evaluation. Cons of Performance Evaluation.

Better building teams. Unclear reward system.
Creating communication. Failure to set standards.
Improve employee motivation. Biases become more prevalent.
Table 6 Pros and Cons of Performance evaluation.

Pros of T & D. Cons of T & D.

Improve productivity. Quality of work.
Earn more profit. Cost.
Retain top talents. Time.
Table 7 Pros and Cons of Training & Development.

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Figure 7 Digital empowerment.

Digital Empowerment.

LOLC firmly believe that information technology is a key constituent of facilitating all
business operations of the group towards providing enhanced customer experience. LOLC
Group through its centralized, shared IT services provider, LOLC Technologies, continues to
be at the forefront of technology innovation and operates as a technology enabler via different
digital platforms designed to provide cutting-edge features, performance, security, and
unprecedented convenience.

Figure 8 Financial services.

Financial Services.

Driven by an unwavering focus on our customers success, LOLC is rapidly expanding its
footprint in across the globe, building a secure future for underserved communities through
market-based solutions. LOLC is making a difference in the MSME landscape by deploying
best practices in customer protection, customer experience, risk management, and the
application of digital technology. By building the economic strength of individuals, LOLC
seeks to propel the GDP growth of its host countries- a mission that ensures the MSME
platform stands out in the global financial services industry.

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Figure 9 Research and innovation.

Research & Innovation.

LOLC’s thirst for innovation remains insatiable with a vision to be in a global leadership
position for creating a culture that spurs and fosters innovation and creativity. The group
continues to explore technology and innovation and create platforms for innovators to work
on exiting projects, leading to improved productivity, competitiveness as contributing to an
enhanced quality of life.

HRM in relation to the changing nature of LOLC.

LOLC is exposed to the challenges and opportunities posed by the increasing change and
complexities in the business environment. The emergence of Work Force Diversity,
Economic and Technological Change and Organizational Restructuring; mandate the
transformation of HRM in organizations. It is necessary for the management to invest
considerable time and amount, to learn the changing scenario of the HR department in the 21st
century. In order to survive the competition and be in the race, HR department in LOLC
should consciously update itself with the transformation in HR and be aware of the HR issues
cropping up. The practice include are:

 High level of training, especially induction training and on the job training.
 Team working.
 Multitasking.
 Better management-worker communications.
 Encouragement of employee suggestions and innovation.

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Work Force Diversity.

Diversity has been defined as any attribute that humans are likely to use to tell themselves,
that person is different from me and, thus includes such factors as race, age, values and
cultural norms.

For Example – The Indian work force is characterized by such diversity that is deepening and
spreading day by day.

It is likely to be more diverse as women, minority-group members, and older workers flood
the work force. With the increasing number of women entering the work force due to a
combination of factors like women’s emancipation and economic needs and so on, additional
pressures of managing a different set of problems at the work place have arisen.

As such, the number of women is on increase in all walks of life. However, increasing
number of women in the work force has been necessitating the implementation of more
flexible work scheduling, child care facilities, maternity and now paternity leave also.

Economic and Technological Change.

Along, with time, several economic and technological changes have occurred that have
altered employment and occupational pattern. In Sri Lanka too, there is a perceptible shift in
occupational structure from agriculture to industry to services.

Organizational Restructuring.

Organizational restructuring is used to make the organization competitive. From this point of
view, mergers and acquisitions of firms have become common forms of restructuring to
ensure organizational competitiveness. The mega-mergers in the banking,
telecommunications and petroleum companies have been very visible in our country.
Downsizing is yet another form of organizational restructuring.

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As a part of the organizational changes, many organizations like LOLC have “rightsized”
themselves by various ways like eliminating layers of managers, closing facilities, merging
with other organizations, or out placing workers. There has been a practice to flatten
organizations by removing several layers of management and to improve productivity, quality
and services.

HRM practices of the Labour Market.

Some of today’s most important trends in human resource management are using employee
diversity as a competitive advantage, the trend of work from home, cultivate critical thinking,
soft skills, digital skills and artificial intelligence (AI) and machine learning. Although overall
labour union enrolment continues to decline, a possible surge in membership in service
unions is anticipated.

 The Trend of Work From Home.

The coronavirus pandemic has altered the paradigms of business domains worldwide. This
global overnight shift to remote work puts a high value on flexible work arrangements. Four
out of five HR managers believe the move to working remotely has caused less employee
absenteeism, with employees available online when needed.

In 2021, many corporations are offering remote–work as a full–time opportunity. With this,
HR departments need to adapt to new workplace settings to keep the employees engaged and
on track.

 Cultivate critical thinking, soft skills, and digital skills.

Gone are the days when education and job skills were the only criteria for the recruitment of
employees. The 21st century calls for HR personnel to look for a combination of power skills
in the workforce. Search for applicants with digital skills like data analytics and digital
literacy.

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Assess critical thinking skills like strategic thinking and conflict management. Soft skills like
emotional intelligence and creativity are considered a priority by businesses these days for
the humanistic work environment. Choose candidates with learnability and aptitude to
operate in a tech-human blended work mode.

 Artificial intelligence.

AI-based algorithms such as applicant tracking software, combined with an increase in cloud-
computing, can assist HR professionals in the recruitment of candidates and streamline
workflow. AI tools promote merit-based selection eliminating conscious or unconscious bias.

AI aids HR to manage onboarding, integration, employee training, performance, reporting,

payroll, and data administration. Integrate Robotic process automation (RPA) to encompass
skills like chatbots, natural language processing (NLP), and machine learning to access the
data.

Pros of Best Practice Approach Cons of Best Practice Approach

 Develop the HR needs of a modern  The drawbacks of best

business. practice sharing.

This will increase the skills of the current Since we need to ensure that it works we
workforce, and with recruiting it will will have made bigger and smaller changes
reinforce the culture of a highly skilled to the final result, which we sometimes
work force. [CITATION 15Mu \l 1033 ]. don’t even remember. Another “flaw” of
Employers are increasing extorting the best Best practice sharing is that it doesn’t
possible performance from employees. promote cooperation or humility as there is
a right way of doing things.

Table 8 Pros & Cons of best practice approach.

