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UNIT 2 THE CONCEPT AND FUNCTIONS OF HUMAN RESOURCE MANAGEMENT
After reading this unit, you should be able to:
understand the meaning and concept of human resource management; and explain the functions of HR, and responsibilities and new roles of HR practitioners.
2.1 2.2 2.3 2.4 2.5 2.6 2.7 Introduction Concept of HRM Objectives of HRM Human Resource Functions Summary Self Assessment Questions Further Readings
Human resource management (HRM) is an approach to the management of people, based on four fundamental principles. First, human resources are the most important assets an organisation has and their effective management is the key to its success. Second, this success is most likely to be achieved if the personnel policies and procedures of the enterprise are closely linked with, and make a major contribution to, the achievement of corporate objectives and strategic plans. Third, the corporate culture and the values, organisational climate and managerial behaviour that emanate from that culture will exert a major influence on the achievement of excellence. This culture must, therefore, be managed which means that organisational values may need to be changed or reinforced, and that continuous effort, starting from the top, will be required to get them accepted and acted upon. Finally, HRM is concerned with integration - getting all the members of the organisation involved and working together with a sense of common purpose.
2.2 CONCEPT OF HRM
HRM is a strategic approach to the acquisition, motivation, development and management of the organisation’s human resources. It is a specialised field that attempts to devd .ng an appropriate corporate culture, and introducing programmes which reflect and support the core values of the enterprise and ensure its success. HRM is proactive rather than reactive, i.e., always looking forward to what needs to be done and then doing it, rather than waiting to be told what to do about recruiting, paying or training people, or dealing with employee relations problems as they arise. The techniques for the application of HRM will include many familiar functions of personnel managers, such as manpower planning, selection, performance appraisal, salary administration, training and management development. These will be overlaid
HRM is preventive. there are three meanings attached to the concept of HRM. These include the role or the job a person has in the organisation. but also on other social realities. Under the HRM approach. And thirdly. It is a resource to be used to its fullest capacity. In its essence. therefore. It is more in the nature of self-development than development thrust from outside.by special programmes designed to improve communication systems. There is scope for unlimited development of these resources. Its approach is multi-disciplinary from the beginning to the end. HRM is the qualitative improvement of human beings who are considered the most valuable assets of an organization-the sources. human resources do not merely focus on employees as individuals. separate from the business. short-term. The approach focuses on the need to humanise organisational life and introduce human values in the organisation. HRM is a production model approach to personnel management. resources. Managing people includes both individual and collective dimensions. and productivity.. If personnel management is curative. organisation development. It is a scientific process of continuously enabling the employees to improve their competency and capability to play their present as well as future expected roles so that the goals of the organization are achieved more fully and at the same time the needs of the employees are also met to an adequate extent. persons working in an organization are regarded as a valuable source. The key distinguishing feature of HRM is its evolving strategic role. But it is much more than its parent disciplines. The traditional personnel management is non-strategic. (consisting of the person and his superior). HRM is also more comprehensive and deeprooted than training and development. some basic assumptions about human resources are also different from the traditional approach. reactive. rewards. and the entity of the total organisation. employee welfare and quality of work life. Secondly. potentiality appraisal and development. it is about the management of work and people in the firm. In the first place. involvement. cannot be treated like material resources. career planning. viz. they are human resources which means that they have their own special characteristics and. The important assumptions of HRM are as follows: 1) 2) 3) 4) The members of an organisation are reservoirs of untapped resources. personnel management. Broadly. training and development. an outgrowth of the older process and approach. HRM is not simply about HR or ‘people practices’. the various teams in which people work. The major attention of traditional personnel function is on personnel administration or management while the major attention of HRM is on developing people and their competencies. no doubt. commitment. units and processes in the organisation. and behavioural science. and human resource information. The HRM model is characterised as being employee-oriented with an emphasis on the maximisation of individual skills and motivation through consultation with the workforce so as to produce high levels of commitment to company strategic goals. HRM is. and end-users of all products and services. industrial relations. It is an asset to be invested in. It integrates in a meaningful way the various sub-systems like performance appraisal. The Concept and Functions of Human Resource Management 2 5 . HRM is concerned with both the structure of work in a firm and with all the related employment practices that are needed to carry out the work. research and systems development. and constrained by a limited definition of its role as dealing with mostly unionised and low level employees. implying that there is a need to invest time and effort in their development. inter-team processes. the dydadic unit. HRM essentially emphasises and incorporates those expectations which are not being fulfilled through the traditional personnel management. The organisation also undergoes development with the overall benefits along with the development of its members.
