HRM UNIT 1- INTRODUCTION TO HRM

Human: refers to the skilled workforce in an organization.

Resource: refers to limited availability or scarce.
Management: refers how to optimize and make best use of such limited or
scarce resource so as to meet the organization goals and objectives.
Management has been defined as control and creation of a technological and
human environment that can support optimal utilization of resources and
competencies for achieving organizational goals. Management has also been
variously defined as development of people; the process of decision-making and
control over actions of human beings; planning, organizing, and controlling
people and resources; the process of accomplishing the desired organizational
objectives; effective utilization of available resources for delivery of services
and goods, etc.

Human Resource Management

Edwin Flippo defines- Human Resource Management as “planning, organizing,
directing, controlling of procurement, development, compensation, integration,
maintenance and separation of human resources to the end that individual,
organizational and social objectives are achieved.
Decenzo and Robbins, “Human Resource Management is concerned with the
people dimension” in management.
Human resource management, or HRM, is defined as the process of managing
employees in a company and it can involve hiring, firing, training and
motivating employees. For example, of human resource management is the way
in which a company hires new employees and trains those new workers.

— Human resources mean the people

— Human resources are knowledge, skills, creative abilities, talents, and
attitudes obtained in the population
— Sumantra Ghosal -Human resources as human capital.
— Human capital-Intellectual capitals, social capital and emotional capital
— HRM is a process of making the efficient and effective use of human
resources so that the set goals are achieved.
HRM can be defined as a process of procuring, developing and maintaining
competent human resources in the organization so that the goals of an
organization are achieved in an effective and efficient manner.
Systematic function of planning for the human resource needs and demands,
selection, training, compensation, and performance appraisal, to meet those
requirements
Evolution of Human resource management
Evolution of HRM over the period of time is important for understanding the
philosophy, functions, and practices of HRM that are followed in different
situations so that relevant HRM practices are evolved in the present situation.
Human Resource Management (HRM) is relatively a very recent term
considered for managing human resources in an organisation. HRM is still
evolving to become an amalgam of organisational behaviour, personnel
management, industrial relations and labour legislation.

1. HRM evolved from personnel management given by Elton mayo, who is

a great psychologist who did a study on human relations and he is known
as father of HRM.
2. Robert Owen was the originator of principle of 8 hours day work, 8 hours
rest and 8 hours sleep to have a better working condition for better
productivity and efficiency. Robert Owen is known as father of Personnel
Management.
3. First personnel management department (later evolved as human resource
management) began at the national cash register co. In the early 1900s,
according to a human resource magazine article.

FEATURES OF HRM
1. Pervasive in nature
It is pervasive in nature because it is present in all industries whether it is
Toyota or Vipro.
2. Focuses on outcomes and not on rules.
HRM focuses on outcomes like productivity and efficiency and not on
how to govern people.
3. Helps employees develop and groom their potential completely
HRM is building of human capital. HRM promotes strategies and tactics
like training, education and knowledge that helps to develop.
4. Motivates employees to give their best to the company.
HRM through its different strategies monetary or non-monetary benefits
encourages employees to perform better.
5. It is all about people at work, as individuals as well as in groups.
It is people oriented, and thus working for people.
6. It tries to put people on assigned tasks in order to have good production
or results.
It is a kind of assignment.
7. Company achieves its goals in the future
Because it facilitates for well-motivated and competent employees.
8. Build and maintain cordial relationship among people
On different level people are working in company and HRM helps to
build relations.
Personnel Management
Part of management that deals with the recruitment, hiring, staffing,
development, and compensation of the workforce and their relation with the
organization to achieve the organizational objectives. Two categories are:
1. Operative Functions: The activities that are concerned with procurement,
development, compensation, job evaluation, employee welfare,
utilization, maintenance and collective bargaining.
2. Managerial Function: Planning, Organizing, Directing, Motivation,
Control, and Coordination are the basic managerial activities performed
by Personnel Management

HRM Functions
1. Human Resource Planning

Human resource planning is the most important key function of the Human
Resource Department. Human resource planning is sometimes known as
workforce planning which is a strategic decision-making process and predicts
the future planning of a company. HRD can align with the company’s goal
through proper human resource planning by accurately evaluating and analyzing
the future needs of the company.  Human resource planning can help HRD to
focus on overall recruitment, selection, performance management, learning and
development, and other HR functions to be successful in the future.

2. Recruitment and Selection

Recruitment and Selection is one of the key functions of the Human Resource
Department that attract people to apply for the position and selection of
competent people for doing work for the organization. Some organization
presently uses recruitment tools for faster and efficient recruitment. On the other
hand, some organizations depend on third-party recruiters which is a costly
process. The HR department must follow the steps of the selection process for
getting advantages of recruitment methods.

3. Performance Management

Performance management is one of the key functions of the Human Resource

Department and KPIs for the HR Manager. A performance management system
helps organizations to engage employees for ensuring their productivity. The
performance management system is effective to identify the gaps in
performance so that those can be filled with training and development
processes. It also helps organizations to identify the quality requirements of
future employees in the organization. Though there are different performance
management systems, organizations can select best on their choice and ultimate
needs.

4. Learning and Development

This is an essential responsibility for HR to develop employee’s skills for the

future. This is also related to the first HR function in which HR bridges the gap
between the present workforce and the workforce needed in the near future.
Every organization needs to set a budget for learning and development which is
then distributed for its employee’s development.

