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Human Resource Management is An Art for Businesses,

Science for Corporations, and a Subject for Others....

Human Resource Management (HRM) act as a catalyst for

overall development of nation’s economy. HRM is a way of
management that links people-related activities to the strategy of
a business or organisation. HRM is often referred to as "strategic
HRM". It has several goals:

⇒ To meet the needs of the business and management (rather

than just serve the interests of employees);
⇒ To link human resource strategies / policies to the business
goals and objectives;


⇒ To find ways for human resources to "add value" to a

⇒ To help a business gain the commitment of employees to its

values, goals and objectives.

It is an approach to the management of people in an

organization. Organizations are made up of people i. e employees
and function through them. It is the human resource which brings
success and prosperity to a business enterprise. Human Resource
Management also called Personnel Management, deals with various
problems relating to manpower employed. Such problems include
personal planning, recruitment and selection, induction,
performance appraisal, employee training and development,
promotions and transfer of employees, compensation payment,
career planning and participative management. The person who
looks after personnel functions/ problems is called
Personnel/Human Resource Manager. HRM is relatively a new term
for what was earlier called as personnel management. The term
HRM got popularity in the USA by 1970s. This is a management
function which helps managers to plan, recruit, select, train,
develop, remunerate and maintain members for an organization.
HRM is the latest nomenclature use to denote personnel
management. The policies of management relating to personnel
matters/problems are called policies. Human Resource
Management in a Business Context provides an international focus
on the theory and practice of people management. A thorough and


comprehensive overview of all the key aspects of HRM, including

case studies, articles from HRM Guide and other sources, key
concepts, review questions and problems for discussion and

The link between Human Resources and Business


All elements of the business strategy have implications for

human resources, as illustrated in the table below. The

challenge for management is to identify and respond to these HR


Examples of Key Strategy Possible Human Resource

Issues Implications.
What markets should the What expertise is required in these
business compete in? markets? Do existing management
and employees theright experience
and skills.


Where the business should be Where do we need our people? How

located to compete optimally? many do we need?

How can we achieve How productive is the workforce

Improvements in our unit currently? How does this compare
production costs to with competitors? What investment
remain competitive? in the workforce (e.g. training,
recruitment) and their equipment is
required to achieve the desired
improvement in productivity?

How can the business effect What are the current values of the
cultural change? workforce? How can the prevailing
culture be influenced/changed to
help implement a change

How can the business respond What technological skills does the
to rapid technological change business currently possess? What
in its markets? additional skills are needed to
respond to technological change?
Can these skills be acquired through
training or do they need to be


An important part of HRM is the Human Resources Plan. The

purpose of this plan is to analyse the strategic requirements of the
business in terms of manpower - and then to find a way of
meeting the required demand for labour. This is the subject of a
separate revision note.

Human Resource Management, in the sense of getting things

done through people. It's an essential part of every manager's
responsibilities, but many organizations find it advantageous to
establish a specialist division to provide an expert service
dedicated to ensuring that the human resource function is
performed efficiently.

"People are our most valuable asset" is a cliché which no

member of any senior management team would disagree with.
Yet, the reality for many organizations is that their people remain

 under valued
 under trained
 under utilized
 poorly motivated, and consequently
 perform well below their true capability

The rate of change facing organizations has never been greater

and organizations must absorb and manage change at a much


faster rate than in the past. In order to implement a successful

business strategy to face this challenge, organizations, large or
small, must ensure that they have the right people capable of
delivering the strategy.

The market place for talented, skilled people is competitive and

expensive. Taking on new staff can be disruptive to existing
employees. Also, it takes time to develop 'cultural awareness',
product/ process/ organization knowledge and experience for new
staff members.

As organizations vary in size, aims, functions, complexity,

construction, the physical nature of their product, and appeal as
employers, so do the contributions of human resource
management. But, in most the ultimate aim of the function is to:
"ensure that at all times the business is correctly staffed by the
right number of people with the skills relevant to the business
needs", that is, neither overstaffed nor understaffed in total or in
respect of any one discipline or work grade.



1. According to Edwin Flippo:

“Personnel management is the planning, organizing, directing

and controlling of the procurement, development, compensation,
integration, maintenance and separation of human resources to
the end that individual, organizational and social objectives are

2. According to George R. Terry:

“Personnel management is concerned with the obtaining and

maintaining of a satisfactory and satisfied work force”.

3. According to Michale Armstrong:

“HRM is strategic approach to the acquisition, motivation,

development and management of the organizations human
resources. It is develop to shaping an appropriate corporate
culture, and introducing programmes which reflects and support
the core values of the enterprise and ensure its success”.

4. “HRM is a process of bringing people and organizations

together so that the goals of each are met. It is a part of


management process which is concerned with the management of

human resources in an organization”.


 Organizational management
 Personnel administration
 Manpower management
 Industrial management

But these traditional expressions are becoming less common for

the theoretical discipline. Sometimes even employee and industrial
relations are confusingly listed as synonyms, although these
normally refer to the relationship between management and
workers and the behavior of workers in companies.

The theoretical discipline is based primarily on the assumption

that employees are individuals with varying goals and needs, and
as such should not be thought of as basic business resources, such
as trucks and filing cabinets. The field takes a positive view of
workers, assuming that virtually all wish to contribute to the
enterprise productively, and that the main obstacles to their
endeavors are lack of knowledge, insufficient training, and failures
of process.

HRM is seen by practitioners in the field as a more innovative

view of workplace management than the traditional approach. Its


techniques force the managers of an enterprise to express their

goals with specificity so that they can be understood and
undertaken by the workforce and to provide the resources needed
for them to successfully accomplish their assignments. As such,
HRM techniques, when properly practiced, are expressive of the
goals and operating practices of the enterprise overall. HRM is also
seen by many to have a key role in risk reduction within



Objectives are pre-determined goals to which individual or

group activity in an organization is directed. Objectives of
personnel management are influenced by organizational objectives
and individual and social goals. Institutions are instituted to attain
certain specific objectives. The objectives of the economic
institutions are mostly to earn profits, and of the educational
institutions are mostly to impart education and / or conduct
research so on and so forth. However, the fundamental objective
of any organization is survival. Organizations are not just satisfied
with this goal. Further the goal of most of the organizations is
growth and / or profits.

Institutions procure and manage various resources including

human to attain the specified objectives. Thus, human resources
are managed to divert and utilize their resources towards and for
the accomplishment of organizational objectives. Therefore,
basically the objectives of HRM are drawn from and to contribute
to the accomplishment of the organizational objectives. The other
objectives of HRM are to meet the needs, aspirations, values and
dignity of individual employees and having due concern for the
socio-economic problems of the community and the country.


The objectives of HRM are as follows:

1. To create and utilize an able and motivated workforce, to

accomplish the basic organizational goals.
2. To establish and maintain sound organizational structure and
desirable working relationships among all the members of the
3. To secure the integration of individual or groups within the
organization by co-ordination of the individual and group goals
with those of the organization.
4. To create facilities and opportunities for individual or group
development so as to match it with the growth of the organization.
5. To attain an effective utilization of human resources in the
achievement of organizational goals.
6. To identify and satisfy individual and group needs by providing
adequate and equitable wages, incentives, employee benefits and
social security and measures for challenging work, prestige,
recognition, security, status.
7. To maintain high employees morale and sound human relations
by sustaining and improving the various conditions and facilities.

8. To strengthen and appreciate the human assets continuously by

providing training and development programs.


9. To consider and contribute to the minimization of socio-

economic evils such as unemployment, under-employment,
inequalities in the distribution of income and wealth and to
improve the welfare of the society by providing employment
opportunities to women and disadvantaged sections of the society.
10. To provide an opportunity for expression and voice
11. To provide fair, acceptable and efficient leadership.
12. To provide facilities and conditions of work and creation of
favorable atmosphere for maintaining stability of employment.

Management has to create conductive environment and provide

necessary prerequisites for the attainment of the personnel
management objectives after formulating them.

To be socially responsible to the needs and challenges of society

while minimizing the negative impact of such demands upon the
organization. The failure of organizations to use their resources for
society's benefit may result in restrictions. For example, societies
may pass laws that limit human resource decisions.

Organizational objective. To recognize that HRM exists to

contribute to organizational effectiveness. HRM is not an end in
itself; it is only a means to assist the organization with its primary
objectives. Simply stated, the department exists to serve the rest
of the organization.


Functional objective:

To maintain the department's contribution at a level appropriate

to the organisation's needs. Resources are wasted when HRM is
more or less sophisticated than the organisation demands. A
department's level of service must be appropriate for the
organisation it serves.

Personal objective:

To assist employees in achieving their personal goals, at least

insofar as these goals enhance the individual's contribution to the
organisation. Personal objectives of employees must be met if
workers are to be maintained, retained and motivated. Otherwise,
employee performance and
satisfaction may decline, and employees may leave the



The scope of human resource management outlined below

includes an outline of transformation and development issues,
tentative generic skills required in performing HRM roles, as well
as the roles of a human resource management practitioner (line
management and HRM professionals). With regard to the latter,
the assumption is made that roles are inter-linked and
interdependent, even though these relationships may not be
expressly stated in each case.

