SUBJECT: HUMAN RESOURCE MANAGEMENT (SUBJECT CODE-BM 106)

SEMESTER- MBA 1

SUBJECT TEACHER: DR. KARABI GOSWAMI

 UNIT I

CONTENTS:

 INTRODUCTION AND CONCEPT TO HUMAN RESOURCE MANAGEMENT

 CONCEPT OF HRM

 SCOPE OF HRM

 FUNCTIONS OF HRM

 ROLE OF HR MANAGER
INTRODUCTION AND CONCEPT OF HRM

Human Resource is of paramount importance for the success of any organization.

This is because people offer competitive advantage to a firm and managing people
is the domain of HRM. It reflects a new outlook which views’s organizations
manpower as its resources and assets. Human resource is the total knowledge,
abilities, skills, talents and aptitudes of an organization’s workforce. The values,
ethics, beliefs of the individuals working in an organization also form a part of
human resource. The resourcefulness of various categories of people and other
people available to the organization can be treated as human resources. In the
present complex environment, no business or organization can exist and grow
without appropriate human resources. So human resource has become the focus of
attention of every progressive organization.

Human resource is a resource like any other natural resource. It means that
management can get and use the skill, knowledge,ability,etc. through the
development of skills, tapping and utilizing them again and again. Human resource
management is that process of management which develops and manages the
human elements of an enterprise. It is not only the management of skills but also
the attitudes and aspirations of people. When individuals come to a work place,
they come with not only technical skills, knowledge, experience etc., but also with
their personal feelings, perceptions, desires, motives, attitude, values etc. So HRM
means management of various aspects of human resources. An important element
of HRM is the ‘humane approach’ while managing people. This approach helps a
manager to view his people as an important resource. It is an approach in which
manpower resources are developed not only to help the organization in achieving
its goals but also to the self satisfaction of the concerned persons. On the other
hand this approach focuses on human resource development, and on the other hand
it focuses on effective management of people. HRM approach is a fundamental
change in philosophy and perspective from the earlier thinking about manpower
resources. It emphasizes the human aspect of individual workers and their
aspirations and needs.
DEFINITION OF HUMAN RESOURCE MANAGEMENT

HRM may be defined as a set of policies, practices and programmes designed to

maximize both personal and organizational goals. It is a process by which the
people and organizations are bound together in such a way that both of them are
able to achieve their objectives.

According to Flippo, “ HRM is the planning, organizing, directing and controlling

of the procurement, development, compensation, integration, maintenance and
reproduction of human resources to the end that individual, organizational and
social objectives are accomplished.

This definition reveals that HRM is that aspect of management which deals with
the planning, organizing, directing and controlling the personnel functions of an
enterprise. The purpose of these functions is to assist in the achievement of basic
organizational, individual and societal goals.

OBJECTIVES OF HRM

The primary objective of HRM is to ensure a satisfactory accomplishment of the

objectives of an organization and of its employees. While framing the HR
objectives of the organization, care is taken to consider the interests and needs of
the employees and of employee goals. This is done by integrating the employee
interests and the management interests with a view to achieve the objectives of the
entire organization. The objectives of the HRM are as follows:

I. Societal Objectives. The basic objective of HRM towards the society

should be to ensure that the organization manages human resources in an
ethical and socially responsible manner through ensuring compliance with
legal and ethical standards. Thus, this objective includes:

 To manage human resources in an ethical and socially responsible

manner.
 To ensure compliance with legal and ethical standards.
 To minimize the negative impact of societal demands upon the
organization.
II. Organizational Objectives. The organizational objectives of HR include
the following:

 HR department, like any other department in an organization, should

focus on achieving the goals of the organization first. It it does not
meet this purpose; the HR department cannot exist in the long run.
 HR department should recognize its role in bringing about
organizational effectiveness.
 HRM is not an end in itself. It is only a means to assist the
organization with its primary objectives.

In other words, the HR department should aim at serving rest of the organization.

III. Functional Objectives. The functional objectives of HRM include the

following:

 To maintain the HRM department’s contribution at a level appropriate

to the organization’s needs. Resources are wasted when HRM is either
more or less sophisticated to suit the organization’s demands.
 The department’s level of service must be tailored to fit the
organization it serves.
 HRM should employ the skills and abilities of the workforce
efficiently. It should aim at making the people’s strengths more
productive and beneficial to the organization.
 HRM should aim at providing the organization with well trained and
well motivated employees.