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Pros of Best Fit Approach Cons of Best Fit Approach

Links business strategy and HRM by The limitations of the best fit SHRM
finding the best organizational design and approach revolve around its concentration
Hr practices to match the company’s on external market positioning and the
strategic goals. This approach considers the challenges of achieving competitive
resources and capabilities of the advantage where other organizations within
organization, as well as the environment in the same sector pursue similar strategies and
which it operates market positions.

Table 9 Pros & Cons of Best fit approach.

Attracting and retaining quality workers is top of mind for anyone in the manufacturing
industry today. Recruiting workers in today’s market also needs to include investing the time
necessary to hire quality workers, which improves retention for the longer term. To succeed
with the odds stacked against them, employers must ensure that recruiting methods are fit for
purpose and suitably adapted to the needs of today’s job seekers. However, retention must
also be prioritised: its as critical as recruitment to workforce planning and management, and
can have widespread, negative impacts if not addressed. It is possible for businesses to bring
in great candidates during more challenging times, but it requires a consistent, concerted
approach.

Business leaders should review the recruiting process to identify whether and to what to
extent, changes are required.

o Are job ads clear and conveying appropriate messaging?

o Which job boards and methods are being used and are they successful in reaching
qualified applicants?
o What else could be done to maximise talent acquisition?

HR personnel and hiring managers should ask themselves these questions, and approach job
postings as they would other marketing strategies. It’s important to sell the organization to
candidates by conveying a strong, consistent employer brand – making it clear what you do

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and the part they will play, highlighting the benefits of the role, and including any other
information that will attract top talent. It can also help to broaden the job search and applicant
pool, for example:

i. Considering different, but still applicable, skill sets.

ii. Relaxing or removing non-essential skill requirements from job descriptions and
person specifications.
iii. Targeting job-sharers, part-timers and candidates who want to work remotely.
iv. Introducing a scheme for employee referrals and recommendations.
v. Adopting less-traditional advertising methods and enhancing internet recruiting
tactics – social media platforms such as LinkedIn offer effective ways to a greater
number of people.

Key External & Internal Factors that affect HRM Decision-Making with Examples.

When it comes to human resource management there are several factors that affect day-to-day
operations. Adapting in this field is important because at a moment notice new legislation can
be passed with an immediate effective date or corporate policies are changed where human
resources feels the brunt. A well-developed strategy for your human resources department
takes into consider external & internal factors that might affect the finance department.
These are the external factors that affect HRM:

a. Government Regulations – With the introduction of new workplace compliance

standards the HRM department is constantly under pressure to stay within the law.
These types of regulations influence every process of the HR department including
hiring, training, compensation, termination, and much more. Without adhering to such
regulations a company can be fined extensively which if it was bad enough could
cause the company to shut down.

Example:- Reserve Requirement is an example of banking regulation. The amount of cash

that a bank must have in reserve to pay its obligations in the event of unforeseen withdrawals
is known as the reserve requirement.

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b. Economic Conditions – one of the biggest external influences is the shape of the
current economy. Not only does it affect the talent pool, but it might affect the ability
to hire anyone at all. One of the biggest ways to prepare against economic conditions
is to not only know what’s happening in the world around you, but also create a plan
for when there is an economic downturn. All companies can make due in a bad
economy if they have a rainy-day fund or plan to combat the harsh environment.

Example:- Interest rates.

Inflation
Housing sales.
Overall economic productivity and growth.

c. Technological Advancements – This is considered an external influence because when

new technologies are introduced the HR department can start looking at how to
downsize and look for ways to save money. A job that used to take 2-4 people could
be cut to one done by a single person. Technology is revolutionizing the way we do
business and not just from a consumer standpoint, but from an internal cost-savings
way.

Example:- Artificial Intelligence(AI)- powered anti-money laundering(AML) and know-your-

customer (KYC) solutions make customer profile screening faster and more accurate.

Figure 10 Technological advancement.

There are three main internal factors affecting HR of an organization. The factors are:

1. Mission – This is the very purpose and justification for the existence of a firm. An
organization’s mission statement tells what it is, why it exists and the unique
contribution it can make. At various levels, people must carry out assigned tasks
keeping the overall mission of the firm in mind. The HRM functions are also
affected by the mission of the organization.

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Example:- Here is a typical mission statement for a bank, “We will be the preferred provider
of targeted financial services in our communities based on strong customer relationships.” We
will strengthen these relationships by providing the right solutions that combine our
technology, experience, and financial strengthen.

2. Organizational Culture – Organizational culture is the sum total of shared values,

beliefs and habits within an organization. It depicts the personality of the
organization. The HR managers have to adjust positively to the culture of the
organization.

Understanding the type of culture that prevails within a firm is important in order
to formulate appropriate HR policies and strategies. HR managers have to choose
the paths that best reflect the culture of the firm and the attitudes of the people.

Example:- Integrity.
Teamwork.
Transparency.
Accountability.

3. Capital resources – From a general view, financial capital is the funds necessary to
grow and sustain a business. CEO takes financial capital to invest in not only
tangible goods such as factories, machines, tools and other productive equipment
to produce an output but also intangible resources such as marketing, employee
training, etc.

No company can survive without having capital resources. Once a company has
enough budget, they can easily launch their projects, expand its scale and even
achieve impressive results.

Example:- For instance, in 2010 Coca Cola- the 84 biggest economy spent 2.9 billion USD
for marketing, which was more than that total marketing investment of Microsoft and Apple.
It can be said that without the big investment and stable financial resource, Coca Cola success
would not be guaranteed.

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There are also several ways for an enterprise to maintain stable budgets by some
resources such as investment opportunities, funding, and annual income.

Figure 11 Capital Resources.

Organizational internal and external factors that affect the HRM decision making process
has been described well

HRM Practices for Sustainable Organizational Performance.

HR is considered the most important asset of an organization, but very few organizations are
able to fully harness its potential. HRM is defined as composed of policies, practices and
systems which influence employees’ behaviour, attitude and performance. Paying special
attention to the HRM is an important requirement for every organization. HRM practices and
processes are part of the management of the human resource in the organization. There are
several HRM practices which have potential to improve and sustain the organizational
performance.

