Human Resource Management Unit 1

Unit 1 Introduction to Human Resource Management

Structure:
1.1 Introduction
Objectives
1.2 Definition and Concept of Human Resource Management
Features of Human Resource Management
Objectives of Human Resource Management
Functions of Human Resource Management
Scope of Human Resource Management
1.3 Evolution and Development of Human Resource Management
1.4 Importance of Human Resource Management
Why study Human Resource Management?
Jobs and Career
1.5 Human Resource Practices
Human Resource Practices in India
1.6 Summary
1.7 Glossary
1.8 Terminal Questions
1.9 Answers

1.1 Introduction
In your previous semester, you have studied various concepts related to
organisation and the processes of organisation through the subject
Organisational Behaviour. You have also studied the behavioural aspects of
human beings in organisations as an individual and as a part of a group. We
cannot deny the importance of people in an organisation.
The whole success of any organisation depends upon the people working in
the organisation. Organisations survive and thrive based on its people.
Companies that have carved out a niche for themselves by coming up with
quality products don’t attribute their success only to new technology and
process; rather it’s the outcome of dedicated service rendered by its loyal
and committed employees. We cannot even imagine an organisation without
employees .So we can say that among all the resources in an organization
human resource is the most important asset of any organisation. All the
activities for the effective utilisation of the resources are performed by the

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people in the organisation. So, an efficient management of the workforce is

the most important duty or task of the managers.
Liberalisation, globalisation and privatisation also have led to a dynamic and
diverse workforce. Multinational companies find that these have made an
impact in the organisations in terms of cultural diversity of workforce,
change in employment regulations, working hours, incentive, rewards and
out sourcing of employees and increase in the requirement for skilled
workforce.
Human Resource Management (HRM) is the process of managing people in
an organisation in a structured and thorough manner. It looks into all the
aspects of the employees; right from hiring the employees to training,
appraising, motivating, solving disciplinary issues and concerns and exit
formalities. In other words we can say that it is a process of bringing people
and organisations together to achieve the best-fit between individuals, jobs,
organisations, and the environment. It is essential to recognise the
importance of human resource and to use them to create excellence.
Companies like Infosys, TCS, Wipro, etc. are the glaring examples of
organisations that apply “think global and act local” approach and have
excellent HR policies and practices that cater to the needs of the diverse
workforce.
In this unit we shall discuss in detail the concept of HRM, its evolution and
some of the HR practices.
Objectives:
After studying this unit, you should be able to:
 define HRM
 explain the evolution of HRM
 state the importance of HRM
 discuss the HR Practices

1.2 Definition and Concept of Human Resource Management

Human Resource Management (HRM) is a process of bringing people and
organisations together so that the goals of each are met. It is the art of
procuring, developing, and maintaining competent workforce to achieve the
goals of the organisation.

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According to National Institute of Personnel Management, “Human

Resource Management is that part of management which is concerned with
people at work and with their relationship within the organisation. It seeks to
bring men and women who make up an enterprise enabling each to make
his or her best contribution to its success both as an individual and as a
member of the working groups.”
According to Byars and Rue “Human Resource Management encompasses
those activities designed to provide for and coordinate the human resources
of an organisation.
Ivancevich and Glueck opine that “Human resource management is the
function performed in organisations that facilitates the most effective use of
people (employees) to achieve organisational and individual goals.”
1.2.1 Features of Human Resource Management
From the definitions of human resource management, certain features of
HRM are:
a) It is action oriented: It helps the employees by emphasising the
solution of the problem to attain organisational goal and to increase
employee satisfaction.
b) It is individual oriented: It offers services and programmes to meet
every needs of the employee.
c) It is future oriented: It motivates the employees to achieve future
goals.
d) It is people oriented: HRM is concerned with employees as an
individual or a part of a group. It can be behavioural, social, or
emotional aspect. Every level and category of employees is important
for management of human resources.
e) It is a comprehensive function: HRM is concerned with
development of people to obtain job satisfaction. In other words, it is
concerned with human resource development, knowledge and
capacity building, skill and potential development for attaining
employee’s goal. It is a method of developing potential that aids better
results.
f) It is a continuous function: Since organization witnesses number of
changes in its environment, continuous development of human
resource never stops.

