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Human resource management is important for business

Human resources may be defined as the total knowledge, skills, creative
abilities, talents and aptitudes of an organization's workforce, as well as the
values, attitudes, approaches and beliefs of the individuals involved in the
affairs of the organization. It is the sum total or aggregate of inherent
abilities, acquired knowledge and skills represented by the talents and
aptitudes of the persons employed in the organization.

The human resources are multidimensional in nature. From the national

point of view, human resources may be defined as the knowledge, skills,
creative abilities, talents and aptitudes obtained in the population; whereas
from the viewpoint of the individual enterprise, they represent the total of
the inherent abilities, acquired knowledge and skills as exemplified in the
talents and aptitudes of its employees.

The Human Resources Management (HRM) function includes a variety of

activities, and key among them is deciding what staffing needs you have and
whether to use independent contractors or hire employees to fill these needs,
recruiting and training the best employees, ensuring they are high
performers, dealing with performance issues, and ensuring your personnel
and management practices conform to various regulations. Activities also
include managing your approach to employee benefits and compensation,
employee records and personnel policies.

Usually small businesses (for-profit or nonprofit) have to carry out these

activities themselves because they can't yet afford part- or full-time help.
However, they should always ensure that employees have -- and are aware
of -- personnel policies which conform to current regulations. These policies
are often in the form of employee manuals, which all employees have.
Human Resource Management: Defined

Human Resource Management (HRM) is the function within an organization

that focuses on recruitment of, management of, and providing direction for
the people who work in the organization. Human Resource Management can
also be performed by line managers.

Human Resource Management is the organizational function that deals with

issues related to people such as compensation, hiring, performance
management, organization development, safety, wellness, benefits,
employee motivation, communication, administration, and training.

Human Resource Management has come to be recognized as an inherent part

of management. Its objective is the maintenance of better human relations in
the organization by the development, application and evaluation of policies,
procedures and programs relating to human resources to optimize their
contribution towards the realization of organizational objectives.

In other words, HRM is concerned with getting better results with the
collaboration of people. HRM helps in attaining maximum individual
development, desirable working relationship between employees and
employers, employees and employees, and effective modeling of human
resources as contrasted with physical resources. It is the recruitment,
selection, development, utilization, compensation and motivation of human
resources by the organization.

Human Resource Management: Evolution

The early part of the century saw a concern for improved efficiency through
careful design of work. During the middle part of the century emphasis
shifted to the employee's productivity. Recent decades have focused on
increased concern for the quality of working life, total quality management
and worker's participation in management. These three phases may be
termed as welfare, development and empowerment.
Human Resource Management: Nature
Human Resource Management is a process of bringing people and
organizations together so that the goals of each are met. The various features
of HRM include:

1. It is pervasive in nature as it is present in all enterprises.

2. Its focus is on results rather than on rules.
3. It tries to help employees develop their potential fully.
4. It encourages employees to give their best to the organization.
5. It is all about people at work, both as individuals and groups.
6. It tries to put people on assigned jobs in order to produce good results.
7. It helps an organization meet its goals in the future by providing for
competent and well-motivated employees.
8. It tries to build and maintain cordial relations between people working
at various levels in the organization.
9. It is a multidisciplinary activity, utilizing knowledge and inputs drawn
from psychology, economics, etc.

Human Resource Management: Scope

1. Personnel aspect-This is concerned with manpower planning,
recruitment, selection, placement, transfer, promotion, training and
development, layoff and retrenchment, remuneration, incentives,
2. Welfare aspect-It deals with working conditions and amenities such as
canteens, crèches, rest and lunch rooms, housing, transport, medical
assistance, education, health and safety, recreation facilities, etc.
3. Industrial relations aspect-This covers union-management relations,
joint consultation, collective bargaining, grievance and disciplinary
procedures, settlement of disputes, etc.

Human Resource Management: Beliefs

The Human Resource Management is based on the following:

1. Human resource is the most important asset in the organization and

can be developed and increased to an unlimited extent.
2. A healthy climate with values of openness, enthusiasm, trust,
mutuality and collaboration is essential for developing human
3. HRM can be planned and monitored in ways that are beneficial
both to the individuals and the organization.
4. Employees feel committed to their work and the organization, if
the organization perpetuates a feeling of belongingness.
5. Employees feel highly motivated if the organization provides for
satisfaction of their basic and higher level needs.
6. Employee commitment is increased with the opportunity to
discover and use one's capabilities and potential in one's work.
7. It is every manager's responsibility to ensure the development and
utilization of the capabilities of subordinates.

