Chapter 01

Chapter
Overview of
Human Resource Management
2 Overview of Human Resource Management
Chapter 1
Overview of Human Resource Management
1. Introduction
Management is a comprehensive and exciting subject. Being essential to run any human
undertaking, management is a universal function. In essence, management is getting things
done with and through others. It is a process of getting activities completed efficiently and
effectively with and through other people. Here others refer to employee or staff. From this
point of view, Management is nothing but managing people at the work place. Thus
management and Human Resource Management are the same or identical. It is true that
management also deals with non-human resources. But, the main focus is on managing
people in the organization effectively and efficiently. Managing people or human resource
is a challenging and difficult task because human resources are not identical; they are
different in terms of personality, likings, disliking, emotions, values and perception.
Moreover, the skills and qualifications of human resources are not constant. A person may
be qualified at the entry level but may become obsolete as time goes on unless he is trained,
retrained and updated. It is the duty of HR manager to help his people to grow and develop.
During any stage of career, an employee may be de-motivated and frustrated. His/her
performance may not be up to the mark. An HR manager needs to identify those employee-
related problems quickly and addresses them without delay.
The effective management of human resources is becoming an increasingly vital concern in

organizations, whether they are professional practices employing only a few staff,
multinational corporations, public sector or not-for-profit organizations. The subject matter
of HRM is the ‘people’ who work in an organization and their relationship with that
organization. It is to be noted that attracting, selecting, retaining and motivating employees
for higher performance are a challenging job for HR Manager. An organization cannot build
a good team of working professionals without good Human Resources. The key functions
of the Human Resources Management (HRM) team include recruiting people, training
them, appraising performance, motivating employees as well as workplace communication,
workplace safety, and much more. Pfeffer (1998) suggested that soft or high -commitment
human resource management practices are those that generate trust in employees and these
practices include giving employees empowerment and involvement in decision making;
extensive communication about functioning and performance of the employees service;
designing training for skills and personal development of employees; selective hiring; team-
working where idea are pooled and creative solutions are encouraged; rewards system that
commensurate with effort; reduction of status between the management and staff and all
workers are valued regardless of their role. This is why, HRM as a separate branch of
academic discipline is gaining popularity with the size and complexity of the organization.
The knowledge of HRM helps a manager to select, train, motivate, maintain and sustain
people so that they can be able to make a productive contribution to the organization.
Without productivity improvement, an organization cannot survive and flourish. Let us
Ikbal Human Resource Management- Chapter 01

Overview of Human Resource Management 3
review the significance of human resources as a factor of production that would certainly
justify human resource management as an emerging discipline.
2. Importance of Human Resources

Human resources or people have become the most important factor in any organization.
Any human organization- a factory, profit or non-profit, a hospital, or an association-
consists of people with various backgrounds who are working together to achieve the goal
of the organization. People are the primary source of a company’s competitive advantage
and organizational prosperity and survival depends on how employees are treated. The
‘human’ aspect of HRM is concerned with the relationship between employer and employee
and is associated with the human relations movement and the concept of high commitment
work practices developed till the day (Walton, 1985). Many organizations believe that
their human resources differentiate them from their competitors. A human being, along with
many other resources, runs an organization. To achieve short- term and long-term goals, an
organization needs a skilled and professional workforce to fulfill its objectives. This
workforce or human resources are vital assets for an organization. Business needs people
as owners, employees, and consumers. Organizations need people to make them operative.
Business may be operated differently and the objectives of business may differ, but the
universal element in all business activities is people. An organization is nothing without
human resources.
According to economists, the factors of production are land, labor, capital and
entrepreneurship. Of all the resources, the most important one is human resource, because
human beings play a dual role- as a resource, and a motive force as well for all other
resources by manipulating, developing, utilizing, commanding and controlling them. It is
the most important of all other resources. This is because manpower is that resource
through which management wants to control and direct all other resources like machines,
materials, and money. Organizations survive and flourish only because of human Resource.
It is true that capital; technology and human force are the important elements for
production. In fact, productivity is the function of a set of interrelated factors (e.g., political,
social, economic, educational and cultural). Experts on productivity improvement
emphasize more on people factor for enhancing productivity. They are of the view that
relatively human resource is the most important of all the factors of production. Resources
other than human beings could produce nothing. Physical resources by themselves cannot
improve efficiency or contribute to an increased rate of return on investment. It is through
the combined and concerted efforts of people that monetary or material resources are
harnessed to achieve organizational goals. In this connection it is meaningful to quote the
comment of Smriti, C. (2014), “Nothing moves unless a piece of paper moves and no paper
can move, unless a person moves. Even if there is total automation, the organization will
require a person to on the button. This shows how important manpower is to any kind of
organization”.
Human Resource Management- Chapter 01

Why is human resource superior to other elements of production? Capital can be borrowed
and technology can be imported, but people cannot be bought. All the factors of production
other than the workforce skills can be duplicated anywhere in the world. It is all fungible-
capital, technology, raw materials, information- all except for one thing, the most critical
part, the one element that is unique about a nation: its workforce (Griffin, 1994). Fred
Luthans, (2000), an expert of Organizational Behavior, rightly argues that “It is not
technology, which separates the Saturn plant of GM from other manufacturing facilities.
Rather the Saturn plant represents a profound change in the way people are managed”.
Productivity is basically people-based. It is for this reason; the developing countries in

spite of acquiring modern technologies could not achieve a higher level of productivity. The
rapidity of technology transfer, access to worldwide capital markets and global competition
reduce the traditional advantages of superior technology and isolated markets. Technology
becomes inactive without work forces. It is a man who works behind a machine. Even in a
highly automated plant, people are nevertheless required to co-ordinate, and control the
plant’s operation. Workers must use them effectively. They must be motivated to provide
the best quality and customer service possible. Sakurai (1989), an advisor to the Japan
Productivity Center has rightly pointed out, “Improvement of productivity through the
introduction of new technology depends, by and large, on how people in the organization
accept the change. To obtain the desired result from the introduction of change in
technology, the change must be acceptable to them”. That is, acceptance of change will lie
with the behavioral level of the workforce. HR adds by reducing costs and boosting
revenues.
Needless to say, machine increases the muscle power of man. A man without the machine is
also less productive. They are inseparable. Labor and technology jointly generate the
outputs that are priced and sold to customers. As Morita, the founder and chairman of Sony
Corporation and the author of “Made in Japan” remarks, “Assets make things possible but
people make things happen.” Organizations depend on people to make them operate. No
change occurs without efficient human beings. Improved productivity through people is
ultimately the fountainhead of all human progress. In the ultimate analysis, it is the human
factor, which will determine the final productivity of an enterprise. People supply the
talents, skills, knowledge and experience to achieve the organization’s objectives. Let us
now mention some inherent qualities that a human being is endowed with. People can think,
imagine and feel. They can be motivated and they have synergistic power. Moreover, they
have the ability to make analysis and interpretation of something or someone. These
qualities are discussed in the chapter of employee productivity through people.
Previously, it was the machine behind the men that counted. But today, it is the men behind
the machine that counts. Organizations are crying for talent globally. There is a scarcity of
right talent, and it is a great opportunity for the right talent to explore and grow globally.
There is a limit to machines, but there is no limit to human potential. Elbert Hubbard rightly
remarked, “One machine can do the work of 50 ordinary men. No machine can do the work
of one extraordinary man.” It is a fact that machines can be handled easily whereas people
cannot as people have different emotions, egos, and feelings. Handling them is a
challenging task as they have different expectations and aspirations. Elbert Hubbard rightly
remarked, “One machine can do the work of 50 ordinary men. No machine can do the work
of one extraordinary man.
3. Employee- the Key to Productivity
HR experts strongly believe that employee is the key to productivity. Peter. F. Drucker
(1990), the prolific management scholar, rightly observed, “Productivity depends on
knowledge and its application” The phenomena of globalization calls for increased labor
productivity which in turn will call for a greater emphasis on human resource development
as a means of enhancing the capacity of labor for productive work. So in order to develop
Bangladesh economically, her human population must be transformed into human
resources.
From the demographic point of view, Bangladesh is the ninth largest country in the world.
Neither natural resource nor technology is her greatest asset. It is people, which constitute
the most precious resource. Tapping that wellspring may be the best hope for the economic
success of Bangladesh. Unfortunately, most of its people are illiterate, unskilled and
inefficient. Manpower shortage exists both in quantitative and qualitative terms and
includes not only engineers and technicians but also managers. In many cases, the
manpower shortages are aggravated by the “brain drain”. The lure of a better living
condition is causing brain drain among the third world countries. Another aspect is the
supply of required mix of manpower resources. Bangladesh falls into the category of LDC
with human development rank of 143 among the 174 nations (Haque, 1997). Our working
force is simply not keeping pace with the kinds of skills required in the new economy. Until
now most of its people could not become productive resources, rather they are liabilities for
the nation. A person is said to be resourceful when he or she has attained problem-solving
ability. It is evident that many people are ignorant, unskilled and cannot sustain
themselves, and become a factor of degradation and backwardness for the society. As a
result, they are becoming liability for Bangladesh. Thus, although wages are lower in
Bangladesh than in the western countries, it is suggested that the actual labor cost to the
industry is above the levels in the western countries because of the higher labor efficiency
in such countries. In Bangladesh many people are liabilities because of our failure to
handle them well. They are becoming a source of corporate distress, not a competitive
advantage.
Most of the scholars believe that Bangladesh is lagging behind in economic spheres largely
because of its inability to handle human resources. We are poor in managing human
resources. The real difference between Bangladesh and developed countries lies not in the
volume of capital but in the knowledge gap (Kibria, 1999). There is a shortage of
knowledge, skill and technological know-how to utilize human and natural resources.
Although information technology and communication have shortened the geographical
distance among the countries, the knowledge gap between a developed country and a
developing country like Bangladesh is increasingly widening. The developed countries are

basically knowledge and information - based societies. The people of the developed
countries are becoming more educated and knowledgeable so they can easily solve all the
problems that a human society is likely to face. In fact their economies are knowledge-
driven.
4. Competitive Advantage through Human Resource

Organizations are operating in a dynamic and competitive environment. They need to create
and sustain competitive advantage if they want to survive and grow. The traditional source
of the competitive advantage has been eroded. Now it is believed that productivity is
through the people. People provide an organization with core source of competitive
advantage. Various studies have concluded that an organization’s human resources can be a
significant source of competitive advantage (Wright and McMahan, 1992; Lado and
Wilson, 1994; Gordon, 1986). The human factor is the only organization resource which is
able to develop a competitive advantage. Porter (1990) argues that people are becoming a
great differentiating factor. Managers should select those people who are smarter, better
trained, more motivated, and more committed. Jeffry Pfeffer (1994) in his famous book
“Human Equation" argues that source of competitive advantage has shifted over time.
Successful companies of the USA for their sustained advantage tend to rely not on
technology, patents or strategic position but on the way they manage their workforce.
Achieving competitive success through people requires a basic change in how managers
think about their employees and how they view the working relationship. Many authors
understand HRM’s current role in the organizations as being strategic. One of the
distinctive features of HRM is that better performance is achieved through the people in the
organization (Aiddamore, Yazam, & Ahmid, 2012). For gaining competitive advantage
through people, Professor Pfeffer of Harvard University suggested few HRM guidelines and
these are listed below:
Employment security
Employment security is a critical element of high performance work arrangement. Security
of employment signals a long standing commitment to the organization to its workforces.
Feeling of stable employment may generate loyalty, commitment or willingness to expend
extra efforts for the organization’s benefits. Employment security enhances employee
involvement because employees are more willing to contribute to the work process when
they need not fear losing their own or co-workers' jobs. Security of employment contributes
to training as both employer and employee have grater incentives to invest in training
because there is some assurance that employment relationship will be of sufficient duration
to earn a return on the time and resources expended in skill development. Employee will
come up with the new ideas when their jobs are secured because they know that
introduction of a new system will not affect their employment stability. They will welcome
to change. Japanese big companies have reputation for long- term employment security.

