Introduction of HRM

Organisation comprise of people & they function through people. The resources of men, money, materials and machinery cannot accomplish the organizational objectives in isolation. They need to be united into a team. It is only through the combined & coordinated efforts of people that the material & monetary resources can be effectively utilized for the attainment of objectives. Hence, people are the most significant resource of any organization & are called as Human Resources. Human Resources are defined as the knowledge, skills, creative abilities, talents and aptitudes obtained in the population Human Resources are the sum-total of the internet abilities, acquired knowledge and skill as exemplified in the talents & aptitudes of its employees.

Features of Human Resources

1. Human Resources of an organization are the product of their biological inheritance & interactions with the environment. The attitude & behaviour of human beings is always shaped by the family relationship, religious influences, educational background & organization climate. 2. Human resources are heterogeneous i.e. everyone has a different personality, different needs, attitudes & values. Inorder to make effective use of its human resources, an organization must recognize and acknowledge the differences between individuals so that each person can maximize his/her potential. 3. The effective utilization of all the other resources of an organization depends upon the quality of human resources. 4. Human resources are dynamic & behave differently. They react different to different situations. Hence, it is difficult to predict human behaviour. 5. If provided with the right climate human resources have a good potential to develop & grow. An organization can survive & grow if it has the right people at the right time working at right jobs.

Features of HRM / Nature of HRM

1. Integral part of management HRM is integral in the process of management. This function is performed by all the managers throughout the organization rather than the personnel department only. The manager must undertake the basic responsibility of lining the right people, thereafter providing them with the right training & motivation and appraising their performance for improving their quality.

2. Comprehensive function - HRM is concerned with managing people at work. It covers all types of people at all levels the organization. It applies to workers, supervisors, officers, managers and other types of personnel. 3. People oriented - HRM is concerned with employees as individuals as well as groups. It is the task of dealing with human relationship within an organization. It is concerned with all categories of personnel from top to the bottom of the organization. It is the process of bringing together people and organizations so that the goals of each are met. 4. Action-oriented HRM focuses on action rather than on recordkeeping or procedures. It stresses the solution of personnel problems to achieve both organizational objective and employees personal goals. 5. Personnel activities or function- Personnel management involves various functions of managing people at work like manpower planning, employment, placement, training appraisal and compensation of employees. Personnel Department is created in the organizations which is responsible for all these activities. 6. Individual-oriented - Every employee is considered as an individual so as to provide services & programmes to facilitate employee satisfaction and growth.

7. Developmentoriented HRM is concerned with developing potential of employees so that they get maximum satisfaction from their work and give their best to the organization. For this, it takes into account the personality, interests and capacities of employees. 8. Continuous Process - Personnel Management is not a one-shot function, but a continuous one which requires constant alertness and awareness of human relations and their importance in day-to-day operations. 9. Pervasive function HRM is a pervasive function of management which is performed by all managers at various level in the organization, across the different industries. When a personnel department is created other managers are not relieved of this responsibility. However, they can always seek advice and help in managing people from experts who specialize in personnel management. 10. Future-oriented - HRM is concerned with helping an organization achieve its objectives in the future by providing for competent and well motivated employees. 11. Based on Human Relations - Personnel management is concerned with the motivation of human resources in the organization. Every person has different needs, perceptions and expectation. Managers must have the human relations skills to deal with the people at

work. Human relations skills are also required in training, performance appraisal, transfer & promation of subordinates. 12. Challenging Fucnction - Managing of human resources is a challenging job due to the dynamic nature of people. People have to be dealt with tactfully as they have sentiments & emotions. 13. Interdisciplinary - HRM involves application of knowledge drawn from disciplines like sociology, anthropology, psychology etc. HRM is a highly specialized job. 14. Science as well as Art - HRM is a sciences as it contains an orgnised body of knowledge consisting of principles & techniques. It is also an art because it involves application of theoretical knowledge to the problems of human resources. 15. Staff Function - The function of HRM is advisory in nature. HR managers contribute to the growth & success of the organization by advising the operating department on personnel matters.

