UNIT1

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.
• 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.
• In short Human Resource Management (HRM) can be defined as the art of
procuring, developing and maintaining competent workforce to achieve the goals
of an organization in an effective and efficient manner.
Nature 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.
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 nonbusiness 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

Scope of Human Resources

The scope of Human Resources Management extends to:
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.
All the dimensions related to people in their employment relationships, and all the
dynamics that flow from it.
Objectives of HRM
1. Human capital: assisting the organization in obtaining the right number and types
of employees to fulfill 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
6) Developing programs to meet the economic, psychological, and social needs of the
employees and helping the organization to retain the productive employees

1. Personal Objectives –HRM should help employees to achieve their personal goals
so that they remain satisfied and helpful to the company, this includes helping
employees to achieve their personal goals, such as higher salary, job satisfaction,
better working conditions, working hours, promotion, motivation, welfare facilities,
social security, etc.
2. Societal Objectives – Human Resource Management (HRM) is socially
responsible for the benefit and interest of the society, needs, demands, and
challenges of the society and legal issues like denial of equal opportunity and equal
pay should not be violated and should also ensure that the available resources are
used for the benefit of the society.
3. Organizational Objectives – Human Resource Management (HRM) involves
accomplishing the goals of the organization effectively and efficiently. It is
responsible for assisting the organization with all its objectives.
4. Functional Objectives – To maintain the contribution of the department at the
proper level, the organization should meet the needs and try to maintain the
contribution of the department at the level commensurate with the needs.
5. Aim for employees - An essential component of human resource management
involves setting objectives for employees. When selecting employee objectives,
managers must consider whether the business is most important. For example, if
sales are important to businesses, increasing employee sales skills is an example of
a wise objective. According to "Human Resource Management through Strategic
 Partnerships", the progress of improving the process of communicating effectively
with the most important HR objectives is employee activism as well as training,
and awareness for employees. To enable the skills to have a growing understanding
of customer requirements.
6. Strategic objective - Strategic objectives in human resource management are not
related to individual employees, but as a whole, strategic human resource
objectives common with employees include reducing employee turnover,
increasing employee morale, and reducing employee absenteeism. To achieve these
goals, human resource managers must implement specific measures aimed at
accomplishing them. For example, to increase employee morale, a human resources
manager may increase employee benefits, increase financial incentives to reduce
workload or reduce employee performance.
7) Financial Objectives - Many financial objectives can measure human resource
management. Common measures include HR return on investment, HR expense ratio, and HR
revenue ratio. HR return from investment is made by the firm divided by profit labour and profit
cost. Calculating HR expense ratio by dividing HR expense by all operating expenses. The human
resources revenue ratio is a calculation of total revenue divided by the number of employees. Each
organization will have specific human resources finance that it wants to achieve these metrics to
allow higher management personnel to acknowledge the actual achievement of these goals.

8) Choose Objective - Managers should select HR objectives according to SMART

criteria, which say that objectives are specific, measurable, and actions that should be
relevant and timely. For example, a firm not only aims to increase employee performance
-- a better goal is to increase employee sales by 35 per cent over the next six months. The
aim is that SMART norms are easier and more likely to be successful in keeping an eye
out.
9) Organizational Objectives: Activities that help in ensuring the efficiency of the
organization include training, hiring the right amount of employees for a given job, or
maintaining a high employee retention rate.
10) To secure integration: It aims to secure the integration of individuals and groups with
the organization. It reconciles individual and group goals with those of the organization.
Thus people feel a sense of participatory commitment and loyalty toward the firm.
11) Procurement of Personnel: The first objective of human resource management is to
acquire capable people who can produce, sell and distribute manufactured products. It
manages to appoint such a person who can deal with all the activities of the organization.

HRM FUNCTIONS
Henry Mintzberg identified 9 roles (read functions) which managers play in
organisations. A typical manager, according to Mintzberg, acts as a monitor,
disseminator, spokesperson, figure-head, leader, liaison, entrepreneur, disturbance
handler, resource allocator and negotiator. He classifies these ten roles into three broad
categories: first three together are called informational role, next three constitute the
interpersonal role, and the decisional role.
• Planning: Preparing forecasts of future HR needs in the light of an
organisation’s environment, mission and objectives, strategies, and internal
strengths and weaknesses, including its structure, culture, technology and
leadership.
• Staffing: Obtaining people with the appropriate skills, abilities, knowledge and
experience to fill jobs in the work organisation. Key practices are human resource
planning, job analysis, recruitment and selection.
• Developing: Analysing learning requirements to ensure that employees possess the
knowledge and skills to perform satisfactorily in their jobs or to advance in the
organisation. Performance appraisal can identify employees’ key skills and
‘competencies’.
• Monitoring: The design and administration of reward systems. HR practices
include job evaluation, performance appraisal, pay and benefits.
• Maintaining: The administration and monitoring of workplace safety, health, and
welfare policies to retain a competent workforce and comply with statutory
standards and regulations.
• Managing relationships: Encompasses a range of employee
involvement/participation schemes in non-union or union work places. In a union
environment this includes negotiating contracts and administering the collective
agreement.
Role of HR manager
The primary responsibilities of Human Resource managers are:

• To develop a thorough knowledge of corporate culture, plans and policies.

