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Items Description of Module

Subject Name Management

Module ID Module 5
Pre-Requisites Understanding the Human Resource Management
Objectives To study the Human Resource Management Functions
Keywords Human Resource Planning, Organizing, Directing and Controlling


1. Learning Outcome
2. Meaning of HRM
3. Human Resource Management Functions
4. HR Policies
5. Summary

1. Module : Human Resource Management Functions

After studying this module, you shall be able to

 Know the Functions of Human Resource Management

 Understand the Policies of Human Resource Management
 Comprehend the Role of Human Resource Manager
 Understand the significance of HR Policies

3. Introduction
Human resource managers carry out the functions of human resource management to
achieve the goals and objectives of the organization. Figure 5.1 illustrate the two set of
functions, i.e. managerial functions and operative functions. The managerial functions
are the fundamental functions human resource managers perform in the capacity of
heads of their own departments. Really, all managers, regardless of their department,
execute these functions. The operative functions are specialized jobs carried out
exclusively by the HR managers, generally for all the departments. We shall, first,
discuss the managerial functions.

4. Human Resource Management Functions

Human Resource Management functions may be categorized in to:
 Managerial Functions, and
 Operative Functions

4.1 Managerial Functions

The Managerial Functions of Human Resource Management are as follows:

4.1.1 Human Resource Planning –

Human resource planning refers to the decision on the future course of action
to accomplish desired goals. The number and type of employees required to
achieve organizational goals is determined. Planning of human resources
today avoids problems tomorrow. Research forms an important part of this
function where information is gathered and analyzed to identify current and
future needs of human resources and to forecast transforming values,
attitudes, behavior of employees and their impact on organization.

4.1.2 Organizing
Organizing is primarily related with proper combining of personnel activities,
allocation of different tasks among its members, delegation of authority,
identification of relationships, and integration of activities towards a common
objective. Designing of a proper structural framework is the primary task of
organizing. Organizational relationships are created among the employees so
that they can collectively contribute to the attainment of organizational goal.

4.1.3 Directing –
Directing involves overseeing and giving directions to the personnel. Proper
direction and motivation makes it possible to activate employees at different
level and make them contribute their maximum to the organization. In order to
execute plans, direction is essential as without direction there is no
destination. Many a time, the accomplishment of the organization goals relies
on the direction of things. Direction embodies motivation and leadership. The
HR manager must be an effective leader to create teams willing to add their
contribution. In order to achieve, the personnel manager must, constantly,
pay attention to the concerns and expectations of the employees at different

4.1.4 Controlling
Controlling function of HRM comprises measures of the performance,
comparing the results accomplished with the standards established. The
managers identify and analyze the deviations, if any positive or negative
attempt to know the reasons for deviations. It makes employee conscious of
their performance through performance appraisal and audit programs. The
controlling attempts to ensure that the activities are being carried out in
accordance with stated plans.

4.2 Operative Functions

The operative functions of HRM are about the specific activities of procurement,
developing, motivating, compensating and, maintaining employees. The operative
functions are to be carried out in association with managerial functions.
The Operative Functions of Human Resource Management include:

4.2.1 Procurement of Human Resources

Procurement of Human Resources is the first operative function of Human
Resource Management. This function is concerned with job analysis,
planning of human resource, recruitment, selection, induction, orientation
placement and internal mobility. Job analysis is the process of gathering
information of the tasks and responsibilities of a particular job, depicting the
nature of a job and stating the human requirements like qualifications, skills,
and work experience to perform that job. Human resource planning
ascertains and assures that the organization has enough qualified persons in
adequate number, available at times when they are required, performing job.
Recruitment of candidates is the function, which raises the pool of
prospective candidates available to the organization so that the management
can choose the suitable candidate from this common supply of people.
Selection is the process of determining qualifications, experience, job skills
and knowledge of an application with a view to appraising his suitability for
the job in question. Placement matches the qualifications of the employees’,
experience, skills and their interest in the job on offer. Induction and
orientation are the techniques to rehabilitate a new employee in his new
situation and made familiar to the practices, policies and people, and is
acquainted with the principles, practices, values and objectives of the
organization. Internal mobility of employees from one job to another takes
place transfers and promotion.

