Principles of HRM

Introduction
• Human are social beings and hardly ever live and work in isolation.
• Human always plan, develop and manage relations consciously and unconsciously.
These relations are the outcome of our actions and depend upon our ability to
manage our actions.
• From childhood each and every individual acquire knowledge and experience on
understanding others and how to behave in each and every situations in life.
• This learning and understanding is carry forward to manage relations throughout
life and even at workplace.
• The whole context of Human Resource Management revolves around this core
matter of managing relations at work place
Introduction
• Since 1980’s Human Resource Management (HRM) has gained acceptance in
both academic and corporate sector.

• HRM is composed of multidisciplinary organizational function that draws

theories and ideas from various fields such as management, psychology,
sociology and economics.
• There is no best way to manage people and no manager has formulated how
people can be managed effectively, because people are complex beings with
complex needs.

• Any Organization has three basic components, People, Purpose, and Structure.
Introduction
• Highly competitive companies compete on the basis of caliber of people in
the organization.
• People truly are the organization’s most important asset.
• Competent staff does not guarantee that a firm’s human resources will be a
source of competitive advantage.
• In order to remain competitive, to grow, and diversify an organization must
ensure that its employees are qualified, placed in appropriate positions,
properly trained, managed effectively, and committed to the firm’s success.
• Thus, HRM maximize employees’ contributions to achieve optimal
productivity and effectiveness, and simultaneously attain individual
objectives (such as having a challenging job and obtaining recognition), and
societal objectives (such as legal compliance and demonstrating social
responsibility).
What is HRM
• HRM is the study of activities performed by the people working in an
organization and tries to match an organization’s needs to the skills
and abilities of its employees.

• Generally speaking, HRM comprises of the activities, policies, and

practices involved in obtaining, developing, utilizing, evaluating,
maintaining, and retaining the appropriate number and skill mix of
employees to accomplish the organization’s objectives.
What is HRM
• According to the Invancevich and Glueck, “HRM is concerned with the
most effective use of people to achieve organizational and individual goals.
It is the way of managing people at work, so that they give their best to the
organization”.
• According to Dessler (2008) the policies and practices involved in carrying
out the “people” or human resource aspects of a management position,
including recruiting, screening, training, rewarding, and appraising
comprises of HRM.
• Thus, Human Resource Management (HRM) can be defined as the art of
procuring, developing and maintaining competent workforce to achieve
the goals of an organization in an effective and efficient manner.
 Nature of HRM
HRM is concerned with people’s dimension in organizations.
• HRM Involves the Application of Management Functions and Principles. The
functions and principles are applied to acquiring, developing, maintaining and
providing remuneration to employees in the organization.
• Decisions Relating to Employees must be Integrated. Decisions on different
aspects of employees must be consistent with other human resource (HR)
decisions.
• Decisions Made Influence the Effectiveness of an Organization. Effectiveness of
an organization will result in betterment of services to customers in the form of
high quality products supplied at reasonable costs.
• HRM Functions are not Confined to Business Establishments Only but applicable
to nonbusiness organizations such as education, health care, recreation and like.
Goals of HRM
• The overall purpose of human resource management is to ensure that
the organization is able to achieve success through people. As Ulrich
and Lake (1990) remark: ‘HRM systems can be the source of
organizational capabilities that allow firms to learn and capitalize on
new opportunities.’
• Specifically, HRM is concerned with achieving objectives in the areas
summarized below.
• Organizational effectiveness: HRM strategies aim to support
programmes for improving organizational effectiveness by developing
policies in such areas as knowledge management, talent management
and generally creating ‘a great place to work’.
 Goals of HRM
• Human capital management: The human capital of an organization
consists of the people who work there and on whom the success of the
business depends.
• Human capital is the prime asset of an organization and businesses need
to invest in that asset to ensure their survival and growth.
• HRM ensure that the organization obtains and retains the skilled,
committed and well-motivated workforce, it needs.

• This means taking steps to assess and satisfy future people needs and to
enhance and develop the inherent capacities of people – their
contributions, potential and employability – by providing learning and
continuous development opportunities.
Goals of HRM
• Knowledge management: HRM aims to support the development of firm-specific
knowledge and skills that are the result of organizational learning processes.
• Reward management: HRM aims to enhance motivation, job engagement and
commitment by introducing policies and processes to ensure that people are
valued and rewarded for what they do and achieve and for the levels of skill and
competence employees have reached.
• Employee relations: The aim is to create a climate in which productive and
harmonious relationships can be maintained through partnerships between
management and employees (trade unions).
• Meeting diverse needs: To develop and implement policies that balance and adapt
to the needs of its stakeholders and provide for the management of a diverse
workforce, taking into account individual and group differences in employment,
personal needs, work style and aspirations and the provision of equal opportunities
for all.
Goals of HRM
• Bridging the gap between rhetoric and reality: An overarching aim of
HRM is to bridge this gap by making every attempt to ensure that
aspirations are translated into sustained and effective action. To do
this, members of the HR function have to remember that it is relatively
easy to come up with new and innovatory policies and practice.
 Policy Goals of HRM
• HRM distilled by Caldwell (2004) into 12 policy goals:
• Managing people as assets that are fundamental to the competitive advantage of the
organization.
• Aligning HRM policies with business policies and corporate strategy.
• Developing a close fit of HR policies, procedures and systems with one another.
• Creating a flatter and more flexible organization capable of responding more quickly to
change.
• Encouraging team working and co-operation across internal organizational boundaries.
• Creating a strong customer-first philosophy throughout the organization.
• Empowering employees to manage their own self-development and learning.
Policy Goals of HRM
• Developing reward strategies designed to support a performance-driven
culture.
• Improving employee involvement through better internal communication.
• Building greater employee commitment to the organization.
• Increasing line management responsibility for HR policies.
• Developing the facilitating role of managers as enablers.
The Development of HRM in Historical and
International Perspective
• HR and Personnel Management - Now used as synonym
• But understanding of the concept of HRM is enhanced by analyzing
what the differences are and how traditional approaches to personnel
management have evolved to become the present day practices of
HRM.
• Literature has highlighted the revolutionary nature of HRM. Others
have denied that there is any significant difference in the concepts of
personnel management and HRM.
The Development of HRM in Historical and
International Perspective
• Similarities and differences between HRM and personnel management
Similarities Differences
1. Personnel management strategies, like HRM strategies, 1. HRM places more emphasis on strategic fit and
flow from the business strategy. integration
2. Personnel management, like HRM recognizes that line 2. HRM is based on a management and business orientated
managers are responsible for managing people. The philosophy.
personnel function provides the necessary advice and
support services to enable managers to carry out their
responsibilities.

