HUMAN RESOURCE

MANAGEMENT
Module I
 Importance of human factor
• Human resource is able to produce an output greater
than input.

• Active and living

—Ability to see, think, show satisfaction or
dissatisfaction, pleasure, resistance or acceptance.

• Most complex and unpredictable in his behaviour

—No formula to guide a manager how to motivate his
worker. Manager can buy a workers time, his physical
presence, and muscular motion
—Manager can’t buy workers enthusiasm, initiative,
loyalty, devotion etc.
• Each individual has his own distinct background
—Unique in psychological framework
—All individuals can’t be treated alike.
—Manager must follow tailor made approach based on
attitude, needs and urges

• HR appreciate in value with the passage of time

—People become experienced and skilled

• Labor laws dictate standard of treatment. For eg: - Factories

Act, Minimum wages Act, Employees state insurance Act.

• Labor unions
—Opposition by labour unions is a reason for treating HR
with greater respect.
 Definition of HRM

HRM is the planning, organising, directing and

controlling of the performance of those
operating functions namely procurement,
training, compensation, integration and
maintenance of the personnel of an
organisation for the purpose of contributing
towards the accomplishment of organisations’
major goals or objectives
—Edwin.B.Flippo
 Objectives

• Enterprise objectives: Attaining economically

& effectively the organisational goals.

• Personnel objectives: Serving to the highest

possible degree of individual goals.

• Social objectives: Preserving & advancing the

general welfare of the community.
 Scope of HRM
• Personnel aspect: HRP, Recruitment &
selection, transfer & promotion etc
• Welfare aspect: Working conditions and
facilities
• Industrial relations aspect: Relation between
management & employees
 Functions of HRM
• Managerial functions
1. Planning
2. Organising
3. Directing
4. Coordinating
5. Controlling
• Operative functions
1. Procurement—recruitment & placement
2. Development—training & education
3. Compensation—remuneration
4. Integration—reconciliation of individual &
organisational interest
5. Maintenance- sustaining & improving conditions
6.Records/audit/research
 Personnel records
 HR Audit: Measuring effectiveness of HR
programmes
 HR Research
 HR Accounting: measuring cost &value of HR
 HR Information system(HRIS)
 Stress & counselling
 International HRM
 Role of HR manager/department
• Advisory role
• Counselling role
• Change agent
• Conscience role
• Mediator’s role
• Liaison
• Legal role
• Welfare role
• Controller
• Human relations role
 ERGONOMICS
• It is the study of work & working conditions in
order to improve the efficiency of people
working in the organisation
 Challenges of HRM
I. Environmental challenges
a. Increase in education levels
b. Technological advancement
c. Workforce diversity
d. Changes in political environment
e. Legislation
• Different in public & private sector
f. Changes in psycho-social system
II. Organization Challenges

– Mobility of workforce
– Down sizing
– Organisational development
– New work ethics
– Organisational culture
– Industrial relations
III. Individual Challenges

– Matching people & organisation

– Ethic & social responsibility
– Productivity
- Job insecurity
 Organization Structure of Personnel Department

• Organization Structure of Personnel Department in Small Enterprises

By small enterprise is meant the enterprise which employs less than one
thousand employees. In such enterprises personnel department may or
may not exist. Services of outsiders who specialise in maintaining accounts
and records relating to provident fund, pension and other statutory
requirements are retained for a fee.
Organisation Structure of Personnel Department in Large Scale Enterprise

• A large scale enterprise will have a

manager/director heading the personnel
department. His status will be equal to that of
any executive
 Personnel Department in Line Organisation

• In line organisations there is uninterrupted line of

authority and responsibility running through the
management hierarchy. Line relationship generally exists
between a superior and a subordinate.
 Personnel Department in Line and Staff Organisation

• Large enterprises generally have organisation structures with both line and staff
executives. Line and staff structure combines the advantages of both line
organisation and functional organisation. Under this system, staff positions are
attached to line executives.
 Personnel Department in Functional Organisation

• In functional structure, all activities in the company are grouped according to

certain functions like production, marketing, finance, personnel etc. Each function
is put under the charge of a functional specialist. 
 Personnel Department in a Divisionalised Organisation Structure

• In a divisional organisation structure, personnel staffs are attached to divisional

officers. The personnel officer at divisional level is responsible to the local
divisional manager.
 Personnel Department in a Matrix Organisation Structure

• In a matrix organisation structure, every employee has two superiors i.e. they are
under dual authority. One chain of command is functional and the other chain of
command is a project team. Hence, matrix structure is referred to as a multi
command system, both vertical and horizontal dimension.
 Man Power Planning (MPP)
• Manpower planning includes the estimating of
how many qualified people are necessary to
carry out the assigned activities, how many
people will be available, and what must be done
to ensure that personnel supply equals
personnel demand at the appropriate point in
future.