4.2.2 Development
Development refers to the process to improve, mould, change and develops
the knowledge, skills, creativities, aptitude, attitude, values and commitment
of employees based on current and future requirements both at the person
and organizational level. The development function includes training,
development of executives, career planning and development, and human
resource development. Training is concerned to the attainment of knowledge,
skill development, and acquisition of competencies as a consequence of the
teaching of the professional or practical skills and knowledge that relates to a
specific job. Executive development is a systematic method of developing
managing skills and capabilities through appropriate management
development programs. Career planning and development consists of the
planning of career and translating career plans into action through educating,
training, job search and gaining of work experiences and succession
planning. Human Resource development aims at developing the total
organization by creating a climate of employee development for using his
capability to achieve both individual and organizational goals.

4.2.3 Motivation

Motivation is a process which encourages people to bestow their best to the

organization through the application of intrinsic and extrinsic rewards. The
intrinsic rewards consist of achievement, recognition, and responsibility,
extrinsic rewards consists of job design, work scheduling, incentives based
on performance appraisal. Job design relates to organizing tasks and
responsibilities for having a productive unit and integrating the needs of
employers to fit the requirements of an enterprise. Work scheduling is carried
out to motivate employees through job enrichment, reduced work weeks,
flexi-time, sharing of work and work at home assignments. Combining forces
that permit individuals to behave in definite ways is an integral tract of
motivation. Employees need to have both the ability and the motivation to
perform at high level. Managers usually make effort to motivate people
through suitably administered rewards. Job evaluation is the technique to
determine of relative worth of job in order to establish which job should be
paid more than others within the organization and establish internal equality
between various jobs. Performance evaluation is the method of evaluating
the behavior of employees at the place of work and usually includes the
quantitative as well as qualitative dimensions of of job performance. It is an
objective and systematic method of evaluating work-related behavior and
potential of employees. It determines and communicates to an employee how
he is performing and establishing a plan of improvement.

4.2.4 Compensation and Incentives

Compensation administration is the process of deciding how much an
employee is likely to be paid. The important goals of compensation
management are to design a low-cost pay plan that will attract, motivate and
retain competent employees. In addition to a basic wage structure, most
organizations usually offer incentives based on actual performance. Unlike
incentives, all employees receive benefits and services as law requires
involving social security, insurance, compensation for workmen’s and welfare
amenities etc. Organizations have been offering a basket of benefits and
services such as employees’ stock options, gifts given to employees on their
birthday, marriage anniversary, paid holidays and membership of a club.

4.2.5 Maintenance
Maintenance aims at guarding and preserving the physical and mental health
of employees through health and safety, employee welfare and social
security measures. Organizations at all levels are expected to enforce safety
and health standards. Managers must ensure a work environment that
protects employees from physical dangers, unhealthy conditions and unsafe
actions of coworkers. Proper safety and health programs may help in
preserving and improving the physical and mental well-being of employees.
Employee welfare involves providing the services, amenities and affording
the facilities offered to employees in and outside the organization for their all
round well being. The employee welfare package includes housing,
transportation, education and recreation facilities.
The employees generally receive social security in addition to fringe benefits.
These measures include Workmen’s compensation to worker who are
involved in accidents, maternity benefit to women employees, sickness
benefits and medical benefits, disability benefit, dependent benefits, and
retirement benefits.

