Human Resource Management (BEBA55A) UNIT-1

REF NO: BEBA55A-U1-01

HUMAN RESOURCE MANAGEMENT (BEBA55A)

UNIT – I
INTRODUCTION

Modern organizational setting is characterized by constant changing relation to environmental

factors and human resources. As regard to the environmental factors, we find changes in the
operating organizational structure, the network of the working procedures, customs on norms
and the economic, political and the social patterns in which organizations exist. Moreover,
there is a constant change in human resources, the individuals are employed daily with new
creativity, ideas and experiences, while the existing workforce is also continuously changing
their ideas, attitudes and even values. These two dimensions reveal the following trends.

o Increased complexity of the organizations, employment and a clear hierarchy of

owners, managers and workers.
o Increased the number of employers, self-employed and enlarged size of workforce.
o Enhance the need of training in view of increased requirements of specialized skills.
o Public interventions and legal complications in employee and employer relationships.
o Enhanced training and development of managers and professionalization of
management education.
o Possibility of employment explosion in view of ever increasing size of workforce.
o Rising the formal level of education of rank and file employees who becoming
increasingly critical of management malpractice and errors.
o Rank and file employees rapidly growing demands in different employment situations.
o Recognizing of close relationships between profits and earnings and ability to manage
human resources.
Indeed these trends manifest themselves in problem areas as identified by the managers in
organizational settings. Although the change may provide solutions to some problems, it may
create several new ones. There is an urgent need to understand these problems, anticipate them
and to find solution to them. The responsibility to find out the solutions to these problems lies
with every manager who has prepared to deal with different change effectively through
educational and developmental programs. Obviously, every manager is responsible for
management of human resources of course with the advice and help of personnel department.
Management of human resources is the essence of being manager who has to get things done
through the people without whom he can be a technician but not a manager. Thus, every

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manager has to develop and maintain his competency in managing human resources, which
have assumed utmost significance in modern organizations.

What is Human Resource Management?

HRM is the study of activities regarding people working in an organization. It is a managerial

function that tries to match an organization‘s needs to the skills and abilities of its employees.

Definitions of HRM

Human resources management (HRM) is a management function concerned with hiring,

motivating and maintaining people in an organization. It focuses on people in organizations.
Human resource management is designing management systems to ensure that human talent is
used effectively and efficiently to accomplish organizational goals.

HRM is the personnel function which is concerned with procurement, development,

compensation, integration and maintenance of the personnel of an organization for the purpose
of contributing towards the accomplishments of the organization‘s objectives. Therefore,
personnel management is the planning, organizing, directing, and controlling of the
performance of those operative functions(EdwardB. Philippo).

According to the Invancevich and Glueck, ―HRM is concerned with the most effective use of
people to achieve organizational and individual goals. It is the way of managing people at work,
so that they give their best to the organization‖.

According to Dessler (2008) the policies and practices involved in carrying out the ―people‖
or human resource aspects of a management position, including recruiting, screening, training,
rewarding, and appraising comprises of HRM.
Nature of HRM
HRM is a management function that helps manager‘s to recruit, select, train and develop
members for an organization. HRM is concerned with people‘s dimension in organizations.
The following constitute the core of HRM

1. HRM Involves the Application of Management Functions and Principles. The

functions and principles are applied to acquiring, developing, maintaining and
providing remuneration to employees in organization

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2. Decision Relating to Employees must be integrated. Decisions on different aspects

of employees must be consistent with other human resource (HR) decisions.
3. Decisions Made Influence the Effectiveness of an Organization. Effectiveness of an
organization will result in betterment of services to customers in the form of high
quality products supplied at reasonable costs
4. HRM Functions are not confined to Business Establishments Only but applicable
to non-business organizations such as education, health care, recreation and like. HRM
refers to a set of programmes, functions and activities designed and carried out in order
to maximize both employee as well as organizational effectiveness.

SIGNIFICANCE/IMPORTANCE/NEED OF HRM

HRM becomes significant for business organization due to the following reasons.

1. Objective: - HRM helps a company to achieve its objective from time to time by creating a
positive attitude among workers. Reducing wastage and making maximum use of resources
etc.

2. Facilitates professional growth: - Due to proper HR policies employees are trained well
and this takes them ready for future promotions. Their talent can be utilized not only in the
company in which they are currently working but also in other companies which the employees
may join in the future.

3. Better relations between union and management:-

Healthy HRM practices can help the organization to maintain co-ordinal relationship with the
unions. Union members start realizing that the company is also interested in the workers and
will not go against them therefore chances of going on strike are greatly reduced.

4. Helps an individual to work in a team/group:- Effective HR practices teach individuals

team work and adjustment. The individuals are now very comfortable while working in team
thus team work improves.

5. Identifies person for the future:-

Since employees are constantly trained, they are ready to meet the job requirements. The
company is also able to identify potential employees who can be promoted in the future for the
top level jobs. Thus one of the advantages of HRM is preparing people for the future.

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6. Allocating the jobs to the right person:-

If proper recruitment and selection methods are followed, the company will be able to select
the right people for the right job. When this happens the number of people leaving the job will
reduce as the will be satisfied with their job leading to decrease in labour turnover.

7. Improves the economy:-

Effective HR practices lead to higher profits and better performance by companies due to this
the company achieves a chance to enter into new business and start new ventured thus industrial
development increases and the economy improves.