There is no single best HRM practice which suits all the organizations. Good HRM practices
vary from organization to organization. The practices which are good for one organization
may not fulfil the needs of other organization since the organization can be functioning in
different type of environment. In fact good HRM practices do not constitute a set of discrete
actions but an approach to the organizational management. Hence, every organization is
required to develop distinct system of HRM practices which is peculiar to the organization
itself.

HRM practices are normally developed in an integrated manner and are to be consistent with
the organizational strategies in order to achieve the goal and the objectives of the
organization. These practices are required for ensuring quality of work life as well as high
commitment and performance of the employees.

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The proper HRM practices always stay focused on getting the best performance from
employees. Normally, this means getting employees to have something (e.g. skills,
competencies, and abilities),

 Feel something. (e.g. commitment, engagement, and motivation).

 Do something (e.g. come to work, be productive, serve customers, and stay with the
organization).

If the HRM practices are correctly designed and put in place, then the organization gets the
best employees’ performance, which means also, the organization getting the best overall
performance as well. HRM practices are critical in execution of effective training to the
employees and enhancing their inspiration. Functions of HRM practices include enhancement
of the employees’ skills, commitment and effort, with a view to enhance, in turn,
organizational performance. HRM practices influence immaterial satisfaction, which, in turn,
positively impacts the performance of the organization. However, the impact of the different
HRM practices is not the same.
HRM practices affect the employees what they do. The practices are required to focus that the
employees are required to focus that the employees are engaged in positive behaviours. The
primary impacts of HRM practices is on the employees themselves, in terms of what they
have, feel and do. Commitment HRM practices have a positive effect on how employees feel
and increase their satisfaction. These practices mean better performance on core tasks, more
going beyond the call of duty, greater willingness to share knowledge, and generally lower
quit rates or turnover.

Strengths and Weaknesses of HRM in sustainable Organizational

Performance and Business Objectives.

HR management entails all activities related to acquiring and keeping a competent staff. HR
managers frequently develop, introduce, and keep an eye on company policies that have an
impact on workers and the company’s relationship with its employees. HR management is

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concerned with the well-being of employees and their families, as well as the community at
large and the nation as a whole.

Functions of HRM.

In order to assist employees in times of need, HR professionals should be familiar with all
aspects of their respective fields[ CITATION Arr16 \l 1033 ]. However, they must also create
strategies to grow HR practices to have an influence across the company. It may divide up a
human resources department into five distinct functional categories, as listed below;

Human resources information and payroll.

Personnel in human resources are responsible for keeping an eye on things like the
company’s working environment in addition to overseeing payroll operations[ CITATION
Buz16 \l 1033 ]. To better serve their customers outside the company, they need to hear from
their staff members about their experiences in the workplace. Overall, a company’s reputation
and the number of consumers it attracts depend heavily on the quality of its
workplace[ CITATION Buz161 \l 1033 ].
LOLC designed the HR software for their financial and banks services to manage employee
training and payroll processing in the same system. Managing employee information,
compensation and performance shouldn’t be a manual process.

Recruiting and staffing employees.

The person in charge of making hires is called the “hiring manager,” however, the actual
process of finding qualified applicants often begins in the human resources department
[CITATION Phi \l 1033 ]. HR might utilise keywords in a job posting to assist them to find
applicants that suit their needs with an applicant tracking system. Appropriate applicants are
forwarded to the recruiting manager when they are found.
As a highly competitive industry, LOLC banking recruitment is not an easy job. HR’s have a
screen hundreds of applicants. They have top perform background checks to check for
pervious financial frauds and terminations. Customers trust banks based on their experience
with bank employees. And the biggest asset of a bank is trust.

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Employee Training and Development.

HR collaborates with management to develop programmes that teach employees new skills
and prepare them for promotions . when determining if additional training is needed, they
will look at factors such as the number of employees enrolled in each programme, how well
those employees do, how managers respond, and the final outcomes.

Employee compensation.

Pay, bonuses, pay increases, and whether or not an employee is on an hourly or salary basis
are all matters that fall within the purview of human resources. As such, LOLC provide the
payroll division with the data required to deliver appropriate payments to workers in cases
such as accrued vacation time, sick leave, and bonuses.

HR Planning.

Human Resource planning is a continual process of methodical planning in advance to make

the best possible use of such an organization’s most precious asset: its people. Human
resource planning is the process of matching available workers with open positions and
minimising the risk of labour shortages and over-and under-utilization.

Changes in the selected company’s HRM.

Digital transformation.

A corporation undergoes digital transformation when it integrates digital technology into

every facet of its operations and the value it offers to customers. Consequently, LOLC has
implications for how firms acquire new customers. Notable examples of digital
transformation also include widespread use of cloud computing, the introduction of AI to
service, and novel methods of CRM.

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Organizational Restructuring.

Though reorganizations and new management structures might be beneficial for firms, the
stress and uncertainly they cause among workers are often not worth the potential gains. As a
result, the LOLC’s culture may need to be correctly linked with the rest of the business,
leading to a loss of engagement and productivity among the workforce. Therefore, if executed
with care and consideration and with the support of all parties involved, a complete overhaul
of the organization as well as its processes may be the best way ahead.

Mergers and Acquisition.

Organizations merge and acquire one another for a variety of reasons, including the creation
of synergy between the two entities and the reduction of duplication of administrative and
other overhead expenditures. Companies with vastly diverse cultures often find that they need
to rethink their approaches to doing business in order to work together effectively. An
organization of tomorrow is one that can handle continual change by being nimble and
adaptable to the market environment, as well as one that has a deep understanding of the
interplay of the company, its employees, and its consumers.

Explaining the obstacles faced by HRM during organizational change.

Lack of effective communication led to misalignment.

LOLC Groups affected by the change will experience confusion and misalignment if they do
not get information that is clear, raises awareness, and is in line with company goals. As a
result , additional effort and resources are used by all parties involved in order to define
responsibilities, set appropriate expectations and gain consensus. Preferred senders are the
cornerstone of efficient communication during times of transition.

Lack of solutions support and change buy-in caused resistance.