IV. Personnel Objectives. Personnel objectives or personal objectives of the

employees must be met if employees are to be maintained, retained and
motivated. Otherwise employee performance and satisfaction may decline
and they may leave the organization. The objectives of HRM in this context
are:

 HRM should increase employees’ job satisfaction to the fullest extent.

  HRM should also meet the self actualization needs of the employees.
It should stimulate every employee to achieve his potential.
 HRM should assist the employees in achieving their personal goals, at
least in so far as these goals enhance the individual’s contribution to
the organization.
 HRM should develop and maintain a quality of work life (QWL). It
makes employment in the organization a desirable, personal and social
situation. Organizational performance can never be improved without
improving the quality of work life.
 The HRM should also communicate HR policies to all employees. It
will help the HRM in tapping the ideas, opinions, feelings, and the
views of the employees.

IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

According to Rensis Likert “All the activities of any enterprise are initiated and
determined by persons who make up that institution. Plants, offices, computers,
automated equipment and all else that make a modern firm are unproductive except
for human effort and direction of all the tasks of management. Managing the
human component is central and the most important task because all else depends
on how well it is done.”

It is, thus, through the combined efforts of people that economic and material
resources are utilized for the achievement of organizational objectives. Therefore,
creating and maintaining a motivated workforce is the central responsibility of
management everywhere. The effectiveness with which human resources are
coordinated and utilized determines the success in achieving organizational
objectives. HRM is important to the organization in a number of ways, as follows:

a) Importance for the organization. HRM is important for the organization

due to the following:
 Good human resource practices help in attracting and retaining the
best people in the organization.
  In order to make use of latest technology the appointment of right type
of persons is essential. The right people can be fitted into new jobs
properly only if the management performs its HR function
satisfactorily.

 Globalization has increased the size of the organizations that employ

thousands of employees in different countries. The performance of the
company depends upon the qualities of the people employed. This has
further increased the importance of HRM.

 Human resource planning alerts the organization to the types of

people it will need in the short, medium and long run.

 Human resource development is essential for meeting the challenges

of future. The importance of HRM has increased because of the
shortage of really good managerial talent in the country.

b) Importance for the employees. The human aspect of organizations has

become very important over the years. HRM stresses on the motivation of
employees by providing them various financial and non-financial incentives.
Right organizational climate is also stressed upon so that employees can
contribute their maximum to the achievement of the organizational
objectives. Effective management of human resources promotes team work
and team spirit among employees. It offers excellent growth opportunities to
people who have the potential to rise. It also encourages people to work with
diligence and commitment.

c) Importance for the society. Society as a whole is the main beneficiary of

good human resource practices. Good HR efforts lead to productivity gains
(ratio of output to input) to the society, since it enables the managers to
reduce costs, save scarce resources, enhance profits and offer better pay,
benefits and working conditions to employees.
SCOPE OF HUMAN RESOURCE MANAGEMENT

According to Dale Yoder, the scope of human resource management is very wide.
It consists of the following activities:

i. Setting general and specific management policy for organizational

relationships and establishing and maintaining a suitable organization for
leadership and cooperation.
ii. Collective bargaining, contract negotiation, contract administration and
grievance handling.
iii. Staffing the organization, finding, getting and holding the prescribed types
and number of workers.
iv. Aiding in the self development of employees at all levels by providing
opportunities for personal development and growth as well as for acquiring
requisite skill and experience.
v. Development and maintaining motivation for workers by providing
incentives.
vi. Reviewing and auditing manpower management in the organization.
vii. Industrial relations research-carrying out studies designed to explain
employee behavior abd thereby effecting improvement in manpower
management.

The Indian Institute of Personnel Management: Personnel Management in India, P.

29-30. has described the scope of human resource management into the following
aspects:

1. The Personnel Aspect. This aspect of human resource management is

concerned with the manpower planning, recruitment, selection, placement,
induction, transfer, promotion, demotion, termination, training and
development, layoff and retrenchment, wage and salary administration,
incentives, productivity etc.

2. The Welfare Aspect. The welfare aspect is concerned with working

conditions and amenities such as canteens, crèches, rest rooms, lunch rooms,
housing, transport, education, medical help, health and safety, washing
facilities, recreation and cultural activities etc.
 3. The industrial Relations Aspect. This aspect is concerned with the
company’s relation with its employees. It includes union management
relations, joint consultation, negotiating, collective bargaining, grievance
handling, disciplinary actions, settlement of industrial disputes etc.

All the above aspects are concerned with human element in industry as distinct
from the mechanical element.

