TOPIC 1: HUMAN RESOURCE MANAGEMENT

Human Resource Management is the process of recruiting, selecting, inducting employees,

providing orientation, imparting training and development, appraising the performance of
employees, deciding compensation and providing benefits, motivating employees,
maintaining proper relations with employees and their trade unions, ensuring employees
safety, welfare and healthy measures in compliance with labour laws of the land.

Human Resource Management involves management functions like planning, organizing,

directing and controlling

1. It involves procurement, development, maintenance of human resource

2. It helps to achieve individual, organizational and social objectives
3. Human Resource Management is a multidisciplinary subject. It includes the study of
management, psychology, communication, economics and sociology.
4. It involves team spirit and team work.
5. It is a continuous process.

Human resource management as a department in an organisation handles all aspects of

employees and has various functions like human resource planning, Conducting Job analysis,
recruitment and conducting job interviews, selection of human resources, Orienting , training,
compensating, Providing benefits and incentives, appraising, retaining, Career planning,
Quality of Work Life, Employee Discipline,human resource auditing, maintenance of
industrial relationship, looking after welfare of employees and safety issues , communicating
with all employees at all levels and maintaining awareness of and compliance with local,
state and federal labor laws.

What is the importance of Human resource?

Behind production of every product or service there is an human mind, effort and man hours
(working hours). No product or service can be produced without help of human being.
Human being is fundamental resource for making or construction of anything. Every
organisation desire is to have skilled and competent people to make their organisation
competent and best.

TOPIC 2: EVOLUTION OF HRM

1.2 Evolution and Development of Human resource Management

The evolution of the concept of Human Resource Management is presented below

Period before industrial revolution 

 The society was primarily an agriculture economy with limited production. Number of
specialized crafts was limited and was usually carried out within a village or community with
apprentices assisting the master craftsmen. Communication channels were limited.

Period of industrial revolution (1750 to 1850) 

Industrial revolution marked the conversion of economy from agriculture based to industry
based. Modernization and increased means of communication gave way to industrial setup. A
department was set up to look into workers wages, welfare and other related issues. This led
to emergence of personnel management with the major task as

–          Worker’s wages and salaries

–          Worker’s record maintenance

–          Worker’s housing facilities and health care

An important event in industrial revolution was growth of Labour Union (1790) – The
workers working in the industries or factories were subjected to long working hours and very
less wages. With growing unrest, workers across the world started to protest and this led to
the establishment of Labour unions. To deal with labour issues at one end and management at
the other, Personnel Management department had to be capable of politics and diplomacy,
thus the industrial relation department emerged.

Post Industrial revolution 

The term Human resource Management saw a major evolution after 1850. Various studies
were released and many experiments were conducted during this period which gave HRM
altogether a new meaning and importance.

A brief overview of major theories release during this period is presented below

 Frederick W. Taylor gave principles of scientific management (1857 o 1911) led to

the evolution of scientific human resource management approach which was involved in

–          Worker’s training

–          Maintaining wage uniformity

 –          Focus on attaining better productivity.

 Hawthorne studies, conducted by Elton Mayo & Fritz Roethlisberger (1927 to 1940).
– Observations and findings of Hawthorne experiment shifted the focus of Human resource
from increasing worker’s productivity to increasing worker’s efficiency through greater
work satisfaction.

 Douglas McGregor Theory X and Theory Y (1960) and Abraham Maslow’s

Hierarchy of needs ( 1954) – These studies and observations led to the transition from the
administrative and passive Personnel Management approach to a more dynamic Human
Resource Management approach which considered workers as a valuable resource.

As a result of these principles and studies, Human resource management became increasingly
line management function, linked to core business operations. Some of the major activities of
HR department are listed as-

1. Recruitment and selection of skilled workforce.

2. Motivation and employee benefits

3. Training and development of workforce

4. Performance related salaries and appraisals.

Strategic Human Resource Management Approach

With increase in technology and knowledge base industries and as a result of global
competition, Human Resource Management is assuming more critical role today. Its major
accomplishment is aligning individual goals and objectives with corporate goals and objectives.
Strategic HRM focuses on actions that differentiate the organization from its competitors and
aims to make long term impact on the success of organization.

