Unit 1:

Meaning, Nature and Scope of HRM

INTRODUCTION

Human Resource Management (HRM) is the process of employing people, training

them, compensating them, developing policies relating to them, and developing
strategies to retain them. As a field, HRM has undergone many changes over the last
twenty years, giving it an even more important role in today’s organizations.

Human Resources Management is concerned with allocating and managing the most
valuable resources – people in the organisation. Human resource is the wealth of a
nation and an organisation. Human Resources Management practice involves careful
strategizing, good leadership, and other solid business practices. Leon. C Megginson
defined human resource in his Personnel and Human Resource Administration as
“From the national point of view, human resources are knowledge, skills, creative
abilities, talents, and attitudes obtained in the population; whereas from the
viewpoint of the individual enterprise they represent the total of the inherent
abilities, acquired knowledge and skills as exemplified in the talents and aptitudes of
its employers”

 MEANING AND DEFINITION

According to Edwin Flippo “Human Resource Management is 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 achieved.”

Michael J. Jucius defined Human Resource Management as “the field of management

which has to do with planning, organising, directing and controlling the functions of
procuring, developing, maintaining and utilising a labour force”.

The National Institute of Personnel Management (NIPM) has defined human resource
management as “that part of management which is concerned with people at work
and with their relationship within an enterprise. Its aim is to bring together and
develop into an effective organisation of the men and women who make up an
enterprise and having regard for the well-being of the individuals and of working
groups, to enable them to make their best contribution to its success”.

 FEATURES / NATURE / CHARACTERISTICS

Human Resource Management is a process of bringing people and organizations

together so that the goals of each are met. The various features of HRM include:
1. Pervasive in nature as it is present in all enterprises.
2. Focus is on results rather than on rules.

3. Tries to help employees develop their potential fully.

4. Encourages employees to give their best to the organization.
5. About people at work, both as individuals and groups.

6. Put people on assigned jobs in order to produce good results.

7. Helps an organization meet its goals in the future by providing for competent
and well-motivated employees.
8. Tries to build and maintain cordial relations between people working at - various
levels in the organization.
9. A multidisciplinary activity, utilizing knowledge and inputs drawn from psychology,
economics etc

 SCOPE

1. Personnel aspect- manpower planning, recruitment, selection, placement, transfer,

promotion, training and development, layoff and retrenchment, remuneration,
incentives, productivity etc.

2. Welfare aspect- working conditions and amenities such as canteens, creches, rest
and lunch rooms, housing, transport, medical assistance, education, health and
safety, recreation facilities, etc.

3. Industrial relations aspect- union-management relations, joint consultation,

collective bargaining, grievance and disciplinary procedures, settlement of disputes,
etc. -

Objectives and Functions of Human Resource Management

OBJECTIVES

1. Social Objectives

            a) Maximising Employment opportunities

            b) Mental Satisfaction

            c) Maximum productivity with minimum wastage of efforts

            d) Healthy and mutually satisfying human relations

2. Personnel Objectives

            a) good remuneration system

            b) Job-security

            c) Proper training and development

            d) Job Satisfaction

            e) Opportunities for advancement

            f) Good working environment

3. Enterprise Objectives

            a) Recruitment, integration and maintenance of competent and loyal workers

            b) Forecasting and balancing the demand and supply of personnel

4. Union Objectives

            a) Recognition of unions

            b) Formulation of personnel policies in consultation with unions

            c) Inculcating spirit of self-discipline and co-operation

FUNCTIONS

Managerial Functions

Managerial functions of human resource management comprises of; planning,

organizing, directing and controlling. It influences the operative functions also.

Planning:  Planning is deciding in advance the future course of action. Planning is

necessary to determine the goals of the organisation and lay-down policies and
procedures to reach the goals. For a human resource manager, planning involves
planning of human resource requirements, recruitment, selection, and training. It also
includes forecasting of manpower needs, planning for career advancements, job
descriptions and determination of the sources of recruitment etc.
Organising: After planning, HR manager must design and develop organisation
structure to carry out the various operations. For this —

(i)             Grouping of personnel activity logically into functions or positions;

(ii)           Assignment of different functions to different individuals;

(iii)         Delegation of authority according to the tasks assigned and responsibilities

involved;

(iv)          Coordination of activities of different individuals.