Objectives of HRM
The basic objective of personnel / human resource management is to contribute to the realsation of the organizational goals. Inorder to achieve organizational objective, integration of employers and employees interest is important. The objectives of HRM are1. To ensure effective utilization of human resources. All other organizational resources will be efficiently utilized by the human resources. 2. To help the organization attain its goals by providing well-trained and well-notivated employees. 3. To establish and maintain an adequate organizational structure of relationships among all the members of an organization by dividing of organization tasks into functions, positions and jobs and by defining clearly the responsibility, accountability, authority for each job and its relation with other jobs in the organization. 4. To bring about maximum individual development of members of the organization by providing opportunities for training and advancement. 6. To ensure reconciliation of individual/group goals with those of the organization in such a manner that the personnel feels a sense of commitment and loyalty towards it. 7. To achieve and maintain high morale among employees in the organization by securing better human relations.

8. 9. 10. 11. 12.

To identify and satisfy the needs of individuals by offering various monetory and nonmonetory rewards. To develop and maintain a quality of work life (QWL) which makes employment in the organization a desirable personnel & social situation. To help maintain ethical policies and behaviour inside and outside the organization. To manage change to the mutual advantage of individuals, groups, organization and the society. To ensure respect for human beings by providing various services and welfare facilities to the personnel. To sum up, HRM seeks to accomplish individual, organizational and societal goals. According to the Indian Institute of Personnel Management, Personnel Management aims to achieve both efficiency and justice, neither of which can be pursued successfully without the other. It seeks to bring together into an effective organization the men and women who make up an enterprise, enabling each to make his/her own best contribution to its success both as an individual and as a member of a working group. It seeks to provide fair terms and conditions of employment and satisfying work for those employed. SCOPE & ACTIVITIES OF HRM The requirements for attaining the above objectives of HRM are 1) Human Resource or Manpower Planning i.e. determining the number and kinds of personnel required to fill various positions in the organization. 2) Recruitment, Selection and Placement of personnel i.e. employment function. 3) Training and Development of employees for their efficient performance and growth. 4) Appraisal of performance of employees and taking corrective steps like transfer from one job to another. 5) Motivation of workforce by providing financial incentives and avenues of promotion. 6) The employees should be given good remuneration (wages & fringe benefits) to achieve higher standard of living and so that they are motivated to give higher productivity. 7) Social security and welfare of employees. 8) Review and audit of personnel policies, procedures and practices of the organization.

According to the Indian Institute of Personnel Management, the scope of personnel management is A) The welfare aspect concerned with working conditions and amenities like canteens, crches, housing, personal problems of workers, schools and recreation. B) The Labour or personnel aspect includes recruitment, placement of employees, remuneration, promotions, incentives, productivity etc. C) The Industrial relations aspect includes trade union negotiations, settlement of industrial disputes, joint consultation and collective bargaining. FUNCTIONS OF HRM There are 3 broad functions of HRM Managerial Functions Operative Functions Advisory Functions Managerial Functions Like any other manager, a Human Resource Manager performs the functions of Planning Organising Directing Controlling 1) Planning A Plan is a predetermined course of action. Planning is the process of deciding the goals and formulating policies and programmes to achieve the goals. HRM involves forecasting vacancies for human resources, predicting trends in labour market, wages, union demands etc and their impact on the organization. In the area of HRM, Planning involves deciding personnel goals, formulating personnel policies & programmes, preparing the human resource budget etc. 2) Organising In order to implement the plans, a sound organization structure is required.. The organization structure includes the following Grouping of personnel activity logically into functions or positions. Assignment of different groups of activities to different individuals. Delegation of authority according to the tasks assigned and responsibilities involved. Co-ordination of activities of different individuals.

3) Direction Direction is the process of motivating, activating, leading and supervising people. The direction function of the personnel manager involves encouraging people to work willingly and effectively for the goals of the enterprise.