TOPIC 3: Difference between HRM and HRD

Basis of
HRM HRD
Differentiation
Definition and The full form of HRM is Human The full form of HRD is
full form Resource Management. It Human Resource
refers to how the principles of Development. It refers
management can be applied to to continuous
manage the employees development functions
working in an organization that are implemented for
effectively. improving the
 Basis of
HRM
Differentiation
HRM is a management
Nature
function.
The functions of HRM are
reactive and are usually
Function
applied to gaining holistic
organizational goals.
The objective of HRM is
related to improving the
Goal
overall performance of
employees.
Most HRM processes are
routine and have to be carried
Process
out as and when the need
arises.
HRM is an independent entity
in itself. It comprises of
different sections inclusive of
Dependency recruitment and retention,
HRD, compensation,
performance, appraisal
management, etc.
HRM deals with and has
Concerned concerns for people only. It
with handles recruitment, rewards,
etc.
HRM functions are generally
Levels of formal and are applied via
formality classroom/laboratory training, receive coaching from
etc.
HRD
performance of those
working in an
organization.
HRD is a sub-function of
HRM.
The functions of HRD are
proactive and have to be
applied consistently to
enhance the productivity
of employees.
HRD goals are usually
connected with skill
development, knowledge
enhancement, and
increasing the
competency of
employees.
HRD processes are
ongoing and not
occasional.
HRD is a subsystem of
HRM and draws many
functions, attributes,
and processes from
HRM.
HRD is concerned with
the development of all
aspects and people
within an organization
and manages its skill
development processes.
HRD functions may be
informal as in
mentorships, employees
superiors, usually
managers.
TOPIC 4: OBJECTIVES AND SCOPE OF HRM
Topic 5:

Functions of Human Resource Management Includes:

· Managerial Functions

· Operative Functions

Managerial Function Includes:

1. Planning

One of the primary function where number & type of employees

needed to accomplish organizational goals are determined.
Research forms core HRM planning which also helps
management to collect, analyze and identify current plus future
needs within the organization.

2. Organizing

Organization of the task is another important step. Task is

allocated to every member as per their skills and activities are
integrated towards a common goal.

3. Directing

This includes activating employees at different levels and

making them contribute maximum towards organizational goal.
Tapping maximum potentialities of an employee via constant
motivation and command is a prime focus.

4. Controlling
Post planning, organizing and directing, performance of an
employee is checked, verified and compared with goals. If actual
performance is found deviated from the plan, control measures
are taken.

Operative Function Includes:

1. Recruitment/Hiring

Hiring is a process which brings pool of prospective candidates

who can help organization achieve their goals and allows
managements to select right candidates from the given pool.

2. Job Analysis & Design

Describing nature of the job like qualification, skill, work

experience required for specific job position is another
important operative task. Whereas, job design includes
outlining tasks, duties and responsibilities into a single work
unit to achieve certain goal.

3. Performance Appraisal

Checking and analyzing employee performance is another

important function that human resource management has to
perform.

4. Training & Development

This function allows employees to acquire new skills and

knowledge to perform their job effectively. Training and
development also prepares employees for higher level
responsibilities.

5. Salary Administration
Human Resource Department also determines pays for different
job types and incudes compensations, incentives, bonus,
benefits etc. related with a job function.

6. Employee Welfare

This function takes care of numerous services, benefits and

facilities provided to an employee for their well-being.

7. Maintenance

Minimizing employee turnover and sustaining best performing

employees within the organization is the key. Minimizing ROI
within HR department is also a key goal for Human resource
management team.

8. Labor Relations

Labor relation is regards to the workforce who work within a

trade union. Employees in such domain form a union/group to
voice their decisions affectively to the higher management.

9. Personal Research

Research is a vital part of human resource management. It is

performed to keep a check on employee opinion about wages,
promotions, work condition, welfare activities, leadership,
employee satisfaction and other key issues.

10. Personal Record

This function involves recording, maintaining and retrieving

employee related information including employment history,
work hours, earning history etc.
TOPIC 6: HR MODEL BY DAVID ULRICH
What Is a Human Resource Information System (HRIS)?
Human resource information system (HRIS) is defined as a software or online solution that is
used for data entry, data tracking, and data management of all human resources operations of
an organization.

