HUMAN RESOURCE MANAGEMENT-17MBA21

INTRODUCTION
UNIT 1 Notes

Unit 1: (8 hours)
Human Resource Management:
Introduction, meaning, nature, scope of HRM - Importance and Evolution of the concept of HRM - Major
functions of HRM - Principles of HRM

HUMAN RESOURCES:
 Human resources may be defined as the total knowledge, skills, creative abilities, talents and aptitudes of
an organization's workforce, as well as the values, attitudes, approaches and beliefs of the individuals
involved in the affairs of the organization.
 It is the sum total or aggregate of inherent abilities, acquired knowledge and skills represented by the
talents and attitudes of the persons employed in the organization.

HUMAN RESOURCE MANAGEMENT: DEFINITION

 “The Process of bringing people and organization together so that the goals of each are met”
 “The art of Procuring, developing and maintaining competent workforce to achieve the goals of an
organization”
 Human resource management is a process consisting of four functions that is acquisitions,
development, motivation and maintenance & retaining potential workforce of an organization

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MEANING OF HRM:
It is the process of recruitment, selection, development, utilization, compensation and motivation of human
resources by the organization.
HRM is a tool that helps managers to plan, recruit, select, train, develop, remunerate, motivate and make
maximum utilization of human and non human resources for the organization and society at large.

NATURE OF HRM:

1. Pervasive force:
a. It is pervasive in nature as it is present in all enterprises. The presence of HRM in all the levels
and department of organization.
2. Action oriented:
a. HRM not only focus on the developing rules and regulation, it actually focuses on the
implementation of rules and regulations and tries to solve the problems of the employees at
work using policies.
b. Its focus is on results rather than on rules
3. Individual oriented:

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 a. It not only focuses on enhancement of organization but also pays attention towards individual
development through the means of training and development.
b. It tries to help employees to develop their potentials and encourages to give the BEST to the
organization.
c. Focuses on Individual development
4. People oriented:
a. HRM is all about people at work. It tries to co-ordinate the individual as well as group
activities towards attainment of organizational goal. The profits generated through the means of
human resource are returned to the employees in form of reward to future motivate them to
deliver effective performance.
5. Future oriented:
a. It helps organization to meet its goal in future by providing competent and well motivated
employees.
6. Development oriented:
a. It focuses on employee development in the organization as it motivates the employees to
perform better through the means of timely reward and incentives and also provides required
training and development which helps the employees to be flexible in terms of coping up with
the changes around.
7. Integrating mechanism:
a. It tries to put people on assigned jobs in order to produce good results.
b. It tries to build and maintain cordial relations between people working at different levels in the
organization.
c. Focuses on integrating various department and requires coordination between department and
Human Asset.
8. Comprehensive mechanism:
a. HRM is concerned with anything & everything which is related to workforce.
b. HRM covers all the aspects of organization, from all levels of management, human relations,
utilization of human resource
9. Auxiliary service:
a. HRM assist & advice the line managers to work more effectively.
b. HRM does the auxiliary service, which assist other people in the organization.
c. Along with the HR functions HRM also plays role of special advisor in helping other
department in accomplishment of their activities.
10. Inter-disciplinary function: It is a multidisciplinary activity, utilizing knowledge and inputs drawn
from psychology, economics, etc.

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THE SCOPE OF HRM:

1. Personnel aspect- Aspects covers the activities from hiring to retaining the competent employees. This is
concerned with manpower planning, recruitment, selection, placement, transfer, promotion, training and
development, layoff and retrenchment, remuneration, incentives, productivity etc.
2. Welfare aspect- Aspects covers the well being of the employees at work place. It deals with working
conditions and amenities such as canteens, rest and lunch rooms, housing, transport, medical assistance,
education, health and safety, recreation facilities, etc.
3. Industrial relations aspect-the relationship exist between employer, employee, government. This covers
union-management relations, joint consultation, collective bargaining, grievance and disciplinary procedures,
settlement of disputes, etc.

