1.

)Meaning
Human resource management is the process of acquiring, training, appraising, and
compensating employees and of attending to their labour relations, health and
safety, and fairness
concerns.

These include:
 Conducting job analyses (determining the nature of each employee’s job).
 Planning labour 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, counselling, 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 labour relations.
2.)Definition
Human resource management is the strategic approach to the effective and efficient
management of people in a company or organization such that they help their
business gain a competitive advantage. It is designed to maximize employee
performance in service of an employer's strategic objectives.
3.)Nature & Scope of HRM

Scope
The scope of HRM is very wide. Research in behavioural sciences, new trends in
managing knowledge workers and advances in the field of training have expanded
the
scope of HR function in recent years. The Indian Institute of Personnel Management
has specified the scope of HRM thus:

i. Personnel aspect:
This is concerned with manpower planning, recruitment,
Selection, placement, transfer, promotion, training and development, lay off and
Retrenchment, remuneration, incentives, productivity, etc.

ii. Welfare aspect:

It deals with working conditions and amenities such as canteens,
creches, rest and lunch rooms, housing, transport, medical assistance, education,
health and safety, recreation facilities, etc.

iii. Industrial relations aspect:

This covers union-management relations, joint
consultation, collective bargaining, grievance and disciplinary procedures, settlement
of disputes, etc.

Nature Of HRM

Simply put, HRM refers to the application of management principles to management

of people in an organisation. This is too simple a statement and fails to capture the
essence of HRM.In its essence, HRM comprises the following:

 HRM consists of people-related functions as hiring, training and development,

performance review, compensation, safety and health, welfare, industrial
relations and the like. These are typically the functions of ‘Personnel
Management’ and are administrative and supportive in nature. Appropriately
called ‘doables’, these activities are highly routinised and have been often
outsourced.

 More important function of HRM is the building of human capital. Human

capital refers to the stock of employee skills, knowledge and capabilities that
may not show up in a balance sheet but have significant impact on a firm’s
performance.
 As stated earlier, human capital (also known as ‘deliverables’) lends
competitive advantage to a firm. Obviously, building human capital is the
major function of an HR professional. These activities (routine as well as
capital building initiatives) are not carried out in isolation. They are
interdependent.

 HRM necessitates alignment of HR policies and practices with the

organisation’s strategies—bothcorporate as well as functional. By meshing
HR practices and policies with strategies, the HR executive helps formulate
and implement business strategies. The HR manager then assumes the
mantle of a strategist. In fact, as will be stated later, the very concept of HRM
signifies that the role of HR executive is elevated, from an administrative level,
to that of the board. He or she becomes the member of the board and thus
takes part in decision making.

 HRM involves the application of management principles and functions to

 doables and deliverables of people management.

 HRM assumes that it is the people who make the difference. They alone are
capable of generatingvalue and adding to the competitive advantage to
organisations.
 l HR activities, both doables and deliverables, are not the sole responsibility of
the HR specialists. Line managers are equally responsible for carrying out the
activities.

 HR functions are not confined to business establishments only. They are

applicable to nonbusiness organisations too, such as education, health care,
recreation.
4.)HRM Characteristics
Characteristics of human resource management

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.
7. To set strategies for future challenges: Organizations should set
some strategies’ to survive in the competition.

8. To formulate the HR policies: The HR manager is supposed to take

action in this regard.

9. To review the existing HRM practices: Employee needs and

workability of HRM policies are to be reviewed regularly.

10. To develop guidelines: The last objective of SHRM is to develop

guidelines for the human resource manage
5.)Objectives of HRM

The principal objectives of HRM may be listed thus:

i. To help the organisation reach its goals: HR department, like other departments
in an organisation, exists to achieve the goals of the organisation first and if it does
not meet this purpose, HR department (or for that matter any other unit) will wither
and die.

ii. To employ the skills and abilities of the workforce efficiently: The primary
purpose of HRM is to make people’s strengths productive and to benefit customers,
stockholders and employees.

iii. To provide the organisation with well-trained and well-motivated employees:

HRM requires that employees be motivated to exert their maximum efforts, that
their performance be evaluated properly for results and that they be remunerated
on the basis of their contributions to the organisation.

iv. To increase to the fullest the employee’s job satisfaction and self-
actualisation: Ittries to prompt and stimulate every employee to realise his potential.
To this end suitable programmes have to be designed aimed at improving the quality
of work life (QWL).

v. To develop and maintain a quality of work life: It makes employment in the

organisation a desirable, personal and social, situation. Without improvement in the
quality of work life, it is difficult to improve organisational performance.

vi. To communicate HR policies to all employees: It is the responsibility of HRM

tocommunicate in the fullest possible sense; tapping ideas, opinions and feelings of
customers, non-customers, regulators and other external public as well as
understanding the views of internal human resources.

vii. To be ethically and socially responsive to the needs of society: HRM must
ensure that organisations manage human resource in an ethical and socially
responsible manner through ensuring compliance with legal and ethical standards.
Check Your Progress
6.)HRM Theoretical Framework
7.)MODELS OF HRM
Five major models have been identified and all these serve four below purpose in
HRM-

 They provide an analytical framework for studying HRM (for example,

situational factors, stakeholders, strategic choice levels, competence).