It is thus an accessible, actionable database that enables the smooth operation of all HR
systems hosted either on the organization’s server, the cloud, or on that of an outsourced
vendor. An HRIS is often referred to an HRMS (human resources management system) since it
aids in effective human resource management and planning.
What Is a Human Resource Information System (HRIS)?
Human resource information system (HRIS) is defined as a software or online solution that is
used for data entry, data tracking, and data management of all human resources operations of
an organization.

It is thus an accessible, actionable database that enables the smooth operation of all HR
systems hosted either on the organization’s server, the cloud, or on that of an outsourced
vendor. An HRIS is often referred to an HRMS (human resources management system) since it
aids in effective human resource management and planning.

six key HRIS processes and working components that most organizations require in some
combination.

Database management

The core offering of most human resource information system solutions is a ready-access
database where all employee information can be stored and managed effectively. The HR team
(or anyone managing the portal) can easily input all personnel data into the system. The point is
to be able to access all this data and relevant metric from it on demand from anywhere across
the globe.
The kind of data stored on the system ranges from compensation information, emergency
contact details, and education history to present contact information, learning metrics, and
performance review scores. The database forms the heart of all HR functions and could prove to
be an effective online or cloud-hosted backup for a largely paperless office.

2. Time and labor management

Monitoring the clocking hours of every single employee is a time-intensive task. With a majority
of offices today allowing employees to either punch in biometrically or log on to input their own
hours, this daily dose of data needs effective management.
Managers can now approve leave requests, and the data can be directly linked to payroll. A non-
intrusive but efficient human resource information system can thus keep a close tab on
punctuality and attendance.

3. Payroll functions

Payroll is one of the most important functions of HR. With a lean human resource information
system allowing easy download or upload of employee hours and attendance data, the number
crunch can be made a lot simpler, and deposits to employees made more seamless. This also
leads to fewer errors by reducing human intervention. Moreover, most HRIS payroll software lead
to an improvement in tax compliance, especially for organizations that deal with multiple tax
levels.

4. Benefits management

Benefits management does not pertain only to medical benefits and retirement investments, but
all queries, feedback, data, and communication related to benefits. Such applications provide a
one-stop platform experience for all employers and employees alike, add transparency, and
enable smoother operations.
Every employee is affected by the benefits regulations and strategy, and how that is managed
affects the total experience that the employee has at work.

5. Employee interface

Most human resource information system software allows limited user access to employees, but
even that moderate level of employee self-service is a step forward in creating a culture where
employees have more operational freedom. The interface that allows employees to update their
personal information, review pay scales, change retirement benefit programs, update direct
deposit information or download benefit election documents needs to provide a user experience
that is easy, integrated, and time-saving.

6. Talent acquisition and retention

Acquiring and retaining the right talent is how an organization can hope to grow. With that
context in mind, recruitment and retention are crucial components of any HRIS and are ranked
by most organizations as must-have features.
Getting the right talent onboard is just the first step to the talent puzzle. Employees also need to
be provided with the right training, career pathing, and reward plans to enable growth, boost
morale, and create job happiness. HRIS tools can improve the candidate experience while also
making it easier for recruiters to source, track, and engage with the right talent.
 II MODULE

ECONOMICS OF HUMAN RESOURCES AND HRP

TOPIC 1:

Labour market equilibrium

The balanced situation where the supply of potential employees is equal to the demand.
When labor market equilibrium occurs, neither a labor excess nor a labor deficit is
observed in the job market, and pay scales tend to remain constant as a result.

To understand equilibrium, it is helpful to see what happens when the labor market
is out of equilibrium. The figure below illustrates a situation where the current real
wage is higher than the equilibrium real wage.

At w0 the supply of labor, NS0 is greater than the demand for labor, ND0 , and so
there is an excess supply of labor in the labor market. Workers bid down the real
wage until it falls to the equilibrium value, w.

The above graph demonstrates that when the current wage is such that it is not
equal to the equilibrium real wage competitive market forces act to push the wage
toward the equilibrium wage. As the wage adjusts, labor demand and labor supply
move closer to equality.
 TOPIC 2: Factors determining wage determination

Factors influencing the determination of wage rates are as follows: 1.

Ability to Pay
2. Demand and Supply
3. Prevailing Market Rates
4. Cost of Living
5. Bargaining of Trade Unions
6. Productivity
7. Government Regulations
8. Cost of Training.
1. Ability to Pay:

The ability of an industry to pay will influence wage rate to be paid, if the concern is running

into losses, then it may not be able to pay higher wage rates. A profitable enterprise may pay

more to attract good workers. During the period of prosperity, workers are paid higher wages

because management wants to share the profits with labour.