The personnel manager can motivate the employees in an organization through career planning, salary administration, ensuring employee morale, developing cordial relationships and provision of safety requirements and welfare of employees. 4) Controlling It implies checking, verifying and regulating to ensure that everything is in accordance with the plans. It is the observation and comparison of results with the standards and corrections of deviations that may occur. Controlling the management of human resources involves auditing training programmes, analyzing labour turnover records, directing morale surveys, conducting separation interviews etc. Operative Functions / Service Functions These functions are undertaken by the personnel manager of the personnel department. These are A) Procurement Function It is concerned with securing and employing the right kind and number of people so as to accomplish the organizational objectives. It consists of the following activities a) Job Analysis It is the process of studying in detail the operations and responsibilities involved in a job so as to identify the nature and level of human resources required to perform the job effectively. b) Human Resource Planning Is the process of estimating the present and future manpower requirements of the organization. c) Recruitment It is the process of searching for required personnel and stimulating them to apply for jobs in the organization. d) Selection Involves judging the suitability of different candidates for jobs in the organization & choosing the most appropriate people. e) Placement It means assigning suitable jobs to the selected candidates so as to match employees qualifications with job requirements. f) Induction or Orientation It involves familiarizing the new employees with the company, the work environment and the existing employees so as the new employees feel comfortable and get introduction to the work culture. B) Development Function HRD is the process of improving the knowledge, skills aptitudes and values of employees so that they can perform the present and future jobs more effectively. It consists of the following activities. a) Performance & Potential Appraisal It consists of a systematic evaluation of employees with respect to their performance once on the job and their potential for development. b) Training Is the process wherein employees learn knowledge, skills and attitudes which help in the present job for which he has been engaged in the organization and also helps to develop him for higher jobs in the organization. c) Executive Development Is the process of developing managerial talent through appropriate programmes. d) Career Planning & Development Involves planning the career of employees so as to fulfill the career aspirations of people. It involves promotions & transfers.

C) Compensation Function It is providing of equitable and fair remuneration to employees for their contributions to achieve the organizational objectives. They can be compensated both by monetary and non-monetary rewards. 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 Consists of developing and operating a suitable wage and salary programme. c) Bonus Involves payment of bonus under the payment of Bonus Act, 1965 as well as non-statutory bonus and other incentives. D) Maintenance Function (Working conditions & welfare) It is concerned with providing the employees with good working conditions so that they like their work and workplace & maintain their efficiency. This is important to increase the motivation & morale of employees several fringe benefits like housing, medical aid, educational facilities etc are also given to the employees, social security measures like provident fund, gratuity, maternity benefits, injury / disablement allowance, group insurance etc are also given. Health, safety and welfare services are designed to preserve the human resources of the organization. E) Motivation The personnel manager helps the various departmental managers to design a system of financial and non-financial rewards which is a source of motivation to the employees. F) Personnel Records Personnel department keeps an updated record of the employees with respect to the training, achievements, transfer, promotions etc. Records of absenteeism, labour turnover and the personnel programmes & policies of the organization are also kept. G) Industrial Relations The personnel managers can help in collective bargaining, joint consultation and settlement of disputes, if they arise, since he is associated with the committees on discipline, labour welfare, safety, grievance etc, he helps in maintaining industrial peace in the organization. H) Separation At the time of separation of the employees from the organization, the personnel manager must ensure the release of retirement benefits to the retiring personnel in time. Advisory Functions The HR Manager offer advice to i) ii) Top Management In formulation & evaluation of personnel programmes & policies; and gives advice on maintaining good human relations & a high employee morale. Departmental Heads The HR manager offers advice to the heads of different departments on manpower planning, job analysis & design, recruitment & selection, placement, training, performance appraisal etc.