Selective recruiting
Organizations serious about making a profit through people will put the efforts needed to
ensure that they recruit the right people in the first place. Organizations need to have a large
applicant pool from which to select the right person. For example, Public Service
Commission of Bangladesh receives more than ten lakhs job applicants, interview only 20%
and hires only 5%. Security in employment and reliance on workforce for competitive
success mean that one must be careful to choose the right people in the right way. Firms
serious about selection put applicants through several rounds of interviews and a rigorous
selection procedure. Japanese companies have reputation for their extensive screening of
employees. Screening is done carefully to find people, who could work best in the new
work environment, learn and develop quickly and need less supervision. Organizations need
to be clear about what are the most critical skills and attributes needed in its application
pool. Care must be taken while selecting employees. If we select a less qualified employee,
he or she will be a burden for the organization for a long time. Organizations must have
right kind of people with right skill mix at the right time at the right place. Bill Gates of
Microsoft (2015) rightly commented, “The key for us, number one, has always been hiring
very smart people.”
High and lucrative wages

Organization can attract and retain qualified candidates if it pays high and lucrative pay
package. High wages tend to attract more outstanding applicants, permitting the
organization to be more selective in finding people who will be committed to the
organization. Higher wages send a message that the organization values its people. Low
labor cost cannot ensure competitive success for a long time. Employee turnover is likely to
be high if wage package is poor.
Incentive pay
Pay system should be based on performance or productivity of an employee. Employee will
contribute more if they earn more. Contingent incentive can take many forms such as gain
sharing, profit sharing, stock ownership, pay for skills, or various forms of individual or
team incentives. Microsoft, for example, encourages share ownership (Pfeffer, 2006). When
employees are owners, they act and think like owners. Moreover, the conflict between
capital and labor can be reduced by linking them through employee ownership. Profit
sharing causes employees to focus on costs and profits because they receive a percentage of
those profits. Paying for skills acquisition encourages people to learn different jobs and
thereby to become more flexible. There is a tendency to overuse money to solve
organizational problems. But this is not always a true solution. Many people prefer
recognition, security, appreciation and fair treatment and these things matter a lot (Huselid,
1995).

Employee ownership
It is important to make an employee a mini-employer. This can be done by stock ownership
plan. This may increase their sense of ownership. Employee ownership reduces conflict
between labor and capital. Employee ownership puts stocks in the hands of people, who are
more inclined to take a long term view of the organization, its investment policies and
strategies and less likely to support hostile takeovers and acquisitions. It has a positive
effect on firm's performance, if managed properly.
Employee empowerment and participation

Empowerment indicates many things to many experts. It refers to mutual influence, creative
distribution of power and shared responsibility. It is a democratic and long-lasting process.
Empowering enables people to use their talents and capabilities, fosters accomplishment,
invests in learning, finds the spirit in an organization and builds effective relationships,
informs, leads, coaches, serves, creates, and liberates. Participation increases both
satisfaction and employee productivity. Managers should encourage decentralization of
decision making. Autonomy is one important dimension of job and was the focus of many
job redesign related efforts undertaken by many companies in the early 1980s as a part of
the movement of quality of working life. The basic change involves moving from system of
hierarchical control and coordination of activity to one in which lower-level employees are
permitted to do things to increase performance. It is a bottom-up approach management
approach.
Information sharing
If people are to be a source of competitive advantage, they must have the information
necessary to do what is required to be successful. Information sharing is an essential
element of high performance work systems. The sharing of information on issues like
budget, strategy and financial performance conveys the people of an organization that they
are trusted. Even motivated and trained people cannot contribute to increased
organizational performance if they do not have information on important dimensions of
performance. Stack (1993) articulates the importance of sharing information. He argues,
“Do not use information to control or manipulate people. Use it to teach people how to
work together to achieve common goals and thereby gain control over their lives. Provide
people with information that allow them to make the right decisions”.
Training and development of skills

Training is an essential component of high performance work systems because these
systems rely on front line employee’s skill and initiate to identify and resolve problems, to
initiate change in work methods, and take responsibility for quality. All of this requires a
skilled and motivated work force that has the knowledge and capability to perform the
requisite tasks. As time goes on employee skill may be outdated. They need to be retrained
to upgrade and acquire new skills. Training also changes and modifies employee attitudes

and behaviors. Trained people must be placed in jobs in which they can apply their acquired
skills.
Treat people with respect and dignity

Dignity is a term used in moral, ethical, legal, and political discussions to signify that a
being has an innate right to be valued and receive ethical treatment. At the heart of human
rights is the belief that everybody should be treated equally and with dignity – no matter
what their circumstances. This means that nobody should be tortured or treated inhuman or
degrading way. It also means that nobody has the right to ‘own’ another person or to force
them to work under threat of punishment. And it means that everybody should have access
to public services and the right to be treated fairly by those services. This applies to all
public services, including the criminal justice system. For example, if you are arrested and
charged, you should not be treated with prejudice and your trial should be fair. The dignity
of Labor indicates that all types of jobs are respected equally, and no occupation is
considered superior. Though, one's occupation for his or her livelihood involves physical
work or mental labor, it is held that the job carries dignity compared to the jobs that involve
more intellect than a body. No work is superior or inferior in itself. Work is work. It is
absolutely wrong to consider any work as high or low. The work itself is a dignity. Every
work has some dignity attached to it. It is improper for anybody to think that a certain kind
of work is undignified or below his status. No work is meant high or low. Social reformers
like Mahatma Gandhi, Martin Luther King, and Ram Mohan Roy were prominent advocates
of Dignity of Labor.
Wage compression
Pay differential among the levels of management should be lower. Wage compression
between senior managers and other employees will reduce status differences and develop a
sense of common fate. Huge pay gap may damage cooperative spirit between managers and
workers. High pay gap causes employees to feel less valued. Pay gap is the lowest in Japan
and highest in the USA. Wage compression is the situation that occurs when there is only a
small difference in pay between employees regardless of their skills or experience. It is also
referred to as salary compression. Pay compression is the result of the market-rate for a
given job outpacing the increases historically given by the organization to high tenure
employees. Therefore, newcomers can only be recruited by offering them as much or more
than senior professionals. Pay inequities exist in all public and private sector organizations
and may be caused by: overtime, talent acquisition, reorganizations, demotions,
reassignments & transfers, demand for technical expertise and seniority. Some
organizations conduct compression studies to achieve certain levels of internal equity, so
that people in relatively similar jobs in the organization receive equal pay.
Promotion from within

It is of vital importance to encourage employee promotion from within the organization.
This practice may boost employee morale. It encourages training and skill development

because of availability of promotion opportunities within the firm bind workers to
employers and vice versa. It facilitates decentralization, participation and delegation
because it helps promote trust across hierarchical levels. Promotion is a reward that is
status-based. It provides a sense of fairness and justice in the workplace. Another advantage
of a promotion from within is that it tends to ensure that people in management positions
actually know something about the business, the technology and the operation they are
managing. Promotion through restructuring is an example of promotion from within.
5. Historical Evolution of HRM

History of HRM is as old and complex as the history of work and organization. Human
Resource management is evolving rapidly. The HR Management history is fascinating.
Human resource management is both an academic theory and a business practice that
addresses the theoretical and practical techniques of managing a workforce (Panzyp, 2007;
Reed and Gusdorf, 2010).
The history of human resources management starts to be interesting with the evolution of
the large factories. It was in the 18th century. The rapid development of a new industrial
approach to work changed the world dramatically. The quick and cheap production became
a priority for many industries. The factories hired thousands of workers, who worked up to
16 hours a day. Soon, many entrepreneurs discovered that satisfied employees are more
effective and can produce more than depressed employees. Many factories started to
introduce voluntary programs for employees to increase their comfort and satisfaction. On
the other hand, the government started to intervene to introduce some basic human rights
and the work safety legislation.
Human resource management has its roots in the late and early 1900's, when workers jobs
became less labor intense and more working with machinery. The scientific management
movement began. This movement was started by Frederick Taylor when he wrote about it
in a book titled The Principles of Scientific Management. The book stated, "The principal
object of management should be to secure the maximum prosperity for the employer,
coupled with the maximum prosperity for each employee. Taylor believed that
management should use the techniques used by scientist to research and test work skills to
improve the efficiency of the workforce. Taylor developed one best way of doing a given
job.
The industrial welfare movement began also around the same time. This was usually a
voluntary effort by employers to improve the conditions in their factories. The effort also
extended into the employee’s life outside of the work place. The human relations movement
is the major influence of the modern human resource management. The movement focused
on employees group behavior and employee feelings. This movement was influenced by the
Hawthorne Studies and the belief that employees worked better in a social system.
Employees were viewed as a social man.

The second rapid development of Human Resources started in the beginning of 20th
century. Most organizations introduced the Personnel Management. The personnel
department had large responsibilities. It was dealing with issues, and introducing the new
law requirements. It had the responsibility for the implementation of different social and
work place safety programs. Everything was focused on the productivity of employees. The
regular productivity increments were the key measure for the management of employees.
The significant change was introduced after the 2nd World War because the military
developed many training programs for new soldiers. After the war, the training became a
respected process in the personnel department.
During this period, the trade unions evolved. The trade unions changed the rules of the
game. The employer got a strong partner to discuss with. Trade unions introduced many
improvements at no significant costs for the employer. Today, trade unions are not as strong
as they were used to be, but many organizations still benefit or suffer from a strong
presence of trade unions in their factories.
The real HR Revolution began in 60’s of the 20th century. The technology and
theglobalization have changed the rules of the game. Most HR functions are running
complex HRIS solutions, which make information about employees available anywhere and
anytime to managers and HR Professionals.
It was around the middle of the 1980’s that Human Resource or HR as it is more often
abbreviated to, began to establish itself. It was quickly realized that the personnel
department and training functions both undertook work around the human element of the
business and that putting these together formed a synergy. It was realized that there was a
need for the consideration of the workforce when planning business change, organizational
changes, restructuring and the need to educate and for the staff to learn what was
happening. In effect the strategic direction of the business needed to consider and reflect the
people as the largest asset of any business. Human Resources Management and HR
directors came into being, providing executive level interaction or even higher and the
establishment of Human Resources was fully accepted by the 1990’s and taken forward
since to include all aspects of a business that applies to the people within that business.
In the latter part of the 1990’s and into the early 2000’s there has been a further evolution to
take the HR role back to the business managers. The decisions and actions being taken near
to the people with the old style HR divisions being streamlined into a more consultative role
provided knowledge and best practice guidelines but only interacting at a strategic level
The economy of the wealthy western countries shifted towards the services economy. The
quality of services became the crucial competitive advantage. HR became necessary
because the structure of the workforce changed. The leadership development was the right
answer.
Managers and leaders have to think global today; they have to understand to different
cultural backgrounds. The corporate culture cannot be country specific; it has to reflect
many nations working for the organization. This is a fantastic opportunity for Human
Resources. Human Resources Management is global today. The global HR policies drive
processes in different countries, but the processes produce comparable results. The
employees relocate from country to country.
The future of Human Resources is bright. The globalization cannot be stopped because
nations collaborate. The organizations become less country specific, and they cannot
identify themselves with one country.
New technologies will bring other revolutions to offices. The commute working is standard
today, but it will become a norm. The technology will connect employees as they would sit
in the next cubicle. ICT will allow quick and instant access to information about employees
and managers will be able to make all decisions and approvals online. However, the future
of Human Resources will be about new networking methods and how to make employees
know each other.
The historical evolution of HRM can be shown in the following diagram:

6. Definition of Human Resources Management (HRM)
HRM is central to management teaching and research, and has emerged in the last decade as
a significant field from its earlier roots in Personnel management, Industrial relations, and
Industrial Psychology. People management and high performance teams have become key
functions and goals for managers at all levels in organizations. Management and human
resources management are one and the same. They should never be separated. Management
is personnel administration. Management has three jobs, two of which are directly related to
personnel- -managing a business, managing managers and managing workers and work.
The word management has three syllables- Manage-Men-T. If T is taken for tact, then
etymologically management means how to manage men with tact. A man manages many
men tactfully.
There exist many definitions of human resource management (HRM).HR experts define
HRM from the diffident perspectives. Few important definitions are presented below:
Mary Parker Follett has rightly defined management as a process of efficiently getting
things done with and through other people. It means that management is nothing but
managing people at work. The staffing function of management is known as HRM.
HRM deals with the design of formal systems in an organization to ensure the effective and
efficient use of human talents to accomplish organizational goals (Mathis and Jackson,
2005).
Dessler (2003) defines HRM as a process of acquiring, training, appraising, and
compensating employees, and attending to their labor relations, health and safety, and
fairness concerns.
One of the well-known definitions was offered by Michael Jucious (1984). He defined
human resources management or personnel management “as the field of management
involves planning, organizing, directing, and controlling the functions of procuring,
developing, maintaining and motivating a labor force”.
According to Flippo, HRM is “planning, organizing, directing and controlling of the

procurement, development, compensation, integration, maintenance and separation of
human resources to the end that individual, organizational and societal objectives are
accomplished".
John Storey, (1995) states that HRM is a distinctive approach to employment management
which seeks to achieve competitive advantage through the strategic deployment of a highly
committed and capable work force, using an integrated array of cultural, structural and
personal techniques.