IMPORTANCE/SIGNIFICANCE OF HUMAN RESOURCES MANAGEMENT:

 Attract and retain employees: HRM main challenge is to attract and retain the competent employees.
Increasing competition in market has made it difficult for companies to attract and retain efficient
employees for which an effective HR policy will help company to motivate and be loyal towards
organization by providing employees with good career opportunity.
 Train people for challenging roles: HRM tries to train the employees and improve the performance
of the employee and train the competent employee for the future role which is challenging roles for
them
 Develop skill and competencies: HRM gives proper training program and develop their skills and
knowledge. And make the employees more competitive
 Promote team spirit: Most of the organizations provide team based task or projects as these days
activities in organization are more of team oriented rather than individual oriented. Organizations
improve team spirit by providing proper training and orientation programs.
 Develop loyalty and commitment: By providing remunerations and benefits company tries to satisfy
employee and which in turn increases the loyalty and commitment. HR department ensures proper
recognition to employees delivering efficient performance at workplace and takes care about
employees’ welfare which builds a strong bonding between employees and company where employees
take personalized interest in accomplishing their task.
 Increased productivity and profits: employee loyalty at workplace leads to effective utilization of
resources which in turn increases productivity and profitability for the organization.
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  Improved job satisfaction: HRM ensures proper working conditions in terms of hygiene factors and
ensure proper employee development opportunity which increases level of job satisfaction among
employees.
 Enhance standard of living: when level of remuneration given to employees are in line with their
expectation and proper infrastructure facilities ensure better standard of living.
 Generate employment opportunities: HRM department identifies skill requirement for organization
which creates job vacancies and provide employment opportunity for candidates in job market.

EVOLUTION OF HRM: It explains the history of HRM, with respect to the evolution of HR
concept.

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The commodity concept: Labor was regarded as a commodity to be bought and sold. Wages were based on
demand and supply. Government did very little to protect workers.

The Factor of Production concept: Labor is like any other factor of production, viz., money materials land
etc. Workers are like machine tools.

The Good will concept: Welfare measures like safety, first aid, lunch room, rest room will have a positive
impact on worker’s productivity.

The Paternalistic Concept / Paternalism: Management must assume a fatherly and protective attitude
towards employees. Paternalism does not mean merely providing benefits but it means satisfying various
needs of the employees as parents meet the requirements of the children.

The Humanitarian concept: To improve productivity, physical, social and psychological needs of workers
must be met. As Mayo and others stated, money is less a factor in determining output than group standards,
group incentives and security. The organization is a social system that has both economic and social
dimensions.

The Human Resources concept: Employees are the most valuable assets of an organization. There should be
a conscious effort to realize organizational goals by satisfying needs and aspirations of employees.

The Emerging concept: Employees should be accepted as partners in the progress of a company. They
should have a feeling that the organization is their own. To this end managers must offer better quality of
working life and offer opportunities to people to exploit their potential fully. The focus should be on Human
Resource Development.

FUNCTION OF HRM:

1. Managerial Function:
 Planning:
o It is the predetermined course of action
o Planning means setting an organization’s goals and deciding how best to achieve them. In other
words it is the process of selecting mission, goals and objectives of an activity or an
organization and determining a systematic process and actions for their accomplishment.
 Organizing:
o It is the process of establishing an organizational structure, assigning roles and responsibilities
and tasks to different positions, and establishing hierarchical, reporting and authority
relationships between different positions to implement plans and accomplish goals in a
coordinated manner. Specifically, organizing involves determining how activities and resources
are to be grouped.

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  Directing:
o After planning and organizing is the execution of plan by motivating, commanding, leading
people to achieve the common goal.
o The next logical function after completing planning and organizing is the execution of the plan
.The basic function of personnel management at any level is motivating, commanding, leading
and activating people .The willing and effective co-operation of employees for the attainment
of organizational goals, is possible through proper direction.
 Controlling:
o After planning, organizing and directing various activities then the performance is verified.
o Controlling involves checking, verifying and comparing of actual with the plans.
o After planning, organizing and directing the various activities of the personnel management,
the performance is to be verified in order to know that thee personnel functions are performed
in conformity with the plans and directions. Controlling also involves checking, verifying and
comparing of the actual with the plans, identification of deviations if any and correcting of
identified deviations.