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g) It is an auxiliary service: The major purpose of the HR department is

to assist the other departments in terms of all concerns related to the
employees. It means it is a staff function.
h) It is a pervasive force: HRM is present in all the levels of an
organisation.
i) It is development oriented: HRM helps in developing the full
potential of the employees through training, job rotation, etc.
j) It is an integrating function: It helps in maintaining cordial
relationship between people at each level of the organisation.
k) It is an inter-disciplinary function: HRM is multidisciplinary. It
utilises the (concepts) and knowledge derived from subjects like
psychology, economics, anthropology, accounting, sociology, etc.
1.2.2 Objectives of Human Resource Management
Today, the relationships in the organisations are democratic rather than
autocratic. Many organisations have more enlightened and better educated
employees. So the objectives of HRM are also expanding. The main
objectives of HRM are:
a) To help the organisation reach its goal.
b) To make use of skills and abilities of the workforce effectively.
c) To train and motivate employees of the organisation.
d) To maintain and increase job satisfaction of employees.
e) To help employees realise their full potentials and reach self-
actualisation.
f) To ensure that quality of work life is maintained.
g) To maintain ethical policies and behaviour.
h) To communicate HR policies to the employees.
Thus we can say that there are various objectives of HRM. Each objective of
it has to be met to ensure that employees are motivated and satisfied.
1.2.3 Functions of Human Resource Management
The Human Resource Department carries out several functions.
These functions are broadly classified into two categories -
 managerial functions and
 operative functions.

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I. Managerial functions – They are functions that a manager of any

department of a profitable or non-profitable organisation must carry out.
According to Henry Fayol, the major managerial functions are:
 Planning – The HR managers must be able to plan the activities that the
HR department must carry out in a given period of time. They must also
plan for unforeseen issues that can come up in their own department. It
requires forecasting problems and then formulating a plan that will
eliminate those problems.
 Organising – The HR must not only organise job relationship for the
department, but also for the entire organisation. Organisational structure
in any organisation is formulated by the HR Department. Depending on
the values of the organisation, the HR managers can design a flat
(absence of hierarchy) or pyramid shaped (presence of hierarchy)
organisational structure. This shows the reporting format in the
organisation and the division of employees on the basis of departments
and teams.
 Controlling – Controlling refers to the balancing of time and integrating
activities. As an HR Manager, one has to ensure that all the
departmental activities are carried out as per the timeline framed at the
beginning of the year. It also includes reviewing and auditing the
activities already carried out.
 Directing – The basic function of a manager of any department is to give
directions to the subordinates. The HR Manager must provide adequate
guidelines to the HR team so that they are clear of their individual and
group targets. The HR Manager must also provide guidance to carry out
difficult tasks. Continuous monitoring of the subordinates is an essential
part of the job of the HR Manager.
II. Operative functions – They are the primary responsibilities, exclusively
done by Human Resource personnel. It refers to the routine activities of the
HR department in any industry. It is focussed on all the aspects of human
workforce in an organisation starting with manpower planning to employee
separation. These can be classified into five broad areas, as shown in
figure 1.1.

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Figure 1.1: Operative functions of HRM

 Procurement – It involves attracting and employing individuals with

suitable knowledge, skills, experience, and aptitude necessary to
perform various jobs.
 Development – It aims to train and develop employees to improve and
update their knowledge and skills in order to help them perform better.
 Compensation – It involves rewarding employees monetarily and
through fringe benefits for their contributions to the organisation.
 Integration – It deals with employees as a social group; it contributes to
the organisation and enhances group interaction and communication.
 Maintenance – It deals with maintaining employee safety and creating a
sense of security among the employees.

