Concept of Human Resource Management

Human resources are the most valuable and unique assets of an organization. The successful
management of an organization’s human resources is an exciting, dynamic and challenging task,
especially at a time when the world has become a global village and economies are in a state of flux.
The scarcity of talented resources and the growing expectations of the modern day worker have
further increased the complexity of human resource function. Even though specific human resource
functions are the responsibility of the human resource department, the actual management of human
resources is the responsibility of all the managers in an organization. It is therefore necessary for all
managers to understand and give due importance to the different human resource policies and
activities in the organization. It examines the various human resource processes that are concerned
with attracting, managing, motivating and developing employees for the betterment of the
organization. It has several goals:

i) To meet the needs of the business and management;

ii) To link human resource strategies to the business goals and objectives;

iii) To find ways for human resources to ‘add value’ to a business;

iv) To help a business to gain the commitment of employees to its values, goals and objectives.

Definition of HRM

Human Resource Management (HRM) may be defined as a set of policies, practices and
programmes designed to maximize both personal and organizational goals. Human Resource
Management is a way of management that links people-related activities to the strategy of a business
or organization. HRM is often referred to as “strategic HRM”.

According to Flippo, Human Resource Management is “the planning, organizing, directing, and
controlling of the procurement, development, compensation, integration, maintenance and
reproduction of human resources to the end that individual, organizational and societal objectives are
accomplished.”
Perspectives of HRM

In Human Resource Management (HRM), perspective refers to the way organizations approach the
management of their human resources and the understanding they have regarding the role of
employees within the organization. There are several key perspectives in HRM:

1. Traditional Perspective: Historically, HRM was viewed as primarily administrative, focusing on

tasks such as payroll, recruitment, and compliance with labor laws. This perspective often saw
employees as mere resources or factors of production, with little emphasis on their development or
well-being.

2. Humanistic Perspective: This perspective emerged in response to the shortcomings of the

traditional approach. It emphasizes the importance of treating employees as valuable assets and
acknowledges their contributions to organizational success. Humanistic HRM emphasizes employee
empowerment, job satisfaction, and work-life balance.

3. Strategic Perspective: In the strategic perspective, HRM is integrated into the overall strategic
planning of the organization. HR practices are aligned with the company's goals and objectives to
ensure that the workforce contributes effectively to achieving strategic outcomes. This perspective
emphasizes the role of HR professionals as strategic partners who contribute to organizational
success through talent management, succession planning, and workforce planning.

4. Contingency Perspective: The contingency perspective recognizes that there is no one-size-fits-

all approach to HRM. Instead, HR practices should be tailored to the specific needs and
circumstances of the organization. This perspective acknowledges the importance of context and
situational factors in determining the most effective HR strategies.

5. Behavioural Perspective: The behavioral perspective focuses on understanding and influencing

employee behavior within the organization. It draws on principles of psychology and organizational
behavior to develop strategies for motivating employees, fostering teamwork, and managing
conflicts.

6. Ethical Perspective: In recent years, there has been growing recognition of the ethical dimensions
of HRM. This perspective emphasizes the importance of fairness, equity, and respect for human
dignity in all HR practices. It involves ensuring that HR decisions and actions are guided by ethical
principles and comply with relevant laws and regulations.

7. Global Perspective: With the increasing globalization of business, HRM also needs to adopt a
global perspective. This involves understanding and addressing cultural differences, managing
diverse workforces, and navigating international labor laws and regulations.

In summary, the perspective in HRM encompasses various approaches and viewpoints regarding the
management of human resources within organizations, reflecting evolving attitudes, values, and
practices in the field of HRM.

Scope of Human Resource Management

The scope of human resource management is very wide. Although the Indian Institute of Personnel
Management has described the scope of human resource management into the following three
aspects:

1. The Personnel Aspect: This is mainly concerned with human resource planning, recruitment,
selection, placement, transfer, promotion, retrenchment, performance appraisal, incentive, training
and development, wage and salary administration etc.