Apart from this. Concept and Doundaries 5) The organisation further develops a culture in which utmost emphasis is placed on harmonious superior-subordinate relations. open communication. HR systems and procedures should be designed on the basis of process values to reduce human wastage 8. judgment calls. there are other objectives too. and personal. HRD is an organic whole: All the parts are interlinked 3. People in an organisation are motivated mainly by salary and rewards Human Resource Development (HRD) 1. TPF is an independent function 2. Specifically. and creates an overall climate and support for its implementation. People are primarily motivated by challenges and opportunities for development and creativity 2. Societal Objectives The societal objectives are socially and ethically responsible for the needs and challenges of society. HRD is a sub-system of a larger system (organisation) 2. and above all.Human Resource Management: Context. TPF has the main responsibilities for their personnel matters 5. The responsibilities of HRS relate to HRS. For example. HRM objectives are four fold: societal. While doing so. The main responsibilities of TPF relate to salary and job administration. The major attention of HRS is on developing people and their competencies 7. integration of the goals of the organisation with the needs of the employees. and the process of the total organisation 6. There are several sub-functions under TPF 3. systems. 2 6 . Personnel system and procedures should be designed to achieve maximum efficiency 8. and learning from past mistakes. the society may limit human resource decisions to laws that enforce reservation in hiring and laws that address discrimination. Table 1: Some Basic Assumptions Underlying Traditional Personnel Function and Human Resources System Traditional Personnel Function (TPF) 1. The failure of organisations to use their resources for society’s benefit in ethical ways may lead to restrictions. The major attention of TPF is on personnel administration or management 7. safety or other such areas of societal concern. organisational. they have to minimize the negative impact of such demands upon the organisation. In practice it is an “art” full of pitfalls. 6) The management of human resources is more of an art than a science. The main task of HRD is to develop enabling capabilities (proactive role) 4. All managers irrespective of functions share the responsibility of human resource functions 5. formulates necessary plans and strategies. The main task of TPF is to respond effectively to the demands (coping role) 4. functional. people. and management of people and their development 6. collaboration among different groups of individuals. teamwork. Top management takes the initiative for HRM.3 OBJECTIVES OF HRM The primary objective of HRM is to ensure the availability of competent and willing workforce to an organisation.
The department’s level of service must be tailored to fit the organisation it serves. 2. Human resources are to be adjusted to suit the organisation’s demands.Organisational Objectives The organisational objectives recognise the role of human resource management in bringing about organisational effectiveness. at least insofar as these goals enhance the individual’s contribution to the organisation. 4. 6. 2. Supporting Functions Legal compliance Benefits Union-management relations Human resource planning Employee relations Selection Training and development Appraisal Placement Assessment Appraisal Placement Assessment Training and development Appraisal Placement Compensation Assessment 2. The Concept and Functions of Human Resource Management Functional Objectives Functional objectives try to maintain the department’s contribution at a level appropriate to the organisation’s needs. 2. Organisational Objectives 3. 2 7 . and Keith Davis. p. 7. Table 2: HRM Objectives and Functions HRM Objectives 1. Personal Objectives Source: William B. 5. Human resource management is not an end in itself. Jr. 4. Otherwise. Functional Objectives 4. 3. Werther. 1.. it is only a means to assist the organisation with its primary objectives. 15. 1. 3. 1. retained and motivated. employee performance and satisfaction may decline giving rise to employee turnover. Societal Objectives 1. 3. Personal objectives of employees must be met if they are to be maintained. Personal Objectives Personal objectives assist employees in achieving their personal goals. 2. Human Resources and Personnel Management. 5. 3. Simply stated the human resource department exists to serve the rest of the organisation.
