HR POLICY AND FUNCTIONS

Chapter 1
 DEFINITION

Human resource management is the art of

managing human workforce in an organization
in an optimum manner which is beneficial to
the employee as well as the organization in
achieving the organizational goal.
EVOLUTION OF HRM
 HISTORY
Human Resource Management – Managing
People
• Deals with understanding the problems of the
people and their Management.
Royal Commission on Labour (1929) – Govt
of India
Labour Officer (1931) (employment,
Dismissal, working conditions, housing,
medical, recreational activities).
 HISTORY (Cont…)
Industrial Disputes Act (1946) and Factories Act (1947)
added policies of leave, wages, bonus & retirement (WO)

• During 60’s & 70’s, growth in business, competition & increasing

size attracting and retaining people formulating policies on
Human Resource Planning, Recruitment and Selection, Training
and Development, Performance and potential appraisal, internal
mobility & compensation management (added to WO’s function).
Welfare Officer Personnel Manager HR Manager
 Reason for transition
(PM HR Manager)
• Increasing labour cost
• Periodic stoppage of work (strike)
• Government legislation (law)
• Changes in production and distribution methodologies
• Information technology
• Strategic use of employees contribution
 DIFFERENCE BETWEEN
PM & HRM
PERSONNEL MANAGEMENT
Management of people
Traditional, routine, maintenance-oriented,
administrative function
Less important auxiliary function
(independent function with independent
sub-functions) – cost centre
Reactive, responding to demands as and
when they arise
Responsibility of the personnel department
HUMAN RESOURCE MANAGEMENT
Management of employee’s knowledge,
attitudes, abilities, talents, creative abilities
and skills/competencies
Continuous, on-going development function
aimed at improving human processes
Strategic management function (systems
thinking approach) – Profit centre
Proactive, anticipating, planning and
advancing continuously
Concern for all managers in the organization
and aims at developing the capabilities of all
line managers to carry out the human
resource related functions
 DIFFERENCE BETWEEN
PM & HRM
PERSONNEL MANAGEMENT
Scope is narrow with a focus on
administering people
Recruitment, selection and administration of
manpower
Motivators in PM are compensation,
rewards, job simplification and so on
Employee is treated as an economic unit as
his services are exchanged for wages/salary
Treats employee as a commodity or a tool or
like equipment that can be bought and used
Preserves information and maintains its
secrecy
HUMAN RESOURCE MANAGEMENT
Views the organization as a whole and lays
emphasis on building a dynamic culture
Satisfy the human needs of the people at
work that helps to motivate people to make
their best contribution
Work groups, challenges and creativity on
the job as motivators
Employee in HRM is treated not only as
economic unit but also a social and
psychological entity
Employee is treated as a resource and as a
human being
Communication is one of its main tasks
(vertical, lateral and feedback type
communication)
 DIFFERENCE BETWEEN
HRM & HRD
HUMAN RESOURCE MANAGEMENT
Subset of the entire management processes
of an organization
Scope of HRM is wider
Emphasizes that employees, their abilities
and their attitudes -used effectively and
efficiently to achieve organizational as well
as employees' goals.
Takes care of all the human - to motivate to
achieve organizational goals
HUMAN RESOURCE DEVELOPMENT
Subset of HRM
Scope of HRD as compared to HRM is
narrower
HRD emphasizes mainly on training and
development , career development,
counseling, updating latest technology,
mentorship and thus its employee skill
development
Focuses on upgrading the skills and
competencies -performance of the
employees on the job
 Objectives of HRM
• To help the organization reach its goals (through reconciliation of
individual goal with the Organisation)
• To ensure effective utilization and maximum development of human
resources by respecting and satisfying their needs.
• To achieve and maintain high morale among employees.
• To provide the organization with well-trained and well-
motivated employees to increase their performance .
• To increase to the fullest the employee's job satisfaction and self-
actualization.
• To develop and maintain a quality of work life.
• To develop overall personality of each employee in its multidimensional
aspect.
 Scope of HRM
1. Personnel aspect - This is concerned with manpower
planning, recruitment, selection, placement, transfer, promotion,
training and development, layoff and retrenchment, remuneration,
incentives, productivity etc.
2. Welfare aspect - It deals with working conditions and amenities such
as canteens, creches, rest and lunch rooms, housing, transport,
medical assistance, education, health and safety, recreation facilities,
etc.
3. Industrial relations aspect - This covers union-management
relations, joint consultation, collective bargaining, grievance and
disciplinary procedures, settlement of disputes, etc.
 HRM Functions

Organizational
Behaviour

Industrial
Personnel relations &
Management Labour
Legislations
 Organizational Behaviour
• Focus on the behaviour of the employees (individual,
group and total organisation).