2. Demand and Supply:

The labour market conditions or demand and supply forces to operate at the national and

local levels and determine the wage rates. When the demand for a particular type of skilled

labour is more and supply is less than the wages will be more. One the other hand, if supply

is more demand on the other hand, is less then persons will be available at lower wage rates
also.

According to Mescon,” the supply and demand compensation criterion is very closely related

to the prevailing pay comparable wage and on-going wage concepts since, in essence to all

these remuneration standards are determined by immediate market forces and factors.

3. Prevailing Market Rates:

No enterprise can ignore prevailing wage rates. The wage rates paid in the industry or other

concerns at the same place will form a base for fixing wage rates. If a unit or concern pays

low rates then workers leave their jobs whenever they get a job somewhere else. It will not be

possible to retain good workers for long periods.

4. Cost of Living:

In many industries wages are linked to enterprise cost of living which ensures a fair wages to
workers. The wage rates are directly influenced by cost of living of a place. The workers will
accept a wage which may ensure them a minimum standard of living.
Wages will also be adjusted according to price index number. The increase in price index will
erode the purchasing power of workers and they will demand higher wages. When the prices
are stable, then frequent wage increases may not be required.

5. Bargaining of Trade Unions:

The wage rates are also influenced by the bargaining power of trade unions. Stronger the
trade union, higher will be the wage rates. The strength of a trade union is judged by its
membership, financial position and type of leadership.

6. Productivity:

Productivity is the contribution of the workers in order to increase output. It also measures
the contribution of other factors of production like machines, materials, and management
.Wage increase is sometimes associated with increase in productivity. Workers may also be
offered additional bonus, etc., if productivity increases beyond a certain level. It is common
practice to issue productivity bonus in industrial units.

7. Government Regulations:

To improve the working conditions of workers, government may pass a legislation

for fixing minimum wages of workers. This may ensure them, a minimum level of
living. In under developed countries bargaining power of labour is weak and
employers try to exploit workers by paying them low wages. In India, Minimum
Wages Act, 1948 was passed empower government to fix minimum wages of
workers. Similarly, many other important legislation passed by government help to
improve the wage structure.

8. Cost of Training:

In determining, the wages of the workers, in different occupations, allowances

must be made for all the exercises incurred on training and time devoted for it.

TOPIC 3: EMPLOYMENT CONTRACTS

An employment contract is a bilateral agreement for an agreed duration for the exchange of
service and remuneration. ... Employment contract related contentious issues include
protection of confidential information, nondisclosure, non-competition and non-solicitation.

KEY ITEMS IN EMPLOYMENT CONTRACTS:

The list of most relevant terms that should form a part of an employment contract:
  appointment (acceptance of employment, office / location of employer, reporting
senior)
 term
 primary responsibility and job description
 remuneration (base salary, incentives, bonus, provident fund, gratuity)
 payment terms
 deductions
 termination (termination without cause, resignation, termination for cause)
 death and disability
 hours of work
 confidentiality
 return of employers property
 intellectual property
 indemnification
 notices
 non compete
 non-solicitation
 governing law, jurisdiction and arbitration

Topic 4: Collective Bargaining

Collective bargaining is a key means through which employers and their organizations
and trade unions can establish fair wages and working conditions. It also provides the
basis for sound labour relations. Typical issues on the bargaining agenda include wages,
working time, training, occupational health and safety and equal treatment. The objective
of these negotiations is to arrive at a collective agreement that regulates terms and
conditions of employment. Collective agreements may also address the rights and
responsibilities of the parties thus ensuring harmonious and productive industries and
workplaces. Enhancing the inclusiveness of collective bargaining and collective
agreements is a key means for reducing inequality and extending labour protection.

