Unit -1

Introduction of Human Resource Management

Concept of HRM
HRM is concerned with the human beings in an organization. “The management of
man” is a very important and challenging job because of the dynamic nature of the people.
No two people are similar in mental abilities, tacticians, sentiments, and behaviors; they
differ widely also as a group and are subject to many varied influences. People are
responsive, they feel, think and act, therefore they cannot be operated like a machine or
shifted and altered like template in a room layout. They therefore need a tactful handing by
management personnel.”
HRM is the process of managing people of an organization with a human approach.
Human resources approach to manpower enables the manager to view the people as an
important resource. It is the approach through which organization can utilize the manpower
not only for the benefits of the organization, but for the growth, development and self-
satisfaction of the concerned people. Thus, HRM is a system that focuses on human resources
development on one hand and effective management of people on the other hand so that
people will enjoy human dignity in their employment

Human resource has a paramount importance in the success of any organization

because most of the problems in organizational setting are human and social rather than
physical, technical or economical failure. In the words of Oliver Shelden, “No industry can
be rendered efficient so long as the basic fact remains unrecognized that it is principally
human.

Definitions of HRM There are two different definitions.

The first definition of HRM is that “It is the process of managing people in organizations in a
structured and thorough manner.”(4) 5This covers the fields of staffing (hiring people),
retention of people, pay and perks setting and management, performance management,
change management and taking care of exits from the company to round off the activities.
This is the traditional definition of HRM which leads some experts to define it as a modem
version of the Personnel Management function that was used earlier.
In simple words, Human resource management is management function that helps manager
to recruit, select, train and develop organization members. Or HRM is a process of making
the efficient and effective use of human resources so that the set goals are achieved.
In general terms, Human Resource Management is “concerned with the people dimension in
management. Since every organization is made up of people, acquiring their services,
developing their skills, motivating them to high levels of performance and ensuring that they
continue to maintain their commitment to the organization are essential for achieving
organizational objectives. This is true regardless of the type of organization government
business, Education, Health, regression or social action.”

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Nature of HRM
HRM is a management function that helps managers to recmit, select, train and develop
members for an organization.
HRM is concerned with people’s dimension in organizations. The following aspects
constitute the core of HRM:
1. HRM Involves the Application of Management Functions and Principles. The functions
and principles are applied for 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 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.
Objectives of HRM
The primary objective of HRM is to ensure the availability of competent and willing
workforce for an organization. Beyond this, there are other objectives too. Specifically, HRM
objectives are four fold: Societal, Organization, Functional and personal.
1. Personal Objectives: To assist Employees in achieving their personal goals, at least
in so far as these goals enhance the individual’s contribution to the organization.
Personal objectives of employees must be maintained, retained and motivated.
2. Functional Objectives: To maintain the contribution of department at an appropriate
level organization should fulfill the needs. Resources are wasted when HRM is either
more or less sophisticated to suit the organizations demands.
3. Organizational Objectives: To recognize the role of HRM in bringing about
organizational effectiveness, HRM is not an end in itself but it is only a mean to assist
the organization with its primary objectives organization.
4. Societal Objectives: To be ethically & socially responsible for the needs and
challenges of society while \ minimizing the negative impact of such demands upon
the organization to use their resources for society’s benefits in ethical ways may lead
to restriction.
5. Other objectives:
 Accomplish the basic organizational goals by creating and utilizing an able and
motivated workforce.
 To establish and maintain organizational structure and desirable working relationships
among all the members of the organization.
 Develop co-ordination among individual and group within organization to secure the
integration of organization.
 To create facilities and opportunities for individual or group development so as to
match it with the growth of the organization.

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  To attain an effective utilization of human resources in the achievement of
organizational goals.
 To identify and satisfy individual and group needs by providing adequate and
equitable wages, incentives, employee benefits and social security and measures for
challenging work, prestige, recognition, security, status.
 To maintain high employees morale and human relations by sustaining and improving
the various conditions and facilities.
 To strengthen and appreciate the human assets continuously by providing training and
development programs.
 To consider and contribute to the minimization of socio-economic evils such as
unemployment, under employment, inequalities in the distribution of income and
wealth and to improve the welfare of the society by providing employment
opportunities to women and disadvantaged sections of the society.
 To provide an opportunity for expression and voice management.
 To provide fair, acceptable and efficient leadership.
 To provide facilities and conditions of work and creation of favorable atmosphere for
maintaining stability of employment.
Scope of HRM
These are given below:
❖ Human Resource Planning