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1.2.4 Scope of Human Resource Management

The scope of HRM is very vast. It stretches from the time an employee joins
an organisation to the time the employee leaves the organisation. It is
classified into three broad aspects:
a) Personnel aspect – This includes manpower planning, recruitment,
selection, placement, transfer, promotion, remuneration, incentives,
training and development, lay off and retrenchment, productivity, etc.
b) Welfare aspect – This is concerned with employees' working conditions
and provision of other facilities to them, such as medical, health, safety,
education, canteens, housing, transport, rest rooms and lunch rooms,
and other recreational facilities.
c) Industrial relation aspect – This deals with union-management relations,
collective bargaining, grievance and disciplinary issues, settlement of
disputes, etc.
Self Assessment Questions
Fill in the blanks
1. Most important asset of an organisation is ____________.
2. Human resource management facilitates the effective use of
employees to achieve __________ and _________ goals.
3. The major functions of human resource management are divided into
_______ and ________.

1.3 Evolution and Development of Human Resource Management

The current HR system, as we see today, is the result of a continuous
evolution over a period of time. This has made HR more sophisticated and
proactive. The various emerging concepts of HRM are:
a) The Commodity Concept: As a result of Industrial Revolution, labour
was regarded as a commodity that can be bought and sold. Wages were
based on demand and supply of the labour. The political philosophy of
this time was laissez- faire. There was no role of the government to
protect the workers. This approach was criticised.
b) Factor of Production Concept: According to this concept, workers are
like any other factors of production. They were viewed as any physical
factor of production such as land, material, money, etc. There was no
special status for the workers. But this concept was found inadequate.

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c) Machinery Concept: In the period of scientific management, a new

concept known as machinery concept evolved. Maximisation of profit
was the main goal of this era. Father of scientific management, Fredrick
W. Taylor and other industrial engineers like Frank and Gantt
emphasised the selection process for employees, training methods, and
appropriate wage policies so that people can be used effectively – the
way machinery is used for maximisation of productivity. The harmonious
industrial relation is thus the contribution of scientific management.
Workers got the benefit of better working condition, better pay and
incentives. With the establishment of International Labour Organisation
(ILO), industrial peace was restored. Social justice was emphasised with
the improvement of working conditions.
d) Goodwill Concept: In this era, the employer realised that the welfare of
the employees had a direct impact on the productivity. Various welfare
measures like incentives, compensation, travel allowance, safety, first
aid, lunch rooms, and rest rooms were provided to the employees.
e) Natural Resource Concept: Natural resource concept says that
workers are like natural resources. They should be protected and any
misuse should be avoided. In this era, child-labour laws, working hours
for women, workmen’s compensation, and health and accident
legislations were passed.
f) Paternalism Concept: This concept says that management must treat
employees fatherly and should have protective attitude towards them.
With the emergence of trade union, employers voluntarily started giving
various benefits to the employees to avoid outside interference. The
employer, as a parent, started caring for the different needs of the
employees. Decisions were taken regarding health facilities, wash-up
and locker room arrangements, lunch rooms, recreational facilities,
group insurance and pension plans, picnic housing, etc. Eventually, it
was found that these facilities had less impact on increasing productivity
and the approaches of the employer was not genuine all the time.
g) Humanitarian Concept: During 1910 to 1917, employees were
considered as the most valuable asset of the organisation. This concept
said that human beings are equal and the rights of every employee
should be respected. To get the co-operation of the employees,