Transformation and development issues

 Knowledge management which entails accumulating & capturing

 Knowledge in large organisations for future application & use
(organisation memory)
 Reconciliation management
 Work creation as opposed to job creation
 Manage the transfer of HRM functions and skills to line
 Marketing of HRM to line management
 Development of contextual approaches to HRM
 Multi-skilling and /or multi-tasking
 Increased societal responsibility
 Managing people in virtual work environments
 Focus on deliverables rather than doable


 Develop additional means of assessing HRM

 Appreciation and assessment of intellectual capital
 Take HRM from a business partner to a business itself /
Managing HRM as a business unit
 Adviser / consultant to line management

Supportive generic skills

This is not intended to be final outline of human resource skills

but the following have emerged during the process as important
skills for human resource practitioner to possess. These are:

 Project management
 Consulting skills
 Entrepreneurship
 Self management
 Communication skills
 Facilitation skills
 Presentation skills
 Skills for transforming groups into self-directed mutually
controlled high performing work teams
 Trans-cultural skills
 Mediation & arbitration skills
 Financial skills
 Problem-solving
 Diagnostic skills


Core roles in Human Resource Management

The core roles of human resource management are grouped

below into four categories. The titles of the clusters are tentative,
and are open for comment.



 Strategic perspective
 Organisation design
 Change management
 Corporate Wellness management

 Staffing the organisation

 Training & development

 Career Management

 Performance Management

 Industrial relations


 Compensation management
 Information management
 Administrative management
 Financial management

HRM vis-à-vis HRD


HRM (Human Resource Management)

HRD (Human Resource Development)
As these two words cannot be one and the same nor synopsis.
They are used in different contexts and they represent different
concepts. At the same time HRD is at the centre of HRM. HRD is
examined in detail elsewhere.
As a result of the fundamental changes in attitudes,
approaches, outlook, philosophy, perspective and practices
emerged in the personnel area in the form of HRM strategy, it has
become a necessary for every organisation to develop skills,
talent, potentialities, capabilities and active of company’s own
people to meet the emerging challenges. Hence HRD policies have
been adopted by many companies. It is now-a-days spreading to
many others. HRD strategies are suppose to bring fourth
necessary changes in skills, capabilities and attitude of people who
are required to cope with the emerging changes. Thus, HRD has
become an integral part HRM.
The new HRD approach, that stress the need for developing
the company’s own people to suit the update technology,
modernisation of machinery and equipments and changing trends
in attitudes and approaches, necessities to develop individual
employee in accordance with his aspiration and potentialities on
the one hand, and the company’s requirement on the other. This is
what the HRD does. Quiet often organisation development (OD)


programs are effectively integrated with the HRD programs. O

fcourse, OD programs are the programms which the OD
interventionists prescribed for the effectiveness of the
organisation. It need not be what the individuals members of the
organisation seek. HRD interventionists primarily seek to know
what the individuals seek to have, and then try to match it with
the organisational needs. Training and development programs
from part of OD while training and development are the most
decisive aspects of HRD too.
At present, therefore, the end result of both HRD and OD are
pre-received as synonymous. Of course, no change can be
effectively and totally incorporated nor their result achieved,
overnight. It need constant effort and continuous monitoring for a
considerably long period. This efforts must go on simultaneously
HRM strategy.
HRM has its various tools like appraisal schemes feedback
system, quality circle and organisation development interventions,
Team-grouping, MbO objective setting, consensus in decision
making, and so on. All such tools are useful in HRD also at
present, however training programms seem to dominated the HRD
scene. An effective management information system backed by
information collecting, storing and retrial system and research and
analysis must be the basis for every HRD program. This would
enable the organisation to motivate its own people to strive to be
develop in accordance with the organisational needs(existing and


expected). This HRM is the integrated approach to actuating and

managing the company’s own people while deals with the process
of developing people in accordance with their aspirations and to
suit the organisational needs. Both are not synonyms; the letter is
at the centre of the former, and both are interdependent and
integrated into one system.


Functions overview and strategy for HRM

These issues motivate a well thought out human resource

management strategy, with the precision and detail of say a
marketing strategy. Failure in not having a carefully crafted human
resources management strategy, can and probably will lead to
failures in the business process itself.

These sets of resources are offered to promote thought,

stimulate discussion, diagnose the organizational environment and
develop a sound human resource management strategy for your
organization. We begin by looking at the seven distinguishable
functions human resource management provide to secure the
achievement of the objective defined above.

Following on from this overview we look at defining a human

resource strategy.

Finally, some questions are posed in the form of a HRM systems

diagnostic checklist for you to consider, which may prove helpful
for you to think about when planning your development programs
for the human resources in your organization, if they are truly
"your most valuable asset."


Function 1: Manpower planning

The penalties for not being correctly staffed are costly.

 Understaffing loses the business economies of scale and

specialization, orders, customers and profits.
 Overstaffing is wasteful and expensive, if sustained, and it is
costly to eliminate because of modern legislation in respect of
redundancy payments, consultation, minimum periods of notice,
etc. Very importantly, overstaffing reduces the competitive
efficiency of the business.

Planning staff levels requires that an assessment of present and

future needs of the organization be compared with present
resources and future predicted resources. Appropriate steps then
be planned to bring demand and supply into balance.

Thus the first step is to take a 'satellite picture' of the existing

workforce profile (numbers, skills, ages, flexibility, gender,
experience, forecast capabilities, character, potential, etc. of
existing employees) and then to adjust this for 1, 3 and 10 years
ahead by amendments for normal turnover, planned staff
movements, retirements, etc, in line with the business plan for the
corresponding time frames.

The result should be a series of crude supply situations as would

be the outcome of present planning if left unmodified. (This,


clearly, requires a great deal of information accretion, classification

and statistical analysis as a subsidiary aspect of personnel

What future demands will be is only influenced in part by the

forecast of the personnel manager, whose main task may well be
to scrutinize and modify the crude predictions of other managers.
Future staffing needs will derive from:

 Sales and production forecasts

 The effects of technological change on task needs
 Variations in the efficiency, productivity, flexibility of labor as a
result of training, work study, organizational change, new
motivations, etc.
 Changes in employment practices (e.g. use of subcontractors or
agency staffs, hiving-off tasks, buying in, substitution, etc.)
 Variations, which respond to new legislation, e.g. payroll taxes
or their abolition, new health and safety requirements
 Changes in Government policies (investment incentives,
regional or trade grants, etc.)

What should emerge from this 'blue sky gazing' is a 'thought

out' and logical staffing demand schedule for varying dates in the
future which can then be compared with the crude supply
schedules. The comparisons will then indicate what steps must be
taken to achieve a balance.


That, in turn, will involve the further planning of such

recruitment, training, retraining, labor reductions (early
retirement/redundancy) or changes in workforce utilization as will
bring supply and demand into equilibrium, not just as a one–off
but as a continuing workforce planning exercise the inputs to
which will need constant varying to reflect 'actual' as against
predicted experience on the supply side and changes in production
actually achieved as against forecast on the demand side.

Function 2: Recruitment and selection of employees

Recruitment of staff should be preceded by:

An analysis of the job to be done (i.e. an analytical study of the

tasks to be performed to determine their essential factors) written
into a job description so that the selectors know what physical and
mental characteristics applicants must possess, what qualities and
attitudes are desirable and what characteristics are a decided

 In the case of replacement staff a critical questioning of the

need to recruit at all (replacement should rarely be an automatic
 Effectively, selection is 'buying' an employee (the price being
the wage or salary multiplied by probable years of service) hence
bad buys can be very expensive. For that reason some firms (and


some firms for particular jobs) use external expert consultants for
recruitment and selection.
 Equally some small organizations exist to 'head hunt', i.e. to
attract staff with high reputations from existing employers to the
recruiting employer. However, the 'cost' of poor selection is such
that, even for the mundane day-to-day jobs, those who recruit and
select should be well trained to judge the suitability of applicants.

The main sources of recruitment are:

 Internal promotion and internal introductions (at times desirable

for morale purposes)
 Careers officers (and careers masters at schools)
 University appointment boards
 Agencies for the unemployed
 Advertising (often via agents for specialist posts) or the use of
other local media (e.g. commercial radio)

Where the organization does its own printed advertising it is

useful if it has some identifying logo as its trade mark for rapid
attraction and it must take care not to offend the sex, race, etc.
antidiscrimination legislation either directly or indirectly. The form
on which the applicant is to apply (personal appearance, letter of
application, completion of a form) will vary according to the posts
vacant and numbers to be recruited.


It is very desirable in many jobs that claim about experience

and statements about qualifications are thoroughly checked and
that applicants unfailingly complete a health questionnaire (the
latter is not necessarily injurious to the applicant’s chance of being
appointed as firms are required to employ a percentage of disabled

Before letters of appointment are sent any doubts about medical

fitness or capacity (in employments where hygiene considerations
are dominant) should be resolved by requiring applicants to attend
a medical examination. This is especially so where, as for example
in the case of apprentices, the recruitment is for a contractual
period or involves the firm in training costs.

