CHAPTER - 1

OVERVIEW OF HUMAN RESOURCE

MANAGEMENT &

HUMAN RESOURCE DEVELOPMENT

A. HUMAN RESOURCE MANAGEMENT

1.A.1 Introduction

1■ A.2 Meaning & Definition

1. A.3 Evolution of HRM

1. A.4 Nature of HRM

1. A.5 Functions of HRM

1. A.6 Objectives of HRM

1. A.7 HR Activities

1. A.8 The Challenge to HRM

 A. HUMAN RESOURCE MANAGEMENT
1. A.1 INTRODUCTION
Resource means, a source, which can be used when needed. Each and every resource
has a last point of finish. But, while about human resources i.e. human skills,
techniques, ideas, aptitudes, etc., it may not have a last point of finish. Compared to
other resources it depreciates, while human resources appreciate with the passage of
time. Amongst all resources required for an organization Human Resource is the most
important resource. From the ages of kings and politicians have ruled, but only those
who have succeeded are the persons, who have tactfully, used their available human
resources. Appropriate human resources assure an organization that the right number
and kind of people are available at the right time and place so that organizational
needs can be met. Therefore, success of any organization depends on the management
of human resources. In generic terms, Human Resource means, “The total knowledge,
skills, creative abilities, talents, aptitudes, values, attitudes, approaches” in a
personnel. Generally, some resources are developed, while some are obtained through
heredity. When these resources are used in a way such that maximum benefits can be
taken out of it, then it is called “Human Resource Management”.

Human resource management is the organization 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. The purpose of human resource
management in an organization is to achieve maximum individual development,
favourable working atmosphere and constructive relationship between employers and
employees; in other words effective utilization of Human Resources. Human resource
management is a strategic approach to the motivation and development of people, and
to gaining their commitment so that they can make their best contribution to
organization success, while also meeting their own needs and aspirations.

It is also pervasive force, action-oriented, individually- oriented, development-

oriented, future-focused, and integrative in nature and is a comprehensive function.
Effective HRM enables employees to contribute effectively and productively to the
overall company direction and the accomplishment of the organization’s goals and
objectives.

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In short, HRM aims at achieving organizational goals meet the expectations of
employees; develop the knowledge, skills and abilities of employees, improve the
quality of working life and manage human resources in an ethical and socially
responsible manner. The effective use of people is the critical factor in the successful
accomplishment of corporate goals. To this end HR managers have to understand the
needs, aspirations of employees proactively, face the challenges head on resolve
issues amicably in the years ahead.

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 1. A.2 MEANING & DEFINITIONS
Human resource management can be defined as that part of management process
which develops and manages the human elements of enterprise considering the
resourcefulness of the organization’s own people in terms of total knowledge, skills,
creative abilities, talents, aptitudes and potentialities. It refers to the qualitative and
quantitative aspects of employees working in an organization. It is a process of
making the efficient and effective use of human resources so that the set goals are
achieved.

In simple sense, “Human Resource Management means employing people,

developing their resources, utilizing, maintaining and compensating their services in
tune with the job and organizational requirements with a view to contribute to the
goals of the organization, individual and society”.

According to Leon C. Megginson, the term human resources can be thought of as “the
total knowledge, skills, creative abilities, talents and aptitudes of an organization’s
workforce, as well as the values, attitudes and beliefs of the individuals’ involved”1.

According to Dale Yoder, “The management of human resource is viewed as a system

in which participants seeks to attain both individual and group goals”2.

Michael J. Jucius defines human resources as “A whole consisting of interrelated,

interpedently and interacting physiological, psychological, sociological and ethical
components”3.

According to Flippo, “Human Resource Management is planning, organizing,

directing and controlling of the procurement, development, compensation, integration,
maintenance and separation of human resources to the end that individual,
organizational and social objectives are accomplished”4.

1 Megginson L.C., Human Resources, Cases & Concepts, Harcout Brace, New York, 1967.
2 Dale Yoder, Personnel Management & Industrial Relations, Prentice Hall, New Delhi, 1982.
3 Michael J. Jucius, Personnel Management, Richard D. Irwin Inc. Homewood, Illinois, 1979.
4 Edwin B. Flippo, Principles of Personnel Management, Mcgraw Hill Publications, 1976.

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 French defined, “Personnel Management is the recruitment, selection, development,
utilization of accommodation to human resource of an organization consists of all
individuals regardless of their role, who are engaged in any of the organization
activities”5.

According to National Institute of Personnel Management of India, “Human Resource

Management is that part of management which is concerned with people at work and
with their relationships within the organization. It seeks to bring men and women who
make up an enterprise, enabling each to make their own best contribution to its
success both as an individual and as a member of a working group”.

Human Resource Management is the term increasingly used to refer the philosophy,
policies, procedures and practices relating to the management of people within
organizations. It is the qualitative improvement of human beings who are considered
the most valuable asset of an organization- the sources, resources, and end-users of all
products and services.

Dun & Stephens defined, “Personnel Management is the process of attracting, holding
and motivating people, innovating all managers-line & staff’6.

Paul Pigors & Charles Myres defined, “It is a method of developing potentialities of
employees so that they get maximum satisfaction out of their work and give their best
efforts to the organization”7.

Prof. Thomas G. Spates defined, “Personnel administration is a code of the ways of

organizing and treating individuals at work so that they each will get the greatest
possible realization of their intrinsic abilities, thus attaining maximum efficiency for
themselves and their group, and thereby giving to the enterprise of which they are a
part its determining competitive advantage and its optimum results”8.

5 French Wendell, the Personnel Management Process: Human Resource Administration, Houghton
Mifflin Company, New York, 1943.
6 Dun, J.D. & Stephens, Ec., Management of People, McGraw Hill Book Company, New York, 1972.
7 Pigors, Paul & Myres, Charles A., Personnel Administration; A point of View & Method, McGraw Hills
Books Company, Kagakusha Ltd., Tokyo, Second Edition, 1961.
8 Spates, Thomas G., An objective Scrutiny of Personnel Administration, American Management
Association, New York, 1944.