2. The Welfare Aspect: It deals with working conditions and amenities such as canteens, creaches,
rest and lunch rooms, housing, transport, medical assistance, education, health and safety, recreation
facilities, etc.

3. The Industrial Relations Aspect: This covers union-management relations, joint consultation,
collective bargaining, workers’ participation in management, grievance and disciplinary procedures,
settlement of industrial disputes, etc.

Structure of HR Department
Roles of HRM
Human Resource Management (HRM) encompasses a wide range of roles and responsibilities aimed
at effectively managing an organization's human capital to achieve its strategic objectives. Here are
some key roles of HRM:
1. Recruitment and Selection
 Attracting and sourcing qualified candidates for open positions within the
organization.
 Screening resumes, conducting interviews, and assessing candidates' qualifications
and fit with the organization's culture.
 Managing the selection process and making final hiring decisions.
2. Training and Development
 Identifying training needs within the organization based on performance gaps, skill
deficiencies, or strategic goals.
 Designing and delivering training programs to enhance employees' skills, knowledge,
and abilities.
  Providing ongoing development opportunities for career growth and advancement.
3. Performance Management
 Establishing performance expectations and goals for employees aligned with
organizational objectives.
 Monitoring and evaluating employee performance through regular performance
appraisals and feedback sessions.
 Recognizing and rewarding high performers and addressing performance issues
through coaching, counseling, or disciplinary actions when necessary.
4. Compensation and Benefits
 Developing and administering compensation strategies and structures to attract,
retain, and motivate employees.
 Managing employee benefits programs such as health insurance, retirement plans,
paid time off, and other perks.
 Ensuring compliance with laws and regulations related to compensation and benefits.
5. Employee Relations
 Managing employee relations issues, conflicts, and grievances in a fair and equitable
manner.
 Promoting a positive work environment and fostering strong relationships between
employees and management.
 Implementing policies and practices to address workplace diversity, equity, and
inclusion.
6. Employee Engagement and Retention
 Monitoring employee satisfaction and engagement levels through surveys, feedback
mechanisms, and exit interviews.
 Developing strategies to improve employee morale, motivation, and job satisfaction.
 Implementing initiatives to retain top talent and reduce turnover rates.
7. HR Planning and Talent Management
 Conducting workforce planning to ensure that the organization has the right people
with the right skills in the right positions.
 Identifying current and future talent needs and developing strategies to address talent
gaps.
  Implementing succession planning and career development programs to build a
pipeline of future leaders.
8. Legal Compliance and Risk Management
 Ensuring compliance with labor laws, regulations, and industry standards related to
employment practices.
 Providing guidance on HR-related legal issues such as discrimination, harassment,
wage and hour laws, and workplace safety.
 Minimizing legal risks and liabilities through effective HR policies, procedures, and
practices.
These roles are crucial for HRM professionals to effectively manage and support an organization's
most valuable asset—its people—in achieving its strategic goals and objectives.

Functions of HRM

Functions of human resource management may broadly be classified into three categories, viz ;( 1)
managerial functions, (2) operative functions, and (3) supportive functions.

Managerial Functions

Managerial functions are common functions to all managers .Like other managers, human resource
managers perform the basic functions of planning, organizing, directing and controlling.

1. Planning: A plan is a trap to capture the future. Planning is the process of deciding the goals and
formulating policies and programmes to achieve the goals of an organization. Human resource
managers make human resource planning to get right quantity and right quality of people at the right
time and at the right place. In the area of human resource management, planning involves deciding
personnel goals and implementation of formulated policicies, programmes and practices in order to
achieve these goals of an organization.

2. Organizing: Organizing is the process of allocating tasks among the employees, establishing
authority-responsibility relationships among them and integrating their activities towards
achievement of the common objectives of an organization.
3. Directing: Directing is the process of motivating, communicating, leading and supervising
people. Human resource management involves proper direction in order to get the maximum
potential of employees for attaining organizational goals.