2. Operative Function:
 Acquiring / Employment: Employing people who possess necessary skills, knowledge and attitude
o Job analysis: it is the process of collecting the information relating to the operations and
responsibilities pertaining to specific job.
o Human resource planning: it focuses on providing adequate qualified human resource at time
that ensures delivering effective performance towards organization.
o Recruitment: process of searching for efficient employees and stimulating them to apply for
jobs.
o Selection: is process of making comparison between the skills required for job and asses
weather the candidate possesses the same abilities in him required to perform by job.
o Placement: is the process of placing right candidate for right job.
o Induction and orientation: is the process through which new employees get an overview
about the company (policies, rules, regulations etc.
 Development: Process of improving/changing the skills, knowledge, attitude of the workforce.
o Training: is a continuous process by which employees learn skills, knowledge to achieve
further individual as well as organizational goals.
o Executive development: process of developing managerial skills and capabilities through
appropriate programs.
o Career planning and development: it is an ongoing process, in which individual’s sets career
goals and tries to achieve those goals.
o Human resource development: it aims at development of total organization. It creates
working environment where employees are required to update their knowledge at regular
interval of time to attain organization as well as individual goals.
 Compensation: Providing remuneration to the employees to inspire or motivate to improve the
performance.
o Job design: organizing task and responsibilities for making the work flow productive in the
organization.
o Work scheduling: it is an attempt to structure the activities incorporating physical,
psychological and behavioral aspects of work.
o Job evaluation: it refers to evaluating the value of job so as to fix proper wages to respective
jobs performed by the employees.
o Performance appraisal: refers to evaluating performance of employee at regular interval to
provide feedback to employees on their performance.

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 o Compensation administration: is the process of dividing how much an employee should be
paid. Main motto of compensation is to ensure effective pay plan which can attract new
employees and retain present employees in the organization.
 Welfare: It aims at protecting and preserving the physical & psychological health of employees
through the welfare measures.
o Health and safety: it ensures that the employees in the organization are protected from
physical hazards, unhealthy conditions and unsafe act of personnel.
o Employee welfare: includes amenities and facilities offered to within or outside the
establishment for their physical, psychological and social well being.
o Social security measures: Social security may refer to the action programs of organization
intended to promote the welfare of the population
 Industrial relations.
o Grievance redressed: it is concern with addressing problems related to wages, hours or
condition and of employment. It focuses on sorting issues between trade union and
management.
o Discipline: it abides the employees to follow rules and regulation set by organization to
monitor and control the activities of workforce.
o Team and team work: it focuses creating teams, groups in the organization and coordinates
their activities towards organization task accomplishment.
o Collective bargaining: it takes place in organization to get collective consent of management
as well as employees on certain terms and conditions. Agreement is mostly based on issues
related to wages, hours of work, promotion etc.
o Employee participation and empowerment: refers decentralized system of decision making
in the organization. It enhances employee’s performance as employees get feeling of belonging
towards organization.
o Trade unions and employees association: it is an association of employees or employers. It is
permanent body working in the organization to protect interest of employees in company.
o Industrial relations: it main object is to maintain harmony between employees and
management.
 Emerging Issues:
o HR Audit: Systematic analysis and evaluation of efficiency & effectiveness of HRM activities.
 Refers to examination and evaluation of policies, procedures and practices to determine
the effectiveness of HRM in company.
o Human Resources Information System: It is a integrative system composed of software,
hardware and database used to take decision related to HR
 It is designed to maintain HR information as serves as reference to top management to
obtain employee detail.
o Human resource research: evaluating the effectiveness of existing HR policies.
o HR Accounting: Measurement of HR activities, process of identifying & measuring data
about HR and communicating this information to the interested parties.
 “Measurement of cost & value of people in the organization”

PRINCIPLES OF HUMAN RESOURCES MANAGEMENT

Principle is the fundamental truth established by research, investigation and analysis; many principles are
established through practice, experience and observation

 Principles of fair reward: Reward employees fairly based on their ability, performance, contribution
and experience.