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employer must provide security and personal satisfaction. The welfare

programmes like pension, gratuity, provident fund, housing, credit
facility, and so on were provided. One of the most important
developments in this period was the application of Social Psychology to
the problems of industrial relation. Industrial Psychology helped HR
department in identifying the cause of dissatisfaction of the employees
so that it can be handled effectively.
h) Human Relation Concept: The Hawthorne experiments that were
conducted from 1927 to 1932 had a great impact on human relation
movements. In this experiment, certain physical and technical variables
were changed to see their impact on productivity. Variables like
temperature, illumination, rest, pause, length of working hour, etc. were
changed to see their impact on productivity. Ultimately, it was observed
that social and human factors have more impact than the physical
factors. In the words of Keith Davis, “Human Relation is motivating
people in organisations in order to develop team work which effectively
fulfils their needs and achieves organisational goals”. There should be a
conscious effort for creating a work force with high morale. In other
words, organisations should work as a social system
i) Citizenship Concept: This concept says that as an industrial citizen,
workers have the right to take certain decisions regarding their work. In
this concept, human resource is considered as an investment that gives
the workers certain rights and responsibilities.
j) Partnership Concept: According to this approach, the relationship
between the worker and the employer should be as partners. Efforts
from both sides are required to attain organisational as well as individual
goals. You must have heard of stock-ownership scheme prevalent in
many modern organisations. This is because it has been felt that both
the management and the workers will mutually be interested and
benefited in increasing the production. Here you can see the change a
transition from commodity to the partnership concept. Still, a lot of work
needs to be done in this area.
k) Emerging Concept or Future Concept: It is expected that workers
play a more important role in effective development of the organisation.
Through stock ownership, they feel more attached to the organisation

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and work sincerely for the betterment. You must have come across
various cases in public sectors in India where a company was revived
due to the effort of the management and the workers.
Thus we can say that all the concepts have contributed to the growth of
distinct approaches to study and develop the field of HRM.

Activity 1:
Collect information about the industrial revolution, and prepare a report on
the condition of labour during that period.
Refer : 1. http://en.wikipedia.org/wiki/Factory_life_during_the_industrial_
revolution
2. http://www.womeninworldhistory.com/lesson7.html

Self Assessment Questions:

State whether the following statements are true of false.
4. Fredrick W. Taylor and other industrial engineers like Frank and Gantt
emphasised the selection process for employees, training methods,
and appropriate wage policies.
5. In the concept of human resources as a factor of production, workers
were given privileged status.
6. The Hawthorne experiment had a great impact on the Human Relations
movements.

1.4 Importance of Human Resource Management

We all agree that motivating people to contribute to the organisational goal
is the most important task. The success of an organisation depends upon
the knowledge, skills, and abilities of the employees.
Good HR practices help in attracting and retaining competent people,
training them, and in enhancing their skills and competencies to increase
the productivity, profit, and to improve the standard of living of the
employees.
HRM helps organisations and people to fulfil their goals:
A) At the enterprise level
 Good HR practices can help in attracting and retaining the right people
in the organisation.

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 It helps in preparing the employees for future challenging roles,

developing positive attitude towards the job and the organisation,
developing team spirit, and increasing the loyalty and commitment
through proper reward system.
B) At the individual level
 It helps in developing team work and team spirit in employees.
 It identifies the potential and provides excellent growth opportunities to
the employees.
 It promotes delegation and cooperation among people.
C) At the society level
 It generates more employment opportunities.
 It makes best use of talented people. Good HR practice makes best use
of employees through proper compensation and treatment.
D) At the national level
 Proper use of human resources helps in utilising the natural and
physical resources adequately. Finance can be managed well and the
economy at large will grow and take the nation ahead. Better
employment opportunities and high standard of living can be managed.
1.4.1 Why study HRM?
As we have discussed, in any organisation, people are the ones who can
take decisions, plan, implement the strategy, or control the activities. All the
factors of production can be used efficiently only if capable human resource
is available. Whether a company is labour intensive or capital intensive,
importance of people cannot be denied. In other words, we can say that
success of every organisation more or less depends upon the employees. In
such a situation it is very important to understand the physical and
psychological aspects people. Only then the workers can be motivated and
the best can be obtained.
Today we live in a world that is a global village. Various technological
advancements have made it necessary for people in an organization to be
skilled and competent. They are the one who can help the organisation in
getting competitive advantages.
People in organisations are considered as assets. Organisations look for
highly competent and multi-skilled employees. It becomes the responsibility
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of the organisation to make them happy and satisfied in the organisation