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 According to Decenzo and Robbins, “Human Resource Management is concerned
with the people dimension management. Since every organization is made 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, essential for achieving organizational objectives. This is true, regardless
of the type of organization- government, business, education, health, recreation or
social action”9 .

Prof. Cynthia D. Fisher, Lyle F. Schoenfeldt and James B. Shaw stated that, “Human
Resource Management involves all management decisions and practices that directly
affect or influence the people or human resources who work for the organization. In
recent years, increasing attention has been devoted to how the organizations manage
human resources. It is important to examine as to how organization’s employees
enable as organization to achieve its goals”10.

Guest defined, “Human Resource Management comprises a set of policies designed to

maximize organizational integration, employee commitment, flexibility and quality of
work”*11.

It is clear from the above definitions that human resources refer to the qualitative and
quantitative aspects of employee working in an organization. Human Resource
Management as a process of making the efficient and effective use of human
resources so that the set goals are achieved.

In short, HRM can be defined as a process of procuring, developing and maintaining

competent human resources in the organization so that the goals of an organization
are achieved in an effective and efficient manner. It also an art of managing people at
work in such a manner that they give their best to the organization.

9 David A. Decenzo & Steppen P. Robbins, Human Resource Management, John Wiley & Soans Inc.
New York, 1994.
10 Prof. Cynthia D. Fisher, Lyle F. Schoenfeldt & James B. Shaw, Human Resource Management,
Houghton Muffic company, Boston, 1977.
11 Guest D.E., Human Resource Management & Industrial Relations, Journal of Management Studies,
1987.

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 A3 EVOLUTION OFHRM
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
availability of managerial personnel and employee productivity. Recent decades have
focused on the demand for technical personnel, responses to new legislation and
governmental regulations, increased concern for the quality of working life, total
quality management and a renewed emphasis on productivity. The evolution and
development of HRM has interrelationship with that of management.

The development of HRM is classified as follows:

1) Industrial Revolution Era:

The Industrial Revolution consisted essentially of the development of machinery. This

brought about mass production of goods. Workers were treated like ‘glorified
machine tools’. Industrialization completely changed the way people earned their
living. It was made possible by the replacement of human effort and skill by the work
of machines. One of the contributions of the industrial Revolution was the
development of the “factory” system. The factory system gave birth to a
rationalization of work and a division of work. With the advent of the factory system
personnel practices became autocratic, based upon a commodity concept of labour.
Consequently, there was a total neglect of the human factor-the focus was upon
materials, markets and production. In the late 1800’s when unions were battling for
recognition and violent strikes become a significant concern, these developments in
management practices accelerated. By the early 1900’s, many of the components of
modem human resource management were falling into place.

2) Scientific Management Era:

The scientific management movement owes its origin to Fredrick WinslowTraylor

who is known as the father of scientific management. He showed scientific
management as an alternative to the prevailing system of management by initiative
and incentive. Scientific management is nothing but a systematic analysis and
breakdown of work into its smallest mechanical elements and rearranging them into
their most efficient combination. Taylor was concerned with worker inefficiency and
the need for managers to gain the co-operative effort of the employees.

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 According to Taylor, “Planning should be the result of co-operation between the
management and workers and that a provision should exist for compensating the
personnel with financial incentives”.

Scientific Management represented a new attitude towards management and Taylor’s

work contributed greatly to the formalization and specialization of management.

3) Trade Unionism:

The view point underlying trade unionism was to safeguard the worker’s interest and
to sort out of their problems such as use of child labour, long working hours and poor
working conditions. Unions tried to improve the lot of workers through collective
bargaining, resolving the grievances of workers relating to working conditions, pay
and benefits, disciplinary actions, etc. For the acceptance of their problems, this union
used strikes, slowdowns, walkouts, picketing, boycotts and sabotage as weapons.

4) Paternalistic Era:

Management must assume a fatherly and protective attitude towards employees.

Paternalism does not mean merely providing benefits but it means satisfying various
needs of the employees as parents meet the requirement of the children.

Robert Owen, British Industrialist, reformer and humanitarian, is considered to be the

first to adopt humanistic and paternalistic approach towards workers. He, who is
considered to be the father of personnel management, worked for the welfare of the
workers and tried to develop a spirit of co-operation between the workers and the
management. He viewed that the returns from investment in human resources would
be much higher than the investment in machinery and equipment. He regarded the
workers as children who must be cautiously guided, trained and protected. He advised
other manufacturers to devote more attention to workers in order to increase
productivity because the workers according to Owen are the vital machines. In order
to improve the productivity, it is necessary to improve conditions of employees by
removing them from an adverse environment or by changing the environment with the
provisions of more satisfactory living and working conditions.

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 5) Industrial Psychology Era:

Hugo Munsterberg is regarded as the father of industrial psychology. His

contributions to industrial management were particularly notable in the field of
emotional requirements of workers. In industrial psychology era, greater emphasis
was given to individual and group relationships in the workplace. Its main objective
was to increase human efficiency by focusing on the maximum well-being of the
worker and decreasing the physiological and psychological costs of work.

6) Human Relations Era:

The organization is a social system that has both economic and social dimensions.
The objective of human relations approach was to make employees productive and it
was realized that employees’ satisfaction is the best means of making the employee
productive. The human relations’ movement has been a major influence on modem
human resource management.

This movement is characterized by its focus on group behaviour and workers’ feelings
as they relate to productivity and morale. Therefore, management must be mainly
concerned with the informal, spontaneous behaviour of work groups and the
sentiments and attitudes of employees.