• It is the process by which a management

determines how an organisation should move
from its current manpower position to its
desired manpower position.
 Need For Man Power Planning

• Each organisation needs personnel with necessary

qualifications, skills, knowledge, work experience and
attitude for work.

• Replacement of workers in case of retirement, death,

physical and mental ailments.

• Labor turnover - voluntary quits, marriage, dismissals.

• Extension programs

• New technology.

• To identify the areas of surplus or shortage of personnel

 Objectives of H R Planning

 to ensure optimum use of human resources

currently employed

 to determine future recruitment level

 to provide control measures to ensure that

necessary human resources are available as and
when required.

 to anticipate redundancies and avoid unnecessary

dismissals
 to forecast future skill requirements to serve as a
basis for training and development programmes

 to assess future planning needs of employees.

 to cost the manpower component in new

projects

 to decide whether any of the enterprises

activities be offloaded or subcontracted.
 MPP Process

• Analysis of the system

• Deciding the time horizon of the plan

• Forecasting the demand for and supply of manpower

• Reconciliation

• Preparation of action plan

 1. Analysis of the system:-

• Analysis on which type of the system exists in the organisation

- whether open or closed system
—Open system —interaction with environment
- Closed system—within the organisation

Analysis of the system on the basis of following

1. Goals: - whether organisation is services motive or profit
motive.
2. Population (uncontrollable variable):- labour cost will be
decreased when population is high
- rules, polices of ministry etc included in it.
3. Controllable variables:-training of a person
4. Incentives/payment.
5. Expectation about the behavior of the work force & reaction:-
reaction to technology.
2. Deciding the time horizon of the plan:-

• decide time period of MPP.

• short period forecast upto 2years

• (shorter time span), accuracy will be more
and less variable.

• long plan will be more variable, accuracy will

be less and forecast more than 2years.
3. Forecasting the demand for & supply of manpower.

FORECASTING THE DEMAND

Steps
1. Selection of appropriate basis for the
calculation manpower needs.
– Eg:-retail store—volume of sales is basis
– steel company –tonnes of steel.
2. Calculation of Productivity ratio:- output per
individual
Methods to calculate productivity ratio:-
• Copying productivity ratio from similar concern

• Regression analysis—correlation between manpower

and output

• Standard hours required to produce one unit of output

on the basis of work measurement study. Eg:- time &
motion study etc.

• Adjustment in the productivity ratio

—that can be done by advanced technology, training,
changes in organisational structure.

• Projecting manpower requirement

FORECASTING THE MANPOWER SUPPLY

• Internal supply forecast

—existing manpower
—promotion, transfer etc

• External supply forecast

—outside the organisation
—campus selection, advertisement
—when expansion is required
 4. Reconciliation:-

• Cost implications of manpower are to be

compatible with the company’s financial
position.

• If not, manpower need will have to be re-

examined to achieve a suitable reconciliation.
5. Preparation of action plan:-
• Recruitment, redundancy, training etc.
 Problems in HR Planning

• Ours is a labor surplus economy so there is no

need to spend time and money in forecasting
human resource.
– But at the same time we will not get skilled persons
and it will take time.
• Long term forecasting – greater inaccuracy.
• Uncertainties with labor turnover, absenteeism,
seasonal employment, and changes in
technologies etc, leads to ineffective planning.
• Lack of expertise to handle personnel matters
leads to unrealistic estimates.

• Absence of reliable data related to human

resources leads to ineffective HR plans.

• Lack of support from top management.

• Lack of integration between organisation

planners & HR planners.
 How to make HRP Effective
We have to consider the following:-
• HRP should be made in accordance with the corporate
objectives.

• Support of the top management should be ensured.

• Personnel record should be complete and up-to-date &

readily available.

• Time period should be appropriate to accommodate the

changing conditions.

• Both quantitative & qualitative aspects of human

resources should be used in balanced manner.
 Ergonomics
• Is concerned with designing and shaping jobs to
fit the physical abilities and characteristics of
employees so that they can perform their jobs
effectively.

• Nature of jobs remains the same but the

location of tools, switches and other facilities is
changed to make the jobholder feel
comfortable