The end product of the job analysis process is the job description. develop. and administer policies and programmes designed to make expeditious use of an organisation’s human resources. It is a method to acquaint new employees with particular aspects of their new job. Large organisations often have development programmes which prepare employees for higher level responsibilities within the organisation. some functions serve a variety of purposes. Although each human resource function can be assigned to one of the four areas of personnel responsibility. and (3) maximum individual development. human resource functionaries are involved in developing and administering methods that enable managers to decide which applicants to select and which to reject for the given jobs. The basic human resource planning strategy is staffing and employee development. working hours. These four areas and their related functions share the common objective of an adequate number of competent employees with the skills. performance appraisal measures serve to stimulate and guide employee development as well as salary administration purposes. Recruiting is the personnel function that attracts qualified applicants to fill job vacancies. On selection. The compensation function facilitates retention of employees and also serves to attract potential employees to the organisation. such as skills. Its objectives are: (1) the effective utilisation of human resources. the most qualified applicants are selected for hiring from among those attracted to the organisation by the recruiting function. Research is an important part of this function because planning requires the collection and analysis of information in order to forecast human resources supplies and to predict future human resources needs. Orientation: Orientation is the first step toward helping a new employee adjust himself to the new job and the employer. including pay and benefit programmes. (2) staffing. A job description spells out work duties and activities of employees. 2 8 . Training and Development: The training and development function gives employees the skills and knowledge to perform their jobs effectively. managers. and experience needed to perform it. (3) employee development. For example. It is that part of management which is concerned with the people at work and with their relationship within an enterprise. (2) desirable working relationships among all members of the organisation. and (4) employee maintenance. and experience needed for further organisational goals. the number and type of employees needed to accomplish organisational goals are determined. The major functional areas in human resource management are: (1) planning. Job Analysis: Job analysis is the process of describing the nature of a job and specifying the human requirements. organisations often provide training programmes for experienced employees whose jobs are undergoing change. Staffing: Staffing emphasises the recruitment and selection of the human resources for an organisation. Job descriptions are a vital source of information to employees. In addition to providing training for new or inexperienced employees.Human Resource Management: Context. and personnel people because job content has a great influence on personnel programmes and practices. and company rules and expectations. knowledge. Concept and Doundaries 2. Training and development programmes provide useful means of assuring that employees are capable of performing their jobs at acceptable levels. Human resources planning and recruiting precede the actual selection of people for positions in an organisation.4 HUMAN RESOURCE FUNCTIONS The role of human resource management is to plan. In the selection function. abilities. A brief description of usual human resource functions is given below: Human Resource Planning: In the human resource planning function.
it is a major consideration in human resource planning. Record-keeping: The oldest and most basic personnel function is employee recordkeeping. benefits. Labour Relations: The term “labour relations” refers to interaction with employees who are represented by a trade union. the human resource function of administering employee benefits shares many characteristics of the compensation function. Benefits: Benefits are another form of compensation to employees other than direct pay for work performed. performance appraisal information is essential for employee development since knowledge of results (feedback) is necessary to motivate and guide performance improvements. Compensation: Human resource personnel provide a rational method for determining how much employees should be paid for performing certain jobs. and retrieving employeerelated information for a variety of purposes. maintaining. Career Planning: Career planning has developed partly as a result of the desire of many employees to grow in their jobs and to advance in their career. turnover. They want to know what is in them. This function involves recording. Human resource professionals are usually responsible for developing and administering performance appraisal systems. since they provide for many basic employee needs. promotion. absences. However. health and medical records. tardiness. Besides providing a basis for pay. v) The raw material for statistics which check and guide personnel policies. Benefits include both the legally required items and those offered at employer’s discretion. As such. Career planning activities include assessing an individual employee’s potential for growth and advancement in the organisation. Since compensation is a major cost to many organisations.Performance Appraisal: This function monitors employee performance to