7) Behavioural Science Era:

The behavioural science era assumes human behaviour as a means to achieve

efficiency in performance and it is an outgrowth of the human relations studies. The
major contributions made by behavioural scientists are in the areas of motivation,
leadership, communication, organizational culture and individual and group
dynamics.

8) Personnel Specialist Era & Welfare Era:

Employees are the most valuable assets of an organization. There should be a

conscious effort to realize organizational goals by satisfying needs and aspirations of
employees. Employees are considered to be the part in the progress of a company and
also having a feeling their own organization. To this end, managers must offer better
quality of working life and offer opportunities to people to exploit their potential
folly.

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Evolution Development of HRM in India

Period Development Outlook Emphasis Status

Status

1920s- Beginning Pragmatism of Statutory, welfare Clerical

1930s Capitalists Paternalism

1940s- Struggling for Technical, Introduction Administrative

1960s recognition Legalistic techniques

1970s- Impressing with Professional, Regulatory, Managerial

1980s sophistication Legalistic, conformance,
Impersonal imposition of
standards another
function

1990s Promising Philosophical Human Values, Executive

Productivity
Through people

Chart No: 1. C. S. Venkataraman and B.K. Srivastava, Personnel Management and Human
Resources 1991, Tata McGraw Hill, New Delhi, Pg.5
 1. A.4. NATURE OFHRM
In every phase of life, man learns new things and makes use of those in his daily
routines. This nature builds a person to develop and change from time to time. When
this change is well utilized by a person to coincide the organizational and individual
goal, it becomes an effective human resources management.

It has following features:

1) Pervasive Force:

HRM is pervasive in nature. It is present in all enterprises. HRM is the central sub­
function of an organization and it permeates all types of functional management viz.,
production management, marketing management and financial management. Each and
every manager is involved with human resource function.

2) Action Oriented:

HRM focuses attention on action, rather than on record keeping, written procedures or
rules. The problems of employees at work are solved through rational policies.

3) Individually Oriented:

It tries to help employees develop their potential fully. It encourages them to give
their best to the organization. Under HRM, every employee is considered as an
individual so as to provide services and programmes to facilitate employees’
satisfaction and growth. In other words, it is concerned with the development of
human resources, i.e., knowledge, capability, skill, potentialities and attaining and
achieving employee goals.

4) People Oriented:

HRM is all about people at work, both as individual and groups. It tries to put people
on assigned jobs in order to produce good results. The resultant gains are used to
reward people and motivate them toward further improvements in productivity. It is
the process of bringing people and organization together so that the goals of each are
met.

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 5) Future Oriented:

Effective HRM helps an organization meet its goals in the future by providing for
competent and well-motivated employees.

6) Development Oriented:

HRM intends to develop the full potential of employees. The reward structure is tuned
to the needs of employees. Training is offered to sharpen and improve their skills.
Employees are rotated on various jobs so that they gain experience and exposure.
Every attempt is made to use their talents fully in the service of organizational goals.
Individual employee-goals consist of job satisfaction, job security, high salary,
attractive fringe benefits, challenging work, pride, status, recognition, opportunity for
development etc. HRM is concerned with developing the potential of employees, so
that they derive maximum satisfaction from their work and give their best efforts to
the organization.

7) Integrating Mechanism:

HRM tries to build and maintain cordial relations between people working at various
levels in the organization. In short, it tries to integrate human assets in the best
possible manner in the service of an organization.

8) Comprehensive Function:

HRM is, to some extent, concerned with any organizational decision which has an
impact on the workforce or the potential workforce. The term ‘workforce’ signifies
people working at various levels, including workers, supervisors, middle and top
managers. It is concerned with managing people at work.

9) Auxiliary Service:

HR departments exist to assist and advise the line or operating managers to do their
personnel work more effectively. HR manager is a specialist advisor. HR managers do
not manufacture or sell goods but they do contribute to the success and growth of an
organization by advising the operating departments on personnel matters.

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 10) Inter-disciplinary Functions:

HRM is a multi-disciplinary activity, utilizing knowledge and inputs drawn from

psychology, sociology, anthropology, economics, etc. to unravel the mystery
surrounding the human brain, managers, need to understand and appreciate the
contributions of all such ‘soft’ disciplines.

11) Continuous Functions:

HRM is a continuous and never ending process.

According to George R.Terry, “it cannot be turned on and off like water from a
faucet; it cannot be practiced only one horn each day or one day each week. Personnel
management requires a constant alertness and awareness of human relations and their
importance in everyday operations.

12) Challenging Functions:

Managing of human resources are challenging job due to the dynamic nature of
people. HRM aims at securing unreserved co-operation from all employees in order to
attain pre-determined goals.

Therefore, HRM is the management of human resources in the organization and is

concerned with the creation of harmonious working relationships among its
participants and bringing about their utmost individual development. It is about
developing people and enabling them to make the best use of their abilities in their
own interests, as well as those of the organization. It furthermore matches human
resources to the strategies and operational needs of the organization, and ensuring the
full utilization of those resources.

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A. 5 FUNCTION OF HRM

HRM has been described as a process of development of human resource through

guidance, integration, motivation of personnel to achieve the organizational goals
along with individual goals. This is a social process involving responsibility for
economic planning and supervising activities of an enterprise keeping the ‘human
factor’ in forefront of all activities. Whilst it is not easy to ensure that all the functions
of HRM are interdependent, interrelated and depend upon the specific situation. Most
functions are carried out as one single activity of management.

Functions of HRM can mainly be divided into two:

A. Managerial Functions
B. Operative Functions

A. Managerial Functions:

Managerial functions involve planning, organizing, staffing, directing, coordinating,

controlling, reporting and budgeting, the work of those who are entrusted with the
performing of operative functions. All these functions influence the operative
functions and also they are interdependent. In other word, managers procure process
and peddle, find and employ resources, develop services and find markets for their
output.