HRM has a crucial role to play in the organization, so following functions can be
associated with HRM:

1. Identifying and Developing Persons. The success of every organization

depends upon the quality of persons it employs. HRM helps in spotting right
persons for the right jobs. Persons are prepared for taking up different jobs.
Every person may not be suitable for every job. Persons are assigned jobs as
per their aptitudes. Persons are given right type of training so that they are
able to develop their potentialities to the maximum. They are also motivated
to give their maximum to the organization.

2. Retaining Suitable Persons. The rapid development of technology is

throwing up new challenges every day. Modernization of various
techniques, computerization and data processing, introduction of
microprocessor controlled machines and revolution in communication
techniques have resulted in a demand for trained and highly skilled persons.
HRM not only helps in procuring suitable persons but is also useful in
retaining them. There may be a redundant workforce because of various
developments, efforts be made to offer golden handshake to them.

3. Creating Work Culture. HRM approach emphasizes the development of

employees’ potentialities and using them for achieving goals. The aims and
priorities of individual workers are given due weightage in the schemes of
the organization. Human resource policy is backed by human values,
understanding and concern for the welfare of people. Persons in the
organization will reciprocate by improving their efficiency, motivation, self
co-ordination and greater co-operation. The work culture in the organization
improves; people feel satisfied and enjoy their work.
 4. Educating Managerial Personnel. HRM approach will succeed only when
managerial personnel change their attitude towards the workforce. There is a
need to educate executives, managers and top management regarding
various aspects of the human resource approach adopted by the
organization.

5. Conducting Research. HRM will be successful only if we know the

aspirations and expectations of various persons working in the organization.
The framing of human resource policies, strategies and approaches depends
upon the information collected through research.

6. Developing a Communication System. There is a need to develop

downward, upward and lateral communication in the organization. HRM
develops a system of communication where policies of the management are
properly communicated to the lowest level of hierarchy and feedback from
lower levels is conveyed to the top management. Communication system
helps in understanding the view points of each other and taking up remedial
steps, if needed.

EVOLUTION OF THE CONCEPT OF HRM

Modern concept of HRM has developed through a number of stages. The

examination of the following stages shows the transformation of personnel
function from one stage to another in a chronological order:

1. The Commodity Concept

Before the industrial revolution GUILD SYSTEM was in operation, which

was the beginning of personnel management. Guild was a closely knit group
of workers, concerned with the selecting, training, rewarding and
maintaining workers. Industrial revolution gave rise to the factory system.
As a result, the place of work shifted from residence to factory and the
management became separate from ownership. The close relationships
between employees and owners were broken. Labour began to be considered
 as a commodity to be bought and sold. Wages were based on demand and
supply. Government did very little to protect the workers.

2. The Factor of Production Concept

Under the factor of production concept, employees were considered a factor

of production just like land, materials and machines. F.W. Taylor in his
scientific management stressed proper selection and training of employees
so as to maximize productivity. The employees were considered as mere
operators of machines. However, this concept was an improvement over the
commodity concept in so far as employees gained better working conditions
and better earnings.

3. The Paternalistic Approach

The paternalistic approach was based on the belief that management must
assume a fatherly and protective attitude towards employees. Paternalism
does not mean merely providing benefits but it means satisfying various
needs of the employees as parents meet the requirements of the children.
During this period, the employees organized themselves on basis of their
common interests and formed trade unions to improve their lot. The growing
strength of trade unions gave an impetus to collective bargaining. The
government also recognized that workers had a right to protection in the
employment. Due to all these factors, employers began to provide welfare
schemes to workers e.g. health facilities, pension plans, group insurance
schemes, housing facilities, recreation facilities etc. in this stage, employers
and employees both began to realize that they cannot survive and prosper
without each other.

4. The Humanitarian Concept

Under the paternalistic concept, the employer was providing welfare

facilities to the employees as a favour. The humanitarian concept is based on
the belief that employees had certain inalienable rights as human beings and
it was the duty of the employers to protect these rights. To improve
productivity, physical, social and psychological needs of the employees
 must be met. As Elton Mayo and others stated, money is less a factor in
determining output, than group standards, group incentives and security. The
organization is a social system that has both economic and social
dimensions. Hawthorne experiments generated considerable interest in
human problems of the work place. This approach is therefore, known as
human relations concept.