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Those who can’t accept the new reality and have a healthy fear of the unknown are more
likely to resist it. They are content with the way things are and have no desire to make
changes. People and groups resist change because they don’t comprehend commercial
reasons. Creating change buy-in is a vital element in change management.

Insufficient change management resources.

There was a lack pf understanding about the need of change management at all organizational
levels. The difficulty in securing the necessary funds and materials is increased as a result.
Leaders and foreground managers reluctance to commit resources to a change management
programme is common.

Key factors affecting HRM decision making.

External factors.

Economic factors.

The term “economic factors” refers to the different elements such as the structure of the
economic system, the state of the economy as a whole, the policies on place, and the various
elements of the production process, such as human capital, that determine the evolution of
economic activity[ CITATION Lew16 \l 1033 ]. The population and labour, labour market
conditions, income growth and price inflation are all elements that affect HRM strategies.

Example: The primary economic indicators to pay attention to when evaluating LOLC are
interest rates, inflation, housing sales, and overall economic productivity and growth

Socio-cultural factor.

HR management is just one area that can be profoundly influenced by socio-cultural

influences[ CITATION Bie16 \l 1033 ]. From human capital management perspective,
attitudes, beliefs, desires, aspirations, and habits of the society at a certain point of time are
significant. Cultural influences, such as buying behaviours and necessities, affect how people

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see and use banking options. People turn to LOLC banks for advice and assistance for loans
related to business, home and academic.

Example: selecting a winner the HR department is responsible for determining whether or

not an applicant’s worldview and cultural values are compatible with those of the company
and its community.

Technological factor.

Technological advances may benefit and hurt HRM. Companies may have to retrain
personnel to stay with technological progress[ CITATION Trk17 \l 1033 ]. If a firm finds its
employees skills insufficient, they may be retrained or laid off. Even modest improvements
like a new text editor or digital copier, may require HR training. The banking sector needs an
internet connection for their transactions. They use advanced technology to have a secured
system to avoid online theft or cons. They need to have a fast internet speed to offer a
seamless service to the customer.

Example: Samsung’s HR staff would be wise to take technological expertise into account
throughout the hiring process. Technology should be used extensively in all HR tasks to
ensure precision and efficiency.

Internal factors

Organizational culture.

What makes up an organizations culture are the people who work there and the values,
beliefs, and practices they upload. It represents the character of the company. Human
resource managers need to be open-minded and receptive to the company’s established
norms. HR decisions can be influenced by the company’s culture. Executive or organizational
practice’s internal dynamics affect the method through which choices are made.

Example: There may be distinctive different culture of communication with executives, as

well as a distinctively distinctive style of leadership in Samsung management, that

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distinguishes one organization from another. This distinction influences the method of
deciding what to do of the HR executive.

Organizations strategy.

HR management problems aren’t something that pops out of nowhere; they stem from the
strategy of the business. Strategy is something that is either expressly or implicitly
established in any organization. A company’s strategy is the way in which it responds to
external conditions by allocating its most important resources and focusing its efforts on
achieving its goals.

Example: LOLC is divided up into various divisions. Each division operates under its own
set of guidelines for getting things done. The HR division must factor in the input of other
department in order to make effective choices when the time comes.

Organizations financial position.

While the above aspects will always influence HR practices, LOLC’s financial health has a
more substantial monetary impact[ CITATION Joh15 \l 1033 ]. Cash flow and economic
security affect a company’s ability to pay salaries, retrain HR, etc. Profitability increases
bonuses, whereas low profitability may result in no bonus at all. Many businesses treat
human capital as their biggest expense, although claiming its their most important resource.

Example: Samsung’s current market cap is $315.78B. The entire division is functioning well
from a financial standpoint. HR tasks have a direct impact on the bottom line, such as hiring
and firing, salary and bonus distribution. The HR department’s choices are affected by the
budget.

Figure 12 Organizational financial position.

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Strengths and weaknesses of HRM practices for sustainable organizational

performance.

Recruitment and retention.

Human resources managers understand the need to balance the need to bring in new
employees with keeping the ones they already have. The recruiting process should take into
account the fact that workers who are satisfied with their work are likely to remain in their
positions. To keep employees’ content in their jobs, HR and recruiters should look for
applicants that are a good fit culturally, have a seamless onboarding experience, and
understand what they’re supposed to be doing. And once the right talent has been recruited, a
retention strategy that includes competitive pay and benefits, flexible scheduling, and the
chance to work from home.

Strengths Weaknesses

High retention rates. Low retention rates.

Employee productivity. Employee morale.
Key performance indicators. Lack of effective management.
Pay grades. Business presence.
Business growth. Wellbeing.

Table 10 Strengths and weaknesses of HRM Practices.

Training & Development.

Training and development are systematic, continuing initiatives inside firms to increase
employee performance and self-fulfilment. Modern workplace activities range from teaching
specific job competencies to long-term career development. Training and development
became a formal company functions, a strategic aspect, and a recognised profession with
different ideas and approaches. Companies of all sizes are embracing “lifelong learning” and
other training and development methods to promote employee growth and acquire a
competent workforce.

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Strengths Weaknesses

Staff can improve their abilities via The organization spends time and money on
Employee development and Training training and skill development. Because of
Program. Every finance industry evolves; the higher price tag, many businesses may
thus, staff must be educated and up to date. have to forego advanced training in favour
As workers learn new technologies, they of in-house instruction. Another training
need less supervision. A well-trained program reduces employee office time,
individual knows their functions and makes reducing productivity. After their shifts,
fewer mistakes. Employees with refined employees are sometimes required to
skills and knowledge are likely to get engage in skill development. They are less
promoted. Superior authority promotes inclined to spend this extra time with their
skilled, knowledgeable staff as a vital asset family. This might stress out and demotivate
to the company’s progress. Training and employees. Some department programmes
development have its benefit. are overly theoretical.
Table 11 Strengths & Weaknesses of T & D.

Performance Management.
Managers can use performance management tools to track and evaluate staff members
activities. The objective of performance management in LOLC is to develop a culture where
every worker feels appreciated and empowered to provide 110% toward company objectives
[ CITATION Sch18 \l 1033 ].