1) Planning:

Planning is a hard job, for it involves the ability to think, to predict, to analyze and to
come to decisions, to control the actions of its personnel and to cope with a complex,
dynamic fluid environment. It is a pre-determined course of action.

According to Allen, “It is a trap laid to capture the future”. In fact, “Planning today
avoids crises tomorrow”.

Thus, planning is future oriented concerned with clearly charting out the desired
direction of business activities in future.
2) Organizing:

Organizing involves giving each subordinates a specific task, establishing

departments, delegating authority to subordinates, establishing channels of authority
and communication, coordinating the work of subordinates, and so on.

In the words of Drucker, “The right organizational structure is the necessary

foundation, without it the best performance in all other areas of management will be
inefficient and frustrated”.

So an organization is the combination of authority and responsibility because, in its

essentials, it consists of the assignment of specific functions to designate to have them
carried out, and their accountability to management for the results obtained.

3) Directing:

Directing includes guiding, overseeing, inspiring and influencing the subordinates to

work in a way that is beneficial to the enterprise as well as the community. The
effective directing is an appreciation of human nature and it is involved with getting
persons together and asking them to work willingly and effectively for the
achievement of designated goals. So direction is an important managerial function to
build sound industrial and human relations besides securing employee contributions.
It is the process of activating group efforts to achieve the desired goals.

4) Controlling:

Controlling is the process of setting standards for performance, checking to see how
actual performance compares with these set standards, and taking corrective actions as
needed. It is through control that action and operation are adjusted to pre-determined
standards, and its basis is information in the hands of the managers. By check,
analysis and review the personnel department assists in realizing the personnel
objectives.

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 B. Operative Functions:

The operative functions of personnel management are concerned with the activities
specially dealing with procuring, developing, compensating, integrating and
maintaining an efficient workforce. These functions are also known as service
functions. It varies from department to department depending on the nature of the
department. The operative functions of HRM relate to ensuring right people for right
jobs at right times.

1) Procurement:

The first operative function of personnel management is procurement. The

procurement function is concerned with the obtaining of a proper kind and number of
personnel necessary to accomplish organizations goals. It deals specifically with such
subjects as the determination of manpower requirements, selection and placement,
induction, follow-up, transfers, lay-offs, discharge and separation etc.

2) Development:

The development function deals with the personal development of employees by

increasing their skills, through training so that job performance is properly achieved.
It is the process of improving, moulding, changing and developing the skills,
knowledge, creative ability, aptitudes, attitude, values and commitment based on
present and future requirements both at the individual’s and organization’s level.

3) Compensation:

Compensation function involves determination of wages and salaries matching with

contribution made by employees to organizational goals. To frame a suitable
compensation policy, management has to take into consideration various factors, viz.,
job evaluation, existing remuneration policy, incentive plans, bonus policy etc. It also
helps in building a suitable salary and wage structure.

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4) Maintenance:

The maintenance function deals with sustaining and improving the conditions that
have been established. It aims at protecting and preserving the physical and
psychological health of employees through various welfare measures. So maintenance
function ensures that employees’ needs are well taken care of by the management by
providing benefits and services.

5) Integration:

HRM tries to integrate the management and the workers to have mutual respect for
each other and bring in a new sense of industrial relations in the enterprise for
economic progress and industrial harmony. It is mainly focus on employees to
understand that they are part and partial of the enterprise and inculcate a feeling of
belonging to the enterprise.

In short, the key role of HRM function is to play a part in the creation of an
environment which enables people to make the best use of their capabilities and to
realize their potential to the benefits of both the organization and themselves. It is also
essentially a business-oriented philosophy concerning the management of people in
order to obtain added value from them and thus achieve competitive advantage.
Today HRM function is not only more integrated but is holistic as well. HR
practitioners of today are not narrowly specialist in his/her personnel area. It is
important to note that the managerial and operative functions of HRM are performed
in conjunction with each other in an organization, be large or small organizations.

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Functions of HRM

Chart No: 2. Functions of HRM

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 L A.6. OBJECTIVE OFHRM

Human resources are managed to divert and utilize their resources towards and for the
accomplishment of organizational objectives. The most important objective of any
organization would be to find out the right person for the right job, so that the
organizational goals are achieved. The objectives of HRM changes from time to time
and from organization to organization.

They are as follow:

1) Societal Objectives:

To be ethically and socially responsible to the needs, and challenges of the society,
while minimizing the negative impact of such demands upon the organization. The
failure of organizations to use their resources for the society’s benefit in ethical ways
may lead to restrictions.

2) Organizational Objectives'.

To recognize the HRM exists to contribute to organizational effectiveness. HRM is

not an end in itself; it is only a means to assist the organization with its primary
objectives.

3) Functional Objectives:

To maintain the department’s contribution at a level appropriate to the organization’s

needs. A department’s level of service must be appropriate for the organization it

serves.

4) Personal Objectives:

To assist employees in achieving their personal goals, at-least in so far as these goals
enhance the individual’s contribution to the organization.

Personal objectives of employees must be met, if workers are to be maintained,

retained and motivated. Otherwise, employee performance and satisfaction may
decline and employees may leave the organization.

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Hence objectives in order to improve business performance and develop
organizational culture that foster innovation and flexibility. Management has to create
conducive environment and provide necessary pre-requisites for the attainment of the
objectives of HRM. Objectives should be based on 3H’s i.e. Heart, Head & Hand. We
should feel by Heart, think by Head & implemented by Hand.