4. Controlling: It implies the establishment of standards and compares it with actual performance in
order to measure deviation and taking remedial measures to minimize the gap. Controlling the
management of human resources involves performance appraisal of employees, auditing human
resources, analyzing the effectiveness of training programme, analyzing labour turnover rate and
such other means.

Operative Functions

These functions are concerned with specific activities of procurement, development, compensation,
integration and maintenance.

1. Procurement Function: It consists of the following activities:

(a) Job Analysis: It is the process of studying in details the operations and responsibilities involved
in a job so as to identify the nature and level of employees required to perform the job effectively.

(b) Human Resource Planning: Through it management strives to have the right number and the
right kind of people at the right places, at the right time, doing things which result in both the
organization, and the individual receiving maximum long-range benefit.

(c) Recruitment: It is the process of searching for required personnel and stimulating them to apply
jobs in the organization.

(d) Selection: It implies the suitability of different candidates for jobs in the organization and
choosing the most appropriate people.

(e) Placement: It means assigning suitable jobs to the selected candidates so as to match employee
qualifications with job requirements.

(f) Induction: It involves familiarizing the new employees with the company, the work environment
and the existing employees so that the new people feel at home and can start work confidently.
2. Development Function: It consists of the following activities:

(a) Performance Appraisal: It implies systematic evaluation of employees with respect to their
performance on the job and their potential for development.

(b) Training: It is the process by which employees learn knowledge, skills and attitudes to further
organizational and personal goals.

(c) Executive Development: It is the process of developing managerial talent through appropriate
programmes.

(d) Career Planning & Development: It involves planning the career of employees and
implementing career plans so as to fulfill the career aspirations of people.

3. Compensation Function: It consists of the following activities:

(a) Job Evaluation: It is the process of determining the relative worth of a job.

(b) Wage & Salary Administration: It implies developing and operating a suitable wage and salary
programme.

(c) Bonus: It involves payment of bonus under the Payment of Bonus Act, 1965 as well as non-
statutory bonus and other incentives.

4. Integration Function: It is the process of reconciling the goals of the organization with those of
its members. It involves motivating employees through various financial and non-financial
incentives, providing job satisfaction, collective bargaining, workers’ participation in management,
conflict resolution, developing sound human relations, employee counseling, improving quality of
work life, etc.

5. Maintenance Function: It is concerned with protecting and promoting the physical and mental
health of employees. For this purpose several types of fringe benefits such as housing, medical aid,
educational facilities, conveyance facilities, etc. are provided to employees.

Supportive Function
Human resource people are staff people. They have specialized knowledge. When line people face
problems then staff people help them in order to solve their work related problems.HRM provides
specialized advice, assistance and information to line executives. This is also known as advisory role
of HR manager.

HRM

Managerial Operative Supportive

Planning Organizing Directing Controlling Procurement Development Compensation Integration Maintenance

Job Analysis Training Job Evaluation

HRP Development Wage & Salary

Recruitment Appraisal Bonus

Career
Placement
Planning

Induction

Functions of Human Resource Management

Line and Staff Functions

Line and staff functions are organizational structures that differentiate between roles that directly
contribute to the primary objectives of the organization (line functions) and those that provide
support and expertise to the line functions (staff functions). In the context of Human Resource
Management (HR), line and staff functions play distinct yet complementary roles:

Line Functions of HR
i) Line functions in HR directly involve activities that impact the achievement of organizational
goals and objectives.
ii) These functions are typically carried out by line managers who have direct authority over
employees and are responsible for the core operations of the organization.
iii) Key line functions in HR include recruitment and selection, performance management, employee
relations, workforce planning, and productivity management.
iv) Line managers are involved in day-to-day decision-making related to managing employees,
ensuring their productivity, and achieving organizational targets.
v) Line functions are crucial for the efficient functioning of the organization and directly contribute
to its success.

