Module:1 –Introduction to Human

Resource Management
CONCEPT, NATURE, SCOPE, OBJECTIVE, IMPORTANCE AND
FUNCTION OF HRM, CHALLENGES OF HRM, PERSONNEL
MANAGEMENT vs HRM, EVOLUTION OF HRM
Meaning of HRM

 HRM means the method of recruiting, hiring, deploying, and managing an

organization's personnel is known as human resource management (HRM). The HR
department of an organization is normally in charge of developing, implementing, and
managing HR policies that regulate workers and ensure to following policies and
procedures and t he organization's interaction with its employees.
Definition

 Armstrong “HRM 'is concerned with the employment, development and reward of people in
organizations and the conduct of relationships between management and the workforce”.

 Robbins and Decenzo “HRM is a process of acquiring, retaining, developing, terminating

and properly using the human resources in an organization”.

 Dessler “HRM as a process of acquiring, training, appraising, and compensating employees,

and attending to their labor relations, health and safety, and fairness concerns”.

 Ricky W. Griffin “Human Resource Management is the set of organizational activities

directed at attracting, developing and maintaining an effective workforce.”
Evolution of HRM
 From industrial revolution era to the present era, various stages to development of
management of human resource practices may be classified as follows:

 1. Industrial revolution era— 19th century

 2. Trade union movement era — close to the 19th century
 3. Social responsibility era — beginning of the 20th century
 4. Scientific management era— 1900-1920s
 5. Human relations era— 1930s-1950s
 6. Behavioral science era— 1950s-1960s
 7. Systems and contingency approach era – 1960 onwards 8. Human resource
management era — 1980 onwards
1. Industrial revolution era— 19th century

 The systematic development of HRM started with industrial revolution that started during
1850s in Western Europe and USA. The industrial revolution consisted, essentially, the
development of machinery, the use of mechanical energy in production processes, and
consequently the emergence of the concept of factory with large number of workforce
working together. The factory system replaced the old cottage system. Industrial revolution
brought out a number of changes like centralized work locations with large number of
workers working together, mechanized production process, migration of workers from
their place of origin, and indirect contact between factory owners and workers.

 In order to manage people in the factory system of industrial revolution, three systems of
HRM were developed- recruitment of workers, training for workers, and control of
workers. However, the basic philosophy of managing workers revolved around master-
servant relationship
2. Trade Union Movement Era

Shortly after the emergence of factory system, workers started to organize themselves based on their
common interests to form workers’ associations which were subsequently known as trade unions.
The basic objectives of these associations were to safeguard interest of their members and to sort out
their problems which arose primarily because of employment of child labour, long hours of work,
and poor working conditions. Later, other aspects of work such as economic problems and wages,
employee benefits and services, etc. also became issues. These trade unions started such weapons as
strikes, slowdowns, walkouts, boycotts, etc., for the acceptance of their demands. These activities of
the trade unions forced owners and managers to adopt employee grievance handling systems,
arbitration as a means of resolving conflicts between owners/managers and workers, disciplinary
practice, expansion of employee benefit programmes, holiday and vacation time, clear definition of
job duties, job rights through seniority, and installation of rational and defensible wage structures
3. Social Responsibility Era
 In the first decade of 20th century, some factory owners started adopting a more humanistic and
paternalistic approach towards workers. Paternalistic approach to labour management is based
on the philosophy that labour is just like a child and owner is just like a father and the owner
should take care of his labour just like a father takes care of his children. Those industrialists
who adopted paternalistic approach offered a number of concessions and facilities to labour
force like reduced number of work hours, improved facilities at workplace, model villages to
workers, etc. All these practices led to the development of social welfare aspect of labour
management. Many critics to paternalistic approach viewed that this approach was adopted to
overcome the problems posed by labour union movement as plenty of trade unions emerged
which frequently interrupted work performance. Employers observed that workers were going
out of their control and to overcome this problem, they implemented welfare scheme. Thus, this
was a compulsion rather than a philosophy.
4. Scientific Management Era

 Around the beginning of 20th century, Taylor started to find out ‘one best way of doing thing’ based on
time and motion studies. On the basis of his experiments, he was able to increase workers’
productivity considerably and wrote many papers based on these experiments and a book on scientific
management.

