heuman resource management | Human Resource Management | Performance Appraisal

Human Resource Management: Context, Concept and Doundaries

UNIT 2 THE CONCEPT AND FUNCTIONS OF HUMAN RESOURCE MANAGEMENT
Objectives
After reading this unit, you should be able to:
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understand the meaning and concept of human resource management; and explain the functions of HR, and responsibilities and new roles of HR practitioners.

Structure
2.1 2.2 2.3 2.4 2.5 2.6 2.7 Introduction Concept of HRM Objectives of HRM Human Resource Functions Summary Self Assessment Questions Further Readings

2.1 INTRODUCTION
Human resource management (HRM) is an approach to the management of people, based on four fundamental principles. First, human resources are the most important assets an organisation has and their effective management is the key to its success. Second, this success is most likely to be achieved if the personnel policies and procedures of the enterprise are closely linked with, and make a major contribution to, the achievement of corporate objectives and strategic plans. Third, the corporate culture and the values, organisational climate and managerial behaviour that emanate from that culture will exert a major influence on the achievement of excellence. This culture must, therefore, be managed which means that organisational values may need to be changed or reinforced, and that continuous effort, starting from the top, will be required to get them accepted and acted upon. Finally, HRM is concerned with integration - getting all the members of the organisation involved and working together with a sense of common purpose.

2.2 CONCEPT OF HRM
HRM is a strategic approach to the acquisition, motivation, development and management of the organisation’s human resources. It is a specialised field that attempts to devd .ng an appropriate corporate culture, and introducing programmes which reflect and support the core values of the enterprise and ensure its success. HRM is proactive rather than reactive, i.e., always looking forward to what needs to be done and then doing it, rather than waiting to be told what to do about recruiting, paying or training people, or dealing with employee relations problems as they arise. The techniques for the application of HRM will include many familiar functions of personnel managers, such as manpower planning, selection, performance appraisal, salary administration, training and management development. These will be overlaid

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Managing people includes both individual and collective dimensions. HRM is also more comprehensive and deeprooted than training and development. and end-users of all products and services. industrial relations. It integrates in a meaningful way the various sub-systems like performance appraisal. The key distinguishing feature of HRM is its evolving strategic role. and human resource information. it is about the management of work and people in the firm. HRM is not simply about HR or ‘people practices’. involvement. The major attention of traditional personnel function is on personnel administration or management while the major attention of HRM is on developing people and their competencies. an outgrowth of the older process and approach. HRM is preventive. implying that there is a need to invest time and effort in their development. Its approach is multi-disciplinary from the beginning to the end. inter-team processes. Secondly. viz. It is a scientific process of continuously enabling the employees to improve their competency and capability to play their present as well as future expected roles so that the goals of the organization are achieved more fully and at the same time the needs of the employees are also met to an adequate extent. The Concept and Functions of Human Resource Management 25 . separate from the business. persons working in an organization are regarded as a valuable source. human resources do not merely focus on employees as individuals. But it is much more than its parent disciplines. and constrained by a limited definition of its role as dealing with mostly unionised and low level employees. The approach focuses on the need to humanise organisational life and introduce human values in the organisation. there are three meanings attached to the concept of HRM. It is an asset to be invested in. (consisting of the person and his superior). These include the role or the job a person has in the organisation. If personnel management is curative. And thirdly. Under the HRM approach.. HRM is concerned with both the structure of work in a firm and with all the related employment practices that are needed to carry out the work. units and processes in the organisation. resources.by special programmes designed to improve communication systems. research and systems development. organisation development. There is scope for unlimited development of these resources. reactive. therefore. potentiality appraisal and development. no doubt. In its essence. The important assumptions of HRM are as follows: 1) 2) 3) 4) The members of an organisation are reservoirs of untapped resources. commitment. and productivity. and the entity of the total organisation. HRM is the qualitative improvement of human beings who are considered the most valuable assets of an organization-the sources. the various teams in which people work. employee welfare and quality of work life. they are human resources which means that they have their own special characteristics and. HRM is. HRM essentially emphasises and incorporates those expectations which are not being fulfilled through the traditional personnel management. the dydadic unit. rewards. some basic assumptions about human resources are also different from the traditional approach. cannot be treated like material resources. It is more in the nature of self-development than development thrust from outside. It is a resource to be used to its fullest capacity. but also on other social realities. The HRM model is characterised as being employee-oriented with an emphasis on the maximisation of individual skills and motivation through consultation with the workforce so as to produce high levels of commitment to company strategic goals. personnel management. and behavioural science. career planning. Broadly. short-term. training and development. In the first place. HRM is a production model approach to personnel management. The organisation also undergoes development with the overall benefits along with the development of its members. The traditional personnel management is non-strategic.