5. Career Planning

The career planning function of HR is also referred to as career pathing because

of the combination function of career guidance and development for employees.
This key function of the Human Resource Department shows employees, how
their personal ambition can be aligned with the future needs of the company and
helps employees to engage and retain them. The organization also gets the
benefit of better succession planning and higher productivity.

6. Function Evaluation

Function evaluation is the difficult and more technical key function of the
Human Resource Department that involves comparing various functions in
terms of qualification, quality, and availability of workers, job location, working
times, job responsibility, the economic situation, and how much value this job
adds to the organization.
There are various ways of spiritually ranking functions as below:

 Ranking method: A method in which subject matter experts rank

functions in terms of how much they contribute to the organization as
a whole. Functions are paired and raters have to decide which one is
more valuable. This is done with all functions and based on the
outcome, a ranking is established.
 Classification method: In classification methods, jobs can also be
classified into different categories. In this case, jobs are categorized
and then ranked within these categories to come up with a ranking.
Categorizations can include education, experience, the degree of
specialized skills needed to do the job, the degree to which these skills
are in-demand, and so on.
  Points method: jobs are categorized according to the factors the
organization believes contribute most to its success. Points are then
awarded to each category for every job. These categories can include
key competencies, like problem-solving, technical knowledge,
communication and influencing skills, innovative capability, business
acumen, and so on. These competencies will differ per organization
 Personal method: in this method, the job itself is not evaluated but the
person doing the job is. Here, employees are rewarded based on their
personal skills and competencies.
7. Rewards

Rewarding employees for their work is a key function of the Human Resource
Department that is impossible to mistake. The reward can also be relational and
psychological outcomes in some cases. For example, fantastic colleagues and
meaningful works are also rewarding to the employees. The monetary reward of
any job consists of financial rewards and other benefits that are considered
secondary benefits.

Rewards are therefore more than just financial. Here is a non-exhaustive

overview of total rewards:

 Base salary
 Performance-based-pay
 Bonuses
 Social environment
 Job security
 Status
 Alternating work
 Autonomy
 Growth opportunities
 Feedback
 Formal and informal development opportunities
The above 7 key functions of the Human Resource Department fall within the
scope of talent management where they aim to attract, develop, motivate and
retain high-performing employees.

8. Industrial Relations
Another key function of the Human Resource Department is maintaining and
cultivating relationships with labor unions and other collective bargaining
agents. Keeping a good relationship with unions will help the HR department to
resolve potential conflicts quickly and will also be beneficial in more difficult
economic times when layoffs or other actions are required.

9. Employee Participation and Communication

According to Dave Ulrich, one of the key functions of the Human Resource
Department is to be a credible activist for the employees. Employees
participation needs to be ensured by HR professionals of the organization.
Proper communication skills of the employees can improve their competency
for the achievement of goals.

10. Health and Safety

HR must follow occupational health and safety regulations in the organization.

There are country-specific OH&S regulations that should be implemented
accurately to avoid any kind of incident. So, safety issues should be monitored
in a continuous way and make it as a culture of the organization to get better
results. 

11. Personal Wellbeing

Employee’s personal problems must be looked after by the HR department. The

HR department will be assisting employees to solve their personal problems.
Personal well-being is about supporting employees when things don’t go as
planned and employee’s productivity decreased due to personal problems.

12. Administrative Responsibilities

Administrative responsibility is treated as the key function of the Human

Resource Department which includes personnel procedures and Human
Resource Information Systems (HRIS). Personnel procedures include
promotions, relocation, discipline, performance improvement, regulations,
cultural and racial diversity, unwanted intimacies, bullying, and so on. The
company must have to implement policies and procedures for successful
management of those issues. 
Human Resource Information Systems (HRIS) store employee’s data. HRIS can
be implemented in the company for better management of data and getting more
accurate analytical information. 

Objectives of HRM

1. Primary Objectives
Help the organization to attain its goals
Utilize the available human resources effectively.
Increase to the fullest the employee’s job satisfaction and self-actualization.
Develop and maintain the quality of work life (qwl) Maintain ethical policies
and behavior inside and outside the organization.
Establish and maintain cordial relations between employees and management.
Reconcile individual/group goals with organizational goals.

2. Social Objectives
To be ethically & socially responsible for the needs and challenges of society
while minimizing the negative impact of such demands upon the organization to
use their resources for society’s benefits in ethical ways may lead to restriction.
3. Organizational objectives
To recognize the role of HRM in bringing about organizational effectiveness,
HRM is not an end in itself but it is only a mean to assist the organization with
its primary objectives organization.

4. Functional objectives
To maintain the contribution of department at an appropriate level
organization should fulfil the needs. Resources are wasted when HRM is
either more or less sophisticated to suit the organizations demands.
5. Personal Objectives
To assist Employees in achieving their personal goals, at least in so far as
these goals enhance the individual’s contribution to the organization.
Personal objectives of employees must be maintained, retained and
motivated.