 The main principles of scientific management are:

 (i) Replacing rule of thumb with science,

 (ii) harmony, not conflict,

 (iii) cooperation, not individualism, and

 (iv) development of each and every person.

 Scientific management techniques relevant to management of workers are- functional foremanship,

standardization and simplification of work, and differential piece wage system.
5. Human Relations Era
 Around 1920s, management researchers gave a close look at the human factor at work and
the variables that affected people’s behaviour. Before that, Hugo Munsterberg wrote a book
on ‘Psychology and Industrial Efficiency’ which suggested the use of psychology in the field
of personnel testing, interviewing, attitude measurement, learning, etc. This brief period was
termed as ‘Industrial Psychology Era’. In 1924, a group of professors from Harvard Business
School, USA, began an enquiry into the human aspects of work and working conditions at
Hawthorne plant of Western Electric Company, Chicago. They conducted researches from
1924 to 1932 and arrived at the conclusions that productivity of workers depended on-

 i) social factors at the workplace,

CONT..

 (ii) group formation and group influence,

 (iii) nature of leadership and supervision, and

 (iv) communication.

 They concluded that in order to have better productivity, management should take care
of human relations besides the physical conditions at the workplace. Consequently, the
concepts of social system, informal organization, group influence, and non-logical
behaviour entered the field of management of personnel.
6. Behavioural Science Era

 In contrast to human relations which assume that happy workers are productive workers,
the behavioural scientists have been goal and efficiency- oriented and consider
understanding of human behaviour to be the major means to that end. They have tried
several sophisticated research methods to understand the nature of work and the people in
the work environment. The contribution of behavioural scientists to management practices
consists primarily of producing new insights rather than new techniques. It has developed
or expanded a useful way of thinking about the role of the manager, the nature of
organizations, and the behaviour of individuals within organizations. As against human
relations model, they have given the concept of human resource model.
7. Systems and Contingency Approach Era

 Systems and contingency approach has attracted maximum attention of thinkers in

management in the present era. It is an integrated approach which considers
management of human resources in its totality based on empirical data. The basic idea
of this approach is that analysis of any object must rely on a method of analysis
involving simultaneous variations of mutually-dependent variables. This happens when
systems approach is applied in managing human resources.
8. Human Resource Management Era

 When the factory system was applied in production, large number of workers started working
together. A need was felt that there should be someone who should take care of recruiting,
developing, and looking after welfare of these workers. For this purpose, industrial relations
department came into existence in most of the large organizations which was concerned
mostly with workers. However, as the time passed and the complexity of managing human
resources in large business organizations increased, the scope of industrial relations
department was extended to cover supervisory staff and subsequently managerial personnel.
Industrial relations department was named as personnel department
CONT…
 With the increasing competition for market share, competition for resources including human talents, and
increased knowledge in the field of managing human resources, people were not treated merely as
physiological beings but socio-psychological beings as a prime source of organizational effectiveness and

 large organizations changed the nomenclature of their personnel department to human resource ‘department
to reflect the contemporary view. Even the American Society for Personnel Administration, the largest
professional association in the field of human resource management, changed its name to the Society for
Human Resource Management in 1990. At the academic level, similar pattern was followed and the title of
personnel management course was changed to human resource management. Since then, the expression is
gradually replacing the hackneyed term ‘personnel management’.
Personal Management

 Personnel Management is a branch of management that is concerned with employees and their relationship

with the entity. It includes workforce-related activities such as staffing, payroll, contract management, and

administrative decisions. It includes all the tasks that are required to run an organization smoothly.

 A personnel manager’s job is administrative in nature. These managers work towards fulfilling the needs

of a workforce and immediately resolving their concerns. They ensure that the organizational

responsibilities are assigned to the right personnel and no compromises are made.

 Personnel Managers act as a mediator between employees and senior management. They work towards

meeting the organizational goals along with maintaining the rules and regulations of an organization
Cont..

 The primary functions of the personnel management are divided into two categories:

 Operative Functions: The activities that are concerned with procurement, development,
compensation, job evaluation, employee welfare, utilization, maintenance and collective
bargaining.

 Managerial Function: Planning, Organizing, Directing, Motivation, Control, and Coordination

are the basic managerial activities performed by Personnel Management.