There are several sub-functions under TPF 3. safety or other such areas of societal concern. TPF is an independent function 2. HR systems and procedures should be designed on the basis of process values to reduce human wastage 8. The major attention of HRS is on developing people and their competencies 7. TPF has the main responsibilities for their personnel matters 5. systems. they have to minimize the negative impact of such demands upon the organisation. there are other objectives too. The main task of HRD is to develop enabling capabilities (proactive role) 4. People are primarily motivated by challenges and opportunities for development and creativity 2.Human Resource Management: Context. people. formulates necessary plans and strategies. functional. Concept and Doundaries 5) The organisation further develops a culture in which utmost emphasis is placed on harmonious superior-subordinate relations. and management of people and their development 6. 6) The management of human resources is more of an art than a science. and the process of the total organisation 6. People in an organisation are motivated mainly by salary and rewards Human Resource Development (HRD) 1. Specifically. Personnel system and procedures should be designed to achieve maximum efficiency 8. open communication. For example. The major attention of TPF is on personnel administration or management 7. and learning from past mistakes. Apart from this. judgment calls. Table 1: Some Basic Assumptions Underlying Traditional Personnel Function and Human Resources System Traditional Personnel Function (TPF) 1. HRM objectives are four fold: societal. The failure of organisations to use their resources for society’s benefit in ethical ways may lead to restrictions. HRD is a sub-system of a larger system (organisation) 2. organisational. The main responsibilities of TPF relate to salary and job administration. The main task of TPF is to respond effectively to the demands (coping role) 4. 26 . teamwork. Societal Objectives The societal objectives are socially and ethically responsible for the needs and challenges of society. All managers irrespective of functions share the responsibility of human resource functions 5. In practice it is an “art” full of pitfalls. The responsibilities of HRS relate to HRS. While doing so.3 OBJECTIVES OF HRM The primary objective of HRM is to ensure the availability of competent and willing workforce to an organisation. collaboration among different groups of individuals. and above all. Top management takes the initiative for HRM. and personal. the society may limit human resource decisions to laws that enforce reservation in hiring and laws that address discrimination. and creates an overall climate and support for its implementation. integration of the goals of the organisation with the needs of the employees. HRD is an organic whole: All the parts are interlinked 3.

Otherwise. Human resource management is not an end in itself. The department’s level of service must be tailored to fit the organisation it serves. 3. Personal Objectives Source: William B. 5. 4. p. Human resources are to be adjusted to suit the organisation’s demands. 4. 2. 7. it is only a means to assist the organisation with its primary objectives. 2. retained and motivated. Human Resources and Personnel Management. 2. The Concept and Functions of Human Resource Management Functional Objectives Functional objectives try to maintain the department’s contribution at a level appropriate to the organisation’s needs. and Keith Davis. Societal Objectives 1. Jr. 2. Functional Objectives 4. Organisational Objectives 3. employee performance and satisfaction may decline giving rise to employee turnover. 3. 1. 6. Personal objectives of employees must be met if they are to be maintained. Supporting Functions Legal compliance Benefits Union-management relations Human resource planning Employee relations Selection Training and development Appraisal Placement Assessment Appraisal Placement Assessment Training and development Appraisal Placement Compensation Assessment 2. at least insofar as these goals enhance the individual’s contribution to the organisation. 3. 1. Personal Objectives Personal objectives assist employees in achieving their personal goals. 15. Werther. 1. 5. Simply stated the human resource department exists to serve the rest of the organisation. Table 2: HRM Objectives and Functions HRM Objectives 1..Organisational Objectives The organisational objectives recognise the role of human resource management in bringing about organisational effectiveness. 3. 27 .