HRM is a process of acquiring, retaining, developing, terminating and properly using the
human resources in an organization (Robbins and Decenzo, 2010).This definition indicates
that HRM is concerned with acquiring the service of people, developing their skills,
motivating them to high levels of performance and ensuring and maintaining their
commitments.
The acquisition function begins with human resource planning. It includes the job analysis,
recruitment, selection and socialization of employees. The development function includes
employee training, management development and career development. As jobs evolve and
change, ongoing retraining is necessary to accommodate technological changes. The
motivation function begins with the recognition that individuals are unique and the
motivational techniques (job satisfaction, employee performance appraisal and
compensation) must reflect the needs of each individual. The maintenance function is
concerned with providing those working conditions that employees are necessary in order to
maintain their commitment to the organization. The relationship between managers and
employees must be handled effectively if both the employees and the organization are to
prosper together.
HRM pervades the organization. Every person in an organization is involved with personnel
decisions. The responsibility for human resource management activities rests with each
manager. If managers throughout the organization do not accept their responsibility, then
human resources activities may be done only partially or not at all. It is concerned with
managing people at work. It covers all types of personnel. It is a continuous function.
HRM draws on a number of related disciplines, such as Industrial Psychology, Sociology,

Social Psychology, Anthropology and Economics. The function of HRM is advisory in
nature. In management terminology, it is a staff function. The personnel manager advises
the operating departments on matters relating to personnel. He does not issue orders to them
but gives them advice. HRM is the field of management which plans, organizes, controls
the functions of procurement, development, maintenance and utilization of the work force
so that organization goals can be accomplished, objectives of human resources can be
accomplished, objectives of society can be accomplished. Human resource management can
be concluded as a business oriented philosophy concerned with the management of people
in order to obtain added value from them and achieve competitive advantage. HRM
includes conducting job analysis, personnel needs, recruiting the right people for the job,
orienting and training, managing wages and salaries, providing benefits and incentives,
evaluating performance, resolving disputes, and communicating with all employees at all
levels.

7. Features of HRM
HRM is regarded as a subsystem of the organization. It is an emerging discipline. HRM as a
discipline has few important features. Smriti, C. (2014) reviews a lot of articles on HRM
and identifies few major features of HRM, which are listed below:
a. It is an art and a science. The art and science of HRM are indeed very complex. HRM
is both the art of managing people by recourse to creative and innovative approaches; it
is a science as well because of the precision and rigorous application of the theory that
is required.
b. It is pervasive. Development of HRM covers all levels and all categories of people, and
management and operational staff. No discrimination is made between any levels or
categories. All those who are managers have to perform HRM. It is pervasive also
because it is required in every department of the organization. All kinds of
organizations, profit or non-profit making, have to follow HRM.
c. It is a continuous process. First, it is a process as there are numbers of functions to be
performed in a series, beginning with human resource planning to recruitment to
selection, to training to performance appraisal.
d. HRM is a service function. HRM is not a profit center. It serves all other functional
departments. But the basic responsibility always lies with the line managers. HRM is a
staff function – a facilitator. The HR Manager has line authority only within his own
department, but has staff authority as far as other departments are concerned.
e. HRM must be regulation-friendly. The HRM function has to be discharged in a
manner that legal dictates are not violated.
f. Interdisciplinary and fast changing. It is about welfare, manpower, personnel
management, and keeps a close association with employee and industrial relations. It is
multi- disciplinary activity utilizing knowledge and inputs from Psychology, Sociology,
Economics, etc.
g. Focus on results. HRM is performance oriented. It has its focus on results, rather than
on rules. It encourages people to give their 100%. It tries to secure the best from people
by winning the whole hearted cooperation.
h. People-centered. HRM is about people at work both as individuals and a group. It tries
to help employees to develop their potential fully. It comprises people-related functions
like hiring, training and development, performance appraisal, working environment,
etc.HRM has the responsibility of building human capital. People are vital for achieving
organizational goals. Organizational performance depends on the quality of people and
employees.
i. Human relations philosophy. HRM is a philosophy and the basic assumption is that
employees are human beings and not only a factor of production like land, machine or
capital. HRM recognizes individuality and individual differences.
j. An integrated concept. HRM in its scope includes personnel aspect, welfare aspect
and Industrial relations aspect in itself. It is also integrated as it concerns with not only
acquisition, but also development, utilization, and maintenance.

8. Nature of HRM
The emergence of human resource management can be attributed to the writings of the
human relationists who attached great significance to the human factor. Lawrence Appley
remarked, ―Management is personnel administration‖. This view is partially true as
management is concerned with the efficient and effective use of both human as well as non-
human resources. Thus human resource management is only a part of the management
process. At the same time, it must be recognized that human resource management is
inherent in the process of management. This function is performed by all the managers. A
manager to get the best of his people must undertake the basic responsibility of selecting
people who will work under him and to help develop, motivate and guide them. Human
Resource Management brings organizations and people together so that the goals of both are
met. The nature of HRM includes:
❖ Broader function. Human Resource Management is a comprehensive function because
it is about managing people in the organization. Inherent Part of management: Human
resource management is inherent in the process of management. This function is
performed by all the managers throughout the organization rather that by the personnel
department only. If a manager is to get the best of his people, he must undertake the
basic responsibility of selecting people who will work under him
❖ People oriented. HRM is the process which brings people and organizations together so
that their goals can be achieved. It is concerned with all categories of personnel from top
to the bottom of the organization. The broad classification of personnel in an industrial
enterprise may be as follows: (i) Blue-collar workers (i.e. those working on machines
and engaged in loading, unloading etc.) and white-collar workers (i.e. clerical
employees), (ii) Managerial and non-managerial personnel, (iii) Professionals (such as
Chartered Accountant, Company Secretary, Lawyer, etc.) and nonprofessional personnel.
❖ Action oriented. Human resource management believes in taking actions in order to
achieve individual and organizational goals.
❖ Development oriented. Development of employees is an essential function of human
resource management in order to get maximum satisfaction from their work so that they
give their best to the organization.
❖ Continuous function. As the human resource is a living factor among all factors of
production, therefore it requires continuous improvements and innovations in order to get
excellence. Human Resource Management is not a ‗one- shot-function. It must be
performed continuously if the organizational objectives are to be achieved smoothly.
❖ Pervasive Function: Human Resource Management is a pervasive function of
management. It is performed by all managers at various levels in the organization. It is
not a responsibility that a 3 manager can leave completely to someone else. However, he
may secure advice and help in managing people from experts who have special
competence in personnel management and industrial relations.
❖ Future oriented. HRM is a very important activity which helps an organization to
achieve its objectives in future by providing well motivated and competent employees.

9. Qualities of a good HRM
HR is all about human. The most important thing in HR is to "Value Human". An HR
manager is to manage, develop, train, retain, and compensate the employees of the
organization. He must possess some basic skills or traits which are as follows:
i) Communication skill,
ii) Interpersonal skill to get things done through others,
iii) Listening skills,
iv) Leadership skills,
v) Liaison,
vi) Ready to accept challenge,
vii) Emotional intelligence,
viii) Judgment of people’s attitudes & behaviors,
ix) Empathetic (share someone else's feelings or experiences by imagining what it
would be like to be in their situation),
x) Earnest (sincere & serious) & commitment,
xi) Diplomatic skills
xii) Adaptation ability,
xiii) Strategist,
xiv) Good communication & convincing ability,
xv) Ability to analyze a situation & ability to resolve grievances,
xvi) Coordinating skills,
xvii) Learning & leadership skills,
xviii) Motivating skills,
xix) Excellent knowledge on human behavior,
xx) Knowledge of related laws & their procedures,
xxi) Problem solving skills,
xxii) Decision making skills.
10. Personnel Management VS Human Resource Management

There is no denying the fact that personal management is the foundation for the evolution of
human resource management. Many theories related to human resource management which
are being learnt and applied in today's management were formulated during or before the
era of personal management. There are some points of dissimilarities between Personnel
Management (PM) and Human Resource Management (HRM) although on some key
issues, PM and HRM are identical. Traditional Personnel Management tends to be narrow,
striving to attend line managers, whereas HRM is integrated into the role of line managers,
with a strong proactive position and a bias towards business. PM has a history of placing
emphasis on bureaucratic control often in a reactive sense, i.e., control of manpower and
personnel systems. Some would argue that PM represented a highly compartmentalized
system. By contrast, HRM makes a determined effort to be a more integrative mechanism in
bringing people issue into line with business issues, with a pronounced problem-seeking
and problem-solving orientation, and a determination to build collaborative organizational
systems. The role of top management in setting the agenda for change and development is
very much in evidence in HRM. From the above discussion we can make the major
differences between traditional personnel management and modern HRM. Human resource
management is the new version of personnel management. There is no any watertight
difference between human resource management and personnel management. However,
there are some differences in the following matters.
a) Personnel management is a traditional approach to managing people in the organization.

