MODULE – I- HUMAN RESOURCE MANAGEMENT

HUMAN RESOURE MANAGEMENT- INTRODUCTION

Human Resource management is the most happening function as of now. This is so because people
offer competitive advantage to a firm and managing people is the domain of HRM. An organization
enjoys competitive advantage when it is the only one which can offer a product at a price and at quality
while its competitors cannot do so.
Fast changes are taking placein the business environment. An organization must have the ability to
absorb these changes at a fast rate than in the past, not simply to prove its competency alone but to
justify its existence in the dynamic business world as well. All organizations, whether large or small
must ensure themselves that they have the competent people capable of accepting this challenge.
Human resource management is a relatively modern concept, which involves arrange of ideas and
practices in managing people. Human resource is the most valuable resource in any organization
because it can function only through people.
Human Resource Management has come to be recognized as an inherent part of management, which is
concerned with the human resources of an organization. Its objective is the maintenance of better
human relations in the organization by the development, application and evaluation of policies,
procedures and programs relating to human resources to optimize their contribution towards the
realization of organizational objectives.

In other words, HRM is concerned with getting better results with the collaboration of people. It is an
integral but distinctive part of management, concerned with people at work and their relationships
within the enterprise. HRM helps in attaining maximum individual development, desirable working
relationship between employees and employers, employees and employees, and effective modeling of
human resources as contrasted with physical resources. It is the recruitment, selection, development,
utilization, compensation and motivation of human resources by the organization.

CONCEPT OF HUMAN RESOURCE MANAGEMENT

What exactly is human resource management? Many people find HRM to be an unclear and strange
concept. ‘This is not simply because of having variety of meanings to this term. This confusion is
mainly due to the different interpretations found in articles and books about human resource
management.
HRM is the philosophy of people management based on the belief that human resources are extremely
important for sustained business success. An organization acquires competitive advantage by using its
people effectively and utilizing their expertise to meet clearly defined objectives. HRM is aimed at
recruiting capable, flexible and committed people. Managing and rewarding their performance and
developing key competencies.
Meaning and Definition
Human Resource Management is the process of recruitment, selection of employee, providing proper
orientation and induction, providing proper training and the developing skills, assessment of employee
(performance of appraisal), providing proper compensation and benefits, motivating,
maintaining proper relations with labor and with trade unions, maintaining employee’s safety, welfare
and health by complying with labor laws of concern state or country.
Many great scholars had defined human resource management in different ways and with different
words, but the core meaning of the human resource management deals with how to manage people or
employees in the organization.
Edwin Flippo defines- HRM as “planning, organizing, directing, controlling of procurement,
development, compensation, integration, maintenance and separation of human resources to the end
that individual, organizational and social objectives are achieved.”
The National Institute of Personal Management (NIPM) of India has defined human resources –
personal management as “that part of management which is concerned with people at work and with
their relationship within an enterprise. Its aim is to bring together and develop into an effective
organization of the men and women who make up enterprise and having regard for the well – being of
the individuals and of working groups, to enable them to make their best contribution to its success”.

Scope of Human Resource Management

1. Personnel Aspect
Human Resource Planning – It is the process by which the organization identifies the number
of jobs vacant.

Job Analysis and Job Design – Job analysis is the systematic process for gathering,
documenting, and analyzing data about the work required for a job. Job analysis is the procedure
for identifying those duties or behavior that defines a job.

Recruitment and Selection – Recruitment is the process of preparing advertisements on the basis
of information collected from job analysis and publishing it in newspaper. Selection is the
process of choosing the best candidate among the candidates applied for the job.

Orientation and Induction – Making the selected candidate informed about the organization’s
background, culture, values, and work ethics.

Training and Development – Training is provided to both new and existing employees to
improve their performance.

Performance Appraisal – Performance check is done of every employee by Human Resource

Management. Promotions, transfers, incentives, and salary increments are decided on the basis
of employee performance appraisal.

Compensation Planning and Remuneration – It is the job of Human Resource Management to

plan compensation and remunerate.

Motivation – Human Resource Management tries to keep employees motivated so that

employees put their maximum efforts in work.
2. Welfare Aspect – Human Resource Management have to follow certain health and safety
regulations for the benefit of employees. It deals with working conditions, and amenities like -
canteens, crèches, rest and lunch rooms, housing, transport, medical assistance, education, health
and safety, recreation facilities, etc.