and in their personal lives.
HRM is a study about people in the organisation. How a suitable employee
can be hired, trained, compensated, motivated, and maintained, is a big
question for the organisations. Due to globalisation companies have diverse
workforce and are operating at international level. People have become
more mobile. Today’s world demands mobility. Companies are operating at
different stages in the international market. The HR department handles the
challenging task of managing people internationally. A management
student, who joins a job with prior knowledge of HRM, makes suitable plans
to cope up with these challenges and manages them successfully.
1.4.2 Jobs and Careers
Any industry, be it garments, software, hardware, iron, steel, mining, etc.
cannot function without human resources. Every organisation wants
someone to bring in the best people to work, to keep them motivated and
happy, and also to ensure that only the required people are in the
organisation. This is where an HR professional comes into picture. It is a
tough but very rewarding work.
A HR professional must have the following qualities:
 Sound knowledge of HR practices
 Ability to understand the business process and cycle
 Good at analysing and understanding human personalities
 Patience and tolerance
 Good communication skills
 Ability to critically think and take prompt decisions
HRM profession has advanced from mere administrative functions to more
specialised functions along with looking into new aspects of the dynamic
workforce. They have transformed from being reactive to highly proactive,
creative, and innovative. These days, the HR department is divided into two
broad areas: human resource management and human resource
development (HRD). The former looks into various activities including
recruitment and retention, performance and appraisal management,
compensation benefits, welfare and safety measures, employee relations,
etc. HRD focuses on training and development of skills in employees,

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organisational development, managing change, creating conducive

organisational climate, and also on the personal development of employees.
Common HRM role includes:
 HR Generalist – They are the backbone of HR operations. They handle
more than two specialised areas. They look after the general
administrative functions of the organisation like induction, training,
payroll, grievance handling, implementation of policies etc.
 Recruitment and Staffing Specialists – Recruitment professionals
find, short-list, and select new employees. They also evaluate the
candidates. Staffing professionals identify the right position for the
selected employees by looking into the employee requirements of the
organisation.
 Compensation and Benefits Specialists – These professionals look
into matters such as finalising the compensation and benefit plan for the
new employees. They also provide salary and incentives to the existing
employees, handle tax deductions, etc.
 Health and Safety Officers – These professionals look into
occupational health hazards. Their functions include imparting
knowledge on safety mechanisms, assessing services, equipment,
workstations, and procedures to recognise the hazards and measure the
related risks. They also create procedures to plan or develop safe work
practices, etc.
 Employee Relations Officer – They look into matters such as
employee contracts, employee rights, and complaints. They are
responsible for negotiating collective bargaining agreements with
employee unions and associations.
 Legal Officer – These HR professionals must have an additional
qualification in Law. They are specialised in handling legal issues related
to workforce. Their major functions include drafting and reviewing
employee contracts, managing legal issues with vendors and external
links of the organisation, complying with labour laws, and representing
the organisation in courts for legal suits filed by employees.
Common HRD roles include:
 Training and Development Specialist – These professionals look after
the training and development requirements of employees for performing