Human Resource Management: Objectives

1. To help the organization reach its goals.
2. To ensure effective utilization and maximum development of human
3. To ensure respect for human beings. To identify and satisfy the needs
of individuals.
4. To ensure reconciliation of individual goals with those of the
5. To achieve and maintain high morale among employees.
6. To provide the organization with well-trained and well-motivated
7. To increase to the fullest the employee's job satisfaction and self-
8. To develop and maintain a quality of work life.
9. To be ethically and socially responsive to the needs of society.
10. To develop overall personality of each employee in its
multidimensional aspect.
11. To enhance employee's capabilities to perform the present job.
12. To equip the employees with precision and clarity in transaction of
13.To inculcate the sense of team spirit, team work and inter-team
Human Resource Management: Functions
In order to achieve the above objectives, Human Resource Management
undertakes the following activities:
1. Human resource or manpower planning.
2. Recruitment, selection and placement of personnel.
3. Training and development of employees.
4. Appraisal of performance of employees.
5. Taking corrective steps such as transfer from one job to another.
6. Remuneration of employees.
7. Social security and welfare of employees.
8. Setting general and specific management policy for organizational
9. Collective bargaining, contract negotiation and grievance handling.
10. Staffing the organization.
11. Aiding in the self-development of employees at all levels.
12. Developing and maintaining motivation for workers by providing
13. Reviewing and auditing manpower management in the organization
14. Potential Appraisal. Feedback Counseling.
15. Role Analysis for job occupants.
16. Job Rotation.

Human Resource Management: Major

Influencing Factors
In the 21st century HRM will be influenced by following factors, which
will work as various issues affecting its strategy:

1. Size of the workforce.

2. Rising employees' expectations
3. Drastic changes in the technology as well as Life-style changes.
4. Composition of workforce. New skills required.
5. Environmental challenges.
6. Lean and mean organizations.
7. Impact of new economic policy
8. Downsizing and rightsizing of the organizations.
9. Culture prevailing in the organization etc.
Human Resource Management: Strategy
Steps in developing HRM strategy

Step 1: Get the 'big picture'

Understand your business strategy.

• Highlight the key driving forces of your business. What are they? e.g.
technology, distribution, competition, the markets.
• What are the implications of the driving forces for the people side of
your business?
• What is the fundamental people contribution to bottom line business

Step 2: Develop a Mission Statement or Statement of Intent

That relates to the people side of the business.

Do not be put off by negative reactions to the words or references to

idealistic statements - it is the actual process of thinking through the issues
in a formal and explicit manner that is important.

Step 3: Conduct a SWOT analysis of the organization

Focus on the internal strengths and weaknesses of the people side of the

• Consider the current skill and capability issues.

Vigorously research the external business and market environment. High

light the opportunities and threats relating to the people side of the business.

From this analysis you then need to review the capability of your personnel
department. Complete a SWOT analysis of the department - consider in
detail the department's current areas of operation, the service levels and
competences of your personnel staff.
Step 4: Conduct a detailed human resources analysis

Concentrate on the organization's COPS (culture, organization, people, and

HR systems)

• Consider: Where you are now? Where do you want to be?

• What gaps exists between the reality of where you are now and where
you want to be?

Step 5: Determine critical people issues

Go back to the business strategy and examine it against your SWOT and
COPS Analysis

• Identify the critical people issues namely those people issues that you
must address. Those which have a key impact on the delivery of your
business strategy.
• Prioritize the critical people issues.

Step 6: Develop consequences and solutions

For each critical issue highlight the options for managerial action generate,
elaborate and create - don't go for the obvious. This is an important step as
frequently people jump for the known rather than challenge existing
assumptions about the way things have been done in the past. Think about
the consequences of taking various courses of action.

Once you have worked through the process it should then be possible to
translate the action plan into broad objectives. These will need to be broken
down into the specialist HR Systems areas of:

• employee training and development

• management development
• organization development
• performance appraisal
• employee reward
• employee selection and recruitment
• manpower planning
• communication
Step 7: Implementation and evaluation of the action plans

The ultimate purpose of developing a human resource strategy is to ensure

that the objectives set are mutually supportive so that the reward and
payment systems are integrated with employee training and career
development plans.

There is very little value or benefit in training people only to then frustrate
them through a failure to provide ample career and development

Human Resource Management: Importance

Social significance:

1. Maintaining a balance between the jobs available

2. Providing suitable and most productive employment
3. Maximum utilization of the resource
4. Eliminating waste or proper use of human resource
5. Helping people make their own decision

Professional significance:

1. Maintaining the dignity of the employees

2. Maximum opportunities for personal development
3. Improving employees working skill and capacity
4. Correcting the errors and reallocation work

Significance for individual enterprise:

1. Creating right attitude among the employees

2. Utilizing effectively the available human resources
3. Securing willing co-operation of the employees for achieving
goals of the enterprise
4. Fulfilling employees social and other psychological needs of
recognition ,love,affection,esteem and self-actualization