UNIT 1 : INTRODUCTION AND IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

An organization consists of people with formally assigned roles who work together to achieve the
organization’s goals. A manager is someone who is responsible for accomplishing the organization’s goals,
and who does so by managing the efforts of the organization’s people. Most writers agree that managing
involves performing five basic functions: planning, organizing, staffing, leading, and controlling. In total,
these functions represent the management process.

Some of the specific activities involved in each function include:

• Planning. Establishing goals and standards; developing rules and procedures; developing plans and
forecasts.

• Organizing. Giving each subordinate a specific task; establishing departments; delegating authority to
subordinates; establishing channels of authority and communication; coordinating the work of subordinates

• Staffing. Determining what type of people should be hired; recruiting prospective employees; selecting
employees; setting performance standards; compensating employees; evaluating performance; counselling
employees; training and developing employees.

• Leading. Getting others to get the job done; maintaining morale; motivating subordinates

• Controlling. Setting standards such as sales quotas, quality standards, or production levels; checking to see
how actual performance compares with these standards; taking corrective action as needed

Human resources means the collection of people and their characteristics at work. These are distinct and
unique to an organization in several ways.

Human Resource Management (HRM) is the process of acquiring, training, appraising, and compensating
employees, and of attending to their labor relations, health and safety, and fairness concerns.

These include:
●Conducting job analyses (determining the nature of each employee’s job).
● Planning labor needs and recruiting job candidates
Selecting job candidates.
●Orienting and training new employees.
● Managing wages and salaries (compensating employees).
●Providing incentives and benefits.
●Appraising performance.
●Communicating (interviewing, counseling, disciplining).
●Training employees, and developing managers.
● Building employee relations and engagement.
And what a manager should know about:
●Equal opportunity and affirmative action.
●Employee health and safety.
●Handling grievances and labor relations.

Why Is Human Resource Management Important to All Managers?

• Avoid personnel mistakes
• Improving profits and performance
• HR for small Businesses
Characteristics of HRM
• People oriented
• Action- oriented
• Development – oriented
• Pervasive Function
• Challenging function
• Continuous Function
• Staff function

Objectives of HRM
The primary objective of HRM is to ensure the availability of competent and willing workforce to an
organization.
The specific objectives include the following:
• Acquiring Human capital.
• Developing organizational climate.
• Helping to maintain performance standards and increase. productivity through effective job design
• Helping to establish and maintain a harmonious employer/employee relationship Helping to create and
maintain a safe and healthy work environment.
• To increase the employees satisfaction and selfactualization.
• To develop and maintain the quality of work life.

Scope of HRM

Line and Staff aspects of Human Resource Management

Authority is the right to make decisions, to direct the work of others, and to give orders.
Managers usually distinguish between line authority and staff authority
 Line authority Line authority gives you the right to issue orders.
 Staff authority Staff authority gives you the right to advise others in the organization
line Manager A manager who is authorized to direct the work of subordinates and is responsible for
accomplishing the organization’s tasks.
Staff Manager A manager who assists and advises line managers
line supervisors’ responsibilities for effective human resource management under these general headings: 1.
Placing the right person in the right job
2. Starting new employees in the organization (orientation)
3. Training employees for jobs that are new to them
4. Improving the job performance of each person
5. Gaining creative cooperation and developing smooth working relationships
6. Interpreting the company’s policies and procedures
7. Controlling labor costs
8. Developing the abilities of each person
9. Creating and maintaining departmental morale
10. Protecting employees’ health and physical conditions.

Duties of Line Manager in HR Department

• Placing the right person in the right job.
• Starting new employees in the organization (orientation).
• Training employees for jobs that are new to them.
• Improving the job performance of each person.
• Gaining creative cooperation and developing smooth working relationships.
• Interpreting the company policies and procedures
• Controlling labor cost.
• Developing the abilities of each person.
• Creating and maintaining departmental morale.
• Protecting employees’ health and physical conditions.

Evolution of HRM

The Industrial Revolution(beyond 1820 to 1840)

• Usages of the machinery
• Mass level of production
• Profit maximization form the factor of production like land , labour, capital, entrepreneur

Trade unionism(1841 to 1909)

World have been separated in two type of economy one is capitalization which has a motive of profit
maximization other side labour intensive economy. Labour class reflected their provouge by strike,
slowdown, pen down, boycott & sabotage of the work for resolution of the problem where new redressal
procedure had been developed to subside the chaos like collective bargaining, grievance handling system,
arbitration, disciplinary practices
Scientific Management (1910 evolve & 1920 implementation to 1940)
• Scientific task planning • Time and motion studies • Standardization • Differential piece rate system •
Functional foremanship

Human Relations Era ( 1971 to 1980

The most important contribution to the OB field came out of the Hawthorne Studies, a series of studies
conducted at the Western Electric Company Works in Cicero, Illinois

Hawthorne experiments
Illumination experiment
Hawthorne effect
Interviewing program
Bank wiring room experiment
• Scholars generally agree that the Hawthorne Studies had a gamechanging impact on management
beliefs about the role of people in organizations. • Mayo concluded that people’s behaviour and attitudes are
closely related. • Group factors significantly affect individual behaviour. • Group standards establish
individual worker output. • Money is less a factor in determining output than group standards, group
attitudes, and security.