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both the current and future roles. Their functions include assessing of
needs, planning training programmes, executing plans, and evaluating
and following the programmes.
 Organisational Development (OD) Specialist – These professionals
are highly specialised in developing the organization and its people
through planned change. They are deployed to various departments to
help employees to adapt to changes arising out of company expansion,
relocation, merger, etc.
 Succession Planners – These professionals work with a specific unit,
team, department, or business line to understand the future plans,
strategies, and objectives of the company and to assess who among the
employees would best fit the higher roles.
 Executive and Employee Coach – These HR coaches work one-on-
one with the employees to provide positive support, feedback and
motivate and help them to understand and solve the problems that they
are facing within the organisation with an aim to increase their personal
effectiveness in the business setting. Coaches interact with employees
only for a specific problem or a specific situation.
HR positions: In any organisation, the role of HR is divided into many
positions. The most common divisions are:
a) HR specialist: It is an entry level position for a career in HRM. HR
specialists are the support system for senior HR specialists. They are
generally given the role of interviewer, compensation analyst, co-
ordinator of benefits, trainer or job analyst, etc. In a large
organisation, they have opportunities of being promoted to any of the
specialised functions.
b) HR manager: HR managers are people who are expected to know all
the aspects of HRM. HR Manager is generally a top ranked position in
the organisation. HR managers can be a part of the strategic group of
the organisation. They co-ordinate different activities and provide HR
related information and advice to the line managers. The job of a HR
manager is to face the challenges and handle the human resource
tactically and to attract talented people for the required jobs in an
organisation.
c) HR executive: HR executive is a more responsible position in the
organisation. HR executives are top level executives and they make HR

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policies and practices according to the corporate policies and strategies.

HR executives provide inputs regarding personnel activities and helps in
efficient human resource planning. Although HR Executive is regarded
as a top position, the role of HR executive varies depending upon the
size of the organization. In some industries, HR executives merely assist
the line managers in their gamut of functions.

Activity 2:
Browse www.naukri.com and www.monsterjob.com .Search for job by HR
role/function. Make a list of different positions of HR in banking industry.
Refer : Section 1.4.2

1.5 Human Resource Practices

The HRM has realised the worth of people in the organisation. It is a staff
function but they support and direct the line managers for successful
accomplishment of corporate goal. With the changes in surroundings, HR is
also expanding day by day. The focus is more on job redesigning, career
opportunities, etc. In today’s lean and mean organisations, HR job is
becoming more challenging. More emphasis is on employee’s welfare and
safety. HR Managers are even making use of ergonomics to provide better
and comfortable working environment to the employees.
We have seen in the evolution of HRM that the significant contributions of
human resource were not properly recognised. The situation was not very
different in India. Today, HRM has an important bearing on success of
organisations because it is directly related to people. Managing people in
right number and in right kind is a very costly affair. In this competitive world,
we always need to curtail our cost of production to get strategic advantage.
HR enhances the profit by reducing the cost of production. In the business
world, people have realised the importance of HRM. Many universities,
institutions, and government organisations are working for the development
of this area.
1.5.1 HR Practices in India
Post 1991, India has been welcoming foreign companies to build their
empire in the Indian soil. At the same time, Indian companies have become
competitive and are trying to match global expectations. Also, many Indian
giants have been successful in capturing foreign markets. This has led to a
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lot of changes in the HR practices followed in India. From being a mere

administrative department, the HR Department is now regarded as the most
crucial department of any organisation and every innovative HR practices
are now appreciated and welcomed.
All HR practices in India are now focussing on four major dimensions:
i) Attracting and retaining employees
ii) Satisfying the needs for growth and development
iii) Engaging employees
iv) Enabling quicker movement across the organisational structure
Some of the innovative HR practices followed for recruitment and selection
in India are head hunting, recruitment through blogs, recruitment through
social network sites – such as Facebook, Linked-in, etc. Some organisations
such as SAP India do half of their recruitment through employee referrals.
Training and development has also gained momentum in India. Most public
and private sectors have now incorporated training and development
programmes for employees as a regular activity. In Infosys the Education
and Research department provides technical training, which is an entry-level
technical training programme for a duration of 14 weeks. Infosys also
provides Quality Process Training tailored to the role one is playing, such as
Software Engineer, Programmer Analyst, etc. Many Indian organisations
have established their own training institutes, for example, Toyota Technical
Training Institute, Bharti School of Telecommunication Technology and
Management, and Dhirubhai Ambani Institute of Information and
Communication Technology.
Many innovative HR practices are being carried out in compensation
management in India. From the traditional basic pay, dearness allowance,
house rent allowance; compensation packages in India have now expanded
to include many more components, such as petrol allowance, mobile
allowance, entertainment allowance, Sodexo meal passes, club
memberships, retirement benefits, etc. Companies are becoming
competitive when it comes to luring executives with a mix of high salary,
incentives, Employee Stock Ownership Plan, and deferred pay. Looking at
performance-based salaries, with variable pay as a percentage of salaries is
on the rise.