Proper organisation helps in establishing relationships among the employees so that

they can collectively contribute to the attainment of company goals.

Directing: After planning and organising, proper direction should be provided for
proper execution of the plan. Direction function of the HR manager involves
encouraging people to work willingly and effectively for the goals of the enterprise.
Directing is an important managerial function in building sound industrial and
human relations besides securing employee contributions.

Controlling: Controlling is concerned with the regulation of activities in accordance

with the plans, which in turn have been formulated on the basis of the objectives of
the organisation. The performance is to be verified in order to know that the
personnel functions are performed in conformity with the plans and directions.
Controlling also involves checking, verifying, and comparing of the actuals with the
plans, identification of deviations if any, and correcting of identified deviations. It also
involves performance appraisal, critical examination of personnel records and
statistics and personnel audit.

Operative Functions

The operative functions of human resources management are related to specific

activities of human resource management, viz., employment, development,
compensation, maintaining sound industrial and human relations. Additionally, these
functions are to be performed in concurrence with management functions.

●      Employment: Employment is concerned with attracting and employing the

people possessing the required skill and level of human resources necessary to
achieve the organisational objectives. It covers functions such as job analysis, human
resources planning, recruitment, selection, placement, induction and internal
mobility.

i)      Job Analysis: It is the process of study and collection of information relating to

the operations and responsibilities of a specific job. It includes job description and
job specification. Job description is the duties and responsibilities associated with a
particular job and job specification is the minimum accepted human qualities
required to perform a job effectively.

ii)    Human Resources Planning: It is a process for determination and assuring that

the organisation will have an adequate number of qualified persons, available at
proper times, performing jobs which would meet the needs of the organisation and
which would provide satisfaction for the individuals involved. It includes; estimation
of present and future requirements and supply of human resources based on
objectives and long range plans of the organisation, calculation of net human
resources requirements based on present inventory of human resources and
developing potentials of existing employees in the organisation so as to meet the
future job requirements.

iii)  Recruitment: It is the process of searching for prospective employees and

stimulating them to apply for jobs in an organisation. It deals with; identification of
existing sources of applicants, creation/identification of new sources of applicants,
stimulating the candidates to apply for jobs in the organisation and maintaining a
balance between internal and external sources of recruiting manpower.

iv)   Selection: It is the process of ascertaining the qualifications, experiences, skills,

knowledge etc., of an applicant with a view to appraising his/her suitability to a job. It
includes; framing and developing application blanks, creating and developing valid
and reliable testing techniques, formulating techniques for conducting interviews,
reference checks, setting up a medical examination policy and procedure, line
manager’s decision and sending letters of appointment and rejection.

v)    Placement: It is the process of assigning the selected candidate with the most
suitable job in terms of job requirements. It is matching of employee specifications
with job requirements.

vi)   Induction and Orientation: After the new employee enters the organisation or

workplace, he/she should be provided with basic background information about the
employer, working conditions and the information necessary to perform his/her job
satisfactorily. The new employee’s initial orientation helps him perform better by
providing him information of the company rules and practices.

●      Human Resource Development: It is the process of improving, moulding, and

changing skills, knowledge, creative abilities, attitudes, and values etc., based on
present and future job and organisational requirements. These includes;

i)      Performance Appraisal: It is the systematic evaluation of individuals with

respect to their performance on the job and their potential for development.
Performance appraisal is a systematic and objective way of evaluating the relative
worth or ability of an employee in performing his job.

ii)    Training: Training is a planned activity for increasing the knowledge and skills of

people for a definite purpose. It involves systematic procedures for transferring
technical knowhow to the employees so as to increase their knowledge and skills for
doing specific jobs with proficiency. It includes identification of training needs of the
individuals and the company, developing suitable training programmes, helping and
advising line management in the conduct of training programmes, imparting of
requisite job skills and knowledge to employees and evaluating the effectiveness of
training programmes.