Objectives of HRM

HRM Objectives Supporting Functions

Social/Societal Objectives 1) Legal Compliance

2) Benefits
3) Union Management Relations
4) Personal Objectives

Organizational Objectives 1) Human resource planning

2) Employee relations
3) Selection
4) Training & Development
5) Appraisal
6) Placement
7) Assessment

Functional Objectives 1) Appraisal

2) Placement
3) Assessment

.. ... Objectives
Personal ... .... ..... .. ... 1) Training and Development
2) Appraisal
3) Placement
4) Compensation
5) Assessment

Chart No: 3. Objectives of HRM

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Objectives of HRM

Chart No: 4. Objectives of HRM

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 L A. 7.HR ACTIVITIES
One aspect of getting the greatest contribution from human capital in an organization
requires that a fit be made with how people are treated and the long-term effect on the
company’s bottom-line. The way that happens is through HR activities that are based
on research, best practices, and continuing enhancement of HR efforts. HRM can be
thought of as seven interlinked activities taking place within organizations.
Additionally, external forces- legal, economic, technological, global, environment,
cultural/geographic, political and social- significantly affect HR activities and how
they are designed, managed and changed.

The HR activities are:

1) Strategic HRM:

As part of maintaining organizational competitiveness, HR effectiveness can be

increased through the use of HR measurement and HR technology. Through HR
planning, managers anticipate the future supply of and demand for employees. An
additional strategic HR concern is the retention of employees.

2) Equal Employment Opportunity:

Compliance with equal employment opportunity (EEO) laws and regulations affects
all other HR activities. The diversity of a workforce creates additional challenges. For
instance, a company must have sufficient diversity to meet affirmative action
requirements.

3) Staffing:

The aim of staffing is to provide a sufficient supply of qualified individuals to fill jobs
in an organization. Job analysis lays the foundation for staffing by identifying what
people do in their jobs. These analyses are used when recruiting applicants for job
openings. The selection process is concerned with choosing qualified individuals to
fill those jobs in the organization.

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 4) Talent Management & Development:

Beginning with the orientation of new employees, talent management and

development includes different types of training. Also, HR development of employees
and managers is necessary to prepare for future challenges. Career planning identifies
paths and activities for individual employees as they move within the organization.
Assessing how well employees perform their jobs is the focus of performance
management.

5) Total Rewards:

Compensation in the form of pay incentives, benefits, rewards people for performing
organizational work. To be competitive, employers develop and refine their basic
compensation systems and may use variable pay programs such as gain sharing and
productivity rewards. The rapid increase in the cost of benefits will continue to be a
major issue for most employers.

6) Risk Management & Workers Protection:

Employers need to address an increasing number of workplace risks to ensure workers

protection. For decades employers have had to meet legal requirements and be more
responsive to concerns for workplace health and safety. Also, workplace security has
grown in importance along with disaster and recovery planning.

7) Employee & Labour Relations:

The relationship between managers and their employees must be handled effectively.
Employee rights and privacy issues must be addressed. It is important to develop,
communicate, and update HR policies and procedures so that managers and
employees alike know what is expected. In some organizations, union/management
relations must be addressed as well.

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HR Activities

SOCIAL

C EXTERNAL ENVIRONMENT

Chart No: 5. HR Activities

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 1. A.8. THE CHALLENGE TO HRM
As Ulrich (1998) points out, environmental and contextual changes present a number
of competitive challenges to organizations, which mean that HR has to be involved in
helping to build new capabilities. Globalization requires organizations to move
people, ideas, products and information around the world to meet local needs.

Some of the important challenges are as follow:

1) Vision Penetration:

Vision not only provides the fuel and directions to business strategy, but also helps
managers evaluate management practices and make decisions. Penetration of vision
shall therefore, become an important integral part of man management in future.

2) Internal Environment:

Creating an environment, which is responsive to external changes, providing

satisfaction to the members of the organization, and sustaining it through culture,
useful traditions, practices, and even systems, will become another important
dimension of managing managerial personnel.

3) Change in Industrial Relations:

The practice of industrial relations has undergone sea change. Development of

workers may need simpler and appropriate inputs, but both the workers and managers
must be managed and developed by the same set of assumptions and HRM
philosophy of the company.

4) Building Organizational Capabilities:

The paradigm of managing managers would include not only assisting them to acquire
new skills and knowledge and to evaluate environmental changes, to evolve business
strategies, but also to live in a psychological state of readiness to continuous change.

5) Job Design & Organizational Structure:

In designing organizations, soon give up uncritical acceptance of foreign concepts and

fads like quality circles, TQM, etc. Instead of these, organizational structure and
design will primarily base on task approach and people approach.

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 6) Increasing size of workforce:

The management of an increased workforce poses serious problems and challenges

especially since the workers are becoming more conscious of their rights.

7) Changing Psycho-social system:

In the traditional bureaucratic mode, the organizations were designed to perform

technical functions with strict compartmentalization of work functions. But in future,
human participation will be required not only in technical functions but also in
establishing the democratic humanistic system.

8) Satisfaction of higher level needs:

The workers are becoming much aware of their higher level needs. This awareness is
likely to intensify further in the future workforce. Therefore, managers would be
required to evolve appropriate techniques of motivating the workers and getting work
for them.

9) Equalitarian Social System:

Contemporary organizations are putting lesser emphasis on the hierarchical structures

and thus moving towards a more equalitarian social system. This is going to be more
common in days to come.

10) Technological Advance:

In the wake of technological advances new jobs will be created and may old jobs will
become redundant. Unemployment resulting from modernization could be liquidated
by properly assessing manpower needs and training of redundant employees in
alternate skills.

11) Computerized Information Systems:

It will pay a revolutionary role in managerial decision-making. It will also have an

increasing impact in co-ordination and at strategic levels.
 12) Changes in legal Environment:

To meet with the increasing changes in the legal environment, necessary adjustments
will have to be made so that greater utilization of human resources can be achieved.

13) Management ofHuman Relations:

The new generation workforce comprising educated and conscious workers will ask
for higher degree of participation and avenues for self-fulfilment. It is rather difficult
to motivate many of the new generation workers than their predecessors. This is partly
due to change in their value system and higher levels of professional competency.