 From the last two decades, as the development of technology has taken place and the humans are
replaced by machines. Similarly, this branch of management has also been superseded by Human
Resource Management.
BASIS FOR
PERSONNEL MANAGEMENT HUMAN RESOURCE MANAGEMENT
COMPARISON

The aspect of management that is concerned
with the work force and their relationship
Meaning
with the entity is known as Personnel
Management.
The branch of management that focuses on
the most effective use of the manpower of an
entity, to achieve the organizational goals is
known as Human Resource Management.

Approach Traditional Modern

Treatment of manpower Machines or Tools Asset
Type of function Routine function Strategic function
Basis of Pay Job Evaluation Performance Evaluation
Management Role Transactional Transformational
Communication Indirect Direct
Labor Management Collective Bargaining Contracts Individual Contracts
Initiatives Piecemeal Integrated
Management Actions Procedure Business needs

Decision Making Slow Fast

Job Design Division of Labor Groups/Teams
Primarily on mundane activities like Treat manpower of the organization as
Focus employee hiring, remunerating, training, and valued assets, to be valued, used and
harmony. preserved.
NATURE OF HUMAN RESOURCE
MANAGEMENT
 The nature of the human resource management has been highlighted in its following features :

1. Pervasive Force:- Human Resource Management is an inherent part of an organization. It is pervasive in

nature and present in all enterprises at all levels of management. It is the responsibility of each manager to

select the right candidate under him and pay attention to the development and satisfaction of each sub-

ordinate.
Cont..
2. People Oriented:- Human Resource Management focuses on and values people at work both as individuals
and groups. It encourages people to develop their full potential and in return give the best to the organization.

 Action-Oriented

 Human Resource Management does follow rules, records, and policies but it stresses the action. The focus is
on providing an effective and timely solution to employees for any problems, tensions, or controversies
faced by them.

 Future-Oriented

 To sustain and grow in this competitive environment organizations follow long term strategic planning.
Effective Human Resource Management prepares people for current as well as future challenges, especially
working in an environment characterized by dramatic changes.
Cont..
 Development Oriented

 HRM continuously works towards the development of employees. There are various tools used to make the
employees reach their maximum potential. Training programs are held to help employees enhance their
skills and knowledge. Monetary and non-monetary reward structures are tuned to motivate the employees.

 Enhance Employee Relations

 HRM helps to build a healthy relationship between the employees at various levels. It encourages mentoring
and counseling to help employees in times of need. It aims at creating a culture in the organization that is
conducive to learning and growth.
Cont….

 Interdisciplinary Function

 The knowledge that has influenced Human Resource Management is interdisciplinary

in nature. It drives knowledge from five major bodies: education, system theory,
economics, psychology, and organizational behaviour.
HRM in Personnel Management

 The objective here is to ensure the individual growth of each employee which indirectly
contributes to the overall growth of the entire organization.

 Human Resource Planning – It is the process by which the organization identifies the number of

jobs vacant.

 Job Analysis and Job Design – Job analysis is the systematic process for gathering, documenting,

and analyzing data about the work required for a job. Job analysis is the procedure for identifying

those duties or behavior that define a job.

 Recruitment and Selection – Recruitment is the process of preparing advertisements on the basis of

information collected from job analysis and publishing it in newspaper. Selection is the process of

choosing the best candidate among the candidates applied for the job.


Cont..
 Training and Development – Training is provided to both new and existing employees to improve their

performance.

 Performance Appraisal – Performance check is done of every employee by Human Resource Management.

Promotions, transfers, incentives, and salary increments are decided on the basis of employee performance

appraisal.

 Compensation Planning and Remuneration – It is the job of Human Resource Management to plan

compensation and remunerate.

 Motivation – Human Resource Management tries to keep employees motivated so that employees put their

maximum efforts in work.

HRM in Employee Welfare

 This aspect of HRM is concerned with the working condition and the amenities at the workplace. It makes
the environment worth working by eliminating workplace hazards, providing job safety, medical and health
services etc.