Interviewing can be carried out by individuals (e.g. supervisor

or departmental manager), by panels of interviewers or in the
form of sequential interviews by different experts and can vary
from a five minute 'chat' to a process of several days. Ultimately
personal skills in judgment are probably the most important, but
techniques to aid judgment include selection testing for:

 Aptitudes (particularly useful for school leavers)

 Attainments
 General intelligence

(All of these need skilled testing and assessment.) In more

senior posts other techniques are:


 Leaderless groups
 Command exercises
 Group problem solving

(These are some common techniques - professional selection

organizations often use other techniques to aid in selection.)

Training in interviewing and in appraising candidates is clearly

essential to good recruitment. Largely the former consists of
teaching interviewers how to draw out the interviewee and the
latter how to xratex the candidates. For consistency (and as an aid
to checking that) rating often consists of scoring candidates for
experience, knowledge, physical/mental capabilities, intellectual
levels, motivation, prospective potential, leadership abilities etc.
(according to the needs of the post). Application of the normal
curve of distribution to scoring eliminates freak judgments.

Function 3: Employee motivation

To retain good staff and to encourage them to give of their best

while at work requires attention to the financial and psychological
and even physiological rewards offered by the organization as a
continuous exercise.

Basic financial rewards and conditions of service (e.g. working

hours per week) are determined externally (by national bargaining
or government minimum wage legislation) in many occupations


but as much as 50 per cent of the gross pay of manual workers is

often the result of local negotiations and details (e.g. which
particular hours shall be worked) of conditions of service are often
more important than the basics. Hence there is scope for financial
and other motivations to be used at local levels.

As staffing needs will vary with the productivity of the workforce

(and the industrial peace achieved) so good personnel policies are
desirable. The latter can depend upon other factors (like
environment, welfare, employee benefits, etc.) but unless the
wage packet is accepted as 'fair and just' there will be no

Hence while the technicalities of payment and other systems

may be the concern of others, the outcome of them is a matter of
great concern to human resource management.

Increasingly the influence of behavioral science discoveries are

becoming important not merely because of the widely-
acknowledged limitations of money as a motivator, but because of
the changing mix and nature of tasks (e.g. more service and
professional jobs and far fewer unskilled and repetitive production

The former demand better-educated, mobile and multi-skilled

employees much more likely to be influenced by things like job


satisfaction, involvement, participation, etc. than the economically

dependent employees of yesteryear.

Hence human resource management must act as a source of

information about and a source of inspiration for the application of
the findings of behavioral science. It may be a matter of drawing
the attention of senior managers to what is being achieved
elsewhere and the gradual education of middle managers to new
points of view on job design, work organization and worker

Function 4: Employee evaluation

An organization needs constantly to take stock of its workforce

and to assess its performance in existing jobs for three reasons:

 To improve organizational performance via improving the

performance of individual contributors (should be an automatic
process in the case of good managers, but (about annually) two
key questions should be posed:
 what has been done to improve the performance of a person
last year?
 what can be done to improve his or her performance in the year
to come?).
 To identify potential, i.e. to recognize existing talent and to use
that to fill vacancies higher in the organization or to transfer


individuals into jobs where better use can be made of their abilities
or developing skills.
 To provide an equitable method of linking payment to
performance where there are no numerical criteria (often this
salary performance review takes place about three months later
and is kept quite separate from 1. and 2. but is based on the same

On-the-spot managers and supervisors, not HR staffs, carry out

evaluations. The personnel role is usually that of:

 Advising top management of the principles and objectives of an

evaluation system and designing it for particular organizations and
 Developing systems appropriately in consultation with
managers, supervisors and staff representatives. Securing the
involvement and cooperation of appraisers and those to be
 Assistance in the setting of objective standards of evaluation /
assessment, for example:
 Defining targets for achievement.

 Explaining how to quantify and agree objectives.

 Introducing self-assessment.

 Eliminating complexity and duplication.

 Publicizing the purposes of the exercise and explaining to staff
how the system will be used.


 Organizing and establishing the necessary training of managers

and supervisors who will carry out the actual evaluations/
appraisals. Not only training in principles and procedures but also
in the human relations skills necessary. (Lack of confidence in their
own ability to handle situations of poor performance is the main
weakness of assessors.)
 Monitoring the scheme - ensuring it does not fall into disuse,
following up on training/job exchange etc. recommendations,
reminding managers of their responsibilities.

Full-scale periodic reviews should be a standard feature of

schemes since resistance to evaluation / appraisal schemes is
common and the temptation to water down or render schemes
ineffectual is ever present (managers resent the time taken if
nothing else).

Basically an evaluation / appraisal scheme is a formalization of

what is done in a more casual manner anyway (e.g. if there is a
vacancy, discussion about internal moves and internal attempts to
put square pegs into 'squarer holes' are both the results of casual
evaluation). Most managers approve merit payment and that too
calls for evaluation. Made a standard routine task, it aids the
development of talent, warns the inefficient or uncaring and can be
an effective form of motivation.


Developing a HRM strategy

Faced with rapid change organizations need to develop a more

focused and coherent approach to managing people. In just the
same way a business requires a marketing or information
technology strategy it also requires a human resource or people

In developing such a strategy two critical questions must be


 What kinds of people do you need to manage and run your

business to meet your strategic business objectives?
 What people programs and initiatives must be designed and
implemented to attract, develop and retain staff to compete

In order to answer these questions four key dimensions of an

organization must be addressed. These are:

 Culture: the beliefs, values, norms and management style of

the organization
 Organization: the structure, job roles and reporting lines of the

 People: the skill levels, staff potential and management



 Human resources systems: the people focused mechanisms

which deliver the strategy - employee selection, communications,
training, rewards, career development, etc.

Frequently in managing the people element of their business

senior managers will only focus on one or two dimensions and
neglect to deal with the others. Typically, companies reorganize
their structures to free managers from bureaucracy and drive for
more entrepreneurial flair but then fail to adjust their training or
reward systems.

When the desired entrepreneurial behavior does not emerge

managers frequently look confused at the apparent failure of the
changes to deliver results. The fact is that seldom can you focus
on only one area. What is required is a strategic perspective aimed
at identifying the relationship between all four dimensions.

If you require an organization which really values quality and

service you not only have to retrain staff, you must also review the
organization, reward, appraisal and communications systems.

The pay and reward system is a classic problem in this area.

Frequently organizations have payment systems which are
designed around the volume of output produced. If you then seek
to develop a company which emphasizes the product's quality you
must change the pay systems. Otherwise you have a contradiction


between what the chief executive is saying about quality and what
your payment system is encouraging staff to do.

There are seven steps to developing a human resource strategy

and the active involvement of senior line managers should be
sought throughout the approach.

Steps in developing HRM strategy

Step 1: Get the 'big picture'

Understand your business strategy.

 Highlight the key driving forces of your business. What are

they? e.g. technology, distribution, competition, the markets.
 What are the implications of the driving forces for the people
side of your business?
 What is the fundamental people contribution to bottom line
business performance?

Step 2: Develop a Mission Statement or Statement of


That relates to the people side of the business.


Do not be put off by negative reactions to the words or

references to idealistic statements - it is the actual process of
thinking through the issues in a formal and explicit manner that is

 What do your people contribute?

Step 3: Conduct a SWOT analysis of the organization

Focus on the internal strengths and weaknesses of the people

side of the business.

 Consider the current skill and capability issues.

Vigorously research the external business and market

environment. High light the opportunities and threats relating to
the people side of the business.

 What impact will/ might they have on business performance?

 Consider skill shortages?
 The impact of new technology on staffing levels?

From this analysis you then need to review the capability of

your personnel department. Complete a SWOT analysis of the
department - consider in detail the department's current areas of
operation, the service levels and competences of your personnel


Step 4: Conduct a detailed human resources analysis

Concentrate on the organization's COPS (culture, organization,

people and HR systems)

 Consider: Where you are now? Where do you want to be?

 What gaps exists between the reality of where you are now and
where you want to be?

Exhaust your analysis of the four dimensions.

Step 5: Determine critical people issues

Go back to the business strategy and examine it against your

SWOT and COPS Analysis

 Identify the critical people issues namely those people issues

that you must address. Those which have a key impact on the
delivery of your business strategy.
 Prioritize the critical people issues. What will happen if you fail
to address them?

Remember you are trying to identify where you should be

focusing your efforts and resources.


Step 6: Develop consequences and solutions

For each critical issue highlight the options for managerial action
generate, elaborate and create - don't go for the obvious. This is
an important step as frequently people jump for the known rather
than challenge existing assumptions about the way things have
been done in the past. Think about the consequences of taking
various courses of action.

Consider the mix of HR systems needed to address the issues.

Do you need to improve communications, training or pay?

