Chapter 1

1. HUMAN RESOURCE MANAGEMENT

1.1 Meaning:

HRM: It is management functions that helps manager’s recruit, select, train and develop members of
the organization. HRM is concerned with the peoples dimension in organizations.

Organizations are not mere bricks, mortar, machinery or inventors. They are people. It is the people
who staff and mange organizations.

HRM functions are not confined to business establishment only. They are applicable to non-business
organizations too such as education, healthcare recreation and the like.

1.2 DEFINATION OF HRM:

According to‘L.M.CUMING’ HRM is concerned with obtaining the best possible staff for an
organization and having got them, looking after them so that they want to satisfy best to their jobs.

DALEYODER’ Defines HRM as a part of the phase of management dealing effectively with control
and use of man power has distinguished from other sources of power.

1.3 PROBLEMS FACED DUE TO IMPROPER FUNCTIONING OF HRM: (Drawbacks)

 Hire the wrong person for the job.
 Experience high turnover.
 Wastage of time with useless interviews.
 Have job misfit. (placing the wrong person)
 Leads to grievances of employees.
 Lack of effective training .(no proper training)
 Commit any unfair labour practices.
 Got into legal issues related to labour loss.

1.4 Significance/importance/need of HRM

HRM becomes significant for business organization due to the following reasons.

1. Objective :-
HRM helps a company to achieve its objective from time to time by creating a positive attitude
among workers. Reducing wastage and making maximum use of resources etc.
 2. Facilitates professional growth :-
Due to proper HR policies employees are trained well and this makes them ready for future
promotions. Their talent can be utilized not only in the company in which they are currently
working but also in other companies which the employees may join in the future.

3. Better relations between union and management :-

Healthy HRM practices can help the organization to maintain co-ordinal relationship with the
unions. Union members start realizing that the company is also interested in the workers and will
not go against them therefore chances of going on strike are greatly reduced.

4. Helps an individual to work in a team/group :-

Effective HR practices teach individuals team work and adjustment. The individuals are now very
comfortable while working in team thus team work improves.

5. Identifies person for the future :-

Since employees are constantly trained, they are ready to meet the job requirements. The
company is also able to identify potential employees who can be promoted in the future for the
top level jobs. Thus one of the advantages of HRM is preparing people for the future.

6. Allocating the jobs to the right person :-

If proper recruitment and selection methods are followed, the company will be able to select the
right people for the right job. When this happens the number of people leaving the job will reduce
as the will be satisfied with their job leading to decrease in labour turnover.

7. Improves the economy :-

Effective HR practices lead to higher profits and better performance by companies due to this the
company achieves a chance to enter into new business and start new ventured thus industrial
development increases and the economy improves.

1.5 Difference between PM and HRM **

SLNO Dimension PM HRM
Beliefs and
1
Assumptions
Careful delineation of Aim to be 'beyond contract' 'can do'
Contract
written contracts. outlook,
Rules Importance of devising impatience with 'rule'
Guide to Management Clear rules/mutuality
'Business Need'
action procedures.
Behaviour referent Norms/customs and
Values/Mission
practice
Managerial task vis-a-vis
Monitoring Nurturing
labour
Nature of relations Pluralist Unitarist
Conflict Institutionalized De-emphasized
 2 Strategic Aspects
Key relations Labour management Customer
Initiatives Piecemeal Integrated
Corporate plan Marginal to Central to
Speed of decision Slow Fast
3 Line Management
Management role Transactional Transformational leadership
Personnel VIS
Key managers General/business/line managers
Specialists
Communication Indirect Direct
High (Eg. Parity an Low(Eg.'parity'
Standardization
issue) not seen as relevant)
Prized management skills Negotiation Facilitation
4 Key Levers
Selection Separate, marginal test Integrated, key task
Job evaluation (fixed
Pay Performance-related
grades)
Conditions Separately negotiated Harmonization
Collective bargaining
Labour management Towards individual contracts
contracts
Thrust of relations with Regulated through Marginalized (with exception of some
stewards facilities and training bargaining for change models)
Job categories and grades Many Few
Communication Restricted flow Increased flow
Job design Division of labour Teamwork
Reach temporary
Conflict handling Manage climate and culture
truces
Training & development Controlled access Learning companies
Foci of attention for Wide ranging cultural structural and
Personnel procedures
intervention personnel strategies