Staff Functions of HR
i) Staff functions in HR provide specialized expertise, advice, and support to line managers and
employees to help them accomplish their goals more effectively.
ii) These functions do not have direct authority over line operations but instead offer guidance,
consultation, and administrative support.
iii) Key staff functions in HR include policy development and implementation, legal compliance and
risk management, compensation and benefits administration, employee training and development,
HR information systems management, employee engagement, and diversity and inclusion initiatives.
iv) Staff functions ensure that HR practices comply with legal requirements, support organizational
objectives, and contribute to creating a positive work environment.
v) Staff specialists often provide recommendations and assistance to line managers in addressing
HR-related challenges, improving employee performance, and fostering employee engagement and
development.
In summary, line functions of HR involve direct involvement in managing employees and achieving
organizational goals, while staff functions provide support, expertise, and services to facilitate the
effective functioning of line operations. Both line and staff functions are essential components of HR
management, working together to optimize human capital management and contribute to
organizational success.

Difference between PM & HRM

Dimensions Personnel Management Human Resource Management

Philosophy Employees are made for Rules and regulations are meant for
rules and regulations employees
Nature Confined to procurement Also integrated with corporate
and training of personnel management
Communication Slow and Downward Fast and both upward and downward
 Decision making Slow Fast
Approach Work oriented People + Work oriented
Job design Division of labour Team work
Manager’s role Transactional Transformational
Level of trust low High

Role of HR in Changing Environment

In a constantly evolving business landscape, the role of Human Resources (HR) becomes
increasingly pivotal. HR plays a crucial role in navigating organizations through changing
environments by addressing various challenges and opportunities. Here are some key aspects of HR's
role in a changing environment:
1. Strategic Business Partner: HR serves as a strategic business partner, working closely with
senior leadership to understand the organization's goals and objectives. HR aligns its strategies and
initiatives with the overall business strategy to ensure that the workforce supports the organization's
long-term success.
2. Talent Management and Development: In a changing environment, HR focuses on talent
management and development to ensure that the organization has the skills and capabilities needed
to adapt to new challenges and opportunities. This includes recruiting top talent, developing existing
employees, and implementing succession planning initiatives.
3. Change Management: HR plays a central role in managing organizational change by facilitating
smooth transitions and minimizing disruptions. HR develops change management plans,
communicates changes effectively to employees, and provides support and resources to help
employees navigate through periods of change.
4. Adapting HR Policies and Practices: HR continuously reviews and adapts HR policies and
practices to meet the evolving needs of the organization and its workforce. This may involve
revising policies related to remote work, flexible scheduling, performance management, and
employee benefits to accommodate changing work dynamics.
5. Employee Engagement and Communication: HR fosters employee engagement and open
communication within the organization, especially during times of change. HR ensures that
employees are informed about changes, have opportunities to provide feedback, and feel valued and
supported throughout the transition process.
6. Managing Diversity and Inclusion: In a changing environment, HR promotes diversity and
inclusion within the organization to leverage the full potential of its diverse workforce. HR
implements initiatives to create an inclusive culture where all employees feel respected, valued, and
empowered to contribute their unique perspectives and ideas.
7. Embracing Technology: HR embraces technology to enhance efficiency, streamline processes,
and improve the employee experience. This may include implementing HRIS systems, digital
recruiting platforms, online learning portals, and communication tools to support remote work and
virtual collaboration.
8. Data-Driven Decision Making: HR leverages data analytics to inform decision-making and
measure the effectiveness of HR initiatives. By analyzing HR metrics and workforce data, HR can
identify trends, anticipate future needs, and make strategic recommendations to support
organizational goals in a changing environment.

In summary, HR's role in a changing environment is multifaceted, encompassing strategic

partnership, talent management, change management, policy adaptation, employee engagement,
diversity and inclusion, technology integration, and data-driven decision-making. By effectively
fulfilling these roles, HR contributes to the organization's resilience, agility, and ability to thrive
amidst change.