3. Industrial Relation Aspect – HRM works to maintain co-ordinal relation with the union members
to avoid strikes or lockouts to ensure smooth functioning of the organisation. It also covers - joint
consultation, collective bargaining, grievance and disciplinary procedures, and dispute settlement.

IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

Human Resource Management is related with effective utilization of human resources. The
importance of HRM can be discussed as:
1. Importance concerned with individual organization

Human Resource Management can help an organization to achieve to its objective more
efficiently and effectively in the followingways:
(a) Procurement of required talents through recruitment, selection, placement, inducting,
training, compensation and promotion policies.
(b) Secures co-operation of all employee of the organization for achieving goals.
(c) Proper utilization of human resources for the success of the enterprise.
(d) Ensure a future team of efficient ancompetent workers required for the organization.
2. Professional Importance
Professional competency among employees can be achieved through the following ways.
(a) Human resource management provides maximum opportunities to employees for their
personnel development.
(b) Providing healthy relationship among employees
(c) Proper allocation of work among employees.
(d) Providing training facilities for the individual development of employees.
3. Social Importance
HRM is important in social perspective also. It includes the following aspects:
(a) Human resource management enhances the dignity of labour.
(b) Provides suitable job to suitable person and it will help to satisfy the psychological and
social satisfaction of employees.
(c) Helps to provide reasonable compensation to workers, which leads them to have a good
standard of living.
(d) Helps to maintain a balance between jobs and job seekers in terms of numbers,
qualification, aptitude etc.
(e) Takes health and safety measures which ensures physical and mental health of the
employees.
4. National Importance
Effective management of human resources will speed up the economic growth of nation. This
in turn leads to better standard of living and more job opportunities.
Human Resource Management: Objectives
• To help the organization reach its goals.
• To ensure effective utilization and maximum development of human resources.
• To ensure respect for human beings.Toidentify and satisfy the needs of individuals.
• To ensure reconciliation of individual goals with those of the organization.
• To achieve and maintain high morale among employees.
• To provide the organization with well-trained and well-motivated employees.
• To increase to the fullest the employee’s job satisfaction and self-actualization.
• To develop and maintain a quality of work life.
• To be ethically and socially responsive to the needs of society.
• To develop overall personality of each employee in its multidimensional aspect.
• To enhance employee’s capabilities to perform the present job.
• To equip the employees with precision and clarity in transactions of business.
• To inculcate the sense of team spirit, team work and inter-team collaboration.

Human Resource Activities

In order to achieve the above objectives, Human Resource Management undertakes the
following activities:
1. Human resource or manpower planning.
2. Recruitment, selection and placement of personnel.
3. Training and development of employees.
4. Appraisal of performance of employees.
5. Taking corrective steps such as transfer from one job to another.
6. Remuneration of employees.
7. Social security and welfare of employees.
8. Setting general and specific management policy for organizational relationship.
9. Collective bargaining, contract negotiation and grievance handling.
10. Staffing the organization.
11. Aiding in the self-development of employees at all levels.
12. Developing and maintaining motivation for workers by providing incentives.
13. Reviewing and auditing manpower management in the organization
14. Potential Appraisal Feedback Counseling.
15. Role Analysis for job occupants.
16. Job Rotation.
17. Quality Circle, Organization development and Quality of Working Life
Functions
Human Resource Management Functions:
Managerial, Operative and Advisory Function
Some of the major functions of human resource management are as follows: 1. Managerial Functions
2. Operative Functions 3. Advisory Functions.
Human Resource or Personnel Department is established in most of the organizations, under the charge
of an executive known as Human Resource/Personnel Manager. This department plays an important
role in the efficient management of human resources.
The personnel department gives assistance and provides service to all other departments on personnel
matters. Though personnel or human resource manager is a staff officer in relation to other departments
of the enterprise, he has a line authority to get orders executed within his department.
(i) Managerial,
(ii) Operative and
(iii) Advisory functions.
1. Managerial Functions:
The Human Resource Manager is a part of the organisational management. So he must perform the
basic managerial functions of planning, organising, directing and controlling in relation to his
department.
There functions are briefly discussed below:
1. Planning:
To get things done through the subordinates, a manager must plan ahead. Planning is necessary to
determine the goals of the organisation and lay down policies and procedures to reach the goals. For a
human resource manager, planning means the determination of personnel programs that will contribute
to the goals of the enterprise, i.e., anticipating vacancies, planning job requirements, job descriptions
and determination of the sources of recruitment.
The process of personnel planning involves three essential steps.
Firstly, a supply and demand forecast for each job category is made. This step requires knowledge to
both labour market conditions and the strategic posture and goals of the organisation.
Secondly, net shortage and excess of personnel by job category are projected for a specific time
horizon.
Finally, plans are developed to eliminate the forecast shortages and excess of particular categories of
human resources.
2. Organizing:
Once the human resource manager has established objectives and developed plans and programs to
reach them, he must design and develop organisation structure to carry out the various operations.
The organization structure basically includes the following:
(i) Grouping of personnel activity logically into functions or positions;
(ii) Assignment of different functions to different individuals;
(iii) Delegation of authority according to the tasks assigned and responsibilities involved;
(iv) Co-ordination of activities of different individuals.

