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HUMAN RESOURCE

MANAGEMENT

Human resource Management is a management function that helps
managers recruit, select, train, and develop members for an
orgninsation HRM is concerned with the people dimensions in
organizations.
The concept of HRM has been gaining prominence and focus in
management during the last two decades. Human resource is
considered to be the center of all development processes of the
economy. While HRM was known for ages, its rediscovery has been
necessitated by the deteriorating social conditions, increased
competition and rapid technological advancement.
Thus HRM refers to a set of programmes, functions and activities
designed and carried out in order to maximize both employee as well
as organizational effectiveness.

DEFINITIONS
1.

HRM is concerned with the people dimension in management. Since
every organization is made up of people, acquiring their services
developing their skills, motivating them to higher levels of performance
and ensuring that they continue to maintain their commitment to the
organization are essential in achieving organizational objectives. This
is true, regardless of the type of organization ie government, business,
education, health, recreation, or social action.

2.

HRM is the process of increasing knowledge, capabilities and positive
work attitudes of all people working at all levels in a business
undertaking.

NATURE & SCOPE OF HRM
The scope of HRM is indeed vast. All activities including from the time the employee
enters the organization until he leaves come under the purview of HRM. The
activities included are –
a) Human resource planning
b) Recruitment and Selection
c) Orientation
d) Training and development
e) Organizational development
f)
Career Development
g) Job Design
h) Performance Management System
i) Compensation and benefits
j) Employee assistance
k) Labour relations
l) HR research and information systems and Audit

FUNCTIONS OF HRM – HRM aims at bringing together expertise and skills in a
scientific way. It helps in creating attitudes and motivate a group to achieve
the organizational goals effectively and economically.
The functions of HRM can be broadly classified as
1. THE INCEPTION FUNCTION – This function deals with recruitment and
selection of human resource. It involves identification of skills, knowledge
and abilities. It facilitates fixation of performance standards, pay structure.
The focus is on facilitating adjustment to the work environment, attainment of
organizational goals and adherence to the rules and regulations of the
department.
2. DEVELOPMENT FUNCTION - It covers employee training, employee
development, organization development. The focus is on assisting employees
to acquire better and improved skills.
3. MOTIVATION FUNCTION – This function aims at improving performance. This
needs proper job designing, adoption of an effective performance appraisal
system and introduction of a fair and just system of incentives and
compensation.

4. MAINTENANCE FUNCTION - The maintenance function deals with activities that will
help to retain productive employees. It involves providing safe working environment,
caring for the well being of the employees and organizing communication
programmes.
5. COMPENSATION AND BENEFIT FUNCTION – It is concerned with paying the
employees and in administering their benefit package. The pay is based on
considerations like skills, job responsibility, efforts and accountability
6. EMPLOYEE RELATIONS FUNCTION – The task is to solve employee grievances. The
function involves enforcement of policies and procedures.

FUNCTIONS OF HRM
MANAGERIAL

1.
2.
3.
4.

OPERATIVE

PLANNING
1. EMPLOYMENT
ORGANISING
DIRECTING
CONTROLLING

2. HRD

3.COMPENSATION

4.HUMAN RELATIONS

JOB ANALYSIS
HUMAN RESOURSE PLANNING
RECRUITMENT
SELECTION
PLACEMENT
INDUCTION / ORIENTATION
PERFORMANCE APPRAISAL
TRAINING
CAREER PLANNING & DEVELOPMENT
ORGANISATIONAL DEVELOPMENT

JOB EVALUATION
WAGE & SALARY ADMINSTRATION
INCENTIVE
BONUS
FRINGE BENEFITS
SOCIAL SECURITY MEASURES

UNDERSTANDING & MAINTAINING RELATIONSHIP
MOTIVATION THE EMPLOYEES
BOOSTING UP THE EMPLOYEES MORALE
DEVELOPING COMMUNICATION SKILLS
DEVELOPING THE LEADERSHIP SKILLS
REDRESSAL OF EMPLOYEE'S GRIEVANCES
DISCIPLINARY CASES HANDLING
COUNSELLING
IMPROVING THE QUALITY OF WORK LIFE OF EMPLOYEES

FUCNTIONS OF PERSONNEL MANAGEMENT
The National Institute of Personnel Management, India classifies the functions of
Personnel Management as
1.
2.
3.
4.
5.
6.

Improvement of Industrial Relations
Promotion of Joint Consultation
Helping Management to formulate a labour policy and improving
communication between management and employees
Advising the Management on the fulfillment of statutory obligations relating to
safety, health of employees
Improving factory amenities and welfare provisions
advising the management on the training and further education of employees.