Scope of HRM
The scope of Human Resource Management refers to all the activities that come
under the banner of Human Resource Management. These activities are as
follows.
Human resources planning :-
Human resource planning or Human Resource Planning refers to a process by
which the company to identify the number of jobs vacant, whether the company
has excess staff or shortage of staff and to deal with this excess or shortage.
Job analysis design :-
Another important area of Human Resource Management is job analysis. Job
analysis gives a detailed explanation about each and every job in the company.
Recruitment and selection :-
Based on information collected from job analysis the company prepares
advertisements and publishes them in the newspapers. This is recruitment. A
number of applications are received after the advertisement is published,
interviews are conducted and the right employee is selected thus recruitment
and selection are yet another important area of Human Resource Management.
Orientation and induction :-
Once the employees have been selected an induction or orientation program is
conducted. This is another important area of Human Resource Management.
The employees are informed about the background of the company, explain
about the organizational culture and values and work ethics and introduce to the
other employees.
Training and development :-
Every employee goes under training program which helps him to put up a better
performance on the job. Training program is also conducted for existing staff
that have a lot of experience. This is called refresher training. Training and
development is one area where the company spends a huge amount.
Performance appraisal :-
Once the employee has put in around 1 year of service, performance appraisal is
conducted that is the Human Resource department checks the performance of
the employee. Based on these appraisal future promotions, incentives,
increments in salary are decided.
Compensation planning and remuneration :-
There are various rules regarding compensation and other benefits. It is the job
of the Human Resource department to look into remuneration and compensation
planning.

Functions of HRM
Managerial

1.Planning: One of the primary function where number & type of employees
needed to accomplish organizational goals are determined. Research forms core
HRM planning which also helps management to collect, analyze and identify
current plus future needs within the organization.

2. Organizing: Organization of the task is another important step. Task is

allocated to every member as per their skills and activities are integrated towards
a common goal.

3. Directing: This includes activating employees at different levels and making

them contribute maximum towards organizational goal. Tapping maximum
potentialities of an employee via constant motivation and command is a prime
focus.
4. Controlling: Post planning, organizing and directing, performance of an
employee is checked, verified and compared with goals. If actual performance is
found deviated from the plan, control measures are taken.

5.Coordinating: Blending efforts to ensure successful attainment of objectives.

Operative Function Includes:

1. Recruitment/Hiring: Hiring is a process which brings pool of prospective

candidates who can help organization achieve their goals and allows
managements to select right candidates from the given pool.

2. Job Analysis & Design: Describing nature of the job like qualification, skill,
work experience required for specific job position is another important operative
task. Whereas, job design includes outlining tasks, duties and responsibilities
into a single work unit to achieve certain goal.

3. Performance Appraisal: Checking and analyzing employee performance is

another important function that human resource management has to perform.

4. Training & Development: This function allows employees to acquire new

skills and knowledge to perform their job effectively. Training and development
also prepares employees for higher level responsibilities.

5. Salary Administration: Human Resource Department also determines pays for

different job types and incudes compensations, incentives, bonus, benefits etc.
related with a job function.
6. Employee Welfare: This function takes care of numerous services, benefits
and facilities provided to an employee for their well-being.

7. Maintenance: Minimizing employee turnover and sustaining best performing

employees within the organization is the key. Minimizing ROI within HR
department is also a key goal for Human resource management team.

8. Labor Relations: Labor relation is regards to the workforce who work within a
trade union. Employees in such domain form a union/group to voice their
decisions affectively to the higher management.

9. Personal Research: Research is a vital part of human resource management. It

is performed to keep a check on employee opinion about wages, promotions,
work condition, welfare activities, leadership, employee satisfaction and other
key issues.

10. Personal Record: This function involves recording, maintaining and

retrieving employee related information including employment history, work
hours, earning history etc.

IMPORTANCE OF HRM

— Maintain quality of work life

Relationship between employees and total work environment. Employee’s

perception of physical as well as psychological wellbeing at workplace

— Increase productivity and profit

Right quality and quantity of personnel in workplace. Motivate individual.

 — Match demand and supply of human resource

Recruitment and selection to balance the need. Lay-off inefficient employee

— Retain employees and motivate them to accomplish company’s goal

Provision of fringe benefits, compensation and rewards.

— Recognize merit and contribution of employee

Timely appraisal of employee’s performance

— Team spirit in the employee

Making each and every employee feel valued

— Sustain business in the market

Company has the best employee

— Develop corporate image

Companies must have moral and social behavior

— Produce employees who are easily adaptable to change

Training and development of employees

Role of HR managers

— Recruitment

Plan and devise strategic campaigns and guidelines for recruiting suitable
candidates for a required job description.
Mediator between the employer and the candidate

Ø Attract Talent- planning the requirement of manpower in the organization

Ø Hire Resources- Reach out to maximum potential candidates, filter out

irrelevant applications, judge suitable incumbents and coordinate
internally to get them interviewed.