Challenging Role of HR
Human Resource Managers face a constantly evolving landscape with new challenges emerging
regularly. Some of the key contemporary challenges before Human Resource Managers include:
1. Remote Work and Hybrid Work Models: Managing a remote workforce or implementing
hybrid work models presents challenges related to communication, collaboration, employee
engagement, and performance management.
2. Talent Acquisition and Retention: Competition for talent is fierce, especially in certain
industries or for specialized skill sets. HR Managers must develop innovative strategies to attract top
talent and retain key employees.
3. Skills Gap and Up skilling: Rapid technological advancements and changes in job roles create a
skills gap where existing employees may lack the skills needed for new roles. HR must focus on up
skilling and reskilling initiatives to bridge this gap.
4. Diversity, Equity, and Inclusion (DEI): Building diverse, equitable, and inclusive workplaces
remains a significant challenge. HR Managers must develop comprehensive DEI strategies and
initiatives to foster a culture of belonging and respect.
5. Employee Well-being and Mental Health: The pandemic has highlighted the importance of
employee well-being and mental health. HR Managers must prioritize initiatives that support
employees' physical, emotional, and mental well-being.
6. Data Privacy and Security: With the increasing use of technology in HR practices, ensuring data
privacy and security is crucial. HR Managers must comply with data protection regulations and
implement measures to safeguard employee data.
7. Remote Onboarding and Off boarding: Onboarding and off boarding processes become more
complex in remote or hybrid work environments. HR Managers must develop effective strategies for
virtual onboarding and off boarding to ensure a smooth transition for employees.
8. Workplace Culture and Employee Engagement: Maintaining a strong workplace culture and
high levels of employee engagement is challenging in remote or hybrid work settings. HR Managers
must find creative ways to foster connections, collaboration, and a sense of belonging among
employees.
9. Leadership Development and Succession Planning: Developing future leaders and planning for
succession becomes more critical as organizations navigate leadership transitions and succession
gaps. HR Managers must invest in leadership development programs and succession planning
initiatives to build a pipeline of capable leaders.
10. Adapting to Legal and Regulatory Changes: HR Managers must stay updated on changes in
employment laws, regulations, and compliance requirements to ensure that HR practices remain
legally compliant and mitigate legal risks for the organization.

In summary, Human Resource Managers face a wide range of challenges in today's dynamic
business environment, including managing remote work, attracting and retaining talent, fostering
diversity and inclusion, supporting employee well-being, ensuring data privacy and security,
adapting to changing work cultures, and developing future leaders. Successfully addressing these
challenges requires HR Managers to be proactive, innovative, and adaptable in their approach.
Nature of Job Analysis
Job analysis is a systematic process of collecting and analyzing information about a job. It involves
identifying and documenting the essential tasks, duties, and responsibilities that make up a job and
the knowledge, skills, and abilities required to perform those tasks effectively. The nature of job
analysis can be described in the following ways:

1. Systematic: Job analysis is a systematic process that involves collecting and analyzing data using
standardized methods and techniques. It is a structured approach to understanding a job and its
requirements.

2. Comprehensive: Job analysis is a comprehensive process that covers all aspects of a job,
including the tasks, duties, responsibilities, and the knowledge, skills, and abilities required to
perform those tasks.

3. Objective: Job analysis is an objective process that focuses on the job and its requirements rather
than the individual who performs the job. The process aims to identify the essential elements of the
job and the competencies required to perform it effectively.

4. Ongoing: Job analysis is an ongoing process that is subject to change as the job evolves over
time. It requires continuous review and updating to ensure that it remains relevant and useful.

5. Contextual: Job analysis takes into account the context in which the job is performed, including
the organizational culture, the work environment, and the external factors that may impact the job.

6. Multi-dimensional: Job analysis is a multi-dimensional process that considers not only the
technical aspects of the job but also the behavioral and personal characteristics required to perform
the job effectively.

Overall, job analysis is a critical process that forms the foundation for many HR activities such as
recruitment, selection, performance management, training and development, and compensation. It
provides the essential information needed to understand the requirements of a job and the
competencies required to perform it effectively, which is essential for the success of individuals and
organizations.

