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Resource Management

People are at the core of every organization. Without
staff, organizations cannot exist. It is therefore vital that
organizations do not take their staff for granted. So organizations
should consider and improve how they recruit, develop and look
after their staff. The term that is often used for this is human
resource management:
Human(s) — people with their experience, skills, and knowledge
and personal qualities.
Human resource — the people, and the policies and practices
that affect them in the workplace.
Human resource management — the management of the
people and the staff policies and practice that enable an
organization to carry out its work. This affects staff from the
moment an individual contacts the organization in response to a
job advertisement, to the time they leave the organization.
Human resource management is about enabling staff to use their
qualities in order to fulfill their role and contribute to the
organization’s mission and purpose.
Good human resource management is essential if
organizations want to attract and retain good staff. If people see
that an organization values its staff, they are more likely to apply
for a job with the organization and more likely to stay once they
are recruited. Good human resource management means that an
organization reduces risk to its staff and reputation. It can do this
by considering issues such as employment law, child protection
and health and safety. Good human resource management can
also reduce costs for an organization. For example, good
recruitment policies and processes mean that organizations can
efficiently recruit people who will carry out their jobs effectively.
Good systems for performance management mean that
organizations can ensure that they are getting the best from their

Edwin Flippo defies HRM as “planning, organizing, directing,
controlling of procurement, development, compensation,
integration , maintenance and separation of human resources to
the end that individual, organizational and social objectives are

Features of HRM
1. HRM involves management functions like planning,
organizing, directing and controlling

2. It involves procurement, development, maintenance of

human resource

3. It helps to achieve individual, organizational and social


4. HRM is a mighty disciplinary subject. It includes the study of

management psychology communication, economics and

5. It involves team spirit and team work.

Evolution of HRM
The evolution of HRM can be traced back to Kautilya Artha
Shastra where he recommends that government must take active
interest in public and private enterprise. He says that government
must provide a proper procedure for regulating employee and
employee relation

In the medieval times there were examples of kings like

Allaudin Khilji who regulated the market and charged fixed prices
and provided fixed salaries to their people. This was done to fight
inflation and provide a decent standard of living

During the pre independence period of 1920 the trade union

emerged. Many authors who have given the history of HRM say
that HRM started because of trade union and the First World War.

The Royal commission in 1931 recommended the

appointment of a labour welfare officer to look into the grievances
of workers. The factory act of 1942 made it compulsory to appoint
a labour welfare officer if the factory had 500 or more than 500

The international institute of personnel management and

national institute of labour management were set up to look into
problems faced by workers to provide solutions to them. The
Second World War created awareness regarding workers rights
and 1940’s to 1960’s saw the introduction of new technology to
help workers.

The 1960’s extended the scope of human resource beyond

welfare. Now it was a combination of welfare, industrial relation,
administration together it was called personnel management.

With the second 5 year plan, heavy industries started and

professional management became important. In the 70’s the
focus was on efficiency of labour wile in the 80’s the focus was on
new technology, making it necessary for new rules and
regulations. In the 90’s the emphasis was on human values and
development of people and with liberalization and changing type
of working people became more and more important there by
leading to HRM which is an advancement of personnel

Core elements of HRM

• People: Organizations mean people. It is the people who staff

and manage organizations.
• Management: HRM involves application of management
functions and principles for acquisitioning, developing,
maintaining and remunerating employees in organizations.
• Integration & Consistency: Decisions regarding people
must be integrated and consistent.
• Influence: Decisions must influence the effectiveness of
organization resulting into betterment of services to customers
in the form of high quality products supplied at reasonable
• Applicability: HRM principles are applicable to business as
well as non-business organizations too, such as education,
health, recreation and the like.

Scope of HRM
The scope of HRM refers to all the activities that come under the
banner of HRM. These activities are as follows

1. Human resources planning :-

Human resource planning or HRP refers to a process by
which the company to identify the number of jobs vacant,
whether the company has excess staff or shortage of staff
and to deal with this excess or shortage.

2. Job analysis design :-

Another important area of HRM is job analysis. Job
analysis gives a detailed explanation about each and every
job in the company. Based on this job analysis the company
prepares advertisements.
3. Recruitment and selection :-
Based on information collected from job analysis the
company prepares advertisements and publishes them in
the news papers. This is recruitment. A number of
applications are received after the advertisement is
published, interviews are conducted and the right employee
is selected thus recruitment and selection are yet another
important area of HRM.

4. Orientation and induction :-

Once the employees have been selected an induction
or orientation program is conducted. This is another
important area of HRM. The employees are informed about
the background of the company, explain about the
organizational culture and values and work ethics and
introduce to the other employees.

5. Training and development :-

Every employee goes under training program which
helps him to put up a better performance on the job.
Training program is also conducted for existing staff that
have a lot of experience. This is called refresher training.
Training and development is one area where the company
spends a huge amount.

6. Performance appraisal :-
Once the employee has put in around 1 year of service,
performance appraisal is conducted that is the HR
department checks the performance of the employee. Based
on these appraisal future promotions, incentives, increments
in salary are decided.

