HRM UNIT 1

BY 3 BBA D
 INDEX
TOPIC PAGE NO.

MIND MAP 2

CONCEPT OF HRM 3

PROCESS OF HRM 4

NATURE OF HRM 5

SCOPE OF HRM 6

EVOLUTION OF HRM 7

ROLE OF HR MANAGER 8

FUNCTIONS OF HRM 10

STRUCTURE OF HRM 12

STRATGEIC HRM 16

READINGS FOR REAL WORLD CASE 18

STUDIES

REFERERCES 19

1
 MIND MAP OF HRM

2
CONCEPT OF HRM

Human Capital
Human Capital An organization’s employees, described in terms of their training, experience,
judgment, intelligence, relationships, and insight.

Definition
The policies, practices, and systems that influence employees’ behavior, attitudes, and
performance

 The core meaning of the human resource management is how to manage people or
employees in the organization.
 According to M L Cuming, “Human Resource Management is concerned with obtaining
the best possible staff for an organization and having got them looking after them so that
they want to stay and give their best to their jobs.”
 Dale Yoder defines Human Resource Management as that part of the phase of
management dealing effectively with control and use of manpower as distinguished from
other sources of power.
 According to F. E. L. Brech, Human Resource Management is that part of management
progress which is primarily concerned with the human constituents of an organization.

Why is HRM critical for a business?

Without an effective and efficient HR team, there will be no talents in the company, and without
talented people who are dedicated to the company, there will be no business.

Attracting and Retaining Talent – Every organization needs high and medium skilled
workers, which increases the demand of the same. But the availability for the same is
very scarce. This leads to the problem of Talent War.
Therefore, HR plays an important role in attracting high skilled workers as well as
retaining them in the organization. HR activities are one of the biggest driving force for
the same.

3
Process of HRM

1. Recruitment – Recruitment is a process of searching for prospective employees and

stimulating or encouraging them to apply for jobs in the organization. The objective of
recruitment is to attract potential employees with the necessary characteristics or
qualification in the adequate number for the job available. There are two sources of
recruitment :
1. Internal – Internal sources means inviting candidates from within the organization.
There are two ways of internal recruitment – transfer and promotion.
2. External – Under this, the candidates from outside the organization are invited to fill
the vacancies. Various sources of external recruitment are – direct recruitment,
casual callers, advertisement, employment exchange, management and placement
agencies, campus recruitment, Recommendation and present employees, labour
contractors, advertising and web publishing.
2. Selection – It is a process of choosing from among the pool of prospective candidates who
have applied for the job.
3. Training – Training refers to the process by which the attitudes, skills and abilities of
employees to perform specific jobs are increased. It is a process of learning new skills and
application of knowledge. It attempts to improve the performance on the current job or
prepare them for any intended job. There are two ways of training.
1. On the job – under these methods, the employee is given training while he is
actually working. In other words, it means “learning while doing”.
2. Off the job – Under these methods, training is given away from the actual work
place. In other words, it means “learning before doing”.

4
4. Assessing performance - Performance appraisal is a systematic evaluation of the employee's
present job capabilities and also his potential for growth and development by his superiors. It
can be either informal or formal. Its focus is on employee's development.
5. Motivation - rewards and benefits & recognitions
6. Compensating - Human resource management determines what is to be paid for different
type of jobs. Human resource management decides employee’s compensation which includes
- wage administration, salary administration, incentives, bonuses, fringe benefits, and etc.
7. Maintaining labour relations - This function refers to the interaction of human resource
management with employees who are represented by a trade union. Employees comes
together and forms an union to obtain more voice in decisions affecting wage, benefits,
working condition, etc,
8. Healthy, welfare and safety of employees - This function refers to various services,
benefits, and facilities that are provided to employees for their well-being.
9. Compliance of labour laws

Nature of HRM
The nature of the human resource management has been highlighted in its following features :
1. Inherent Part of Management: Human resource management is inherent in the process
of management. This function is performed by all the managers throughout the
organisation rather that by the personnel department only. If a manager is to get the best
of his people, he must undertake the basic responsibility of selecting people who will
work under him.
2. Pervasive Function: Human Resource Management is a pervasive function of
management. It is performed by all managers at various levels in the organisation. It is
not a responsibility that a manager can leave completely to someone else. However, he
may secure advice and help in managing people from experts who have special
competence in personnel management and industrial relations.
3. Basic to all Functional Areas: Human Resource Management permeates all the
functional area of management such as production management, financial management,
and marketing management. That is every manager from top to bottom, working in any
department has to perform the personnel functions.
4. People Centered: Human Resource Management is people centered and is relevant in all
types of organisations. It is concerned with all categories of personnel from top to the
bottom of the organisation. The broad classification of personnel in an industrial
enterprise may be as follows:
(i) Blue-collar workers (i.e. those working on machines and engaged in loading,
unloading etc.) and white-collar workers (i.e. clerical employees),
(ii) Managerial and non-managerial personnel,