 Human Resource Management have to follow certain health and safety regulations for the benefit of
employees. It deals with working conditions, and amenities like - canteens, creches, rest and lunch rooms,
housing, transport, medical assistance, education, health and safety, recreation facilities, etc.
HRM in Industrial Relation

 The main aim of this aspect is to maintain peace and harmony in the organization. It requires effective
interaction with the labour or employee unions, sensitively addressing their grievances and settling their
disputes. HRM works to maintain co-ordinal relation with the union members to avoid strikes or lockouts to
ensure smooth functioning of the organization. It also covers - joint consultation, collective bargaining,
grievance and disciplinary procedures, and dispute settlement.
Objectives of Human Resource Management

 The primary objective of Human resource management is to ensure the availability of

competent and willing workforce for an organization. Human Resource Management
objectives may be influenced by organizational, individual, and social objectives. We
have categorized the objectives of HRM under four heads as follows:-
Societal Objectives

Human Resource management is socially responsible for the needs, demands, and
challenges of the society. All the resources must be utilized for the benefit and in the
interest of the society. HRM should follow the rules and laws or legal restrictions imposed
by the society. It has to develop and maintain healthy relations between union and
management.
Organizational Objectives

It consist of recognize the role and importance of HRM to bring organizational effectiveness. HRM has to
prepare human resource planning, to recruit, select, place, induct, train and develop the human resources, to
arrange for performance appraisal and to achieve the organizational objectives like to earn profit, growth and
expansion, survival, diversification etc.
Functional Objectives

It consists of to maintain the department’s contribution at a level appropriate to the organization needs.
Departmental functions are carried out by the human resources to see the functions are performed in time or not.
Personal Objectives

It consist of to assist employees in achieving their personal goals, such as, higher wages
and salaries, job satisfaction, better working conditions, standard working hours,
promotion, motivation, welfare facilities, social security and so on. These objectives of
employees must be met if workers are to be maintained, retained and motivated. Otherwise
employees may leave the organization and join some other organization.
 Functions of Human Resource Management

 Human Resource Management functions can be classified into the following three
categories.

• Managerial Functions,

• Operative Functions, and

• Advisory Functions.
The Managerial Functions of Human Resource
Management are as follows:

 1. Human Resource Planning - In this function of HRM, the number and type of employees needed

to accomplish organizational goals are determined. Research is an important part of this function,

information is collected and analyzed to identify current and future human resource needs and to

forecast changing values, attitudes, and behavior of employees and their impact on the organization.

 2. Organizing - In an organization tasks are allocated among its members, relationships are identified,

and activities are integrated towards a common objective. Relationships are established among the

employees so that they can collectively contribute to the attainment of the organization's goal.
Cont….

 3. Directing - Activating employees at different levels and making them contribute maximum to the

organization is possible through proper direction and motivation. Taping the maximum potentialities of the

employees is possible through motivation and command.

 4. Controlling - After planning, organizing, and directing, employees' actual performance is checked,

verified, and compared with the plans. If the actual performance is found deviated from the plan, control

measures are required to be taken.

 The Operative Functions of Human Resource Management are as follows:

 1. Recruitment and Selection - Recruitment of candidates is the function preceding the selection, which

brings the pool of prospective candidates for the organization so that the management can select the right

candidate from this pool.

 2. Job Analysis and Design - Job analysis is the process of describing the nature of a job and specifying the

human requirements like qualification, skills, and work experience to perform that job. Job design aims at

outlining and organizing tasks, duties, and responsibilities into a single unit of work for the achievement of

certain objectives.
Cont…


. Performance Appraisal - Human resource professionals are required to perform this function to ensure that the

performance of employees is at an acceptable level.

 4. Training and Development - This function of human resource management helps employees acquire skills and

knowledge to perform their jobs effectively. Training and development programs are organized for both new and existing

employees. Employees are prepared for higher-level responsibilities through training and development.

 5. Wage and Salary Administration - Human resource management determines what is to be paid for different types of

jobs. Human resource management decides employee's compensation which includes - wage administration, salary

administration, incentives, bonuses, fringe benefits, etc,.

Cont…
 . Employee Welfare - This function refers to various services, benefits, and facilities that are provided to

employees for their well-being.

 7. Maintenance - Human resource is considered an asset for the organization. Employee turnover is not

considered good for the organization. Human resource management always tries to keep their best

performing employees with the organization.

 8. Labour Relations - This function refers to human resource management interaction with employees

represented by a trade union. Employees come together and form a union to obtain more voice in decisions

affecting wage, benefits, working conditions, etc,.

