E BOOK ON HUMAN RESOURCE MANAGEMENT (HRM)

ORGIN OF HRM
Organizations have many operational functions. HRD is one of the functions that is engaging with
the tasks of an organization. In early 70 s there was no division called as Human Resource Department
or Division. By that time there was only a division called "Personnel" engaged with the labor related in
the organization. Personnel Management was introduced by the end of 19th century. At that time, this
was focused on the welfare of labors in the organizations. During the period of 1914-1939, many
organizations has showed a quick growth and quick changes in needs and wants of the operations.
Therefore the tasks done by women shifted to the men's, because of the complexity of tasks. After
Second World War, during the period 1945 - 1979, this has grown up and changed to "Personnel
Management".
CONCEPT AND MEANING OF HUMAN RESOURCE MANAGEMENT (HRM)
Human resource management may be defined as a process in which human resources are recruited
and mobilized in such a way that it helps in achieving the objective of the organization. HRM is concerned
with the people dimension in management under which the consideration is given towards recruitment
and selection, development, motivation and maintenance of human resources in an organization.
Therefore, human resource management is an art of managing and mobilizing people in the organization
Features Of Human Resource Management
 Human Resource Management Is A Management Of An Individual
 Human Resource Management Is A Continuous Process
 Human Resource Management Is A Dynamic Function
 Human Resource Management Is a Universal Function
 Human Resource Management Is A Strategic Approach.
 Human Resource Management Is Future-oriented
Components Or Elements Of Human Resources Management
Human resource management is a process which involves around four basic functions- acquisition,
development, motivation and maintenance of human resources. These basic elements are the key steps
for achieving organizational goals.
1. Acquisition
Acquisition function is concerned with recruitment and selection of manpower requirement for an
organization.
2. Development
It is concerned with imparting knowledge and skill to perform the task properly.
3. Motivation
Motivation includes job specification, performance evaluation, reward and punishment, work
performance, compensation management, discipline and so on.
4. Maintenance
 It is concerned with the process of retaining the employees in the organization. This requires
that the organization should provide additional facilities, safe working conditions, friendly work
environment, and satisfactory labour relations.
Importance And Objectives Of Human Resource Management
 Effective Utilization Of Resources
 Maintaining good relations between employer and management.
 Development Of Human Resources
 Respectful Environment For Human Beings
 Goal Harmony [ Individual goal & Organizational goals.
 Employee Satisfaction
 Employee Discipline And Moral
 Organizational Productivity
Functions And Roles Of Human Resource Department/Manager
1. Managerial Functions Of Human Resource Department
Managerial function is concerned with the activities performed by top management in the organization.
Planning
Organizing
Directing/leading
Controlling
2.Operative Functions Of Human Resource Department
Operative function is concerned with day-to-day management of organizational activities and human
resources.
Employment
Development
Compensation
Motivation
Maintenance
Personnel record
Industrial relation or employee relation
3. Advisory Functions of Human Resource Department
Human resource manager has specialized knowledge, education and training in managing human
relations.. So, he/she can provide advice on matters relating to human resources of the organization.
The advice may be to the top management or departmental heads.
Concept And Meaning Of Human Resource Planning
Human resource planning is one of the crucial aspects of human resource management because it helps
to ensure the needed manpower for organizational goal.
Balancing demand and supply of workers
Controlling cost of human labour
Formulating policies on transfer, succession, relocation of manpower * Ensuring right kind of people at
the right time and right place.
Characteristics Of Human Resource Planning
Future Oriented
Continuous Process.
Optimum Utilization Of Human Resources
Right Kinds And Numbers
Determination Of Demand And Supply.
Human Resource Planning Approaches
Quantitative Approach
It is also known as top down approach of HR planning under which top level make and efforts to prepare
the draft of HR planning. It is a managementdriven approach. The focus of this approach is to forecast
human resource surplus and shortages in an organization. In this approach major role is played by top
management.
Qualitative Approach
This approach is also known as bottom up approach of HR planning under which the subordinates make
an effort to prepare the draft of HR planning. Hence, it is also called sub-ordinate-driven approach. It is
concerned with matching organizational needs with employee needs. In this approach, major role is
played by lower level employees.