5
 (iii) Professionals (such as Chartered Accountant, Company Secretary, Lawyer, etc.) and
non-professional personnel.
5. Personnel Activities or Functions: Human Resource Management involves several
functions concerned with the management of people at work. It includes manpower
planning, employment, placement, training, appraisal and compensation of employees.
For the performance of these activities efficiently, a separate department known as
Personnel Department is created in most of the organisations.
6. Continuous Process: Human Resource Management is not a one shot‘ function. It must
be performed continuously if the organisational objectives are to be achieved smoothly.
7. Based on Human Relations: Human Resource Management is concerned with the
motivation of human resources in the organisation. The human beings can‘t be dealt with
like physical factors of production. Every person has different needs, perceptions and
expectations. The managers should give due attention to these factors. They require
human relations skills to deal with the people at work. Human relations skills are also
required in training performance appraisal, transfer and promotion of subordinates.

Scope of HRM
1. HRM in Personnel Management - The objective here is to ensure the individual growth
of each employee which indirectly contributes to the overall growth of the entire
organization.
2. HRM in Employee Welfare - This aspect of HRM is concerned with the working
condition and the amenities at the workplace. It makes the environment worth working by
eliminating workplace hazards, providing job safety, medical and health services etc.
3. HRM in Industrial Relation - The main aim of this aspect is to maintain peace and
harmony in the organization. It requires effective interaction with the labour or employee
unions, sensitively addressing their grievances and settling their disputes.

Evolution of HRM
The term “human resource management” is of recent origin. In its modern connotation, it came to
be used mainly from the 1980s onwards. During ancient times and for a long period in the medieval
era, the production of goods was done mainly by skilled artisans and craftsmen. They owned the
tools and instruments, produced articles and sold these in the market.

6
 1. Early Philosophy (Before 1900): The history of modern Human Resource Management
began with the efforts of Robert Owen. Owen is called the founder of Human Resource
Management. In it propounded the need for better industrial relations and improvements in
the service conditions. His attitude towards workers was very cordial, liberal and
paternalistic.
2. Efficiency and Productivity Movement (1900-1920): During the last year of the 19th
century arrived the age of efficiency and productivity movement. The two decades from
1900 to 1920 were the years of the scientific management movement. Taylor’s Scientific
Management Thought was accepted during this period. Taylor opposed the idea of trade
unionism and workers’ organization. The main contribution of these two decades has been
the increase in the size of units, the introduction of scientific thinking into actions, job
analysis, standards costing, scientific selection and training of workers and the idea of
mental revolution
3. Period of Welfarism and Industrial Psychology (1920- 1930): Human Resource
Management had taken a definite form. Staff line organization became the basis of Human
Resource Management. The opposition of the scientific management movement by
workers introduced the need for industrial psychology
4. Period of Human Relations (1930-1950): When Prof. Elton Mayo and his companions
conducted Hawthorn experiments, it was the beginning of recognition of the fact that
human resources have a greater influence on production than other psychical resources. A
worker must be treated as a human being. His social, psychological and moral instincts
should be fully recognized by the management
5. Modern Times (After 1950): The History of Human Resource Management from 1950
up to current times is the age of modern developments. It is the period of the citizenship
concept of labour where the workers have the full right to be consulted in determining the
rules and regulations under which they work. The concept of industrial democracy has
imposed many new responsibilities upon the human resource managers of industrial
houses. In modern times, Human Resource Management is widely accepted as an
independent discipline. One finds two important developments during this period, after
1960, Human Resource Management began to be realized as a behavioural science that

7
 centred completely on human elements with the study of organizational behaviour as its
main crux.

HUMAN RESOURCE MANAGEMENT IN INDIA

• Traditional craftsman goods shipped to Europe

• Master servant relationship in 17th century 1828-Robert Owen father of co-operative movement
wrote a book titled “New view society”- Improving working conditions and work-life of labourers

• After 1850 British rulers institutionalized for running the government which leads to personnel
management system 1931-Role of Royal commission of labour

• Industrial revolution

• Awakening of labour

• Government attitude towards labour 1941-First tripartite labour conference 1948-Factories Act,
Cultural and social changes. Changes in the social value of labour Changes in managerial value
1950-1969 III five year plans-Private and public sector projects 1990- Personnel management and
IR in public sector undertakings After 1990 the emphasis is shifted to human values and
productivity through people

• Role of Public sector companies like BHEL, SAIL and SBI • 1995 Progressive efforts in HR

• 1997- Focus on product and customer

• Leading to customer satisfaction, benchmarking, core competence, empowerment and learning

organization.