To, sum up: HR Functions

Managerial a) Planning b) Organising c) Directing d) Controlling

Operative Advisory a) Procurement a) Advice to top Mgmt. b) Development b) Advice to departmental heads c) Compensation d) Maintenance e) Motivation f) Personnel Records g) Industrial Relations h) Separation

Importance of HRM
1) Significance for an Enterprise HRM helps an enterprise to accomplish its goals efficiently by means of a) Attracting, & retaining the required talent through proper HR Planning, recruitment, selection, placement, orientation, and compensation & promotion policies. b) Developing the skills and right attitudes among the employees through training, development, performance appraisal etc,. c) Securing willing co-operation of employees through motivation, participation, grievance handling etc. d) Utilising the human resources effectively e) Ensuring a team of competent people in the organization in the future also. 2) Professional Significance Effective management of human resources improves the quality of work life. It encourages team work among employees by providing a healthy, working environment. It leads to professional growth by means of a) Providing Maximum Opportunities for personal development of each employee. b) Maintaining healthy interpersonal & intergroup relationships. c) Allocating work properly. 3) Social Significance A sound HRM contributes to the society since it enhances the dignity of labour in the following ways a) Providing suitable employment that provides social & psychological satisfaction to people. b) Maintaining a balance between the jobs available and he jobseekers w.r.t. the numbers, qualifications, needs & aptitudes. c) Eliminating waste of human resource through conservation of physical and mental health.

4) National Significance Countries are under developed because their people are backward. There is a big difference in development between countries with similar resources due to the differences in the quality of people The level of development in a country depends on the skills, attitudes & values of its human resources. Thus, effective management of human resources aids in the economic growth of the country, thereby leading to a higher standard of living & better employment.

Challenges of HRM
1) Increasing size of workforce - The size of organizations is increasing and with the rise of MNCs, the workforce of an organization has also increased. The management of such a large workforce is difficult as the workers are more conscious of their rights. 2) Increase in Education Level The rise in the literacy level will definitely create tough task for the future managers. 3) Increasing aspirations of employees The workers are becoming more aware of their higher level needs & this awareness will intensify more in the future workers. The managers would have to evolve appropriate techniques to satisfy the higher level needs of workers & thus motivate them. 4) Technological Advances In the competitive world of today, organizations cannot survive for long with old technology. The problem of unemployment resulting from modernization will be solved by properly assessing manpower needs and training of redundant employees in alternate skills. 5) Changes in Political Environment There may be more of government interference in business to safeguard the interests of workers, consumers & the public at large. Govts participation in trade & commerce will also pose challenges for the managers. 6) Changing Psycho-social system The future management would be required to ensure effective participation of lower levels in the management of the organization system. An organizational model will have to be designed whose roots are deeply entrenched in democratic humanistic system. 7) Mobility of Professional Personnel There is an increased mobility of various managerial & professional personnel between organizations. As individuals develop greater technical & professional expertise, their services are in greater demand by the other organizations. 8) Motivation Work-force in the future & in fact, now also is more educated & are selfconscious, will demand more of participation & avenues for self-fulfillment. With the rise in the proportion of professional & technical employees & the women getting into managerial ranks, non-financial incentives are more important for the employees rather than only the financial incentives.

9) Changes in Legal Environment Many changes are taking place in the legal framework within which the industrial relations system in the country is now functioning. It is the duty of the HR executive to anticipate the changes & prepare the organization to face them & bring about necessary adjustment for the effective utilization of human resources. 10) Empowerment Dynamic managers understand the role of empowerment of lower levels. Empowerment means giving everyone more information & control over how they perform their jobs. Empowerment techniques can be from participation in decisionmaking to the use of self-managed teams. 11) Building Responsive Organizations Rather than being a traditional boss, the managers today have to be more so a team leader, internal consultant & change facilitator. They have to aim at building up of responsive organizations, customer-oriented organizations which require more of employees commitment. 12) Leadership The HR Managers have to not only look after the personnel functions, but also be involved in the actuating process (leadership & motivation) of the entire organization (from bottom to the top level). The HR Manager is required to play the key role in formulation of personnel policies, programmes, plans etc in consultation with the other functional managers. 13) Change Agent The HR Managers will be required to act as change agents through greater involvement in environmental scanning & strategic planning; they not only have the responsibility of maintaining the organization but also furthering it. They need to prepare the personnel to help them deal with the environmental uncertainties. 14) Greater Professionalism The HR Manager is required to be an expert in behavioral sciences who can play a creative & developmental role. HRM as a profession will survive with the judicious application of knowledge & skills available. 15) New Work Ethics HR Managers will have initiate & foster a new work ethic so as to assist the top management in setting up & enforcing good quality standards. As changing work ethic requires increasing emphasis on individual, jobs will have to be redesigned to make them more challenging. Flexitime would be necessary. Focus will (infact has already started) shifting from extrinsic to intrinsic motivation of employees. 16) Keeping IR from conflict to co-operation The challenge for Managers is to move IR from conflict to co-operation. The present industrial relations situation in India is marked by multiplicity of unions. The union tend to make irrational & false promises & adopt erratic and violent measures to compete with their rivals. There is more of inter-unions rivalry too. This problem can be resolved by a system of recognition of trade unions. Industrial harmony can be accomplished through workers participation in the management. There should be improved interpersonal interaction based on trust & confidence between workers & the management.