Mixed Approach
This is called mixed approach because it combines both top-down and bottom-up approaches of HR
planning. In fact, the effort is made by employees and the management equally. There is a equal
participation of each level of employees of the organization.
Concept And Meaning Of Job Design
Job design is a process through which job related data are revealed and the contents as well as methods
of performing different tasks are specified. It plays a key role in bringing organizational productivity
and employee motivation at work. Job design is a process by which required and job-related information
is gathered to determine different tasks to be included in the job.
Methods Of Job Design
1. Classical Approach
Under this approach, the job is designed in the basis of organizational requirements. Its purpose is to
simplify the tasks and break them down into small work units. The primary focus of this approach is
planning, standardizing and improving human effort at work in order to optimize organizational
productivity. 2. Socio-technical Approach
This is another important approach of job design in which social and technical aspects of the
organization are considered. Under it, jobs are designed according to individual needs and
organizational requirements. Furthermore, this approach considers both job-related technical systems
as well as accompanying social forces of the job. The technical and social aspects of job are analyzed in
order to create jobs which have supportive relationship.
3. Behavioural Approach
Behavioural approach is concerned with behavioural factors such as: autonomy, variety, task identity,
task significance, feedback mechanism etc. It means the above mentioned behavioural factors are
analyzed and considered while designing the jobs under this approach.
Concept And Meaning Of Job Analysis
Job analysis collects and analyses the information related to jobs and various aspects of jobs. Job
analysis is a process of gathering or collecting information relating to job description and job
satisfaction. It is the systematic process of gathering and organizing the information relating to various
aspects of job, which describes the job contents and minimum job requirements in terms of skills,
efforts, responsibilities and working conditions.
Objectives Of Job Analysis
Job Description
Job description is a job profile which describes the contents, environment and condition of jobs. It
provides information relating to activities and duties to be performed in a job. It differentiate one job
from another by introducing unique characteristics of each job.
Job Specification
It includes the information relating to the requirements of skills and abilities to perform a specific task.
The job specification statement identifies the knowledge, skills, abilities needed to perform that task
effectively.
Job Evaluation
Job analysis also provides required information which are necessary for evaluating the worthiness of
jobs. After the preparation of job description and job specification statements, it assists for the
evaluation of actual performance against the predetermined standard.
Steps Involved In Job Analysis Or Job Analysis Process
 Information Collection through different methods such as interview, observation,
questionnaire,etc.
 Review Background Information on the basis of collected data to assess the job
 Analysis Of Job By Collecting Data
 Develop Job Description
 Develop Job Specification
Concept And Meaning Of Job Evaluation
Job evaluation is concerned with a process of establishing value of different jobs. job evaluation
provides a basis for ranking or grading different jobs and developing a pay structure for them. Job
evaluation is the rating of job in an organization which attempts to compare the relative intrinsic value
of each job and forms a job hierarchy.
Importance And Features Of Job Evaluation
 Job evaluation helps to rate the job
 Job evaluation helps to determine pay structure
 Job evaluation helps in bringing harmonious relation between labour and management
 Job evaluation helps to minimize the cost of recruitment and selection
 Job evaluation helps to determine the cost and rate of production
 Job evaluation helps to determine the requirement of training and development
 Job evaluation helps to minimize cost
Concept And Meaning Of Job Specification
Job specification is a document or statement which spells out the minimum levels of qualification, skills,
physical and other abilities, experience, judgement and attributes required to perform the efficiently
and effectively. Job specification is prepared along with job description statement to explain the
minimum acceptable human qualities necessary to perform the task effectively. It specifies the physical,
psychological, personal, social and behavioural characteristics of each job-holder.
Contents Of Job Specification Statement
Required Level of Education
Health And Physical Fitness
Appearance - outlook of an employee
Mental And Other Abilities
Experience.
Concept And Meaning Of Recruitment
Recruitment process begins after preparing HR planning and conducting job analysis .Recruitment
is a process of identifying and preparing potential candidates to fill the application form. Recruitment
may be defined as a process of bringing right people for right position, at the right time to perform
organizational activities in order to achieve the objectives.
 Recruitment process identifies different sources of manpower supply,
 Recruitment assesses their validity,
 Recruitment process choose the most suitable source and
 Recruitment process invites applications from prospective candidates.
