INTRODUCTION TO HUMAN RESOURCE MANAGEMENT The Concept of Human Resource ManagementHuman resources is a term used to refer to how people

are managed by organizations.It was basica lly a traditionally administrative function but with time it focuses and recogni zestalented and engaged people and organizational success. Human resources has a t least tworelated interpretations depending on context. The original usage was traditionally calledlabour . It is a measure of the wor done by human beings.This perspective is changing as afunction of new and ongoing research into more strategic approaches. This firs t usage is usedmore in terms of 'human resources development', and can go beyond just organizations to thelevel of national importance. The more traditional usa ge within corporations and businessesrefers to the individuals within a firm or agency, and to the portion of the organization thatdeals with hiring, firing, tr aining, and other personnel issues, typically referred to as 'humanresources man agement'. The terms "human resource management" and "human resources" (HR) have largelyrep laced the term "personnel management" as a description of the processes involved inmanaging people in organizations. In simple sense, HRM means employing people , developingtheir resources, "personnel management" as a description of the proc esses involved inmanaging people in organizations. Human resource management is to maximize the return on investment from theorgani zation's human capital and minimize financial ris . Presently Human ResourceMana gement is an integral but distinctive part of management. Its objective is thema intenance of better human relations in the organization by the development, appl icationand evaluation of policies, procedures and programs relating to human res ources to optimizetheir contribution towards the realization of organizational o bjectives. HRM helps in attainingmaximum individual development, desirable wor i ng relationship between employees andemployers, employees and employees, and eff ective modeling of human resources ascontrasted with physical resources. It is t he recruitment, selection, development, utilization,compensation and motivation of human resources by the organization. Generally, human resource management refers to the management of the entirewor f orce of an organization in a reliable, honest and professional manner. It is the responsibility of human resource managers in a corporate context to conduct thes e activitiesin an effective, legal, fair, and consistent manner. That s why the de mand of HumanResource (HR) management has been dramatically increased these days . From corporatesector to ban ing industry, from non profit organizations to hum an protection groups, from ITsolution companies to printing industry; human reso urce management is playing a critical rolein all the other sectors of the econom y

One very important trend in the recent times has been the growth of human resour ceoutsourcing. HR outsourcing is the outsourcing of peripheral but necessary adm inistrativetas s such as payroll, benefits, education/training, recruiting perso nnel, administration, torealize economies of scale and achieve standardization o f services.Rapidly changing mar et dynamics and global competitive pressures hav e causedorganizations to spend more time focusing on their core business. Organi zations are fastrealizing that they can't be all things to all people. So compan ies now, be it a softwarecompany, a service provider or a manufacturing firm, de cide what they are good at andoutsource everything else, i.e., focus on their co re competency, and let someone else do therest in a more efficient and cost-effe ctive manner.As a result, human resources outsourcing is becoming increasingly p revalent. The number ofcompanies outsourcing HR activities continues to rise, an

d the scope of outsourced HRactivities continues to expand. HR outsourcing can h appen in HR functions, li e payrolladministration (producing chec s, handling ta xes, dealing with sic -time and vacations),employee benefits (Health, Medical, L ife insurance, Cafeteria, etc), human resourcemanagement (hiring and firing, bac ground interviews, exit interviews and wage reviews),ris management, etc. Outs ourcing has become a common response to manage people andtechnology resources st rategically, enhance services, and manage costs more effectively.Outsourcing non core activities allows HR professionals to move away from routineadministration to a more strategic role. The organization can focus on higher value-addedactivi ties while the outsourcing provider ta es care of the day-to-day administration. Criticalinternal resources, such as technology and talent, can be devoted to co mpany's core business.Outsourcing reduces the need for large capital expenditure s in noncore functions. Thus,outsourcing becomes a strategy for reducing the cap ital intensity of the business. Thisstrategy has gained popularity as companies aim to become more nimble and gain the speedand flexibility necessary to compete in today's business environment. A growing number ofexecutives understand the b enefits it can bring in terms of not only cost savings, but alsoheightened strat egic focus. Many recognize outsourcing relationships as long-termpartnerships cr eated to further the strategic goals of the organization.The HR outsourcing busi ness opportunity is large and India is li ely to garner a larger andlarger piece of this pie in the future. India, with its intrinsic advantages such as low cos t,ready pool of English spea ing manpower and geographic positioning, is emergin g as a viabledestination for HR outsourcing companies to set up their businesses .However, the future seems to be very promising. It's set to become a $ 51 billi on mar etworldwide in 2005, representing 39 per cent of the total business proce ss outsourcingrevenue. Estimates show that the latent size of HR outsourcing in India is about $ 2 billionwith a current mar et of $ 27 million and it is growin g at an alarming rate of about 50 percent. India has immense potential as more t han 80% of fortune 1,000 companies are discussingHR outsourcing as a way to cut costs and increase productivity.HR outsourcing has a huge potential for employme nt also. Nasscom numbers are a millionsoftware jobs by 2005; HRO would be about a 25 per cent of that. Experts believe that inpresent times HR outsourcing is un dergoing a transition phase, it would still be sometimebefore we see increased l evels of HR activities being outsourced to India as lac of domain nowledge and quality are some of the critical issues