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Organisations in India have also changed their attitude towards leave

policies. As competition in the labour market is high, HR departments are
coming up with various innovative leave policies other than the legal leaves
in order to find and retain skilled employees. These leaves include birthday
leave, bereavement leave in case of death of a family member, volunteering
leave for employees who wish to do charity, paternity leave, and vacation
leave.
Self Assessment Questions:
Match the following
7. HR Generalist a) Solves legal issues related to workforce
8. OD Specialist b) Manages general administrative
functions
9. Legal Officer c) Prevents occupational hazards
10. Succession Planner d) Plans training programmes for workers
11. Health and Safety Officer e) Helps employees to adapt to changes
12. Training and f) Assesses the best-fit employee for
Development Specialist higher roles

1.6 Summary
Let us recapitulate the important concepts discussed in this unit:
 Human Resource Management is people centric. It is the art of
procuring, developing, and maintaining competent workforce to achieve
the goals of the organisation.
 HRM facilitates the most effective use of employees to achieve
organisational and individual goals.
 The features of HRM are that it is a pervasive force, action oriented,
development oriented, auxiliary service, multi-disciplinary,
comprehensive, and continuous function.
 The objectives of HRM is to help the organisation to reach its goal,
make effective use of skills and abilities of the workforce, train and
motivate employees effectively, increase employee job satisfaction,
maintain quality of work life, and maintain ethical policies and behaviour.
 HRM functions are broadly classified into managerial functions and
operative functions.
 Major managerial functions are planning, organising, controlling, and
directing.
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 Major operative functions are procurement, development, compensation,

integration, and maintenance.
 The scope of HRM stretches from the time an employee joins the
organisation to the time the employee leaves the organisation. It is
classified into personnel aspects, welfare aspects, and industrial
relations aspect.
 The concept of human resources underwent a lot of changes. Initially, it
was regarded as a commodity, then as a factor of production, and later
evolved into human resource concept.
 The importance of HRM is that it helps organisations and employees to
fulfil their goals at individual, enterprise, and society level.
 Good HR practices help in attracting and retaining the talents. It
increases the production and profit of the organisation with the skills and
competencies of the employees.
 HR has got wide acceptance all over the world. It is a part of the
strategic plan and prepares people for future challenges.

1.7 Glossary
 Autocratic organisation: A form of management where the leader is in
complete control. No one is permitted to make any suggestions or offer
any opinions, no matter how it may benefit the group.
 Conducive: Helpful in making a situation or condition possible.
 Employee retention: Employee retention refers to the various policies
and practices that let the employees to stick to an organisation for a
longer period of time.
 Globalisation: The process enabling organisations to operate
internationally, largely as a result of deregulation and improved
communications.
 Gratuity: An amount payable to an employee who has served more
than 5 years in the organisation, after the termination of his employment
due to retirement, resignation, disability, or death.
 Laissez- faire: An environment in which transactions between private
parties are free from state intervention, including restrictive regulations,
taxes, tariffs, etc.
 Liberalisation: Relaxation of previous government restrictions, usually
in areas of social or economic policy.
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 Organisational climate: Organisational climate refers to a set of

measurable properties of the work environment that are perceived by
the people who live and work in it. It influences their motivation and
behaviour.
 Proactive: Carrying out some action in order to control a situation by
foreseeing the future rather than responding to it after it has happened.
 Procurement:: It is the process of hiring employees at the least cost to
the company to meet the needs of the organisation in terms of quality
and quantity, time, and location.
 Provident fund: It is the fund that is composed of the contributions
made by an employee during the tenure in an organisation along with an
equal contribution by the employers. It is calculated as a percentage of
the salary, for example, 12 percent and it is returned to the employee on
retirement.
 Quality of work life: It is the degree to which members of a work
organisation are able to satisfy important personal needs through their
experiences in the organisation.
 Self-actualisation: It is the desire of an individual for self-fulfilment. It is
the desire to become everything that one is capable of becoming.
 Thrive: To grow vigorously

1.8 Terminal Questions

1. Explain the concept of human resource management.
2. Describe the evolution of the concept of human resource management.
3. What is the importance of human resource management in
organisations?
4. What are the different positions in the HR Department?