Thus, in a collective bargaining process, various steps involved are as follows:

1. Preparation for negotiation.
2. Issues for bargaining.
3. Negotiation.
4. Negotiated agreement.
5. Ratification of agreement.
6. Implementation of agreement.
Topic 5: Labour union

A labor union, also called a trade union or worker's union, is an organization that
represents the collective interests of employees. Labor unions help workers unite to
negotiate with employers over wages, hours, benefits, and other working
conditions.
They may be classified into the following types:

1. Craft Unions:

The membership of such unions is drawn from among workers employed in a particular craft
or trade or allied crafts or trades or occupations irrespective of the organisation or the
industry they belong to. Such employees are craft conscious and usually professionals or non-
manual employees. The Ahmedabad Weavers’ Union is an example that can be cited in this
regard.

2. Industrial Unions:

In industrial unions, membership is open to all types of workers engaged in any one industry
or a group of industries or service, that is, on industry-wise basis, for example, Rashtriya Mill
Mazdoor Sangh, Mumbai.

3. Labour Unions:

In these unions, membership is open to all workers irrespective of their occupation, skill or
industry, the philosophy being that all workers have common status and a common need for
mutual help. Labour unions refer to both craft and industrial unions.

4. General Unions:

General unions believe in the solidarity of the working class. Hence, their membership is
open to workers of different skills and trades engaged in different industries.

5. Blue-Collar Workers’ Unions:

Blue-collar workers’ unions constitute of employees usually performing operative jobs. They
usually operate machines in the production and allied departments. Blue-collar workers
constitute the bulk of membership of trade unions in the organised sector.

6. White-Collar Workers’ Unions:

Such unions usually comprise office staff or who work off the shop floor and perform desk
jobs or provide service over the counter or any such other job. White-collar category includes
executives, managers, professionals, administrators, supervisors, clerks and the like.

We come across such unions in banks, service sector, insurance companies, BPOs, software
organizations, Central and state government offices, and so on. Their members being
educated and matured are aware of the capacity to pay off their organisations and, therefore,
are more reasonable while they prepare their charter of demands.

TOPIC 6: Labour mobility

Labor mobility refers to the ease with which laborers are able to move around within an
economy and between different economies. It is an important factor in the study of
economics because it looks at how labor, one of the major factors of production, affects
growth and production.

Types of Mobility of Labour:

Mobility of labour is of the following types:
1. Geographical Mobility:
When a worker moves from one place to another within a country or from one country to
another, it is called geographical mobility of labour. For example, the movement of labour
from Delhi to Chennai or from India to England is geographical mobility.
 2. Occupational Mobility:

Occupational mobility refers to the movement of workers from one occupation to another.

This mobility is further divided into the following two types:

(a) Horizontal Mobility:

The movement of labour from one occupation to another in the same grade or level is called
horizontal mobility. For example, a bank clerk joins as an accounts clerk in a company.

(b) Vertical Mobility:

When a worker of a lower grade and status in an occupation moves to another occupation in a
higher grade and status, it is vertical mobility. Just as a school lecturer becomes a college
lecturer, a clerk becomes a manager, etc.

HRP:

Objectives of Human Resource Planning:

 Making assessment human resource requirements for future and making plans for
recruitment and selection.
 Assessing skill needs in future.
 Determining training and development needs of the enterprise.
 To assess the surplus or shortage of human resources and avoiding unnecessary
dismissals.
 TOPIC 7: HRP PROCESS

Steps in Human Resource Planning

Human resource planning is a process through which the right candidate for the right job is

ensured. For conducting any process, the foremost essential task is to develop the

organizational objective to be achieved through conducting the said process.

1. Analysing Organizational Objectives:

The objective to be achieved in future in various fields such as production, marketing,

finance, expansion and sales gives the idea about the work to be done in the organization.

2. Inventory of Present Human Resources:

From the updated human resource information storage system, the current number of

employees, their capacity, performance and potential can be analysed. To fill the various job

requirements, the internal sources (i.e., employees from within the organization) and external

sources (i.e., candidates from various placement agencies) can be estimated.

3. Forecasting Demand and Supply of Human Resource:

The human resources required at different positions according to their job profile are to be

estimated. The available internal and external sources to fulfill those requirements are also

measured. There should be proper matching of job description and job specification of one

particular work, and the profile of the person should be suitable to it.

4.Estimating Manpower Gaps:

Comparison of human resource demand and human resource supply will provide with the

surplus or deficit of human resource. Deficit represents the number of people to be employed,

whereas surplus represents termination. Extensive use of proper training and development

programme can be done to upgrade the skills of employees.

5. Formulating the Human Resource Action Plan:

The human resource plan depends on whether there is deficit or surplus in the organization.