• To act as an internal change agent and consultant
• To initiate change and act as an expert and facilitator
• To actively involve in company’s strategy formulation
• To keep communication line open between the HRD function and individuals and
groups both within and outside the organization
• To identify and evolve HRD strategies in consonance with overall business
strategy.
• To facilitate the development of various organizational teams and their working
relationship with other teams and individuals.
• To try and relate people and work so that the organization objectives are achieved
efficiently and effectively.
• To diagnose problems and determine appropriate solution particularly in the human
resource areas.
 • To provide co-ordination and support services for the delivery of HRD
programmes and services
• To evaluate the impact of an HRD intervention or to conduct research so as to
identify, develop or test how HRD In general has improved individual and
organizational performance.
Current Classification of HR roles
1. Administrative Role of HR- Technology is being used in most HR activities, from
employment applications and employee benefits enrollments to e-learning using
Internet-based resources.
Increasingly, many HR administrative functions are being outsourced to vendors.
This outsourcing of HR administrative activities has grown dramatically in HR areas such
as employee assistance (counseling), retirement planning, benefits administration, payroll
services, and outplacement services.
2. Operational and Employee Advocate Role for HR- HR often has been viewed as
the “employee advocate” in organizations. They act as the voice for employee concerns,
and spend considerable time on HR “crisis management,” dealing with employee problems
that are both work-related and not work-related. Employee advocacy helps to ensure fair
and equitable treatment for employees regardless of personal background or
circumstances.
The operational role requires HR professionals to cooperate with various departmental and
operating managers and supervisors in order to identify and implement needed programs
and policies in the organization. Operational activities are tactical in nature. Compliance
with equal employment opportunity and other laws is ensured, employment applications
are processed, current openings are filled through interviews, supervisors are trained,
safety problems are resolved, and wage and benefit questions are answered. For carrying
out these activities HR manager matches HR activities with the strategies of the
organization.
2. Operational and Employee Advocate Role for HR- HR often has been viewed as the
“employee advocate” in organizations. They act as the voice for employee concerns, and
spend considerable time on HR “crisis management,” dealing with employee problems that
are both work-related and not work-related. Employee advocacy helps to ensure fair and
equitable treatment for employees regardless of personal background or circumstances.
The operational role requires HR professionals to cooperate with various departmental and
operating managers and supervisors in order to identify and implement needed programs
and policies in the organization. Operational activities are tactical in nature. Compliance
with equal employment opportunity and other laws is ensured, employment applications
are processed, current openings are filled through interviews, supervisors are trained,
safety problems are resolved, and wage and benefit questions are answered. For carrying
out these activities HR manager matches HR activities with the strategies of the
organization.
HRM- Human resource management (HRM or HR) is the HRD- Human Resource Development (HRD) is the frame
strategic approach to the effective and efficient employees develop their personal and organizational sk
management of people in a company or organization abilities.
such that they help their business gain a competitive
advantage

It is broader Part of HRM

Continuous and administrative process Continuous process

Deals with all aspects of hr functions It deals with development part

Concerned with management of people/ resources in an org Concerned with development of resources in a comp.

Org structure is independent Interdependent

Deals with staffing function Development and management of resources

Functions are mostly formal Formal and informal like mentorship

Focuses on how to manage different type of people in the Focuses on teaching employees how to develop themselves
organization

Focuses on overall development of employees Focuses on personal development

For many people, HRD and HRM convey the same meaning. This may not be true:
 HRD falls under the umbrella of HRM
 Industrial Relations Management (IRM) is yet another term which adds to the problem of
semantics
 ‘Industrial relations’, as the term implies, is merely concerned with employee grievances
and their settlement, unionization, and the like
 Obviously, IRM is one wing of HRM
 Talent Management is another form increasingly used nowadays

Factors Influencing HR Team Structure

1. Size of the firm
Mid-sized firms with a head count of 200-500 each will have a structured HR function.
Key HR activities like staffing, training, compensating, health and safety and the like
are clearly established and responsibilities assigned.
Clear policies, procedures and manuals are established, identifying who should do
what and how it should be done.
In large organisations with employee strength of 1000 to 3000, HR function is highly
matured and organised. HR processes are well documented, defined and implemented
meticulously.
Sophosticated HR tools are in place and technology is leveraged to ensure that HR is
contributing to the goal realisation.
2. Nature of business
Structure varies from brick-and-mortar, to knowledge to service industry.
HR functions are commonly distributed to three categories:
(i) HR generalists who carry out generic activities like payroll, leave and benefits.
(ii) HR specialists who assume responsibility for areas like hiring, training and
development, compensation, performance assessment and employee relations.
(iii) HR heads who head either functions across locations or head HR for a division
within an organisation. These roles carry end-to-end responsibility for either that
function or for that division. For example, Head-Training & Development would carry
the responsibility for
3. Philosophy of Senior Management
The philosophy of founders/senior, managers of the organisation defines the nature of
HR function. The degree of importance accorded to the HR head, the place allotted the
HR executive at the ‘table’ and the reporting alignments are all dependent on the
attitude of people at the top.
4. Global Presence OF Organisations
Global Presence Organisations with global presence tend to have fully blown and
highly elevated HR structures. There is corporate HR department at headquarters and
each subsidiary has its own HR team. HR team at the headquarters formulates and
institutionalises company-wide HR policies and processes. Such policies help ensure
one organisational culture that knits all subsidiaries together. The HR teams at local
levels implement the companywide policies as well as customise practices to meet
local business needs.
Tata Group is one example that can be cited here. The group has core corporate HR
policies and philosophies that are common to all group companies across locations, in
addition to individual organisations having own HR teams that support unit-specific
requirements