Human resource management is a modern approach to managing people in the
organization.
b) Personnel management focuses on personnel administration, employee welfare and
labor relations. Human resource management focuses on acquisition, development,
motivation and maintenance of human resources in the organization.
c) Personnel management assumes people as an input for achieving desired output. Human
resource management assumes people as an important and valuable resource for
achieving desired output.
d) Under personnel management, personnel function is undertaken for employee's
satisfaction. Under human resource management, administrative function is undertaken
for goal achievement.
e) Under personnel management, job design is done on the basis of division of labor.
Under human resource management, job design function is done on the basis of group
work/team work.
f) Under personnel management, employees are provided with less training and
development opportunities. Training is viewed as an expense. Under human resource
management, employees are provided with more training and development
opportunities. Training is considered a profitable investment.
g) In personnel management, decisions are made by the top management as per the rules
and regulation of the organization. In human resource management, decisions are made
collectively after considering employee's participation, authority, decentralization,
competitive environment etc.
h) Personnel management focuses on increased production and satisfied employees.
Human resource management focuses on effectiveness, culture, productivity and
employee's participation.
i) Personnel management is concerned with personnel manager. Human resource
management is concerned with all level of managers from top to bottom.

j) Personnel management is a routine function. Human resource management is a strategic
function. Traditional personnel management is viewed as a support activity to line
activities, closely associated with administrative tasks an coordinating and liaising
between the demands of management and the concerns and needs of employees, while
HRM is often regarded as a holistic, strategy centered approach to employment
management.
k) Management role is personnel management is transactional, while it is transformational
leadership in HRM.
l) Personnel management involves negotiation, and HR managers facilitate.
m) Division of labor is the basis of job design in personnel management and teamwork is
the basis of job design in HRM.
11. The Philosophy of Human Resources Management
According to the Merriam-Webster on-line dictionary, philosophy is the study of general

and fundamental problems, such as those connected with reality, existence, knowledge
values, reasons, mind and a language. Philosophy is distinguished from other ways of
addressing such problems by its critical, generally systematic approach and its reliance on
rational argument. In more casual speech, by extension, "Philosophy" can refer to "the
most basic beliefs, concepts, and attitudes of an individual or group” (Blackburn, Simon
(1994). The basic guide to HR management action in any company derives from its
philosophy toward people. A philosophy exists in every company, although it is not written
down. It guides to personnel policies. The Harvard and British human resource management
schools and the two definitions cited from John Storey and Michael Armstrong and others
(Terrington & Hall 1991; Farnham & Pimlott 1992) suggest that human resource
management is not without philosophy. There are two contrasting views regarding
employee at work:
a) Labor is viewed as technical factor-a factor of production. They are treated as a

commodity and they can be bought and sold. They are considered as cogs in the
machine. They can be hired and fired at will. Writings of Taylor and Adam Smith
reinforced these concepts. Employees must be controlled and closely supervised by
management to attain company goals. This approach treats employees with limited
potentiality. This is consistent with the theory X as suggested by Douglas McGregor.
b) Labor has been viewed as a human factor with a lot of positive potentials. So they must
be treated with respect and dignity. People are assets- not cost/ liabilities. Investment
on people is very rewarding. Management must develop and utilize the talent of people
to achieve common goals. Under traditional personnel management philosophy, training
and development of employees was quite often seen as a cost that should be avoided
whenever possible. Investment in people, like any other capital investment, is necessary
for better returns in the future Japan is the first country which realized the importance of
human beings in its attempt to improve productivity. When Japan realized this truth
and recognized human values, it achieved unprecedented progress in all fields.
Stagnation in economic progress of Bangladesh compared to Japan is again attributed to
this lack of focus on human resources development and utilization. Although we are
endowed with fertile land, rich in natural gas, possess large homogeneous population.
c) Another philosophy is getting additional value from employees. Employees are capable
of producing added value. It is the role of the management to obtain such added value
through human resource development and performance management systems. The
concept of added value is borrowed from production economics. It stipulates that an
employee can be utilized to produce marginal output if properly trained, does the right
job and is rewarded accordingly. Work measurement and matching jobs with the right
people as well as measuring performance against the set targets and standards stand out
clearer under human resource management school of thought.
12. Basic Principles of Human Resources Management

A principle is a basic statement of truth explaining cause and effect relationship between
two or more variables. Principles are fundamental beliefs- generally constant and
unchangeable. Every subject is guided by its principles. Principle is a fundamental truth or
proposition that serves as the foundation for a system of belief or behavior or for a chain of
reasoning. The synonyms of principles are: truth, concept, idea, theory and assumptions,
etc.
Human resource management (HRM) or management of human capital is extremely

important in today's industries. The principles of HRM, derived from legislation,
management philosophy and organizational values, are touchstones which enable managers
to exercise judgments in a variety of situations. The principles of HRM are the foundations
in any sector and these must be observed. For every institution some essential principals
should be followed by the human resources department. For example, the selection of
employees should be strictly merit based, there should be no discrimination or favoritism
and every employee should be treated fairly and in a consistent manner. These principles
are essential for any business to succeed.
The fundamental principles of HR management (Jucious, 1992; Memoria, 1998; Flippo,

1986; Drucker, 1997) are as follows:
• Deal with people as complete individuals. Consider employee as a whole person. For
example, the family life of an employee may have an effect on his working life. Work
life satisfaction and family life are closely related.
• Make people feel worthwhile and related. People are the most valuable asset of the
organization. They make other resources productive.

• Treat all employees with justice; there should be no discrimination in terms of gender,
color, race and religion. Justice means that all administrative procedures are fair and
perceived to be fair because due process has been followed. For example, the selection
and placement process is realized on the basis of equal opportunity principle.
• Human resources management is not personal. The individuality of the human resource
must be recognized, and cannot be treated like any other resource. After all, people have
feelings and emotions.
• Rewards should be earned, not be given. Rewards may be monetary and non-monetary
(recognition, appreciation).If it is given, it becomes a gift or donation. For example,
students earn grade through their efforts.
• Supply employees with relevant information. Because secrecy may create confusion
and misunderstanding. Information should be shared with employees. Commitment by
employees to the organization is nurtured when the organization informs them of
important matters, such as the mission statement, the values it cherishes and trading
prospects. HR policies must be clear, frank and accessible. They must be transparent.
• Do not underestimate the intelligence of people. People have a lot of positive
potentiality. The objective of HR manger is to make the best use of human talent.
Employee should be empowered to utilize their talents. But reality is that many people
in the developing countries remain undervalued, undertrained and underutilized.
• Treat people with respect and dignity. People deserve to be treated differently from
other factors of production (land, capital, technology) because they are of higher order
in the universe. This will enhance people’s motivation and commitment to the
organization (Newstrom and Devis, 2002). N.R. Narayana Murthy, Chairman,
Emeritus, Infosys Ltd. rightly comments, “You must treat your employees with respect
and dignity because in the most automated factory in the world, you need the power of
human mind. That is what brings in innovation. If you want high quality minds to work
for you, then you must protect the respect and dignity.”
• People should be considered as social and intellectual capital capable of making
development. Human capital theory, developed by Becker (1964) and it has grown in
importance worldwide because it focuses on education and training as a source of
capital. It is now widely acknowledged that one of the key explanations for the rapid
development of Asian countries in the 1970s and 80s is high investment in human
capital (Robert 1991; Psacharopolos & Woodhall 1997). Human capital theory changes
the equation that training and development are ‘costs the organization should try to
minimize’ into training and development as ‘returnable investments’ which should be
part of the organizational investment capital. Therefore, human resource training and
development decisions and evaluations have to be done based on clearly developed
capital investment models.
• Provides opportunities for growth within the organization. According to Herzberg,
employee growth is a motivational factor. All employees are expected to enhance
knowledge, skills, and competencies. It is believed that development is an individual

initiative, provides necessary resources and supports its people. A good manager must
develop good successors.
• Predominance of group interest over individual interests. According to Fayol, one of the
basic principles of management is subordination of individual to group interest. HR
manager must integrate the interests of different stakeholders of an organization.
• Diversity is an important principle of modern HRM. It recognizes that people have
individual characteristics that make them distinct from others, including age, language,
culture, ethnicity, skills, gender, abilities, talents and perspectives. Diversity enriches an
environment by facilitating the exchange of different perspectives and ideas.
• People (men) behind the machine count. Previously, it was the machine behind the
man that counted. Today, people are the real power to drive organizations forward.
Machines only assist people. Ultimately, the machine is servant to men, not the other
way around.
• Attitude is the key to employee engagement and success. Hence, HR leaders must
emphasize attitude rather than experience. It is better to hire a new job seeker with high
attitude and no experience than one with a rotten attitude and years of experience
Another HR expert developed ten principles of HRM, which is known as Ten Cs (Alan
Price, 1997). Price presented the Ten Cs in his book titled Human Resource Management in
a Business Context. This framework incorporates ten principles, each conveniently
beginning with 'C' - in the best management-guru style. These are: comprehensiveness,
credibility (Staff must trust top management and in their strategies). Communication,
control, change (continuous improvement and development are essential for survival) cost-
effectiveness, competence, creativity, and coherence ( HRM activities and initiatives must
form a meaningful whole).
13. Objectives of Human Resources Management

Objective is a specific result that a person or system aims to achieve within a timeframe and
with available resources. In general objectives are more specific and easier to measure.
Objectives are basic tools that underlie all planning and strategic activities. They serve as
the basis for creating policy and evaluating performance.
All the functions of the organization should contribute to the objectives of the organization.
This means that the determination of objectives is of prime importance and is a prerequisite
to the solution of most management problems. Objectives are predetermined goals at which
individual or group activity in an organization is aimed. The formulation of the objectives
of an organization is necessary for the following reasons:
• Human beings are goal – directed. People must have a purpose to do some work.
Announced organizational goals invest work with meaning.
• Objectives serve as standards against which performance is measured.
• The objectives stand out as guidelines for organizational performance. They help in
establishing the character of an organization.

• The central focus for HR management must be in contributing to organizational
success.
The objectives of human resource management are derived from the philosophies which tie
the emergence and development of human resource management together, both as a
discipline and profession (Beer & Spector 1985; Cuming 1985; Armstrong; 1995; Dessler
2005). Werther and Davis (1998) categorized HRM objectives into broad four types:
A. Societal. HRM may contribute ethically and socially regarding the needs and
challenges emerging in the society. If an organization fails to use its resources for
society benefits in ethical ways it may lead to restriction by society.
B. Organizational. The main objective of HRM is to achieve organizational goals by
bringing organizations effectiveness. HRM is not an end but it is a means to assist the
organization in order to attain its objectives.
C. Functional. Functional objective of HRM deals with contributions to each department
regarding their need and effectiveness in order to attain organization goal.
D. Personal.HRM also deals with personal objectives of the individuals so that personal
and organizational objectives can be met to achieve maximum production and attain
competitive advantage. These personal objectives are important in order to maintain,
retain and to motivate employees.
The objectives of human resources management can be described as follows:

• To make best use of human talent. Effective employee utilization is critical, not only
for the good of the organization but also for the good of individual employees and their
teams. Underutilized staff is a lost resource to the organization in terms of opportunity
cost because even if the employee has enough work to earn a salary, the added marginal
labor value will not be realized
• To maintain and sustain industrial peace. Without peace, prosperity is not possible. It is
true for a nation as well as for a business organization. Without industrial peace, all
resources remain under-utilized.
• To ensure that organizational systems, processes and activities are integrated and
synergized through a strong organizational culture. Organizational culture is made up of
values, attitudes, norms, myths and practices that is ‘how things are done around’.
• To improve the productive contribution of people to the organization. In a competitive
environment, productivity improvement is very significant. Productivity is the function
of ability and motivation. Training and education can improve ability. The HR
managers must take measures to increase employees’ willingness to put more effort.
Excellent companies of USA also encourage productivity through people.
• To attract and secure appropriate people capable of performing effectively and
efficiently the organization’s specific tasks. This is important for obtaining and
sustaining a Competitive advantage.

• To generate the maximum individual development of the people within the
organization. Individuals get internally developed through training and experience. It is
a motivating factor according to human behavior experts Maslow and Herzberg. It
should be kept in mind that today’s industries are knowledge-based and skill-intensive.
• To ensure reconciliation of individual/group goals with those of the organization in
such a manner that the personnel feel a sense of commitment and loyalty towards it.
• To recognize and satisfy individual needs.
• To maintain a high morale and better human relationships inside the organization.
• To promote employee discipline through performance based incentives. It creates a
healthy and friendly working environment through appropriate work design and
assignment of jobs.
• To provides a favorable environment for employees so that people working in an
organization can work creatively.
• To bridge the gap between individual goal and organizational goal and thus results in a
good harmony.
M.W. Cumming (1989) has described the objectives of HR management in these words:
HR management aims to achieve both efficiency and justice, neither of which can be
pursued successfully without the other. It seeks to bring together and develop into an
effective organization, the men and women who make up an enterprise enabling each to
make his own best contribution to its success both as an individual and as a member of a
working group.
According to Mathis and Jackson (1999), the main goal of HR management is to enhance
human capital of the organization. Human capital is the total value of human resources to
the organization. It is composed of the people in the organization and what capabilities they
have and can utilize in their jobs. As a part of a strategic role, HR managers are often seen
as responsible for expanding the capabilities of the human resources in the organization.
According to Scott, Clothier and Spriegal, the objectives of Human Resource Management,
in an organization, is to obtain maximum individual development, desirable working
relationships between employers and employees and employees and employees, and to
affect the molding of human resources as contrasted with physical resources‖.

