HUMAN RESOURCE MANAGEMENT

Chapter -1

Introduction: The origin of human resource management (HRM) can be traced back in the roots of
personnel management, the need of which was felt in order to seek the ‘willing and effective
cooperation of people at work for accomplishing the objectives of an enterprise’.

Definition: HRM is the planning, organising, directing and controlling of the procurement,
development, compensation, integration, maintenance and separation of human resources to the
end that individual, organisational and social objectives are accomplished.

The theories involved in Personnel management

1. Theory X
2. Theory Y

Theory X Key characteristics:

 Recognises economic man only

 Close supervision and strict control
 Centralisation of authority and power
 Employees as one of the factors of production
 Considers only economic and financial motivators

Theory Y key characteristics:

 Supports democratic or participative leadership

 Decentralisation of authority
 Employees as a live factor of production, regards them as responsible and faithful
 Take them into confidence in decision making process
 Motivators of all sort, be it financial social and self-actualisation
 With no job satisfaction employee will not offer for organisation’s goals

Human capital: the processes that relate to training, education and other professional initiative in
order to increase the level of knowledge, skills, abilities, values and social assets of an employee
which will improve the employee’s satisfaction and performance and eventually improve the firm’s
performance.

Strategic human resource management: SHRM is formulation and execution of HR Policies and
practices that create and develop human capital the organisation requires to accomplish its strategic
objectives.

Basic process of aligning HR Strategies with business strategy involves:

 Assisting the formulation of business strategy and its understanding

 Identifying employee behaviour to produce the outcome that align with business strategy
 Formulation of HR strategic policies and actions to produce employee behaviour
 Develop measures to evaluate HR Performance

Changing environment of HRM (Page 15)

 1. Technology
2. Workforce diversity
3. Globalisation
4. Trade union
5. Statutory obligations

HRM Challenges (Page 16)

Environmental challenges

1. Fast and frequent changes

2. Internet and technology evolution
3. Globalisation
4. Skill shortage
5. Diversity
6. Government intervention

Organisational challenges

1. Labour cost
2. Quality of production
3. Innovation
4. Organisation culture
5. Outsourcing
6. Downsizing
7. Capacity gaps
8. Decentralisation
9. Technological advancement

Individual challenges

1. Brain drain
2. Job insecurity
3. Productivity
4. Matching people with their job and organisation
5. Social responsibilities and ethics

Role of HR Manager (Page 23)

1. Conscience role: reminding the management of its moral and ethical role
2. 3Line and staff role
3. Mediator’s role
4. Trainer and developer’s role
5. Change agent’s role
6. Functional role: procurement, development, compensation, integration and maintenance
7. Employee advocacy role

Correlation between human resource and human capital

Human Resource Management and Human Capital Management having a clear distinction. Human
Capital is used from profit centre point of view. Human resources are used from development and
cost centre point of view. Human resource means those employees or would be employee who is
having four characteristics- Physique (head leg, hand); Mind and Intellect; Relationships; and Spirits.
These are resource and those can be development (from source - regenerate, repaired).

But human Capital treats those people who already have developed all the resource and these
resources can be used for maximising profits.

CHAPTER – 2

Significance of HRM

 HRM ensures not only ‘sustainability’ but also the ‘prosperity’ of an organisation through
appropriate procurement, development, compensation, integration and maintenance of
human resources.
 By taking due care of human factor, HRM makes it a willing and effective contributor
towards the accomplishment of an organisation’s objectives.
 HRM is helpful in increasing job satisfaction, commitment, productivity and confidence.
 HRM is instrumental in boosting morale of employees.
 HRM helps a company to achieve its objective from time to time by creating a positive
attitude among workers.
 Due to proper HR policies employees are trained well and this takes them ready for future
promotions.
 Healthy HRM practices can help the organization to maintain co-ordinal relationship with the
unions.
 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.

Nature of HRM

 A line function – the HR Manager directs the activities of the people and thus exerts the
line authority
 A coordinative function – the HR manager coordinates personnel activities and exert
functional authority
 Staff function – the HR assists in hiring, training, evaluating, rewarding and firing
employees.

Scope of HRM (Page 42)

Dynamic in nature and as such it keeps including the relevant aspects and excluding the aspects that
have lost their relevance to HRM.