❖ Design of the Organization and Job

❖ Selection and Staffing

❖ Training and Development

❖ Organizational Development
❖ Compensation and Benefits

❖ Employee Assistance
❖ Union/Labour Relations

❖ 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 a
human resources, inventory with a view to assess present and future needs, availability and
possible shortages in human resource. Moreover, HR Planning forecasts demand and supplies
and identify sources of selection. HR Planning develops strategies both long term and short-
term, to meet the manpower requirement.
b) Design ofOrganization and Job: This is the task oflaying 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.

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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 trainingneeds
of individuals to meet the knowledge and skill which is needed not only to perform current
job but also to fulfill the future needs ofthe 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, expectationand
temperament. By and large each one of them faces problems everyday. Some are personal
some are official. In their case 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 ofthe areas ofHRM.
i) Personnel Research and Information System: Knowledge on behavioral science and
industrial psychology throws better insight into the workers expectations, aspirations and
behavior. 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. HRM is a broad concept; personnel
management (PM) and Human resource development (HRD) are the parts ofHRM.

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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
These are discussed in turn.
(1) Managerial Functions
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.
Organizing
Organising is a process by which the structure and allocation of jobs are determined. Thus
organising 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.

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Staffing
TOs 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, counseling employees, training and developing employees.
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.
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 brief description of these follows:
Procurement
It involves procuring the right kind of people in appropriate number to be placed in the
organisation. It consists of activities such as manpower planning, recruitment, selection
placement and induction or orientation of new employees.
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,

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organisation development to strike a better fit between organisational climate/culture and
employees.
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 organisation. It consists of activities
such as job evaluation, wage and salary administration, bonus, incentives, etc.
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 organisation, be large or small organisations. Having
discussed the scope and functions of HRM, now it seems pertinent to delineate the HRM
scenario in India.
Strategic Role for HR:
The administrative role traditionally has been the dominant role for HR. A broader
transformation in HR is needed so that significantly less HR time and fewer HR staffs are
used just for clerical work.
Differences between the operational and strategic roles exist in a number of HR areas. The
strategic HR role means that HR professionals are proactive in addressing business realities
and focusing on fiiture business needs, such as strategic planning, compensation strategies,
the performance of HR and measuring its results. However, in some organizations, HR often
does not play a key role in formulating the strategies for the organization as a whole; instead
it merely carries them out through HR activities.

Many executives, managers, and HR professionals are increasingly seeing the need for HR
management to become a greater strategic contributor to the business success of
organizations. HR should be responsible for knowing what the true cost of human capital is
for an employer.
For example, it may cost two times key employees’ annual salaries to replace them if they
leave. Turnover can be controlled though HR activities, and if it is successful in saving the
company money with good retention and talent management strategies, those may be
important contributions to the bottom line of organizational performance.
The role ofHR as a strategic business partner is often described as “having a seat at the table,”
and contributing to the strategic directions and success of the organization. That means HR is
involved in devising strategy in addition of implementing strategy. Part of HR’s contribution
is to have financial expertise and to produce financial results, not just to boost employee
morale or administrative efficiencies. Therefore, a significant concern for chieffinancial
officers (CFOs) is whether HR executives are equipped to help them to plan and meet
financial requirements.

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The role of HR shifted from a facilitator to a functional peer with competencies in other
functions and is acknowledged as an equal partner by others. The HR is motivated to
contribute to organizational objectives of profitability and customer satisfaction and is seen as
a vehicle for realization of quality development. The department has a responsibility for
monitoring employee satisfaction, since it is seen as substitute to customer satisfaction.
According to McKinsey’s 7-S framework model HR plays the role of a catalyst for the
organization. According to this framework, effective organizational change is a complex
relationship between seven S’s.
HRM is a total matching process between the three Hard S (Strategy, Structure and Systems)
and the four Soft S (Style, Staff, Skills and Super-ordinate Goals). Clearly, all the S’s have to
complement each other and have to be aligned towards a single corporate vision for the
organization to be effective. It has to be realized that most of the S’s are determined directly
or indirectly by the way Human Resources are managed and therefore, HRM must be a part
of the total business strategy.
References:

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