Human resource management

Introduction
Behind production of every product or service there is an human
mind, effort and man hours (working hours). No product or service can
be produced without help of human being. Human being is fundamental
resource for making or construction of anything. Every organisation
desire is to have skilled and competent people to make their organisation
competent and best.
Among the five Ms of Management, i.e., men, money, machines,
materials, and methods, HRM deals about the first M, which is men. It is
believed that in the five Ms, "men" is not so easy to manage. "every man is
different from other" and they are totally different from the other Ms in the
sense that men possess the power to manipulate the other Ms. Whereas, the
other Ms are either lifeless or abstract and as such, do not have the power to
think and decide what is good for them.
 Human: refers to the skilled workforce in an organization.
 Resource: refers to limited availability or scarce.

 Management: refers how to optimize and make best use of such

limited or scarce resource so as to meet the organization goals

and objectives.
Therefore, human resource management is meant for proper
utilisation of available skilled workforce and also to make
efficient use of existing human resource in the organisation.
 Meaning of HR
 What is Human Resources (HR)?
In an organization, Human Resources is the department in
charge of all employees and employee-related operations. As a
term, we also use it to describe the entire workforce of an
organization.
Definition
 “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 higher levels of performance and ensuring that
they continue to maintain their commitment to the organization is
essential to achieve organisational objectives.
According to Decenzo and Robbins

“Human Resource Management (HRM) is an operation in

companies designed to maximize employee performance in order
to meet the employer's strategic goals and objectives”
 “Human resources management (HRM) is managing
(planning, organising, directing and controlling) the functions of
employing, developing, compensating and utilising human
resources, resulting in the creation and development of human
and industrial relations which would shape the future policies
and practices of human resource management, with a view to
contribute proportionately (due to them) to the organisational,
individual and social goals”.
-P .Subba Rao
Human resource management (HRM or HR) is the strategic
approach to the effective and efficient management of people in a
company or organization such that they help their business gain
a competitive advantage.
 It is designed to maximize employee performance in service of
an employer's strategic objectives.
 Human resource management is primarily concerned with the
management of people within organizations, focusing
on policies and systems.
 HR departments are responsible for overseeing employee-

benefits design, employee recruitment, training and

development, performance appraisal, and reward management,
such as managing pay and employee-benefits systems.
 HR also concerns itself with organizational
change and industrial relations, or the balancing of
organizational practices with requirements arising
from collective bargaining and governmental laws.
Nature of HRM
HRM involves management functions like planning, organizing,
directing and controlling.
 It involves procurement, development, maintenance and
management of human resource.
 It helps to achieve individual, organizational and social objectives.

 HRM is a multi disciplinary subject. It includes the study of

management psychology communication, economics and

sociology.
 It involves team spirit and team work.
1.It is an art and a science:
The art and science of HRM is indeed very complex. HRM is
both the art of managing people by recourse to creative and
innovative approaches; it is a science as well because of the
precision and rigorous application of theory that is required.

2. It is pervasive: (That presents in all parts of something)

Development of HRM covers all levels and all categories of
people, and management and operational staff. No
discrimination is made between any levels or categories. All
those who are managers have to perform HRM. It is pervasive
also because it is required in every department of the
organisation. All kinds of organisations, profit or non-­profit
making, have to follow HRM.
 3. It is a continuous process:
First, it is a process as there are number of functions to be
performed in a series, beginning with human resource planning to
recruitment to selection, to training to performance appraisal.
To be specific, the HRM process includes acquisition (HR
planning, recruitment, selection, placement, socialisation),
development (training and development, and career development),
utilisation (job design, motivation, performance appraisal and
reward management), and maintenance (labour relations, employee
discipline, grievance handling, welfare, and termination).
Second, it is continuous, because HRM is a never-ending process.
 4. HRM is a service function:
HRM is not a profit centre. It serves all other functional
departments. But the basic responsibility always lies with the line
managers. HRM is a staff function – a facilitator. The HR
Manager has line authority only within his own department, but
has staff authority as far as other departments are concerned.
 5. HRM must be regulation-friendly:
The HRM function has to be discharged in a manner that
legal dictates are not violated. Equal opportunity and equal
pay for all, inclusion of communities in employment,
inclusion of tribal’s and farmers in the benefits and non-
violation of human rights must be taken care of by the HRM.

 6. Interdisciplinary and fast changing

It is encompassing welfare, manpower, personnel
management, and keeps close association with employee and
industrial relations. It is multi- disciplinary activity utilising
knowledge and inputs from psychology, sociology,
economics, etc. It is changing itself in accordance with the
changing environment. It has travelled from exploitation of
workers to treating them as equal partners in the task.
 7. Focus on results:
HRM is performance oriented. It has its focus on results,
rather than on rules. It encourages people to give their 100%. It
tries to secure the best from people by winning the whole
hearted cooperation. It is a process of bringing people and
organization together so that the goals of each are met. It is
commitment oriented.

 8. People-centred:
HRM is about people at work both as individuals and a
group. It tries to help employees to develop their potential fully.
It comprises people-related functions like hiring, training and
development, performance appraisal, working environment, etc.
HRM has the responsibility of building human capital. People
are vital for achieving organizational goals. Organizational
performance depends on the quality of people and employees.
 9. Human relations philosophy
HRM is a philosophy and the basic assumption is that
employees are human beings and not a factor of production like
land, labour or capital. HRM recognises individuality and
individual differences. Every manager to be successful must
possess social skills to manage people with differing needs.