Concept of Job Description

A personnel manager carries job analysis in two ways: i) Job Description and ii) Job Specification.
Job description is a written statement showing job title, tasks, duties and responsibilities involved in
a job. It also prescribes the working conditions, hazards, stress and relationship with other jobs.
Thus, a job specification contains the following information:
1. Job title, code number, and department / division.
2. Job contents in terms of activities or tasks performed.
3. Job responsibilities towards effective performance of the job.
4. Working conditions specifying specific hazards/stress.
5. Social environment prevailing at the workplace.
6. Extent of supervision given and received.
7. Relationship with other jobs-vertical, horizontal, and diagonal.

Objectives of Job Description

i) The job description provides the title of the job and gives the area or department that the person
would be working in. Since every job in the company serves a specific purpose, the objective of the
job description is to explain the primary role of the position.
ii) It may also contain specific education, skills, and experience requirements that the employee
needs to be able to do the work as well as any physical requirements.
iii) Job descriptions provide a listing of the specific tasks and duties that the person in the job is
responsible for completing.
iv) Another objective of a job description is clarifying the roles and relationships associated with the
position.

Concept of Job Specification

Job specifications, also known as man or employee specifications, is prepared on the basis of job
specification. It specifies the qualities required in a job incumbent for the effective performance of
the job.
Basic contents of a job specification are as follows:
1. Personal characteristics such as education, job experience, age, sex, and extra co-curricular
activities.
2. Physical characteristics such as height, weight, chest, vision, hearing, health, voice poise, and
hand and foot coordination (for specific positions only).
3. Mental characteristics such as general intelligence, memory, judgment, foresight, ability to
concentrate, etc.
4. Social and psychological characteristics such as emotional ability, flexibility, manners, drive,
conversational ability, interpersonal ability, attitude, values, creativity etc.
Various contents of a job specification can be prescribed in three terms:
(1) Essential qualities which a person must possess;
(2) Desirable qualities which a person may possess; and
(3) Contra-indicators which are likely to become a handicap to successful job performance.

Job Design
Job design refers to the process of defining the tasks, duties, responsibilities, and work environment
associated with a particular job. The main goal of job design is to create jobs that are efficient,
productive, and satisfying for the employees performing them. The nature of job design can be
described in the following ways:

1. Systematic: Job design is a systematic process that involves analyzing the tasks, duties, and
responsibilities associated with a job and organizing them in a structured and logical way.

2. Flexible: Job design is flexible and can be adapted to meet the changing needs of the organization
and the employees performing the job. It allows for the modification of jobs to better suit the skills
and interests of the employee or the needs of the organization.

3. Employee-Centered: Job design places the needs and abilities of the employee at the center of
the process. It aims to create jobs that are challenging, meaningful, and satisfying for the employees
performing them.
4. Goal-Oriented: Job design is goal-oriented and focuses on creating jobs that support the
achievement of organizational goals and objectives. It ensures that the tasks and responsibilities
associated with a job are aligned with the overall mission and vision of the organization.

5. Creative: Job design encourages creativity and innovation in the development of jobs. It allows
for the exploration of new ideas and approaches to job design that can improve efficiency,
productivity, d job satisfaction.

Overall, job design is an essential process that ensures that jobs are structured and organized in a
way that maximizes efficiency, productivity, and employee satisfaction. It helps to create jobs that
are challenging, meaningful, and rewarding for the employees performing them, and that support the
achievement of organizational goals and objectives.

Methods of Job Evaluation

Job evaluation is the systematic process of assessing and determining the value of jobs performed
within the organization and the relative value or worth of the employee’s efforts. The four major
methods of job evaluations are job ranking, job classification, factor comparison, and the point
method.

1. Job Ranking: The job ranking method is the simplest and easiest job evaluation method; jobs and
the employees who perform those jobs are ranked from highest to lowest depending on their quality
and value to the organization.

Example: Array of Jobs according to the Ranking Method

Rank Monthly salaries

1. Accountant Rs 3,000
2. Accounts clerk Rs 1,800
3. Purchase assistant Rs 1,700
4. Machine-operator Rs 1,400
5. Typist Rs 900
6. Office boy Rs 600
The variation in payment of salaries depends on the variation of the nature of the job performed by
the employees. The ranking method is simple to understand and practice and it is best suited for a
small organization. Its simplicity, however, works to its disadvantage in big organizations because
rankings are difficult to develop in a large, complex organization. Moreover, this kind of ranking is
highly subjective in nature and may offend many employees. Therefore, a more scientific and
fruitful way of job evaluation is called for.