What are the implications for the business and the personnel

Once you have worked through the process it should then be

possible to translate the action plan into broad objectives. These
will need to be broken down into the specialist HR Systems areas

 employee training and development

 management development
 organization development
 performance appraisal

 employee reward
 employee selection and recruitment

 manpower planning


 communication

Develop your action plan around the critical issues. Set targets
and dates for the accomplishment of the key objectives.

Step 7: Implementation and evaluation of the action


The ultimate purpose of developing a human resource strategy

is to ensure that the objectives set are mutually supportive so that
the reward and payment systems are integrated with employee
training and career development plans.

There is very little value or benefit in training people only to

then frustrate them through a failure to provide ample career and
development opportunities.


 Employee needs extend beyond the training classroom

 Includes coaching, group work, and problem solving


 Need for basic employee development

 Need for structured career development
 ASTD changes its name to the American Society for
Training and Development

Relationship Between HRM and HRD

 Human resource management (HRM) encompasses many

 Human resource development (HRD) is just one of the
functions within HRM

Primary Functions of HRM

 Human resource planning

 Equal employment opportunity
 Staffing (recruitment and selection)
 Compensation and benefits
 Employee and labor relations
 Health, safety, and security
 Human resource development.

Secondary HRM Functions

 Organization and job design

 Performance management/ performance appraisal
 Research and information systems.

HRD Functions

 Training and development (T&D)


 Organizational development
 Career development

1. Training and Development (T&D):

Training – improving the knowledge, skills and attitudes of
employees for the short-term, particular to a specific job or
task – e.g.,
 Employee orientation
 Skills & technical training
 Coaching
 Counseling
Development – preparing for future responsibilities, while
increasing the capacity to perform at a current job
 Management training
 Supervisor development

2. Organizational Development:
 The process of improving an organization’s effectiveness
and member’s well-being through the application of
behavioral science concepts
 Focuses on both macro- and micro-levels
 HRD plays the role of a change agent

3.Career Development:

Ongoing process by which individuals progress through

series of changes until they achieve their personal level of
maximum achievement.
 Career planning
 Career management

 Learning & Performance


Critical HRD Issues


1. Strategic management and HRD

2. The supervisor’s role in HRD
3. Organizational structure of HRD

1.Strategic management:
It aims to ensure organizational effectiveness for the
foreseeable future – e.g., maximizing profits in the next 3 to 5
HRD aims to get managers and workers ready for new
products, procedures, and materials.

2. Supervisor’s Role in HRD:

 Implements HRD programs and procedures.
 On-the-job training (OJT).
 Coaching/mentoring/counseling.
 Career and employee development.
 A “front-line participant” in HRD.

3. Organizational Structure of HRD Departments:

 Depends on company size, industry and maturity.
 No single structure used.
 Depends in large part on how well the HRD manager
becomes an institutional part of the company – i.e., a
revenue contributor, not just a revenue user.

Challenges for HRD

 Changing workforce demographics

 Competing in global economy
 Eliminating the skills gap
 Need for lifelong learning
 Need for organizational learning

A Framework for the HRD Process


HRD efforts should use the following four phases (or

1. Needs assessment
2. Design
3. Implementation
4. Evaluation
Training & HRD Process Model

1.Needs Assessment Phase:

 Establishing HRD priorities

 Defining specific training and objectives
 Establishing evaluation criteria

2.Design Phase:

 Selecting who delivers program

 Selecting and developing program content
 Scheduling the training program

3. Implementation Phase:

 Implementing or delivering the program

4. Evaluation Phase:

Determining program effectiveness –

 Keep or change providers?
 Offer it again?
 What are the true costs?
 Can we do it another way?

HRD is too important to be left to amateurs. HRD should be

a revenue producer, not a revenue user. HRD should be a
central part of company. You need to be able to talk MONEY.



Challenges before HR Management

In fact in the face of enornous and the rapid changes in the

business environment in India backed by liberalisation of economy,
globalisation of business, modernisation of technology and large
scale employment, a need exist for a fresh look at the human
resources. Multinationals, foreign investors and NRIs entering the
Indian business in a big way communist countris adopting the path
of capitalism and large scale technology transfer, all such factors
necessitate a wider perspective of human resoures in the days to
come.some of the factors,which pose grater challagenes to the
HRM in future are :

1.A larger, faster and greater growth of industrialization is

expected in the next decade.

2.There is a possibility for more takeovers, acquisations and

mergers in future in India.

3.With the presence and influence of more multinational and

tranationals, as well as higher standards and competitions, there is
a possibility for many small indigenous units to be sick

4.There is a possibility for the emergence of many large and giand

enterprises havening economies of scale, leading the units without
the merits of economies of scale and large scale production to
wind up.


5.ISO 9000 and other international standardization requirement

are bound to dictate higher quality specification making it difficult
for less quality conscious business enterprises to survive.

6.Large investment and modernization would require highly skilled

and technically trend people who would replace less train,
unskilled and redundant workforce.

7.Increasing number of industrial houses are bound to introduce

scheme for golden handshake.

8.Import of technology may become more common in the days to

come resulting in increasing requirement of highly skill manpower.

9.Greater and greater training needs are bound to be identified for

updating the technological behavior skill.

10.There would arise greater needs for interpersonal skill,

behavioral and counciling skills of executive and hence greater
training needs in his directions are bound to arise.

11.Greater privatization of business and increase of employment in

the private sector may leads to greater training needs in the
private sector.

12.Quality of work life and quality circle programmes may receive

greater acceptance.


HRM Challenges faced by Managers

The HR Managers of today may find it difficult because of the

rapidly changing business environment and therefore they should
update their knowledge and skills by looking at the organization's
need and objectives. The HRM challenges are

1. Managing the Vision:

Vision of the organization provides the direction to business

strategy and helps managers to evaluate management practices
and make decisions. So vision management becomes the integral
part of Man management in future.

2. Internal environment:

Creating an environment which is responsive to external changes,

providing satisfaction to the employees and sustaining through
culture and systems is a challenging task.

3. Changing Industrial Relations:

Both the workers and managers has to be managed by the same

HRM Philosophy and this is a daunting task for the managers.


4. Building Organizational capability:

Even in the adverse circumstances the employees have to be

made to live in psychological state of readiness to continually

5. Job Design & Organizational structure:

Instead of depending on foreign concepts we need to focus on

understanding the job, technology and the people involved in
carrying out the tasks.

6. Managing the large work force:

Management of large workforce poses the biggest problem as the

workers are conscious of their rights.

7. Psycho-Social environment:

Nowadays employees participation required not only in performing

job but also in democratizing and humanizing the institution.

8. Employee Satisfaction:

Managers should be aware of techniques to motivate their


employees so that their higher level needs can be satisfied.

9. Modern technology:

There will be an unemployment due to modern technology and this

could be corrected by assessing manpower needs and finding
alternate employment.

10. Computerized Information System:

This is revolutionary in managerial decision making and is having

impact on coordination in the organization.

11. Legal environment:

To meet the changes in legal environment, adjustments have to be

made to the maximum utilization of human resources.

12. Managing Human Relations:

As the workforce comprises of both educated and uneducated,

managing the relations will be of great challenge.

In spite of all the problems HR Managers are able to

overcome all these problems with the support of management and


employees. In the current business world managing employees are

becoming complex task and this can be handled effectively only by
our great HR Leaders.


Limitation of HRM

Human resource management has its own limitations also.

Though personnel management has been in practice for quite
sometime now, human resource management is of recent origin.
Some companies have already has their personnel management
departments while some have taken initiative to appoint human
resource managers to look after their personnel function. Such
superficial actions may not bear much fruit. What is actually
needed is the fundamental change in attitudes, approaches and
the very management philosophy. Without such a change,
particularly at the top management level renaming of personnel
department or predestinating the personnel officer may not serve
the people.
At least some HRD people hold the view that HRM people hold
the view that HRM is something very distinct from personnel
management and neglect the importance of personnel
management. This is very dangerous approach. It must be
understood that a balanced and integrated approach is necessary.
Actually speaking the philosophy outlook, attitude, and approach
to the company own people may undergo a change not only of top
management but other levels of management. Then an integrated
approach is to HRM is necessary that is it becomes the part of the


personnel management, while the whole personnel function must

be viewed through the human resource angle.
HRM Philosophy and thrust must come from the top and
accepted by people at all levels. But unfortunately in many
organization top bosses remains passive leaving the HRD functions
to be carried out by the personal manager waiting for the result to
come. If good result emerges the credit will go to the
magnanimity of the boss and all the discredit remains with the
personal manager. Hence the personnel manager may look at the
HRD programme with suspicion. This is very serious limitation.
Management must be not satisfied with the few training
programme at it happens in some organization now. HRM
functions must constantly strive to determine the actual needs and
an aspiration of the companies own people and plans to satisfy
them, develop their potentiality and use them. But unfortunately
management’s productivity and profitability approach still remains
undisturbed in many organizations.
HRM is of recent origin as it lacks universally approved academic
base. Different professionals tent to decline the term in different
ways. Until a general definition is accepted and operational frame
work is universally approved, the approach of the practitioner may
continue this is another draw back. However, a generally accepted
approach is expected to emerge in near future because of the
strenuous efforts of HRM professionals and thinkers.