 10. An integrated concept:

HRM in its scope includes Personnel aspect, Welfare
aspect and Industrial relations aspect in itself. It is also
integrated as it concern with not only acquisition, but also
development, utilisation, and maintenance.
Scope of HRM
The organizational objectives can be best attained by
acquiring human resource, develop their skills, motivate
them for high performance and ensure that they
continue to maintain their commitment and loyalty
towards the high performance.
The scope of HRM is very vast. It covers all the activities
in the working life of an employee.
The focus of HRM is on people at work. It is indeed a wide area
and covers a broad spectrum of activities. A manager, whether he
is in charge of production or a marketing function deals with
human beings and gets his job done through and with people.
 HRM comprises of three aspects
 a. Personnel Aspects:
This is concerned with manpower planning, recruitment,
selection, placement, transfer, promotion, training and
development, lay-off and retrenchment, remuneration, incentives,
productivity, etc.
 b. Welfare Aspects:
It deals with working conditions and amenities such as
canteen, crèches, rest and lunchrooms, housing, transport, medical
assistance, education, health and safety, recreational facilities, etc.
 c. Industrial Relations Aspects:
This covers union-management relations; join consultation,
collective bargaining, grievance and disciplinary procedures,
settlement of disputes, etc.
The different activities that come within the scope of human
resource management are discussed below:
Scope # 1. Human Resource Planning (HRP):
It is the first step of human resource management. HRP is a
process through which the company makes an assessment of the
present manpower-the number of people employed, number of
post vacant, whether there is excess or shortage of staff and
prepares plans and policies to deal with them accordingly.
It also estimates the future man power requirement. It matches
the supply and availability of manpower with the company’s
purpose and makes the best person available for the job.
Scope # 2. Job Analysis:
An important task of HRM is job analysis. It provides the
basis for recruitment, training and development of staff. Every job
is analysed to identify the inherent requirement of the job – “what
the job demands of a worker”..
 Job analysis provides a detailed picture of the nature of
job, the skill and abilities required to perform the job, the
duties and responsibilities of the worker required for the job
This helps in the process of recruitment and selection, to
appoint the appropriate person for the job and also facilitates
arranging training and development programme for the
employees to match their skill and abilities with the job
requirement.
 Scope # 3. Job Evaluation:
It forms the basis of wage and salary determination.
Different jobs are compared and evaluated to determine the
relative importance of different jobs within the organization.
The jobs are compared, graded and ranked. Job evaluation
determines how much pay to be affixed to the particular job on
the basis of their importance in the organisation functioning.
This helps to determine a fair wage and salary and to determine
 Scope # 4. Recruitment and Selection:
The company on the basis of human resource planning and job
analysis identifies the requirement of personnel and explores
different internal and external sources from where manpower can
be acquired. This process is called recruitment. The right person is
selected and put to work.
The selection process involves steps like receiving
applications, tests, interviews, medical examination and final
selection. Right selection and placement provides employee
satisfaction which improves their productivity and efficiency and
benefits the organization.
 Scope # 5. Performance Appraisal:
It is a systematic method of evaluating the performance of
employees. This helps to assess the efficiency, strength and weakness
of the employees. It is a controlling process whereby the employees’
performance is matched with the standard level of performance and
remedial measures taken in case actual performance does not meet
the standard.
 It helps the management in their decision-making
relating to promotion, pay hike that may be rewarded if the
employee meets standard or outperforms the standard. It
also helps the management to decide about the training and
development needs for employees, who needs up gradation and
development of skill.
 Scope # 6. Training and Development:
Human resource management is concerned with
arrangement of training and development programme for the
newly appointed staff as well as for existing employees. This
helps to enhance the qualitative and quantitative
performance of the work force.
Training helps the employees to cope up with the
changing technological and other internal and external work
situations. Training and development make employees excel in
their present post as well as make them competent for future
higher job responsibilities.
 Scope # 7. Employee Compensation:
Human resource management performs the function of
determining the pay structure for different employees on the
basis of qualification, efficiency, experience, nature of the job. It
also determines rewards and incentives to be paid for their
contribution towards the organisation.

 Scope # 8. Employee Motivation:

Motivation of employees is essential for retention and
sustenance of employees within the organisation. Motivation
plays an important role in management of personnel. It helps to
improve productivity of personnel. There are different ways by
which employees may be encouraged. Recognition and reward
for performance, promotion, pay-hike, and other monetary and
non-monetary rewards motivate the employees.
 Scope # 9. Employee Welfare:
Human resource management focuses on the welfare of
employees by providing canteen facilities, crèches, rest and
lunch rooms, housing, transport, medical assistance,
education, health and safety, medical care, sickness
benefits, recreation facilities.
It aims at improving the quality of work life by
providing a better environment worth working, job security,
flexible working hours, eliminating workplace hazards, which
will have a positive impact on the productivity and quality of
work. Along with monetary benefits provided to employees
these non-monetary benefits improves the morale of the
employees and motivates them.
 Scope # 10. Industrial Relation:
Labour unrest, conflicts between the work groups and
between workers and management over issues like low wage,
bad work environment are common problems that must be
handled carefully by establishing a balance between the
worker’s interest and interest of the organisation and
management. Human resource management considers
establishment and maintenance of harmonious and cordial
relation between employer and employees.
This is achieved through careful interactions with labour
or employee unions, addressing their grievances and settling
the disputes effectively through negotiation, joint consultation,
collective bargaining, in order to maintain peace and harmony
in the organization.
 Significance of HRM
 Human Resource Management becomes significant for
business organization due to the following reasons.
 Objective :- Human Resource Management 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 Human
Resource policies employees are trained well and this makes
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 Human Resource Management
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
Human Resource 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 preparing 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 Human Resource 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.