Strengths Weaknesses

Performance reviews should take managers Performance management pushes managers

around an hour per employee. I’ve known to discuss employee performance. Managers
supervisors with 100+ staff whose have daily tasks. This might lead to missing
performance reviews took weeks. out on coaching and feedback opportunities
Depending on the number of people being with employees. Everyone is growing. The
evaluated, writing the department’s company must train them to take on greater
performance appraisals can take hours, as roles. By gaining insight into employee’s
can going to meet with staff to evaluate the professional goals, locating training and
written material. The appraisal process growth opportunities, and facilitating
should be one of motivation, positive succession planning organizations may

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reinforcement, and celebration of a year’s improve performance management.

accomplishments.

Table 12 Strengths & weaknesses of performance management.

Key internal and external factors that affect the selected organizational HRM decisions to
improve the organizational performance illustrated well

Section B.

HRM is the process of recruiting, selecting, inducting employees, providing orientation,

imparting training and development, appraising the performance of employees, deciding
compensation and providing benefits, motivating employees, maintaining proper relations
with employees, and their trade unions, ensuring employees safety, welfare and healthy
measure in compliance with labour laws of the land and finally following the
Orders/Judgements of the concern High Court and Supreme Court, if any.

Figure 13 HRM Process.

HRM deals with the management functions like planning, organizing, directing and
controlling.

 It deals with procurement of human resource, training & development and

maintenance of HR.

 It helps to achieve individual, organizational and social objectives.

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Human Resource Management is a multidisciplinary subject.

 It includes the study of management, psychology, communication, economics and

sociology.

 It also deals with building team spirit and team work.

 It is a continuous process.

HR Functions.

Core HR functions include job analysis and design, hiring and selection, training and
development, compensation and benefits, succession planning, employee engagement and
more. Let’s look at each of these functions in detail.

Job analysis and Design.

This investigates and identifies the duties, tasks, responsibilities, skills, and knowledge, and
essential qualifications for a certain job profile. Job design focuses on integrating the
requirements and needs of an employee with the objectives of the organization.

Roles and Responsibilities.

Job analysis is the process of gathering and analysing information about the content and the
human requirements of jobs, as well as, the context in which jobs are performed. This process
is used to determine placement of jobs. Under NU Values the decision-making in this area is
shared by units and Human Resources.

Recruitment and Selection.

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They are the two different stages in the hiring process. Recruitment involves getting the job
description in front of as many potential candidates as possible. Selection is about narrowing
down the pool of applicants until you’re left with the strongest candidate.

Roles and Responsibilities.

It sources the candidates with the abilities and attitude, which are required for achieving the
objectives of an organization. And it identifies the jobs vacancy, selecting the right
candidates, analysing the job requirements and screening.

Employee engagement.

This is a HR concept that describes the level of enthusiasm and dedication a worker feels
toward their job. Engaged employees care about their work and about the performance of the
company, and feel that their efforts make a difference.

Roles and Responsibilities.

 Developing strong, trusting relationships with each team member.

 Recognizing and celebrating strong individual and team performance.
 Working with employees to create motivating goals.
 Identifying promising individuals who are ready for new opportunities and roles.

Succession Planning.

This is the process of identifying the critical positions within your organization and
developing action plans for individuals to assume those positions.

Roles and Responsibilities.

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o Identifying critical positions and highlighting potential vacancies.

o Selecting key competencies and skills necessary for business continuity.
o Focusing development of individuals to meet future business needs.

Compensation and Benefits.

This is a sub-discipline of human resources, focused on employee compensation benefits

policy-making. While compensation and benefits are tangible, there are intangible rewards
such as recognition, work-life and development. Combined, these are referred to as total
rewards.

Roles and Responsibilities.

 Defining a fair, equitable and competitive total compensation and benefits package.
 Developing a consistent compensation philosophy.
 Ensuring that compensation practices are in compliance with current legislation.

Objectives of the HR Functions.

HRM mainly denotes managing employees and recognizing their needs to maintain an
optimistic work culture. Some of the objectives of HRM include accomplishing
organizational goals, work culture, training and development, employee motivation,
empowering employees, and team coordination.

Define an organizational structure that drives productivity.

Hiring the right talent for the task is only a small part of the challenge. Once an organization
has captured the talent it then needs organizational structures and practices in place to nurture
staff skills and maximize the return on investment in human capital. The kind of structures
required for a highly technical manufacturing unit will necessarily be very different from the

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structure of an academic institution, or a hospital, or retail consumer-facing unit. Its thus the
job of HR to recognize the optimal structures that need to be in place for a wide range of
work environments.

Developing effective coordination and communication within the organization.

The 16th – century poet John Donne is possibly best known today for the phrase “No Man is
an Island”. It alludes to the idea that people do pretty badly when isolated from others. They
need to be part of a community in order to survive. We are, after all, the most social of
animals.

Thus, in isolation from fellow staff, it is fairly obvious that many people would people would
struggle. It, therefore, falls to HR to ensure that staff hired for their skills to aid in achieving
wider corporate objectives, must be given a framework that helps them succeed. HR must
faster a hierarchy that achieves the best communication within and between the departments
that make up any business.

Dedicate time to finding the right staff and developing their skills base.

We definitely live in some of the most fluid and dynamic times for employers and employees.
People increasingly expect to acquire new skills to remain relevant in the employment
market, whilst employers are constantly looking to staff as a key part of the business’s
competitive advantage.

HR then, must not only find the right staff to mesh with the strategic course the business is
taking, but then ensure that these employees are given the skills to remain valued and
valuable to companies seeking to compete in an ever-more competitive landscape.

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Employees find themselves operating in knowledge economies where lifelong learning has
become the norm and HR, to be effective, must be matching, if not exceeding, their
competitive counterparts.

Internal & External Factors Affecting HR Functions.

HRM is a subsystem of an organization as a system. However, when a subsystem is taken for

analysis, it is treated as a system because it has the features of a system. A system works in
the context of its environment. Environment of a system consists of all those factors which lie
outside the system but affects working of the system.

In the case of HRM, there are two categories of environmental factors-external and internal.
External factors are all those factors which lie outside an organization and affect its working,
including HRM. Internal factors are all those factors which lie within the organization and
affect HRM.

