UNIT I

HUMAN RESOURCE MANAGEMENT

Edwin Flippo defines- Human Resource Management as “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.”

Human resources may be defined as the total knowledge, skills, creative

abilities, talents and aptitudes of an organization’s workforce, as well as the values,
attitudes, approaches and beliefs of the individuals involved in the affairs of the
organization. It is the sum total or aggregate of inherent abilities, acquired
knowledge and skills represented by the talents and aptitudes of the persons
employed in the organization.

Human resources are multi dimensional in nature. From the national point of
view, human resources may be defined as the knowledge, skills, creative abilities,
talents and aptitudes obtained in the population; whereas from the view point 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 employees.

FEATURES OF MANAGEMENT:
1. It is an art and a science:

The art and science of HRM is indeed very complex. HRM is both the art of
managing people by recourse to creative and innovative approaches; it is a science
as well because of the precision and rigorous application of theory that is required.

2. It is pervasive:

Development of HRM covers all levels and all categories of people, and
management and operational staff. No discrimination is made between any levels
or categories. All those who are managers have to perform HRM. It is pervasive
also because it is required in every department of the organisation. All kinds of
organisations, profit or non-profit making, have to follow HRM.

3. It is a continuous process:

First, it is a process as there are number of functions to be performed in a series,

beginning with human resource planning to recruitment to selection, to training to
performance appraisal.

To be specific, the HRM process includes acquisition (HR planning, recruitment,

selection, placement, socialisation), development (training and development, and
career development), utilization (job design, motivation, performance appraisal and
reward management), and maintenance (labor relations, employee discipline,
grievance handling, welfare, and termination). Second, it is continuous, because
HRM is a never-ending process.

4. HRM is a service function:

HRM is not a profit centre. It serves all other functional departments. But the basic
responsibility always lies with the line managers. HRM is a staff function – a
facilitator. The HR Manager has line authority only within his own department, but
has staff authority as far as other departments are concerned.

5. HRM must be regulation-friendly:

The HRM function has to be discharged in a manner that legal dictates are not
violated. Equal opportunity and equal pay for all, inclusion of communities in
employment, inclusion of tribal’s (like Posco or Vedanta projects) and farmers in
the benefits and non-violation of human rights must be taken care of by the HRM.

6. Interdisciplinary and fast changing:

It is encompassing welfare, manpower, personnel management, and keeps close

association with employee and industrial relations. It is multi- disciplinary activity
utilizing knowledge and inputs from psychology, sociology, economics, etc. It is
changing itself in accordance with the changing environment. It has travelled from
exploitation of workers to treating them as equal partners in the task.
7. Focus on results:

HRM is performance oriented. It has its focus on results, rather than on rules. It
encourages people to give their 100%. It tries to secure the best from people by
winning the whole hearted cooperation. It is a process of bringing people and
organization together so that the goals of each are met. It is commitment oriented.

8. People-centred:

HRM is about people at work both as individuals and a group. It tries to help
employees to develop their potential fully. It comprises people-related functions
like hiring, training and development, performance appraisal, working
environment, etc.

HRM has the responsibility of building human capital. People are vital for
achieving organizational goals. Organizational performance depends on the quality
of people and employees.

9. Human relations philosophy:

HRM is a philosophy and the basic assumption is that employees are human beings
and not a factor of production like land, labour or capital. HRM recognises
individuality and individual differences. Every manager to be successful must
possess social skills to manage people with differing needs.

10. An integrated concept:

HRM in its scope includes Personnel aspect, Welfare aspect and Industrial
relations aspect in itself. It is also integrated as it concern with not only acquisition,
but also development, utilization, and maintenance.

IMPORTANCE OF HRM:

An organisation cannot build a good team of working professionals without good

Human Resources. The key functions of the Human Resources Management
(HRM) team include recruiting people, training them, performance appraisals,
motivating employees as well as workplace communication, workplace safety, and
much more. The beneficial effects of these functions are discussed here:

RECRUITMENT AND TRAINING:

This is one of the major responsibilities of the human resource team. The HR
managers come up with plans and strategies for hiring the right kind of people.
They design the criteria which is best suited for a specific job description. Their
other tasks related to recruitment include formulating the obligations of an
employee and the scope of tasks assigned to him or her. Based on these two
factors, the contract of an employee with the company is prepared.

PERFORMANCE APPRAISALS
HRM encourages the people working in an organisation, to work according to their
potential and gives them suggestions that can help them to bring about
improvement in it. The team communicates with the staff individually from time to
time and provides all the necessary information regarding their performances and
also defines their respective roles. This is beneficial as it enables them to form an
outline of their anticipated goals in much clearer terms and thereby, helps them
execute the goals with best possible efforts. Performance appraisals, when taken on
a regular basis, motivate the employees.

