HUMAN RESOURCE MANAGEMENT & HUMAN

RESOURCE DEVELOPMENT
 HUMAN RESOURCE MANAGEMENT

HRM may be defined as a set of policies practices and programmes

designed to maximise both personal and organisational goals. It is
the process of binding people and organisations together so that the
objectives of each are achieved.
It can be defined as the total knowledge, skills, competencies,
intelligence, values, attitude and aptitudes of the employees working
in an organisation. With the growing importance of manpower in the
organisation, its management is also crucial to retain good skill and
talent.
Jucius Michael calls human resource as “human factor” which is a
“whole consisting of inter-related, inter-dependent and interacting
physiological, psychological, sociological, and ethical component”.
HRM is a management function that helps managers recruit, select,
train and develops manpower for an organisation. Also HRM
includes employees remuneration, motivation and growth.
 HUMAN RESOURCE DEVELOPMENT
HRD can be defined as a set of systematic and planned activities
designed by an organisation to provide its members with the
opportunities to learn necessary skills to meet current and future job
demands.
HRD activities should begin when an employee joins an organisation
and continue throughout his or her career, regardless of whether
that employee is an executive or a worker on an assembly line, HRD
programs must respond to job changes and integrates the long term
plans and strategies of the organisation to ensure the efficient and
effective use of resources.
Nadler (1970) defined HRD as a series of organised activities conducted
within a specified period of time and designed to produce behavioural
change.
Nadler (1984) defined HRD as organised learning experience in a
definite time period to increase the possibility of job performance and
growth.
 CONCEPT OF HRM
� Human: refers to the skilled workforce in an organization.
� Resource: refers to limited availability or scarce.
� Management: refers how to optimize and make best use of such
limited or scarce resource so as to meet the organization goals and
objectives.
Human Resource Management is meant for proper utilisation
of available skilled workforce and also to make efficient use of
existing human resource in the organisation.
The best example in present situation is, construction industry has
been facing serious shortage of skilled workforce. It is expected to
triple in the next decade from the present 30 per cent, will
negatively impact the overall productivity of the sector, warn
industry experts.
Human Resource Management 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.”
 OBJECTIVE OF HRM
In order to achieve organisational objectives integration of employer’s
interest and employee interests is necessary. In this light, the
objectives of human resource management may be summarized as
follow:
1. To help the organisation attain its goals by providing well trained
and well motivated employees.
2. To employ the skills and knowledge of employees efficiently and
effectively, i.e. to utilize human resource effectively.
3. To enhance job satisfaction and self actualization of employees by
encouraging and assisting every employees to realise his/her full
potential.
4. To establish and maintain productive, self respecting and internally
satisfying working relationships among all the members of the
organisation.
5. To bring about maximum individual development of members of the
organisation by providing opportunities for training and
advancement.
NATURE OF HUMAN RESOURCE MANAGEMENT
1. A part of Management Discipline
HRM is a part of management discipline. It is not a discipline in itself but is only
a field of study. HRM, being a part of management process, draws heavily from
management concepts, principles and techniques and apply these in the
management of human resources.
2. Universal Existence
HRM is pervasive in nature. It is present in all enterprises. It permeates all
levels of management in an organization.
3. Concerned with People
HRM is all about people at work, both as individuals and groups. It tries to put
people on assigned job in order to produce goods results. The resultant gains are
used to reward people and motivate them towards further improvement is
productivity.
4. Action oriented
HRM focuses attention on action, rather than on record keeping, written