7. Compensation planning and remuneration :-

There are various rules regarding compensation and
other benefits. It is the job of the HR department to look into
remuneration and compensation planning.

8. Motivation, welfare, health and safety :-

Motivation becomes important to sustain the number of
employees in the company. It is the job of the HR
department to look into the different methods of motivation.
Apart from this certain health and safety regulations have to
be followed for the benefits of the employees. This is also
handled by the HR department.

9. Industrial relations :-
Another important area of HRM is maintaining co-
ordinal relations with the union members. This will help the
organization to prevent strikes lockouts and ensure smooth
working in the company.

Role of HRM

1. Advisory Role: HRM advises management on the solutions

to any problems affecting people, personnel policies and

a. Personnel Policies: Organization Structure, Social

Responsibility, Employment Terms & Conditions,
Compensation, Career & Promotion, Training &
Development and Industrial Relations.
b. Personnel Procedures: Relating to manpower
planning procedures, recruitment and selection
procedures, and employment procedures, training
procedures, management development procedures,
performance appraisal procedures, compensation
procedures, industrial relations procedures and health
and safety procedures.

2. Functional Role: The personnel function interprets and

helps to communicate personnel policies. It provides
guidance to managers, which will ensure that agreed policies
are implemented
3. Service Role: Personnel function provides services that
need to be carried out by full time specialists. These services
constitute the main activities carried out by personnel
departments and involve the implementation of the policies
and procedures described above.

Significance 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

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.

Impact of HRM
Functions of HRM along with objectives

HRM Objectives Supporting HRM

Social Objectives (3) Legal Compliance


Union Management Relations

Organizational Objectives (7) Human Resource Planning

Employee Relations

Recruitment & Selection

Training & Development

Performance Appraisals

Placement & Orientation

Employee Assessment
Functional Objectives (3) Performance Appraisals

Placement & Orientation

Employee Assessment
Personal Objectives (5) Training & Development

Performance Appraisals

Placement & Orientation


Employee Assessment
Managerial Functions of HRM
1. Planning: Plan and research about wage trends, labor market
conditions, union demands and other personnel benefits.
Forecasting manpower needs etc.
2. Organizing: Organizing manpower and material resources by
creating authorities and responsibilities for the achievement of
organizational goals and objectives.
3. Staffing: Recruitment & Selection
4. Directing: Issuance of orders and instructions, providing
guidance and motivation of employees to follow the path laid-
5. Controlling: Regulating personnel activities and policies
according to plans. Observations and comparisons of deviations
Operational Functions of HRM
1. Procurement: Planning, Recruitment and Selection,
Induction and Placement
2. Development: Training, Development, Career planning and
3. Compensation: Wage and Salary determination and
4. Integration: Integration of human resources with
5. Maintenance: Sustaining and improving working conditions,
retentions, employee communication
6. Separations: Managing separations caused by
resignations, terminations, lay offs, death, medical sickness

Challenges of HRM
Personnel management which is known as human resource
management has adapted itself to the changing work
environment, however these changes are still taking place and
will continue in the future therefore the challenges before the HR
manager are

1. Retention of the employees :-

One of the most important challenge the HR manager
faces is retention of labour force. Many companies have a
very high rate of labour turnover therefore HR manager are
required to take some action to reduce the turnover

2. Multicultural work force :-

With the number of multi cultural companies are
increasing operations in different nations. The work force
consists of people from different cultures. Dealing with each
of the needs which are different the challenge before the HR
manager is integration of multicultural labour work force.

3. Women in the work force :-

The number of women who have joined the work force
has drastically increased over a few years. Women
employees face totally different problems. They also have
responsibility towards the family. The organization needs to
consider this aspect also. The challenge before the HR
manager lies in creating gender sensitivity and in providing a
good working environment to the women employees

4. Handicapped employees :-
This section of the population normally faces a lot of
problems on the job, very few organization have jobs and
facilities specially designed for handicapped workers.
Therefore the challenge before the HR manager lies in
creating atmosphere suitable for such employees and
encouraging them to work better.

5. Retrenchment for employees :-

In many places companies have reduced the work force
due to changing economic situations, labourers or workers
who are displaced face sever problems. It also leads to a
negative atmosphere and attitude among the employees.
There is fear and increasing resentment against the
management. The challenge before the HR manager lies in
implementing the retrenchment policy without hurting the
sentiments of the workers, without antagonizing the labour
union and by creating positive attitude in the existing

6. Change in demand of government :-

Most of the time government rules keep changing.
While a lot of freedom is given to companies some strict
rules and regulations have also been passed. The
government has also undertaken the disinvestment in
certain companies due to which there is fear among the
employees regarding their job. The challenge before the HR
manager lies in convincing employees that their interest will
not be sacrificed.

7. Initiating the process of change :-

Changing the method of working, changing the attitude
of people and changing the perception and values of
organization have become necessary today. Although the
company may want to change it is actually very difficult to
make the workers accept the change. The challenge before
the HR manager is to make people accept change.