Cont…

 . Personnel Research - Personnel research is done by human resource management to

gather employees' opinions on wages and salaries, promotions, working conditions,

welfare activities, leadership, etc,. Such researches help in understanding employee

satisfaction, employee turnover, employee termination, etc,.

 10. Personnel Record - This function involves recording, maintaining, and retrieving

employee-related information like - application forms, employment history, working

hours, earnings, employee absents and presents, employee turnover, and other data

related to employees.
The Advisory Functions of Human Resource Management are as
follows:


Human Resource Management is expert in managing human resources and so can give advice on matters

related to human resources of the organization. Human Resource Management can offer advice to:

 1. Advised to Top Management

 The personnel manager advises the top management in the formulation and evaluation of personnel

programs, policies, and procedures.

 2. Advised to Departmental Heads

 The personnel manager advises the heads of various departments on matters such as manpower planning,

job analysis, job design, recruitment, selection, placement, training, performance appraisal, etc.
 IMPORTANCE OF HRM

Human Resource Management is development oriented. It is concern of managers of all level and provides

space for employee involvement, performance and growth. It has several importance which are discussed

below:-

To maintain quality of work life

Quality of work life is the perception of employees regarding the relationship between working condition with

management. Simply, it is the relationship between employees and total work environment. Quality of work

life is concerned with the employee’s perception of physical as well as psychological wellbeing at workplace

and it can be obtained by maintaining work autonomy, work freedom, job recognition, belongingness, rewards,

etc.
CONT…
 To increase productivity and profit

Human resource management ensures right quality and quantity of personnel in workplace, apart from which,

it creates opportunities to facilitate and motivate individual and group of employees to grow and advance their

career. Motivated employees work hard to meet their personal career goal which directly influences

productivity of organization. Minimizing cost and maximizing profit is the essence of productivity.

To produce employees who are easily adaptable to change

Human resource management performs various functions, among which training and development of

employees is one of the vital ones. Training and development programs keep employees updated with skills

necessary to adjust with alteration of organization's environment, structure and technology.

CONT…
 To match demand and supply of human resource

Human resource management probes existing human resource in certain interval of time to identify if the

company has adequate number of workers or not. In case when company has inadequate human resource,

human resource management performs activities like recruitment and selection to balance the need. In the

same way, it lay-off inefficient employee in case when the company has excessive employees

To retain employees and motivate them to accomplish company’s goal

Utilizing human resource to their fullest and maintaining them in the company for a long term is a major

function of human resource management. Under this function, HRM performs tasks like providing fringe

benefits, compensation and rewards to the deserving employees. These activities do not only help in

retaining employees in the company but also in achieving organization's goal effectively.
Cont..
 To recognize merit and contribution of employee
Human resource management performs timely appraisal of employee’s performance in order to recognize
excellent and poor workers. The excellent workers are then rewarded as a return for their contribution.

To create a feeling of belongingness and team spirit in the employee

Human resource management designs job on the basis of teamwork. As teamwork demands contribution
from every team member, HRM focuses on making each and every employee feel valued so that employee
contributes best from their side.
CONT…

 To sustain business in the market

Human resource management makes sure that the company has the best employee
because promising employees are capable of taking their company ahead in the race by
delivering excellent results. This guarantees organization's success and stability in
future.
Human Resource Management Challenges

 Challenges of HRM are important functions of any organization. It is the

practice of managing people to achieve better performance. These HR
challenges might be:

1. Environmental Challenges

2. Organizational Challenges

3. Individual Challenges
Environmental Challenges

 The environmental challenges are related to the external forces that exist in the outside environment of an

organization and can influence the performance of the management of the organization. These external

forces are almost out of control of the management of the organization. These can be regarded as threats

to management and should be handled in a proactive manner. Following are the list of human resource

management challenges that are considered environmental challenges.

1. Rapid Change

2. Workforce Diversity

3. Globalization

4. Legislation

5. Technology

6. Lack of Skills
Cont..
 Rapid Change

 The world is changing at a faster rate because change is constant for several centuries. So the management of the

organizations should be quickly adaptive to the changing requirement of the environment otherwise they become

obsolete from the market.