Behavioural Science (1980 to 1990)

• Multiple branch discipline like sociology , anthropology, psychology, economics & politics • Contributors:-
Abraham Maslow, Douglas mc gregeor, Fredrik Herzberg, Rensis Likert, Robert black, Robert Owen, kurt
lewin, burke letwin, fidler contingent theory, victor vroom theory, grid theory, Aldofer ERG theory,
Meclland Nach theory

Systems and Contingency Approach Era

It is an integrated approach which considers management of human resources in its totality based on
empirical data. The basic idea of this approach is that analysis of any object must rely on a method of
analysis involving simultaneous variations of mutually-dependent variables. This happens when systems
approach is applied in managing human resources.

The Contemporary HRM Era (1990 onwards)

• More focused on gaining competitive advantage in market through HR. • Focuses on developing HR
strategies, aligning them with corporate strategy and achieving organizational goals effectively

Trends in HRM and The New Human Resource Manager

Working cooperatively with line managers, human resource managers have long helped employers hire and
fire employees, administer benefits, and conduct appraisals. However, trends are occurring in the
environment of human resource management that are changing how employers get their human resource
management tasks done

• Nearly 60% of employees want to work remote full-time after the pandemic, according to one survey. •
Technology adoption and deployment is a priority as companies seek to unify dispersed, digital-first
workforces. • Two-thirds of employees value when their feedback is heard and acted on. • In the face of
mental health adversity, companies respond by providing resources, cutting costs and taking other measures
to support well-being. • Data will be the new currency and a core part of how HR operates in the coming
years. • Ensuring employees have the skills they need is a top priority among business leaders.

Trends Shaping HRM- Using Artificial Intelligence:

Nearly every industry uses artificial intelligence (AI) to simplify its processes. Human resources is no
different.
One of 2020’s HR trends is incorporating more AI tools into everyday operations for better efficiency and
workflow.
HR professionals can also use AI to: • Verify experience and education listed on candidates’ resumes •
Manage employee performance • Answer employees’ HR questions • Customize suggestions for career
paths, professional development options, etc. for each employee • Detect anomalies in behavior that could
indicate time theft, corruption or other misconduct

Trends Shaping HRM-More Remote Employees :

With so many people working from home, HR departments face a unique set of challenges.
For instance, how do you: • make employees feel a sense of company community? • manage employee
productivity and morale? • operate when employees are located in different time zones
Remote work does have some upsides • Flexibility for employee scheduling • Expands the pool of talent
which a company can hire from Employees with no commute and more flexible hours are often more
productive • In addition, employers save money with a remote staff. • Fewer perks (e.g. snack closet, coffee
machine, parking spots) • Smaller offices with less overhead • Fewer office supplies to buy

Trends Shaping HRM- Automation of Tasks

HR professionals have a lot to do and often not enough time or staff to complete it all.
Reduce your workload by automating the following tasks: • Payroll • Recruitment and onboarding • Records
management • Employee benefits management • Employee evaluations • Tax documentation

Trends Shaping HRM- Data-Driven Strategies

HR professionals have to make dozens of decisions every day, each one a choice that could potentially
change the direction of the company. Using metrics and analytics removes the guesswork, which is why it’s
one of the biggest HR trends today.
Use data-driven HR strategies to: • Choose candidates based on performance capability, skill set and
potential to work for you long-term. • choose benefits plans and workplace perks • Gather insight into how to
better engage and motivate employees • Create training modules that adapt to employees’ learning style and
pace

Trends Shaping HRM- Emphasis on Learning

HR departments should focus on helping employees achieve their learning goals. Whether it’s personal or
professional development, employees who feel their growth is supported by their employer will be more
engaged, motivated and productive.
Example: • Offer annual education stipends • Require (and pay for) at least one annual professional
development course for every employee and/or manager • Add paid time off for volunteering and
educational opportunities to employee leave allotments • Ask employees to share their professional and
personal goals in their annual self-assessments

Trends Shaping HRM- Open Workforce

In order to find the best talent, many HR departments are turning to the open workforce. That is, hiring
freelancers and independent contractors on an as-needed basis. These nontraditional employees can fill skill
gaps in in-house teams, as well as pick up the slack when you’re short-handed.