1.9 Answers
Self Assessment Questions
1. Human resources
2. Organisational, individual
3. Managerial and operative
4. True
5. False
6. True

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7. (b) Manages general administrative functions

8. (e) Helps employees to adapt to changes
9. (a) Solves legal issues related to workforce
10. (f) Assesses the best-fit employee for higher roles
11. (c) Prevents occupational hazards
12. (d) Plans training programmes for workers

Terminal Questions
1. Human Resource Management is a process of bringing people and
organisations together so that the goals of each are met. It is the
management of human resources in order to achieve organisational
goals. It is the art of procuring, developing, and maintaining competent
workforce. Refer section 1.2 for more details.
2. The concept of human resources underwent a lot of changes. Initially it
was regarded as a commodity that could be bought by paying wages. It
was then considered as a factor of production just like land, capital, and
entrepreneurship. Later, the concept evolved to human resource
management giving value to labourers who were considered as the most
important resource in organisations. For more details refer section 1.3.
3. Human resource management is important for all organisations. Good
HR practices help in attracting and retaining competent people, training
them, and enhancing their skills and competencies to increase the
productivity, profit and further more improve the standard of living of the
employee. For more details refer section 1.4.
4. In any organisation, the role of HR is divided into three HR positions.
The most common divisions are HR Specialist, HR Manager, and HR
Executive. HR Specialist is an entry level position. HR manager co-
ordinates different HR activities and the HR Executive is responsible for
making HR plans. For more details refer section 1.4.2.

References:
 C. B. Mamoria and S. V, Gankar. (2010). Human Resource
Management. Mumbai: Himalaya Publishing House.
 D'Cenzo, David A. & Robbins, P. Stephen., (2001). Human Resource
Management. New Jersey: Prentice Hall.

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 Deb T. (2009). Human Resources and Industrial Relations. New Delhi:

Excel Books.
 Dessler, Gary. (2010) Human Resource Management. New Jersey:
Prentice Hall.
 K Aswathappa. (2006). Human Resource and Personnel Management.
New Delhi: Tata Mc Graw Hill.
 Rao V.S.P. (2009). Human Resource Management. New Delhi: Excel
Books.
E-References:
 http://en.wikipedia.org/wiki/Occupational_safety_and_healthhttp://
www.citeman.com/11853-evolution-of-the-concept-of-hrm.html
(Retrieved on 15 November, 2011)
 http://googlemoneybiz.blogspot.com/2008/06/innovative-hr-practices-of-
indian.html (Retrieved on 14 November, 2011)
 http://payroll.naukrihub.com/compensation/indian-industry/healthcare-
medical-sector/management-level-compensation.html
(Retrieved on 13 November, 2011)
 http://traininganddevelopment.naukrihub.com/training-scenario/telecom/
(Retrieved on 14 November, 2011)
 http://www.chillibreeze.com/articles_various/HR-practices-in-Indian-
Corporate-510.asp (Retrieved on 14 November, 2011)
 http://www.differencebetween.net/business/difference-between-hrm-
and-hrd/ (Retrieved on 15 November, 2011)
 http://www.managementstudyguide.com/human-resource-
management.htm (Retrieved on 14 November, 2011)
 http://www.paycheck.in/main/DecentworkcheckIndia/leave-policy
(Retrieved on 13 November, 2011)
 https://careers.infosys.com/infyrms/infycareers/careers/training.asp
(Retrieved on 15 November, 2011)

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