Most of the HRD programmers are limited to the classroom

training in many organizations. This is another drawback of HRD.
On the job training developmental programmers, carrier planning
and counseling are used to develop people. Actually, speaking,
unless a proper learning atmosphere is created no training
programmed would be able to produce expected results.
In many organizations adequate information and data base may
be lacking. This is serious threat to accuracy of information without
which HRM practice is difficult. Collection storing and retrieval of
information must therefore be given first priority which many
manager neglect.
In many organizations even the personal professionals
misunderstand HRM as synonymous to HRD. Some classroom
training programmers are generally arranged which are called HRD
programmers. These programmers are understood as Human
Resource Management. Such cursory classrooms are not the
actual HRD programmers even a well-planned and executed HRD
programmed is not HRM. HRD is the only part of HRM, which is
integrated approach to management. Human Resource
Management suffers from such limitation. However, the impact, it
has made on the managerial effectiveness has been spectacular
wherever it was introduce. Actually speaking a real need exists in
every Indian Organization for an HRM approach


Employment & Structural Changes

Human Resources in INDIA

India is a vast country with equally vast population, second only

to china. According to official admission about 300 million people
in India are below poverty line. According to planning commission,
an annual income of Rs.7980 for rural and Rs.9120 for urban
areas. Although the life expectancy has increased during the years
after independence, infant mortality is still very high--95 per 1000
births. Out of every 10 illiterates in the world, three are in India.
Every 7 out of 10 illiterates are women. About 25 % of girls are
illiterate. The drop-out in school ranged between 47 and 77 %
during 1985-86, according to latest information available. During
the 20 years after the adoption of constitution, the number of
illiterate persons in the country had risen from 300 million in 1951
to 387 million in 1971. According to 1981 census, the literacy rate
continues to be only 36%. School dropouts in the case of
scheduled tribes are as much as 87.2% and for scheduled castes
India has also got one of the largest child labor populations in
the world, some 40 million mostly engaged in hazardous jobs.


HUMAN RESOURCES DEVELOPMENT is not an academic pursuit,

nor isolated from the strategy and pattern of economic
development. The two are interrelated--one subserves the other.
It cannot be gainsaid that despite diversified industrial
development during the planning period, the spectacular growth of
public sector in building up infrastructure, growth in agricultural
sector, the vast human resources, urban and rural go largely
wasted and are hardly utilized.


It should not be confined to short-run narrow sectional

interests, but should have wider perspective of social development
towards a progressive direction for the benefits of our people at
large. An efficient and satisfied in organizational effectiveness and
managerial excellence. Dynamic employees are essential for any
organization that would like to be dynamic and growth-oriented.
HUMAN RESOURCES DEVELOPMENT aims at developing such
dynamism in employees along with several other qualities that in
combination make the organization perform well.
The central theme in the HUMAN RESOURCES DEVELOPMENT
approach is the development of the individual and the
development of work groups. The emphasis has shifted from
“Maximization of performances “and "compensation" towards
"employee potential awareness creation" and "employee potential


realization." The Personnel function has reduced human resources

in organization’s history and destiny. The employees are no longer
cogs in the organisational wheels but as the active agents shaping
not only their own futures but also future of the organisation. The
postulates a proactive rather than a reactive approach.
Human Resources are organic and complex and so is their
development. While education is an instrument for the general
development of the individual, HUMAN RESOURCES DEVELOPMENT
in the context of an organisation refers to the improvement in the
capacities and capabilities of the personnel in relation to the needs
of the organisation. It involves the creation of a climate in which
the flower of human knowledge, skill, capabilities and creativity
care bloom. It involves the setting up of systems through which
human capabilities and potential can be identified and topped to
the mutual satisfaction of the individual and the organization.
HUMAN RESOURCES DEVELOPMENT, in the organizational
context, is a process by which employees of an organization are
continuously held in a planned way. Human resources are thought
of as “the total knowledge, skills, creative abilities, talents and
aptitudes of an organisation’s work-force, as well as the values
and attitudes of an individual involved. It is the sum total of
inherent abilities, acquired knowledge and skills represented by
the talents and aptitudes of the employed persons. “The HUMAN
RESOURCES DEVELOPMENT is concerned with the improvement of


the above said attributes of an individual as well as a group of

persons. It is the process of increasing the knowledge, the skills
and the capacities of all the people in an undertaking and a
Human resources can be developed by providing formal
education from elementary to the higher level, technical and
professional, on-the-job training, adult education programmes,
correspondence or distance education, improvement in the health
of masses through medical facilities and improvement in nutrition.

The process of economic development tends to be associated

with fundamental structural change in an economy. These
structural changes take place in the form of sectoral composition
as wll as occupational structure of the work force. Such a change
emerges as a result of rising productivity in agriculture and the
industrial and the tertiary sectors. The size of a country and its
population has also an influence on the structural changes in the
the economy brought about by the process of economic growth.

Human resources are a term used to refer to how people are
managed by organizations. The field has moved from a
traditionally administrative function to a strategic one that
recognizes the link between talented and engaged people and
organizational success. The field draws upon concepts developed in


Industrial/Organizational Psychology and System Theory. Human

resources have at least two related interpretations depending on
context. The original usage derives from political economy and
economics, where it was traditionally called labor, one of four
factors of production although this perspective is changing as a
function of new and ongoing research into more strategic
approaches at national levels.
This first usage is used more in terms of 'human resources
development', and can go beyond just organizations to the level of
nations. The more traditional usage within corporations and
businesses refers to the individuals within a firm or agency, and to
the portion of the organization that deals with hiring, firing,
training, and other personnel issues, typically referred to as
'human resources management'.

Human resource management's objective, on the other hand, is
to maximize the return on investment from the organization's
human capital and minimize financial risk. It is the responsibility of
human resource managers in a corporate context to conduct these
activities in an effective, legal, fair, and consistent manner.

Human resource management serves these key functions:
1. Recruitment & Selection


2. Training and Development (People or Organization)

3. Performance Evaluation and Management
4. Promotions/Transfer
5. Redundancy
6. Industrial and Employee Relations
7. Record keeping of all personal data.
8. Compensation, pensions, bonuses etc in liaison with Payroll
9. Confidential advice to internal 'customers' in relation to
problems at work
10. Career development
11. Competency Mapping
12. Time motion study is related to HR Function
13. Performance Appraisal


Modern analysis emphasizes that human beings are not

"commodities" or "resources", but are creative and social beings in
a productive enterprise. The 2000 revision of ISO 9001 in contrast
requires identifying the processes, their sequence and interaction,
and to define and communicate responsibilities and authorities. In
general, heavily unionized nations such as France and Germany
have adopted and encouraged such job descriptions especially
within trade unions. The International Labour Organization also in


2001 decided to revisit, and revise its 1975 Recommendation 150

on Human Resources Development.
One view of these trends is that a strong social consensus on
political economy and a good social welfare system facilitates labor
mobility and tends to make the entire economy more productive,
as labor can develop skills and experience in various ways, and
move from one enterprise to another with little controversy or
difficulty in adapting. Another view is that governments should
become more aware of their national role in facilitating human
resources development across all sectors.

As person 38th round, there were 255.7 million persons
employed in the ‘usual status’ sense, that is employed for major
part of time of 365 days reference period. For the purposes of
comparing the 38th round employment estimates with the 32nd
and 27th round employment estimate, an estimate of 31.7 million
marginally employed obtained on the basis of usual subsidiary
status of the non-workers was added to 255.7 million to make it
287.4 million employed.
This number constituted 48.51% of the respective total 1977-78, as per 32nd round, the total employed
which included marginal workers constituted 42.34% of the
respective total population. This indicated an overall increase of


6.17% in total employment in relation to population during the

period 1977-78 to 1983.


The sectoral composition of the working force, in general,
indicates the type and level of economic development of the
country. One aspect of structural change manifests itself in the
form of a change in the industrial structure involving a greater
shift of the working force to the tertiary sector and that to the
secondary sector from the primary sector of the economy. The
sectoral composition of the working force which had remined
constant till 1971 is now-changing.


Current status of HRM in India


Over many centuries India has absorbed managerial ideas and

practices from around the world. Early records of trade, from 4500
B.C. to 300 B.C., not only indicate international economic and
political links, but also the ideas of social and public
administration. This treatise presented notions of the financial
administration of the state, guiding principles for trade and
commerce, as well as the management of people. Increasing
trade, that included engagement with the Romans, led to
widespread and systematic governance methods by 250 A.D.
During the next 300 years, the first Indian empire, the Gupta
Dynasty, encouraged the establishment of rules and regulations
for managerial systems, and later from about 1000 A.D. Islam
influenced many areas of trade and commerce. A further powerful
effect on the managerial history of India was to be provided by the
British system of corporate organisation for 200 years. Clearly, the
socio cultural roots of Indian heritage are diverse and have been


drawn from multiple sources including ideas brought from other

parts of the old world. Interestingly, these ideas were essentially
secular even when they originated from religious bases.