MAINTAINING WORK ATMOSPHERE

This is a vital aspect of HRM because the performance of an individual in an
organisation is largely driven by the work atmosphere or work culture that prevails
at the workplace. A good working condition is one of the benefits that the
employees can expect from an efficient human resource team. A safe, clean and
healthy environment can bring out the best in an employee. A friendly atmosphere
gives the staff members job satisfaction as well.
MANAGING DISPUTES
In an organisation, there are several issues on which disputes may arise between
the employees and the employers. You can say conflicts are almost inevitable. In
such a scenario, it is the human resource department which acts as a consultant and
mediator to sort out those issues in an effective manner. They first hear the
grievances of the employees. Then they come up with suitable solutions to sort
them out. In other words, they take timely action and prevent things from going out
of hands.

DEVELOPING PUBLIC RELATIONS

The responsibility of establishing good public relations lies with the HRM to a
great extent. They organise business meetings, seminars and various official
gatherings on behalf of the company in order to build up relationships with other
business sectors. Sometimes, the HR department plays an active role in preparing
the business and marketing plans for the organisation too.

CHARACTERISTICS OF HUMAN RESOURCE MANAGEMENT (HRM):

1.HRM recruits: Human resource management (HRM) recruits/hires people to fill

up the vacant positions of the organization.
2. Tests and interviews: HRM take various tests and interviews to select people.
3. Communicate with top management: HRM tries to communicate with top
management in helping to formulate strategies to achieve organizational goals.
4. Arranges training: HRM gives or arranges training programs to improve the
skills of the employees.
5. Evaluates the performance: HRM evaluates the performance of the employees.
On this basis, he gives the promotion.
6. Exit interview: HRM takes exit interviews when an employee quits his job.
7. Collect various suggestions: HRM tries to collect various suggestions from the
employees.
8. Helps the organization’s top management to implement various
techniques: HRM helps the organizational top management in implementing
various techniques to help the organization to go ahead.

OBJECTIVES OF HUMAN RESOURCE MANAGEMENT :

(1) To create an able and motivated workforce and ensure its effective utilisation to
accomplish various organisational goals.
(2) To establish and maintain suitable and sound organisational structure in order to
secure integration of employees and groups and to create desirable working
relationship amongst them for increasing the organisational effectiveness. For this
purpose, efforts are required to be made to create a sense and feeling of
belongingness and team spirit by encouraging the employees to make positive and
valuable suggestions.
(3) To create an environment that would help maintain high morale and to encourage
a value system that would foster trust and mutuality of interests.
(4) To provide training and education for developing human resources.
(5) To provide opportunities for participation, recognition, etc., and for a fair,
acceptable and efficient leadership.
(6) To provide attractive incentives, monetary benefits, social security measures and
welfare facilities, various non-monetary rewards, benefits, etc., in order to ensure
the retention of competent employees.
(7) To adopt such policies which recognise merits and contributions by the
employees.
(8) To ensure that there is no threat of unemployment by instilling confidence among
the employees regarding stability of their employment.
(9) An organisation has to bear in mind its responsibility towards the society as a
whole. The society may not desire to enforce reservation in hiring and the laws
leading to discrimination affecting the society badly or if certain organisational
decisions have some negative impact on the society, such decisions should be
avoided. It should be the objective of an organisation to use the resources for the
betterment of the society and the nation.
(10) To develop and maintain a quality work life which makes employment in the
organisation a desirable, personal and social situation

FUNCTIONS OF HRM:
We have already defined HRM. The definition of HRM is based on what managers
do. The functions performed by managers are common to all organizations. For the
convenience of study, the function performed by the resource management can
broadly be classified into two categories, viz.
1) Managerial functions, and
2) Operative functions.
These are discussed in turn.
(1) MANAGERIAL FUNCTIONS:
Planning:
Planning is a predetermined course of actions. It is a process of determining the
organisational goals and formulation of policies and programmes for achieving
them. Thus planning is future oriented concerned with clearly charting out the
desired direction of business activities in future. Forecasting is one of the important
elements in the planning process. Other functions of managers depend on planning
function.
Organising:
Organising is a process by which the structure and allocation of jobs are determined.
Thus organising involves giving each subordinate a specific task establishing
departments, delegating authority to subordinates, establishing channels of authority
and communication, coordinating the work of subordinates, and so on.
Staffing:
TOs is a process by which managers select, train, promote and retire their
subordinates This involves deciding what type of people should be hired, recruiting
prospective employees, selecting employees, setting performance standard,
compensating employees, evaluating performance, counseling employees, training
and developing employees.
Directing/Leading:
Directing is the process of activating group efforts to achieve the desired goals. It
includes activities like getting subordinates to get the job done, maintaining morale
motivating subordinates etc. for achieving the goals of the organisation.
Controlling:
It is the process of setting standards for performance, checking to see how actual
performance compares with these set standards, and taking corrective actions as
needed.
(2) OPERATIVE FUNCTIONS:
The operative, also called, service functions are those which are relevant to specific
department. These functions vary from department to department depending on the
nature of the department Viewed from this standpoint, the operative functions of
HRM relate to ensuring right people for right jobs at right times. These functions
include procurement, development, compensation, and maintenance functions of
HRM.
A brief description of these follows:
Procurement:
It involves procuring the right kind of people in appropriate number to be placed in
the organisation. It consists of activities such as manpower planning, recruitment,
selection placement and induction or orientation of new employees.
Development:
This function involves activities meant to improve the knowledge, skills aptitudes
and values of employees so as to enable them to perform their jobs in a better manner
in future. These functions may comprise training to employees, executive training
to develop managers, organisation development to strike a better fit between
organisational climate/culture and employees.
Compensation:
Compensation function involves determination of wages and salaries matching with
contribution made by employees to organisational goals. In other words, this
function ensures equitable and fair remuneration for employees in the organisation.
It consists of activities such as job evaluation, wage and salary administration,
bonus, incentives, etc.