procedures or rules. The problems of employees are solved through rational
policies.
5. Directed towards Achievement of Objectives
HRM is directed towards achievement of organisational objectives by providing
tools and techniques of managing people in the organisation effectively.
6. Integrating Mechanism
HRM tries to build and maintain cordial relation between people working at
different levels in the organization. It tries to integrate human assets in the best
possible manner for achieving organisational goals.
7. Development Oriented
HRM intends to develop the full potential of employees. The reward structure is
turned to the needs of employees. Training is provided to improve the skill of
employees. Every attempt is made to use their talents fully in the service of
organisational goals.
8. Continuous Process
HRM is not a one short deal. It cannot be practised only one hour each day or one
day a week. It requires constant alertness and awareness of human relations and
their importance in every day operations.
9. Comprehensive Function
HRM is concerned with managing people at work. It covers all types of people at all
levels in the organization. It applies to workers, supervisors, officers, manager and
other types of personnel.
 SCOPE OF HRM
The scope of HRM is, indeed, very vast and wide. It includes all activities starting from
manpower planning till employee leaves the organization. Accordingly, the scope of
HRM consists of acquisition, development, maintenance/retention, and control of
human resources in the organization (see figure 1.1). The same forms the subject
matter of HRM. As the subsequent pages unfold, all these are discussed, in detail, in
seriatim.
The National Institute of personnel Management, Calcutta has specified the scope of HRM
as follows:
1. The Labour or Personnel Aspect
This is concerned with manpower planning, recruitment, selection, placement, transfer,
promotion, training and development, lay-off and retrenchment, remuneration,
incentives, productivity, etc.
2. Welfare Aspect
It deals with working conditions, and amenities such as canteen, creches, rest and lunch
rooms, housing, transport, medical assistance, education, health and safety, recreation
facilities, etc.
3. Industrial Relations Aspects
This covers union-management relations, joint consultation, collective bargaining,
grievance and disciplinary actions, settlement of disputes, etc.
 FUNCTIONS OF HRM
We have already defined HRM. The definition of HRM is based on what managers do. The
functions performed by managers are common to all organizations. For the convenience
of study, the function performed by the resource management can broadly be classified
into two categories, viz.
(1) Managerial functions, and
(2) Operative functions
(1) MANAGERIAL FUNCTIONS
(a) Planning
Planning is a predetermined course of actions. It is a process of determining the
organizational goals and formulation of policies and programmed for achieving them.
Thus planning is future oriented concerned with clearly charting out the desired
direction of business activities in future. Forecasting is one of the important elements
in the planning process. Other functions of managers depend on planning function.
(b) Organizing
Organizing is a process by which the structure and allocation of jobs are determined.
Thus organizing involves giving each subordinate a specific task establishing
departments, delegating authority to subordinates, establishing channels of authority
and communication, coordinating the work of subordinates, and so on.
(c) Staffing
Staffing is a process by which managers select, train, promote and retire their
subordinates This involves deciding what type of people should be hired, recruiting
prospective employees, selecting employees, setting performance standard, compensating
employees, evaluating performance, counselling employees, training and developing
employees.
(d) Directing/Leading
Directing is the process of activating group efforts to achieve the desired goals. It
includes activities like getting subordinates to get the job done, maintaining morale
motivating subordinates etc. for achieving the goals of the organization.
(e) Controlling
It is the process of setting standards for performance, checking to see how actual
performance compares with these set standards, and taking corrective actions as needed.