— Training

Contribute to employee motivation and retention

New employee can be subjected to an on-the-job training

Assess the results of the training program

— Professional Development

Developing employees professionally 

Increasing employee engagement

— Appraisals

Timely performance appraisals

Improving their performance and achieving targets

Communicate individually with employees

— Maintaining work culture

Healthy, safe, and fun work environment

Efficient work atmosphere

Open-door policy

— Resolving Conflicts

Help map out a solution

Disposal of the conflicting parties and hear out their issues without being
judgmental

Unbiased and practical decision

— Employee relations

Interpersonal skills

Builds a good public image within the organization

Both an HR expert and an employee advocate

— Rewards and Incentives

Imparts motivation

Healthy competitive environment

Provision of non-traditional rewards

— Legal knowledge

Build guidelines and draft policies

Organization’s continued growth and existence

— Organization Functions
 Employee on-boarding

Introduce the new employees

Defining roles and responsibilities

Organizing and storing all employee data

— Management

Manage, create, implement and supervise policies

Monitoring attendance and tracking leaves

— Payroll Management

Efficient calculation of salaries, wage-cuts, reimbursements, and generation

of pay slips

Maintain transparency

ROLE OF HUMAN RESOURCES DEPARTMENT

Human Resource Department:

Division of a company that is responsible for effectively managing a

company's human resources, which are its employees, provides effective
policies, procedures, and people-friendly guidelines and support.
An HR department is tasked with maximizing employee productivity and
protecting the company from any issues that may arise within the workforce.
HR responsibilities include compensation and benefits, recruitment, firing, and
keeping up to date with any laws that may affect the company and its
employees.
Structure of HRD: Effective way of organizing the structure of an HR team is
to have individuals (or teams) that each specialize on key human resource
functions.

Human Resources Business Partner (HRBP)- partners have clients within the
organization and provide resources focusing on the missions and objectives set
forth by the organization
HR Structure in a Small Business
1. HR Manager: The Human Resource Manager will lead and direct the
routine functions of the Human Resources (HR) department including
hiring and interviewing staff, administering pay, benefits, and leave, and
enforcing company policies and practices.

2. A human resources specialist—often referred to as an HR specialist—

helps an employer find job candidates who are most qualified to meet the
organization's needs. They recruit applicants, review resumes, conduct
interviews, and perform background checks. The HR specialist may also
inform applicants of their acceptance or rejection.

3. Recruiting Coordinator is an entry to intermediate level job role. The

role involves working with hiring managers, panel members, and others
to coordinate the recruitment and hiring of new employees. It also
provides exposure to multiple HR roles and to learn on the job.

HR Structure-Mid Sized Business

Ê Chief Human Resources Officer (CHRO). Focuses on the strategy of
human capital and how HR programs grow revenue
Ê Recruiting Director. senior leader for hiring and recruiting.
Ê HR Director. Responsible for annual budgets and decisions on buying
software, systems and negotiating benefits for the company
Ê Compensation and Benefits Manager- Benefit plans
Ê HR Generalist. handling benefits, compensation, recruiting and employee
relations, as well as location forecasting and budgeting, recruiting and
interviewing, compliance etc.

HR Structure- Large Companies

Ê Vice President of HR.  Works with the executive team on business
objectives.
Ê Chief Diversity Officer. Focuses solely on employee and candidate
diversity and inclusion
Ê Recruiter. Specializes in the hiring and selection for open requisitions
Ê Recruiting Coordinator. Recruiting tasks
 Ê HR Coordinator. Files and maintains reports, processes payroll, schedules
interviews, plans and organizes events, handles inter-office
communication

HUMAN RESOURCE PLANNING

Human resource planning (HRP) is the continuous process of systematic

planning ahead to achieve optimum use of an organization's most valuable asset
—quality employees. Human resources planning ensures the best fit between
employees and jobs while avoiding manpower shortages or surpluses. For
example, a human resources strategic plan may include long-term aims to
recruit and retain an excellent staff with a high-level of technical expertise. The
tactical plan would include detailed action plans with completion due dates.

E.W. Vetter viewed human resource planning as “a process by which an

organisation should move from its current manpower position to its desired
manpower position.
According to Leon C. Megginson human resource planning is “an integrated
approach to performing the planning aspects of the personnel function in order
to have a sufficient supply of adequately developed and motivated people to
perform the duties and tasks required to meet organisational objectives and
satisfy the individual needs and goals of organisational members.”

NEED AND IMPORTANCE OF HRP

Assessing future personnel needs
Picture of defective planning or absence of planning in an organization
Ensure the employment of proper number and type of personnel. For example,
Godrej hiring from campus placement.
For example, Coca Cola wants diversity in their company and thus gives
preferences to women for positions in their workplace.
For example, SAP labs have great working environment and take care of
women employees.
Foundation for other HRM functions
First step in all HRM functions
Coping with change
Changes in the demand of personnel, content of job, qualification and
experience needed.
Investment perspective
Long run success of the enterprise
Proper planning of future employees
Expansion and diversification plans
More employees at various levels
Employee turnover
Manpower planning for further recruiting and hiring.
Conformity with government guidelines
Protect the weaker sections of the society
International expansion strategies
Fill the foreign subsidiary’s key positions from its home country employees or
from host-country or from a third country
Having highly talented manpower inventory
Attracting and retaining well qualified, highly skilled and talented employees

Human Resource Planning – Objectives--- Also on page 57 of book

1. Proper assessment of human resources needs in future
Human resource planning helps the organization in identifying future
manpower requirements for organizations. In view of organizational
objectives to be achieved in the future, this process analyses the precise
manpower required for the functioning of the organization. This process
ensures the right number of peoples at the right time in an organization to
derive requisite output.

2. Anticipation of deficient or surplus manpower

Identification of the gap between the manpower supply and manpower
demand is a must for every organization. Human resource planning helps in
finding out the surplus or deficit of employees in an organization.
Accordingly, it makes a plan to overcome these gaps. In case of the deficit
its plans for hiring new employees and in case of the surplus it reduces the
number of employees by retirement, termination, layoff, etc.