5. The Behavioral resource Concept

The human resource concept was based on the belief that employees are the
most valuable assets of an organization. There should be a conscious effort
to realize organizational goals by satisfying needs and aspirations of the
employees. Several studies were conducted to analyse and understand
human behavior in the organizations. These studies led to the application of
behavioral sciences to the problems of individual and group behavior at
work. Efforts were made to integrate employees with the organization so
that organizational goals and employees aspirations could be achieved
simultaneously. Motivation, group dynamics, organizational conflict etc.,
became popular concepts and the focus shifted towards management
practices like two-way communication, management by objectives, role of
informal groups, quality circles etc.

6. The emerging Concept

The emerging concept aims at creating a feeling among workers that the
organization is their own. Employees should be accepted as partners in the
progress of the organization. To this end, management must offer better
quality of working life and offer opportunities to people to exploit their
potential fully. The focus should be on Human Resource Development.
Slowly and steadily human resource management is emerging as a special
academic discipline and as a profession.

Thus personnel management started from a stage where employees were

considered problems. Procedures and costs reached a stage where employees
are looked upon as a resource, an asset and an opportunity.
ROLE OF HR MANAGER/DEPARTMENT

Basically, the job of HR manager is the management of HR i.e. human resources.

He generally acts in an advisory capacity, providing information, offering
suggestions, counseling and assisting all the line managers in the organization and
is not responsible for the end results. However, within his own department, the HR
manager performs a line function by directing the activities of his subordinates and
in service areas like canteens etc. the role of HR manager in the organization can
be explained as follows:

1) Advisory Role. The HR department has functional relationship with each

other departments/managers in the total organization. As a specialist, the HR
manager advises the heads of different functional departments on various
aspects of human resource management e.g. manpower planning,
recruitment, selection, training, appraisal, compensation etc. He represents
management in many of the relationships that affect the organization as a
whole. He is also responsible for conveying the problems, grievances or
simply opinions of workers to management. The HR manager should
provide suggestions and assistance very tactfully, in order to win the
confidence and cooperation of all the line managers. Staff assistance is likely
to be effective when it is wanted rather than imposed. He has to persuade the
line managers to work with staff specialists and not against them.

2) Counseling Role. The HR manager plays the role of a counselor with the
employees also. He discusses the various problems of the employees relating
to work, career, their supervisors, colleagues, health, family, financial, social
etc. and suggests them means to minimize and overcome those problems.

3) Role of a Change Agent. HR manager works as a change agent regarding

HR areas. To be an effective consultant, he should be familiar with the needs
and changing environment of the business. He should initiate and spearhead
necessary improvement in human resource policies. As a consultant, he can
provide necessary infrastructure and support for organizational development.
 He helps in introducing and implementing major institutional changes in the
organization.

4) The Conscience Role. While playing the conscience role, the HR manager
informs the management about the humanitarian approach. He should advise
the management about the moral and ethical obligations towards the
employees.

5) Mediator’s Role. The HR manager often acts as a mediator in the

organization. Whenever there is a friction between two employees, two
groups of employees, superiors amd subordinates and employees and
management, the HR manager has to act as a mediator, so as to maintain the
industrial harmony.

6) Liaison Role. The HR manager acts as a representative of the organization

so as to give an overall picture of the organizational operations to the
employees particularly in case of industrial disputes or grievance redressal.
Similarly, he acts as employees’ representative in representing their
problems to the management particularly in concerns where trade unions are
not there.

7) Legal Role. The HR manager plays the fire fighting role of grievance
handling, settlement of disputes, handling disciplinary cases, collective
bargaining, joint consultation, interpretation and implementation of various
labour laws, contacting lawyers regarding court cases, filing suits in labour
courts, industrial tribunals, civil courts and the like.

8) Welfare Role. Under Section 49 of the Factories Act, a welfare officer has
to be appointed in specific factories. HR manager is expected to be the
welfare officer of the company. As a welfare officer, he provides and
maintains (on behalf of the company canteens, hospitals, crèches,
educational institutions, clubs, libraries, conveyance facilities, cooperative
credit societies, consumer stores etc.
9) Controller’s Role. The HR manager assists the line managers in effective
implementation of HR policies and programmes. His advice and service is
essential for monitoring and controlling the progress. As an arm of the top
management, the HR manager ensures that the HR policies and procedures
approved and adopted by the management are being consistently carried out
in all the departments.

10) Human Relations Role. HR manager is supposed to be an expert in

human relations. He is expected to improve productivity by fulfilling the
economic, social and psychological needs and aspirations of employees. Hr
manager also has to meet the challenge of a fast changing post industrial
society.