 They legitimise certain HRM practices; a key issue here being the
distinctiveness of HRM practices: “It is not the presence of selection or
training but a distinctive approach to selectionor training that matters”.

 They provide a characterisation of HRM that establishes variables and

relationship to be researched.

 They serve as a heuristic device—something to help us discover and

understand the world for explaining the nature and significance of key HR
practices.

The five HR models are:

i)The Fombrun,
(ii) The Harvard,
(iii) The Guest,
(iv) The Warwick
(v) Dave Ulrich.

 Fombrun, tichy and devanna model :

 Being the first model (dates back to 1984), this emphasises just four functions
and their interrelatedness.
 The four functions are: selection, appraisal, development and rewards. These
four constituent components
 of HRM and are expected to contribute to organisational effectiveness
 .
The Fombrun model is incomplete as it focuses on only four functions of HRM and
ignores all environmental and contingency factors that impact HR functions.
Nevertheless, the model deserves appreciation for being the first and has set stage
for other theories to emerge.
It is also a simple model that serves as a heuristic framework for explaining the
nature and significance of the key HR activities.
The model also deserves appreciation for emphasising interrelationship among the
four activities and their collective impact on organisational effectiveness.
The Harvard model :

The Harvard model claims to be comprehensive in as much as it seeks to comprise

six critical components of HRM. The dimensions included in the model are:
 stakeholders interests
 situational factors
 HRM policy choices
 HR outcomes
 long-term consequences and
 feedback loop through which the outputs flow directly into the organisation
and the stakeholders .
The guest model

Yet another HRM model was developed by David Guest in 1997 and claims to be
much superior to other models. The details will justify the claim. This model claims
that the HR manager has specific strategies to begin with, which demand certain
practices and when executed, will result in outcomes.
These outcomes include behavioural, performance related and financial rewards.
HR practices, HR outcomes, behavioural outcomes, performance results and
financial consequences.
Looking inversely, financial results depend on employee performance, which in turn
is the result of action oriented employee behaviours. Behavioural outcomes are the
result of employee commitment,
Understanding the Nature and Scope of Human Resource Management 31
quality and flexibility, which, in turn, are impacted by HR practices. HR practices
need to be in tune with HR strategies which are invariably aligned with organisational
strategies.
The claim of the Guest model that it is superior to others is partly justified in the
sense that it clearly maps out the field of HRM and delineates the inputs and
outcomes.
The Warwick model

This model was developed by two researchers, Hendry and Pettigrew of University
of Warwick (hence the name Warwick model). Like other models, the Warwick
proposition centres around five elements:
Human Resource Management
l Outer context (macro environmental forces)
l Inner context (firm specific or micro environmental forces)
l Business strategy content
l HRM context
l HRM content
The Warwick model takes cognisance of business strategy and HR practices (as in
the Guest model), the external and internal context (unlike the Guest model), in
which these activities take place, andthe process by which such changes take place,
including interactions between changes in both context and content. The strength of
the model is that it identifies and classifies important environmental influences
on HRM. It maps the connection between the external and environmental factors and
explores how HRM adapts to changes in the context.15 Obviously, those
organisations achieving an alignment between the external and internal contexts will
achieve performance and growth.
Pause and Ponder Looking at the four models described in this section, what
similarities and dissimilaritiesdo you notice among them? What assumptions do they
make? What lessons do theycarry to practising HR managers and students of HRM
The ulrich model