14. Significance of HRM
HRM plays a very significant role in the development of a nation. Efficient and committed
human resource leads to effective exploitation and utilization of nation’s natural, physical
and financial resources. Skilled and developed human resource ensures the development of a
country. If people are underdeveloped then that country will be underdeveloped. Effective
HRM enhances economic growth which in turn leads to higher standard of living and
maximum employment. According to Peter F. Drucker, ―The proper or improper use of the
different factors of production depends on the wishes of the human resources. Hence, besides
other resources human resources need more development. Human resources can increase
cooperation but it needs proper and efficient management to guide it‖. For an enterprise
effective HRM leads to the attainment of its goal efficiently and effectively.HRM helps
enterprise in the following ways.
• Hiring required a skill set and retaining them through effective human resource planning,
recruitment, selection, placement, orientation and promotion policies.
• Development of employees by enhancing necessary skills and right attitude among
employees through training, development, performance appraisals etc.
• HRM also takes care of optimum utilization of available human resource.
• HRM also ensures that organization has a competent team and dedicated employees in
future.
• HRM also leads to improved quality of work life, it enables effective team work among
employees by providing the healthy working environment.
It also contributes to professional growth in various ways such as :

• Providing opportunities for personal development of an employee.
• Enabling healthy relationships among teams and allocating work properly to employees
as well as teams.HRM plays important role in the society;
• It helps labor to live with pride and dignity by providing employment which in turn gives
them social and psychological satisfaction
• HRM also maintains a balance between open jobs and job seekers.
The responsibility of establishing good public relations lies with the HRM to a great extent.
HR managers organize business meetings, seminars and various official gatherings on behalf
of the company in order to build up relationships with other business sectors. Sometimes, the
HR department plays an active role in preparing the business and marketing plans for the
organization too. Any organization, without a proper setup for HRM is bound to suffer from
serious problems while managing its regular activities. For this reason, today, companies
must put a lot of effort and energy into setting up a strong and effective HRM. A sound
understanding of human resource principles and concepts and how to implement human
resource policies and procedures is of importance to human resource specialists and line
mangers alike. Effective human resource management requires a thorough knowledge of,

and skills in, various people management functions, together with the ability to meld these
functions into a carefully planned, well-integrated program that will assist organizations
achieve their objectives. Human resource management practices are now considered as one
of the key contributing factors to the accomplishment of an organization. The organizations
should place increased importance on the policies and practices of HRM to achieve
competitive advantage.
15. Functions of HRM

HR managers are performing a variety of functions. The functional areas of HR managers
are changing as the time goes on. The main HRM functions include:
• Human resource planning is an important activity that involves estimating the size and
makeup of the future workforce. It is a process by which managers ensures that they
have the right number and kinds of people in the right places, and at the right times,
who are capable of effectively and efficiently completing assigned tasks (Robbins and
Coulter,
(2005). Planning of human resources is the life-blood of the firm. Without the right
people in the right place at the right time, the firm could go out of business. Through
planning organizations can avoid sudden talent shortages and surpluses.
• Job analysis is the process of determining the tasks that make up the job and the
knowledge, skills and abilities an employee needs to successfully accomplish the job.
From job analysis, job description and job specification can be prepared. Job
description is a written statement of what the jobholder does, how it is done and why it
is done. Job specifications state the qualifications necessary for a job.
• Recruitment is one of the major responsibilities of the human resource team. The HR
managers come up with plans and strategies for hiring the right kind of people. They
design the criteria which are best suited for a specific job description. Their other tasks
related to recruitment include formulating the obligations of an employee and the scope
of tasks assigned to him or her. Based on these two factors, the contract of an employee
with the company is prepared. Recruitment is the process of finding and attracting
qualified or suitable applicants to fill vacancies. Recruiting is important because the
best- qualified applicants must be found to fill vacancies. The methods and procedures
used to acquire an understanding about jobs are called job analysis. This is discussed
next. There are mainly two sources of recruitment: internal and external. Promotion
from within an organization is called internal source and recruiting new people from
outside the organization is known as the external source.
• De-recruitment: De-recruitment, on the other hand, if HR planning shows a surplus of
employees, managers may want to reduce the workforce through de-recruitment, which
is not a pleasant task for any manager. De-recruitment options may include firing,
layoffs, attrition, transfer, early retirement and job sharing.

• Once the recruiting effort has developed a pool of candidates, the next step in the HRM
process is to determine who is best qualified for the job. Selection is a process of hiring
suitable people for a job. It is the process of screening job applicants to ensure that the
most appropriate candidates are hired. Right man for the right job is the main goal of
selection. Selection device must be valid and reliable. Managers can use a number of
selection devices to reduce errors. The best- known selection devices are application
forms, written tests, interviewing, medical test, references or background investigations,
and the final decision of hiring.
• Placement is the assignment or reassignment of duties to an employee. It may take
different forms such as promotion, transfer, demotion, and termination.
• Orientation is a process of getting new employees acquainted with the organization, its
culture, rules and regulation, objectives and supervisors and other employees. It is the
act of introducing new employees to an organization and their work units. Many
organizations have formal orientation programs which might include a tour of the work
facilities, a PowerPoint presentation describing the history of the organization. It is
important because it helps new employee to adapt with a new situation.
• Training is a continual process of helping employees to perform at a high level. It is a
process of acquiring new skills to do a job properly. Training changes and modifies
employee attitudes and behaviors that will improve his ability to perform a given job.
To be effective, a training program must accomplish a number of objectives. First, it
must be based on both organizational and individual needs. Second, the objectives of
training should spell out what problems will be solved. Third, all training should be
based on sound theories of learning. Finally, a training program must be evaluated to
determine whether it is working.
• Job evaluation is a process of measuring and determining the value of each job in
relation to all jobs within the organization. Jobs are ranked in order to arrive at each
job’s appropriate worth. It is the basis of designing a well- balanced compensation
program. The widely used methods of job evaluation are ranking method, classification
method, point rating method, and factor comparison method.
• HRM encourages the people working in an organization, to work according to their
potential and gives them suggestions that can help them to bring about improvement in
it. Performance appraisal is a process in an organization whereby each employee is
evaluated to determine how he or she is performing. Employee may be appraised
against absolute standards, relative standards, and objective. The appraisal process
consists of six steps: establish performance standards, communicate performance
expectations to employees, measure actual performance, compare actual performance
with standards, discuss the appraisal with the employee, if necessary, and initiate
corrective action. Managers can choose different performance appraisal methods such
as written essays, critical incidents, graphic rating scales, MBO and 360 degree
feedback. .

• Compensation is the reward or price for labor. The goal of compensation administration
are to design the lowest-cost pay structure that will attract, motivate and retain
competent employees, and that also will be perceived as fair by these employees.
• Discipline refers to a condition in the organization when employees conduct themselves
in accordance with the organization’s rules and standard of acceptable behavior. For the
most part, employees discipline themselves. But not all employees will accept the
responsibility of self-discipline. Some are problem employees. These employees require
some degree of extrinsic disciplinary action. This extrinsic is labeled punishment. The
most frequent discipline problems can be classified as related to attendance, on-the-job
behavior, dishonesty, and outside criminal activities. Disciplinary actions available to
the manager include oral warning, written warning, suspension, demotion, pay cut, and
dismissal.
• A trade union is an organization of workers, acting collectively, who seek to protect and
promote their mutual interests through collective bargaining. The goals of unions
include a) influencing the wage and effort bargain, b) establishing a security system for
members, c) influencing the administration of rules, and d) obtaining political power in
the state and over the economy.
• Collective bargaining is negotiation, administration and interpretation of a written
agreement between two parties; at least one of, which represents a group that is acting
collectively, that, covers a specific period of time.
• Electronic HRM: E-HRM. E-HRM has different names, for example, digital HRM and
web-based HRM in the world wide. The processing and transmission of digitalized HR
information is called electronic human resource management (e-HRM). E-HRM is the
application of IT for HR practices which enables easy interactions between employee
and employers. It stores information regarding payroll, employee personal data,
performance management, training, recruitment and strategic orientation. E-HRM has
been defined as “a way of implementing HR strategies, policies and practices in
organizations through a conscious and directed support of and/or with the full use of
web-technology-based channels” (Ruel, Bondarouk and Looise, 2004).
• Green HRM. Green HRM (GHRM) is the emerging topic in current scenario. The green
movement across the world gave birth to Green HRM.GHRM refers to making efforts
to improve energy efficiency or reduce the pollution produced by our home, business
and general living habits ( Rajasshrie and Sivathannu, ). The main purpose of going
green is to reduce the potential negative impact that energy consumption and pollution
can have on the environment.
• Formulation of human resource strategy is another important function of any HR
manager. Human resource managers play a pivotal role in developing human resource
strategy and policies that fit the organizational and business strategy. The strategy will
form the framework for different human resource policies for use by other managers.
• The human resource manager as an expert is expected to provide guidance to other
managers and staff on the interpretation of personnel strategies and policies in various
areas which include human resource implications of organizational and business
strategies, human resourcing, staff training and development, disputes and grievance
handling, employment legislations, health and safety, layoffs etc.
• HR manager should encourage employee empowerment. The employer has many
sources of power including the ability to reward and punish. Similarly, employees can
reward or punish employers by deciding how and when to use their knowledge, skills
and attitudes to build or destroy the organization. It is the role of the human resource
manager to ensure that there is no abuse of power and employees are empowered to
make the right decisions on the shop floor in order to create an enabling environment
for creativity and innovation.
16. Approaches to HRM
The word approach includes ideas or actions intended to deal with a problem or situation. It
is a tentative suggestion designed to elicit the reactions of others. There are many different
approaches to human resource management (Tripathi, P. C. 2002; Gomez, Meija ,1998) .
In other words, HRM may be discussed from the different approaches. These approaches
define HRM from the different perspectives.
• Strategic approach: People are the strategic asset of an organization. People have core
competency-, the basis of competitive advantage. Human resource is the combination of
talent and skills, some of them are inborn and others they have acquired through
learning and education. The strategic HRM approach focuses on people management
programs and long-term solutions, and stresses organizational development
interventions, achieving employee organizational fit, and other aspects that ensure
employees add value to the organization
• Management approach: HRM is a part of management. Management is nothing but
managing people at the workplace.
• Human resource approach: People are human beings with a lot of potentials and
intellectual abilities. It is important to treat people with respect and dignity.
• Commodity approach: People are a commodity. They are viewed as a cog of a machine.
People can be hired and fired through money. It is money that matters most. There is a
saying, money is sweeter than honey. This approach views people as an economic man.
• Proactive approach: HR managers must anticipate challenge or problem before they
arise. Prevention is better than cure. The proactive approach will save companies
considerable time and money in the short and long run. Drucker highlighted the
importance of proactive approach very rightly. He argues, " In a perfect world every
startup would take the proactive approach and build their company from the beginning
by identifying not only mission, vision, values, goals, objectives, etc., but will
determine where they want to go in the short- and long-term and build a holistic,
aligned organization beginning at the founder level where they can attract, hire, and
retain the top talent to get them where they want to go"