In the contemporary context, the Indian management

mindscape continues to be influenced by the residual traces of
ancient wisdom as it faces the complexities of global realities. One
stream of holistic wisdom, identified as the Vedantic philosophy,
pervades managerial behaviour at all levels of work organisations.
This philosophical tradition has its roots in sacred texts from 2000
B.C. and it holds that human nature has a capacity for self
transformation and attaining spiritual high ground while facing
realities of day to day challenges (Lannoy 1971). Such cultural
based tradition and heritage can have a substantial impact on
current managerial mindsets in terms of family bonding and
mutuality of obligations. The caste system, which was recorded in
the writings of the Greek Ambassador Megasthenes in the third
century B.C., is another significant feature of Indian social heritage
that for centuries had impacted organisational architecture and
managerial practices, and has now become the focus of critical
attention in the social, political and legal agenda of the nation.

One of the most significant areas of values and cultural

practices has been the caste system. Traditionally, the caste
system maintained social or organisational balance. Brahmins
(priests and teachers) were at the apex, Kshatriya (rulers and
warriors), Vaishya (merchants and managers) and Shwdra


(artisans and workers) occupied the lower levels. Those outside

the caste hierarchy were called ‘untouchables’. Even decades ago,
a typical public enterprise department could be dominated by
people belonging to a particular caste. Feelings associated with
caste affairs influenced managers in areas like recruitment,
promotion and work allocation (Venkatranam & Chandra 1996).
Indian institutions codified a list of lower castes and tribal
communities called ‘scheduled castes and scheduled tribes’. A
strict quota system called, ‘reservation’ in achieving affirmative
equity of castes, has been the eye of political storm in India in
recent years. The central government has decreed 15 per cent of
recruitment is to be reserved for scheduled castes, and a further
seven and half per cent for scheduled tribes. In addition, a further
27 per cent has been decreed for other backward castes. However,
the liberalisation of markets and global linkages have created
transformation of attitudes towards human resource (HR) policies
and practices (Khalilzadeh-Shirazi & Zagha 1994, Gopalan &
Rivera 1997). Faced with the challenge of responding to the
rationale of Western ideas of organisation in the changing social
and economic scenario of Indian organisation, practitioners are
increasingly taking a broader and reflective perspective of human
resource management (HRM) in India.

This manuscript has three main parts. In the first part is

provided an overview of important historical events and activity
that has influenced contemporary managerial tenets, the second


part of the manuscript describes the emerging contemporary

Indian HRM practices and indicates some interesting challenges.
Much of the second part is also summarised on four informative
Figures. The concluding section, the third part of the manuscript,
succinctly integrates the two preceding parts.


The managerial ideologies in Indian dates back at least four

centuries. Arthãshastra written by the celebrated Indian scholar-
practitioner Chanakya had three key areas of exploration, 1) public
policy, 2) administration and utilisation of people, and 3) taxation
and accounting principles (Chatterjee 2006). Parallel to such
pragmatic formulations, a deep rooted value system, drawn from
the early Aryan thinking, called vedanta, deeply influenced the
societal and institutional values in India. Overall, Indian collective
culture had an interesting individualistic core while the
civilisational values of duty to family, group and society was
always very important while vedantic ideas nurtured an inner
private sphere of individualism.

There has been considerable interest in the notion that

managerial values are a function of the behaviours of managers.
England, Dhingra and Agarwal (1974) were early scholars who
contended that managerial values were critical forces that shape
organisational architecture. The relevance of managerial values in
shaping modern organisational life is reflected in scholarly


literature linking them to corporate culture (Deal & Kennedy

1982), organisational commitment and job satisfaction (O’Reilly,
Chatham & Caldwell 1991), as well as institutional governance
(Mowday, Porter & Steers 1982). Thus, understanding the source
of these values and in particular societal work values (which link
the macro-micro relationships and in turn organisational practices)
had become a popular line of enquiry, and a great deal of evidence
has been presented to support the importance of national culture
in shaping managerial values. One of the most widely read
formulations of this literature is the seminal work of Hofstede
(1980) who popularised the notion of clustering culture in generic
dimensions such as power distribution, structuring, social
orientation, and time horizons. In turn, these dimensions could be
employed to explain relevant work attitudes, job incumbent
behaviors and the working arrangements within organisational
structures. Two of these dimensions were individualism and

The traditional social ethos from the ancient roots, which was
developed over centuries, underwent profound transformation
during the British rule. Consequently, in the contemporary context
multiple layers of values (core traditional values, individual
managerial values, and situational values) have emerged
(Chatterjee & Pearson 2000). Though the societal values largely
remain very much anchored in the ancient traditions they are
increasingly reflecting corporate priorities and values of global


linkages. But in the arena of globalisation where priorities of

consumerism, technological education, mass media, foreign
investment and trade union culture predominate, newer tensions
are becoming evident. For instance, contemporary Indian multi
national companies and global firms in India have started shifting
their emphasis to human resources with their knowledge and
experience as the central area of attention in extending new
performance boundaries (Khandekar & Sharma 2005).
Considerable research evidence attests to this trend with particular
relevance to greenfield organisations with little or no historical
baggages in their organisational culture (Settt 2004, Roy 2006).

Within Indian traditions the choice of individualistic or

collectivistic behavior depends on a number of culturally defined
variables. The dynamics of these variables are underpinned
through three key elements guiding Indian managerial
mindscapes. These three constructs are Desh (the location), Kaal
(the timing), and Patra (the specific personalities involved). Sinha
and Kunungo (1997) claim that the interaction of these three
variables determines the guidelines for decisional cues. This
managing or nurturing of the outer layer of collectivism in an inner
private sphere of individualism is expressed in Figure 1 which
demonstrates the behavioural anchors in Indian organisational life.

Figure 1
Behavioral Anchors in Indian Organisational Life
DECISIONAL Desh Kaal Patra


CUES (place) (Timing) (Actors)

SPIRITUAL Sattava guna Tamas guna Rajas guna
ORIENTATION (Virtue focus) (Negative focus) (Action focus)
NAL (Upward respect / (Downward
RELATIONS Loyalty) affection)

Figure 1 also presents another powerful insight of the Indian

tradition of the notion of ‘Guna’ dynamics. According to Sharma

(1996), this culture based framework, which has three types of
gunas (attraction), is being increasingly used in employee
assessment and organisational team building strategies. The
contention is that each guna is a separate contribution to the core
of human personalities. The Sattava (or truth orientation) is the
sentiment of exalted values in people, organisations or society.
Alternatively, the Tamasik guna depicts a negative orientation
which can be expressed behaviourally as ignorance, greed or
corruption. Those individuals with a Rajasik guna are inherently
driven by a desire to make a worthwhile contribution to their
surroundings. Collectively, these spiritual orientations, which
manifest as Sattava, Tamas or Rajas gunas, articulate as positive
or negative HRM functions such as leadership, motivation or other
institutional behavioural activity. The third row of Figure 1
highlights the linking of HRM trends to socio cultural roots. The


culture of Sradha (upward loyalty) and Sneha (mentoring with

affection) outline the behavioural anchors derived from the
civilisational roots. The acceptance of ‘Sradha’ by youngers and
the display of ‘Sneha’ by the seniors have been the root of
sustainability of all types of Indian oragnisations. This has a
striking similarity to the concepts of ‘oyabun’ and ‘kobun’ in the
Japanese cultural context.


In a recent survey of Indian CEO’s, it was suggested that Indian

managerial leaders were less dependent on their personal
charisma, but they emphasised logical and step by step
implementation processes. Indian leaders focused on
empowerment and accountability in cases of critical turnaround
challenges, innovative challenges, innovative technology, product
planning and marketing or when other similar challenges were
encountered (Spencer, Rajah, Narayan, Mohan & Latiri 2007).
These social scientists contend.

Leaders in other countries often tell about why they chose a

peculiar person for a certain role per task, detailing the personal
characteristics that made that person right for that situation. They
may also consider, in detail, how an assignment would help
someone grow and develop their abilities. In general, Indian
leaders simply did not discuss how they matched particular people
to certain roles or tasks, nor did they usually consider in detail how


the personal characteristics of individuals might shape or inform

the best way to influence that person.

Indian HRM in Transition

One of the noteworthy features of the Indian workplace is

demographic uniqueness. It is estimated that both China and India
will have a population of 1.45 billion people by 2030, however,
India will have a larger workforce than China. Indeed, it is likely
India will have 986 million people of working age in 2030, which
well probably are about 300 million more than in 2007. And by
2050, it is expected India will have 230 million more workers than
China and about 500 million more than the United States of
America (U.S.). It may be noted that half of India’s current
population of 1.1 billion people are under of 25 years of age. While
this fact is a demographic dividend for the economy, it is also a
danger sign for the country’s ability to create new jobs at an
unprecedented rate. As has been pointed out by Meredith (2007).

