DSE: II Human Resource Management (22PAEL602)

Unit: I
Human Resource Management: Meaning - Features – Objectives and
Significations of HRM – Role of HRM in Corporate Strategic
Management – HRM Functions – Development of HRM

Human: refer to the skilled workforce in the organisation.

Resource: refer to limited availability or scarce.
Management: refer to maximise or proper utilisation and make best use of limited and a scarce
resource.
The success of any organization depends upon how it manages its resources. While
several resources arethe non–humanresource such as land, capital, and equipment, it is the
human resource and its management which is at the heart of an organization’s success.
Human Resource (HR) refers to all the people who work in an organization
called personnel. Human Resource Management refers to the organizational function which
includes practices that help the organization to deal effectively with its people during the various
phases of the employment cycle. HRM is management function concerned with hiring,
motivating, and maintaining people in an organisation. It focuses on people in the organisation.

Meaning and Definition

Essentially, the Human Resource Management (HRM) is a management function that
deals with recruiting, selecting, training and developing human resource in an organization. It is
concerned with the ”people” dimension in management. It includes activities focusing on the
effective use of human resources in an organization. It is concerned with the development of a
highly motivated and smooth functioning workforce. It also includes planning, acquiring,
developing, utilising and maintaining ‘human resources’ in the achievement of organizational
goals.
According to Edwin B. Flippo, “Human resource management is the planning, organizing,
directing, and controlling of the procurement, development, compensation, integration,
maintenance and separation of human resources to the end that individual, organizational
and societial objectives are accomplished.”
The Indian Institute of Personnel Management defines HRM as, “Human resource
management is a responsibility of all those who manage people as well as being a description of
the work of those who are employed as specialists. It is that part of management which is
concerned with people at work and with their relationships within an enterprise. It applies not
only to industry and commerce but to all fields of employment.”
According to Tead and Metcaff, “Human resource management is the planning, supervision,
direction and co-ordination of those activities of an organization which contribute to realising
the definite purpose of that organization, with an animating spirit of co-operation and with a
proper regard for the well-being of all the members of the organization.”
Milkovich and Boudreau view HRM as, “A series of integrated decisions that form the
employment relationship; their quality contributes to the ability of the organizations and the
employees to achieve their objective.”
It is thus clear that human resource management is a specialized knowledge and practice
concerned with the management of human resources in an organization. It constitutes a
significant activity of the management. It attracts and selects capable men, organises them in
productive groups, develops their potential, gives them necessary motivation and maintains their
high morale.

Objectives of HRM
The primary objective of HRM is to ensure the availability of a competent and willing workforce
to an organization. Apart from this, there are other objectives too.
Specifically, HRM objectives are four fold: societal, organisational, functional, and personal.
Societal Objectives
The societal objectives are socially and ethically responsible for the needs and challenges
of society. While doing so, they have to minimize the negative impact of such demands upon the
organisation. The failure of organisations to use their resources for society’s benefit in ethical
ways may lead to restrictions. For example, the society may limit human resource decisions to
laws that enforce reservation in hiring and laws that address discrimination, safety or other such
areas of societal concern.
Organisational Objectives
The organisational objectives recognise the role of human resource management in
bringing about organisational effectiveness. Human resource management is not an in itself; it
is only a means to assist the organisation with its primary objectives. Simply stated the human
resource department exists to serve the rest of the organisation.
Functional Objectives
Functional objectives try to maintain the department’s contribution at a level appropriate
to the organisation’s needs. Human resources are to be adjusted to suit the organisation ’s
demands. The department’s level of service must be tailored to fit the organisation it serves.
Personal Objectives
Personal objectives assist employees in achieving their personal goals, at least in so far as
these goals enhance the individual’s contribution to the organisation. Personal objectives of
employees must be met if they are to be maintained, retained and motivated. Otherwise,
employee performance and satisfaction may decline giving rise to employee turnover.
Functions of HRM
Human Resources management has an important role to play in equipping organizations
to meet the challenges of an expanding and increasingly competitive sector. Increase in staff
numbers, contractual diversification and changes in demographic profile which compel the HR
managers to reconfigure the role and significance of human resources management.
Human Resource or Personnel Department is established in most of the organisations,
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.
Some of the major functions of human resource management are as follows:
 Managerial Functions
 Operative Function
 Advisory Function
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. These functions are briefly discussed below:
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.
 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 organization.
 Net shortage and excess of personnel by job category are projected for a specific time
horizon.
 Plans are developed to eliminate the forecast shortages and excess of particular categories
of human resources.
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 organisation structure basically includes the following:
 Grouping of personnel activity logically into functions or positions;
 Assignment of different functions to different individuals;
 Delegation of authority according to the tasks assigned and responsibilities involved;
 Co-ordination of activities of different individuals.
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
involved 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.
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.
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:
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.
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
jobsand 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.
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.
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.
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.
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.
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.
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.
Advisory Functions:
Human resource manager has specialised 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
organisation. He offers his advice to:
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.
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.
Significance/importance/need of HRM
HRM becomes significant for business organization due to the following reasons.
Objective: HRM helps a company to achieve its objective from time to time by creating a
positive attitude among workers. Reducing wastage and making maximum use of resources etc.
Facilitates professional growth: Due to proper HR policies employees are trained well and this
takes them ready for future promotions. Their talent can be utilized not only in the company in
which they are currently working but also in other companies which the employees may join in
the future.
Better relations between union and management: Healthy HRM practices can help the
organization to maintain co-ordinal relationship with the unions. Union members start realizing
that the company is also interested in the workers and will not go against them therefore chances
of going on strike are greatly reduced.
Helps an individual to work in a team/group: Effective HR practices teach individuals team
work and adjustment. The individuals are now very comfortable while working in team thus
team work improves.
Identifies person for the future : Since employees are constantly trained, they are ready to meet
the job requirements. The company is also able to identify potential employees who can be
promoted in the future for the top level jobs. Thus one of the advantages of HRM is eparing
people for the future.
Allocating the jobs to the right person : If proper recruitment and selection methods are
followed, the company will be able to select the right people for the right job. When this happens
the number of people leaving the job will reduce as the will be satisfied with their job leading to
decrease in labour turnover.
Improves the economy: 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.
Role of HRM in Corporate Strategic Management
Strategically, the role of International Human Resource Management (IHRM) relates to
supporting global HR operations in localization with successful organizational performance
worldwide. IHRM takes care to include global business objectives while considering human
resource strategies so that multinational operations are both effective and responsive in the face
of not only local but international challenges.
Global Talent Management: Global talent management is a key function in IHRM. This
alludes to identifying the skill requirements globally for international businesses and attracting,
developing global skills. Talent sourcing in different markets, assigning expats and upskilling
employees to operate across a range of cultures & business environments. Global talent
management that is strategic will help companies stay competitive in this global economy.
Cross-cultural Training & Workshops: Organizations rely on IHRM to provide overseas
cross-cultural training and development enabling employees to be able work successfully within
an international working environment. This includes providing learning opportunities to improve
cultural competency, communication skills and increased flexibility. IHRM can reduce cultural
conflicts and improve cooperation in international teams by training employees to work across
various cultures.
Performance Management: Performing on such a global scale, it is understandable that one of
the key roles of IHRM relates to managing performance - indeed more precisely firms need ways
to effectively and fairly manage their international human resources. That means setting common
benchmarks for performance, but recognizing that there are regional differences in work norms
and expectations. International performance management assures that the roles and outputs of
employees are aligned to elements like global business objectives translating into a bottom-up
corporate alignment.
International Labour Standards: International Labor Law: IHRM helps make sure these
international labor laws and regulations are installed correctly to abide by the different
requirements of a country. It may be because they want to know and comply with other
countries' employment laws, tax rules or labor standards. All of this happens while ensuring that
the organization´s international operations comply with local and global legal regulations, in a
strategic way to manage compliance before any other possible dilemma.
Worldwide Strategic Staff Planning: This one ensures that the right talent is in place, at the
right location and aligned with your international business strategy by aligning HR practices.
These things involve predicting future workforce needs, planning talent pipelines and filling skill
gaps around the world. It facilitates the expansion of the organization internationally if need be,
and also assists in optimization allocation of resources all over a diverse market.
Evolution and Development of HRM