Factors Affecting Recruitment
 Size of the organization
 Recruiting Policy- how many candidates from outside the organization.
 Image or goodwill of the organization
  Image of job
 Labour market
 Unemployment rate of particular area
Recruitment Process Or Steps Of Recruitment
Identifying The HR Requirement
Assess the requirement of human resource in an organization to carry out the organizational
mission, goals and objectives.
Identifying Possible Sources Of HR Supply
The probable sources are identified for generating a pool of qualified candidates.
Communicating The Information
The potential candidates are informed about vacancy announcement.
Receiving Application
Recruitment process ends receiving the application forms dropped by different applicants who
are interested to apply for a job. It provides a pool of candidates for selection.
Internal Sources And Methods Of Recruitment
Internal sources refer to recruiting employees from within the organization.
Promotions
It refers to promoting or upgrading an employee who is already existed in the pay roll and
contributed for organizational performance.
Transfers
Under it, employees are internally recruited through transfer from one work place to another.
Recalling of laid-off employees.
Advantages Of Internal Recruitment
 Increases employee Moral
 Increases Labour Relation
 Enables Better Selection
 Economy
 Better Performance of employees.
 Employee Development
 Less Time
Disadvantages Of Internal Recruitment
 Limited Choice
 Implementation Of Traditional System - limits the scope of fresh talent in the organization.
 No Opportunity to fresh talents
 Favourism – giving opportunity to friends, & relatives.
 Limited Internal Sources for the supply of candidates.
  Costly – Payment of higher salary and benefits to promoted and transferred personals.
Methods Of External Recruitment
External recruitment is concerned with generating a pool of qualified candidates from outside of the
organisation.
1. Direct Recruitment
Direct recruitment refers to a process of recruiting qualified candidates from external sources by
placing a notice of vacancy in an organization's notice board.
2. Casual Callers
This method of recruitment is concerned with using previously applied candidates as a source of
recruitment.
3. Advertising
Advertising is one of the most common and popular methods of external recruitment under which the
job vacancy is announced through different print and electronic media
4. Employment Agencies
Employment agencies run by private, public or government sectors are regarded as an important
source of recruitment for unskilled, semi-skilled and skilled jobs.
5. Schools, Colleges And Universities
It is also known as campus recruitment. Under this method of external recruitment, educational
institutions such as schools, colleges and universities offer opportunities for recruiting fresh
candidates.
6. Labour Contractors
Labour contractors are an important source of recruitment under which workers are recruited
through contractors.
7. Recommendations
Under this method of external recruitment, applicants are introduced by friends and relatives.
Advantages Of External Recruitment
1. Wider Choice
2. Qualified Personnel
3. Fresh Talent
4.Competitive Spirit
5.Widens opportunity for all.
Disadvantages Of External Recruitment
 Too much Expensive
 Dissatisfaction for existing employees.
 It is too Long Process
  Adaptability Problem with the old employees.
 Competition with the new employees.
 Reduce Moral of old workers
Concept And Meaning Of Selection
Selection is a process of choosing the most qualified and suitable candidate to fill organizational
vacancies. The process of selection provides an employment opportunity to the persons who possess
the abilities and qualifications to perform a specific job.
Selection Process
 Application Form Evaluation
 Screening Application
 Selection Tests
 Selection Interview
 Reference Check
 Medical Check
 Final Employment Decision
Concept And Meaning Of Selection Test
A selection test is a systematic and standardized procedure of sampling human behaviour in
order to obtain qualified applicants for organizational activities. It is used to assess the ability, aptitude
and personality of prospective candidates. Selection test is conducted in order to select a right person
for the right job who will be capable of performing organizational activities if hired.
Types Of Selection Tests
1. Intelligence Test
Intelligence test is used to judge the mental ability of the candidates
2.Aptitude Test
It measures the probability of performing the job in terms of how often and how well.
3. Personality Test
It is the measurement of personal characteristics of the candidates. It is also known as
personality inventory.
4. Interest Test
The personal interests such as like and dislikes are identified by interest test.
5. Situational Test
It evaluates whether a particular candidate can perform the job in a given situation.
6. Honesty Test
Honesty test measures to what extent the information provided by the prospective candidates
is accurate.
