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PROGRAM Master of Business Administration- MBA


SUBJECT CODE & NAME MBA106 Human Resource Management

BK ID B1626

CREDITS & MARKS 4 Credits, 30 marks

Q1- Ans Meaning of HRM -

Human resource management (HRM or simply HR) is the management of

human resources. It is designed to maximize employee performance in service
of an employer's strategic objectives. HR is primarily concerned with the
management of people within organizations, focusing on policies and on

Edwin Flippo defines- HRM as planning, organizing, directing, controlling of

procurement, development, compensation, integration , maintenance and
separation of human resources to the end that individual, organizational and
social objectives are achieved.

Scope of HRM
Human Resource Management: Scope. The scope of HRM is very wide:
Personnel aspect-This is concerned with manpower planning, recruitment,
selection, placement, transfer, promotion, training and development, layoff and
retrenchment, remuneration, incentives, productivity etc.
1- Employees Hiring

The process of interviewing and evaluating candidates for a specific job and
selecting an individual for employment based on certain
criteria. Employee selection can range from a very simple process to a very
complicated process depending on the firm hiring and the position.

2- Remuneration
Reward for employment in the form of pay, salary, or wage, including
allowances, benefits (such as company car, medical plan, pension plan),
bonuses, cash incentives, and monetary value of the noncash incentives.

3- Employee Motivation

Employee motivation is the level of energy, commitment, and creativity that a

company's workers bring to their jobs. Whether the economy is growing or
shrinking, finding ways to motivate employees is always a management
concern. Competing theories stress either incentives or employee involvement

4- Employee Maintenance

Employee Maintenance refers to the maintenance of employee master data. ]po[

allows the management of employee data such as contact information, cost
involved and share of compound costs. The sum of monthly costs for an internal
resource will be broken down to an hourly rate that is used to calculate costs on
activities (project tasks, RFC's, incidents, etc.)
5- Industry Relation
Industrial relationship is about the relationship between an employee and

Industrial relation is defined as relation of Individual or group of employee and

employer for engaging themselves in a way to maximize the productive

In the words of Lester, Industrial relations involve attempts at arriving at

solutions between the conflicting objectives and values; between the profit
motive and social gain; between discipline and freedom, between authority and
industrial democracy; between bargaining and co-operation; and between
conflicting interests of the individual, the group and the community.

6- Prospect of Employees
Potential customer or client qualified on the basis or his or her buying authority,
financial capacity, and willingness to buy. Also called sales lead.
Employment prospects means what employment opportunities you currently
have available to you. For example, if you are currently being interviewed
forseveral companies, those companies are your prospects.

Function of HRM Function of HRM are as follows-

1- Managerial
(A) Planning

In simple words, planning is deciding in advance what is to be done, when

where, how and by whom it is to be done. Planning bridges the gap from where
we are to where we want to go. It includes the selection of objectives, policies,
procedures and programmes from among alternatives. A plan is a predetermined
course of action to achieve a specified goal. It is an intellectual process
characterized by thinking before doing. It is an attempt on the part of manager
to anticipate the future in order to achieve better performance. Planning is the
primary function of management.

(B) Organising
Organising is that managerial process which seeks to define the role of each
individual (manager and operator) towards the attainment of enterprise
objectives; with due regard to establishing authority-responsibility relationships
among all; and providing for co-ordination in the enterprise-as an in-built
device for obtaining harmonious groups action.

(C) Directing

Directing is said to be a process in which the managers instruct, guide and

oversee the performance of the workers to achieve predetermined
goals. Directing is said to be the heart of management process. Planning,
organizing, staffing have got no importance if direction function does not take
place. Directing initiates action and it is from here actual work starts. Direction
is said to be consisting of human factors. In simple words, it can be described as
providing guidance to workers is doing work. In field of management, direction
is said to be all those activities which are designed to encourage the
subordinates to work effectively and efficiently. According to Human,
Directing consists of process or technique by which instruction can be issued
and operations can be carried out as originally planned Therefore, Directing is
the function of guiding, inspiring, overseeing and instructing people towards
accomplishment of organizational goals.
(D) Controlling-
If you want your workers to be able to handle all their duties try and not be to
controlling so that they can grow on their own.Control, or controlling, is one of
the managerial functions like planning, organizing, staffing and directing. It is
an important function because it helps to check the errors and to take the
corrective action so that deviation from standards are minimized and stated
goals of the organization are achieved in a desired manner.