1.6 OBJECTIVES OF HRM

The primary objective of HRM is to ensure the availability of competent and willingworkforce to an
organization. Apart from this, there are other objectives too.Specifically, HRM objectives are four
fold: societal, organizational, functional, and personal.

a. Societal Objectives
The societal objectives are socially and ethically responsible for the needs and challenges of society.
While doing so, they have to minimize the negative impact of such demands upon the organization.
The failure of organizations to use their resources for society’s benefit in ethical ways may lead to
restrictions. For example, the society may limit human resource decisions to laws that enforce
reservation in hiring and laws that address discrimination, safety or other such areas of societal
concern.

b. Organizational Objectives
The organizational objectives recognize the role of human resource management in bringing about
 organizational effectiveness. Human resource management is not an end in itself; it is only a means to
assist the organization with its primary objectives. Simply stated the human resource department
exists to serve the rest of the organization.
c. Functional Objectives
Functional objectives try to maintain the department’s contribution at a level appropriate to the
organization’s needs. Human resources are to be adjusted to suit the organization’s demands. The
department’s level of service must be tailored to fit the organization it serves.

d. Personal Objectives
Personal objectives 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 they are to be maintained, retained and motivated. Otherwise, employee performance and
satisfaction may decline giving rise to employee turnover.

Table 2: HRM Objectives and Functions

HRM Objectives Supporting Functions

1. Societal Objectives 1. Legal compliance
2. Benefits
3. Union-management relations
2. Organizational Objectives 1. Human resource planning
2. Employee relations
3. Selection
4. Training and development
5. Appraisal
6. Placement
7. Assessment
3. Functional Objectives 1. Appraisal
2. Placement
3. Assessment
4. Personal Objectives 1. Training and development
2. Appraisal
3. Placement
4. Compensation
5. Assessment

1.6.1 Human Resource Management: Objectives**

 To help the organization reach its goals.
 To ensure effective utilization and maximum development of human resources.
 To ensure respect for human beings. To identify and satisfy the needs of individuals.
  To ensure reconciliation of individual goals with those of the organization.
 To achieve and maintain high morale among employees.
 To provide the organization with well-trained and well-motivated employees.
 To increase to the fullest the employee's job satisfaction and self-actualization.
 To develop and maintain a quality of work life.
 To be ethically and socially responsive to the needs of society.
 To develop overall personality of each employee in its multidimensional aspect.
 To enhance employee's capabilities to perform the present job.
 To equip the employees with precision and clarity in transaction of business.
 To inculcate the sense of team spirit, team work and inter-team collaboration.

1.7 FUNCTIONS OF HRM: **

The functions of HRM are divided into two categories:

 MANAGERIAL FUNCTIONS
 OPERATIVE FUNCTIONS

A. MANAGERIAL FUNCTIONS:

a) Planning: It is the determination of strategies, programmes, policies, and procedures to accomplish

organizational objectives.

b) Organizing: It is a process of allocating the task among the members for achieving organizational
objectives.

c) Directing: It means telling people to do a particular work and ensures that they perform as per the
directions.

d) Staffing: Staffing emphasizes the recruitment and selection of the human resources for an
organization. Human resources planning and recruiting precede the actual selection of people for
positions in an organization. Recruiting is the personnel function that attracts qualified applicants to
fill job vacancies.

e) Co-ordinating: Organizational objectives will be achieved only if group activities in the enterprise
are co-ordinate effectively.

f) Controlling: It is the act of checking, regulating and verifying whether everything occurs as per the
standards set and plans adopted.

B. OPERATIVE FUNCTIONS:
 Employment: It is concerned with securing and employing the people possessing the required
and level of resources necessary for achieving organization objectives.
 Functions: Job analysis, Human resource planning, Recruitment, selection, placement, etc…

 HRD (Human Resource Development): It is a process of improving, molding, and changing

the skills, knowledge, and creative ability of an employee to satisfy the present or future job
recruitments.
Functions: Performance appraisal, Training appraisal, Management development, carrier
planning and development, etc…

 Compensation: process of paying the remuneration to the employees for the job they perform.
Job evaluation, wages & salary administration, incentives, bonus, fringe benefits, social security,
etc…

 Human relation: Policies and programmers like employment, interaction among employees and
creating a sense of relationship between employees and management.

 Industrial relation: The main role of HR is to bring relationship between employees,

employers, government, and trade unions.