Concept And Meaning Of Interview
 An interview is a face-to-face interaction between interviewer and interviewee. Interview is a
procedure designed to obtain information through the exchange of ideas and the answering of queries.
It attempts to secure maximum amount of information that cannot be obtained from other methods
Steps Involved For Conducting Interview Or Interview Process
Preparation
Under this an interview schedule or plan for the interview is prepared.
Conducting
The prepared plans and actions are implemented which is called conduction of the interview.
Evaluation
In this the information received from the interviewee or candidate is evaluated.
Types Of Interview
A. Preliminary Employment Interview – For Collecting preliminary data.
B. Final Selection Interview – at the time of final selection.
C. Follow-up Placement Interview - to provide the selected applicant with permanent duties and
responsibilities
D.Exit Interview-at the time of leaving the organization.
2. Types Of Structured Interview - follows a standard list of questions or plan F. Unstructured Interview
- follows a list of questions which are not prepared in advance.
The Stress Interview - to evaluate the patience of an employee.
The Depth Interview - for higher level or managerial jobs.
Board Interview - one candidate is interviewed by a group of experts
Group Interview - , a group of candidates are interviewed at a time
Concept, Meaning And Nature Of Human Resource Development (HRD)
Human Resource Development (HRD) is a process of developing skills, competencies, knowledge
and attitudes of people in an organization. The people become human resource only when they are
competent to perform organizational activities HRD imparts the required knowledge and skill in them
through effective arrangement of training and development programs.
Nature Of HRD
 HRD is a continuous process
 HRD is a well integrated system
 HRD provides better quality of life.
 HRD focuses on all round development of human resources
Importance Of Human Resource Development (HRD)
1.HRD Develops Competent HR
2.HRD Creates Opportunity For Career Development
3.Increase in Employ Commitment
4.Gives Job Satisfaction
5. Change Planning & Management in an organisation.
6. Opportunities For Training And Development
7. Performance Improvement.
Concept And Meaning Of Training
Training can be defined as an on-going process of teaching new employees the basis skills they need to
perform their task effectively and efficiently. Training is a short term skill development campaign
intended to impart the basic skills of work to middle and lower level employees. It focuses on teaching
operational skills to the technical persons.
Objectives Of Training
 To Increase Knowledge
 To Increase New Skill
 To Change The attitude Of Workers
 To Improve Organizational Performance
 To Make Workers For Efficient Use Of Resources
 To Reduce Accidents
 To Provide Better Opportunity For Workers
 To Increase Productivity And Profit
Training Process Or Steps Involved For Conducting Training
 Identifying Training Needs
 Establish Specific Objectives
 Select Appropriate Methods
 Implement Programs
 Evaluate Program
 Feedback
Techniques Or Methods Of Training
1. On-the-job Training (OJT)
OJT is the most commonly used method of employee training which is concerned with the philosophy,
"Learning by doing". OJT method is suitable for imparting operative or technical skills to operative
personnel.
Following methods may be used under on-the-job training:
Apprenticeship training
Jon instruction training
Program instruction
Coaching and counselling
Internship
2. Off-the-job Training
Off-the-job training is another method of employee training which is concerned with the arrangements
organized away from organizational work station. It takes place outside the work station and is mostly
classroom base.
Class room lecturers
Films - Simulation exercise - Program instruction.
Concept And Meaning Of Motivation
The term "Motivation" is derived from the Latin word "Movire" meaning to move. Motivation thus, is
to move to do or not to do something. Motivation is one of the essential aspects of HRM which is
concerned with the process of inducing, inspiring, organizing and stimulating employees to do the better
job in organization. Motivation activates people for better job performance and high productivity.
Motivation is a step-by-step process that prompts an individual into action. The three basic elements of
motivation are: needs, drives and goals.
Techniques Or Methods Of Motivation
 Participation in management decision making and planning activities.
 Behavioural Motivation - enhancing employee's behaviour
 Money And Financial Benefits
 Forming Work Group with the same interest.
 Additional Profit Sharing Plans for employees.
 Skill Based Pay of higher level jobs and salary.
 Flexible Return to employees based on performance.
 Putting employees as Representation of management.