Therefore, today personnel managers may find themselves obsolete because of the
rapidly changing business environment, and they should also constantly update their
knowledge and skills by looking at the organization’s needs and objectives.
Challenges of HR Managers

Chart No: 6. Challenges of HR Managers

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B. HUMAN RESOURCE DEVELOPMENT

1. B.1 Introduction

1. B.2 Meaning & Definitions

1. B.3 Evolution of HRD

1. B.4 Nature of HRD

1. B.5 Functions of HRD

1. B.6 Aims of HRD

1. B.7 HRD Matrix

 Bo HUMAN RESOURCE DEVELOPMENT

1. B.l INTRODUCTION
Human resource development is concerned with the development of human resource
in an organization. Development means improving the existing capabilities to the
human resources in the organization and helping them to acquire new capabilities
required for the achievement of the corporate as well as individual goals. It believes
that individuals in an organization have unlimited potential for growth and
development and their potential can be developed and multiplied through appropriate
and by providing the right type of climate in the organization, individuals can be
helped to give foil expression of their potential, contributing to the achievement of
goals of the organization and thereby ensuring optimization of human resources.

Investment in human beings is another underlying concept of the human resources

system. The organization accepts that development of human resources involves
investment of time and concern for growth. Everyone in the organization will have to
take self-responsibility for growth and optimization of performance. It is the process
of enhancing potential of people to perform better in all spears of life. People’s
potential can be developed through training and capacity building access to
opportunity and environment, which supports their developments.

The term “HRD” implies development qualities, capabilities, positive work aptitudes
of all the people working at all levels in an organization, so that their performance in
the present jobs is increased and they become prepared to take on increased
responsibilities in the foture. HRD is a process, which consists of a series of activities
conducted in order to design behavioural efforts should be made in such a way that
the employees should contribute willingly and wholeheartedly towards the
accomplishment of the goals or objectives of their organization. It is expected that
HRD should help and motivate the employees of an organization to acquire and
develop necessary technical, managerial and behavioural knowledge, skills and
abilities to mould the values, beliefs, attitudes required to perform present as well as
foture roles by realizing human potentials with a view to contribute positively to the
organizational, group, individual and social goals. HRD helps the employees to

28 | P a g e
acquire expertise required to perform all their activities, jobs efficiently and
effectively for their own well being as well as of their organization.

HRD aims at overall development of human resources in order to contribute to the

well being of the employees, organization and the society at large. It activities should
begin, when an employee joins an organization and continues throughout his/her
career, regardless of whether that employee is an executive or a worker on an
assembly line. HRD programs must respond to job changes and integrate the long­
term plans and strategies of the organization to ensure the efficient and effective use
of resources.

HRD, on the other hand is a proactive function, as it prepares people to face, future
challenges with confidence. In a broad sense, HRD is the process of increasing
knowledge and capabilities of all the people in a given society. In the national context,
HRD is a process by which the people in various groups are helped to acquire new
competence continuously so as to make them more and more self-reliant and
simultaneously develop a sense of pride in our country. In the corporate vision, the
HRD framework views employees as an asset to the enterprise, whose value is
enhanced by development. As far as industrial organization is concerned, human the
‘Human’ aspect where people are seen as having skills, having potential and the
ability to grow, change and develop; the ‘Resource’ aspect where individuals are
considered resources rather than problems and the ‘development’ aspect, where is an
emphasis on the discovery and nurturing of their potentials.

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HRD a Humanistic Concept

People can do better, they can do wonders

------->
concept

Involve them, trust them, and empower them: treat

y
them as resources, as assets

0
•H

*v
Focus on the strengths of people and help them
y
overcome their weaknesses.

Integrate the needs and aspirations of individuals into

---------> the strategic goals and the mission of an organization
for better result.

Encourage individual initiative and response by

---------- 7
providing a fostering culture (openness, trust,
collaboration, mutuality etc.).

Chart No: 7. HRD Concept

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 1. B.2 MEANING & DEFINITION

Human Resource Development can be defined as a set of inter-related activities, by

which human potentialities’ are assessed, selectively upgraded and appropriately
deployed for achievement of envisioned goals, which foster human dignity.

From the organization context, “HRD is a process which helps employees of an

organization to improve their functional capabilities for their present and future roles,
to develop their general capabilities, to harness their inner potentialities both for their
self and organization development and to develop organizational culture to sustain
harmonious superior-subordinates relationships, team work, motivation, quality and a
sense of belongingness.

According to Peter F. Drucker, “The prosperity if not the survival of any business
19
depends on the performance of its managers of tomorrow.”
i

According to Leonard Nadler, “HRD is organized learning experiences in a definite

time period to increase the possibility of improving job performance and growth”.13

According to Kelly D., HRD can be defined simply as developing the most important
section of any business its human resource by, “Attaining or upgrading the skills and
attitudes of employees at all levels in order to maximize the effectiveness of the
enterprise. The people within an organization are its human resource.14

M. M. Khan defined as “HRD is the process of increasing knowledge, skills,

capabilities and positive work attitude and values of all people working at all levels in
a business undertaking”.15

12www.oppapers.com, business & economy research papers.

13 Leonard Nalder & Garland Wiggs, Managing HRD, San Franciso: Jossey-Bass Inc., 1986, Wiley Online
Library.
14Kel!y D., Dual Perceptions of HRD, http://ro.uow.edu.artpaper/26, 2001.
15 Ashok Khurana, Parveen khurana & Hiralal Sharma, V.K. (India) enterprises, New Delhi, 2009-10.

31 | P a g e
 A successful Human Resources Development program will prepare the individual to
undertake a higher level of work, “Organized learning over a given period of time, to
provide the possibility of performance change”.16

K.C. Gupta in his research paper HRD is organization concept & Mechanism states,
“HRD means safeguarding, maintaining, and improving existing skills of human
beings (i.e. human resources) so as to increase their productivity for ultimate well­
being of organizations as well as their own.”17

According to John E. Jones, “HRD is an approach to the systematic expansion of

people’s work-related abilities, focused on the attainment of both organizational and
f o

personal goals” .