• Reactive approach: It occurs when decision makers respond to problems. If efforts are
reactive only, problems may be compounded and opportunities may be missed and
organization may suffer loss. Companies may lose time and money if they take a
reactive approach.
• System Approach: A system is a set of interrelated but separate elements or parts
working together to attain a common goal. For example, HRM is a system which may
have parts such as procurement, training, performance appraisal and reward, etc.
17. Indicators to measure the Efficiency of the HR Department
The HR manager is concerned with staffing, motivating, maintaining good employer-

employee relationships and running welfare services. The performance achieved in all these
spheres will have to be assessed by the general management to ascertain the efficiency and
quality of personnel man. There are many criteria that can be used to measure effectiveness
or ineffectiveness of HR department.
Experts used (Guest, 1987, Michael, 1995; Biswanath Ghosh, 1997) the following criteria
to measure the efficiency of HR department:
a) Recruitment cost report

This report indicates the recruitment cost for different categories of employees and
compares such costs with results over the time. If recruitment cost has increased over the
year, it reflects inefficiency of the personnel department. If it has reduced, it is an index of
successful personnel policy.
b) Labor productivity report

Although labor productivity depends not only on the efficiency of labor but also on many
other factors which lie outside the jurisdiction of personnel department, yet the personnel
department is mainly responsible for maintaining an efficient workforce. A comparison of
labor productivity and efficiency of different departments and between different periods is a
good index of labor productivity. It the total productivity falls, personnel department is
inefficient; if it rises, personnel department will be considered efficient.
c) Labor turnover report

Labor turnover may be used as an index to judge the efficiency of the personnel department.
One of the most important tasks in the management of employees is to make sure that labor
turnover is minimized and that all vacancies that exist are filled. Labor turnover is a
measure of the number of people that leave a business in a given period of time as a
percentage of the average number of people employed during that period (Hall and Jones,
2003). Excessive labor turnover indicates a failure of personnel policy while lower
turnover reflects the success of such policy.
d) Discipline
Discipline is an indication of success or failure of the personnel policy concern. Discipline
is good when employees follow willingly the rules of the company and discipline is said to
be bad when employees disobey them.
e) Employee morale
The effectiveness of the personnel policy determines the morale of the employees. Morale
is the state of mental health. An individual’s morale is high when he is happy with his work,
his surroundings and his fellow-beings. High morale indicates the efficiency of personnel
administration while poor morale reflects its failure. Poor morale is reflected in high rate of
absenteeism, turnover, accident records, grievances and the low level of output.
f) Welfare provisions
The personnel department looks after welfare activities within the organization. When
workers feel that the company has an adequate labor welfare policy, their tendency to
grouse and grumble will disappear. Welfare activities will reduce labor turnover and
absenteeism and will increase the efficiency of the work force.
g) Employee satisfaction.
When employees are satisfied, they work hard and their commitment to the organization
will be increased. Usually, satisfied employees are productive employees.
h) Cost-Effectiveness.
The cost of work performed should be used as a measure of performance only if the
employee has some degree of control over costs.
i) Timeliness.
It means promptness or punctuality. Punctuality is not just limited to arriving at a place at
right time; it is also about taking actions at right time. How fast work is performed is
another performance indicator that should be used with caution. Customers are happy with
timeliness of deliveries.
j) Adherence to Policy.
Deviations from policy indicate an employee whose performance goals are not well aligned
with those of the company. In many cases policies and actions are not consistent. Policy
must be executed uniformly.

k) Industrial relations.
The management of human resources may also improve industrial relations. A business
may consider that a reduction in the number of industrial disputes, days lost through
industrial action, grievance against the business by employees might indicate effective
management.
l) Profitability.
The main aim of most private sector businesses is to make profit. Modern approaches to
HRM suggest that the management of human resources should be geared towards
improving productivity of workers, reducing costs, raising revenue and increasing profit.
Increasing profit may be a result of improvements in HRM. It is widely believed that
profitability is through people. Employees who believe that management is concerned about
them as a whole person - not just an employee - are more productive, more satisfied, more
fulfilled. Satisfied employees mean satisfied customers, which leads to profitability.
18. Specific Challenges of Modern HRM
There are a number of human resource management challenges that need to be addressed as
it is an important function of any organization. These challenges might be environmental
challenges, organizational challenges and individual challenges, etc. And these challenges
are not related to the single dimension; rather they are directed towards multi-dimensional
issues that should be tackled with immediate care. The field of HR management is
undergoing transition because organizations themselves are changing. HR managers who
encounter these challenges use their leadership skills and expertise to avert issues that might
arise from these challenges. Human resource experts (Flippo, 1992; Hall and Jones, 2003)
have identified few challenging problems of HR department:
(a) Changing mix of the workforce. One of the most important challenges currently facing
HR managers is adapting to people who are different. The term we use for describing this
challenge is workforce diversity. Workforce diversity means that organizations are
becoming a more heterogeneous mix of people in terms of gender, age, race, ethnicity, and
gender orientation. Contemporary workforces are having diverse background. Women
participation in the job market is increasing significantly. Women, long-confined to low
paying temporary jobs in Japan, are moving into managerial positions. A growing number
of women seeking employment are likely to affect many aspects of HRM including how a
company recruits workers, work conditions and employee relations. The increase
prevalence of single-parent household and dual-career couples puts tremendous pressure on
women and men to balance their own work, family and personal responsibility. Women are
entering in wide range of occupations such as legal, medical, defense, and business.
Gender-role boundaries are weakening. Older people are predicted to be a larger percentage
of the population. Older employees may be less flexible than younger workers and
motivated by factors other than money. Among the major changes in the mix of personnel
entering the workforce are: increased numbers of minority entering occupations requiring

greater skills, increasing levels of formal education for the entire workforce, more female
employees, more married female employees, and more working mothers(Hall and Jones,
2003).
Diversified workforce is also an opportunity for an organization. Many companies are now
realizing the advantages of a diverse workplace. Unity in diversity is the new business
song. As more and more companies are going global in their market expansions either
physically or virtually (for example, e-commerce-related companies), there is a necessity to
employ diverse talents to understand the various niches of the market. An HR manager
must be able to organize the pool of diverse talents strategically for the organization. He/she
must consider how a diverse workforce can enable the company to attain new markets and
other organizational goals in order to harness the full potential of workplace diversity (
Chan, 2012). To control such instances, a company must formulate and implement strict
rules and regulations.
(b) Changing values of the workforce. New generation workforces are more educated and
they prefer challenging and difficult jobs. Research suggests that new employees tend to
hold inflated and unrealistic expectation about work (Wanous, 1998). High expectation can
produce anger, frustration, disappointment and dissatisfaction if work experiences do not
live up to values and expectations.
(c) Changing demands of employees. The demand of new employees is different from that
of their predecessors. Contemporary employees are not only happy with money; they
demand more freedom and autonomy in the workplace. They are more concerned about
intrinsic motivational factors such as challenging job, recognition and appreciation. They
want more time for leisure, recreation and self-development. They would like to balance
between work life and family life. The comment made by Greenhaus (2009) in this regard is
noteworthy. He said,” Attaining high quality job performance on challenging autonomous
projects may be more important to many employees than receiving a promotion”. Family –
responsive organizations will increasingly provide more flexible work schedule, part-time
employment, opportunities for job sharing and child care arrangement in order to retain
employees who are experiencing extensive work-family conflict.
(d) Changing demands of the environment. Working environment is becoming more

unstable, turbulent and dynamic. Modern working environment is characterized by
globalization, increased competition, government legislation and technological innovations.
New jobs are being created and new jobs require more education and skills. For example, it
has been observed that automation and JIT manufacturing mean that even manufacturing
jobs require more reading, mathematics, and communication skills than before (Dessler,
2013). Thus it is clear that there is a growing emphasis on knowledge workers and therefore
on human capital. Human capital refers to knowledge, education, training, skills and
expertise of a firm’s employees.

(e) Introduction of new technology: New technology requires workers with special skills.
It may lead to retraining or need to recruit workers with specialist skills. For example,
many former typists have become computer operators with the introduction of computer
systems for storage, retrieval and presentation of information. Telecommuting and remote
reporting relationships are becoming the norm rather than an anomaly (Ruth Mayhew,
2010). Flexible work schedules are ways to improve productivity for some employees.
Competition by other firms for workers may affect the supply of labor available to a
business. If competitors offer high wages to workers with specialist skills then a business
may have to raise its wage levels to recruit the staff it needs. Government legislation on
minimum wage, working hours, and equal opportunities has affected the wage costs of
businesses and their recruitment and selection procedures. Business may operate a policy
where they guarantee disabled workers or ethnic minorities for a proportion of jobs.
(f) Changing market. Changes in the purchasing pattern of consumers may mean that the
demand for labor or labor skills have to change. Changes in the economy can also affect
human resource planning. In a recession, a business is likely to reduce its workforce as
demand for its products falls.
(g) Changing goals of business. The goal of business can affect the demand for labor. If a
chemical company, for example, decided that the most effective way to increase profits was
to become more market oriented, this is likely to change the personnel the business needs.
There would be a need for employees with marketing research skills or training in how to
promote products. The move in recent years by Bangladesh Rail, for example, to close
down unprofitable lines has meant fewer workers are required as a result.
(h) Outsourcing. It is the practice of hiring another firm to complete work that is
important and must be done efficient. Outsourcing refers to companies giving work to
independent contractors outside the company rather than to in-house employees.
Outsourcing is a major part of HRM’s role in a company, as many companies choose to hire
freelance workers to complete additional tasks rather than taking on salaried employees in-
house. When outsourcing, HR managers do not need to consider overheads like taxes,
medical insurance, working equipment’s cost or benefits, as these are met by the freelancers
themselves.
(i) Discrimination. HR managers must create a workplace free from any kind of
discrimination. Many countries have laws that make various forms of discrimination in the
workplace illegal, so HR managers have to perform their activities in way that follow both
legal and business standards. Since more employees are aware of their rights, a modern HR
department may need to handle a potential increase in complaints about discrimination.
(j) Conflict resolution. Interpersonal conflict between coworkers as well as disagreement

between employees and supervisor may happen for many reasons. You can say conflicts are
almost inevitable. It is common for HR managers to investigate complaints of verbal and
physical harassment and they must need to resolve conflicts before they become serious or
harmful (Cyprus, 2013). In such a scenario, it is the human resource department which acts
as a consultant and mediator to sort out those issues in an effective manner. They first hear
the grievances of the employees. Then they come up with suitable solutions to sort them
out. In other words, they take timely action and prevent things from going out of hands.
k) Brain Drain: One of the challenges for HRM is the indifference of the key potential
employees from the organization which links with the competitors for higher remunerations
etc. In such cases the organization loses its intellectual property & in many situations the
leaving employees at the higher levels also take with them the potential lower level
employees. This brain drainage is becoming serious issue in the high-Tec companies.
Employee development and engagement, health and safety, recognition, flexible work
timings, work-life balance are some examples of novel approaches that you could use to
retain your employees.
l) Leadership Development and Succession Planning

Leadership development is one of the biggest challenges for human resource management.
It needs to be a critical strategic initiative. HR professionals are expected to provide the
essential structure, processes and tools to select the best and develop the future leaders of
the organization.
The role of the HR manager must parallel the needs of the changing organization.
Successful organizations are becoming more adaptable, resilient, quick to change
directions, and customer-centered. Within this environment, the HR professional must learn
how to manage effectively through planning, organizing, leading and controlling the human
resource and be knowledgeable of emerging trends in training and employee development.
19. Changing role of HRM