SCOPE OF HRM

The major HRM activities include HR planning, job analysis, job design, employee hiring,
employee and executive remuneration, employee motivation, employee maintenance,
industrial relations and prospects of HRM.
The scope of Human Resources Management extends to:

o All the decisions, strategies, factors, principles, operations, practices, functions,

activities and methods related to the management of people as employees in any type
of organization.
o All the dimensions related to people in their employment relationships, and all the
dynamics that flow from it.

The scope of HRM is really vast. All major activities on the working life of a worker – from
the time of his or her entry into an organization until he or she leaves it comes under the purview
of HRM. American Society for Training and Development (ASTD) conducted fairly an
exhaustive study in this field and identified nine broad areas of activities of HRM.
o Human Resource Planning
o Design of the Organization and Job
o Selection and Staffing
o Training and Development
o Organizational Development
o Compensation and Benefits
o Employee Assistance
o Union/Labour Relations

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o Personnel Research and Information System

a) Human Resource Planning:

The objective of HR Planning is to ensure that the organization has the right types of persons
at the right time at the right place. It prepares human resources inventory with a view to assess
present and future needs, availability and possible shortages in human resource.
HR Planning forecast demand and supplies and identify sources of selection. HR Planning
develops strategies both long-term and short-term, to meet the man-power requirement.

b) Design of Organization and Job:

This is the task of laying down organization structure, authority, relationship and
responsibilities. This will also mean definition of work contents for each position in the
organization. This is done by ―job description‖. Another important step is ―Job specification.
Job specification identifies the attributes of persons who will be most suitable for each job
which is defined by job description.

c) Selection and Staffing:

This is the process of recruitment and selection of staff. This involves matching people and their
expectations with which the job specifications and career path available within the organization.

d) Training and Development:

This involves an organized attempt to find out training needs of the individuals to meet the
knowledge and skill which is needed not only to perform current job but also to fulfil the future
needs of the organization.

e) Organizational Development:
This is an important aspect whereby ―Synergetic effect‖ is generated in an organization i.e.
healthy interpersonal and inter-group relationship within the organization.

f) Compensation and Benefits:

This is the area of wages and salaries administration where wages and compensations are fixed
scientifically to meet fairness and equity criteria. In addition labour welfare measures are
involved which include benefits and services.

g) Employee Assistance:
Each employee is unique in character, personality, expectation and temperament. By and large
each one of them faces problems every day. Some are personal some are official. In their case

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he or she remains worried. Such worries must be removed to make him or her more productive
and happy.

h) Union-Labour Relations: Healthy Industrial and Labour relations are very important for
enhancing peace and productivity in an organization. This is one of the areas of HRM. i)
Personnel Research and Information System: Knowledge on behavioural science and industrial
psychology throws better insight into the workers expectations, aspirations and behaviour.
Advancement of technology of product and production methods have created working
environment which are much different from the past. Globalization of economy has increased
competition many fold. Science of ergonomics gives better ideas of doing a work more
conveniently by an employee. Thus, continuous research in HR areas is an unavoidable
requirement. It must also take special care for improving exchange of information through
effective communication systems on a continuous basis especially on moral and motivation.

Objectives of HRM

The primary objective of HRM is to ensure the availability of competent and willing workforce
to an organization.
The specific objectives include the following:
1. Human capital: assisting the organization in obtaining the right number and types of
employees to fulfil its strategic and operational goals.
2. Developing organizational climate: helping to create a climate in which employees are
encouraged to develop and utilize their skills to the fullest and to employ the skills and
abilities of the workforce efficiently.
3. Helping to maintain performance standards and increase productivity through effective
job design: providing adequate orientation, training and development; providing
performance related feedback; and ensuring effective two-way communication.
4. Helping to establish and maintain a harmonious employer/employee relationship.
5. Helping to create and maintain a safe and healthy work environment.
6. Developing programs to meet the economic, psychological, and social needs of the
employees and helping the organization to retain the productive employees.
7. Ensuring that the organization is in compliance with provincial/territorial and federal
laws affecting the workplace (such as human rights, employment equity, occupational
health and safety, employment standards, and labour relations legislation).
8. To help the organization to reach its goals.

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9. To provide organization with well-trained and well-motivated employees.

10. To increase the employees satisfaction and self-actualization.
11. To develop and maintain the quality of work life.
12. To communicate HR policies to all employees.
13. To help maintain ethical polices and behavior.

Management has to create conductive environment and provide necessary prerequisites for the
attainment of the personnel management objectives after formulating them. The primary
objectives of HRM are to ensure the availability of competent and willing workforce to an
organization. Apart from this, there are other objectives too. Specifically, HRM objectives are
of four fold: societal, organizational, functional and personal.

Societal Objectives

The Societal Objectives are socially and ethically responsible for the needs and challenges of
society. While doing so, they have to minimize the negative impact of such demands upon the
organization. The failure of the organizations to use their resources for society may limit human
resources decisions to laws that enforce reservation in hiring and laws that address
discrimination, safety or other such areas of societal concern.

Organizational Objectives

The Organizational Objectives recognizes the role of human resources management in bring
about organizational effectiveness. Human resource management is not an end itself; it is only
a mean to assist the organizations with primary objectives.

Functional Objectives
Functional Objectives try to maintain the departments’ contribution at a level appropriate to
the organizational needs. Human resources is to be adjusted to suit the organizational demands.
The department’s level of service must be tailored to fit the organization it serves.

Personal Objectives
Personal objectives assist employees in achieving their personal goals, at least in so far as these
goals enhance the individuals’ contribution to the organization. Personal objectives of
employees must be met if they are to be maintained, retained and motivated. Otherwise,
employees’ performance and satisfaction may decline giving rise to employee turnover.

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