Trends Shaping HRM- HR Design is a Strategic Focus

The concept of design should be a prominent focus over the coming year
HR design aids strategy in three important ways: • “Shaping the design of the new organization of the future.
• “Designing the new and re-shaped jobs that new working practices and automation will demand. •
“Identifying the new capabilities and requirements that the new world of work will make upon the
workforce, its managers and its leaders in terms of behavioral and technical demands

The concept of design should be a prominent focus over the coming year
HR design aids strategy in three important ways: • “Shaping the design of the new organization of the future.
• “Designing the new and re-shaped jobs that new working practices and automation will demand. •
“Identifying the new capabilities and requirements that the new world of work will make upon the
workforce, its managers and its leaders in terms of behavioral and technical demands

Trends Shaping HRM- Mental Health Gets the Attention it Deserves

One of the most impacts of the pandemic has been its effect on mental health. An SHRM report from the first
half of 2020 found that up to 35% of employees surveyed experienced depression symptoms often, while
41% reported work burnout and 45% said they felt “emotionally drained from their work”

Trends Shaping HRM- DEI Receives Major Focus

Over the years, companies have faced increasing expectations – particularly from younger generations – to
support DEI initiatives (diversity, equality and inclusion).
Matters of diversity and inclusion have become part of the conversation as HR professionals seek to address
bias, unfair wages and other problems.

The New Human Resource Manager

Society for Human Resource Management (SHRM) introduced a new “competency model” (called the
SHRM Body of Competency and Knowledge™); it itemizes the competencies, skills, and knowledge and
expertise human resource managers need. Here are the behaviors or competencies (with definitions) SHRM
says today’s HR manager should be able to exhibit

The New Human Resource Manager Competency Model

• Leadership & Navigation • Ethical Practice • Business Acumen • Relationship Management The ability to
manage interactions to provide service and to support the organization. • Consultation • Critical Evaluation •
Global & Cultural Effectiveness • Communication

The New Human Resource Manager : Functional Knowledge

 Talent Acquisition & Retention
 Employee Engagement
 Learning & Development
 Total Rewards
 Structure of the HR Function
 Organizational Effectiveness & Development
 Workforce Management

The New Human Resource Manager : Functional Knowledge

 Employee Relations
 Technology & Data
 HR in the Global Context
 Diversity & Inclusion
 Risk Management
  Corporate Social Responsibility
 Employment Law & Regulations
 Business & HR Strategy

Functions of HRM

• Human Resources management has an important role to play in equipping organizations.

• This department plays an important role in the efficient management of human resources.
Some of the major functions of human resource management are as follows:
• Managerial Functions
• Operative Functions
• Advisory Functions

Managerial Functions of HRM

• Planning • Organizing • Directing • Controlling

Planning
The planning function of human resource department pertains to the steps taken in determining in advance
personnel requirements, personnel programmes, policies etc. After determining how many and what type of
people are required, a personnel manager has to devise ways and means to motivate them.
For a human resource manager, planning means the determination of personnel programs that will contribute
to the goals of the enterprise. The process of personnel planning involves three essential steps • A supply and
demand forecast for each job . • Projection of net shortage and Excess of personnel. • Development of plans

Organizing
Under organisation, the human resource manager has to organise the operative functions by designing
structure of relationship among jobs, personnel and physical factors in such a way so as to have maximum
contribution towards organisational objectives. In this way a personnel manager performs following
functions: (a) preparation of task force; (b) allocation of work to individuals; (c) integration of the efforts of
the task force; (d) coordination of work of individual with that of the department.

• Grouping of personnel activity logically into functions or position. • Assignment of different functions to
different individuals; • Delegation of authority according to the tasks assigned and responsibilities –
Directing
Directing is concerned with initiation of organised action and stimulating the people to work. The personnel
manager directs the activities of people of the organisation to get its function performed properly. A
personnel manager guides and motivates the staff of the organisation to follow the path laid down in
advance.
• The direction function of the personnel manager involves encouraging people to work willingly and
effectively for the goals of the enterprise. • The motivational function poses a great challenge for any
manager.

Controlling
It provides basic data for establishing standards, makes job analysis and performance appraisal, etc. All these
techniques assist in effective control of the qualities, time and efforts of workers.
• The direction function of the personnel manager involves encouraging people to work willingly and
effectively for the goals of the enterprise. • The motivational function poses a great challenge for any
manager.