iii)  Management Development: It is the process of designing and conducting

suitable executive development programmes so as to develop the managerial and
human relation skills of employees.

iv)   Career Planning and Development: It is planning of one's career and

implementation of career plans by means of education, training, job search and
acquisition of work experience. Career development is viewed today as a kind of
partnership with employees. It is also a key component of a company’s attraction and
retention strategy. Many candidates will not consider employment with an
organisation unless it offers career development as a basic component of its culture.

v)    Internal Mobility: It includes vertical and horizontal movement of an employee

within an organisation. It consists of transfer, promotion and demotion.

vi)   Transfer: It is the process of placing employees in the same level jobs where
they can be utilised more effectively in consistence with their potentialities and needs
of the employees and the organisation.

vii) Promotion: It deals with upward reassignment given to an employee in the

organisation to occupy higher position which commands better status and/or pay
keeping in view the human resources of the employees and the job requirements

viii) Demotion: It deals with downward reassignment to an employee in the

organisation.

ix)   Organisation Development: It is a planned process designed to improve

organisational effectiveness and health through modifications in individual and
group behavior, culture and systems of the organisation, using knowledge and
technology of applied behavioural science.

●      Compensation: This function is concerned with the determination of adequate

and equitable remuneration of the employees in the organisation for their
contribution to the organisational goals. It is the process of providing adequate,
equitable and fair remuneration to the employees. It includes job evaluation, wage
and salary administration, incentives, bonus, fringe benefits, social security measures
etc.

i)      Job Evaluation: It is the process of determining relative worth of jobs. It

involves selecting suitable job evaluation techniques, classifying jobs into various
categories and determining relative value of jobs in various categories.

ii)    Wage and Salary Administration: This is the process of developing and

operating a suitable wage and salary programme. It covers; conducting wage and
salary survey, determining wage and salary rates based on various factors,
administering wage and salary programmes and evaluating its effectiveness.

iii)  Incentives: It is the process of formulating, administering and reviewing the

schemes of financial incentives in addition to regular payment of wages and salary

iv)   Bonus: It includes payment of statutory bonus according to the Payment of

Bonus Act, 1965 and its latest amendments.

v)    Fringe Benefits: These are the various benefits at the fringe of the wage.
Management provides these benefits to motivate the employees and to meet their
life’s contingencies. These benefits include; disablement benefit, housing facilities,
educational facilities to employees and children, canteen facilities, recreational
facilities, conveyance facilities, credit facilities, legal clinics, medical maternity and
welfare facilities etc.

vi)   Social Security Measures: Managements provide social security to their

employees in addition to the fringe benefits. These measures include; workmen’s
compensation to those workers (or their dependents) who involve in accidents,
maternity benefits to women employees, sickness benefits and medical benefits,
disablement benefits/allowance, dependent benefits, retirement benefits like
provident fund, pension, gratuity etc.

●      Human Relations: It is the process of interaction among human beings. Human

relation is integrating people into work situations in a way that motivates them to
work together productively, co-operatively and with economic, psychological and
social satisfaction.

●      Industrial Relations: The term industrial relations refers to the study of

relations among employees, employers, government and trade unions. Industrial
relations include; Indian labour market, trade unionism, collective bargaining,
industrial conflicts, workers’ participation in management and quality circles.
Qualities of a HR Manager

Qualities of Human Resource Manager

 The functions of HR department differ from organisation to organisation. So the

qualities required for an HR manager vary from organisation to organisation
depending on its nature, size, location etc. However, qualities which will be
applicable in generic are consolidated as follows:

●      Knowledge and Expertise in HR: In addition to educational qualification, an

HR manager must display a willingness to remain abreast of the latest trends, best
practices, and ethics in their profession, which requires dedication and discipline. It is
with this expertise and knowledge that they will contend with the daily challenges
that arise in any organization.