When India’s young demographic bubble begins to reach

working age, India will need far more jobs than currently exist to
keep living standards from declining. India today doesn’t have
enough good jobs for its existing workers, much less for millions of
new ones. If it cannot better educate its children and create jobs
for then once they reach working age, India faces a population
time bomb: The nation will grow poorer and not richer, with
hundred of millions of people stuck in poverty.


With the retirement age being 55 to 58 years of age in most

public sector organisations, Indian workplaces are dominated by
youth. Increasing the retirement age in critical areas like
universities, schools, hospitals, research institutions and public
service is a topic of considerable current debate and agenda of
political parties.

The divergent view, that each society has an unique set of

national nuances, which guide particular managerial beliefs and
actions, is being challenged in Indian society. An emerging
dominant perspective is the influence of globalisation on
technological advancements, business management, and
education and communication infrastructures are leading to a
converging effect on managerial mindsets and business
behaviours. And when India embraced liberalisation and economic
reform in the early 1990s, dramatic changes were set in motion in
terms of corporate mindsets and HRM practices as a result of
global imperatives and accompanying changes in societal
priorities. Indeed, the onset of a burgeoning competitive service
sector compelled a demographic shift in worker educational status
and heightened the demand for job relevant skills as well as
regional diversity. Expectedly, there has been a marked shift
towards valuing human resources (HR) in Indian organisations as
they become increasingly strategy driven as opposed to the culture
of the status quo. Accordingly, competitive advantage in industries
like software services, pharmaceuticals, and biotechnology (where


India is seeking to assert global dominance), the significance of

HRs is being emphasised. These relativities were demonstrated in
a recent study of three global Indian companies with (235
managers) when evidence was presented that positively linked
the HRM practices with organisational performance. In spite of this
trend of convergence, a deep sense of locality exists creating more
robust ‘cross vergence’ in the conceptual as well as practical


Figure 2
Drivers of Contemporary Indian HRM Trends

Figure 2 presents the key drivers for contemporary

Indian HRM trends. In Figure 2 there are four external spheres of
intervention for HRM professionals and these spheres are


integrated in a complex array within organisational settings. The

intellectual sphere, which emphasis’s the mindset transaction in
work organisations, has been significantly impacted by the forces
of globalisation. Indeed, Chatterjee and Pearson (2000) argued,
with supporting empirical evidence from 421 senior level Indian
managers, that many of the traditional Indian values (respect for
seniority, status and group affiliation) have been complemented by
newer areas of attention that are more usually linked to
globalisation, such as work quality, customer service and
innovation. The most important work related attribute of the study
was the opportunity to learn new things at work. Such cross
verging trends need to be understood more widely as practitioners
face a new reality of human resource development of post
industrial economic organisations.

The other three spheres, of Figure 2, namely the emotional, the

socio cultural and the managerial domains are undergoing, similar
profound changes. For instance, the socio cultural sphere confronts
the dialects of the national macro level reform agenda as well as
the challenge of innovating by addressing the hygiene and
motivational features of the work place. Consequently, this sphere,
which is underpinned by the anchors of Sradha and Sneha, has the
opportunity to leverage work setting creativity in dimensions of
autonomy, empowerment, multiskilling and various types of job
design. And the emotional sphere, which focuses on creativity and
innovation to encapsulate the notions of workplace commitment


and collaboration as well as favorable teamwork, brings desirable

behavioral elements of transparency and integrity into
organisational procedures and practices. The managerial sphere
provides the mechanisms for shifting mindsets, for in Indian
organizations. HRM is viewed to be closely aligned with managerial
technical competency. Thus, understanding of the relativity
of HRM to strategic intended organisational performance is less
well articulated in Indian firms. The current emphasis of
reconfiguring cadres (voluntary and nonvoluntary redundancy
schemes), downsizing, delayering and similar arrangements will
become less relevant as holistic perspectives gain ground. A
hallmark of future Indian workplaces is likely to be a dominant
emphasis on managerial training, structural redesign and
reframing of institutional architectures to achieve enterprise
excellence. Thus, a primary role of Indian managers will be to
forge new employment and industrial relationships through
purposeful HRM policies and practices. In Figure 3 is presented a
variety of HRM practices that are being employed in Indian


Progress of personnel management in India

Personnel management - The renewed emphasis on the

importance of human resources in the 1980s and 90s drew
attention to the way in which people management was organized.
Specifically, this meant a critical review of the functions of
personnel management.

Personnel management has been a recognized function in the

USA since NCR opened a personnel office in the 1890s. In other
countries the function arrived more slowly and came through a
variety of routes. This excerpt from Human Resource Management
in a Business Context looks at Personnel Management from a
historical perspective.

Specialist Personnel Functions:

 Recruitment - advertising for new employees and liaising with

employment agencies.
 Selection - determining the best candidates from those who
apply, arranging interviews, tests and references.
 Promotion - running similar selection procedures to determine
progression within the organization.
 Pay - a minor or major role in pay negotiation, determination
and administration.


 Performance assessment - coordinating staff appraisal and

counseling systems to evaluate individual employee performance.

 Grading structures - as a basis for pay or development,
comparing the relative difficulty and importance of functions.
 Training and development - coordinating or delivering

programmes to fit people for the roles required by the organisation

now and in the future.
 Welfare - providing or liaising with specialists in a staff care or
counseling role for people with personal or domestic problems
affecting their work.
 Communication - providing an internal information service,
perhaps in the form of staff newspapers or magazines, handouts,
booklets, videos.
 Employee Relations - handling disputes, grievances and
industrial action, often dealing with unions or staff representatives.
 Dismissal - on an individual basis as a result of failure to meet
requirements or as part of a redundancy, downsizing or closure
exercise, perhaps involving large numbers of people.
 Personnel administration - record-keeping and monitoring of legislative requirements related to
equal opportunities and possibly pensions and tax.

Management theory

The human relations and human factors approaches were

absorbed into a broad behavioral science movement in the 1950's
and 1960's. This period produced some influential theories on the


motivation of human performance. For example, Maslow's

hierarchy of needs provided an individual focus on the reasons why
people work. He argued that people satisfied an ascending series
of needs from survival, through security to eventual 'self-

In the same period, concepts of job design such as job

enrichment and job enlargement were investigated. It was felt that
people would give more to an organization if they gained
satisfaction from their jobs. Jobs should be designed to be
interesting and challenging to gain the commitment of workers - a
central theme of HRM.

By the 1970s most managers participating in formal

management training were aware of: Theory X and Theory Y
(McGregor, 1960); of Maslow and Herzberg's motivation theories;
and knew where they should be in terms of the managerial grid
(Blake and Mouton, 1964). These theorists advocated
participative, 'soft' approaches to management. However, only a
minority of managers in the USA received such training, with even
fewer in other countries. Most operational managers - concerned
with production, engineering, or distribution - had worked their
way up from low-level jobs: they were probably closer in spirit to
F.W. Taylor than the theorists of the 1950s and 1960s. This
contrasted with personnel departments with a higher proportion of
people who had received academic training; additionally,


'personnel' was an area where women were prevalent - as

opposed to production which was male dominated. Were women
naturally more open to human relations concepts than men?

Development of the personnel specialism

Personnel management has been a recognized function in the

USA since NCR opened a personnel office in the 1890s. American
personnel managers worked within a unitarist tradition, identifying
closely with the objectives of their organization. It was natural for
HRM to emerge comparatively smoothly from this perspective.

In other countries the personnel management function arrived

more slowly and came from a number of routes. Moreover, its
orientation was not entirely managerial. In Britain its origins can
be traced to the 'welfare officers' employed by Quaker-owned
companies such as Cadburys. At an early stage it became evident
that there was an inherent conflict between their activities and
those of line managers. They were not seen to have a philosophy
compatible with the worldview of senior managers. The welfare
officer orientation placed personnel management as a buffer
between the business and its employees. In terms of
'organizational politics' this was not a politically viable position for
individuals wishing to further their careers, increase their status
and earn high salaries.


Management thinking

Like fashions in hairstyle and clothing, management ideas come

and go. Today's best-selling management concept will not survive
long before being overtaken by the next 'big idea'. Significantly,
however, a consistent theme has prevailed for more than two
decades: the most successful organizations make the most
effective use of their people - their human resources.

The emergence of HRM was part of a major shift in the nature

and meaning of management towards the end of the twentieth
century. This happened for a number of reasons. Perhaps most
significantly, as we will see in Part 2 of this book, major
developments in the structure and intensity of international
competition forced companies to make radical changes in their
working practices .

From the 1970s onwards, managers in the industrialized

countries felt themselves to be on a roller-coaster of change,
expected to deliver improved business performance by whatever
means they could muster. Their own careers and rewards were
increasingly tied to those improvements and many were
dispatched to the ranks of the unemployed for not acting quickly
and imaginatively enough. Caught between the need to manage
decisively and fear of failure, managers sought credible new ideas
as a potential route for survival.