3. Directing:
The plans are to be pure into effect by people. But how smoothly the plans are implemented depends
on the motivation of people. The direction function of the personnel manager involves encouraging
people to work willingly and effectively for the goals of the enterprise.
In other words, the direction function is meant to guide and motivate the people to accomplish the
personnel programs. The personnel manager can motivate the employees in an organisation through
career planning, salary administration, ensuring employee morale, developing cordial relationships and
provision of safety requirements and welfare of employees.
The motivational function poses a great challenge for any manager. The personnel manager must have
the ability to identify the needs of employees and the means and methods of satisfy those needs.
Motivation is a continuous process as new needs and expectations emerge among employees when old
ones are satisfied.
4. Controlling:
Controlling is concerned with the regulation of activities in accordance with the plans, which in turn
have been formulated on the basis of the objectives of the organisation. Thus, controlling completes
the cycle and leads back to planning. It involves the observation and comparison of results with the
standards and correction of deviations that may occur.
Controlling helps the personnel manager to evaluate the control the performance of the personnel
department in terms of various operative functions. It involves performance appraisal, critical
examination of personnel records and statistics and personnel audit.
2. Operative Functions:
The operative functions are those tasks or duties which are specifically entrusted to the human resource
or personnel department. These are concerned with employment, development, compensation,
integration and maintenance of personnel of the organisation.
The operative functions of human resource or personnel department are discussed below:
1. Employment:
The first operative function of the human resource of personnel department is the employment of proper
kind and number of persons necessary to achieve the objectives of the organisation. This involves
recruitment, selection, placement, etc. of the personnel.
Before these processes are performed, it is better to determine the manpower requirements both in terms
of number and quality of the personnel. Recruitment and selection cover the sources of supply of labour
and the devices designed to select the right type of people for various jobs. Induction and placement of
personnel for their better performance also come under the employment or procurement function.
2. Development:
Training and development of personnel is a follow up of the employment function. It is a duty of
management to train each employee property to develop technical skills for the job for which he has
been employed and also to develop him for the higher jobs in the organisation. Proper development of
personnel is necessary to increase their skills in doing their jobs and in satisfying their growth need.
For this purpose, the personnel departments will device appropriate training programs. There are
several on- the-job and off-the-job methods available for training purposes. A good training program
should include a mixture of both types of methods. It is important to point out that personnel department
arranges for training not only of new employees but also of old employees to update their knowledge
in the use of latest techniques.
3. Compensation:
This function is concerned with the determination of adequate and equitable remuneration of the
employees in the organisation of their contribution to the organisational goals. The personnel can be
compensated both in terms of monetary as well as non-monetary rewards.
Factors which must be borne in mind while fixing the remuneration of personnel are their basic needs,
requirements of jobs, legal provisions regarding minimum wages, capacity of the organisation to pay,
wage level afforded by competitors etc. For fixing the wage levels, the personnel department can make
use of certain techniques like job evaluation and performance appraisal.
4. Maintenance (Working Conditions and Welfare):
Merely appointment and training of people is not sufficient; they must be provided with good working,
conditions so that they may like their work and workplace and maintain their efficiency. Working
conditions certainly influence the motivation and morale of the employees.
These include measures taken for health, safety, and comfort of the workforce. The personnel
department also provides for various welfare services which relate to the physical and social well- being
of the employees. These may include provision of cafeteria, rest rooms, counseling, group insurance,
education for children of employees, recreational facilities, etc.
5. Motivation:
Employees work in the organisation for the satisfaction of their needs. In many of the cases, it is found
that they do not contribute towards the organisational goals as much as they can. This happens because
employees are not adequately motivated. The human resource manager helps the various departmental
managers to design a system of financial and non-financial rewards to motivate the employees.
6. Personnel Records:
The human resource or personnel department maintains the records of the employees working in the
enterprise. It keeps full records of their training, achievements, transfer, promotion, etc. It also
preserves many other records relating to the behaviour of personnel like absenteeism and labour