3. Create a highly talented workforce

Human resources planning aims at providing various training to all
employees as per the requirement of market needs. These training and
development programmes are meant for both new and existing employees. It
focuses on updating and improving skills of manpower to derive the
requisite productivity from them. This way it aims at the advancement of
employees and serves the high skilled employees need of an
organization. For example, Vipro provides training and development
programmes to its employees after recruitment.
4. Ensures Optimum Use Of Manpower
Human resource planning process helps in the full utilization of human
resources. The right man at the right place is a must to achieve high
productivity and efficiency. This process aims at providing job to individuals
according to his knowledge, skills, and experience. Job positions are
 properly analyzed before deputing persons and it is checked whether a
person is capable of delivering roles or not. This way Human resources
planning ensures fuller utilization of human resources within the
organization.

5. Meet Expansion And Diversification Needs

Expansion and diversification are activities that every organization needs to
follow as they achieve progress over time. Human resource planning
supports the organization in its various expansion, diversification, and
modernization programs. It formulates plans for meeting the employee
requirements as per the expansion plan. This ensures that skilled and
knowledgeable people are available at the right time that is able to face the
challenging job roles.

6. Estimates Human Resource Cost

Human resource planning controls the cost of human resources of an
organization. It facilitates the preparation of the budget for meeting these
expenses by estimating the cost of each and every human resource working
in the organization. Formulation of appropriate budgets will ensure timely
payment to employees and also avoids a shortage of funds.

7. Monitors Human Resource Performance

It monitors and controls the performance of employees from time to time.
Human resource planning measures the actual performance of manpower
with planned performance. If any deviations are found in performance it
aims at removing them by taking appropriate corrective measures. It ensures
whether human resources are performing as their defined roles and
responsibilities. This way it helps in the achievement of organizational goals
and objectives timely.

Human Resource Plan – Factors

External Factors

COMPETITIVE CONDITIONS
HR managers seek to maintain low costs, one of the most common factors
affecting human resource planning. For example, when there are many
recruiters vying for the same talent, it can drive up costs.
REGULATORY SHIFTS 
For example, whether it’s ensuring safety or labor laws, regulatory shifts impact
HR practice. Organizations have to provide safe working conditions and
appropriate training for their employees, minimizing the risk of accidents.
These factors affecting human resource planning can improve working
conditions.
ADVANCING TECHNOLOGY 
The HR manager must know recent developments in technology and trends
which impact the planning process. In many organizations, new information
technologies are being introduced that have a significant impact on functioning.
The HR department needs to be two steps ahead. Working with the relevant
departments to recruit talent to grow with the organization and offer skills that’ll
be in demand for future projects is critical.  For example, many companies are
using LinkedIn for recruiting it’s employees.
UNFORESEEN CIRCUMSTANCES 
One of the external factors affecting human resource planning is situations that
arise out of the control of the organization. These can cause massive changes to
how we function. The Covid-19 pandemic is a prime example. Almost
overnight, businesses had to adapt to closures, social distancing norms and
disruptions in the supply chain. Natural disasters and climate change may cause
further changes in the future. While these factors affecting human resource
planning are impossible to predict, organizations need to be prepared.
ECONOMIC CONDITIONS 
The economic climate will affect an organization’s human resource planning as
it impacts the bottom line. Changes in the labor market will affect the
organization’s ability to attract and keep qualified employees.
DEMOGRAPHIC CHANGES
Changes in the population may affect an organization’s ability to attract and
retain qualified employees. This is one of the long-term external factors
affecting human resource planning. An increase or decrease in population may
cause an increase or decrease in the supply of qualified candidates. It may also
strain the educational system, which will further impact hiring.

Internal Factors
RECRUITMENT NEEDS
The key internal factors affecting human resource planning are the recruitment
needs of various departments. One of the factors affecting HRP is the need to
fill vacant positions. Recruitment is a process that identifies and invites
applicants to apply for vacant positions. For example, Zomato gives the
opportunity for it’s vacant positions.

BUDGET 
Effective HRP requires resources, money and time and many other resources for
functioning. Besides this, all pay packages for hires must also fit into the
available resources. Increments are also affected by budgetary constraints. For
example, TCS hires many graduates at low amount of packages.
TRAINING NEEDS 
HR’s role doesn’t end with recruitment. One of the significant internal factors
affecting human resource planning is whether the staff needs upskilling or
reskilling. 
It’s not enough to hire someone who has adequate skills to do their job well.
Managers also ensure employees receive adequate on-the-job training. For
example, Vipro provides training to its employees after recruitment.
WORK ENVIRONMENT
A pleasant work environment is another factor for HR managers to consider.
Employees want to be part of a team that’s committed to a common goal and
where they enjoy the respect of co-workers and management. If an employee
isn’t happy, they may leave to work elsewhere. For example, Zomato provides
maternity and paternity leaves to its employees which is a sign of good working
condition.
RETRENCHMENT 
From time to time, organizations will need to let people go. These may be
underperformers, or perhaps they’re employees who’d been hired for a specific
project or location that’s shutting down. It falls to HR to see them through this
difficult time. For example, Microsoft let employees go who underperforms.

RECRRUITMENT
In human resource management, “recruitment” is the process of finding and
hiring the best and most qualified candidate for a job opening, in a timely and
cost-effective manner. It can also be defined as the “process of searching for
prospective employees and stimulating and encouraging them to apply for jobs
in an organization”.