The role of human resource management is changing very fast. This change is required in
order to help corporate to achieve their goals. In recent years we have seen that HRM has
undergone many phases. Initially main focus of HRM was on hiring and firing; however in
current corporate scenario HRM has much more responsibilities like relationship building
and legislation role. HR role is now shifting from protector to strategic partner. Nowadays
most of the high performing organizations are flattened with least hierarchy which requires
highly skilled employees to gain competitive edge in market. So HR role has drastically
changed to develop and implement company strategy in order to achieve its goals.
The late 20th and early 21st century saw a number of shifts that suggest changes in the
nature of work in the future. These include the growing use of contingent workers (people
who are hired, as needed, to perform specific tasks, but are not employed by the company),
the use of virtual workers (those who may or may not work for the company but who are
not physically located on the company's premises), and the growing impact of technology
on the need for certain types of employees, which causes increased need in some areas and
declined need in others.
As HRM is concerned with people who work in organization, it becomes very important for
HRM to hire good people, train them, and retain good employees in order to achieve the
organizations long term objectives. In recent years all the above HR roles are being used
strategically and so now HRM is termed as SHRM.The concept of SHRM is discussed in
chapter 4.
20. HR manager- a line or staff

First of all, we should define authority. It consists of the right to make decisions and to give
order concerning the production, sales or finance related behavior of subordinates. In a
sense, all managers are HR managers as they all get involved in activities like selecting,
training, and compensating employees. Yet most firms, now- a-days, have the HR
department headed by a person with requisite qualifications in behavioral sciences. How do
the duties of this HR manager relate to the line managers’ HR duties would be an
interesting question to answer? Line managers have the final responsibility for achieving
the organization's goals. They also have the authority to direct the work of subordinates.
Line authority is represented by the standard chain of command starting with the board of
directors and extending down activities of the organization that is carried out. Staff
managers usually help and advice line managers in achieving organizational goals.
Line managers have total authority over those who report directly to them, but staff workers
have primarily advisory authority. Their function is to create, develop, collect and analyze
shop information, which flows to line workers in the form of advice. HR managers are staff
experts. They assist line managers in areas like recruiting, selecting, training and
compensating. Let us now distinguish between line manager and staff manager. The line
manager is a generalist and staff is myopic. Line manager directs others and staff assists
others. Line managers delegate authority and staff managers serve the authority. Line
managers use sanction while staff managers solve special problems. Line managers have
veto power while staff managers support the line. Line managers take operating decisions,
and staff managers provide ideas to the line. Line managers have the final authority and
staff managers have expertise.
Managing people, in a broader context, is every manager’s business and successful

organizations generally combine the experience of line managers with the experience of HR
specialists while utilizing the talents of employees to their greatest potential. HR managers
have to win the hearts of employees working alongside line managers and deliver results in
a cost-effective manner. HR managers as indicated earlier are assuming a greater role in top
management planning and decision making, a trend that indicates the growing realization
among executives that HRM can make significant contributions to the success of an
organization.

21. Line and Staff Conflict
When both line and staff authorities are included in an organization, it is known as a line
and staff organization. Line and staff organization is a modification of line organization and
it is more complex than line organization. According to the administrative organization,
specialized and supportive activities are attached to the line of command by appointing staff
supervisors and staff specialists who are attached to the line authority. The power of
command always remains with the line executives and staff supervisor guide, advice and
counsel the line executive. Personal secretary to the managing director is a staff official.
Line and staff organization design helps management apply technical expertise where it is
needed while maintaining the relative unity of command. It ensures check and balance. It
also reduces the workload of line executives. The line authority is directly responsible for
the performance of the organization, whereas staff authority supports the line managers.
Different authority relationships basically revolve around line and staff relationships. Line
functions are those that directly influence the accomplishment of objectives of an
organization, while staff functions help the line manager to work effectively and
accomplish organizational objectives. Line managers have the authority to make decisions
and give orders to those lower in the chain of command. In contrast, those who occupy staff
positions merely give advice and support line managers. Staff authority is normally
restricted to immediate assistants. Line and staff managers are supposed to work
harmoniously to achieve the organizational goals. But their relationship is one of the major
sources of conflict in most organizations. Since such conflicts lead to loss of time and
organizational effectiveness, it is always desirable to identify the sources of such conflicts
and initiate necessary action to overcome them. What is a conflict? Conflict refers to some
form of friction, disagreement, or discord arising within a group when the beliefs or actions
of one or more members of the group are either resisted by or unacceptable to one or more
members of another group. The factors that cause conflict between line and staff are
mentioned below:
a. It is very common for line and staff workers to come into conflict. Staff specialists say
line workers avoid and ignore them, and line workers say staff workers lack expertise in the
organization's core work, distract them, and get in their way. Staffs managers allege that
line managers often take decisions without any input from them. Line just informs staff
after taking decisions. This makes staff managers feel that line managers do not need staff.
b. Since the staff generally advises and the line decides, the staff often feels powerless.
Their advice may be accepted or not. Line managers often do not take prompt actions as per
the advice of the staff managers. Staff manager feels their advice will produce miracles
while line manager feels it impracticable. Staff seeks to change and experimentation,
whereas line often desires quo and caution.
c. Line managers may resist an idea because they did not think of it in the first place, which
hurts their ego. The staff is generally younger and educated and hence their ideas may be
more academic and theoretical rather than practical. There is a conflict about the degree of

importance the line and staff as far as the contribution towards the growth of the company is
concerned.
d. Staff often alleges that despite having the best solutions to the problems being faced in
their areas of specialization, they fail to contribute to organizational goals. This is because
the staff lacks the authority to implement the solutions and are unable to persuade the line
managers (who have the authority) to implement them. Staff managers may be resented
because of their specialized knowledge and expertise. The line usually complains that if
things go right then the staff takes the credit and if things go wrong, then the line gets the
blame for it.
e. Line managers often allege that staff managers intrude upon their authority by giving
recommendations on matters that come within their purview. Such encroachments influence
the working of their departments and often lead to hostility, resentment, and reluctance to
accept staff recommendations.
f. Line and staff managers are usually from different backgrounds. Normally line managers
are seniors to staff in terms of organizational hierarchy and levels. On the contrary, staff
managers are relatively younger and better educated. Staff often looks down upon the line.
Such complexes create an atmosphere of mistrust and hatred between the line and staff.
g. Staff managers often weaken the authority and be- little the responsibilities of line
managers. Line managers fear that their responsibilities may be reduced and they even
suffer from a feeling of insecurity.
h. In practice, it is difficult to make a distinction between line and staff authority. Overlap-
ping and duplication of work creates a gap between the authority and responsibility of line
and staff. Each tries to shift the blame to the other. Failure to understand authority causes
misunderstandings between the line and staff. This leads to encroachment and creates
conflict.
Management textbooks advise resolving the line-staff conflict by explicitly recognizing the
mutual dependency of the two, making it clear what the staff role is, de-emphasizing any
controlling elements of the staff role, having staff deliberately set out to win the confidence
and trust of line workers, and emphasizing the staff role as part of the team. Management
experts believe that organizations should minimize their investment in staff positions,
because they increase costs while not directly contributing to the organization's goals.
Increasingly organizations, especially smaller ones, are beginning to move away from line-
staff structures to structures that are more hybrid or matrixes.

A certain amount of conflict is inevitable and even desirable. But extreme and prolonged
line-staff conflict can be very dangerous to the organization. To overcome the line and staff
conflict, it is necessary for an organization to follow certain approaches:
Clarity in relationships: Duties and responsibilities of both line and staff should be clearly
laid down. Relationships of staff with the line and their scope of authority need to be clearly
defined. Similarly, line managers should also be made responsible for decision making and
they should have corresponding authority for the same. Line should enjoy the freedom to
modify, accept, or reject the recommendations or advice of the staff.
Proper use of staff: Line managers must know how to maximize organizational efficacy by
optimizing the expertise of staff managers. They need to be trained on the same. The line
should give due consideration to the staff advice and should follow the recommendations if
they are in the best interests of the organization. • Similarly, staff managers should also help
the line to understand how they can improve their activities.
Completed staff work: Completed staff work denotes a careful study of the problem,
identifying possible alternatives for the problem, and providing recommendations based on
the compiled facts. This will result in more staff work and pragmatic suggestions. Holding
staff accountable for results: Once staff becomes accountable, they would be cautious about
their recommendations. Line also would have confidence in staff recommendations, as the
staff is accountable for the results. Staff should appreciate and understand the problems of
line. Staff should recognize and overcome resistance to change on the part of line.
22. Why Should HR & Line Managers Work Together?

HR manager and line manager are supplementary and complementary to each other. For
example, in recruiting and hiring, it is usually line manager’s responsibility to specify the
qualifications employees needed to fill specific positions. Then HR manager takes over. HR
manager develops sources of qualified applicants and conducts screening interview and
administers tests. Then HR managers refer the best candidate to the line manager, who
selects the right one for the organization. HR manager and line manager represent links in
the chain of organizational success. The primary reason HR manager and line manager
should work together because of their vested interest in ensuring the organization’s success.
a) Through working together, line management becomes more proficient in tactical human
resources functions. This frees up time for human resources professionals to devote
more time to strategic HR management.
b) HR manager and line manager should communicate regularly and frequently to
determine the skills and qualifications required for flawless operation of department
functions. Whenever there is a vacancy in a line manager’s department, an HR recruiter
or employment specialist and the line manager review the job description for accuracy
and completeness. During the recruitment and selection process, HR manager advises

line managers on how to identify qualified candidates and assess existing department
staff capabilities.
c) Strategic planning between HR manager and line manager involves reviewing
projections concerning future business demands to determine whether to train current
employees to prepare them for promotion or to recruit candidates with higher level
skills to augment the current employee knowledge base. By working together on
immediate and future staffing needs, HR manager and line manager benefit from
reduced cost per hire and turnover. In addition, the organization benefits from
appropriate succession planning and adequate staffing.
d) HR manager and line manager should work together to ensure that the organization
maintains a consistent approach to performance management. Inconsistencies within an
organization’s performance management system negatively impact employee job
satisfaction.
e) Workplace conflict is inevitable among the employees because of different cultures,
work styles and personalities. When conflicts arise, line managers typically seek the
advice of HR manager in resolving issues between employees or issues between
employees and their managers. A positive working relationship between HR and line
management facilitates easier handling of workplace investigations and mediating
differences between staff.
23. Human Resource - Asset or Liability or Expense
Introduction
There is a debate whether a human resource is an asset or expense or liability. Before
answering to this question, let us define asset. An asset is a resource with economic value
that an individual, corporation or country owns or controls because it will provide future
benefit. An asset is an item of economic value that is expected to give way a benefit to the
owning entity in future periods. Assets are reported on a company's balance sheet, and they
are bought or created to increase the value of a firm. Employees are a company's
greatest asset - they're the prime source of competitive advantage. Leading organizations
want to attract and retain the most talented people. .
Employee as Asset
Many organizations strongly believe that their employees are their greatest assets.
Employees as an asset, mean that an employer invests to develop and maintain the skills of
those employees. They provide generous training allowances and work with their
employees to choose courses and programs that not only benefit the company but develop
the value of the person as a whole. People are also called human capital. People are
not assets like tangible fixed assets such as equipment. They are the intangible asset having
so many soft skills. Human capital includes talent and ability of the workforce. People are
tangible but their skills and talents are intangible. The skill set of a company's workers,
more than the workers themselves, is an asset, and since abilities can't be touched, it's an
intangible asset. Employees' skills undoubtedly have future economic benefit.
Employees are assets in the sense that, the present value of their future work are worth more
than the present value of their compensation. An influential paper in the Harvard Business
Review in 2004 noted that the skills and talents of a company's workforce constitute an
intangible asset -- and that such assets "are worth far more to many companies than their
tangible assets." If a business has talented employees, it might well agree with this
assessment. Employees are assets because productivity is through people. High-performing
and innovative employees are the foundations of productivity. Employee skills and
knowledge must be continually updated to maintain productivity. Top managers must
create a productive working environment to make people valuable assets. It is about
creating a productive working environment where employees can share ideas, tap into each
other’s knowledge. When employees are not being treated as assets, they become very
unhappy or dissatisfied in their jobs. Employee turnover can be minimized by treating
people as the valuable asset.
Employees as liabilities
Few employees are much more like liabilities because organizations have to pay them more
than the value they generate to justify their compensation. When employee's contribution is
less than the amount of compensation they receive from an organization, people are
considered liabilities or company's distress. But unfortunately, human resources like other
tangible assets is not in the balance sheet.
Employees as expenses
Many companies treat their employees as just another expense. They try to reduce them in
every way possible. They try to keep the wages as low as possible. They think training is
not absolutely necessary. Many employers, especially the USA, consider training is an
expense. Regardless of what employers have invested in training their employees, their
skills ultimately belong to them, not the organization. An organization doesn’t always own
them. Employers in the USA are reluctant to arrange training and development program for
the employees because an employee may switch to other companies. Thus employees are
often trained in specialized functions resulting in narrow career path. Since jobs are not
secured, employees have freedom to switch frequently, so training is not considered as an
investment rather an unnecessary expense. Job hopping is very popular in the USA; hence it
appears that employers have very little commitment to training.