The evolution of Human Resource Management (HRM) approaches can be traced

through various stages, reflecting changes in how organizations perceive and interact with their
employees. Let's explore this evolution with real-life examples and highlight some tricks or
strategies adopted at each stage:
1. Transactional Approach (1900s - 1950s):
· Example: During the early 20th century, HRM primarily focused on transactional tasks such as
payroll processing and benefits administration.
· Tricks/Strategies: Efficiency and accuracy in administrative tasks were crucial. Organizations
employed basic record-keeping systems and clerical staff to manage routine HR functions.
2. Personnel Management Approach (1950s - 1970s):
· Example: Post-World War II, organizations recognized the need for more structured employee
management. Personnel departments emerged, focusing on hiring, training, and compliance.
· Tricks/Strategies: Organizations started emphasizing compliance with labor laws and
regulations. HR departments focused on creating standardized policies and procedures to manage
employees effectively.
3. Human Resource Management (1980s - 1990s):
· Example: The shift from Personnel Management to Human Resource Management marked a
change in mindset. HRM started viewing employees as valuable assets to be developed and
nurtured.
· Tricks/Strategies: Training and development programs became more common. Companies
invested in employee engagement initiatives, recognizing that satisfied and motivated employees
contribute to organizational success.
4. Strategic Human Resource Management (2000s - Present):
· Example: In the 21st century, HRM evolved into a strategic partner, aligning HR practices with
overall organizational goals. Talent management and employee engagement took center stage.
· Tricks/Strategies: Organizations began adopting strategic HR planning, linking HR practices
with business objectives. Talent acquisition strategies became more sophisticated, focusing on
acquiring and retaining top talent. Employee performance management shifted towards
continuous feedback and development.
5. People-Centric Approach (Present and Future):
· Example: Today, HRM is evolving towards a more people-centric approach. Organizations
recognize the importance of employee well-being, diversity, and inclusion.
· Tricks/Strategies: Companies are investing in employee experience initiatives, offering flexible
work arrangements, and promoting a positive workplace culture. HR is actively involved in
fostering diversity, equity, and inclusion, reflecting a commitment to creating a workplace that
values and respects individual differences.
Tricks/Strategies for Modern HR:
· Data-Driven Decision Making: Utilize HR analytics to make informed decisions about talent
acquisition, retention, and development.
· Technology Integration: Leverage HR technology, such as HRIS and AI tools, to streamline
processes and enhance efficiency.
· Continuous Learning: Encourage a culture of continuous learning and development to keep
employees engaged and adaptable in a rapidly changing work environment.
· Employee Well-being Programs: Implement well-being initiatives, including mental health
support, to ensure employees feel supported and valued.
· Strategic Partnerships: Collaborate with other departments to align HR strategies with overall
business goals, fostering a more integrated approach to organizational success.
In summary, the evolution of HRM reflects a shift from transactional tasks to a strategic, people-
centric approach. Successful organizations today understand that their employees are critical
assets, and effective HR practices contribute directly to overall business success.