In his epic book Human Resource Champions, Dave Ulrich proposes a

contemporary HR model which lifts HR function from mere transactional to
transformational role. Being one of the most popular models in the industry today,
Ulrich identifies four distinct roles that HR team should deliver-strategic,
administration, champion, and change harbinger
Strategic Partner: Being a strategic partner is about the alignment of HR activities
and initiatives with the overall business strategy. The HR team should now answer a
fundamental question: How do we create an organisation to accomplish business
objectives? The answer implies that all the strategic statements to be converted into
specific organisational actions, and implement them relentlessly. HR
manager should work with line managers to formulate business strategies, convert
them into action plans and execute them.
Understanding the Nature and Scope of Human Resource Management 33
Change Agent: The role of change agent involves initiating three categories of
responses to meet business goals. First refers to the initiative changes. These focus
on implementing new programmes, projects or procedures. Such initiatives (e.g.
implementing a new organisational structure, customer service agenda, quality-
improvement effort, or cost reduction programme) occur annually in most
organisations. Through strategic planning, initiatives are identified as necessary and
are implemented as part of an evolving management improvement process. Second
refers to process changes which focus on the way in which work gets done in a firm.
Companies first identify core processes and then try to improve them through work
simplification, value-added assessments, and other reengineering efforts.
Finally, the cultural changes, occur within an organisation when the fundamental
ways of doing business are reconceptualised. The identity of the firm is transformed
both for employees and customers.
As an administrative expert, HR manager is responsible for offering HR deliverables
at the lowest cost. A HR professional acts at two levels as an expert. First, he or she
may help a firm go through the reengineering of business processes. As
organisations identify and improve core processes, the HRhead may actively work
on the improvement teams working towards greater simplicity, efficiency and
effectiveness. For too long, business reengineering has been driven by technologists
working mechanically with little input from HR professionals sensitive to the human
issues related to change. Lack of HR inputs many times leads to failure of
reengineering initiatives. Second, HR professional must apply his/her administrative
expertise to HR processes even if not participating in process reengineering, he or
she should demonstrate one’s ability to deliver HR services efficiently by
reengineering own processes as needed. By doing so, HR professional not only
improves his or her firm’s infrastructure but earns credibility for participation in
subsequent business change
efforts.
8.) Difference between HRM AND
PERSONNEL MANAGEMENT
A debate about the differences, if any, between HRM and personnel management
went on for some time. It has died down recently, especially as the terms HRM and
HR are now in general use both in their own right and as synonyms for personnel
management. But understanding of the concept of HRM is enhanced by analysing
what the differences are and how traditional approaches to personnel management
have evolved to become the present day practices of HRM.
 9.)HRM Opportunity & Challenges
HRM is a big challenge, because technically they don’t have a HR department.
They may have one or two HR persons, but they are not authorized to take any
decisions. So their owner, have to face challenges, so that they can resolve their HR
related problems so that its workforce can grow. It can be done by:

1. Rewarding and Retaining Talented Candidates: Around 60% of HR

professionals believe that in the upcoming years, major issue will be of
retaining the talented and well-performing employees. Although, it’s going to
be more difficult when they have to reward its best performers so that the
market can grow in competition which requires more joint efforts for
establishing loyalty between employees.

2. Developing Future Leaders: By giving the employees, opportunity to grow, future

pillars of organization can be build. Rate of turnover of employees can be reduced if
employee engagement practices are involved and their skills can be developed with
the help of business. More than 50% of HR professionals are taking it seriously to
get more concerned towards next generation business leaders.

3. Social Media: Social media websites, such as Facebook and LinkedIn, can also
be used to get better job candidates. HR needs to use social media as a benefit for
the organization in an extremely competitive way by creating job market for both
candidates and hiring institutions. HR professionals should be able to get the best
talent before the competitor gets it, in other means, hiring the employee, even before
a candidate applies for it. At social media profiles, candidates have their information
regarding their studies, for that HRprofessionals need to have in-depth knowledge of
social media too.

4. Globalization: In the globe, a talent pool has been opened up in the job market by
internet. In the 21st century, HR are recruiting candidates from all over the world,
who speaks various languages and practice different customs so that, they will be
more beneficial to the company. They also try to behave alike company’s local
employees. It brings changes in different HR strategies, so that existing staff can
also address such concerns. HR needs to pay more attention towards wage
difference between local employees and the employees from other countries.

5. Staff Turnover: The main issue for HR is staff turnover always. Employees keep
on moving after 3-4 years. Therefore, recruiting and retaining new talents has
become the top priority for the HR staff. Large and global companies offer high
salaries to experienced employees and also give extensive benefit packages, so it
becomes difficult to recruit and retain best staff for small business. With new learning
and developing environment, new opportunities can be created within the
organization, so that employees tempt to be a part of the organization.

6. Accelerating Human Capital Investments: Around half of the HR people indicate

that in upcoming years there will be need to acquire human capital and optimizing
human capital investments. It seems to be a big challenge, because it needs
recruiting best employees and retaining them. It implies that HR people needs to
develop talent management practices in organization for rewarding attracting,
retaining and developing the employees of the organization.

7. Flexible Work Arrangements: The new generation of employees focuses on

working in flexible time and it is the major concern for them. They do not want to
work in traditional 9 to 6 timings. So the flexible work timings needs to be there, by
allowing workers to work the way they want and their desirable time to give
maximum productivity. More than 50% of modern HR professionals think that this
can be proved as a winning factor for the organization.

Opportunities for better future of HRM: There can be various ways which can help
in making the future of HRM better in various ways. By grabbing some opportunities,
an organization can have better future for its Human Resource Management which
in turn will help in making better optimization of resources for attaining the goals of
the business efficiently and effectively.

