HUMAN RESOURCE MANAGEMENT

CHAPTER 1

HUMAN RESOURCE MANAGEMENT– AN INTRODUCTION

Learning Objectives
After going through this unit, you will be able to:
Define Human Resources – Key element
Discuss Need & Scope of HRM
Clarify Difference between HRM & Personnel Management

Structure
1.1 Introduction
1.2 Nature Of HRM
1.3 Definition
1.4 Need For HRM
1.5 Scope Of HRM
1.6 Distinction Between Personnel Management and HRM
1.7 Distinction between Human Resource Management and Human
Resource Development.
1.8 Summary
1.9 Keywords

1.1 Introduction
It is now globally recognized that managing human resources is the basic job
of Management. With the advent of globalization of business, HRM & HRD
have now emerged as the most spectacular aspect of Management in India
too.
Neither general management nor any functional area would be able to
successfully operate, if the management fails to manage the people who
manage it. Hence, the crux of managing a business is the capability to
manage people.
The most important asset or resource of every organization is its human
resource. Of late this fact has been recognized globally. Resultantly
companies started viewing their people as their most important resource and
hence humanization of work environment has become the need of the hour.
The very management philosophy has, therefore, undergone a tremendous

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revival to the extent that every manager from top-to-bottom, in an organization

is now concerned with the human resources management. Thus human
resources management has achieved a pivotal position in management.

1.2 Nature Of HRM

Human Resource Management (HRM) is concerned with the human beings in

an organization. It reflects a new philosophy, a new outlook, approach and
strategy which view an organization's manpower as its resources and assets
and not as liabilities or mere hands.
Resources are the means which can be drawn on. They are collective means
for production, support and defense as well as a source of strength and aid.
Human Resources are human wealth or means that can be drawn on. Human
capital or manpower resources of a company can be treated as its human
resources. It can otherwise be understood as the resourcefulness of the
human beings or people available for an organization.

1.3 Definition

Human Resource Management can be defined as that “part of management

process which develops and manages the human elements of enterprises
considering the resourcefulness of the organization's own people in terms of
total knowledge, skills, creative ability, talents, aptitudes and potentialities for
effective actuating.”
1. Human Resource Management is the process of managing the people of an
organization with a humane approach.
2. Human Resource Management is a series of integrated decisions that form
the employment relationship; their quality contributes to the ability of the
organizations and the employees to achieve their objective.
3. Human Resource management is concerned with the people dimensions in
management. Since every organization is made up of people, acquiring their
services, developing their skills, motivating them to higher levels of
performance and ensuring that they continue to maintain their commitment to
the organization are essential to achieve organizational objectives. This is true
regardless of the type of organization – government, business, education,
health, recreation, or social action.
4. Human resource Management is the planning, organizing, directing and
controlling of the procurement, development, compensation, integrating,
maintaining, and separation of human resources to the end that individual,
organizational and social objectives are accomplished.
Thus, HRM refers to a set of programs, functions and activities designed and
carried out in order to maximize both employees as well as organizational

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effectiveness.

1.4 Need For HRM

The human resource management approach which has been gaining the
attention of management professionals during the last decade has become the
need of the hour due to various reasons.
Widespread industrial unrest, growing trade union influence on workforce,
trained worker management relationship, increasing gulf between
management and their people, emergence of militancy in trade unionism, and
the growing conflict in the industrial relations scene have resulted in the
workers getting out of gear of the management in many organizations in India.
This has made the management to think in terms of carrying their work with
them. Convincing the workers of the management's concern for them may,
perhaps, go a long way in getting along with them and ensuring their better
performance. This has naturally resulted in the present human resources
movement.
Humanization of work environment in countries like Japan, quality of work life
movement in countries like United States and the quality circles approach in
India itself have initiated action to attain better organizational commitment
among the work force. The human resource approach is in consistency with
these movements.
Changes in business environment have substantially affected the approach to
manpower. Technological changes are prominent among them. Computer
revolution, introduction of microprocessor CNC machines in manufacturing
operations, mechanization and automation of office operations, quick
communication systems like satellite and facsimile, introduction of Robots,
electronic revolution, and such other developments have revolutionized the
vital area of business. Operational efficiency of manpower must cope with
such a revolutionary change in the technology which necessitated a new
approach to manpower.
Political philosophy has also undergone a substantial change not only in India,
but elsewhere in the world, which necessitated a renewal in approach to
human side of enterprise. Government of India under the leadership of Prime
Minister Rajiv Gandhi gave a new emphasis for human resource development
at the national level and a separate ministry was founded under a senior
cabinet minister. Human resource development has, thus, received
unprecedented emphasis in India, which opened up a door for a fresh
approach to human resources development in the industrial sector too.
Globalization of business is another important aspect of change which takes
place in the business environment of today, necessitating a human resource
approach to manpower. It is not only that Indian firm operates and competes

