Session 15

Personnel
Management
What is HRM?

• Human resource management is a strategic and

coherent approach to the management of an
organization’s most valued assets—the people,
that work there, who individually and collectively
contribute to the achievement of its objectives.
The Importance of Human Resource
Management (HRM)
• As a necessary part of the organizing function of
management
➢ Selecting, training, and evaluating the work force
• As an important strategic tool
➢ HRM helps establish an organization’s sustainable
competitive advantage.
• Adds value to the firm
➢ High performance work practices lead to both high
individual and high organizational performance.
The HRM Process
• Functions of the HRM Process
➢ Ensuring that competent employees are identified and
selected.
➢ Providing employees with up-to-date knowledge and
skills to do their jobs.
➢ Ensuring that the organization retains competent and
high-performing employees who are capable of high
performance.
Exhibit 12–2 Human Resource Management Process
What is Personnel Management ?
• It is defined as obtaining, using and maintaining
a satisfied workforce.
• It is the planning, organizing, compensation,
integration and maintenance of people for the
purpose of contributing to organizational,
individual and societal goals.
• It is that part which is primarily concerned with
human resource of organization.
Definition
• ”The personnel function is concerned with the
procurement, development, compensation,
integration, and maintenance of the personnel of
an organisation for the purpose of contributing
toward the accomplishment of that
organisation’s major goals or objectives.
Therefore, personnel management is the
planning, organising, directing, and controlling of
the performance of those operative functions.”
— Edwin B. Flippo, Principles of Personnel
Management
 PM : Functions
• 1. Managerial Functions :
• The Managerial functions of a personnel manager involve
POSDCORB (Luther Gullick) i.e., Planning, organisation,
staffing, directing, coordinating, reporting and budgeting of
those who actually perform the operative functions of the
Personnel Department.
• 2. Operative/ Service Functions :
• (a) Procurement/ recruitment function : It covers areas
connected with the employment of employees such as
manpower requirements, recruitment, selection, placement
& induction.
• (b) Development / training & development : In order to
perform work properly, employees must be trained. This
function is concerned with increasing the efficiency of
employees by enhancing their skill.
Contd…
• (c) Promotion, transfer and termination function :
This function deals with the formulation of policy
setting out the basis of promotion (viz., seniority,
merit or both).
• (d) Compensation function - This function deals
with the determination of fair wages for the
employees. Wages may be paid according to the
time spent or units produced or there may be a
combination of time and piece rate system in the
form of incentive plans.
• In order to know the worth of the job in terms of
money job evaluation is undertaken
Contd…
• (e) Welfare function – ensure physical & social
well being (safety provisions, counselling,
medical services, recreational facilities)
• (f) Collective bargaining function
• (g) Miscellaneous functions.

While importance of wage administration is

declining, certain other areas of personnel
management (Manpower planning, staffing,
training etc.) are getting prominence.
Personnel Management : Functions
• 1. Manpower Planning :
• It consists of putting the right number of people,
the right kind of people at the right place, at the
right time, doing the right things for which they
are suited for the achievement of goals of the
organization.
• 2. Recruitment :
• The process of locating, identifying, and
attracting capable applicants to an organization
Contd…
• 3.Selection : It is the process of putting right men
on the right job. It is a procedure of matching
organizational requirements with the skills and
qualifications of people.
• 4.Training : Training is the process of enhancing
the skills, capabilities and knowledge of employees
for doing a particular job.
• 2 types :
• On the job/ learning by doing : classroom/lecture’
e-learning
• Off the job/ vestibule training
Personnel Policy
• Policy - is a pre-determined selected course—
established as a guide towards accepted goals
and objectives’.
• Personnel policies are the rules that govern
how to deal with a human resources
or personnel related situation.
• A personnel policy must cover all areas of
manpower management.
Contents of Personnel Policy
• 1. Recruitment or hiring of employees.
• 2. Manpower planning and development.
• 3. Training programmes.
• 4. Absenteeism.
• 5. Hours of work.
• 6. Conditions of employment.
• 7. Overtime.
• 8. Lay-off, termination of services and welfare.
• 9. Wage policy, motivation and incentives.
• 10. Recognition of trade union, collective bargaining and
workers participation in management.
• 11. Promotion, demotion and transfer.