1. Submission with Laws and Regulation: Change in employment laws is a big

problem for business owners. They select to ignore laws of employment, with the
belief that it is not applicable to their business. But it could possibly ends in doing
lawsuits and demise to the company. No matter how small or large the business is, it
is necessary to make sure that an organization is in compliance with local, state, and
federal labor laws. There are continuous regulations on hiring practices, wage
payments and workplace safety.

2. Change in Management: With the growth of business, its strategy and internal
process grows with it. For some employees it is hard coping up with changes.
Companies experienced reduce in productivity and morale during the change. Owner
of business should focus on communicating the perks of change to its workforce.
Regular meetings can be done. Once the team, comes to understand the reason of
the change, they will be more comfortable with the change.

3. Adaptation to Innovation: Technology is changing constantly. It is necessary for

business to be quick in adapting changes. The small business employees resist to
change and new technology, it is the biggest challenge for them. Communication is
necessary. With changes, make sure that the employees know the need for change
and the effects of change on them and provide them necessary training.
 4. Leadership Development: More than one-third of the companies are doing
average on work and at implementing leadership programs. A recent study states
that leadership development program of around 40% of the companies is below
average. Leadership development is very important to keep the management and
team busy and motivated, to prepare them to take more responsibilities in the future.
By creating opportunities for employees to use their strengths in business

5. Employees Training and Development: Low investment for training and

development of employees of small scale business is also a major HR problem.
Some organizations don’t have enough resources to fulfill the need. Training and
development don’t take lot of money and time. Good HR policies should be made
and recruiting managers and senior leaders can help in mentoring the employees.
By investing in workforce, organization will get more loyal and productive team.

6. Compensation: Employee compensation needs to be structured in the best way.

Small business have to struggle with payroll budgets and they have to cut down the
benefits, training, taxes, and other expenses from the budget. As salary, is the
important factor, it is not the most important factor. Employees seek job recognition,
rewards for excellent performance and other incentives such as profit sharing, which
can be beneficial for the employees and the organization. 7. Recruitment of Talented
Employees: Attracting best talent for the company takes a large investment for both
money and time. It is sometimes impossible to know that candidate will actually fit
the job position or not until he/she don’t have experience. With the help of staffing
companies, this problem can be minimized. They help in hiring employees which
involves a little or no risk. It also helps in saving money and t ime.
 10.)HRM Functions
Human Resource Management functions can be classified into the
following three categories.

o Managerial Functions,
o Operative Functions, and
o Advisory 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 organizational goals is
determined. Research is an important part of this function, information is
collected and analyzed to identify current and future human resource
needs and to forecast changing values, attitude, and behavior of
employees and their impact on the organization.

2. Organizing - In an organization 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
the organization's goal.

3. Directing - Activating employees at different levels and making them

contribute maximum to the organization is possible through proper
direction and motivation. Taping the maximum potentialities of the
employees is possible through motivation and command.

4.  Controlling - After planning, organizing, and directing, employees'

actual performance 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. 

The Operative Functions of Human Resource Management are as

follows:
1. Recruitment and Selection - Recruitment of candidates is the
function preceding the selection, which brings the pool of prospective
candidates for the organization so that the management can select the
right candidate from this pool.

2. 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 organizing tasks, duties, and responsibilities into a
single unit of work for the achievement of certain objectives.

3. Performance Appraisal - Human resource professionals are required

to perform this function to ensure that the performance of employees is
at an acceptable level.

4. Training and Development - This function of human resource

management helps employees acquire skills and knowledge to perform
their jobs effectively. Training and development programs are organized
for both new and existing employees. Employees are prepared for
higher-level responsibilities through training and development.

5. Wage and Salary Administration - Human resource management

determines what is to be paid for different types of jobs. Human resource
management decides employee's compensation which includes -  wage
administration, salary administration, incentives, bonuses, fringe
benefits, and etc,.
6. Employee Welfare - This function refers to various services, benefits,
and facilities that are provided to employees for their well-being.

7. Maintenance - Human resource is considered an asset for the

organization. Employee turnover is not considered good for the
organization. Human resource management always tries to keep their
best performing employees with the organization.

8. Labour Relations - This function refers to human resource

management interaction with employees represented by a trade union.
Employees come together and form a union to obtain more voice in
decisions affecting wage, benefits, working conditions, etc,.

9. 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 help in understanding employee satisfaction,
employee turnover, employee termination, etc,.

10. 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.

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
organization. Human Resource Management can offer advice to:
1. Advised to Top Management

The personnel manager advises the top management in the formulation

and evaluation of personnel programs, policies, and procedures.

2. Advised to Departmental Heads

The 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 .

11.)Bussiness Strategy and HRM

12.)Qualities and Role of HRM