4.2.6 Integration Function

The integration function aims to integrate the goals of an organization with
employees’ strong desired through several employee-directed programs, like
grievance redress, disciplinary measures, empowering people to take
decisions independently, encouraging a culture of employee participation in
decision making and offering constructive assistance to trade unions etc.
Constructive grievance handling depends on the ability of a manager to
recognize, diagnose and set right the causes of potential employee
dissatisfaction before it convents into a formal grievance. Discipline is the
force that promotes an individual or a group to follow the rules, regulations
and procedures deemed necessary for the attainment of an objective.
Self-managed teams have come up as the most important formal groups in
organizations today. They enhance employee involvement and increase the
potential to create positive synergy. Enhancing worker mutual influence, they
create good fellowship among members of a team and encourage individuals
to diver energy from individual goals to those of the group. Teams have
inseparable strengths which ultimately lead to organizational success at
various levels.
Collective bargaining is the process of reaching an agreement between
management and union. The contract includes mutual arrangements about
terms and conditions of employment, like wages, hours of work, promotions,
and discipline; lay- off, fringe benefits, paid holidays, rest pauses and the
management of grievances. In collective bargaining management and
workers both tend to put proposals and counter proposals generally takes
time, as both. The resulting agreement must be ratified by unions, workers
and management.
Managements also encourage employee participation and empowerment.
Participation profess sharing the power of decision-making with the lower
ladders of an organization in an appropriate manner to enable them to see
the big picture clearly and also the manner in which their actions would
influence the growth of the company. Since the workers are not treated with
respect, they begin to see the job and the organization as their own, and
commit themselves to organizational objectives whole-heartedly.
The trade unions aim to counter exploitation and harassment and pay a
powerful role in improving the lot of workers using aggressive bargaining
tactics. Harmonious industrial between labor and management are essential
to achieve industrial growth and higher productivity.
4.3 Emerging Functions
Effective management of human resources relies on make HRM practices finer
to changing conditions. Hence there is the need to focus on other important
factors that can motivate employees to give their best in a dynamic and ever-
changing environment. Such emerging issues are maintenance of personnel
records, human resource audit, HR research, human- resource accounting
system, stress and counseling and international human resource management.
Personnel records such as papers, files, cards, cassettes and films are
maintained to record of what is actually happening in an organization and to
formulate appropriate HR policies and programs from time to time
Human resource audit is an examination and evaluation of policies, procedures
and practices to evaluate the effectiveness of HRM. Human resource research
evaluates the effectiveness of human resource policies and practices so that
more appropriate policies and practices are developed. Human resource
accounting measures cost and value of human resources for the enterprise.
Human resource information systems is an integrated system directed to
improve the efficiency in collection of HR data by making HR records more
useful to the management and by serving as a source of information. In an
organization burn out is the outcome stress, increased absenteeism and
increased turnover. Through counseling and employee development programs
companies are trying to promote the physical and mental wellbeing of
International human resource management poses many challenges before
managers including coordinating different operations on a worldwide basis.
International HRM places greater importance on a variety of responsibility and
functions such as relocating, providing orientation and training to assist
employees adjust to an unfamiliar and distinct environment from their own

5. HR Policies
Once the objectives of the organization are established, HR policies are to be
formulated. Policies are common assertions that guide thinking and action for taking

5.1 Definition of HR Policy

Human resources policies guide action, offer the general standard or yardsticks for
decision-making, work as a guide for managers on various issues such as
recruitment, selection, promotion and compensation. HR policies are usually derived
from the HR objectives of the organization and summarize the past experience in
terms of valuable guidelines to help manager and speed up the decision-making
process. They assist managers and subordinates for the disposal of routine matters
and permit managers to delegate some of the repetitive problems to subordinates.
Thus, HR policies are significant means of transferring a part of decision-making to
lower hierarchies of organization.

5.2 Types of HR Policies

Human resources policies may be categorized on the basis of their source, scope
and form.
 Originated policies:
Top management establishes originated policies deliberately to guide executive
thinking at different levels
 Appealed policies are formulated to satisfy the needs of certain peculiar
situation uncovered by earlier policies on the request on subordinates who find it
difficult to resolve certain issues.
 Imposed policies are the outcome of pressures of government, trade
associations and unions.
 General policies reflect the basic philosophies and priorities of the top
management in the formulation of overall plan for the organization’s growth
 Specific policies include issues such as hiring, rewarding and bargaining and
should be in consonance with the basic framework of general policies
 Written or implied policies are drawn from behavior of members including
dress code, gentle tone at the time of talking to customers, remaining calm at
work etc. and spell out managerial thinking to spare little space for loose

5.3 Objectives of HR Policies

HR policies as useful instructions, serve several purposes and objectives for the
organization. Some important objectives are:

 Delegation: HR policies assist operating- managers act with confidence without

consulting superiors every time.