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abroad, but they have to compete with multinationals and foreign firms in India
itself. Business philosophy, skills, expertise, efficiency and particularly global
cooperate citizenship philosophy fostered by internationally successful firms
necessitate Indian firms to deliberately update their perspective to suit the
internationally emerging trends. In conformity with the human resource
approach emerging globally, Indian managers must also foster a human
resources philosophy to guide their management practices.
A widespread feeling now influences at least some management practitioners
that the technological development has gone to the extent of machines taking
over the human jobs. For example: highly skilled milling, grinding and lathe
machines are replaced by CNC machine tools which can take over, not only
manual functions but even the intelligent human functions, and robots can take
up human functions in place of real human beings. Increasing influence of
illusions tend to reduce the importance of human role. In fact, no machine can
replace man. The more the technological development, the greater would be
the dependence on man. One single error a computer makes can lead to
havoc, where skills and intelligence of man are indispensable. Greater the
technological development, greater skill and technical capability are required
of people who operate. Obviously greater human approach to people would be
required.
Large scale production, increasing effects of recession, technical and
technological developments and so on have opened up new training needs for
the people at work. Human resources development programs have, therefore,
become the need of the hour. Government policy of importing technology has
also necessitated introducing new facilities and avenues for training and
development. Fresh initiatives and emphasis on research and development in
the realm of industry also lead to a new policy of human resource development
to cope with the increasing demand for technically capable people. Resultantly
a need arose for a new approach to human resources.

1.5 Scope Of HRM

Human Resources approach of management to its own people would go a
long way in effectively actuating. It facilitates in identifying the right kind of
people, socializing them in the most appropriate way, training and developing
them in the right direction, assigning the tasks which are best suited for every
individual so as to bring out their best, motivating them to make their best
contribution and creating conditions for the people to enjoy their work. It
establishes and maintains an organizational philosophy, culture and climate
conducive for the organization's own people to have job satisfaction and a
sense of fulfillment. As human resources development has a pivotal role in
HRM, the organization gets the people it requires, while every individual gets
the task which he can perform efficiently.
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HRM has great scope to improve organizational climate and efficiency which
include:
 A cordial worker management relationship would be possible.
 Management would be able to understand their people better.
 A situation would be created in the organization for the employees to
enjoy their work and gain substantial job satisfaction.
 Management would be able to get better cooperation from its workers.
 Employees would be able to gain a great sense of accomplishment
through their work.
 Organizational efficiency and workers productivity would increase.
 It would help the employees to gain a sense of belonging to their work
place.
 Better organizational climate and culture may emerge as a result of
good human resource management.
 As the people would be able to foster a sense of belonging, their sense
of fulfillment and accomplishment would remain high.
 As the people are respected as individuals, and their contribution are
valued and rewarded, they would gain more self confidence and self
respect and they will learn to respect other, particularly their superiors
and managers.
 The employees may be able to gain a self-confidence that their
competence and performance can be improved and they would have
prospects for better career growth and to use their competence and
talents.
 Management gets enlightened workforce.
 A good communication channel would become possible as a result of
mutual understanding and better coordination.
 Influence level of management and managers would increase.
 Adverse effect of trade unions, particularly self-seeking militant trade
union leaders, can be reduced.
 Gulf between management and workers can be reduced.
 A good Human Resource Management policy would improve the
possibility for industrial peace, which is badly needed in India now
days.
 It would become easier for the management to identify and train
appropriate talents for every job.