Evolution of the Concept of HRM

1) The Commodity concept Prior to the Industrial Revolution, the guild system was the onset of personnel management. Guild refers to a closely knit group concerned with selecting, training rewarding, and maintaining workers. The industrial revolution gave rise to the Factory System wherein factory owners employed workers on fixed wages. The workers were treated as a commodity which could be bought & sold. The close relationships between owners and workers were broken. 2) The Factor of Production Concept In this, employees were considered a factor of production just like capital, materials & machinery. Taylors scientific management laid stress on the proper selection and training of employees inorder to maximize productivity. The employees were treated as mere operators of machines. However, unlike in the commodity concept, employees gained through higher earnings & better working conditions in this concept. Personnel Management was believed to be concerned with keeping records of production, employment, wage payments, training etc. 3) The Paternalistic Concept Employees organized together on the basis of their common interest & formed trade unions. The growing democracy and the growth of trade unions stimulated the employees to have a paternalistic (fatherly & protective) attitude towards the workers. Employees launched health and welfare schemes like housing facilities, recreation facilities, medical facilities, workers education, pension plans, etc. In several factories, welfare officers were appointed to provide welfare services to the workers. Employers & Employees both realized that they cannot survive without each other. All the benefits were treated as a favour to the employees by their workers. 4) The Humanitarian Concept In the 1920s and 30s, industrial psychologists and human relations activists advocated the adoption of humanitarian concept. They opined that workers should be treated as human beings and the employers responsibility is to provide facilities for the social and psychological satisfaction of the workers. Hawthorne Experiments generated considerable interest in human problems of the workplace. This approach is also known as human relations concept. 5) The Behavioral Human Resource Concept The emergence of behavioral science approach in 1950s led to the application of behavioral sciences to the problems of individual and group behavior at work. There was a rise in the concepts of motivation, leadership, group dynamics, organizational climate, organizational conflict etc. Employees were considered as a valuable asset of the organization. Focus was on the integration of employee with the organization so that organizational & individuals goals

could be achieved simultaneously. Focus was on management practices like two-way communication, management by objectives, quality circles etc. 6) The Partnership Concept The modern trend is to view employees as partners in industry. Workers participation is of utmost importance, several companies have launched stock option plans to retain their employee and achieve their commitment to the organization. The employees are treated as a valuable resource and Human Resource Development (HRD) is the buzz word in the industry today.

The HRD Concept Human Resource Development (HRD) is the core of a larger system known as Human Resource
System, wherein HRD is mainly concerned with providing learning experiences for the people associated with an organization through behavioral processes. It means those learning experiences which are organized for a specific time & is aimed to bring about a behavioral change. In this, the individual is provided with learning experiences not only in isolation but he shares others learning experiences also. HRD is a process whereby the employees are continuously helped in a planned way to a) Acquire or sharpen capabilities required to perform various tasks & functions associated with their present and future expected roles. b) Develop their general enabling capabilities as individuals so that they can be developed for their own/organizational development purposes. c) Develop an organizational culture where superior-subordinate relationships, team work & collaboration among different sub-units are strong & contribute to the professional wellbeing, motivation & pride of employees.