According to one opinion, the scope of HRM may include:

 HR planning (HRP), procurement, training and development, compensation, integration and

maintenance
 Industrial relations
 Public relations
 Strategic function
According to another opinion, HRM deals with four aspects:

 Welfare aspect
 Personnel aspect concerned with procurement, development, compensation, integration
and maintenance of human resources
 IR aspect
 Strategic aspects

Objectives of HRM (For more points refer page 45)

 To seek willing and effective cooperation of employees for the success of an organisation
 To create, maintain and utilise a competent and motivated workforce
 To secure integration of individual and organisational goal
 To keep workers satisfied
 To enrich human capital
 To involve workers in decision-making
 To provide conducive work environment and effective leadership

Main Principles of HRM

 HRM should deal with an employee as a complete individual, that is, in his/her totality.
 It should assess the needs, feelings and reactions of employees and associate them while
formulating HR policies and programmes.
 Employees should be given fair compensation.
 Creating conducive working and living conditions.
 Recognising personality of each employee.
 Effective and free flow of communication.
 Making the worker feel that he/she has earned the reward and not received it as a gift.
 Associating employees in the decision-making process in matters affecting them.

Functions of HRM

1. Managerial functions
2. Operative functions

Managerial function (Page 47)

 Planning
 Organising
 Staffing
 Directing
 Controlling

Operative function

 Procurement of personnel
 Development of personnel
 Compensation
 Integration
 Maintenance of personnel
HR Policy

Needless to mention, the performance of HR functions is significantly conditioned by HR policies

Human resource policies are the formal regulations or guidelines that businesses put in place to hire,
train, assess, and reward the members of their workforce.

Significance of HR Policies (Page 53)

1. Sound basis for decisions

2. Facilitate meaningful and effective HRM
3. Restrain discrimination and undesirable behaviour towards employee
4. Restrain injustice
5. Help in decentralisation of authority
6. Distinguish policy from procedure – policy is general guidance and procedure is
implementation of the policies on a particular problem
7. Saves time
8. Bring uniformity
9. Helps in accomplishing organisation’s goals

Types of HR Policies (Page 55)

1. Originated policies
2. Appealed
3. Imposed
4. General
5. Specific
6. Recruitment and selection
7. Training and development
8. Job evaluation, wage and incentive
9. Labour welfare

Characteristics of an Ideal HR Policy

1. HR Policy should contribute to organisational objectives

2. HR Policy should make the employee conscious of their importance and place in the
organisation
3. It should be in writing
4. Should create a sense of security
5. Should be flexible
6. Encourage cooperation between management and employees
7. Should be consistent
8. Should be controlled
 CHAPTER – 3

Human resource planning

Human Resource Planning is the process of determining manpower requirement and the means for
meeting those requirements in order to carry out the integrated plan of the organisation.

Types of HRP (Page 71)

1. Short term
2. Long term

In short term HRP,

In case when employee is less qualified than the job requirement

 Imparting training to develop skills

 Providing assistant to the employee temporarily
 Effecting changes in the job so that a part of job, for which the employee is not suitable, may
be transferred to some other employee or section
 Demotion

In case when employee is more qualified than the job requirement

 Job enlargement
 Counselling and control
 Temporary assignment
 Promotion

Long term HRP

Forecasting HR Requirements – Bases of HRP

 Economic forecasts
 Sales forecasts
 Expansion programmes
 Employee market forecast

Objectives of HRP (Page 75)

1. Correct estimates of manpower requirement

2. Making sound recruitment and selection policy
3. Making sound training and development policy
4. Maintaining the production level
5. Maintaining good human and Industrial relations
6. Spelling out both short and long term objectives clearly
Explanation in Page 82

Job analysis - It is the systematic process of collecting information about a specific job—its tasks,
duties, responsibilities and so on.