It is one whole process, with a full life cycle, that begins with identification of
the needs of the company with respect to the job, and ends with the introduction
of the employee to the organization. For example, Hackathon events attract
programmers, coders, and developers which unfortunately is extremely male-
dominated. Spotify recognized this imbalance (they saw their events having
15/85 female to male ratio) and as a major company in the industry, leveraged
their influence to promote a change. In 2015, Spotify hosted a hackathon titled
“Diversify” to pull in 50/50 female and male participants. Spotify worked hard
to market the event outside of the usual Facebook hacker groups by advertising
through word-of-mouth and avoided “ninja and Barbie themes” in their
recruiting campaign. Although coding a product was a major aspect of the
event, workshops and lectures were also featured to step away from the
traditional idea of a hackathon. The company managed to bring in a 43% female
and 57% male participant ratio, unseen before at tech events.
FACTORS AFFECTING RECRUITMENT
Internal Factors
Organizations have control over the internal factors that affect their recruitment
functions. The internal factors are −

 Size of organization
 Recruiting policy
 Image of organization
 Image of job

Size of Organization

The size of the organization is one of the most important factors affecting the
recruitment process. To expand the business, recruitment planning is
mandatory for hiring more resources, which will be handling the future
operations.

Recruiting Policy

Recruitment policy of an organization, i.e., hiring from internal or external

sources of organization is also a factor, which affects the recruitment process.
It specifies the objectives of the recruitment and provides a framework for the
implementation of recruitment programs.

Image of Organization

Organizations having a good positive image in the market can easily attract
competent resources. Maintaining good public relations, providing public
services, etc., definitely helps an organization in enhancing its reputation in the
market, and thereby attract the best possible resources.

Image of Job

Just like the image of organization, the image of a job plays a critical role in
recruitment. Jobs having a positive image in terms of better remuneration,
promotions, recognition, good work environment with career development
opportunities are considered to be the characteristics to attract qualified
candidates.
External Factors
External factors are those that cannot be controlled by an organization. The
external factors that affect the recruitment process include the following −
 Demographic factors − Demographic factors are related to the attributes
of potential employees such as their age, religion, literacy level, gender,
occupation, economic status, etc.
 Labor market − Labor market controls the demand and supply of labor.
For example, if the supply of people having a specific skill is less than
the demand, then the hiring will need more efforts. On the other hand, if
the demand is less than the supply, the hiring will be relative easier.
 Unemployment rate − If the unemployment rate is high in a specific
area, hiring of resources will be simple and easier, as the number of
applicants is very high. In contrast, if the unemployment rate is low, then
recruiting tends to be very difficult due to less number of resources.
 Labor laws − Labor laws reflect the social and political environment of
a market, which are created by the central and state governments. These
laws dictate the compensation, working environment, safety and health
regulations, etc., for different types of employments. As the government
changes, the laws too change.
 Legal considerations − Job reservations for different castes such as STs,
SCs, OBCs are best examples of legal considerations. These
considerations, passed by government, will have a positive or negative
impact on the recruitment policies of the organizations.
 Competitors − When organizations in the same industry are competing
for the best qualified resources, there is a need to analyze the
competition and offer the resources packages that are best in terms of
industry standards.

SOURCES OF RECRUITMENT
Internal Sources of Recruitment
Internal sources of recruitment refer to hiring employees within the
organization internally. In other words, applicants seeking for the different
positions are those who are currently employed with the same organization.
At the time recruitment of employees, the initial consideration should be given
to those employees who are currently working within the organization. This is
an important source of recruitment, which provides the opportunities for the
development and utilization of the existing resources within the organization.
Internal sources of recruitment are the best and the easiest way of selecting
resources as performance of their work is already known to the organization.
Let us now discuss more on the various internal sources of recruitment.
Promotions

Promotion refers to upgrading the cadre of the employees by evaluating their

performance in the organization. It is the process of shifting an employee from
a lower position to a higher position with more responsibilities, remuneration,
facilities, and status. For example, TCS fills the higher vacant positions with
the process of promotions, internally.

Transfers

Transfer refers to the process of interchanging from one job to another without
any change in the rank and responsibilities. It can also be the shifting of
employees from one department to another department or one location to
another location, depending upon the requirement of the position.
Let’s take an example to understand how it works. Assume there is a finance
company called ABC Ltd. Having two branches, Branch-A and Branch-B, and
an employee from Branch-A resigned from his job responsibilities. Hence, this
position has to be filled for the continuation of the project in Branch-A.
In this scenario, instead of searching or sourcing new candidates, which is time
consuming and expensive, there is a possibility of shifting an employee from
Branch-B to Branch-A, depending upon the project requirements and the
capabilities of that respective employee. This internal shifting of an employee
from one branch to another branch is called as Transfer.

Recruiting Former Employees

Recruiting former employees is a process of internal sources of recruitment,

wherein the exemployees are called back depending upon the requirement of
the position. This process is costeffective and saves plenty of time. The other
major benefit of recruiting former employees is that they are very well versed
with the roles and responsibilities of the job and the organization needs to
spend less on their training and development.

Internal Advertisements (Job Posting)

Internal Advertisements is a process of posting/advertising jobs within the

organization. This job posting is an open invitation to all the employees inside
the organization, where they can apply for the vacant positions. It provides
equal opportunities to all the employees working in the organization. Hence,
the recruitment will be done from within the organization and it saves a lot of
cost.