Role of HRM
Role of
Human Resource
Management

HR Role

Welfare
Role

Personnel
Role

Fire-Fighting
Role

Advisory
- Advising Mgt
on effective
use of Human Resource

Research in Personnel
& Organisational
Problems

Time keeping

Grievance Handling

Managing Services
Canteen,
transport, co-operative society,
Creche, etc.,

Salary & Wage
Administration

Settlement of
disputes

Group Dynamics
Group Counseling,
Motivation, Leadership,
Communication, etc

Incentives

Handling In Disciplinary
cases

Maintenance of
Records

Collective
Bargaining

Human Engineering
Man-Machine
Relationship

Joint
Consultation

Manpower Planning
Recruitment
Selection, etc

Training & Development

Measurement and
assessment of
individual and
group behavior

HR STRUCTURE

Director HR

Organisational
Planning &
Development

Staffing &
Employment

Training &
Development

Wage &
Salary Admn.,

Motivation

Employee
Services &
Benefits

Employee
Records

Labour
Relations

Personnel
Audit
Research
etc.,

Formulating
Policies

Manpower
Planning

Competency
Mapping

Job Evaluation

Financial
Incentives

Safety / Welfare/
Health

Collection of
Data

Grievance
Handling

Employee Opinion
Survey

Planning
Desining &
Organisational
Structure

Recruitment

Gap Analysis

Market
Survey

Non-Financial
Incentives

Employee
Counselling

Analysis of
Data

Implementation
of
Labour Laws

Record
Keeping

Designing /
Development of
Interpersonal
Relationships

Selection

Training Need
Identification

Maintenance
of Payroll

Medical
Services

Developing
Information for
Decisions

Collective
Bargaining

Identification of
Needs & Areas
of Change

Placement

Preparation of
Training Calendar

Incentive
Compensation

Recreational &
Welfare
Services

Induction
Orientation

Feedback

Performance
Appraisal

Benefits Leave,
Pension, Gratuity
PF & Other
Supplimentary items

Transfer

Effectiveness
Evaluation

Promotion

Separation i.,e
Discharge
Dismissal
Retirement, Resign

Discipline

Role of Government
Pre reform scenario:
India discouraged foreign investments to protect
domestic industries.
Denied access to international capital, technology
and markets

Role of Government
New Economic Policy :
MID 80’s: Initiated to change its policies regarding business,
licences & permits and also attitudes towards MNC’s
operating in India.
1991- 1996 : Forumulated its strategy to bring Indian
Economy into the mainstream of the Global Economy.
The winds of liberalization that swept through the nation with
far reaching implications for HRM brought a new era in
a) Technology
b) Quality Consciousness
c) Competition

Role of Government
The reform Process :
After 1991 – Two fold shift in the Indian Economic
Policy.
• A) Global Level – It sought to integrate the Indian Economy with
the world economy by aligning free movement of capital
investment both into and from India. (FDI)
• B) National Level – It envisaged a decontrolled business
environment where free market forces would be given more
freedom to operate and state control will be reduced or
eliminated.

Role of Government
The reform Process :
The Central Government reform package was a mix of policy
and administrative changes.
1997 – The budget presented by the Finance Minister tried to
establish India’s commitment to the reform process by




Reforming India’s Tax structure in line with the structure in developed
countries.
Significantly reduced tariffs.
Rationalized Excise rates.
Encouraged investment in infrastructure.
Opened up the insurance sector partially.

Role of Government
The reform Process :
One of the imperative of the environment is to have
skilled and educated workforce which can understand
and cope with the requirements of IT and Other
technologies in the manufacturing and service sector.

Therefore the Government has to make
heavy investments in Education

Role of Government
Reflections on the reform package:
Foreign entrance have distinct advantages in terms of
 State of the art technology
 Research & Development
Indian Companies will have to be more careful about
 Capital Investments
 Quality Systems

The Labour Issue:
Although India has significantly progressed due to
the structure adjustment program a lot remains to be
achieved.
1) A Free market economy demands a transparent set of laws and
quick disposal of litigations.
2) The Government has also being indecisive to the labour policy.
3) Trade Unions and Government are in principle against lay-off
and retrenchment even in recessionary condition.
4) The Unions are demanding protection of Labour against capital.

5) With the introduction of new technology and competition the
very existence of the jobs has become a major area of concern
for the workers.
6) The trend is on engaging workmen on contract or temporary
basis.

Therefore, it is necessary for Labour and
Capital to co-operate and create a WIN – WIN
situation.

Implications for HRM:

The Challenges are two fold;
a)
b)

Meeting Customer Requirements
Taking advantage of market opportunities in terms of Quality, Cost and on
time Delivery of the product or service.
The process of re-adjustment calls for changes in the HR System and its
practices. The challenges for HR functions necessitates a cultural in work
practices at the enterprise level that would focus on
a) Employee Efficiency
b) Skill up gradation including multi-skilling
c) Induction of new technology
d) Re-engineering
e) Bench marking Human Resource practices
f) Leaner / Flatter organization

Implications for HRM:
g) Employee empowerment
h) New dynamism to meet the challenges of competition.
I) Achievement of corporate goals and business performance
parameters.

Important changes in HR in different companies:
All companies emphasize on the up gradation of managerial and professional
skills.
Flatter Organizational structure thereby enhancing empowerment, decision
making authority, flexibility, leading to improved employee involvement and
motivation.
Employee participation
Emphasis on openness and transparency
Changes in recruitment policy
Induction of professionals with diverse technical, managerial and academic
background.
Higher Salaries and more responsibilities for young employees.
Performance based rewards for employees
A new culture that emphasized an employees’ role of supporting rather than
reporting.
Networking of various functions within the organizations with a view to create a
responsive, goal oriented and competitive organization.
Change in attitude and discipline has to be brought out by continuous process
of culture change and team building.

Important changes in HR in different companies:
To-day employees are recognized as a key to build a world
class organization. Pro-active organizations have adopted
strategic Human Resource Management as a tool to
position themselves in the business world by linking the
HRM strategy with corporate plans.

Service - Profit Chain
“Smart HR” Practices
More Productive and Engaged Workforce
Loyal Customers

Improved Business Performance...

If you want 1 year of prosperity,
grow grain.
If you want 10 years of prosperity,
grow trees.
If you want 100 years of prosperity,
grow people.
- old Chinese proverb