●      Intelligence: This includes skills to communicate, articulate, moderate,

understand etc., command over language, mental ability and tact in dealing with
people intelligently, including the ability to draft agreements, policies etc.

●      Educational Skills: HR manager should possess learning and teaching skills as

he has to learn and teach employees about organisational growth, need for and
mode of development of individuals etc.

●      Discriminating Skills: He should have the ability to discriminate between right

and wrong, between just and unjust, merit and demerit.

●      Executing Skills:  He/she is expected to execute the management’s decisions

regarding personnel issues with speed, accuracy and objectivity. He/she should also
be able to streamline the office, set standards of performance, co-ordinate, control
etc. Additionally, they should have deep faith in human values, empathy with human
problems, foreseeing future needs of employees, organisation, government, trade
unions, society etc.

●      Leadership Qualities:  Further, the HR manager is expected to have leadership

qualities. He/she should be in a position to stand in the forefront and lead the team.

●      Experience and Training: Training in psychological aspects, labour legislations

and more specifically in HR management and general management is an additional
benefit. Experience in an enterprise in some other executive capacity can also help
towards an appreciation of the general management problems and a practical
approach in meeting HR problems.

●      Communication Skills: A key skill that all HR managers must have is the ability
to communicate with both employers and employees. Both written and oral
communication skills must be clear, concise, and effective to individuals on all levels
of the organization. Effective communication will sometimes include negotiation.
When conflicts arise between co-workers or management and employees, an HR
manager must assist both sides in finding middle ground, so that a compromise can
be reached.

Duties and Responsibilities of HR:

1. Preparing, modifying and up-dating job analysis including job description and job
specifications

2. Advising the line managers regarding the latest developments in job analysis

3. Helping the line managers in planning for human resources and finalising the
human resource plans

4. Advising the managers regarding the impact of multiskilling, down-sizing and de-
layering 

5. Searching for the prospective employees at various sources and motivating them
to apply for jobs in the company

6. Identifying employment agencies and entrusting recruitment function to them, if it

is economical and desirable

7. Conducting various selection tests and interviews and helping the line managers in
selecting the right candidates for various jobs

8. Conducting the induction programmes to the new employees and placing the
employees in right jobs

9. Identifying the training needs of employees

10. Organising Training and management development programmes

11. Fixing and administering the salaries and employee benefits

12. Introducing various techniques to motivate the employees

13. Preparing the employees in quality improvement programmes

14. Maintaining close and sound relations with individual employees, employee
groups, trade unions, govt etc
15. Conducting collective and individual bargaining meetings to solve various
problems

16. Administering employee benefit programmes

17. Encouraging the employees to form into team

18. Assisting the line managers in organising for promotions, transfers and
demotions

19. Conducting surveys and research

20. Maintaining and enhancing sound human relations.

Recent trends in Human Resource Management

1. Employee experience

More than the engagement of employees at workplace, the focus has shifted to
employee experience. More than mere engagement, concentration is now given to
enhancement of company culture, and performance management. The main roles of
the HR department now covers enhancing employee’s journey map and giving a
greater exposure to feedback tools, employee wellness apps, productivity tools and
advanced communication tools. Moreover, they are analyzing the employee data to
address the need of staff and enhance productive office atmosphere. They can even
use its possibilities to ease the implementation of the HR process and improve the
employee’s career.

2. Advanced people analytics

Companies have moved far ahead from just the back office data to utilizing the best
of people analytics. Reporting through the dashboards has outdated in most of the
companies and focus is more on predictive models.

SAP Success Factors, ADP, Visier, Cornerstone and Oracle are among the most widely
used HR tools to enhance the possibilities of HR sector to improve the overall
effectiveness of employees.

Most of these tools come with advanced features like employee retention predictors.
They can even help build strategies like making job moves to get higher
performance.
3. Learning management systems

Despite the position of the employees or their experience, learning new skills is
important to stay updated. That is why constant learning is now a novel trend in the
HR sector. Providing learning opportunities to employees is the key for any company
that is eyeing for progress.