Accordingly, the plan may be finalized either for new recruitment, training, interdepartmental

transfer in case of deficit of termination, or voluntary retirement schemes and redeployment

in case of surplus.

6. Monitoring, Control and Feedback:

It mainly involves implementation of the human resource action plan. Human resources are

allocated according to the requirements, and inventories are updated over a period. The plan
is monitored strictly to identify the deficiencies and remove it. Comparison between the

human resource plan and its actual implementation is done to ensure the appropriate action

and the availability of the required number of employees for various jobs.

HR Demand Forecasting

Forecasting Techniques: HR Forecasting techniques vary from simple to sophisticated ones.

 Ratio-trend analysis.
 Regression analysis.
 Work study techniques.
 Delphi technique.

Ratio-trend Analysis
This is the quickest HR forecasting technique. The technique involves studying·past ratios,
say, between the number of workers and sales in an organisation and forecasting future ratios,
making some allowance or changes in the organisation or its methods.

Regression Analysis

This is similar to ratio-trend analysis in that forecast is based on the relationship between
sales volume and employee size. However, regression analysis is more statistically
sophisticated. A firm first draws a diagram depicting the relationship between sales and
workforce size.. By observing the regression line, one can find out number of employees
required at each volume of sales.

Work-study Techniques

Work-study techniques can be used when it is possible to apply work measurement to

calculate length of operations and the amount of labor required. The starting point in a
manufacturing company is the production budget, prepared in terms of volumes of saleable
products for the company as a whole, or volumes of output for individual departments.

The budgets of productive hours are then compiled using standard hours for direct labor. The
standard hours per unit of output are then multiplied by the planned volume of units to be
produced to give the total number of planned hours for the period. This is then divided by the
number of actual working hours for an individual operator to show the number of operators
required.

Delphi Techniques

Delphi Technique Named after the ancient Greek Oracle at the city of Delphi, the Delphi
technique is a method of forecasting personnel needs. It solicits estimates of personnel needs
from a group of experts, usually managers. The human resource planning (HRP) experts act
as intermediaries, summarize the various responses and report the findings back to the
experts.

The experts are surveyed again after they receive this feedback. Summaries and surveys are
repeated until the experts’ opinions begin to agree. The agreement reached is the forecast of
the personnel needs. The distinguishing feature of the Delphi technique is the absence of
interaction among experts.

TOPIC 7: Forecasting Techniques

HR Forecasting techniques vary from simple to sophisticated ones. Before describing each
technique, it may be stated that organisations generally follow more than one technique. The
techniques are:

1. Ratio-trend analysis

2. Regression analysis

3. Work study techniques

4.Delphi technique

Ratio-trend Analysis
This is the quickest HR forecasting technique. The technique involves
studying·past ratios, say, between the number of workers and sales in an
organisation and forecasting future ratios, making some allowance or
changes in the organisation or its methods.

Regression Analysis
This is similar to ratio-trend analysis in that forecast is based on the
relationship between sales volume and employee size. However,
regression analysis is more statistically sophisticated. A firm first draws a
diagram depicting the relationship between sales and workforce size. It
then calculates regression line – a line that cuts right through the center of
the points on the diagram. By observing the regression line, one can find
out number of employees required at each volume of sales.

Work-study Techniques
Work-study techniques can be used when it is possible to apply work
measurement to calculate length of operations and the amount of labor
required. The starting point in a manufacturing company is the production
budget, prepared in terms of volumes of saleable products for the
company as a whole, or volumes of output for individual departments.

The budgets of productive hours are then compiled using standard hours for direct
labor. The standard hours per unit of output are then multiplied by the planned
volume of units to be produced to give the total number of planned hours for the
period. This is then divided by the number of actual working hours for an individual
operator to show the number of operators required.
Delphi Technique
The Delphi technique is a method of forecasting personnel needs. It
solicits estimates of personnel needs from a group of experts, usually
managers. The human resource planning (HRP) experts act as
intermediaries, summarize the various responses and report the findings
back to the experts.

The experts are surveyed again after they receive this feedback. Summaries and
surveys are repeated until the experts’ opinions begin to agree. The agreement
reached is the forecast of the personnel needs. The distinguishing feature of the
Delphi technique is the absence of interaction among experts.