Operative Functions of HRM :

Staffing - Employment is the foremost operative function of HRM. This task is carried out by the HR
managers for all the department of any organisation. The HR department creates personnel policies and
coordinates with all the departments of the firm. Employment includes securing and employing professionals
who possess required skill that is necessary for achieving the organisational objectives. It also covers job
analysis, recruitment, selection, placing of the candidate, induction session and internal mobility. When you
decide to excel your career as an HR professional, you have to be highly skilled and experienced to carry out
the above-mentioned work with precision.

Development- of HRM involves improving, changing the skills, knowledge, aptitude, creative ability,
values, aptitude, commitment, etc. based on the requirement of the organisations and job vacancies for both
present and future. This also covers performance appraisal, career planning, training management
development, promotion and demotion, internal transfer, mobility and organisational development. An
employee gets all support from the HR department of an organisation when joined newly in a firm.
Compensation & Motivation-
means determining the pay scale and other emoluments for the employees. Establishing and maintaining
properly the pay system of any firm is considered to be the most important task of HR managers. Being an
HR manager, you need just and impartial pay rates to the employees. In addition to this, an HR manager
must regularly manage the performance system of the employees and should continue to design reward
scheme for the employees such as performance-based incentives, bonus and flexible working schedule.

Maintenance- The maintenance function of HR manager includes retaining the efficient and skilled
professionals in the organisations. When it comes to maintenance function, HR managers have to ensure to
the employees that they must have an occupational safety.
Integration

Advisory Functions of HRM

Advised to Top Management: Personnel manager advises the top management in formulation and
evaluation of personnel programs, policies and procedures. He also gives advice for achieving and
maintaining good human relations and high employee morale.

Advised to Departmental Heads: Personnel manager offers advice to the heads of various departments on
matters such as manpower planning, job analysis and design, recruitment and selection, placement, training,
performance appraisal, etc.

Strategic HRM

The Strategic View of Human Resources

Employees are human assets • Increase in value to organization and marketplace when investments of
appropriate policies & programs are applied
Effective organizations recognize that employees have value • Much as organization’s physical & capital
assets have value Employees are valuable source of sustainable competitive advantage
Research Findings
• HR practices directly related to profitability & market value • Primary reason for profitability- Effective
management of human capital • Integrated management of human capital can result in 47% increase in
market value • Top 10% of organizations studied experienced huge return on investment in management of
human capital.

Sources of Employee Value

Technical Knowledge
✓ Markets, processes, customers, environment Ability to Learn and Grow ✓ Openness to new ideas ✓
Acquisition of knowledge & skills
Decision Making Capabilities
Motivation
Commitment
Teamwork
Interpersonal skills, leadership ability

HR Value Chain

Factors Influencing Investment Orientation of companies towards the human resources

Senior Management Values & Actions • Managers need “investment orientation” toward people
Attitude Toward Risk • Investment in human resources inherently riskier • Human assets never absolutely
“owned”
Nature of Skills Needed by Employees • The more marketable employee skills, the riskier the firm’s
investment in skill development
Utilitarian (“Bottom Line”) Mentality • Attempt made to quantify employee worth through cost-benefit
analysis • “Soft” benefits of HR programs difficult to objectively quantify
Availability of Outsourcing • Given availability of cost-effective outsourcing, investments in HR should
produce highest returns & sustainable competitive advantages.

Strategic Human Resource Management

Formulating and executing human resource policies and practices that produce the employee competencies
and behaviors the company needs to achieve its strategic aims

Strategic Human Resource Management Tools

Managers use several tools to translate the company’s strategic goals into human resource management
policies and practices. These tools include the strategy map, the HR scorecard, and the digital dashboard.
 Strategy Map The strategy map summarizes how each department’s performance contributes to
achieving the company’s overall strategic goals. A strategic planning tool that shows the “big
picture” of how each department’s performance contributes to achieving the company’s overall
strategic goals
 HR scorecard A process for assigning financial and nonfinancial goals or metrics to the human
resource management– related chain of activities required for achieving the company’s strategic
aims and for monitoring results.
The computerized scorecard process helps the manager quantify the relationships between
(1) the HR activities (amount of testing, training, and so forth)
(2) the resulting employee behaviors (customer service, for instance),
(3) the resulting firm-wide strategic outcomes and performance (such as customer satisfaction and
profitability
 Digital dashboard Presents the manager with desktop graphs and charts, and so a computerized
picture of where the company stands on all those metrics from the HR scorecard process.

HR Metrics, Benchmarking, and Data Analytics:

Human resource metrics The quantitative gauge of a human resource management activity, such as
employee turnover, hours of training per employee, or qualified applicants per position.
Strategy-based metrics Metrics that specifically focus on measuring the activities that contribute to
achieving a company’s strategic aims.
HR audit An analysis by which an organization measures where it currently stands and determines what it
has to accomplish to improve its HR functions.