(2) desirable working relationships among all members of the organisation. Human resources planning and recruiting precede the actual selection of people for positions in an organisation. Staffing: Staffing emphasises the recruitment and selection of the human resources for an organisation. In addition to providing training for new or inexperienced employees. The major functional areas in human resource management are: (1) planning. The basic human resource planning strategy is staffing and employee development. and (4) employee maintenance. knowledge. and experience needed to perform it. such as skills. 28 . Concept and Doundaries 2. Training and Development: The training and development function gives employees the skills and knowledge to perform their jobs effectively. (2) staffing. including pay and benefit programmes. some functions serve a variety of purposes. Recruiting is the personnel function that attracts qualified applicants to fill job vacancies. and personnel people because job content has a great influence on personnel programmes and practices. develop. Training and development programmes provide useful means of assuring that employees are capable of performing their jobs at acceptable levels. The compensation function facilitates retention of employees and also serves to attract potential employees to the organisation. A job description spells out work duties and activities of employees. abilities.Human Resource Management: Context.4 HUMAN RESOURCE FUNCTIONS The role of human resource management is to plan. These four areas and their related functions share the common objective of an adequate number of competent employees with the skills. In the selection function. Although each human resource function can be assigned to one of the four areas of personnel responsibility. and administer policies and programmes designed to make expeditious use of an organisation’s human resources. performance appraisal measures serve to stimulate and guide employee development as well as salary administration purposes. On selection. A brief description of usual human resource functions is given below: Human Resource Planning: In the human resource planning function. and experience needed for further organisational goals. For example. and company rules and expectations. human resource functionaries are involved in developing and administering methods that enable managers to decide which applicants to select and which to reject for the given jobs. Research is an important part of this function because planning requires the collection and analysis of information in order to forecast human resources supplies and to predict future human resources needs. (3) employee development. the number and type of employees needed to accomplish organisational goals are determined. Its objectives are: (1) the effective utilisation of human resources. Orientation: Orientation is the first step toward helping a new employee adjust himself to the new job and the employer. and (3) maximum individual development. It is that part of management which is concerned with the people at work and with their relationship within an enterprise. managers. Job Analysis: Job analysis is the process of describing the nature of a job and specifying the human requirements. It is a method to acquaint new employees with particular aspects of their new job. Job descriptions are a vital source of information to employees. organisations often provide training programmes for experienced employees whose jobs are undergoing change. The end product of the job analysis process is the job description. Large organisations often have development programmes which prepare employees for higher level responsibilities within the organisation. the most qualified applicants are selected for hiring from among those attracted to the organisation by the recruiting function. working hours.

v) The raw material for statistics which check and guide personnel policies. transfers. More than ever employees today have a great interest in their personnel records. tardiness. promotion. Records which must be maintained include application forms. Human resource professionals are usually responsible for developing and administering performance appraisal systems. health and medical records. the personnel responsibility primarily involves negotiating with the unions regarding wages. As such. maintaining. although the actual appraisal of employee performance is the responsibility of supervisors and managers. and retrieving employeerelated information for a variety of purposes. iii) A guide when recruiting a new employee. iv) A historical record of previous action taken regarding employees. Record-keeping: The oldest and most basic personnel function is employee recordkeeping. They want to know what is in them. Since compensation is a major cost to many organisations. Personnel records provide the following: A store of up-to-date and accurate information about the company’s employees. vi) The means to comply with certain statutory requirements.g. However. benefits are primarily related to the maintenance area. e. Unions are organisation of employees who join together to obtain more voice in decisions affecting wages. i) ii) The Concept and Functions of Human Resource Management 29 . by showing the rates of pay received by comparable employees. lay-offs). Pay is obviously related to the maintenance of human resources. promotions. particularly by comparing him with other employees. absences. and other aspects of employment. Career planning activities include assessing an individual employee’s potential for growth and advancement in the organisation. The cost of benefits has risen to such a point that they have become a major consideration in human resources planning. why certain statements have been made. It is related to employee development in that it provides an important incentive in motivating employees to higher levels of job performance and to higher paying jobs in the organisation. working conditions. service conditions. With regard to labour relations. Complete and up-to-date employee records are essential for most personnel functions. earnings and hours of work. employment history (jobs held.Performance Appraisal: This function monitors employee performance to ensure that it is at acceptable levels. benefits. since they provide for many basic employee needs. Benefits: Benefits are another form of compensation to employees other than direct pay for work performed. and why records may or may not have been updated. and resolving disputes and grievances. the human resource function of administering employee benefits shares many characteristics of the compensation function. Labour Relations: The term “labour relations” refers to interaction with employees who are represented by a trade union. Benefits include both the legally required items and those offered at employer’s discretion. This function involves recording. it is a major consideration in human resource planning. A guide to the action to be taken regarding an employee. Besides providing a basis for pay. Career Planning: Career planning has developed partly as a result of the desire of many employees to grow in their jobs and to advance in their career. and disciplinary action. seniority lists. Compensation: Human resource personnel provide a rational method for determining how much employees should be paid for performing certain jobs. performance appraisal information is essential for employee development since knowledge of results (feedback) is necessary to motivate and guide performance improvements. Compensation affects staffing in that people are generally attracted to organisations offering a higher level of pay in exchange for the work performed. and other employee data. turnover.