In short, HRD means to develop available manpower through suitable methods such
as training, promotions, transfers and opportunities for career development. It is
organized learning activities arranged within an organization in order to improve
performance and personal growth for the purpose of improving the job, the individual,
and the organization.

16 Nalder L. Ed., The Handbook of HRD, John Wiley & Sons, New York, 1984.
17 K.C Gupta Research paper of HRD, organization concept and Mechanism states,
WWW.hrmnotes.com
18 Gupta Santosh & Gupta Sachin, Human Resource Development, Deep & Deep Publications Pvt. Ltd.,
New Delhi, 2005.

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 L B.3 EVOLUTION OF HKD
The early part of the century saw a concern for improved efficiency through careful
design of work. Improving employee productivity and efficiency was the next big
thing to hit the business world. Recent years have witnessed an increasing towards the
quality of working life, product, and quality, speedy and efficient delivery of work.
During this middle part of the century emphasis shifted to the availability of
managerial personnel and employee productivity.

The term HRD has become very popular in the recent past. Many organizations have
either started new HRD department or have appointed HRD managers or at least have
strengthened their personal departments to look after the HRD functions. The format
introduction of the concept of Human Resource Development (HRD) was done by
Prof. Len Nadler in 1969 in American Society for Training and Development
Conference.

In India, Larsen and Toubro Ltd, was the first company to introduce this concepts in
1975 among the private sector companies with an objectives of facilitating growth of
employees, especially people at the lower levels. Among the public sector
Government companies it was BHEL, which introduced this concept in 1980. Even
while introducing HRD, many organizations were under the impression that it was
nothing but Training and Development concept. Certain companies started renaming
their Training and Development Departments and some have created new
departments.

Later some other personnel management functions like performance appraisal,

potential appraisal, career planning and development, feedback and counselling,
organizational development and data storage systems were included as sub-systems of
Human Resources Development.

A survey by Industrial Team Service in 1969 indicated that the personnel function is
no longer viable, if it doesn’t include or allow scope for employment, training,
welfare measures, employee education, employee benefits, industrial relations and
industrial insurance. Thus, the concept was subject to serious criticism and this has
ultimately paved the way for the emergence of Human Resources Development.

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Evolution of IIRD

Concept What’s it all about

The Commodity concept Labour was regarded as a commodity to be bought and

sold. Wages were based on demand and supply.
Government did very little to protect workers

The factor of production Labour is like any other factor of production, viz,
money, materials, land etc. Workers are like machine
concept
tools

The Goodwill concept Welfare measures look safety, first aid, lunch room,
and restroom will have a positive in productivity.

The paternalistic concept Management must assume a fatherly and protective

attitude towards employers. Paternalism does not mean
/ paternalism
merely providing benefits, but it means satisfying
various needs of the employers just as parents meet the
requirement of the children.

The improve productivity; physical social and

Humanitarian concepts
psychological needs of waters must be met. As Mayo
and others stated, money is less a factors in determining
output, than group standards, group incentives and
security. The organization is a social system that has
both economic and social dimensions

\
Employees are the most valuable assets of an
The Human Resource
organization. There should be a conscious effort to
concept
realise organizational goals by satisfying needs and
aspirations of employees.

Employees should be accepted as partners in the

The Emerging Concept
progress of a company. They should have a feeling that
:HRD
the organization is their own. To this end, managers
must offer better quality of working life and provide
opportunities to people to exploit their potential fully.
There should be opportunities for self-fulfilment in
one’s work. The focus should be on Human Resource
Development

Chart No: 8. Evolution of HRD

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 1. B.4 NATURE OF HRD
HRD is a process, by which the employees of an organization are helped to help
themselves and develop the organization. Following are some of the important
features of HRD, which makes the concepts of HRD clearer. They are as follows:

1) HRD is the employee-oriented concept:

HRD is mainly concerned with developing the knowledge, skills and capabilities,
competencies of the employees and hence, it is said that HRD is the employee
oriented concept. It can be applied for the development of the total human resources
at the national level as well as for the development of employees employed in an
organization.

2) HRD is a system:

HRD is a system having several interdependent parts or subsystems such as

procurement appraisal, development, etc. change in any one subsystem leads to
changes in other parts. This system made up of various mutually dependent parts.
Hence, the design of the HRD system cannot be considered in isolation. It has to take
into consideration its linkages with other parts, areas of the organization.

3) HRD is a planned process:

HRD is a planned and systematic way of developing people. Further, it is undertaken

on a continuous basis. Proper planning is necessary for proper development of human
resources. Planning is done in various areas such as recruitment and selection, training
and development, etc.

4) HRD is a proactive approach:

Now-a-days, it is found that business environment is changing very fast and becoming
challenging, competition is keen. HRD is not merely to cope with the needs of an
organization, but it has to anticipate them in advance in a continuous and planned
manner. The proactive HRD practices can positively contribute to set the journey in
the right direction. The proactive HRD practices can successfully integrate
productivity with quality of work life and help the effectiveness. Hence, the approach
of HRD should be proactive and not reactive. d.d-3

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 5) HMD is an interdisciplinary concept:

HRD is an amalgamation of various ideas, concepts, principles and practices drawn

from a number of soft sciences such as sociology, psychology, anthropology,
economics, etc.

6) HRD is a comprehensive programme:

HRD aims at developing the capabilities of human resources and emphasis of building
the right work culture by motivating the people properly.

7) Approach ofHRD is dynamic:

Considering the needs, necessary actions are taken. HRD programmes for developing
human resources are adopted.