3. The values of personnel management and at least the 3. HRM attaches more importance to the management of
‘soft’ version of HRM are identical with regard to ‘respect for culture and the achievement of commitment (mutuality).
the individual’, balancing organizational and individual
needs, and developing people to achieve their maximum
level of competence both for their own satisfaction and to
facilitate the achievement of organizational objectives.
The Development of HRM in Historical and
International Perspective
Similarities
4. Both personnel management and HRM recognize that
one of their most essential functions is that of matching
people to ever-changing organizational requirements –
placing and developing the right people in and for the
right jobs
5. The same range of selection, competence analysis,
performance management, training, management
development and reward management techniques are
used both in HRM and personnel management.
6. Personnel management, like the ‘soft’ version of HRM,
attaches importance to the processes of communication
and participation within an employee relations system.
Differences
4. HRM places greater emphasis on the role of line
managers as the implementers of HR policies
5. HRM is a holistic approach concerned with the total
interests of the business – the interests of the members of
the organization are recognized but subordinated to those
of the enterprise.
6. HR specialists are expected to be business partners
rather than personnel administrators.
7. HRM treats employees as assets not costs
 HRM in the New Millennium
• These factors are driven by the way organizations implement things and how
employees are treated.
• HR Can Help in Dispensing Organizational Excellence: By designing an entirely
new role and agenda that results in enriching the organization’s value to
customers, investors and employees, HR can help in delivering organizational
excellence. This can be carried out by helping line managers and senior
mangers to planning from the conference room to the market place and by
becoming an expert in the way work is organized and executed.
• Human Resource Should be a Strategy Partner: HR should also become a
partner in strategy executions by propelling and directing serious discussions
of how the company should be organized to carry out its strategy
HRM in the New Millennium
• HR Accountability Should be Fixed to Ensure Employee Commitment: HR
must be held accountable for ensuring that employees feel committed to the
organization and contribute fully. Line managers should be trained to achieve
objectives. The new HR should be the voice of employees, employee
involvement and by giving more control over their own work schedules.
• The New HR Must Become a Change Agent: The new HR must become a
change agent, which is building the organization’s capacity to embrace and
capitalize on change. Even though they are not primarily responsible for
executing change it is the duty of the HR manager to make sure that the
organization carries out the changes framed for implementation.
• Improving the Quality of HR: New mandate for HR is to improve the quality of
the HR staff itself. Senior executives must get beyond the stereotypes of HR
professionals as incompetent support staff and unleash HR’s full potential
 HRM in the New Millennium
• Change in Employment Practices: In the information age, it is perceived that
the machines can do the work more efficiently than most people however;
technology to work is dependent on people.
• Benchmarking Tool Must be Mastered by HR Professionals: HR professionals
must master benchmarking, which is a tool for continuous improvement-
directing the human side associated with the strategic path adopted by the
organization.
• Aligning Human Resources to Better Meet Strategic Objectives: Too often
organizations craft their strategy in a vacuum. Some organizations don’t even
include key people during strategy formulation resulting in lacunae between
the actual problems and the solutions implemented- as critical inputs are not
sought from those individuals who are supposed to implement the new
strategies.
HRM in the New Millennium
• Promote From Within and Invest in Employees: Promoting employees from
within sends a powerful message that the organization’s employees are
valued. New blood and fresh ideas often come from newcomers to the
organization. To avoid stagnation of the firm, new ideas and approaches are
critical. Yet to improve employee morale, promoting individuals from within
the organization is essential.
• Review the Recruitment and Selection Process: A key element of human
resource planning is ensuring that the supply of appropriate employees (with
the right skill mix) is on board when needed.
• Communicate Mission and Vision: If employees are expected to contribute to
the attainment of the organization’s strategic objectives, they must
understand what their role is. This can be achieved in part by clearly
communicating the mission and vision statements of the firm.
HRM in the New Millennium
• Use Teams to Achieve Synergy: Synergy can be concisely defined as “two plus
two equals five”. In other words, the whole is greater than the sum of the
parts. So much more can be achieved as people work together. Through the
effective use of teams, organizations can often achieve synergy. Team goals,
however, must be aligned with the organization’s strategic objectives.
Thank you