2. Job Classification: The job classification method uses job classes or job groups to provide more
customization in the evaluation. This method also uses scales to measure performance rather than
comparing and ranking employees.

Example:

This method places groups of jobs into job classes or job grades. Separate classes may include
office, clerical, managerial, personnel, etc. Following is a brief description of such a classification in
an office:

(a) Class I - Executives: Further classification under this category may be Office manager, Deputy
Office manager, Office superintendent, Departmental supervisor, etc.

(b) Class II - Skilled workers: Under this category may come the Purchasing assistant, Cashier,
Receipts clerk, etc.

(c) Class III - Semiskilled workers: Under this category may come Steno typists, Machine-operators,
Switchboard operators, etc.

(d) Class IV - Semiskilled workers: This category comprises Daftaris, File clerks, Office boys, etc.

The job classification method is less subjective when compared to the earlier ranking method.

3. Factor Comparison: The factor comparison method is more scientific and complex than any
other method. Each job is ranked according to a specific set of factors, such as physical effort,
mental effort, or responsibility, all of which have predetermined weights indicating their importance
to success.

The steps involved in factor comparison method may be briefly stated thus:

i) Select key jobs (say 15 to 20), representing wage/salary levels across the organization. The
selected jobs must represent as many departments as possible.

ii) Find the factors in terms of which the jobs are evaluated (such as skill, mental effort,
responsibility, physical effort, working conditions, etc.).

iii) Rank the selected jobs under each factor (by each and every member of the job evaluation
committee) independently.

iv) Assign money value to each factor and determine the wage rates for each key job.

v) The wage rate for a job is apportioned along the identified factors.
vi) All other jobs are compared with the list of key jobs and wage rates are determined.

4. Point Method: The point method measures performance through scales and job factors rather
than focusing on entire job functions and ranking employees against each other. The point method is
usually seen as the most reliable and valid evaluation method by employees compared to more
subjective methods such as the job ranking method.

Example:

Conversion of Job Grade Points into Money Value

Point range Daily wage rate (Rs) Job grades of key bank officials
500-600 300-400 1 Officer
600-700 400-500 2 Accountant
700-800 500-600 3 Manager I Scale
800-900 600-700 4 Manager II Scale
 900-1,000 700-800 5 Manager III Scale

Human Resource Planning

According to Geisler, “ Human resource planning is the process –includes forecasting, developing
and controlling by which a firm ensures that it has –the right number of people, the right kind of
people, at the right places, at the right time, doing work for which they are economically most
useful.”

According to Beach, “Human resource planning is a process of determining and assuming that the
organization will have an adequate number of qualified persons, available at the proper times,
performing jobs which meet the needs of the enterprise and which provide satisfaction for the
individuals involved.”

Process of Human Resource Planning

Human resource planning is a process consisting of five steps. These are analyzing organizational
plan, demand forecasting, forecasting supply of human resources, estimating human resource gaps
and action planning. These are mentioned below:

1. Analyzing Organizational Plans: First of all, the objectives of the company are analyzed. Plans’
relating to production, marketing, finance, mergers and acquisitions give an estimate of man power
requirement of future work in an organization. It is also necessary to decide the time horizon for
which human resource planning is to be made. Our man power planning must be consistent with
organizational planning in order to achieve overall organizational objectives.