Employee Referrals
Employee referrals is an effective way of sourcing the right candidates at a low
cost. It is the process of hiring new resources through the references of
employees, who are currently working with the organization. In this process,
the present employees can refer their friends and relatives for filling up the
vacant positions.
Organizations encourage employee referrals, because it is cost effective and
saves time as compared to hiring candidates from external sources. Most
organizations, in order to motivate their employees, go ahead and reward them
with a referral bonus for a successful hire.

Previous Applicants

Here, the hiring team checks the profiles of previous applicants from the
organizational recruitment database. These applicants are those who have
applied for jobs in the past. These resources can be easily approached and the
response will be positive in most of the cases. It is also an inexpensive way of
filling up the vacant positions.

External Sources of Recruitment

External sources of recruitment refer to hiring employees outside the
organization externally. In other words, the applicants seeking job
opportunities in this case are those who are external to the organization.
External employees bring innovativeness and fresh thoughts to the
organization. Although hiring through external sources is a bit expensive and
tough, it has tremendous potential of driving the organization forward in
achieving its goals. Let us now discuss in detail the various external sources of
recruitment.
Direct Recruitment
Direct recruitment refers to the external source of recruitment where the
recruitment of qualified candidates are done by placing a notice of vacancy on
the notice board in the organization. This method of sourcing is also called
as factory gate recruitment, as the blue-collar and technical workers are hired
through this process.

Employment Exchanges

As per the law, for certain job vacancies, it is mandatory that the organization
provides details to the employment exchange. Employment exchange is a
government entity, where the details of the job seekers are stored and given to
the employers for filling the vacant positions. This external recruitment is
helpful in hiring for unskilled, semi-skilled, and skilled workers. For example,
National Employment Exchange and National Employment Services.

Employment Agencies

Employment agencies are a good external source of recruitment. Employment

agencies are run by various sectors like private, public, or government. It
provides unskilled, semi-skilled and skilled resources as per the requirements
of the organization. These agencies hold a database of qualified candidates and
organizations can use their services at a cost. For example, internshala and
naukri.com.

Advertisements

Advertisements are the most popular and very much preferred source of
external source of recruitment. The job vacancy is announced through various
print and electronic media with a specific job description and specifications of
the requirements. Using advertisements is the best way to source candidates in
a short span and it offers an efficient way of screening the candidates’ specific
requirements.
Let’s take an example. Assume that there is a Sales Company called XYZ Ltd
which has got a new project of selling a product in a short span of time, as the
competition is very high. In this scenario, choosing the specific recruitment
plays a vital role. Here the ideal type of recruitment which should be chosen is
Advertisement.
Advertisement is the best suitable practice for this kind of hiring, because a
large volume of hiring in a short span can be done through Advertisement only.
Advertisement is one of the costliest way to recruit candidates, but when time
and number are important, then advertisement is the best source of recruitment.

Professional Associations

Professional associations can help an organization in hiring professional,

technical, and managerial personnel, however they specialize in sourcing mid-
level and top-level resources. There are many professional associations that act
as a bridge between the organizations and the job-seekers.

Campus Recruitment

Campus recruitment is an external source of recruitment, where the educational

institutions such as colleges and universities offers opportunities for hiring
students. In this process, the organizations visit technical, management, and
professional institutions for recruiting students directly for the new positions.

Word of Mouth Advertising

Word of mouth is an intangible way of sourcing the candidates for filling up

the vacant positions. There are many reputed organizations with good image in
the market. Such organizations only need a word-of-mouth advertising
regarding a job vacancy to attract a large number of candidates.

SELECTION
It is comprised of different stages of interview a candidate undergoes before
being selected or hired by the company.
For example, Harver platform provides recruiters with a variety of recruitment
dashboards that track the most important hiring metrics. Among others, you can
see if there’s any bias in your recruitment process, in which stages it occurs, and
whether one location is more prone to bias than others.

Advantages of Selection
A good selection process offers the following advantages−
 It is cost-effective and reduces a lot of time and effort.
 It helps avoid any biasing while recruiting the right candidate.
 It helps eliminate the candidates who are lacking in knowledge, ability,
and proficiency.
 It provides a guideline to evaluate the candidates further through strict
verification and reference-checking.
 It helps in comparing the different candidates in terms of their
capabilities, knowledge, skills, experience, work attitude, etc.
A good selection process helps in selecting the best candidate for the
requirement of a vacant position in an organization.

Selection Process

It is comprised of different stages of interview a candidate undergoes before

being selected or hired by the company.

The stages of selection process vary from company to company and depend on
the nature of job. The basic stages involved in a standard selection process are:
1) Preliminary Interview

It is a short duration interaction with the candidate. This stage aims to get basic
information about the candidate and to check if he possesses the required skills
and aptitude for the job or not. Accordingly, he is rejected or promoted to the
next phase of selection process.

2) Written or Online Test

In this stage, tests are conducted to evaluate the candidates. The types of test
depend on the nature of job and selection format of the company. The most
common tests conducted at this stage are aptitude test, personality test and
technical test. The score of the tests helps company know how well the
candidate can perform job related tasks.