8) HRD improves quality of life:

HRD enables the employee to discover and utilize their capabilities in service of
organizational goals. It finds a new meaning in work, when managers support such
initiatives through incentive plans and challenging work assignments. The whole
effort of HRD thus, is focused on improving the quality of life of employees working
at various levels in an organization.

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 Shifts in HR Management

I
„| Traditional HR Functions Emerging HR Practices
If
I0 ' f
a %■ &
If Administrative Focus Strategic Focus i

Reactive Proactive

Separate & Isolated from Company Key part of Organizational Mission

mission

Production Focus Services Focus

Functional Organization with Process-Based Organization I

Vertical Lines of Authority • Generalists with horizontal §
responsibility j
• Corporate team of specialists I

People as Expenses People as Investments

iI
1
Ii KZ/.'4Z.<&.’/.*PAK
■
Iyi
I

Chart No: 9. Source: HR 21: Human Resource for the Next Century

(Washington D C Watson, Wyatt Worldwide)

37 | P a g e
 1. B. 5 FUNCTIONS OFHRD

HRD plays an important role in any organization. HRD is a function consists of

various activities related to individual’s growth and development.

These functions are as follows:

1) Role A nalysis:

HRD includes designing the wider roles than more jobs based on the organization
present-future needs.

2) Human Resource Planning:

Based on role analysis, plan for human resource, which would meet only the future
organizational requirement, but also capable of being developed comes the previews
ofHRD.

3) Recruitment:

It is a process of searching for prospective employees and stimulating them to apply

for job in an organization.

4) Selection".

It is a process of ascertaining the qualification, experience, skill, knowledge, etc., of

an applicant with a view to appraising his/her suitability to a job.

5) Induction and Orientation:

Induction and orientation are the techniques by which a new employee is rehabilitated
in changed surroundings and introduced to the practices, policies, purpose and people,
etc of the organization.

6) Performance Appraisal:

It is the system evaluation of individuals with response to their performance on the

job and their potential of development.

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 7) Training:

Training is a systematic process, by which employees leam, acquire skills,

knowledge, abilities or attitudes to further organizational and personal goals.

8) Management Development:

It is a process of designing and conducting, suitable, executive development

programmes so as to develop the managerial and human relations skill of employees.

9) Career Planning & Development:

HRD deals with his/her planning and development of career of employer, so that
don’t leave the organization, but plan for internal mobility by means like transfer
problem etc.

10) Organization Development:

Organization development is an organization wide planned effort managed from the

top with a goal of increasing organizational performance through planned
interventions.

11) Compensation:

It is a process of providing equitable and fair remuneration wage and salary

administration incentive bonus, fringe benefits, social security measures, etc.

12) Social & Cultural Programme:

HRD should arrange for social and cultural programmes to enable the employees to
leam from each other.

13) Employee Counselling:

HRD function includes employee counselling about his/her job and organizational
related activities to help them acquire additional skill, knowledge and ability from
his/her counsellor.

39 I P a g e
 14) Teamwork:

HRD functions also include encouraging the team spirit among the employees for
developing the organizational human process efficiently and effectively.

15) Communication Policy:

The free flow of communication both ways are to share new ideas, experience and
work related issues.

16) Monetary and Non-monetary Rewards:

The functions of HRD management include educating the top management on

providing proper monetary and non-monetary rewards and benefits to the employees.

17) Employee Benefits:

It also encourages the employee to learn and acquire additional skills.

18) Grievance Handling Mechanism:

Promote settlement of employee grievance leads to job satisfactions and satisfied

employees are encouraged to enrich their resources with a view to enhance their
contributions to the organization.

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Functions of HRD

Chart No: 10. Functions of HRD

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1. B. 6 AIMS OF HRD

HRD is concerned with providing learning and development opportunities, making

training interventions and planning, conducting and evaluating training programmes.
It is essentially a strategic process, which is concerned with meeting both business
and individual’s needs. HRD system helps to create the expected work culture and
work environment besides improving the capabilities and skills in the human .
resources. HRD is needed by any organization that wants to survive, develop and
succeed the fast changing environments.

The overall aim of HRD is to see that the organization has the quality of people it
needs to attain its goals for improved performance and growth. This aim is achieved
by ensuring as far as possible that everyone in the organization has the knowledge and
skills and reaches the level of competence required to carry out their work effectively,
that the performance of individuals and teams is subject to continuous improvement,
and that people are developed in a way that maximizes their potential for growth and
promotion.

HRD basically aims at developing:

> The capabilities of each employee as an individual.

> The dyadic relationship between each employee and his/her employer;
> To generate systematic information about human resources;
> To create to technological changes;
> To create and maintain competent workforce;
> To adapt technological changes;
> To fill the vacuum at different levels of management;
> To fulfil career aspirations of employees;
> To aid total quality management;
> To import new entrants with basic HRD skills and knowledge;
> To prepare employees for higher level jobs;
> To broaden the minds of senior managers by providing them with
opportunities for an interchange of experiences within & outside of
organization;

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 1.B.7HRD MATRIX

The HRD matrix shows the interrelationships between HRD instruments, Processes,
outcomes and organizational effectiveness.

a) HRD Instruments:

These include performance appraisal, counselling, role analysis, potential

development, training, communication policies, job relations, rewards, job enrichment
programmes, etc. These instruments may vary depending on the size of the
organization, the internal environment, the support and commitment of the top
management, the competitive policies, etc.

b) HRD Processes:

The HRD instruments lead to the generation of HRD of processes like role charity,
performance planning, development climate, risk-taking, dynamism in employees.
Such HRD processes should result in more competent, satisfied and committed people
that would make the organization grow by contributing their best to it.

c) HRD Outcomes:

HRD instruments and processes make people more committed and satisfied, where
they tend to give their best to the organization enthusiastically.

d) Organizational Effectiveness Dimensions:

Such HRD outcomes influence the organizational effectiveness, which in turn,

depends on a number of variables like environment, technology, competitors, etc.

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