Classification of various environmental factors affecting HRM into two categories is

important because an organization cannot control external factors but it can control internal
factors.

Workforce Market Condition:

This shows demand and supply of workforce. It influences HRM practices relating to
recruitment and selection. Exchanges between employers and potential employees occur in
the workforce market. Since workforce market includes all types of workforce, only relevant
workforce market is taken into account for searching potential employees.

Three factors usually define the relevant workforce market –

 Occupation – qualifications and skills required.
 Geography – potential employees are willing to relocate or commute.
 Other employers that compete with similar products and services.

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These three factors define the part of the workforce that is of interest to a particular employer.
In fact, HR professionals consider workforce market in terms of all three factors.

National income.

This particularly measured in terms of per capita income, affects wage/salary structure at the
macro level. Each employer has to align wage/salary structure with that operating at the
macro level. This is the reason for difference between wage/salary structure of economically
advanced countries and developing countries.

Economic factors.

Economic factors are those factors which give shape and form to the development of
economic activities and include factors like nature of economic system, general economic
conditions, various economic policies and various factors of production including HR.

Out of these, factors that influence human resource management practices are population and
workforce, workforce market conditions, national income, and inflationary pressure.

Internal Factors.

Internal factors (also known as organizational factors) lie within the organization and affect
HRM practices. In an organization, HRM works within the overall perspective provided by
the organization.

Overall perspective for the functioning of HRM is provided by numerous organizational

factors, the more relevant being the following – organization’s strategy, organizational
culture, trade unions, and organizations financial position.

Besides the above organizational factors, organizations technology also affects human
resource management practices by defining nature of jobs. Now let us see how the above
internal factors affect HRM practices.

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Organization’s strategy.

HRM issues are not independent issues but these are derived; these are derived from
organization’s strategy. every organization sets its strategy either explicitly or implicitly.
Strategy is a way in which an organization, reacting to its environment, deploys its principle
resources and marshals its main efforts in pursuit of its purpose.

HR is one of the principal resources of any organization. Therefore, it must be deployed and
utilized keeping in view the requirements of the strategy. Its implication is that HR strategy
should be chalked out in the light of organization strategy.
Organizational culture.

This is very important factor which affects organizational processes and practices including
HRM practices. To understand the differences in human resource management practices in
different types of organizational culture and low-performing culture.

Organizational culture is another factor that shapes human resource management practices.
Organizational culture is the set of assumptions, beliefs, values, and norms that are shared by
an organization’s members. There are two types of elements which define the culture of an
organization – abstract elements are internally – oriented and include values, beliefs,
attitudes, and feelings.

Trade unions.

Though a trade union in an organization is a separate entity, it has been treated as an internal
factor because organizations employees (particular operatives) are members of the trade
union. Trade union affects recruitment of employees, their development, compensation,
maintenance, and industrial relations.

Generally, agreement between management and labour is reached through collective

bargaining. Outcome of the collective bargaining depends on the relative bargaining position
of the management and labour. If trade union is in relatively better bargaining goes in its
favour.

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Factors that affect the decision-making and organizations development.

 Economic Factors – many economic factors, such as unemployment, exchange rates,

inflation, wages and supply and demand, typically impact how businesses make a
profit and increase their efficiency. Companies that study these factors can usually
predict consumer spending and plan their marketing efforts to improve performance.

 Work force – this affect high-growth firms by influencing the supply of skilled
workers to new or expanding firms. Legal and institutional hurdles preventing firms
from laying off workers who underperform discourage potential high-growth firms
from expanding.

 National income – this income depicts the value of goods and services which are
produced by an economy. This gives effect to the net result of all the economic
activities performed in the country.

 Organizational strategy – a company’s strategy can cause the structure to change or

shift. As a business creates specific goals, marketing strategies and market analysis, it
may need to change its structure. For example, a company whose goal is to open a
new location may need to adjust its teams and department sizes.

 Organizational culture – the culture creates the environment in the organization and
influences the nature of the long-term plans that move the organization toward its
vision. Culture also dictates the policies and processes that enable the organization to
live its mission every day.

 Trade unions – they have the power to go on strikes and can pressure employers to
increase wages and fulfil their demands. Also, it can force employers to avoid
redundancies. However, if the labour market flexibility is improved, trade union
power may be impacted.

History of LOLC.

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Decades ago, a company with a very good eye for the future and a broader vision, opened its
doors to provide what was then Sri Lanka’s pioneer portfolio of leasing solutions to an eager
market. This company was Lanka ORIX Leasing Company (LOLC).

From the onset, LOLC’s prowess within the financial services sphere helped the company
identify a lacuna in the industry – the lack of financial solutions reaching grassroot level
entrepreneurs and individuals. As its business unfolded and evolved, LOLC by means of a
carefully tailored portfolio of products and services, financially empowered the masses and
the SME sector to such an extent that they reached whole new levels of financial stability and
well-being.

The HR Functions of LOLC.

Job analysis and design.

Obtaining all the information about jobs and determining what the tasks, duties and
responsibilities of them, is done by Head of Department. For example Marketing, Finance
and IT.

HR Planning.

Further procedure of HR Planning including forecasting demand for employees is done by

the HR Department of LOLC Group. The company hardly faces surplus of employees
because of their strict procedures of hiring.

Performance Evaluation.

Branch manager maintains spreadsheets including that employee – performance related data.
At the end of the month Managers appraise performance by the results; So, LOLC mainly use
Results Appraisal Method.

Training and Development.

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Technical Skills Development Trainings are also held by LOLC. Induction related training is
their primary training program.

Job Description in LOLC.

Managing client bank accounts, including opening and closing accounts, and overseeing
transactions. Processing deposits, payments, and withdrawals. Authorizing and evaluating
overdrafts and loans. Handling other transactions, such as writing cashier checks or money
orders, when necessary.

Performance management.

This is an essential aspect of any organization, as it helps to ensure that employees are
working to their full potential and that the organization is meeting its goals.

Employee relationships.

Even more critically, a disengaged employee will likely lead to the business losing
customers. According to a quantum workplace study, LOLC lose 20% of their business to
competitors because of poor customer service.

Importance of HRM.