Areas in Which Job Analysis Provides Information

 Job identification
 Distinctive characteristics of job
 What the typical worker does
 What materials and equipment will be used by the worker
 How the job is performed
 Required personal attributes
 Job relationships

Development of plans for action

1. In case of shortage of employees

 Regularising the part-time workers
 Making workers to work Overtime
 Recalling the laid-off employees
 Using sub-contractors
 Imparting desired training
 Promoting the deserving current employees
2. In case of employees are in surplus
 Early retirement
 Lay-offs
 Termination
 Demotion
Job Description

A job description is a written statement that identifies, describes and defines a job in terms of its
duties, responsibilities, working conditions and specifications.

Contents of Job Description

 Job identification
 Job summary
 Duties performed
 Extent of supervision given and received
 Machines, tools and equipment used
 Working conditions
 Relation to other jobs
 Organisational relationship
 Hazards involved
 Pay
 Training and promotion
 Required qualifications of the worker
 Comments

Job specification

Job specification spells out what human traits and experiences are required to do a particular job
well.

Contents of Job Specification

1. Physical requirements

2. Mental requirements

a. Education

b. Language ability
c. Special ratings

d. Test rating

e. Experience

3. Emotional and social requirements

4. Behavioural requirements

Job analysis: Few trends

1. Flatter organisation: Traditional hierarchical structure is almost obsolete in the forthcoming

companies and most of the existing companies. It will be having fewer or no middle level
management
2. Self-managing work teams: A self-managed work team is a small group of employees who
take full responsibility for delivering a service or product through peer collaboration without
a manager's guidance. This team often works together long-term to make decisions about a
particular process.
3. Flexi work: Flexible work culture is nothing but a form of organisation culture where the
team members connect with each other, regardless of when, where, and how they work.
The work transcends physical workspaces, stationary desktop computers or the typical log-in
and log-out time structure.
4. Multi-tasking

CHAPTER – 4

Recruitment of human capital is not just placing the advertisements or calling consultants or
employment agencies. It is a much more complex exercise. We have to ensure that the human
capital to be recruited matches the strategic plans of the organisation.

Yield ratio: Yield ratio is a recruiting metric that indicates the percentage of candidates' movements
from one part of the hiring process to the next.

Time lapsed data: the Time period between the dates of demand for manpower requirement from a
department to the actual date of filling the vacancies in that department.

Source of HR Supply

 Internal sources
 External sources
o Advertising
Employment agencies
Public employment agencies
Private employment agencies
 Recommendations of present employees
 Schools and colleges
 Labour organisations

Methods of recruitment

Direct Methods
  Job posting/recruiting at the gate of the factory
 Sending recruiters to
Educational and professional institutions
Conventions and seminars
 Sending mobile officers or recruiters to the desired centres

Indirect Methods

 Advertising in
 Newspapers
 Trade publications
 Radio
 Television
 Subway
 Bus card
 Telephone

Third-party Methods

 Public employment agencies

 Private employment agencies
 Inviting biodata and/or recommendations from schools, colleges and professional
institutions
 Friends and relatives of present employees
 Casual applicants
 Labour unions
 Special events recruiting
 E-recruiting/Internet/networking sites
 Summer internships
 Walk-ins
 Offshoring/outsourcing white-collar and other jobs

Alternatives to Recruitment

 Overtime
 Employee leasing
 Contingent/temporary employment

Recent Developments

Companies going digital for quick recruitment and other processes.

Selection: A process to divide candidates into two groups, namely those selected and those rejected.

Steps Involved/Selection Procedure

 Initial contact
 Screening
 Initial or preliminary interview
 Application blank
 Selection tests: Psychological tests, Aptitude test, other tests
 Interview
  References
 Institute references
 Character references
 Work references

Common methods used in induction

 Motion pictures and sound slides

 Lectures
 Written material either in the form of booklets or included in one book
 Trips through the plant
 Trips to the department or division or section
 Illustrated catalogues, especially designed for the purpose
 Models of finished products
 Display/notice boards
 Showcases exhibiting the assembled and disassembled products of the company
 Charts showing the number of employees, rate of absenteeism and turnover
 Charts displaying total output during the last few months/years
 Counsellors meeting and escorting the new employee to his/her workplace
 Surprise and frequent visits by the supervisor to the workplace of the new employee

Socialisation: Socialisation is a long process and enables the new hire to acclimatise himself/herself
to the new organisation, its culture and so on.

Phases

1. Anticipatory phase

2. Encounter phase

3. Settling-in phase