ensure that it is at acceptable levels. although the actual appraisal of employee performance is the responsibility of supervisors and managers. and other employee data. Compensation affects staffing in that people are generally attracted to organisations offering a higher level of pay in exchange for the work performed.g. seniority lists. With regard to labour relations. and why records may or may not have been updated. working conditions. e. employment history (jobs held. The cost of benefits has risen to such a point that they have become a major consideration in human resources planning. A guide to the action to be taken regarding an employee. More than ever employees today have a great interest in their personnel records. Complete and up-to-date employee records are essential for most personnel functions. Unions are organisation of employees who join together to obtain more voice in decisions affecting wages. why certain statements have been made. earnings and hours of work. Personnel records provide the following: A store of up-to-date and accurate information about the company’s employees. particularly by comparing him with other employees. and resolving disputes and grievances. service conditions. It is related to employee development in that it provides an important incentive in motivating employees to higher levels of job performance and to higher paying jobs in the organisation. promotions. iv) A historical record of previous action taken regarding employees. Records which must be maintained include application forms. iii) A guide when recruiting a new employee. lay-offs). Pay is obviously related to the maintenance of human resources. and disciplinary action. by showing the rates of pay received by comparable employees. transfers. vi) The means to comply with certain statutory requirements. and other aspects of employment. the personnel responsibility primarily involves negotiating with the unions regarding wages. benefits are primarily related to the maintenance area. i) ii) The Concept and Functions of Human Resource Management 2 9 .
Concept and Doundaries Personnel Research: All personnel people engage in some form of research activities. its keynote is a cross-fertilisation of ideas from different organisations. leadership. training. however. The ultimate goal of every HR person should be to develop a linkage between the employee and the organisation because the employee’s commitment to the organisation is crucial. To initiate change and act as an expert and facilitator. sales progress. To try and relate people and work so that the organisation objectives are achieved effectively and efficiently. employee opinions can be gathered on wages. sharp price movements. In a good research approach. Apart from the above. but should be properly made use of. To facilitate the development of various organisational teams and their working relationship with other teams and individuals. They are required to have a thorough knowledge of the organisation and its intricacies and complexities. The primary responsibilities of a human resource manager are: l l l l l l l l l l l 3 0 To develop a thorough knowledge of corporate culture. welfare services. To evaluate the impact of an HRD intervention or to conduct research so as to identify. restructuring plans. and their organisation in particular. which however should be assisted by line supervisors and executives at all levels of management. terminations. It is impossible to run a personnel programme without some pre-planning and post-reviewing. To act as an internal change agent and consultant. The HR professionals should impart education to all employees through small booklets.Human Resource Management: Context. the HR function involves managing change. To provide co-ordination and support services for the delivery of HRD programmes and services. in a sense. plans and policies. and so on. innovation. Through a well-designed attitude survey. research. in most companies. working conditions. The assistance that can be rendered by trade unions and other organisations should not be ignored. To identify and evolve HRD strategies in consonance with overall business strategy. industrial relations. research is the most neglected area because personnel people are too busy putting out fires. The initial responsibility is that of the human resource department. Periodic social audits of HR functions are considered essential. video films. HR professionals have an all-encompassing role. promotions. To keep communication lines open between the HRD function and individuals and groups both within and outside the organisation. and lectures. The employees should know about their balance sheet. technology. Inspite of its importance. It is no longer confined to the culture or ethos of any single organisation. the object is to get facts and information about personnel specifics in order to develop and maintain a programme that works. For that matter. . any survey is. develop or test how HRD in general has improved individual or organisational performance. turnover and all such details. and the like. To diagnose problems and to determine appropriate solution particularly in the human resources areas. employee turnover. The first and foremost role of HR functionary is to impart continuous education to employees about the changes and challenges facing the country in general. diversification plans. Research is not done to put out fires but to prevent them. job security. Research is not the sole responsibility of any one particular group or department in an organisation. and diversity. There is a wide scope for research in the areas of recruitment. To actively involve himself in company’s strategy formulation.