3) Final Interview

The interview at this stage can be a one to one or a panel interview. Also,
depending on the job, it can be a behavioral interview or a stress interview. The
skills and capacity of the candidate are measured against specific job
requirements. It remains a two way communication as it also allows the
candidate to ask questions about the job and company. The rejection or
selection of a candidate largely depends on the outcome of this interview.

4) Reference Check

The company asks the candidate to provide references that may include the
contact details of former employer or any two or more persons that are not in
relation. Afterwards, references are contacted through formal letters or
telephonic conversations to verify the information provided by the candidate.

5) Selection

In this stage, selection decision is made on the basis of performance of the

candidate in the previous stages. If the candidate has performed well, he will be
selected and issued an offer letter with all relevant details like his designation,
salary structure and term of employment.

PLACEMENT AND INDUCTION

According to Pigors and Myers, “Placement may be defined as the
determination of the job to which a selected candidate is to be assigned, and his
assignment to the job.”
According to Edwin B.Flippo, “Induction is concerned with introducing or
orienting a new employee to the organisation. It is the welcoming process to
make the new employee feel at home and generate in him a feeling of
belongingness to the organisation”.

Benefits- Placement of Employees

1. Reduced labour turnover
2. Reduced Absenteeism Rate
3. Increased safety of workers and lower accidents
4. Incleased morale of workers
5. Better human relation in the organisations.

PRINCIPLES FOR PLACEMENT

(i) Job requirement – Man should be placed on the job according to the
requirement of the job rather than qualification and requirement of the man.
(ii) Qualification – The job offered should match with the qualification
possessed by an employee.
(iii) Information – All the information relating to the job should be given to the
employees along with the prevailing working conditions. They should also be
made known that they have to pay penalty for wrong doing.
(iv) Loyalty and Co-operation – Every effort should be made to develop a sense
of loyalty and co-operation in employees to make them understand their
responsibilities

INDUCTION
It is the process of receiving and welcoming an employee when he first joins a
company and giving him the basic information he needs to settle down quickly
and happily and start work.
It is a welcoming process to make him feel at home and generate in him a
feeling of belongingness to the organization. In the process of induction the new
comer is explained his duties and responsibilities, company rules, policies and
regulations so as to make him familiar to the organization.

BENEFITS OF INDUCTION
1. Reduces new employee’s anxieties
2. Knowing the expectations of the organisation
3. Uniform understanding
4. Strengthens two-way communication.
5. Speed up socialisation process.
CONTENTS OF INDUCTION PROGRAMME
An induction programme is generally undertaken by the company to provide
information to the new recruit about the following.
* Products and services offered by the company.
* Brief history and achievements of the company.
* Policies, procedures, guidelines, norms and practices followed by the
company.
* The organisation structure and the hierarchy in the organisation.
* Grievances redress mechanism available with the company.
* Various employee welfare schemes available with the company.
* The location of various departments and the production facility .
* Career improvement and development programs adopted by the company.
* Service conditions, duties and responsibilities of the employees.

PERFORMANCE APPRAISAL
Performance appraisal in HRM is a process of analysing an employee’s worth
as well as contribution to the job. Getting an objective evaluation of
an employee’s performance will help a company identify any existing problems
in the workplace. This will help the HR department to solve those problems
quickly and with ease. Performance appraisals are used for an employee’s
development.

Objectives of Performance Appraisal

Ê Promote the employees
Ê Identify the requirement for training and development
Ê Take a decision regarding the hike
Ê Facilitate communication
Builds employees understanding

COMPENSATION AND REWARD

The compensation and rewards as received by employee is proportional to the
effort exerted by them. Internal and external factors determine the financial as
well as non-financial compensation for them. Need to manage and maintain
their compensation and reward system

Objectives of Compensation and Reward

Ê Develop skills and personality of employees
Ê Fair and justify remuneration
 Ê Obtain able and efficient employees and retain high performing
employees
Ê Increase the level of efficiency and productivity of employees
Ê Enhance cooperation
Ê Motivate employees
Ê Better employer employee relations
Ê Reinforce desirable and applicable employee behaviour

Major areas of compensation and rewards-Financial Methods

Monetary payment

Direct Wages, salaries, allowances, commission,

monetary incentives, bonus, overtime
payments and profit sharing

methods
Tangible value of the reward

Indirect Received by employees on the basis of

completion of their particular tenure of work

methods
Insurance, pension, provident fund and
traveling benefits

Major areas of compensation and rewards- Non-Financial Methods

Ê Intrinsic rewards based on human nature, praise, morale, recognition,
motives and informal interactions
 Ê Proper service conditions, job enlargement, promotions, rights and
responsibilities, opportunities for advancement, recognition, health and
maternity leave, gratuity and medical leave etc.
Ê Fulfilled the self-actualization needs of employees
Ê Retention of employees
Ê Develop the morale and enthusiasm
Ê Recognize the individual and group work performance

TRAINING AND DEVELOPMENT

Training and Development is one of the most important functions of Human
Resource management in any of the organization. The objective of this
Training is to enhance employees’ skills behaviour and expertise by putting
them into learning new techniques of doing work.
Employee Training and Development helps in updating employees’ skills and
knowledge for performing a Job which at the end results in increasing their
work efficiency and increase the productivity of an organization. It ensures that
Employees oddness or eccentricity is reduced and learning or behavioural
change should take place in a very structured format.  Training development or
learning and development are official ongoing educational activities designed
for goal fulfilment and enhance the performance of employees.