2. Demand Forecasting: The common demand forecasting techniques of manpower planning are
managerial Judgement, ratio trend analysis, work-study method, work force analysis, Delphi method,
etc. These are discussed below:

a) Managerial Judgement: Under this method all departmental heads estimate the manpower
requirements on the basis of their knowledge and past experience. These departmental estimates are
then aggregated to get an estimate of total manpower requirement of an organization. But it is quite
subjective and is, therefore, appropriate only for small firms.
b) Ratio Trend Analysis: Under this method future ratios are calculated on the basis of calculated
past ratio from past data of a company. Then on the basis of past ratios manpower requirement is
estimated. The following example illustrates this method:

Example: Produced unit in 2009-10 60000 units

Workers worked 2009-10 60

Past ratio 60:60000 or 1: 1000

Estimated production in 2010-11 80000 units

Estimated number of workers in 2010-11 80000 x1/ 1000 = 80

c) Work-Study: In this method, standard time required per unit of work is determined with the help
of time and motion study. This technique can be used when it is possible to apply work measurement
to calculate the length of operations and the amount of labour required.

Example: Planned output for next year: 50000 units

Standard hours per unit: 2

Planned hours required: 50000x2 = 100000

Productive hours per worker in the year: 2000

Number of workers required = 100000/ 2000 = 50

d) Work Force Analysis: All the employees may not be available throughout the year due to
absenteeism and turnover. Therefore, it is very necessary to make some provision for loss of
manpower to avoid the unwarranted situation. If from the work load analysis it is estimated that
manpower requirement in a year is 1000,then the actual number of workers needed will be 1000+
1000x.10 =1100.Here 10% has been taken as loss of manpower due to absenteeism and turnover.

e) Delphi Method: It seeks estimates of personnel needs from a group of experts. The HRP experts
act as intermediaries, summarize the various responses and report the findings back to the experts.
Summaries and surveys are repeated until the experts opinions begin to agree. The agreement
reached is the forecast of the personnel needs. There will be no interaction among experts.

3. Supply Forecasting: There are mainly two sources where from organization can get required
number of human resources. These are internal source and external source. If the number of
requirements is less then organization can fulfill the vacant posts through internal source like
promotion, transfer, demotion, etc. If the number of requirements is more then organization can
fulfill the vacant posts through external source of recruitment.

4. Estimating Manpower Gaps: Manpower gaps can be identified by comparing demand and
supply of manpower after forecast. There may be surplus or deficit of human resources in future.
Action plan has to be taken depending upon the situation.

5. Action Planning: Once the manpower gaps have been identified, plans are prepared to bridge
these gaps. Plans to meet the surplus manpower may be redeployment, retrenchment, transfer, etc.
On the other hand deficit can be checked by selection, promotion, etc.

Factors Affecting HRP

Human resource planning can be defined as the process of identifying the number of people required
by an organization in terms of quantity and quality. All human resource management activities start
with human resource planning. So we can say that human resource planning is the principle/primary
activity of human resource management. The factors affecting human resource planning are as
follows:

1. Employment: HRP is affected by the employment situation in the country i.e. in countries where
there is greater unemployment; there may be more pressure on the company, from government to
appoint more people. Similarly some company may force shortage of skilled labour and they may
have to appoint people from other countries.

2. Technical Changes in the Society: Technology changes at a very fast speed and new people
having the required knowledge are required for the company. In some cases, company may retain
existing employees and teach them the new technology and in some cases the company has to
remove existing people and appoint new.
3. Organizational Changes: Changes take place within the organization from time to time i.e. the
company diversify into new products or close down business in some areas etc. in some cases the
HRP process i.e. appointing or removing people will change according to situation.

4. Demographic Changes: Demographic Changes refer to things referring to age, population,

composition of work force etc. A number of people retire every year. A new batch of graduates with
specialization turns out every year. This can change the appointment or the removal in the company.

5. Shortage of Skill due to Labour Turnover: Industries having high labour turnover rate, the HRP
will change constantly i.e. many new appointments will take place. This also affects the way HRP is
implemented.

6. Multicultural Workforce: Workers from different countries travel to other countries in search of
job. When a company plans it’s HRP. It needs to take into account this factor also.

7. Pressure Groups: Company has to keep in mind certain pleasure groups like human rights
activist, woman activist, media etc.as they are very capable for creating problems for the company,
when issues concerning these groups arise, appointment or retrenchment becomes difficult.