.......... To help individuals and groups work in new situations and to expand and change their views so that people in power move from authoritarian to participative models of leadership................ to ensure the best and most flexible use of resources and competencies......... To facilitate the development and implementation of strategies for transforming one’s own organisation by pursuing values and visions..... help it happen fast... The first................................ and to create commitment among the people who help us to meet customers’ needs whether those people work directly for the organisation or not....... 3 1 .............. It seeks to achieve the fullest development of human resources and the fullest possible socio-economic development........................ the third............. Activity A With business going global and competition becoming intense today HR has travelled a long way from its conventional role as a support function to being a strategic business partner in the present technology leveraged era... an employee champion role-managing the talent or the intellectual capital within a firm. and implement development actions... according to Dave Ulrich...................... and the fourth........ Its role in organisations has also undergone a substantial change and many organisations have gradually oriented themselves from the traditional personnel management to a human resource management approach......................... the second........... The Concept and Functions of Human Resource Management 2) 3) 4) 5) 6) 7) 8) 9) There are four roles which HR play............. although many see it as the “old wine in a new bottle................ ...” The basic approach of HRM is to perceive the organisation in its totality. To assess HRD practices and programmes and their impact and to communicate results so that the organisation and its people accelerate their change and development.... To create the smoothest flow of products and services to customers....... and goals so that they can identify................ ....... Discuss this statement by citing suitable examples from your own organisation........... a change agent role-making change happen and......... faster and cheaper. in particular........... strategic partner role-turning strategy into results by building organisations that create value... values....... To design and prepare HR systems and actions for implementation so that they can produce maximum impact on organisational performance and development. Human resource management has received tremendous attention in recent years..... Its emphasis is not only on production and productivity but also on the quality of life.........The following are the nine new roles of HR practitioner as suggested by Pat McLegan: 1) To bring the issues and trends concerning an organisation’s external and internal people to the attention of strategic decision-makers.......................................... an administrative role-trying to get things to happen better..... plan... To identify learning needs and then design and develop structured learning programmes and materials to help accelerate learning for individuals and groups.......... ............................. and to recommend long-term strategies to support organisational excellence and endurance.................................. To help people assess their competencies. To assist individuals to add value in the workplace and to focus on the interventions and interpersonal skills for helping people change and sustain change....
.. Kogan Page.... What is “Human Resource Management”? What functions does a human resource department normally perform? Explain the new roles of HR managers.... In the light of new challenges........ Human Resource Management: Key Concepts and Skills.. Vol..... London........ selecting........................... there are indications that human resource people will play an increasingly important role in an organisation’s longrange planning and policy-making activities........ Large organisations usually have a human resource or personnel department that is responsible for co-ordinating and directing the human resource functions.............................. 3. 1993.. most human resource functions are performed by owners or operating managers....... Quality of Work Life. 1994.... and getting them involved in working productively............................................... The objectives of HRM include getting the organisation right........ Rao............................. New York.............................5 SUMMARY The human resources of an organisation represent one of its largest investment............................. Purcell J.... HRD in the New Economic Environment..... (2) career system......... The main HRM systems are: (1) appraisal system.... W...... (5) cultural system... Tata McGraw-Hill Book Company.................. counselling employees...... Managing Human Resources: Productivity........................ 1992........... 2.. ...... ..... M... 4..7 FURTHER READINGS Armstrong............ Cascio.............. This will also integrate the purposes and processes and make HRM more meaningful................Human Resource Management: Context.. (3) training system... 2.B. In small organisations.................... providing effective motivation and leadership.... New York........................ Profits...............................6 SELF-ASSESSMENT QUESTIONS 1............................ Beaumont....... Boxall P......................... and (6) self-renewal system............ compensation management.... All systems and sub-systems of HRM must be incorporated in the organisation while setting the goals and objectives... Palgrave....... New Delhi.. 2.............. recruiting. 1999.... obtaining and developing the right people... The attainment of these objectives necessitates the performance of several functions........ . 2. training........... 3 2 ......... Managing People......... paying and treating them fairly......... Concept and Doundaries ......... and Others... Strategy and Human Resource Management... Sage Publications.. Successful human resource management is essential to organisational growth and success.... P.......V..................... T... (4) work system.. 2003....... .. India...... Human resources functions are many and varied and include such things as human resource planning.......... and employer-employee relations. McGraw-Hill Book Company..............F. Macmillan.....................................
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