turnover and the personnel programs and policies of the organisation.
7. Industrial Relations:
These days, the responsibility of maintaining good industrial relations is mainly discharged by the
human resource manager. The human resource manager can help in collective bargaining, joint
consultation and settlement of disputes, if the need arises. This is because of the fact that he is in
possession of full information relating to personnel and has the working knowledge of various labour
enactments.
The human resource manager can do a great deal in maintaining industrial peace in the organisation as
he is deeply associated with various committees on discipline, labour welfare, safety, grievance,
etc. He helps in laying down the grievance procedure to redress the grievances of the employees. He
also gives authentic information to the trade union leaders and conveys their views on various labour
problems to the top management.
8. Separation:
Since the first function of human resource management is to procure the employees, it is logical that
the last should be the separation and return of that person to society. Most people do not die on the job.
The organisation is responsible for meeting certain requirements of due process in separation, as well
as assuring that the returned person is in as good shape as possible. The personnel manager has to
ensure the release of retirement benefits to the retiring personnel in time.
3. Advisory Functions:
Human resource manager has specialized education and training in managing human resources. He is
an expert in his area and so can give advice on matters relating to human resources of the organization.
He offers his advice to:
1. Advised to Top Management:
Personnel manager advises the top management in formulation and evaluation of personnel programs,
policies and procedures. He also gives advice for achieving and maintaining good human relations and
high employee morale.
2. Advised to Departmental Heads:
Personnel manager offers advice to the heads of various departments on matters such as manpower
planning, job analysis and design, recruitment and selection, placement, training, performance
appraisal, etc.
Personnel Management vs. Human Resource Management
Both the terms refer to the one and the same function of the management and that is managing the
people at work. However, Human Resource Management is mainly focused on best utilizing the man
power by understanding their strength and weaknesses and engaging them in different occupations so
that their productivity can be increased. Therefore, training and development and employee
engagements are part of it. Personnel Management, on the other hand, is mainly concerned with
maintaining good employee- employer relationship and activities connected with it. Therefore,
Personnel Management mainly works around Industrial/ Employee/ Labour Relations and activities
connected with grievance handling, negotiations, enforcement of labour statute, looking after welfare
of employees and so on.
Personnel Management is thus basically an administrative record-keeping function, at the operational
level. Personnel Management attempts to maintain fair terms and conditions of employment, while at
the same time, efficiently managing personnel activities for individual departments etc. It is assumed
that the outcomes from providing justice and achieving efficiency in the management of personnel
activities will result ultimately in achieving organizational success.
Human resource management is the new version of personnel management. There is no any
watertight difference between human resource management and personnel management.
However, there are some differences in the following matters.
1. Personnel management is a traditional approach of managing people in the organization.
Human resource management is a modern approach of managing people and their strengths
in the organization.
2. Personnel management focuses on personnel administration, employee welfare and labor
relation. Human resource management focuses on acquisition, development, motivation and
maintenance of human resources in the organization.
3. Personnel management assumes people as a input for achieving desired output. Human
resource management assumes people as an important and valuable resource for achieving
desired output.
4. Under personnel management, personnel function is undertaken for employee's
satisfaction. Under human resource management, administrative function is undertaken for
goal achievement.
5. Under personnel management, job design is done on the basis of division of labor. Under
human resource management, job design function is done on the basis of group work/team
work.
6. Under personnel management, employees are provided with less training and
development opportunities. Under human resource management, employees are provided
with more training and development opportunities.
7. In personnel management, decisions are made by the top management as per the rules and
regulation of the organization. In human resource management, decisions are made
collectively after considering employee's participation, authority, decentralization,
competitive environment etc.
8. Personnel management focuses on increased production and satisfied employees. Human
resource management focuses on effectiveness, culture, productivity and employee's
participation.
9. Personnel management is concerned with personnel manager. Human resource
management is concerned with all level of managers from top to bottom.
10. Personnel management is a routine function. Human resource management is a strategic
function.