 The human resource management of an organization plays a basic role in response to environmental change. The HR

department should adopt such policies that can avail the new opportunities of the environment and keep the

organization away from the newly emerging threats.

 Workforce Diversity

 The changing environment provides both the opportunities and threats to the human resource management of the

organization. The HR manager should adopt such policies that can make possible the diverse workforce of employees.

Although on one hand diversity creates a big problem, in the long run, the survival and performance of the organization

is flourished.
Cont..
 Globalization

 One of the serious issues that today’s organizations are facing is the issue of globalization. The world is converting into

a global business and severe competition is started between domestic and foreign companies. Such competition results

in laying off the effective workforce of the organization. The HR department can play an important role in keeping the

culture of the organization as global and wider.

 Legislation

 It is the old environmental challenge that is faced by the organization for many decades. There are certain labor laws

that are declared by the government for the benefits of the working employees. Some of these laws are disadvantageous

to the interests of the organizations so it is one of the big challenges for the HRM to implement all those labor laws

within the organizations. If any such law is violated, serious actions are taken by the relevant government authority that

may result in serious penalties for the management of the organization.

Cont..

 Technology
 Technology is also growing at great speed especially in the field of computer and
telecommunication. New methods are emerging that quickly dominate the older ones
and make them obsolete. Therefore the skills required by the employees also change
with the changing technology and this would compel the worker to advance the skills
three to four times throughout their working lives. So there comes a burden on the HR
department to constantly update the skills and expertise of its employees.
Cont..
 Lack of Skills

 The service sector development is expanding due to many reasons like change in the tastes and preferences
of customers, technological change, legal change, etc. All of this affected the structure and managing style
of business organizations.

 The skills required in the employment of the service sector are also advancing but the graduates of the
technical colleges and universities are groomed according to the latest requirements. Therefore most of the
employees lack the standard required skills to perform their duties and it becomes a big challenge for HRM
to properly train these new and old employees to become an efficient and effective worker.
Organizational Challenges

 The organizational challenges for HRM are related to the factors that are located inside the organization.
Although these challenges are evolved as a byproduct of the environmental challenges these can be
controlled by the management of the organization to much extent.

 The proactive HR managers take notice of such challenges in advance and take corrective measures before
these would convert into serious issues. The human resource management challenges within the organization
include competitive position and flexibility, organizational restructuring and issues of downsizing, the
exercise of self-managed teams, development of suitable organizational culture etc.
Cont..
 When the workforce of an organization is effectively used in combination with other factors of production,
the opportunities of the environment are availed and the threats are eliminated. The competitive position of
the organization can be influenced by the policies of HR in the following ways.

• Controlling Costs

• Improving Quality

• Developing Distinctive Capabilities

• Restructuring
Cont..
 Controlling Costs

 An organization can avail of the competitive position by lowering its cost and strengthening its cash flows. For this purpose, the labor cost

of the organization is minimized through an effective compensation system that adopts innovative reward strategies for good

performances. In this way, the favorable behaviors of the employees are rewarded so the organization would get the ultimate advantage.

 Moreover, the policies of compensation should keep the labor cost under control. Effective employees should be selected that keep with

the organization for longer duration and proper training should also be provided to these employees. The HR department should also

restore the work of the employees along with the improvement in the health and safety issue of the working environment. All of these

efforts would limit the cost of labor.

 Improving Quality

 Quality improvement can lead an organization towards a competitive advantage. The total quality management programs are employed

that improve all the processes within the organization which would ultimately result in the improvement of the final product or service.
Cont..
 Developing Distinctive Capabilities

 Another method of gaining a competitive advantage is to employ the people that have distinct capabilities to develop

extraordinary competence in specific areas.

 Restructuring

 Another technique is the restructuring of the organization in which the methods of performing different functions are

altered positively. In the case of the HR department, the majority of functions are still performed within the organization.

 In some organizations, the major functions of the HR department are now transferred to the other parties in the shape of

outsourcing, shared service centers, etc. The sizes of the HR department in those organizations are shrinking because most

of the functions are performed by outsiders. But in most organizations, the HR manager performs all the relevant functions

of HRM. The HR department is now involved in mission-oriented and strategic activities.

Individual Challenges

 The decisions related to the specific individual employees are included in the individual challenges for the
HRM. The organizational issues are also affected by the fact that how employees are treated within the
organizations. The problems related to the individual level are as follows.

 1.Matching People and organization

 2. Productivity

 3. Attrition and Turnover

 4. Keep employee motivated

Cont..

 5. Job Insecurity
 6. Counter Productive Behavior
 7. Managing work life balance
 8. Conflict, Groupism and Politics
STRATEGIC HUMAN RESOURCE
MANAGEMENT
 MEANING

 Strategic Human Resource Management (SHRM) is a process of managing human resources that links the
workforce with the core strategies, objectives, and goals of an organization. It focuses on the following
aspects of HR operations:

• Ensuring practices that foster flexibility and give a competitive advantage to the organization

• Building a cultural fit for the organization

• Ensuring superior business performance

DEFINITION OF HRM

 Experts define SHRM from a different perspective. Some of the important definitions are listed

below:

 “Strategic human resource management means formulating and executing human resource policies and

practices that produce the employee competencies and behaviors that the company needs to achieve its

strategic aims.”- Gary Dessler

 “Strategic human resource management is an approach to making decisions on the intentions and plans of

the organization concerning the employment relationship and the organization’s recruitment, training,

development, performance management, and the organization’s strategies, policies, and practices.”

 Armstrong Strategic human resource management (SHRM) is defined as “the pattern of planned human

resource deployments and activities intended to enable an organization to achieve its goals”. – Wright &
Conclusion
 Since it is essentially a contemporary approach to human resource management, the HR department has to
play a key role in making SHRM successful. HR managers need to gain a deeper understanding of SHRM in
order to be an active partners in creating company policies and implementing them.

 Strategic HR management can be integrated into various functions including hiring, training, and rewarding
the workforce for their performance. The SHRM approach finds ways for the HR personnel to make a
positive and direct contribution to the company’s growth. There has to be a strategic plan related to every
employee’s development and retention in sync with the long-term business goals.
TRADITIONAL HRM CONCEPT

 Traditional human resource management is primarily reactive. This means the HR department’s activities
aren’t fully aligned with the business’s leadership goals. Instead, HR is more of a task-oriented,
administrative department that fulfills employees’ needs only as they occur.

 For example, in a traditional human resource management approach, HR will recruit and hire employees
once a department manager informs them of an open position. Similarly, if employees have questions
about a specific policy, then HR will provide the answers. However, HR probably won’t go so far as to
create an employee handbook or host seminars on new policies that employees need to be aware of.

 One of the issues with this approach is that, because it’s largely reactive, the HR team may sometimes
rush processes, which can make them feel disjointed. There’s often little strategic planning involved in
traditional human resource management, so the team isn’t always aware of what they could be doing
before the company or an employee needs assistance.
STRATEGIC HRM
 Unlike the reactive approach of traditional human resource management, strategic human resource management is
highly proactive. With this approach, HR aligns with the business’s larger goals from an executive level.

 The organization develops a cohesive HR strategy in conjunction with the objectives it wants to achieve. All human
resource initiatives — from recruiting and hiring to onboarding and training — are designed to bring the organization
closer to its targets.

 For example, instead of waiting for a department manager to notify the HR team of an open position, HR will
proactively recruit and hire employees based on the overall business strategy and in lockstep with department
managers. The HR team can do this because it’s already aware of the company’s future needs and can set plans in
motion to meet those needs.

 Similarly, using the strategic approach, HR will preemptively assess employees’ needs for onboarding, training,
performance evaluations, and compensation, and they’ll develop and implement programs to provide employees with
the necessary information and resources.
 Traditional HRM vs Strategic HRM
BASIS FOR COMPARISON HRM SHRM
Meaning Human resource management (HRM) SHRM is a managerial function which
implies the governance of manpower of the implies framing of HR strategies in such a
organization in a thorough and structured way to direct employees efforts towards the
manner. goals of organization.

Nature Reactive Proactive

Responsibility lies with Staff specialist Line manager
Approach Fragmented Integrated
Scope Concerned with employee relations Concerned with internal and external
relations

Time horizon Short term Long term

Basic factor Capital and products People and knowledge
Change Follows change Initiates change
Accountability Cost center Investment centre
Control Stringent control over employees It exhibits leniency.