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1.6 Distinction Between Personnel Management And HRM

Some thinkers and writers feel that personnel management lost its relevance
with the emergence of human resource management. This is quite a mistake
notion. On the contrary, personnel practices have attained a more crucial role
as a result of the emergence of the human resources philosophy. In fact,
personnel management has attained a multi-dimensional role; and the
managers now make a multi-disciplinary approach to managing their people.
Management is now concerned with working with people, for which a greater
emphasis of the human element of enterprise is indispensable. Hence, a
humanized personnel management is the crux of the human resource
management.
Human elements of enterprise are the most important resource, particularly
because other resources cannot be effectively managed without appropriate
human resources. Human resources consist of people, and personnel
management is responsible for managing people. Hence, there cannot be any
human resource management without personnel management in it. Human
resource management, as a philosophy, has emerged recently while
personnel management, as a function, has been existing for the last many
decades. One may, therefore, regard that HRM is emerged out of personnel
function and personnel management cannot be isolated from Human
Resource Management, while there cannot be any management without
human resource management.
In respect of the relation between HRM and personnel management the
following points may be relevant:
I. Human resource management is primarily a philosophy, an attitude, an
approach, a policy and a practice; while personnel management is a
functional area and a function.
II. Human resource management must remain at the centre of
management itself, while personnel management is one of the
functional areas in HRM.
III. HRM represents the humanization of management, while personnel
management is concerned with managing of manpower.
IV. HRM is the concern of all managers from top to bottom in an
organization, while personnel management is mainly concern of the
personnel manager.
V. HRM makes efforts primarily to satisfy the human needs of the people
at work which motivates the people to make their best contribution for
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the achievement of organization goals and objectives, while personnel

management maintain the rules, principles and legal provisions in
managing the people.
VI. HRM intervention is more concerned with working with people, team-
building and team-work; while personnel management is interested in
the orderly way of administration.
VII. HRM concentrates more on motivation, morale-boosting and job
satisfaction, while personnel management is primarily concerned with
selection, recruitment and administration of manpower.
VIII. Human resource development is at the centre of HRM, while
managing people for maximizing output is the basic job of personnel
management.
IX. Human beings are considered as resources in HRM, while they are
workmen to be managed in personnel management, and sometimes
they are treated as liability.
X. Training and development make an integral part of HRM, while
organisation development presupposes manpower development in
personnel management.
XI. Human values and individual needs are given priority in HRM, while
personnel management gives emphasis on effective administration.
XII. All managers must be trained to adopt a human resource philosophy
and to implement it in HRM intervention, while personnel function is the
job of the personnel department in personnel management.
XIII. Counseling, career planning, developing, correcting and redeeming
make important aspects of HRM, while maintain records, enforcing
rules, punishing the guilty, and keeping the administration intact are
concern of personnel management.
XIV.Significant part of every manager's time is set aside in HRM for those
who directly report to him, whereas it is only the personnel manager's
job to take care of the people in the organization.
XV. Human resource management is an integrated approach
accommodating all the aspects of developing, managing, satisfying
and motivating human resources, whereas personnel management is
primarily concerned with administration and management of people of
an organization.
XVI. Human resources managers act as catalysts, change agents,
counselors, leaders and the spirits behind every activity, whereas
personnel managers are concerned with administration of personnel
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matters only.
XVII. Human resources managers are line executives who are, and must
be, involved in policy and strategy formulation of the general
management and all functional areas, particularly operations
management, while personnel managers are concerned to be staff
executives.
XVIII. Human resources management philosophy must be primarily
fostered by the top management which then remains the guiding
principle of all levels of management, whereas personnel
management is the exclusive job of personnel manager.
XIX. Communication system (vertical, lateral, feedback and feed forth) is
one of the most indispensable tasks of HRM, while personnel
management is more concerned with preserving information and
maintaining the secrecy of information.
XX. HRM is concerned with determining the needs and aspirations of the
people and formulating policy to fulfill them while matching the
individual needs with the organizational objectives, whereas personnel
management is concerned with procuring and managing people in
accordance with the organizational needs.
XXI. While personnel management is exclusive in itself, it is part and parcel
of HRM which integrates personnel practices, industrial relations and
employee welfare with it.
Thus, HRM is not personnel management, while personnel management is in
it. All the aspects of personnel function are integrated into human resources
management along with HRD, counseling, redeeming, career planning,
evaluation and compensating.