The World Competitiveness Report rated India’s human resource

capabilities as being comparatively weaker than most Asian
nations. The recognition of world class human resource capability
as being pivotal to global success has changed Indian HRM
cultures in recent years. While the historical and traditional roots
remain deeply embedded in the subjective world of managers,
emphasis on objective global concepts and practices are becoming
more common. Three very different perspectives in HRM are
evident. Firstly, Indian firms with a global outlook; secondly,
global firms seeking to adapt to the Indian context; and thirdly,
the HRM practice in public sectors undertakings (PSV’S). As the
Indian economy becomes more globally linked, all three
perspectives will move increasingly towards a cross verging
strengthening. Interestingly, within the national context, India
itself is not a homogenous entity. Regional variations in terms of
industry size, provincial business culture, and political issues play
very relevant roles. The nature of hierarchy, status, authority,
responsibility and similar other concepts vary widely across the
nations synerging system maintenance. Indeed, organisational
performance and personal success are critical in the new era.



Rajasthan steel manufacturing company is a well established

company manufacturing and marketing steel furniture items. The
head office of the company is at Jaipur and the plant is also
located near Jaipur. Nearly 140employee are working in the plant.

The foundry of the plant provides employment to 24 workers

and use high technical equipment. However foundry has always
been regarded as one of the worst places to work in steel
manufacturing units. The same is the position in Rajasthan steel
manufacturing company. The atmosphere of the foundry is hot,
dirty and tense. Physical fitness is the basic requirement of the
workers for working in the foundry. Technical education,
intelligence, skill, etc. are secondary job requirement. However as
per the job evaluation plan of the company. “Physical ability” and
“working condition” are weighted relatively lower than “training”,
“skill” and “responsibility”. As a result, most of the job in the
foundry rated at the bottom of the wage scales of the company.
The people working in the foundry are low paid and have low
status among the total labour force of the company.

In the course of the last two years, the company finds it difficult
to get workers for foundry work. Unsuitable person are appointed
because of the non-availability of suitable person such unsuitable
person work for one or two months and leave the job due to hard


work, unsuitable work atmosphere and low wage rate. The labour
turnover is also high in the case of foundry workers, which reduce
the sale. Vacancies are always available but job seekers rarely
accept foundry jobs. In the same months, out of 24 workers
required, only 5 to 10 workers working and 15 to 20 posts are
vacant. In spite of all efforts, the personal manager finds it’s
difficult to appoint adequate staff for the foundry. People not
getting job elsewhere accept foundry jobs but are eager to leave
foundry jobs immediately when any other job are available. This
situation affects the foundry work. The unit works slowly creating
inconvenience to other departments. The quality of production is
inferior and minor accidents are also common. Now recruitment for
foundry is a continuous problem before the personnel manager.

In June 2002, the situation in the foundry was extremely bad.

Out of 25 workers required, only seven workers were working. The
pending work was substantial and other departments were
complaining due to limited supply of material from the foundry.
One new worker from the foundry was caught in an accident on
10th June 2002. He died in the hospital after five days. The
company is mew facing police case in this regard. All efforts for
appointment of new workers are ineffective due to low wage rate
offered to foundry jobs.


The general manager of the company has noted the seriousness

of the problem. He instructed personnel manager to give
immediate attention to this urgent problem. He also assured that
the management is willing to take all necessary steps to solve this
problem of foundry department. The personal manager was asked
to make his recommendation within ten days. The personal
manager Mr. Samant has difficult task. However he can now make
suitable recommendation to solve the problem on permanent

Mr. Samant studied the whole issue once again and submitted
his concrete recommendation to the general manager.

{1} Which policy of the company increases the labour turnover


{2} How the high labor turnover ratio increases the cost and
reduces the sale?

{3} Which, of the following, is the appropriate measure for

solving the present problem?

{1} Which policy of the company increases the labor


turnover ratio?
Ans: There are various polices of the company which increases
the worker turnover ratio are as :

[1] They use high technical equipment but weighted on

“Physical ability” and “working condition” and not on
“training”, “skill” and “responsibility”.

[2] Low wages scales

[3] Low status among the total labor force of the company.

[4] Unsuitable work atmosphere for worker

Due to these polices of the company, workers leave the jobs

with in two to three month; this is the main reason for high labor
turnover ratio.

For more project reports, Notes etc.


{2} How will the high labour turnover ratio increases the
cost and reduces the sale?
Ans: This can be explained with the help of triangle diagram:


Internal Marketing External Marketing

Interactive Marketing

The right side of the triangle shows the external marketing i.e.
setting promises. It is the normal activity of the firm to develop
price, promotion and distribute the service offering to the


customers. Anything that is communicated to the customers

before service delivery is seen as a part of external marketing.
In the figure at the bottom of the triangle is Interactive
marketing or real-time marketing, where the focus is on the skills
of the employees in handling customers contact. Here the actual
service delivery takes place and the firms employees interact
directly with the customers. Customer judges the service quality
not only on the basis of the technical quality of the product-service
package, but also by its functional quality. Hence, having a
positive link between what is delivered through external marketing
and what is delivered through internal marketing is useless if
promises cannot be kept.

The left side of the triangle shows the internal marketing i.e.
enabling the promise. The internal marketing activities of the firm
are to train and motivate its employees to work as a team in order
to deliver the service. It emphasizes on the critical role that
enables the employee to keep the promises made to the customer.
In an organization every single individual plays some role in
marketing, a product or service, and therefore any effort by the
organization by way of training in product handling, customer
knowledge, product knowledge etc. Motivation is an internal
marketing tool. Employee satisfaction and customer satisfaction
are closely linked. Therefore, services marketing Triangle will
collapse, if service employs are unable to deliver the promises


made, which in turn would adversely affect customer satisfaction

and expectations.

But in the case of the Rajasthan steel manufacturing company,

they not motivated the employee by providing the good working
environment; training facilities, fair wages rate.
Person work for one or two months and leave the job due to
hard work, unsuitable work atmosphere and low wage rate and for
a new appointed worker company not provide any training facilities
so that the new appointed worker not liable to complete his job
and supply the raw-material to his internal customer with in a sate
time period which increase the cost of production and reduce the
sale because when we marketing the our product that time we
promise the customer to supply good quality of product with in a
time period, if we not supply the product
with in a fixed period that time customer canceling the order.
Due to cancellation of the order sale of the company is decline.


For more project reports, Notes etc.

{3} As a human resource manager what appropriate

measure will you follow for solving the present problem?
Ans: The appropriate measures for solving the present problem
{A} Improvement in the working condition of factory.

{B} Increase in the wages rate of factory workers.

{C} Appointing the right worker for right job.

{D} Provide training facilities.

{E} Motivate the employee by delegation of authority.


For more project reports, Notes etc.


 Human Resource Management

- Vipul Prakashan

 Human Resource Management

- Fisher, Schoenfeldt, Shaw


 Human Resource Development

- P. P. Arya, B. B. Tandon

 Management Paradise Publication.

 Wikipedia.

 Human Resource Management & Human Relation

- Dr. V. P. Michael

Himalaya Publications

 Human Resource Management

- Mirza S. Saiyadain

For more project reports, Notes etc.

Meeting Details


1) DATE- 28/07/2009 Day : Tuesday

Time : 2.15-2.40pm Venu- Library
Topic : A brief discussion about topic
Roll No. Group Members SIGN
04 Sheshnath Barai (Leader)
03 Renu Bajaj
14 Pratiksha Gaikwad
34 Vaibhav Parmar
44 Aniket Satam
54 Pratik Waghmare

2) DATE- 30/07/2009 Day : Thursday

Time : 1.45-2.20pm Venu- Library
Topic : Reffered different books
Roll No. Group Members SIGN
04 Sheshnath Barai (Leader)
03 Renu Bajaj
14 Pratiksha Gaikwad
34 Vaibhav Parmar
44 Aniket Satam
54 Pratik Waghmare

3) DATE- 11/08/2009 Day : Tuesday

Time : 1.45-2.20pm Venu- Library
Topic : Topics were distributed to each member


Roll No. Group Members SIGN

04 Sheshnath Barai (Leader)
03 Renu Bajaj
14 Pratiksha Gaikwad
34 Vaibhav Parmar
44 Aniket Satam
54 Pratik Waghmare

4) Date- 07/09/2009 Day : Monday

Time : 1.45-2.20pm Venu- Library
Topic : Case Study discussed
Roll No. Group Members SIGN
04 Sheshnath Barai (Leader)
03 Renu Bajaj
14 Pratiksha Gaikwad
34 Vaibhav Parmar
44 Aniket Satam
54 Pratik Waghmare

5) Date- 15/09/2009 Day : Tuesday

Time : 2.30-3.15pm Venu- Library
Topic : Complete Topic Study discussed
Roll No. Group Members SIGN


04 Sheshnath Barai (Leader)

03 Renu Bajaj
14 Pratiksha Gaikwad
34 Vaibhav Parmar
44 Aniket Satam
54 Pratik Waghmare

For more project reports, Notes etc.