Discussion Questions
1. Define Human Resources Management. How does HRM affect all managers?
2. “Employee is the key to productivity”. Justify your answer.
3. “Assets make things possible but people make things happen”. Do you agree? Why?
Why not?
4. Why is managing employee at work so complex?
5. How is HR management related to the management process?
6. “Productivity is through people”. Explain.
7. What guidelines would you recommend for gaining competitive advantage through
people?
8. Discuss the following statement: “In many ways, all managers are and must be HR
managers.”
9. A HR manager must be effective and efficient. Why?
10. “Management is getting things done with and through others.” Do you agree or
disagree? Why?
11. What are the objectives of HRM?
12. Distinguish between proactive and reactive approach to HRM.
13. What are the challenges faced by HRM?
14. “HRD has grown importance in globalization”. Explain.
15. Discuss the changing role of HRM.
16. Distinguish between personnel management and modern HRM. To what extent are the
differences practical?
17. What is the single most critical “people’ problem facing managers today? Give specific
support for your position.
18. What do you mean by productivity? How would you ensure productivity through
people?
19. How would you maximize competitive advantage through people?
20. By using specific examples, discuss the relevance of human resource management
functions in the situation of a developing country.

Case
Inside Summit Logistics
“A funny thing happens when you take the time to educate the employees, pay them well,
and treat them as equals. You end up with extremely motivated and enthusiastic people.” -
stated by Mr. A. A. Khan, CEO, Summit Logistics.
It takes considerable time and effort to hire employees who “fit” the company’s culture and
values. This effort means additional recruiting and selection attention by HR staff and
operating managers. The company also pays higher wages than many retailers and offers a
competitive benefits package. Incentive programs allow some hourly employees to earn up
to Tk, 5000 which may be close to store manager’s starting rates.
The company also spends considerable time training its-employees, averaging more than
200 hours per year, compared to the seven hours of training typical at other retailers.
Extensive use of internal promotions demonstrates the company’s commitment to providing
career opportunities for employees.
At Container Service Provider locations managers are expected to keep in constant

communication with employees, help out in various jobs in the stores and be more team
leaders than “supervisors.” Yearly, HR professionals have responsibilities in some areas of
store operations, so that they maintain a sense of what employees and managers face daily
and weekly.
All of these activities take considerable effort, but the payoffs make them worthwhile. Sales
at the firm have increased 20-25% each year, and average dollars-per-customer has grown
from Tk2000 to almost Tk5000. One HR measure, the employee turnover rate, has averaged
15-25% yearly, compared to the 100%-plus rate common in retail jobs. Obviously, the
Container Store has the “right package” that enables its employees to be significant
contributors to its success.
Questions
1. Discuss how the culture of the Container Service provider is “made” by the HR activities
and practices used.
2. Tell what recommendations you would make in this regard to the executives where
you work.

CASE: Unilever (Bangladesh)
Unilever has an excellent national and international reputation and employees are proud to
work for the firm. But the company demands complete loyalty from its employees and even
tries to influence their behavior and appearance after work.
Samia Hoque was a bright young woman who had been working for Unilever for over 10
years. She has highly respected by her colleagues, did an excellent job as a divisional sales
manager, and it was generally agreed that she had excellent potential for advancement. For
2 months Samia Hoque had dated Mr.Imrul Kayes who worked in the toiletries division of a
competing company. One day, Rupok Malhotra, Samia’s boss, approached her about this
matter, stating that there may be a possible conflict of interest in the association with an
employee from the competitor. He made it clear that Unilever has an unwritten policy that
demands (and rewards) complete loyalty from all its employees.
Shortly after, this emotional confrontation with her boss, Samia Hoque was transferred to a
non-managerial position without any loss in pay. She also noted that even her friends at
Unilever tried to avoid her. But Samia felt very strongly that the company had no business
suggesting whom she can and cannot see after working hours; as a result, she quit her job.
1. Can a company demand loyalty to an extent indicated in the case? Would your answer be
different if Samia had access to important company trade secret?
2. What would you have done in Samia Hoque’s position?
3. What would you have done in the supervisor’s position?

Career: Human Resources Manager
A Day in the life of a Human Resources Manager

Human resource managers handle personnel decisions, including hiring, placement,
training, appraising performance and compensation. Their decisions are subject to some
oversight. It is true that physical resources—capital, building, technology, equipment—are
important to run the organization. But it is truer that the quality and quantity of their output
is directly related to the quality and commitment of their human resources. To enhance
productivity human resources professionals take different measures in order to make
appropriate matches between support staff and producers, between assistants and managers,
and between coworkers. This multiplicity of tasks of a HR manager requires individuals
with strong organizational skills who can quickly shift from project to project and topic to
topic without becoming overwhelmed. The most difficult feature of the human resources
professional’s job is handling the dirty work involved in the staffing of a company: dealing
with understaffing, resolving disputes between two mismatched personalities, firing
employees, informing employees of small (or nonexistent) bonuses, maintaining an ethical
culture, and punishing irresponsible employees. Performing these tasks can be
disheartening for human resources managers who are supposed to support and assist
employees. Many human resources managers feel that employees dislike or fear them
because of this ‘unpopular role’. Academic requirements for a career in human resources
vary, but most employers prefer that each candidate have a bachelor’s degree. Master’s
degrees in human resource management, industrial relations, organizational development,
organizational behavior, and business administration are also considered worthwhile. Each
company has its own internal protocols, and most new hires are trained in them when they
begin.

References
Alvin Chan (2012), The Challenges of Human Resource Management, Academy of
Management Journal, 38, University Press.
Beardwell, Holden and Claydon. (2004), Human Resource Management, A contemporary
Approach, 4rth Edition, Prentice Hall.
Briscoe, D.R.(1982). Human resource management has come of age. The Personnel
Administrator, 26.
Cascio, W. F. (1993). Downsizing: What do we know? What have we learned? Academy of
Management Executive, 7(1).
Cyprus, S. (2013). What are the Most Common Human Resources Issues? Conjecture
Corporation, London.
Dessler, G (2003), Prentice-Hall of India, New Delhi.
Drucker, P, (1997), The coming of the New Organizations, HBR, January.
French L. 1997, Human Resource Management, 3rd Edition Houghton muffin Company
USA, pp 79
Gomez, Meija (1998). Human Resource Planning, Pearson Education Canada.
Gordon, J.R (1985), Human resource Management: A Practical Approach, Allyn and
Bacon, Boston.
Greenberg J. and Baron A. 1993, Behavior in organizations, 7th edition Prentice Hall
Publishers, International Journal of Manpower 20, http:/www.emerald-library.com pp 4-5
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productivity and corporate performance, Academy of Management Journal, 38, University
Press.
Hall,D and Jones, R (2003), Business Studies, Causeway Press ltd, London. .
Jones, S (2012), HRD Dissertations, Prentice Hall, London Press. London
Kane, Crawford and Grant, (1999), Barriers to Effective HRM, Electronic Article
International Journal of Manpower 20, 8 http:/www.emerald-library.com pp 16
Kane, Crawford and Grant, 1999, Barriers to Effective HRM, Electronic Article.
Lado. A and Wilson, M.C (1994), Human Resource Systems and Sustained Competitive
Advantage, Academy of Management review, October.
Lawler, E.E. & Mohrman, S.A. (1985) Quality Circles: After the fad. HBR.
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resource Management, 123.
Newstrom , J. W. Newstrom and Keith Davis (2002), Organizational Behavior : Human
Behavior at Work, McGrawhill, New York.
Pfeffer, J, (1998) Human Equation, Harvard Business School Press, Boston.
Pfeffer, J, (2005), Competitive Advantage through people, HBS Press.
Prahalad, C. K, (1983), the Core Competency of the Corporation, HBR.
Robbins, S.P and Coultier, M (2005), Management, 8th Edition, Pearson Education,Inc,
Sandy Reed, and Myrna L. Gusdorf, (2010). The Evolution of Human Resource
Management,http://www.shrm.org/Education/hreducation/Pages/TheEvolutionofHum
anResourceManagement.aspx
Schuler, R. S. (1990). Repositioning the human resource function: Transformation or
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Smriti, C. (2014), Features of Human resource Management,
www.yourarticlelibrary.com/management/10.
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Alan Price (1997), Human Resource Management in a Business Context,

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Chapter

The effective management of human resources is becoming an increasingly vital concern in

Ikbal Human Resource Management- Chapter 01

2. Importance of Human Resources

Human Resource Management- Chapter 01

Productivity is basically people-based. It is for this reason; the developing countries in

Human Resource Management- Chapter 01

4. Competitive Advantage through Human Resource

Ikbal Human Resource Management- Chapter 01

High and lucrative wages

Human Resource Management- Chapter 01

Employee empowerment and participation

Training and development of skills

Ikbal Human Resource Management- Chapter 01

Treat people with respect and dignity

Promotion from within

Human Resource Management- Chapter 01

5. Historical Evolution of HRM

Ikbal Human Resource Management- Chapter 01

The historical evolution of HRM can be shown in the following diagram:

Ikbal Human Resource Management- Chapter 01

According to Flippo, HRM is “planning, organizing, directing and controlling of the

Human Resource Management- Chapter 01

HRM draws on a number of related disciplines, such as Industrial Psychology, Sociology,

Ikbal Human Resource Management- Chapter 01

Human Resource Management- Chapter 01

Ikbal Human Resource Management- Chapter 01

10. Personnel Management VS Human Resource Management

a) Personnel management is a traditional approach to managing people in the organization.

Ikbal Human Resource Management- Chapter 01

11. The Philosophy of Human Resources Management

According to the Merriam-Webster on-line dictionary, philosophy is the study of general

a) Labor is viewed as technical factor-a factor of production. They are treated as a

12. Basic Principles of Human Resources Management

Human resource management (HRM) or management of human capital is extremely

The fundamental principles of HR management (Jucious, 1992; Memoria, 1998; Flippo,

Ikbal Human Resource Management- Chapter 01

Human Resource Management- Chapter 01

13. Objectives of Human Resources Management

Ikbal Human Resource Management- Chapter 01

The objectives of human resources management can be described as follows:

Human Resource Management- Chapter 01

Ikbal Human Resource Management- Chapter 01

It also contributes to professional growth in various ways such as :

Human Resource Management- Chapter 01

15. Functions of HRM

Ikbal Human Resource Management- Chapter 01

Human Resource Management- Chapter 01

16. Approaches to HRM

Human Resource Management- Chapter 01

17. Indicators to measure the Efficiency of the HR Department

The HR manager is concerned with staffing, motivating, maintaining good employer-

a) Recruitment cost report

b) Labor productivity report

c) Labor turnover report

Human Resource Management- Chapter 01

18. Specific Challenges of Modern HRM

Ikbal Human Resource Management- Chapter 01

(d) Changing demands of the environment. Working environment is becoming more

Human Resource Management- Chapter 01

(j) Conflict resolution. Interpersonal conflict between coworkers as well as disagreement

l) Leadership Development and Succession Planning

19. Changing role of HRM