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INTRODUCTION TO HRM NATURE & ROLE The real value of enterprise is in the experience, skills, innovativeness and insights

s of its people Leif Edvinsson, Swedish Intellectual Capital guru in Corporate Longitude (2002) Business, as we know, is a going concern. However, to keep it going one needs people and to get good people on board, one needs effective HRM policies in place. Thus, efficient HRM practices form the life and blood of any organization. It is said that 15 % success is due to technical skills and 85 % due to the skills in human engineering. These statistics brings out the vital role played by HRM in any organization. The objective of HRM is not limited to only attract good talent in the company but also to retain them and to instill among them, a feeling of belonging towards the organization. People have always been central to organizations, but their strategic importance is growing in todays knowledge based industries. An organizations success increasingly depends on the knowledge skills and abilities (KSAs) of employees particularly as they help establish a set of core competencies that distinguish an organization from its competitors. With appropriate HR policies and practices an organization can hire develop and utilizes best brains in the marketplace realize its professional goals and deliver results better than others. For many years it has been said that capital is the bottleneck for a developing industry. I dont think this any longer holds true. I think its the work force and a companys inability to recruit and maintain a good work force that does constitute the bottleneck. F. K. Foulkes The employees are the real force that drive the success of any organization. Great plans that look effective on paper can fail to pick up at the implementation phase if one does not have a competent workforce to take them ahead. Take our 20 best people away, and I will tell you that Microsoft would become an unimportant company Bill Gates, CEO of Microsoft in Fortune, November 25th, 1996 HRM today is not just a personnel function but has acquired a whole new meaning in the role of being Strategic HR. Its focus now lies in framing procedures and policies in line with the short term and long term vision of the organization. High-performing companies align people management practices to the corporate culture (cultural fit) and to the business strategy and long-term objectives of the organization (strategic fit). This tight coupling of internal practices, culture and strategy remains unique for each organization and is difficult for competitors to imitate. It is said To keep customers, business needs to invest in its employees. As the old adage of shareholders wealth maximization has given way to stakeholders wealth maximization, corporates over the world have come to realize that employees feature as one of the prime stakeholders of an organization.

Definition: Human resource management (HRM) is the management of employees knowledge, aptitudes, abilities, talents, creative abilities and skills/competencies. HRM is concerned with getting better results with the collaboration of people. It is an integral but distinctive part of management, concerned with people at work and their relationships within the enterprise. HRM helps in attaining maximum individual development, desirable working relationship between employees and employers, employees and employees, and effective modeling of human resources as contrasted with physical resources. It is the recruitment, selection, development, utilization, compensation and motivation of human resources by the organization.


To help the organization reach its goals: HR department like other departments in an organization exists to achieve the goals of the organization first. To employ the skills and abilities of the workforce efficiently: The primary purpose of HRM is to make peoples strengths productive and to benefit customers, Stockholders and employees. To provide the organization with well trained and well motivated employees: HRM requires that employees are motivated to exert their maximum efforts that their performance be evaluated properly for results. To increase to the fullest the employees job satisfaction and self actualization: It tries to prompt and stimulate every employee to realize his potential. To develop and maintain quality of work life: It makes employment in the organization a desirable, personal and social situation. Without improvement in the quality of work life it is difficult to improve organizational performance. To communicate HR policies to all employees: It is the responsibility of HRM to communicate 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. To be ethically and socially responsive to the needs of society: HRM must ensure that organizations manage human resource in an ethical and socially responsible manner through ensuring compliance with legal and ethical standards.

Human resources management helps an organization and its people to realize their respective goals: At the enterprise levels: 1) Good human resource practices can help in attracting and retaining the best people in the organization. Planning alerts the company to the types it will need in the short medium and long run. 2) it helps in training people for challenging roles, developing right attitudes towards the job and the company promoting team spirit among employees and developing loyalty and commitment through appropriate reward schemes. At the individual level: Effective management of human resources helps employees thus: 1) it promotes team work and team spirit among employees. 2) It offers excellent growth opportunities to people who have the potential to rise. 3) It allows people to work with diligence and commitment. At the society level: Society, as a whole is the major beneficiary of good human resources practices 1) Employment opportunities multiply. 2) Scarce talents are put to best use. Companies that pay and treat people well always race ahead of others and deliver excellent results Ref:


As people become the key competitive advantage in any industry especially banking, the human resource (HR) development function will and should play a more strategic role. It should go beyond its mere administrative support function to operations and front line departments. Whether or not company views HR strategically may decide whether market share, sales, or profits would increase or not. An effective HR strategy becomes equally decisive as the companys marketing strategy.

Strategic human resource management: linking HRM with strategic goals and objectives to improve business performance and develop organizational cultures fostering innovation and flexibility.
Human resources must think about key business challenges and design an HR plan to respond to the challenges. HR metrics is about measuring and managing the linkages between the initiatives and key challenges that are strategic to the business

Strategic Role

HRM should be strategic business partner of an organization Should support business strategies In addition to internally representing the employees (people dimension), should also have external focus Forward thinking and proactive Assist the organization in creating and maintaining competitive edge Should try to work as profit center and economise its operations Should add value to the organization
1 Building and developing a competency model. 2 Very competitive and committed people. 3 Robust training model that helps get ahead of competition.