2- Operative
(A) Procurement -

The act of obtaining or buying goods and services. The process includes
preparation and processing of a demand as well as the end receipt and approval
of payment. It often involves
(1) purchase planning,
(2) standards determination,
(3) specifications development,
(4) supplier research and selection,
(5) value analysis,
(6) financing,
(7) price negotiation,
(8) making the purchase,
(9) supply contract administration,
(10) inventory control and stores, and
(11) disposals and other related functions.
The process of procurement is often part of a company's strategy because the
ability to purchase certain materials will determine if operations will continue.

(B) Development
The systematic use of scientific and technical knowledge to meet specific
objectives or requirements.
2. An extension of the theoretical or practical aspects of a concept, design,
discovery, or invention.
3. The process of economic and social transformation that is based on complex
cultural and environmental factors and their interactions.
4. The process of adding improvements to a parcel of land, such as grading,
subdivisions, drainage, access, roads, utilities.

(C) Compensation
Compensation is the total amount of the monetary and non-monetary pay
provided to an employee by an employer in return for work performed as
required. Essentially, it's a combination of the value of your pay, vacation,
bonuses, health insurance, and any other perk you may receive, such as free
lunches, free events, and parking.

Integration is the act of bringing together smaller components into a single
system that functions as one. In an IT context, integration refers to the end result
of a process that aims to stitch together different, often disparate, subsystems so
that the data contained in each becomes part of a larger, more comprehensive
system that, ideally, quickly and easily shares data when needed. This often
requires that companies build a customized architecture or structure of
applications to combine new or existing hardware, software and other

(E) Maintenance

Activities required or undertaken to conserve as nearly, and as long, as possible

the original condition of an asset or resource while compensating for normal
wear and tear.
2. Accounting: A periodic cost incurred in activities that preserve an asset's
operational status without extending its life. Maintenance is an expense that,
unlike capital improvement (which extends an asset's life), is not capitalized.
3. Engineering: Actions necessary for retaining or restoring a piece of
equipment, machine, or system to the specified operable condition to achieve its
maximum useful life.
(F) Seperation
Separation is living apart. Although it is possible to be 'separated' while living in
the same house in practice it is difficult to obtain a divorce based on two years'
separation when part of that period of separation involved living at the same
address. Frankly, I don't understand the necessity to petition on the grounds of
separation in these circumstances. After all, you did not start these living
arrangements without reason. Each of you can almost certainly divorce the other
on the grounds of unreasonable behaviour and one ground for divorce is much
the same as any other.

Q2- Ans - Process of HR Planning

Strategic human resource planning. Human resources planning is a process that
identifies current and future human resources needs for an organization to
achieve its goals. Human resources planning should serve as a link
between human resources management and the overall strategic planof an

1. Determining the Objectives of Human Resource Planning:

The foremost step in every process is the determination of the objectives for
which the process is to be carried on. The objective for which the manpower
planning is to be done should be defined precisely, so as to ensure that a right
number of people for the right kind of job are selected.

The objectives can vary across the several departments in the organization such
as the personnel demand may differ in marketing, finance, production, HR
department, based on their roles or functions.

2. Analyzing Current Manpower Inventory:

The next step is to analyze the current manpower supply in the organization
through the stored information about the employees in terms of their experience,
proficiency, skills, etc. required to perform a particular job.

Also, the future vacancies can be estimated, so as to plan for the manpower
from both the internal (within the current employees) and the external (hiring
candidates from outside) sources. Thus, it is to be ensured that reservoir of
talent is maintained to meet any vacancy arising in the near future.

3. Forecasting Demand and Supply of Human Resources:

Once the inventory of talented manpower is maintained; the next step is to
match the demand for the manpower arising in the future with the supply or
available resources with the organization.
Here, the required skills of personnel for a particular job are matched with the
job description and specification.

4. Analyzing the Manpower Gaps:

After forecasting the demand and supply, the manpower gaps can be easily
evaluated. In case the demand is more than the supply of human resources, that
means there is a deficit, and thus, new candidates are to be hired.

Whereas, if the Demand is less than supply, there arises a surplus in the human
resources, and hence, the employees have to be removed either in the form of
termination, retirement, layoff, transfer, etc.

5. Employment Plan/Action Plan:

Once the manpower gaps are evaluated, the action plan is to be formulated
accordingly. In a case of a deficit, the firm may go either for recruitment,
training, interdepartmental transfer plans whereas in the case of a surplus, the
voluntary retirement schemes, redeployment, transfer, layoff, could be followed.

6. Training and Development:

The training is not only for the new joinees but also for the existing employees
who are required to update their skills from time to time.

After the employment plan, the training programmes are conducted to equip the
new employees as well as the old ones with the requisite skills to be performed
on a particular job.