(2) Operative Functions

The operative, also called, service functions are those which are relevant to specific
department. These functions vary from department to department depending on the
nature of the department Viewed from this standpoint, the operative functions of HRM
relate to ensuring right people for right jobs at right times. These functions include
procurement, development, compensation, and maintenance functions of HRM.
(a) Procurement
It involves procuring the right kind of people in appropriate number to be placed in the
organization. It consists of activities such as manpower planning, recruitment, selection
placement and induction or orientation of new employees.
(b) Development
This function involves activities meant to improve the knowledge, skills aptitudes
and values of employees so as to enable them to perform their jobs in a better
manner in future. These functions may comprise training to employees,
executive training to develop managers, organization development to strike a
better fit between organisational climate/culture and employees.
(c) Compensation
Compensation function involves determination of wages and salaries matching
with contribution made by employees to organisational goals. In other words,
this function ensures equitable and fair remuneration for employees in the
organization. It consists of activities such as job evaluation, wage and salary
administration, bonus, incentives, etc.
(d) Maintenance
It is concerned with protecting and promoting employees while at work. For this
purpose virus benefits such as housing, medical, educational, transport
facilities, etc. are provided to the employees. Several social security measures
such as provident fund, pension, gratuity, group insurance, etc. are also
arranged.
It is important to note that the managerial and operative functions of HRM are
performed in conjunction with each other in an organization, be large or small
organizations. Having discussed the scope and functions of HRM, now it seems
pertinent to delineate the HRM scenario in India.
 PROCESS OF HUMAN RESOURCES
� 1. Analysis of Organisational Plans and Objectives:
Human resource planning is a part of overall plan of organisation. Human resource
planning process begins with the analysis of overall plan of the organisation into
departmental, sectional and sub-sectional plans and functional plans like sales, marketing,
technological plans. This break up of overall plan provides for assessing the human
resource requirement for each department and activity. Besides analyzing the
organisational plans, the objectives of the organisation are also analyzed.
� 2. Analysis of Human Resource Planning Objectives:
Human resource planning is a part of corporate plan. Its objectives are to be fixed in the
light of corporate objectives. The emphasis is given on future requirements than the
present one. The main purpose of human resource planning is to match the present and
future manpower needs of the organisation.
The human resource department should specify the policy regarding acquisition of human
resources. It may recruit them by way of promotion; transfer i.e. from within the
organisation or from external source. It also has to clarify the selection criteria and the
need for training and development.
The other factors dominating the forecast for human resources are the
following:
(a) Expansion of the enterprise,
(b) Mergers and acquisitions,
(c) Retirement, death, resignation and terminations,
(d) Change in style of leadership,
(e) Improvement in productivity.
3. Assessment of Supply of Human Resources:
To make assessment of supply of human resources for the organisation it
should begin with the current human resource inventory of the
organisation. It is also known as auditing of human resource to be
undertaken by the departments of the organisation where complete
information regarding skills, abilities, qualifications, capacity for hard
work is available and so also the quantity and quality of human resources
manning various positions, the probable retirements.
4. Matching Demand and Supply:
It is one of the objectives of human resource planning to assess the demand
for and supply of human resources and match both to know shortages and
surpluses on both the side in kind and in number. This will enable the
human resource department to know overstaffing or understaffing. In
case of shortages of human resources to meet certain jobs in the
organisation and are not available in the labour market then under such
circumstances it is advisable to change the objectives of the organisation.
 IMPORTANCE OF HUMAN RESOURCES
Human resources are the valuable assets of the corporate bodies. They are their strength. To face
the new challenges on the fronts of knowledge, technology and changing trends in global economy
needs effective human resource management. Significance of HRM can be seen in three contexts:
organisational, social and professional.

(i) Organization Significance

HRM is of vital importance to the individual organization as a means for achieving their objectives.
It contributes to the achievement of organisational objectives in the following ways:
(i) Good human resource practice can help in attracting and retaining the best people in the
organization.
(ii) Developing the necessary skills and right attitudes among the employees through training,
development, performance appraisal, etc.
(iii) Securing willing cooperation of employees through motivation, participation, grievance handling,
etc.
(iv) Effective utilization of available human resources.
(v) Ensuring that enterprise will have in future a team of competent and dedicated employees.

(ii) Social Significance

Social significance of HRM lies in the need satisfaction of personnel in the organization. Since these
personnel are drawn from the society, their effectiveness contributes to the welfare of the society. Society,
as a whole, is the major beneficiary of good human resource practice.
(i) Employment opportunities multiply.
(ii) Eliminating waste of human resources through conservation of physical and mental health.
(iii) Scare talents are put to best use. Companies that pay and treat people well always race ahead of
others and deliver excellent results.
(iii) Professional Significance

Professional significance of HRM lies in developing people and providing healthy

environment for effective utilization of their capabilities.
This can be done by:
(i) Developing people on continuous basis to meet challenge of their job.
(ii) Promoting team- work and team-spirit among employees.
(iii) Offering excellent growth opportunities to people who have the potential to rise.
(iv) Providing environment and incentives for developing and utilizing creativity.
 PERSONNEL MANAGEMENT
Personnel management deals with the managerial function of estimating
and classifying human resources requirements for meeting organizational
goals through people at work and their relationships with each other.