HRM is a modern approach of maintaining people at workplace which focuses on acquisition,

development, utilization and maintenance of HR. HRM is development oriented. It is concern
of managers of all level and provides space for employee involvement, performance and
growth. Several companies nowadays prefer HRM to personnel management because HRM
plays vital role in maintaining quality team of working expects. Besides, it has several
importance which are discussed below.

To maintain quality of work life.

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Quality of work life is the perception of employees regarding the relationship between
working condition with management. Simply, it is the relationship between employees and
total work environment. Quality of work life is concerned with the employee’s perception of
physical as well as psychological wellbeing at workplace and it can be obtained by
maintaining work autonomy, work freedom, job recognition, belongingness, rewards, etc.

To increase productivity and profit.

HRM ensures right quality and quantity of personnel in workplace, apart from which, it
creates opportunities to facilitate and motivate individual and group of employees to grow
and advance their career. Motivated employees work hard to meet their personal career goal
which directly influences productivity of organization. Minimising cost and maximizing
profit is the essence of productivity.

To produce employees who are easily adaptable to change.

HRM performs various functions, among which training and development of employees is
one of the vital ones. Training and development programs keep employees updated with skills
necessary to adjust with alteration of organization’s environment, structure and technology.

Few HRM Practices of the selected organization has been explained well

Employee Relations.

This refers to an organizations effort to create and maintain a positive relationship with its
employees. By maintaining positive, constructive employee relations, organizations hope to
keep employees loyal and more engaged in their work.

Typically, an organizations human resources department manages employee relations efforts;

however, some organizations may have a dedicated employee relations manager role.
Typically responsibilities of an employee relations manager include acting as a liaison or
intermediary between employees and managers, and either creating or advising on the
creation of policies around employee issues like fair compensation, useful benefits, proper

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work-life balance, reasonable working hours, and others. When it comes to employee
relations, an HR department has two primary functions. First, HR helps prevent and resolve
problems or disputes between employees and management.

Organizational Practices & Benefits of Employee Relations.

To maintain positive employee relations, an organization must first view employees as

stakeholders and contributors in the company rather than simply as paid laborers. This
perspective encourages those in management and executive roles to seek employee feedback,
to value their input more highly, and to consider the employee feedback, to value their input
more highly, and to consider the employee experience when making decisions that affect the
entire company.
Good relationships between employer and employee don’t just happen. They are the result of
a strategy and activities that employee relations managers design to improve communication
between employees and management. Employee relations managers create ways to boost
employees’ attitudes. Organizational practices incorporate labour and employment laws,
resourcefulness and human resource expertise in developing practices that improve working
relationships

Employee Engagement.

Employee engagement is a HR concept that describes the level of enthusiasm and dedication
a worker feels toward their job. Engaged employees care about their work and about the
performance of the company, and feel that their efforts makes a difference. An engaged
employee is in it for more than a pay check and may consider their well-being linked to their
performance, and thus instrumental to their company’s success.

Organizational Practices & Benefits of Employee Engagement.

Engaging employees is critical for retaining top talent and is an important piece of the
employee satisfaction puzzle, as disengaged employees are more likely to leave their jobs.
According to Forbes, employees engaged in their work are more likely to be motivated and
remain committed to their employer.

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Meeting regularly with the employees ensures that they are providing clarity around changes
or new initiatives and support their concerns to help them influence their own path to
engagement and success. Organizational practices empower employees in this way directly
contributes to engagement.

Application of psychological contracts.

Developments are outlined that are leading to changes in employment relations and to the
need for a conceptual framework that has contemporary relevance. It is proposed that the
psychological contract provides a useful framework , and different studies that have adopted
the psychological contract to study aspects of employment relations are outlined. Building on
these, it is argued that the psychological contract needs extending to give greater weight to
context and to what is described as the state of the psychological contract, incorporating
issues of fairness and trust that lie at the heart of employment relations. Based on this model,
an agenda for future research is presented.

This conceptual review focuses on the research evidence showing interrelationships between
organizational context factors, job factors, individual employee psychological and
motivational factors, and competitive advantage. The proposed model integrates framework
that have previously run independently in the HR and engagement literatures.

The authors conclude that HRM practitioners need to move beyond the routine administration
of annual engagement surveys and need to embed engagement in HRM policies and practices
such personnel selection, socialization and performance management. The authors provide
useful new insights for researches and management professionals wishing to embed
engagement within the fabric of HRM policies and practices and employee behaviour, and
organizational outcomes.

Legal and Regulatory frameworks in HRM.

In the process of HRM, the HR managers need to adhere to different laws and standards
which are being developed for the welfare of employees and protecting their interests at the
workplace. Similarly, a range of employee protection laws are followed in the HR
management curriculum of M & S and the different laws are discussed below.

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Relations Amendment Act 2000 – This is the act developed for strengthening relations with
the employees and not practicing any unlawful discrimination on the basis of race, nationality
and colour and this law is the improvisation of the Race Relations Act 1976.

HR Planning – the aspect of HR planning can be defined as the management process

designed to match up with the strategic requirements of the business with sufficient skills and
talents. The planning is the strategic approach to the management to figure out the present
and future requirements of human resource in the business based on the requirement of
functions and activities of the company.[ CITATION Ulr16 \l 1033 ]

Analysis of reasons for planning, the planning process is very essential for the business
managers to follow an organized approach for meeting the HR requirement of the business
on the continual basis. By the way of planning the present organization would also be able to
reduce its labour management cost as; higher employee turnover is affecting the financial
return in the adverse manner and wastage of time due to regular interviews and research.

Based on the requirement of the company the required profile can be selected. In the planning
process the external factors are also to be accounted are the details of the labour market
regarding the supply and demand of labour in the particular sector, government policies and
following new technologies in the R & S process.

Application of theory on employee engagement and relations explained but did not
related to the organizational practices

Strengths and Weaknesses of HRM LOLC.

Strengths Weaknesses
We’re living in the world of technological
advancement. Many HR tasks used to be Power can backfire.
highly time-consuming , but the LOLC
Group technological tools have reduced It won’t be wrong to say that HR
their processing timing to great extent. management has the power to sail the entire
However, the usage of technology in HR organization. It’s because the HR

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operations would help the company increase department recruits and hires the type of
the efficiency of operations and save a lot of employees that the company needs. They
time. also have the power to terminate the
contract of any employee based on any valid
reasons. Their focus is on satisfying the few
rather than keeping in mind the goodness of
the entire organization.

