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The history of development of HR management in India is a comparatively of recent origin.
But Kautilya had dealt with some of the important aspects of human resources management
in his “Arthasastra,” written in 400 B.C. government in those days adapted the techniques of
H.R.M. as suggested by kautilya.


Recent developments in the area of H.R.M. includes :
Treating the employees as economic, social, psychological and spiritual men and women.
The important aspects of development of human resources management in India are:
2000 Emphasis has been shifted towards empowerment of employees.
2001 Emphasis has been on „smart sizing of the organization‟.
2002 Emphasis has been shifted to positive attitude of the candidate/employee rather
than the skill and knowledge.
2003 shift from intelligent quotient to emotional quotient
2004 shift from skilled workers to knowledge workers.
2005 shift from hierarchical structure to flexible and virtual structures.
2006 HRM has become the core of strategic management level.
2007 The concept of HRM has been relegated to human capital management.


The functions are classified into two types. (1) Managerial functions (2) Operative functions.
Managerial functions include Planning, Organising, Directing, Controlling.
Operative functions include Employment, Human resource, Development, Compensation,
Human relations, Industrial relations, recent trends in HRM.

1. Planning: It is a predetermined course of action. In other words, it involves planning of
human resources, requirements, recruitment, selection, training etc, it also involves
forecasting of personnel needs, changing values, attitudes and behavior of employees
and their impact on the organization.
2. Organizing: In the words of J.C.Massie, an organization is a “structure and a process
by which a co-operative group of human beings allocates its task among its members,
identifies relationships, and integrates its activities towards a common objective”.
3. Directing: The next logical function after completing the planning and organizing is the
execution of plan. The basic function of personnel management at any level is
motivating, commanding, leading and activating people. The willing effective co-
operation of employees for the attainment of the organizational goals is possible
through proper direction.
4. Controlling: The performance is to be verified in order to know that the personnel
functions are performed in conformity with the plans and directions of the organization.
Controlling also involves checking, verifying and comparing of the actuals with the
plans, identifications of deviations if any and correcting of identified deviations.

Operative functions:

1. Employment: it is the first Operative function of HRM. Employment is concerned with
securing and employing the people possessing the required king and level of human
resources necessary to achieve the organizational objectives.
(i) Job Analysis: it is the process of study and collection of information relating to the
operations and responsibilities of a specific job.
(II) Human Resources planning: it is a process for determination and assuring that the
organization will have an adequate number of qualified persons, available at proper times,
performing jobs which would meet the needs of the organization and which would provide
satisfaction for the individuals involved.
(iii) Recruitment: it is the process of searching for prospective employees and stimulating
them to apply for jobs in an organization.
(iv) Selection: it is the process of ascertaining the qualifications, experiences, skills,
knowledge etc, of an applicant with a view to appraising his/her suitability to a job.
(v) Placement: it is the process of assigning the selected candidate with the most suitable
job in terms of job requirements. It is matching of employee specifications with job
(vi)Induction and Orientation: these are the techniques by which a new employee is
rehabilitated in the changed surrounding and introduced to the practices, policies, purposes
and people etc,. of the organization.

2. Human Resources Development: it is the process of improving, moulding and changing
the skills, knowledge create ability and so on. It includes
(i) Performance appraisal: it is the systematic evaluation of individuals with respect to their
performance on the job and their potential for development.
(ii) Training: it is the process of imparting to the employees technical and operating skills
and knowledge.
(iii) Management Development: it is the process of designing and conducting suitable
executive development programmes so as to develop the managerial and human relations
skill of employees.
(iv)Career Planning and Development: it is the planning of one‟s career and
implementation of career plans by means of education, training, job search and acquisition
of work experiences.
(v) Internal mobility: it includes vertical and horizontal movement of an employee within an
organization. It consists of transfer, promotion and demotion.
(vi) Transfer: it is the process of placing employees in the same level jobs where they can
be utilized more effectively in consistence with their potentialities and needs of the
employees and the organization.
(vii) Promotion: it deals with upward reassignment given to an employee in the
organization to occupy higher position which commands better status and/or pay keeping in
view the human resources of the employees and the job requirements.
(viii) Demotion: it deals with downward reassignment to an employee in the organization.

3.Compensation : it is the process of providing adequate, equitable and fair remuneration
to the employees.
(i) job evaluation: it is the process of determining relative worth of jobs.
(ii) wage and salary administration: this is the process of developing and operating a
suitable wage and salary programme.
(iii) Incentives: it is the process of formulating, administering and reviewing the schemes of
financial incentives in addition to regular payment of wages and salary..
(iv) Bonus: it includes payment of statutory bonus according to the payment of bonus act ,
1965 and the latest amendments.
(v) Fringe Benefits: Management provides these benefits to motivate the employees and
to met their life contingencies.
(vi) Social Security Measures: Managements provide social security to their employees in
addition to the fringe benefits. It includes maternity benefits to women employees,
disablement benefits/allowances, dependent benefits etc,.
4. Human Relations: it includes
 Motivating the employees
 Boosting employee morale
 Developing communication skill
 Providing a comfortable environment
5. Industrial relations: it includes
 Indian labour market
 trade unionism
 Collective bargaining
6. Recent Trends in HRM: it includes
 Total quality in human resources
 HR accounting, audit and research


In simple terms, HRP means deciding the number and type of the human resources
required for each job, unit and the total company for a particular future date in order to
carryout organizational activities.
According to Leon C.Megginson, HRP is “ an integrated approach to performing the
planning aspects of the personnel function in order to have a sufficient supply of adequately
developed and motivated people to perform the duties and tasks required to meet
organizational objectives and satisfy the individual needs and goals of organizational

1. To recruit and retain the human resources of required quantity and quality.
2. To meet the needs of the programmes of expansion, diversification, etc,.
3. To improve the standards, skills, knowledge, ability, discipline etc,.
4. To assess the surplus or shortage of human resources and take measures accordingly.
5. To maintain congenial industrial relations by maintaining optimum level and structure of
human resources.
6. To estimate the cost of human resources.


External Factors are
1. Government policies.
2. Level of economic development
3. Business Environment
4. Information technology
5. level of technology
6. International factors

Internal Factors are
1. Strategies of the company
2. Human resources policy
3. Job analysis
4. Time horizons
5. Type and quality of information
6. Company‟s production/operations policy
7. trade unions

1. Government Policies: it includes labour policy, industrial relations policy, policy
towards reserving certain jobs to different communities and sons-of the-soil etc,.
2. Level Of Economic Development: it determines the level of HRD in the country and
thereby the supply of human resources in the future in the country.
3. Business Environment: External Business Environmental factors influence the volume
and mix of production and thereby the future demand for human resources.
4. Information Technology: The computer-aided design and computer-aided technology
also reduced the existing human resources.
5. Level Of Technology: it determines the kind of human resources required.
6. International Factors: International Factors like the demand for and supply of human
resources in various countries.

1. Company Strategies: Company‟s policies and strategies relating to expansion,
diversification, alliances etc,. determine the human resources demand in terms of
2. Human resources policies: Human resources policies of the company regarding
quality of Human resources, compensation level, quality of worklife etc,. influence
Human resources plan.
3. Job Analysis; fundamentally Human resources plan is based on job analysis, job
description and job specification. Thus the job analysis determines the kind of
employees required.
4. Time horizons: companies with a suitable competitive environment can plan for the
long run, whereas firms with an unstable competitive environment can plan for only
short-term range.
5. Type and quality of information: any planning process needs qualitative and accurate
information. This is more so with Human resources plan.
6. Company’s production/operations policy: company‟s policy regarding how much to
produce and how much to buy from outside to prepare a final product influences the
number and kind of people required.
7. Trade unions: influence of trade unions regarding the number of working hours per
week, recruitment sources etc,. affect HRP.


Process of Human resources planning consists of the following steps:

1. Analyzing the corporate and unit level strategies.
2. Demand Forecasting: Forecasting the overall Human resources requirements in
accordance with the organizational plans
3. Supply Forecasting: Obtaining the data and information about the present inventory of
Human resources and forecast the future changes in the Human resources inventory.
4. Estimating the net Human resources requirements
5. In the case of future surplus, plan for redeployment, retrenchment and lay-off.
6. In case of future deficit, forecast the future supply of Human resources from all sources
with references to plans of other companies.
7. Plan for recruitment, development and internal mobility if future supply is more than or
equal to the net Human resources requirements.
8. Plan to modify or adjust the organizational plan if future supply will be inadequate with
reference to future net requirements.


1. Outplacement: Outplacement programmes also intended to provide career guidance
for displaced employees. This programmes covers retaining the prospective displaced
employees who can be redeployed else where in the organization, helping in resume
writing, interview techniques, job searching etc,.
2. Employment in the sister Organization: The surplus employees are offered in sister
organizations either at the similar level or at the lower level under the same
management. This programme is undertaken when the jobs are vacant in the sister


1. Reduced work hours: Under this technique each worker work less hours and receives
less pay, so that the jobs are saved.
2. Work sharing: Some Organizations offer employees the opportunity to share jobs or
two employees work half time each. This technique solves the problem of retrenchment
in the short run.
3. Layoffs: Layoffs can be temporary or permanent. Temporary layoffs are due to the
slackness in business, machinery breakage, power failure etc,. workers are called back
as soon as work resumes to the normal position. Permanent layoffs is due to liquidation
of the company.
4. Voluntary retirement or early retirement: Government of India introduced Voluntary
Retirement Scheme(VRS) under the caption “ Golden Handshake” in order to solve the
problem of overstaffing in the public sector.
5. Compulsory retirement or Iron handshake: Under this programme, the HR manager,
with the help of the line manager, identifies surplus employees and discharges them
from the service.
6. Creation of ad-hoc projects: Some companies create ad-hoc projects in order to
provide employment to the surplus staff for a short span of time.