• Motivation
• Job satisfaction
• Communication
• Supervision
• Inter and Intra group behaviour
• Organisational Development
• Structures and Designs
 Personnel Management
Policy Formulation and Implementation on
• Human Resource Planning
• Recruitment and Selection
• Training and Development
• Performance and Potential Appraisal
• Promotions
• Transfers
• Quality of Work Life
• Compensation Management
 Industrial Relations and Labour
Legislations

• Union-Management Relationship
• Union Structure
• Collective Bargaining
• Grievance Handling
• Discipline Management
• Implementaion of various Labour Legislations.
 Categories of HR Functions
Line Functions Staff Functions
(advisory Functions)
HR Department activities Assisting other Managers in performing their
(hiring and retaining employees) duties without creating human problems

• HR Planning Educate Managers on issues such as

• Job Analysis
• Recruitment and Selection • Harassment
• Induction training • Conducing surveys on various issues
• Performance and Potential Appraisal • Employment of special group employees
• • helping in setting up compensation
Internal mobility
• packages
Training and development
• dealing with indiscipline
• Compensation Management • Others problems of managing Human
• Union Management Resources
• Motivational Schemes, etc.
(ensures smooth flow of activities in the Orgn)
 Hall Mark of HR Policies
• Policies are designed – Management of the people in the Orgn, ensure parity and
justice to all employees.
• HR Policies are governed by Labour Laws.
• Indian Constitution Promises –social, economical and political justice and equality to
status and opportunity.

Articles of Indian Constitution that influence HR activities are

• Article 16 (equality in education and employment)

• Article 24 (Prohibition of Child Labour)
• Article 39 (equal pay for equal work)
• Article 43 (to provide living wages)
• Article 43a (participation of workers in Management)
 Roles of HR Manager

• Business and Strategic Partner

• Employee Advocate
• Change Champion
 Assessment Centre (Procedure – not a location)
• Employees are not contended by just having a job, but growth and individual
development is required.
• It uses variety of techniques to evaluate the employees (promotions / supervisory
positions)
• Use situational test to observe specific job behavior. (assessors do SWOT analysis)

Elements required for an Assessment Centre: (IPMA – International Personnel

Management Association)

• Job analysis – to determine attributes, skills, abilities, etc.

• Multiple Assessment Technique must be used – Job related Simulations
• Multiple Assessors (thoroughly trained) must be used for each assessee
• Systematic Procedure should be used to record observations
• Assessors must prepare report (as discussion / using statistical techniques)
 Benefits of Assessment Centre
• Helps to identify supervisory / managerial potential early,
provide lead time for training before occupying new position
• Identify T&D needs
• Training to assessor, helps to know Organisation little better
• Opportunity for the Orgn to review HRM Policies.
GSK started its assessment centre recently: (3 functions)
• Selection of candidate and confirming their potential
• Assist in Target development
• Guides in career development
 Assessment Tools (used by GSK)

• Simulation
• Structured interview
• Presentation
 Empowerment (USA – 1970)
• Redistribution of power in work setting (liberate the range of thought and action)
• Providing greater freedom and discretion to employees
– Develop mutual trust
– Liberal sharing of information
– Become team player
• A Major electronic company launched 2 programs to increase the effectiveness of
the supervisor.
– Traditional competency training
– Empowering (flexibility, access to resources, control over
working conditions)
• Employee can be empowered after training and adding responsibility and
accountability. Eg. Reliance Industries Ltd.
 Job Enrichment
(Hackman and Oldham – 1975)
• Job needs to satisfy the inner desire of actualization & satisfaction.
• Providing discretion, flexibility and variety of job to increase the
employees willingness to contribute.
7 Characteristics:
• Skill variety
• Task variety
• Task significance
• Autonomy
• Feedback from job
• Feedback from others
• Dealing with others
 Parity and Justice
• Fairness in the treatment of job.
• According to the Preamble of Indian Constitution – “Sovereign,
Socialist, secular, democratic republic” - promises social,
economic and political justice, liberty of thought, expression,
worship, equality of status, opportunity and dignity of
individual.
(Article 14, 15, 16, 24, 39, 41, 43a).
• HRM approach has to be
– Flexible
– Innovative
– Constantly responding to the challenges of the environment
 Downsizing / Rightsizing
• Activities undertaken by the management to improve efficiency,
productivity and competitiveness of organisations by reducing
the workforce.
• To workout the irreducible number of core employees required
to operate the system.
• Large staff – increase cost, inhibits speed, create road blocks in
responding to challenges , curtails innovation and creativity.
• Smaller number of well trained employees + good infrastructure
= increase the effectiveness at work.
 Reasons for Downsizing / Rightsizing
• Mergers, acquisitions and sell off
• To reduce labour cost and to enhance revenue (cutting down
salary / wages bills)
• Modernization and upgradation of technology, less manual
work.
• Multitasking
Eg: Tata Steel – 78,276 (Jan 1994) reduced to 50,910 (Oct 2000)
under “Early Seperation Scheme”
 Human Resource Information System
• Defined as a composite of database, computer applications, hardware
and software that are used to collect, record, store, manage, deliver
and manipulate data for Human Resource Management.
• Systematic way of sorting data and information for each employee,
to aid in planning, decision making and report generation.
Requirements of HRIS:
• Duties and responsibilities of every job in the organisation
• Skills possessed by every employee
• Future human resource needs of the organisation
• Current productivity of human resources
• Identification of training needs