Cooperation with HR. Bad reputation.

The other problem employees face is the If the company has a bad reputation in the
non-cooperative attitude of employees. market because of any reason, then HR
Usually, the HR department remains in with management would have to work extra hard
employees, and they should develop a better to bring out a good image by hiring
relationship with them. If they have got a qualified employees and improving
cooperative attitude, then it would make productivity.
employees feel happy and satisfied.
Resultantly, positive word-of- mouth
marketing would send a good image of the
company.

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Compensation Package. Not motivated employees.

It doesn’t how good the workplace Ideally speaking, every company wants
environment is and the benefits you’re efficient and motivated employees, but this
offering, the focus of employees is always is not the case in reality. Some of the
on the salary at the end of the month. If the employees are highly demotivated and
HR management offers good salaries to its disappointed, and changing their attitude is
employees along with other compensations the biggest challenge for the company. It’s
and benefits, then their job satisfaction and because such disappointed employees
work performance would improve to a great would spread their negative energy and
extent. impact the overall workplace environment.

Table 13 Strengths & Weaknesses of HRM.

Recommendation.

Internally, despite all the involvement of technology, business managers cannot negate the
significance of planned, well-trained and well-managed HR in the data centre business
infrastructure. On the other side, the contextual factors also involve both HR and the
technology equally. After evaluating the external and internal factors that could be affecting
your HRM strategy, these are the recommendations that can play an important role in
signifying the capability building blocks and maintaining a strong HR team while having a
technology-based business:

I. Align business strategies with external and internal factors.

For example, consider how the current strategy aligns with economic changes(i.e., external
factors) and the expectation of a high return on investment in the case of training and
development costs(i.e., internal factors)

II. Ensure your talent strategy also aligns with the company’s overall plan.

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The main and essential key to managing a provocative workforce is to streamline the
strategies of the talent management process alongside the overall company strategy.
Ultimately, the aptitude of training, developing and then retaining the employees depends
upon the success of the business operations.

III. Get ahead of your competitors by being proactive.

In my experience, leaders who use the best talent management practices find themselves
more equipped and can make effective use of available opportunities to help operate their
businesses. But this is only obtainable when management does more than just adopt new
trends; they must quickly anticipate and adapt to new and emerging opportunities regarding
talent management before the rest of the market.

In this manner, executing a proactive approach, rather than a reactive approach, indicates the
implications of the strategic talent management in the business process to support the
capability development in the organization.

Conclusion.

In conclusion, due many challenges that are facing HR departments, there is need for
organizations to adopt correct and workable policies that will not only ensure they alleviate
these challenges, but also develop mechanisms of dealing with such challenges in case they
occur in the future.
Recommendations were provided to improve the performance of the selected organizations
by analysing the strength and weakness of the HRM practices

Theoretical Review about Changing Nature of HRM Practices. (P2)

Armstrong showed that the assumption of HR is that people are key source of organization
and the performance of organizations depends especially from people. And that the wide
range of appropriate policies and HR process is developed and applied effectively, HR will
substantially influenced in the firm performance. Using human resources practices
effectively, LOLC can survive from traditional practices not effective nor efficient which
disturbs the firm to achieve the objective. The practices of HRM with the focus on employees

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in firm strategy implementation, influences positively the performance of LOLC, in the same
form as the small enterprises and in the big enterprises.

From various empirical studies that have been made has been showed that the application of
SME traditional practices of HRM are useful for all the sizes of enterprises. Selection and
formal recruiting, offering trainings for employees, and using a system of formal evaluation
of performance, are evidenced that have a positive influence in the enterprise performance.
According to Kotey an d Folker, the practices of HRM in SME consists of a mixture of non-
structured training, compensation, recruiting and selection of employees. This assumption is
supported even more from the other empirical researches of the authors.

Cardon and Stevens claimed that exactly these are the variables that contribute more in HRM
success in small enterprises. The usage of these practices of HRM in SME has improved their
performance( Chandler & McEvoy, 2017). Also, the same opinion is shared from these
authors(Huselid, & Osman et al, 2016) which came to conclusion that HRM practices or the
relationship in between the staff, training, development and compensation are related directly
with the finance firm. The other authors such as Tocher and Rutherford showed that the
formal practices of HRM are positively related with the finance firm. Literatures on strategic
HRM even indicate that HRM practices and systems contribute to the creation of a sustained
competitive advantage for the finance firm. As a result, it is important that a finance firm
adopt HRM practices that make use of its employees.

Changing nature of LOLC Finance.

Throughout the financing activities and investments, LOLC Finance have an important role
to play. They can finance restoration and protection of nature via a number of financial
vehicles, and help close the global biodiversity funding gap by developing innovative deals
such as debt for nature swaps. But money also has a darker side. In 2019, the world’s largest
banks invested more than USD 2.6 trillion-or 5% of global GDP- in sectors which
governments and scientists agree are the primary drivers of biodiversity destruction.

Workforce diversity in LOLC.

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This eliminates conscious and unconscious bias against underrepresented groups. This allows
LOLC to succeed and contribute at equal rates to other demographics. One way to improve
the workforce diversity in LOLC is by actively seeking out and promoting diverse talent
through mentorship programs, targeted recruitment strategies and by fostering LOLC culture
that encourages open dialogue about diversity and inclusion.

Changes in the nature of jobs and work.

Technology is changing the skills that employers seek. Workers need to be good at complex
problem-solving, teamwork and adaptability. Technology is changing how people work and
the terms on which they work. To understand the future work in LOLC, they believe it is
essential to explore three major factors that will impact on the future work in LOLC:

• Globalization and Glocalization.

• Technological progress.
• IT Platforms.

Engagement of employees.

The main key role in LOLC is to handle the company’s budget and financials. Low
engagement and potential absenteeism have a significant impact on productivity, recruitment,
training and payroll costs. They need to be vigilant and ensure employees are aligned to the
business goals.

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