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  Principles of motivation: basic principles that will help you engage, encourage and energize your
team in real-world situations.
 Principle of communication: communication is the foundation of human interaction. Its importance
for innovation, information sharing and managing change.
 Principle of cooperation: there should be proper integration and coordination between people and
department. HRM objective is to coordinate and co-operate with the all the employees in an
organization.
 Principle of individual development: Provide employees with equal opportunity to be considered for
training and development based on their strengths and needs, to help them achieve their full potential.
 Principle of scientific selection: Recruit and select employees on the basis of merit (such as skills,
experience or ability to perform the job), and regardless of age, race, gender, religion, family status or
disability.
 Principle of dignity of labor: Treat employees fairly and with respect
 Principle of humanitarian treatment: Treat the employees as a human’s
 Principle of maintaining high morale: when morale is high, the employees tend to have more energy
and greater focus on achieving the organization’s goals
 Principle of Team spirit: to promote team spirit among employees, enabling them to cooperate and
work well together.
 The principle of merit means that decisions about appointments and pay are based on an unbiased
assessment of one's competencies (e.g. knowledge, skills and abilities).
 Transparency refers to policies that are clear, frank and accessible

OBJECTIVES OF HUMAN RESOURCE MANAGEMENT:

Societal Objectives:
The basic objective of the HRM is towards the society. The HRM objective is to ensure that their organization
manages resources in ethical manner.
• The company should follow the ethics and legal standards.
• To be ethically and socially responsive to the needs of society.
Organizational Objectives:
The main organizational objective focuses on the achieving the goals of the organization.
The HRM should recognize its role in bringing the organizational effectiveness.
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• To help the organization reach its goals.
• To ensure effective utilization and maximum development of human resources.
• To ensure respect for human beings.

Functional Objectives:
Effective utilization and maximum development of human resources is the functional objective of HRM and
to develop and maintain a quality of work life.
• To inculcate the sense of team spirit, team work and inter-team collaboration
• To equip the employees with precision and clarity in transaction of business.

Individual/personal Objectives: To align individual goals with those of the organization.

The primary objective is to recruit, maintain, retain and motivate the employees and to increase to the fullest
the employee's job satisfaction and self-actualization.
• To identify and satisfy the needs of individuals.
• To achieve and maintain high morale among employees.
• To provide the organization with well-trained and well-motivated employees.
• 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.
• To enhance employee's capabilities to perform the present job.

DIFFERENCE BETWEEN PERSONNEL MANAGEMENT AND HRM:

The Personnel management is defined as “Personnel management is the planning, organizing, compensation,
integration and maintenance of people for the purpose of contributing to organizational, individual and
societal goals.”
The HRM is defined as Human resource management is a process consisting of four functions that is
acquisitions, development, motivation and retaining potential workforce of an organization

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Recent Trends in HRM:
1. Poaching/Raiding: Poaching means employing a competent and experienced person already working
with another reputed company in the same or different industry
2. Outsourcing: The outsourcing firms help the organization by the initial screening of the candidates
according to the needs of the organization and creating a suitable pool of talent for the final selection
by the organization.
3. E-Recruitment: E-Recruitment is the use of technology to assist the recruitment process. They
advertise job vacancies through worldwide web. The job seekers send their applications or curriculum
vitae (CV) through an e-mail using the Internet.
4. Whistleblowers: A whistleblower is a person who exposes any kind of information or activity that is
deemed illegal, unlawful, unethical, or not correct within an organization.
5. A contingent workforce is a labor pool whose members are hired by an organization on an on-
demand basis. A contingent workforce consists of freelancers, independent contractors and consultants
who are not on the company's payroll because they are not full-time employees of the organization.

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