 Uniformity: They provide uniformity for making choices at various levels of the
organization when independently face similar situation and make the actions more

 Control measure: The HR policies allow members to strive for achievement of the
objectives of the organization as they specify the relationship divided between the
organization, management and its employees.
 Standards of Efficiency: HR policies are able to serve as standards in the
execution of work and enable the management to visualize if the various groups
convert policies into action.
 Coordination: HR policies assist in achieving coordination. The organizational
members guided by the same policies can easily predict the action and decision of
other and ensure a steady course of action and avoid unwarranted deviations from
 Confidence: Personnel policies create confidence among people while
encountering routine and repetitive matters and reduce possibilities of
misinterpretation and friction and enable speedy decision making.

5.4 Formulation of HR Policies

Formulation and implementation of HR policies involves the following steps:

5.4.1 Need Identification

At the beginning significant areas of human resource management consists
recruitment and selection, training, compensation and collective bargaining,
need to have a clearly spelt out policy formulation. In addition policy
guidelines may come in at a later stage depending on the recurrence of
difficult issues at different levels.

5.4.2 Collection of data:

The next step in the policy formulation is to collect facts needed for
formulating a HR policy. Different sources such as records of the company,
practices in the past, survey of industry practices, experience of personnel
handling different issues, philosophy of top management, organizational
culture, aspirations of employees and changes in economic, social and
legislative environment etc could be utilized for these purposes.

5.4.3 Specifying alternatives:

Policy alternatives are likely to emerge clearly after the relevant data from
various sources has been collected. These alternatives should be evaluated
in respect of their contribution to organizational objectives. People at various
levels should also be involved, especially those such policies influence. Top
management should approve the policies only after everything is set and the
stated policy clearly represents organizational priorities.

5.4.4 Communicating the policy:

The formulated policy should be communicated to all in the organization to
get approval at various levels, Discussions with people may take place at
various levels, policy manual and in house journal may also be of assistance
to re approach to employees quickly. Special coaching programs can also
communicate people about the manner of implementation.

5.4.5 Evaluation of the Policy:

In order to be effective, HR policies need be reviewed, evaluated and
controlled constantly against prior established standards to assist determine
changes in existing policies. All the policies require annual review, while
some need be reviewed at specific times. Employees, consultants or experts
may take part in the review of policies.

5.5 HR Procedures and Programs

Policies are brief statements and do not describe specifically the way policy is to
be implemented. Procedures implement policies. A procedure is a well thought
out course of action prescribing the specific manner in which a work is to be
done. They are ‘action guidelines’ derived from policies. Where policies define a
broad field, procedures demonstrate a chronological, step-by-step sequence of
activities within that area


 Broadly, human resource management functions may be categorized into: managerial

functions, operative functions, integrative function and emerging function. Managerial
functions include planning, organizing, leading and controlling; operative function
consists of procurement, development, motivation, compensation and incentives,
 The integration function aims to integrate the goals of an organization with employees’
aspirations through various employee-oriented programs, like grievance redress,
disciplinary measures, empowering people to take decisions independently, encouraging
a culture of participation of employee in decision making and constructive assistance to
trade unions etc.
 Emerging issues are maintenance of personnel records, human resource audit, HR
research, human- resource accounting system, stress and counseling and international
human resource management.
 Human resources policies guide action, offer yardsticks for decision-making, serve as a
plan for managers on various issues such as recruitment, selection, promotion and
 Major types of HR policies include originated, appealed, imposed, general, specific,
written or implied policies.
 Main stages in the formulation of HR policies need identification, collection of data:
specifying alternatives, communicating the policy and evaluation of the Policy: