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Personnel Management and the new approach of Human

Resource Management

This chapter focuses its main objective on evolution of personnel management and its
importance. Today in very organisation HUMAN CAPITAL is the main factor based on
which the organisation functions. Since no individual can work isolate and has to work with
team, the need for personnel management becomes all the more pivotal.


After reading this chapter, you should know:

* How did the Personnel Management evolve.

* What do you understand by Personnel Management.
* How did various traditions lead to the development of Personnel
Management .


Lesson Contents:

The Nature And Development Of Personnel Management

Introduction to personnel management.

Nature and the development of personnel mgmt.

Growth of personnel Management:

Although the field of personnel management as a discipline of study is relatively new,

the ideas upon which its current concepts are based had their origins deep in history. For
example, the minimum wages rate and Babylonian code of Hammurabi around 1800 BC.
The ancients, with their Stone axes, adages and other flint tools, may not have
appreciated the principle of “transfer of skill from the humans to the machine”, but they were
applying the principle of “transfer of skill from the humans to the machine”, and this
separated them from large no of other human beings. Unknowingly they were doing it.
In India, Kautilya has observed that there existed a sound base for systematic
management of human resources as early as the fourth century BC. The government then

took active interest in the operation of public and private sector for regulating employer-
employee relationship.

Evolution of personnel mgmt.

After the 2 world war when industrialization came into existence, there was
a rapid growth of industries and basically then came into being of two
divisions labour and management. People at those times understood only two
terms 1.labour 2. Management.
But slowly this concept changed. People started realizing that organizations
in which they work are not just offices but their second homes. Because most
of there time or rather majority of their time they spend at the workplace. So
if this workplace is turned into happy place where people enjoy their work,
enjoy working with their superiors and subordinates then there would be no
problems and no hassles at all.

With this concept or idea personnel management was born. Here we believe
that men when they come to work come first as human beings then they come
with their respective designations. We are first humans i.e., we have our own
emotions, feelings, perceptions, attitudes, values, judgements, backgrounds,
educations etc.,
Therefore to cater to all these attributes and motivate employees to work in a
proper channel personnel mgmt was evolved.

We all know an organization is a place where two or more persons come

together and work to achieve a common goal. There can be any sort of
organizations like manufacturing units, service sectors, government
organizations, public limited companies etc.
Whatever may be the organization primarily it is the human beings who are
working there. So in short organizations are made of human beings. And
taking care of these human wealth is utmost important to the
All these organizations which exist today, exist for some reason i.e., they try to serve some
purpose in the society e.g. if hospital exist it tries to provide health services to the people. If a
police station exist it tries to provide security services to the people thereon we have many
institutions like this. But the basic purpose is they have an objective /goal for there existence.
Therefore any organizations will have objective or multiple objectives to serve members of
different category of people. In order to achieve the goals a well-run organization works out a
set of rules sometimes called policies, programmes, rules, regulations, procedures or
guidelines and sanctions. These are designed not to restrict creativity but to assist its
members in accomplishment of the organizational goals. Therefore now we understood
human resources are most important part of any organization.

There are other things, which are also important in any organization to
achieve its objectives they are material, money, short there are
4M’S i.e., including the MEN. But human beings are the only living
resources available to the management in an organization, so these resources
have to be coordinated with other resources like money, machinery and
material so as to achieve organizational objectives.
In brief we can say human beings efficiency, effectiveness and productivity
will determine to what degree we can achieve organizations goal.

Now that we know the most important factor of any organization is human
resource so, this factor has to be taken care of. We can say human resource is
nothing but people at work. Therefore we can define human resource as
nothing but pool of knowledge, skills, creative, abilities, talents, and
aptitudes. It is this human resource, which is of paramount importance in the
success of any organization, because most of the problems in organizational
settings are human and social rather than physical, technical or rather

“PEOPLE AT WORK” comprises a large number of individuals of different

sex, age, socio-religious group and different educational backgrounds. Now
this is where the problem arises. Since we know, no two individuals are
same. There behaviour is also not same. Thus we can say that these
individuals in the work place exhibit not only similar behaviour patterns but
they exhibit dissimilarities also.
Now as we get on to the topic we will move a little deeper. So far we were
talking at a macro level “human resources” or “people at work” etc., but
when we break up into smaller portions or segments we call them individuals.
Or rather at micro level we call them employees of the organization.
Therefore management must, be aware not only of the organizational goals
but also employee and if needs have to be taken care of. None of them can be
In today’s world every organization has an internal management system and
external system to which it encounters everyday. In brief internals are “
people at work” or “people who manage them” these are called managers. The
external environment, which these managers face day in and day out, are “
customers, shareholders, the entrepreneurs, government, suppliers etc.,
Therefore to coordinate internally and externally a manager develops 4
dimensional relationships, they are
1.those between management and workers
2.those among the workers themselves
3.those among the managerial personnel
4. Those among different members of the organizations

Therefore now we are in a position to understand that management of men is

a challenging job. Reason as we all know men are dynamic in nature. Hence
we can say manpower management is a most crucial job because managing
people is the heart and essence of being a manager. Since now we are clear
about personnel and there management we can now define it
These are some of the standard definitions.

“ The Management Of Human Resources Is Viewed As A System In Which

Participants Seeks To Attain Both Individual And Group Goals.”
“ It is that phase of management which deals with the effective control and
use of manpower as distinguished from other resources of power”

Edward FLIPPO states “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 societal objectives are accomplished.”

The Indian institute of personnel management, London, formulated an official

definition of personnel management after the Second World War.

“Personnel management is that part of the management function which is

primarily concerned with the human relationships within an organization. Its
objective is the maintenance of those relationships on a basis which, by
consideration of the well-being of the individual, enables all those engaged
in the undertaking to make their maximum personal contribution to the
effective working of that undertaking.”

Therefore ultimately what we understand about personnel management.

Personnel management is concerned with managing people at work
It is concerned with employees, both as individuals as well as a group.
Personnel management concerned with helping the employees to develop
their potentialities and capacities to the maximum possible extent.

Now, since we know what personnel management means we should know

what is a personnel manager’s role and what are his tasks

Growth of personnel management in India

In India there were various reasons why personnel management evolved the
main important reason being labour officers in Indian industry which was
realized as early as 1929.when royal commission on labour was set up in
1931 the commission recommended the appointment of labour officer in order
to protect the workers from evils of robbery and indebtedness. And to safe
guard their interests.
During the Second World War, these labour officers or relations officers
were entrusted to handle grievances. Their functions were subsequently
enlarged and were influenced by social reform movement in the country,
public concern for improving labour administration and the growth of the
modern management movement. Their core functions included activities
relating to welfare, personnel and industrial relations.
Although we know this field is recent origin lets us see in detail its
chronological growth
Era of industrial revolution:
In industrial revolution or we can call it evolution there were several phases.

We can now understand human resource management term came into being
.HRM of an organization consist of all people who perform its activities. In

other words all the decisions that effect workforce is HRM function.
Regardless of the size or existence of a formal function.
HRM activities are divided into 5 major domains
1.Organizational Design
Human resource planning
Job analysis/work analysis
Job design
Information systems
Affirmative action
Promotion /transfer/separation
Outplacement services
Employee selection methods
3.Performance management and appraisal
Management appraisal/management by objectives
Productivity/enhancement programs
Customer-focused performance appraisal
Multilateral systems
4.Employee training and organizational developments
Management/supervisory development
Career planning
Employee assistance/counselling
Attitude surveys
Training delivery options
Diversity programs
5. Reward systems, benefits and compliance
Safety programs
Health/medical services
Complaint/ disciplinary procedures
Compensation administration
Wage/salary administration
Insurance benefits administration
Unemployment compensation
Pension/profit sharing plans
Labour relations/collective bargaining