An improved skill set can help employees to deliver their best at workplace that
reflects in the overall productivity of the enterprise. Learning management systems
are playing the crucial part in tracking the employees learning process and even to
collaborate between various departments effectively.

4. Productivity of HR process

Earlier the focus was covering the automation of areas like record keeping,
performance appraisal, resume capture, interview and hiring, compensation and
assessment.

However, the focus is now shifted to productivity of the overall HR process than just
automating sections.

So significance is now given on the techniques to enhance productivity like quality

people, considering people analytics, team-centric companies, and optimal usage of
hired employees as well as agile workforce.

Now the key role will be to sort out employee’s focus, engagement and burnouts
and build strategies accordingly.

5. Digitized rewards and recognition

Receiving praise and recognition is the key to help employees to trigger their
performance level and these are undoubtedly true motivators for most of them.
However, the present trend has taken this a step forward as rewards and recognition
is now becoming digitised.

Digital recognition is helping them excel one step higher and peer to peer
recognition for their contribution through social media platforms is evidently
improving their performance scale.

6. Online skill assessments

The trend of using online skill assessments is now seen in companies as it is proving
effective as an optimal talent management tool.
It comes in the form of surveys, quizzes, tests, and exams that offers a platform for
companies to learn what their employees actually know and even a chance for self
assessment for employees.

7. Biometric time tracking and security

This is another recent trends in human resource management that offers a lot of
room for minimizing attendance fraud risk by using biological markers to recognize
employees.  Minimizing time theft through these means help companies to save their
funds to a great extent. Employees are blocked from doing unwanted fraud actions
outside the office hours as system access will be tracked. This additional layer of
security also offers an advantage of tracking business property.

8. Enhanced employee engagement

When it comes to employee engagement, it has moved forward a lot from mere
basic activities. The scenario is now digitized and employees are offered lots of
wellness and fitness apps. The goal is to ensure proper work and life balance.

Building a sustainable workforce by balancing professional and personal lives helps

them to be more productive and then end result will be a profitable enterprise.
Companies are now taking initiatives to set up seminars and sessions like yoga,
dietary counselling, and counselling on improved work-life balance.

9. Transformation of leadership

Unlike in the past, leadership is not always about leading a team or managing them.
The digitalised world has put forward possibilities of networked organisations than
bring more success than with just delegation of authority.

Individual employees are enabled to initiate leadership on their own and sometimes
even without proper formal authority. The shift of leadership goals have changed
from simply leading people to overall coordination of the ecosystem of work.

10. Targeted recruitment

One of the mostly discussed trends in HR sector is targeted recruitment which is

processed through social media and cognitive assessment.

Companies are utilizing the possibilities of cognitive technologies that come in the
form of predictive algorithms, natural language processing and self-learning.

At time of recruitment, they use tools that consider career experiences and skills to
provide a fit score to see if the candidate matches the organizational requirements.  
Moreover, reputation checks of organizations and their competitors are now easy
with social listening that is possible in the form of public reviews.

11. Wearable Tech

Work place health can be monitored more systematically through this emerging HR
trend. These wearable tech possibilities can make a huge impact on employees
working on high pressure situations.

These devices are designed to track several features like heart rate, pupil dilation,
body temperature, and similar areas. Management can analyze these points to get a
deeper insight into stress and pain points of employees. They can reframe the
strategies accordingly to improve their workplace experience.

12. Performance management

Unlike in the past when the performance was evaluated through monthly meetings
or quarterly reviews, the present trend shows the shift of focus to real time feedback.
Apart from logistic benefits, this instant feedback can help managers to put up
conversations about personal and professional development. The real time open-
dialogue conversations in fact help employees to benefit from constructive criticisms
that give them a large room for improvement on the go.

Experts have advised not to react blindly to any of the emerging trends but to learn,
understand and analyse it before applying to your particular business scenario.
However, experts in the field are more or less sure that technology is not going to
replace any of the jobs or HR department but it is sure to better the way how jobs
are done.