1.7 Distinction Between Human Resource Development And HRM

As a result of the fundamental changes in attitudes, approaches, outlook,
philosophy, perspective and practices emerged in the personnel area in the
form of human resources management (HRM) strategy, it has become
necessary for every organization to develop skills, talents, potentialities,
capabilities and attitudes of company's own people to meet the emerging
challenges. Hence, HRD (human resources development) policies have been
adopted by many companies. It is now-a-days spreading to many others. HRD
strategies are supposed to bring forth necessary changes in skills, capabilities
and attitudes of people who are required to cope with the emerging changes.
Thus, HRD has become an integral part of human resource management.

HRD efforts are now described in terms of the training and educating programs
and the number of people who are exposed to these programs. Unless a
systematic and constant monitoring of these programs, in terms of actual
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results achieved, can be determined, it may not be possible to understand

whether the real purpose is served by these programs. It needs constant
efforts and continuous monitoring for a considerably long period. These efforts
must go on simultaneously with the human resources management.
HRM has its various tools like appraisal schemes, feed-back system, Quality
Circle and Organization Development interventions, T-group training, MBO
objective setting, consensus in decision-making, and so on. All such tools are
useful in human resources development also. At present, however, training
programs seem to dominate the HRD scene. An effective management
information system backed by information collecting, storing and retrieval
system and research and analysis must be the basis for every HRD program.
This would enable the organization to motivate its own people to strive to be
developed in accordance with the organizations needs (existing and
expected). Thus, HRM is the integrated approach to actuating and managing
the company's own people, while HRD deals with the process of developing
people in accordance with their aspirations and to suit the organizational
needs. Both are not synonyms; the latter is at the centre of the former, and both
are independent and integrated into one system.

In short HRM is essentially concerned with basic employee management. “It

encompasses the traditional areas that most people think of as HR, including
compensation and benefits, recruiting and staffing employee and labor
relations and occupational health and safety”.

Dave Ulrich, Professor of Business at the Ross School of Business, University

of Michigan, defines four fields for HRM:
1. Strategic business partner
2. Change agent
3. Employee champion
4. Administration
Human resource Development (HRD) on the other hand deals with the
development of the resources in a company – organizational development,
performance management, training and learning and coaching.

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Comparison between HRM and HRD

BASIS FOR COMPARISON HRM
Meaning Human Resource Management is the strategic
approach to the effective management of people
in a company or organization such that they help
their business gain a competitive advantage. It is
HRD
Human Resource Development
means a continuous development
function that intends to improve the
performance of people working in the
organization.

designed to maximize employee performance in

service of an employer's strategic objectives.
What is it? Management function. Subset of Human Resource
Management.
Function Reactive Proactive

Objective To improve the performance of the employees. To develop the skills, knowledge and
competency of employees.

Process Routine Ongoing

Dependency Independent It is a subsystem.

Concerned with People only Development of the entire

organization.

1.8 Summary

• Human Resource Management (HRM) is concerned with the human beings

in an organization.

• The physical resources will not give results unless the human resources are
applied to them.

• Management of human resources is being regarded as a specialized

profession such as that of medicine and law.

• HRM has great scope to improve organizational climate and efficiency.

• A good Human Resource Management policy would improve the possibility

for industrial peace, which is badly needed in India now days.

• A human relations program represents an attempt at improving employee

morale and motivation.

• HRM is a broad concept which covers many personnel aspects and includes
social, professional and individual enterprise aspects, whereas Personnel
Management focuses only on personnel aspects such as leadership, justice
determination, task specialization, staffing, performance appraisal, etc.

• HRM is more growth-oriented whereas Personnel Management is slightly

narrow.

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1.9 Keywords

· Globalization:- The development of an increasingly integrated

economy marked especially by free trade, free flow of capital.

· Human resource (HR) department:- is a framework for the

expansion of human capital within an organization through the
development of both the organization and the individual to
achieve performance improvement
· Strategy:-Strategy is the pattern of decision in a company that
determines and reveals its objectives , purpose or goals ,
produces the principal policies and plans for achieving those
goals.

· Management by Objectives(MBO):- is a process in which

organizational members at all levels participate in management,
goals are established and objectives are specified.

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