Personnel Management involves strategies that ensure right number of

staff, a right combination of talent, training, and performance in jobs.
According to Edwin B. Flippo – “Personnel Management is the planning,
organising, directing, and controlling of the procurement, development,
compensation, integration and maintenance and separation of personnel to
the end that individual, organisational and societal objectives are
accomplished.”
Personnel management is a little old and a more traditional way of
handling employees at a workplace; whereas HRM is a more modern and a
more specific approach to managing human resources in an organization.
Personnel management focuses on dealing with the employees within the
organization; however, HRM focuses on utilizing the HR of the
organization in the best possible way.
DIFFERENCE BETWEEN PERSONNEL MANAGEMENT AND
HRM

Sr. Dimensions Personnel Management HRM

No
Contract Careful Delineation of Written Aim to go beyond
Contracts contract.

2. Rules Importance of Devising clear Can do Outlook:

rules. Impatience with rule.

3. Guide to Management Procedures Business Need

4. Behaviour Referent Norms/Customs and Practice Value/Mission

5. Nature of Relations Pluralist Unitarist

6. Key Relation Labor Management Customer Oriented

7. Initiative Piecemeal Integrated

8. Speed of decision Slow Fast

 HRM VS. HRD
Points of Distinction HRM HRD

Status It is an independent function with It is an integrated system

independent sub- functions. consisting of
interdependent sub
system.
Orientation It is a service and reactive Proactive Function
function.
Aims Improve the efficiency of people Develop the total
organisation.
Incentives Focuses on salary, economic Job challenges and
rewards, job simplification and creativity for motivating
job specialization. people.

Responsibility Responsibility of human Responsibility of all

resources manager managers
Morale Productivity Improve Satisfaction Improve Performance
Relationship
 OBJECTIVES OF HRD
The objectives of HRD are:
i. To prepare the employee to meet the present and changing future job requirements.
ii. To prevent employee obsolescence.
iii. To develop creative abilities and talents.
iv. To prepare employees for higher level jobs.
v. To impart new entrants with basic HRD skills and knowledge.
vi. To develop the potentialities of people for the next level job.
vii. To aid total quality management.
viii. To promote individual and collective morale, a sense of responsibility, co-operative
attitudes and good relationships.
ix. To broaden the minds of senior managers by providing them with opportunities for
an interchange of experiences within and outside.
x. To ensure smooth and efficient working of the organisation.
xi. To provide comprehensive framework for HRD.
xii. To enhance organisational capabilities.
xiii. To create a climate that enables every employee to discover, develop and use
his/her capabilities to a fuller extent in order to further both individual and
organisational goals.
 FOCUS OF HRD SYSTEM
HRD system is entirely designed keeping in view the contextual factors such as size,
technology, skill levels, and support for function. It does focus on developing human
resources at various levels (problem-solving capabilities leading to increase employee
productivity) and commitment.
The main focus of human resource development is as follows:
1. Building Linkages with Other Functions:
Human resource development systems should be designed to strengthen some other
functions in the company. These functions are long range corporate planning;
budgeting and finance, marketing, production, and other similar functions. These
linkages are of great significance.

2. Balancing Specialisation and Diffusion of the Function:

Although HRD includes specialised functions, line people should be involved in various
aspects of HRD. Action is the sole responsibility of the line people and HRD should
strengthen their roles accordingly.