Maintenance:
It is concerned with protecting and promoting employees while at work. For this
purpose virus benefits such as housing, medical, educational, transport facilities, etc.
are provided to the employees. Several social security measures such as provident
fund, pension, gratuity, group insurance, etc. are also arranged.

It is important to note that the managerial and operative functions of HRM are
performed in conjunction with each other in an organisation, be large or small
organisations. Having discussed the scope and functions of HRM, now it seems
pertinent to delineate the HRM scenario in India.

SCOPE OF HUMAN RESOURCE MANAGEMENT

The scope of HRM in the modern times is very wide and ever growing. In the changing
environment, all organizational systems have become a part of global village. Path breaking
researches in behavioral sciences have enabled us to use new techniques of recruiting,
compensating, training and developing the human resource. These developments have led to a
great increase in the scope of HRM.

The Indian Institute of Personal Management has specified the scope of HRM as a discipline
which looks into the following dimensions:

(a) The Labour Dimension or Human Resource Dimension:

HRM is concerned with all aspects of manpower planning, recruitment, selection, placement,
induction, transfer, promotion, demotion, training, layoffs, development, retrenchment, wages and
salaries etc.

(b) The Employee Welfare Dimension:

HRM is concerned about the overall welfare of employees. It is the responsibility of HRM to see
the working conditions and the workplace are congenial. There is proper housing and
transportation facility for employees. There is medical aid available in case of any mishap on
the job. HRM has to also look into the adequacy of facilities like wash rooms, dining rooms,
recreation rooms, canteen, library etc.

(c) The Industrial Relation Dimension:

This dimension is related to the organization’s relations with employees. It means that HRM deals
with unions of employees, consults them and negotiates with them the terms of their employment
contracts. HRM also initiates disciplinary actions against destructive employees and handles the
grievances of employees at all levels.
The American Society for Training and Development has defined the Human Resource
Management Model as a system with nine sub-systems. The model explains that every sub-system
works in an interactive fashion to manage the human resource of an organization.
The sub-systems are as follows:
(i) Training and development – HRM has to look after all training programs for selected employees
to develop them for excellence in job.

(ii) Organizational Development – OD is a method which aims at changing the attitudes, values
and beliefs of employees so that employees can improve the organization. This program is almost
always handled through HR, whose staff has the specialized knowledge and networks required to
implement OD.

(iii) Organization /Job Design – This subsystem of HR defines the tasks, authority and
responsibility relationships in the organization. It integrates all divisions of the organization and
also connects individual employees to their job.

(iv) Human Resource Planning – HR Planning is an integral part of various strategy and HRM.
This subsystem takes care of all fundamental decisions regarding personnel and whether they can
be met with internal sources or not. External sources are used only after HR manager suggests.

(v) Selection and Staffing – Careful scrutiny of all information supplied by the candidate is the
work of HRM. After this, the next work of HR revolves around putting the best people for the job.

(vi) Personnel Research and Information System – The focus of this sub-system is to develop a
personnel information base. This help in compensating, promoting and motivating them.

(vii) Compensation Benefits – This sub-system of HR measures the work with compensation so
that employees got fair and consistent wages/ salary.

(viii) Employee Assistance – This sub-system helps employees get over their fear of failure in
the organization. Proper counselling is given by experts to build up their self-confidence to work
in the organization and solve their individual problems themselves.

(ix) Union/Labour relations – This subsystem assures that there is a very healthy employer-
employee relationship in the organization where regular employer interaction with labour unions
takes place.

QUALIFICATIONS AND QUALITIES OF HR MANAGER

Being an important management function in running an organisation smoothly, HR department
needs leadership of competent people having people skills.

Qualities of HR Manager
1. Knowledge of changing business strategy
2. Knowledge of role makers rather than role takers
3. Knowledge of global competition
4. Knowledge of innovation and creativity
5. Knowledge of decision making skills
6. Knowledge of policymaking skills
7. Knowledge of versatile people in HRD
8. Knowledge of good human relations
9. Knowledge of behavioural science
10. Knowledge of various related disciplines of management.