terminations. sales progress. . leadership. and their organisation in particular. There is a wide scope for research in the areas of recruitment. Apart from the above. To actively involve himself in company’s strategy formulation. job security. Concept and Doundaries Personnel Research: All personnel people engage in some form of research activities. employee turnover. They are required to have a thorough knowledge of the organisation and its intricacies and complexities. Research is not the sole responsibility of any one particular group or department in an organisation. its keynote is a cross-fertilisation of ideas from different organisations. industrial relations. To evaluate the impact of an HRD intervention or to conduct research so as to identify. To provide co-ordination and support services for the delivery of HRD programmes and services. restructuring plans. employee opinions can be gathered on wages. To keep communication lines open between the HRD function and individuals and groups both within and outside the organisation. develop or test how HRD in general has improved individual or organisational performance. To diagnose problems and to determine appropriate solution particularly in the human resources areas. The first and foremost role of HR functionary is to impart continuous education to employees about the changes and challenges facing the country in general. To facilitate the development of various organisational teams and their working relationship with other teams and individuals. To identify and evolve HRD strategies in consonance with overall business strategy. It is no longer confined to the culture or ethos of any single organisation. Periodic social audits of HR functions are considered essential. the object is to get facts and information about personnel specifics in order to develop and maintain a programme that works. diversification plans. plans and policies. Inspite of its importance. technology.Human Resource Management: Context. training. The primary responsibilities of a human resource manager are: l l l l l l l l l l l 30 To develop a thorough knowledge of corporate culture. but should be properly made use of. Through a well-designed attitude survey. HR professionals have an all-encompassing role. sharp price movements. To initiate change and act as an expert and facilitator. The initial responsibility is that of the human resource department. in a sense. and lectures. promotions. Research is not done to put out fires but to prevent them. in most companies. To act as an internal change agent and consultant. For that matter. In a good research approach. The employees should know about their balance sheet. research is the most neglected area because personnel people are too busy putting out fires. which however should be assisted by line supervisors and executives at all levels of management. and the like. research. and so on. The HR professionals should impart education to all employees through small booklets. innovation. turnover and all such details. any survey is. the HR function involves managing change. however. video films. The assistance that can be rendered by trade unions and other organisations should not be ignored. The ultimate goal of every HR person should be to develop a linkage between the employee and the organisation because the employee’s commitment to the organisation is crucial. working conditions. welfare services. To try and relate people and work so that the organisation objectives are achieved effectively and efficiently. It is impossible to run a personnel programme without some pre-planning and post-reviewing. and diversity.