Role of a Human Resource Manager

A human resource manager, charged with fulfilling the objectives of an organisation, should be a
leader with high intellectual powers, a visionary and a philosopher who provides the initiative to
shape the future in terms of leading the human beings in an organisation towards more
prosperous and progressive policies.

8
 1. As an Intellectual: The basic skill in the human resource field as compared to
technologists or financial experts is the skill to communicate, articulate, understand and
above all, to be an expert when it comes to putting policies and agreements in black and
white. The personnel man‘s skill lies in his command over the language. A personnel
man has to deal with employees and he must possess the skills of conducting fruitful and
systematic discussions and of communicating effectively. He should also be in a position
to formulate principles and foresee the problems of the organisation. This means that he
would require the mental ability to deal with his people in an intelligent manner as well
as to understand what they are trying to say.
2. As an Educator: It is not enough that a human resource man has command-over the
language, which, however, remains his primary tool. He should be deeply interested in
learning and also in achieving growth. Basically, human beings like to grow and realise
their full potential. In order to harmonise the growth of individuals with that of the
organisation, a personnel administrator must not only provide opportunities for his
employees to learn, get the required training and assimilate new ideas but also he himself
should be a teacher. A personnel man who simply pushes files and attends labour courts
for conciliation purposes and other rituals of legal procedure for the settlement of
industrial disputes is not a personnel administrator of the future.
3. As a Discriminator: A human resource administrator must have the capacity to
discriminate between right and wrong, between that which is just and unjust and merit
and non-merit. In other words, he should be a good judge when he sits on a selection
board, a fair person when he advises on disciplinary matters and a good observer of right
conduct in an organisation.
4. As an Executive: The human resource man must execute the decisions of the
management and its policies with speed, accuracy and objectivity. He has to streamline
the office, tone up the administration and set standards of performance. He has to
coordinate the control functions in relation to the various other divisions and, in doing so
he should be in a position to bring unity of purpose and direction in the activities of the
personnel department. He must ask relevant questions and not be merely involved in the
office routine whereby the status quo is maintained. He should have the inquisitiveness to
find out causes of delay, tardy work and wasteful practices, and should be keen to
eliminate those activities from the personnel functions which have either outlived their
utility or are not consistent with the objectives and purposes of the organisation.
5. As a Leader: Being basically concerned with people or groups of people, and being
placed in the group dynamics of various political and social functions of an organisation,
a Human resource man must not shirk the role of leadership in an organisation. He, by
setting his own example and by working towards the objectives of sound personnel
management practices, must inspire his people and motivate them towards better
performance. He should resolve the conflicts of different groups and build up teamwork
in the organisation.
6. As a Humanist: Deep faith in human values and empathy with human problems,
especially in less developed countries, are the sine qua non for a Human resource man.

9
 He has to deal with people who toil at various levels and partake of their joys and
sorrows. He must perform his functions with sensitivity and feeling.
7. As a Visionary: While every leading function of an organisation must evolve its vision
of the future, the primary responsibility for developing the social organisation towards
purposive and progressive action fall on the personnel man. He should be a thinker who
sets the pace for policy-making in an organisation in the area of human relations and
should gradually work out new patterns of human relations management consistent with
the needs of the organisation and the society. He must ponder on the social obligations of
the enterprise, especially if it is in the public sector, where one has to work within the
framework of social accountability. He should be in close touch with socio-economic
changes in the country. He should be able to reasonably forecast future events and should
constantly strive to meet the coming challenges.

Functions of HRM
Human Resource Management functions can be classified in following three categories.
1. Managerial Functions
2. Operative Functions
3. Advisory Functions
Managerial Functions:
The Managerial Functions of Human Resource Management are as follows:
1. Human Resource Planning - In this function of HRM, the number and type of employees
needed to accomplish organisational goals is determined. Research is an important part of
this function, information is collected and analysed to identify current and future human
resource needs and to forecast changing values, attitude, and behaviour of employees and
their impact on organisation.
2. Organising - In an organisation tasks are allocated among its members, relationships are
identified, and activities are integrated towards a common objective. Relationships are
established among the employees so that they can collectively contribute to the attainment of
organisation goal.
3. Directing - Activating employees at different level and making them contribute maximum
to the organisation is possible through proper direction and motivation. Taping the maximum
potentialities of the employees is possible through motivation and command.
4. Controlling - After planning, organising, and directing, the actual performance of
employees is checked, verified, and compared with the plans. If the actual performance is
found deviated from the plan, control measures are required to be taken.
Operative Functions:

10
The Operative Functions of Human Resource Management are as follows:
Recruitment and Selection Recruitment of candidates is the function preceding the selection,
which brings the pool of prospective candidates for the organisation so that the management can
select the right candidate from this pool.
1. Job Analysis and Design - Job analysis is the process of describing the nature of a job and
specifying the human requirements like qualification, skills, and work experience to perform
that job. Job design aims at outlining and organising tasks, duties, and responsibilities into a
single unit of work for the achievement of certain objectives.
2. Performance Appraisal - Human resource professionals are required to perform this
function to ensure that the performance of employee is at acceptable level.
3. Training and Development - This function of human resource management helps the
employees to acquire skills and knowledge to perform their jobs effectively. Training an
development programs are organised for both new and existing employees. Employees are
prepared for higher level responsibilities through training and development.
4. Wage and Salary Administration - Human resource management determines what is to be
paid for different type of jobs. Human resource management decides employees
compensation which includes - wage administration, salary administration, incentives,
bonuses, fringe benefits, and etc.,
5. Employee Welfare - This function refers to various services, benefits, and facilities that are
provided to employees for their well-being.
6. Maintenance - Human resource is considered as asset for the organisation. Employee
turnover is not considered good for the organisation. Human resource management always
tries to keep their best performing employees with the organisation.
7. Labour Relations - This function refers to the interaction of human resource management
with employees who are represented by a trade union. Employees comes together and forms
an union to obtain more voice in decisions affecting wage, benefits, working condition, etc,
8. Personnel Research - Personnel researches are done by human resource management to
gather employees' opinions on wages and salaries, promotions, working conditions, welfare
activities, leadership, etc,. Such researches helps in understanding employees satisfaction,
employees turnover, employee termination, etc,
9. Personnel Record - This function involves recording, maintaining, and retrieving employee
related information like - application forms, employment history, working hours, earnings,
employee absents and presents, employee turnover and other data related to employees.
Advisory Functions:
The Advisory Functions of Human Resource Management are as follows:
Human Resource Management is expert in managing human resources and so can give advice on
matters related to human resources of the organisation. Human Resource Management can offer
advice to:

11
1. To Top Management: Personnel manager advises the top management in formulation and
evaluation of personnel programs, policies, and procedures.
2. To Departmental Heads: Personnel manager advises the heads of various departments on
matters such as manpower planning, job analysis, job design, recruitment, selection,
placement, training, performance appraisal, etc.

STRUCTURE OF HR

HR Manager. Generalists in their roles, they do a bit of everything including benefits,

compensation, recruiting and handling employee relations issues.

or

HR Director. Often responsible for HR teams of two or more, human resource directors may
serve as the highest-ranking member of HR within a smaller company or a startup.

HR Specialist. Focused on administration, payroll processing**, and other administrative tasks,

as well as employee orientation, training, and pre-screen interviewing.

*A small business will not always have specialist HR roles.

12
**Payroll is often an externally sourced function provided by a vendor partner for SMBs (small
and mid-sized businesses).

Human Resource Information Specialist (HRIS). Oversees and maintains HR and recruiting
technologies. The HRIS is familiar with recruiting and HR processes but is highly technical and
interfaces directly with the information technology department.*

*Many small businesses have HRIS roles that fall under the umbrella of the IT department,
especially in the technology sector.

HR Coordinator. Files and maintains reports, processes payroll, schedules interviews, plans and
organizes events, handles inter-office communication. In a small company, this role is typically
the “right hand” of the head of HR.

Recruiting Coordinator. An administrative position, this role is responsible for recruiting tasks
(including being the point person of contact for staffing or recruiting partners), as well as
maintaining ATS data and reports.

Office Administrator. This position within a startup or small company typically supports the HR
team, but also performs other administrative tasks for the entire company.

13
Chief Human Resources Officer (CHRO). Focuses on the strategy of human capital and how
HR programs grow revenue and the organization for the broad and often global organization and
for the longer term. Reports to company CEO.

Vice President of HR. Works with the executive team on business objectives. They view
financial documents and work to understand how programs and services drive revenue. Focused
on business metrics, reporting, and analytics. Reports to the CHRO.

Chief Diversity Officer. Focuses solely on employee and candidate diversity and inclusion. This
position in Fortune 500 companies and within the tech industry often reports directly to the CEO.
Sometimes this role is also referred to as Vice President of Diversity and could also report
directly to the CHRO depending on a company’s organizational structure.