Importance Of Motivation
 Effective Utilization Of Human Resources
 Effective Utilization Of Other Resources
 Willingness To do a particular Work
 Acceptance For Changes in organisational environment.
 Enhance good Public Image
 Co-operation Between Employees
 Requires no Supervision
 Brings Organizational Effectiveness
Concept And Meaning Of Job Satisfaction
Job satisfaction can be defined as an employee's attitude towards the job. It is not same as
motivation, rather it is concerned with the attitude and internal state of an individual regarding a
particular job. It is a pleasurable feeling that results from an employee's perception of achieving the
desired level of need or satisfaction
Effects Of Job Satisfaction
  Job satisfaction increases efficiency and effectiveness at work.
 Job satisfaction helps to reduce employee's absenteeism.
 Job satisfaction promotes harmonious employee's relation.
 Job satisfaction enhances organization's productivity and employees satisfaction.
 Job satisfaction helps to decrease employee's turnover.
 Job satisfaction helps to improve the image of the organization.
Factors Affecting Job Satisfaction
 Employee's Expectation About Job
 Reward And Punishment
 Working Condition
 Communication in the organisation.
 Personal Ability, Interest, Attitude .
 Work Groups or work teams [ Co-workers ]
 Style of Supervision.
Concept And Meaning Of Performance Appraisal
Performance appraisal is a process of identifying, measuring and managing employee's
performance in order to enhance organizational efficiency and effectiveness. Performance appraisal
systematically evaluates the personality and performance of each employee so that the productivity
can be measured in terms of efficiency and effectiveness. The primary purpose of performance
appraisal is to facilitate the orderly determination of an employee's worth in comparison to his/her
fellow employees and expected level of performance
Importance of performance appraisal in an organization:
 Performance appraisal helps supervisors to assess the work performance of their
subordinates.
 Performance appraisal helps to assess the training and development needs of employees.
 Performance appraisal provides grounds for employees to correct their mistakes.
 Performance appraisal provides reward for better performance.
 Performance appraisal helps to improve the communication system of the organization
 Performance appraisal evaluates whether human resource programs being implemented in the
organization have been effective.
 Performance appraisal helps to prepare pay structure for each employee working in the
organization.
 Performance appraisal helps to review the potentiality of employees so that their future
capability is anticipated..
Performance Appraisal Process
 Establishment Of Performance Standards
 Communication Of Standards To Employees
 Measure Actual Performance
 Comparison Of Actual Performance With Standards
  Discuss Appraisal With The Employee
 Taking of Corrective Action
Purposes And Uses Of Performance Appraisal
 Promotion
 Transfers
 Remuneration Administration
 Training And Development
 To determine Supervision is required or not.
Concept And Meaning Of Reward Management
Reward means a thing given to any one because of his contribution to organization.
Rewards and incentives contribute to strategy implementation by shaping
individual behavior in the organization. Reward is defined as the total return given by an employer to an
employee for rendering his/her services towards the organizational objectives. This is the overall
return from the work.
Types Of Rewards
 Intrinsic Rewards And Extrinsic Rewards
 Intrinsic rewards are the satisfactions that an individual obtains from the job itself.
 Extrinsic rewards are the benefits provided externally in term of money.
Financial Rewards And Non-financial Rewards
Financial rewards means those direct and indirect payments that enhance an employee's well being..
Direct payment consists of salary, wages, commissions, incentives, bonus, allowances etc. Indirect
payment include pensions, medical insurance, paid leaves, paid sick leaves, purchases, discounts etc.
Non-financial rewards are those employee benefits that do not enhance an employee's financial well-
being. Preferred lunch hours, preferred office furnishing, parking spaces, impressive job title, desired
work assignments, , own secretary etc. are some of its examples.
Performance Based Rewards And Membership Based Rewards Performance based rewards are such
benefits which are provided on the basis of an employee's job performance ability.
Membership based rewards are those rewards that are paid on the basis of being a member of an
organization. It means, the basis of allocating rewards is employee's organizational membership.
Criteria For Distributing Rewards
 The level of job performance ability of an individual.
 The effort contributed by an individual towards organizational objectives
 Seniority - those individuals who have served relatively for longer period
 Skills Held, - individuals having special skills
 Job Difficulty - the complexities of the job