3. Balancing Adaptation and Change in the Organisational Culture:

HRD systems are designed to suit the organisational culture yet the role of HRD may
be to modify that culture to increase the effectiveness of the organisation. There are
two contrary views, first view is HRD should be designed to suit the culture and the
second view that HRD should be able to change the culture.
Both positions seem to be extreme. Yet they are complimentary HRD should take
the organisation forward, and this can be done only if its design anticipates
change and evolution in the future.

4. Focus on Enabling Capabilities:

The main purpose of HRD is to assist the organisation to enhance its ‘enabling’
capabilities. These capabilities include the following development of human
resources, development of organisational health, improvement of problem-solving
capabilities, development of diagnostic ability so that problems can be located
quickly and effectively to achieve increased employee productivity and
commitment.

5. Attention to Contextual Factors:

After considering the various contextual factors of the organisation the following
issues are decided and settled. What is to be included in the HRD system, how it
is to be subdivided, what designations and tides will be used and similar issues
its culture and tradition, size, technology, levels of existing skills, available
support for the function, availability of outside help, and so on.
 STRUCTURE OF HRD
1. Establishes as the Identity of HRD:
It is important that the distinct identity of HRD be recognised. The person in
charge of HRD should bear the responsibility exclusively for this function and
should not be expected to do it in addition to any other function. Multiple
responsibilities produce several kinds of conflict. This person should report
directly to the Chief Executive officer of the organisation.

2. Ensures Respectability for the Function:

In many companies, the personnel function does not have much the reason it is
not perceived as a major function within the organisation. It is essential that
HRD is instituted at a very high level in the organisation and that the head of
the HRD department be classified as a senior manager. Both the credibility and
utility of HRD depend on such resultant.

3. Balances Differentiation and Integration:

The human resource development function often includes three functions-
personnel administration, human resource development and training and
industrial relations.
4. Establishes Linkage Mechanisms:
HRD has connection with outside system as well as with internal
subsystems. It is wise to establish specific linkages to be used to manage
the system. Standing committees for various purposes (with
membership from various parts and levels of the organisation), task
groups and ad hoc committees for specific tasks are useful mechanisms.

5. Develops Monitoring Mechanisms:

The HRD function is never stationary it is always evolving. Hence these
are requirement of systematic monitoring to review the progress and
level of effectiveness of the system and planning for its next steps. A
thorough annual review and a detailed appraisal every three years will
be invaluable in reviewing and planning. It may be helpful to include
persons from other functions in the organisation in the HRD assessment
effort.
 ROLE OF HRD MANPOWER
The objective of human resource manpower development is to provide a framework
for employees to develop their competencies necessary for individual and
organizational efficiency and productivity as well as career growth.

(1) Training and Development of Manpower

Among manpower development's functions is to oversee the development of human
expertise in the organization to improve productivity and efficiency. Through
planning and monitoring of employee work results, development programs are
designed to ensure employees acquire pertinent skills and qualities required for
working at higher levels. This motivates the workers and enhances their career
growth.

(2) Performance Appraisal and Management

Performance evaluations and reviews are a crucial opportunity for employee
improvement in your organization. Manpower development should devise
techniques for managers to use in conducting meaningful and effective appraisals.
Typically, these should help the manager rate goal achievement and assess
performance against some defined metrics such as job-specific competencies and
core company values.
(3) Manpower Planning and Strategy Development
Planning consists of getting the right number and right kind of people in
the right place. This ensures employees are assigned tasks for which they
are well-suited to help the organization achieve its goals. Human resource
manpower development has to analyze the current manpower inventory,
make future manpower forecasts and determine whether recruitment
from outside or promotions from within are necessary to boost
performance. By identifying the different skill sets and talent required by
respective areas of your business, a human resources strategy can be
developed that considers how existing and future employees fit into your
company’s overall business.

(4) Employee Welfare and Quality of Work Life

The ultimate objective of manpower development is to contribute to the
professional well-being, pride and motivation of the worker. Employee
welfare refers to those efforts that improve the living standard of
employees and hence the quality of work life. The goal is to provide good
leadership, interesting and challenging jobs, safe working conditions and
good wages.