HR Business Partner (HRBP). A consultative position that provides resources and builds
relationships while focusing on the missions and objectives of the organization. This person is
seen as an operational and more strategic resource for the region or area in which they support
and often specializes in a specific area of need for the company. Larger companies often have
multiple HRBPs supporting specific functions within human resources.

14
Recruiting Director. Reports to VP of HR and is the senior leader for hiring and recruiting. A
decision maker responsible for budgeting, allocation, and strategy planning with senior
leadership on the subject of talent acquisition and recruitment.

HR Director. Responsible for annual budgets and decisions on buying software, systems and
negotiating benefits for the company. This role is less focused on compliance and policy and
more on driving results for the organization related to human capital.

Compensation and Benefits Manager. This role is responsible for managing benefit plans
including health insurance, life insurance, dental, vision, 401(k) plans, and other programs like
employee assistance programs and tuition reimbursement.

HR Specialist. Focused on administration, payroll, and other administrative tasks, as well as

employee orientation, training, and pre-screen interviewing. May specialize in employee
relations, program management, project management, and compliance, among other areas. Large
companies will typically have multiple HR Specialists for these areas.

HR Generalist. A broad role that can include handling benefits, compensation, recruiting and
employee relations, as well as location forecasting and budgeting, recruiting and interviewing,
compliance and overseeing EEOC investigations and claims.

Human Resource Information Specialist (HRIS). Oversees and maintains HR and recruiting
technologies. The HRIS is familiar with recruiting and HR processes but is highly technical and
interfaces directly with the information technology department. Depending on the size of the
company, multiple HRIS positions that focus on specialty areas like data management and
security, technology development and HROS support.

Recruiter. Specializes in the hiring and selection for open requisitions that the organization is
hiring for from job seekers who applied for a position through a career site and applicant tracking
system. Most commonly works with candidates and hiring managers. Large companies may have
a team of recruiters dedication to specific lines of business or regions.

Recruiting Coordinator. An administrative position, this role reports to lead or senior recruiters
and is responsible for a wide variety of recruiting tasks like candidate outreach, campaign
coordination and execution, as well as maintaining ATS data and reports.

HR Coordinator. Files and maintains reports, processes payroll, schedules interviews, plans and
organizes events, handles inter-office communication. In a large company, this role is typically
held by multiple individuals focusing on recruitment marketing, email outreach, or internal
resourcing.

15
Strategic HRM
Strategic human resource management is a proactive process of managing employees in an
organization, that includes standard human resource components such as attracting, developing,
rewarding, and retaining employees and brings them one step further by taking in consideration
the goals and needs of other departments within the organization, and the organization itself.

It's important to analyze organization-wide goals and needs, including all departments, and create
a strategy for managing employees that is aligned with the overall vision, mission and values of
the particular organization. The end-goal of the strategic human resource management is
ensuring a higher chance of organizational success.

Importance of Strategic Human Resource Management (SHRM)

Since the last twenty years or so, there was an increasing fear of HR being secluded from
business goals and as a separate part of the organizations. There was an increasing need felt
across sectors of HR playing a vital role in improving productivity in organizations to achieve a
competitive edge. So, strategic HRM came into existence. The primary goal of strategic human
resource management is to solve business objectives or obstacles that may not occur within the
direct purview of HRM. This has to be done through effective HRM itself. So it is basically
tuning of human resource management (HRM) to suit business objectives. The other types of
HRM are Hard HRM and Soft HRM.
For strategic HRM, there must be effective cooperation between the top management and the HR
head. Some of the challenges faced in modern day HRM are as follows:

1. Cross cultural issues and interaction

2. Internationalization
3. Changing ownership due to increased M & A
4. Rapidly changing business environments
5. Technological advancements

Elements of Strategic Human Resource Management (SHRM)

The pillars for SHRM are:
a) Humans are not just resources but they are an asset to an organization, which should provide a
competitive edge to the organization.
b) It’s the people within the organization who actually implement such change.
c) Every change is achievable only through a proper planning followed by execution with respect
tpo the organizational needs and objectives.
d) The main aim of strategic HRM is to concentrate on the ways through which the firm can take
an edge over its competitors.
e) According to Hendry and Pettigrew, SHRM has four different meanings, mainly:

16
  Making use of planning.
 Designing and managing people via a coherent approach.
 Developing systems which are based on employment policy and workforce strategy.
 Bringing out coordination between HR activities and other policies into developing
business strategy.
 Considering people as resources and achieving competitive edge by making the best the
of them.

17