...... and goals so that they can identify...... Discuss this statement by citing suitable examples from your own organisation....................... To assist individuals to add value in the workplace and to focus on the interventions and interpersonal skills for helping people change and sustain change......................................... in particular........ the third.. To identify learning needs and then design and develop structured learning programmes and materials to help accelerate learning for individuals and groups......................” The basic approach of HRM is to perceive the organisation in its totality. To help individuals and groups work in new situations and to expand and change their views so that people in power move from authoritarian to participative models of leadership.. help it happen fast......... according to Dave Ulrich.. strategic partner role-turning strategy into results by building organisations that create value..................... to ensure the best and most flexible use of resources and competencies.................. To help people assess their competencies.... faster and cheaper........ To assess HRD practices and programmes and their impact and to communicate results so that the organisation and its people accelerate their change and development............................ To create the smoothest flow of products and services to customers..... ...... and implement development actions..................... the second.......... Human resource management has received tremendous attention in recent years....... It seeks to achieve the fullest development of human resources and the fullest possible socio-economic development. and to recommend long-term strategies to support organisational excellence and endurance. a change agent role-making change happen and........ . plan...... an employee champion role-managing the talent or the intellectual capital within a firm............ values...... The first....................... To design and prepare HR systems and actions for implementation so that they can produce maximum impact on organisational performance and development............ The Concept and Functions of Human Resource Management 2) 3) 4) 5) 6) 7) 8) 9) There are four roles which HR play................................................... although many see it as the “old wine in a new bottle... and the fourth............... Its emphasis is not only on production and productivity but also on the quality of life. and to create commitment among the people who help us to meet customers’ needs whether those people work directly for the organisation or not........... an administrative role-trying to get things to happen better.............. Activity A With business going global and competition becoming intense today HR has travelled a long way from its conventional role as a support function to being a strategic business partner in the present technology leveraged era.... 31 .............. .. Its role in organisations has also undergone a substantial change and many organisations have gradually oriented themselves from the traditional personnel management to a human resource management approach.. To facilitate the development and implementation of strategies for transforming one’s own organisation by pursuing values and visions.....The following are the nine new roles of HR practitioner as suggested by Pat McLegan: 1) To bring the issues and trends concerning an organisation’s external and internal people to the attention of strategic decision-makers................

....... compensation management.......................... Cascio.....V... ...................... India..... 2..... London................. What is “Human Resource Management”? What functions does a human resource department normally perform? Explain the new roles of HR managers.. Concept and Doundaries .............. Managing Human Resources: Productivity.... Rao.. Purcell J..7 FURTHER READINGS Armstrong......... M.Human Resource Management: Context.. and getting them involved in working productively......... Managing People..... This will also integrate the purposes and processes and make HRM more meaningful........... paying and treating them fairly................... McGraw-Hill Book Company.... obtaining and developing the right people....................... . P......... (3) training system......................... 1993........................... The objectives of HRM include getting the organisation right....... recruiting... 4... 2. counselling employees... 2..... Beaumont. Macmillan....................... 1994.... most human resource functions are performed by owners or operating managers.. 1992....... selecting...... Kogan Page...... The attainment of these objectives necessitates the performance of several functions. New Delhi.. W....... and employer-employee relations................................. Human Resource Management: Key Concepts and Skills..... All systems and sub-systems of HRM must be incorporated in the organisation while setting the goals and objectives.................... Boxall P.6 SELF-ASSESSMENT QUESTIONS 1........ Sage Publications................ In the light of new challenges....... Strategy and Human Resource Management..... training. 2003........................ and (6) self-renewal system..5 SUMMARY The human resources of an organisation represent one of its largest investment........ Palgrave........ 2....................... (2) career system.............F......... (4) work system..................... HRD in the New Economic Environment. Quality of Work Life........ Successful human resource management is essential to organisational growth and success................ 32 .... Large organisations usually have a human resource or personnel department that is responsible for co-ordinating and directing the human resource functions... and Others.......... Profits... Vol.................................. 1999.... T. In small organisations.............. providing effective motivation and leadership.... New York............. 3.............. ............................................. New York... there are indications that human resource people will play an increasingly important role in an organisation’s longrange planning and policy-making activities. The main HRM systems are: (1) appraisal system..... Human resources functions are many and varied and include such things as human resource planning..........B............................ (5) cultural system...... Tata McGraw-Hill Book Company........ ..

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