7. Appraisal of Manpower Planning:

Finally, the effectiveness of the manpower planning process is to be evaluated.
Here the human resource plan is compared with its actual implementation to
ensure the availability of a number of employees for several jobs.

At this stage, the firm has to decide the success of the plan and control the
deficiencies, if any.

Thus, human resource planning is a continuous process that begins with the
objectives of Human Resource planning and ends with the appraisal or feedback
and control of the planning process.
HR Forecasting Techniques
Human resource planning can improve operational efficiency and increase the
profitability of a business of any size. HR planning doesnt, however, include
making staffing decisions on the fly. A strategic HR policy can eliminate
confusion, streamline the hiring process and save precious time for a small
business owner who never has enough of it. Including forecasting as an integral
part of HR planning fulfills efficiency and profitability objectives by ensuring
the business is not overstaffed or understaffed.
Forecasting Basics -
Forecasting is a systematic process of predicting demand and supply. Human
resources forecasting seeks to secure the necessary number and quality of
employees for a business to achieve strategic goals. Although forecasting
techniques can be complex and full of statistical calculations, a more practical
approach is just as effective and less difficult for a small business to implement.
Demand and supply forecasting techniques use sales or production projections
for the coming year as well as quantitative and qualitative assessments.
Quantitative assessments identify how many and when, while qualitative
assessments identify desired personal qualities and role-related qualifications.
Trend Analysis-

Trend analysis is more appropriate for an existing business because it requires

historical staffing data to make future staffing predictions. This creates a
relationship between past and future staffing needs by linking the two using a
performance or financial metric called an operational index. A service business,
for example, might base future staffing requirements on the number of
customers each customer service representative effectively handled in the past,
while a retail business might compare sales volume per sales employee.

Ratio Analysis -
A new businesses, or one having less than five years of historical staffing data,
often uses a ratio analysis forecasting technique. Ratio analysis uses elements
called causal factors that can be linked to and help predict future staffing needs.
A business might identify production or sales volume as a causal factor and
estimate, for example, that it needs one customer service representative for
every five clients or one production line worker for every 5,000 widgets. If
projections determine the business will handle 500 clients or produce 500,000
widgets over the coming year, forecasting sets demand at 100 employees for

Supply Forecasting

Supply forecasting techniques often start internally for human resources.

Replacement charts are a visual tool for identifying internal candidates available
and qualified to fill demand estimations. Replacement charts include both a
hierarchical diagram and information relating to current employee performance,
education and an assessment of how ready the employee is to move into upward
or lateral position. External supply side forecasting typically involves a labor
market analysis that also considers hiring practice legislation to avoid the
possibility of facing a discrimination lawsuit. Market analysis information such
as employment and wage trends is available on The Society for Human
Resource Management website, as well as national and state labor information
websites. Information on these sites can help businesses document the current
strengths and weaknesses of the workforce, define emerging employment trends
and economic opportunities and assist businesses in finding qualified workers.

Q3 Ans- Meaning of Succession Planning -

Succession planning is a process for identifying and developing new leaders
who can replace old leaders when they leave, retire or die. ... In business, it
entails developing internal people with the potential to fill key business
leadership positions in the company.

Identification and development of potential successors for key positions in an

organization, through a systematic evaluation process and training. Unlike
replacement planning (which grades an individual solely on the basis of his or
her past performance) succession planning is largely predictive in judging an
individual for a position he or she might never have been in.

A payment or entitlement, such as one made under an insurance policy or
employment agreement, or public assistance program. Or, more generally,
something of value or usefulness

Firstly, let us understand what succession planning is all about, before

exploring its numerous benefits. Corporate succession planning can
be defined as a process that enables companies to identify and develop internal
people with a specific objective of filling key business leadership positions in
the company.

The benefits of succession planning are numerous:

It serves as contingency planning and keeps the organization well
prepared for any sudden attrition that may happen and reduces the impact
of losing key employees to a great extent
By insisting on succession planning, managers get to identify various
skill-sets among the team members and their strengths come to light
Also, employees who are identified as successors based on the skill-sets
they possess can be groomed well to handle the relevant positions, and
any skill-set that is lacking in the employee can be developed by
providing appropriate training and opportunities
Employees get to have a well-defined road map of their career and it
serves as a motivation factor for them to perform even better
Employees who get to understand that their organization has future plans
for them, will tend to stay with the organization for longer time
Internal employees already have a good understanding of the organization
and its goals. Thus, it saves a considerable amount of time and cost for
the organization in hiring and inducting new candidates for these
Overall, it creates a very positive atmosphere within the organization and
leaves employees feeling extremely satisfied in terms of career progress
and highly motivated.