 Recent development in HR: Due to the research that is made in the HR field many
developments has taken place such as Quality of work, Total quality in HR, HR accounting, HR
audit, etc…

1.8 ROLE OF HR MANAGER **

1. Advisory role: He advises different functional development on various aspects like man power
planning, recruitment, selection placement, induction, etc…He is a person who conveys the grievance
of a worker to the management.

2. Counseling role: He discusses various problems of the employees relating to work carrier and their
supervisor, colleagues, health, etc... And suggest overcoming those problems.

3. Role of change agent: He plays a change agent to deal with dynamic situations in an organization.
He should be familiar with change that are taking place in the environment and provide information
to support organization.

4. Conscience role: He advices management about moral and ethical obligation towards employees.

5. Mediator’s role: He acts as a middle man, mediator between employee and employer, employer and
management, employee and employee management and trade union to make sure that the cordial
exist between these departments.
6. Legal role: HR acts as legal advisor in an organization to handle various disciplinary measures and to
settle down various disputes that arise among man power in an organization and finally takes action
according to the law.

7. Welfare role: As a welfare officer he needs to provide welfare facilities like canteen, hospitals, clubs,
education, etc…

8. Controller role: HR sees to it that all policies and procedure are implemented by an organization at
the right time.

9. HR role: As an HR he needs to improve productivity by fulfilling the needs and aspiration of an

employee.

1.9 System and Techniques

1.9.1 The system

System

Input Output
Environment
Transform

Feed back

A system is a set of comprehensive inter related and unified objective and element that interacts with each
other. This element receives input from external environment and process these input and produce the
final output for the external environment thus system consist of external environmental factors like social
factors, technological factors, economic factors, political and natural factors, this input is transformed into
output finally the system gives the feedback.

Business organization is regarded as open and adoptive system which are influenced by external factors
and also influenced by shape of environment.

The factors identifying business organization as system

Business organization composed of an interrelated sub units like marketing, HR, production. Organization
as a system receives raw material process the raw material into finished product and sells the product into
the environment.
Information in an organization flows freely. System integrates all its internal and external stake holders
like employees, customers, and share holders.

HR Informatio
n

Production Business
organization Marketing

Finance

Business Organization
1.9.2 HRM system

HRM system receives input from the organization, vision, mission and strategies, employee skills.

HRM process the organization strategies and a goal into innovative ideas, performance etc and produces
the output in the form of profit, market share, diversification etc.

EXTERNAL ENVIRONMENT

ORGANIZATION

INPUT TRANSFORMATION OUTPUT

Vision Creative ideas Performance

Strategies Knowledge Market
Share Goals HR Policies Customers services
Skills HR practices Profits
Talent Motivation Expansion
Knowledge Leadership Diversification
Technology Communication Value addition
Policies Strategy implementation
1.9.3 HR OPEN AND DYNAMIC SYSTEM

It is dynamic as it interacts not only with the organizational policies but also with the external
environmental factors such as political, natural, environmental, economic, and cultural.
 Unlike other system HR interacts closely with other sub systems.

Development Employment

Human Resource
System Industrial
Compensation relation

Human
Resource

1.10 HR Manager Duties & Responsibilities **

A HR Manager/Director manages and organizes multiple functional areas within Human Resources
including providing technical direction to technical/professional and clerical staff within assigned areas.
She/he:
 Advises administrators and employee representatives on personnel-related company policies and
procedures.
 Interprets and communicates laws and regulations to ensure the agency is aware of its legal
responsibilities; in conjunction with the Legal Department.
 Develops and implements personnel rules and regulations, and interprets and administers human
resources-related provisions of collective bargaining agreements.
 Analyzes processes and procedures in assigned functional areas including conducting research
and statistical analyses, and makes recommendations for improvement.
 Develops, implements, and administers large and/or complex research studies or projects that
may include the development and validation of selection instrumentation for a variety of
classifications.
 Establishes collaborative relationships with various functional and departmental areas of the
District.
 Trains and evaluates subordinates and prepares preliminary budget reports in assigned functional
areas.
 Represents Human Resources Department at a variety of meetings and advises the Human
Resources Director in alternative courses of action in Human Resources issues.
 Presents written and oral reports on a wide variety of human resources related issues.
 May participate in labour negotiations and/or recommend preliminary proposals including cost
implementation projections.
 May be required to temporarily replace or act in the position of the senior District staff member to
whom this position normally reports, and may be required to perform some or all of the senior
staff member’s essential functions in such situations.