UNIT -1 INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

STRUCTURE

1. Learning Objectives
2. Introduction
3. Nature of human resource management
4. Scope of human resource
5. Need and importance of HRM
6. Functions of HRM.
7. Summary
8. Key Words/Abbreviations
9. Learning Activity
10. Unit End Questions (MCQ and Descriptive)
11. Suggested Readings

LEARNING OBJECTIVES

After studying this unit, you will be able to:

 Understand Nature and scope of Human resource management
 State the need and importance of HRM
 Identify functions of HRM

INTRODUCTION

Human resource management (HRM) is an approach to the management of people, based on four
fundamental principles. First, human resources are the most important assets an organisation has and
their effective management is the key to its success. Second, this success is most likely to be
achieved if the personnel policies and procedures of the enterprise are closely linked with, and make
a major contribution to, the achievement of corporate objectives and strategic plans. Third, the
corporate culture and the values, organisational climate and managerial behaviour that emanate from
that culture will exert a major influence on the achievement of excellence. This culture must,
therefore, be managed which means that organisational values may need to be changed or reinforced,
and that continuous effort, starting from the top, will be required to get them accepted and acted
upon. Finally, HRM is concerned with integration - getting all the members of the organisation
involved and working together with a sense of common purpose.

NATURE OF HUMAN RESOURCE MANAGEMENT

HRM has the following features:

1. A part of Management Disc ipline:

HRM is a part of management disc ipline. It is not a discipline in itself but is only a fie ld of
study. HRM, being a part of manage ment process, draws heavily from ma nageme nt concepts,
princ iples and techniques and apply these in the manageme nt of human resources.

2. Universal Existence:

HRM is pervasive in nature. It is present in a ll enterprises. It permeates all leve ls of

manage ment in an organization.

3. Concerned with People:

HRM is all about people at work, both as individua ls and groups. It tries to put people on
assigned job in order to produce goods results. The resultant gains are used to reward people
and motivate them towards further improve ment is productivity.

4. Action oriented:

HRM focuses attention on action, rather than on record keeping, wr itten procedures or rules.
The problems of emplo yees are solved through rationa l polic ies.

5. Directed towards Achieve ment of O bjectives:

HRM is d irected towards achieveme nt of orga nizational objectives by providing tools and
techniques of mana ging people in the organization effective ly.

6. Integrating Mechanis m:

HRM tries to build and ma inta in cordial re lation between people work ing at different leve ls
in the organization. It tries to integrate human assets in the best possible manner for
achieving organizationa l goals.
7. Development Oriented:

HRM inte nds to develop the full potential of e mplo yees. The reward structure is turned to the
needs of employees. Training is provided to improve the skill of e mployees. Every attempt is

8. Continuous Process:

HRM is not a one short deal. It cannot be practiced only one hour each day or one day a
week. It requires constant alertness and awa reness of human re lations and the ir importance in
every day operations.

9. Comprehensive Function:

HRM is concerned with managing people at work. It covers all types of people at all le vels in
the organizatio n. It applies to workers, supervisors, officers, manager and other types of
personnel.

SCOPE OF HUMAN RESOURCE

1. Personnel Aspect
Human Resource Planning – It is the process by which the organization identifies the number of jobs
vacant.
Job Analysis and Job Design – Job analysis is the systematic process for gathering, documenting, and
analyzing data about the work required for a job. Job analysis is the procedure for identifying those
duties or behaviour that define a job.

Recruitment and Selection – Recruitment is the process of preparing advertisements on the basis of
information collected from job analysis and publishing it in newspaper. Selection is the process of
choosing the best candidate among the candidates applied for the job.

Orientation and Induction – Making the selected candidate informed about the organization’s
background, culture, values, and work ethics.

Training and Development – Training is provided to both new and existing employees to improve
their performance.
Performance Appraisal – Performance check is done of every employee by Human Resource
Management. Promotions, transfers, incentives, and salary increments are decided on the basis of
employee performance appraisal.

Compensation Planning and Remuneration – It is the job of Human Resource Management to plan
compensation and remunerate.

Motivation – Human Resource Management tries to keep employees motivated so that employees put
their maximum efforts in work.

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

3. Industrial Relation Aspect –

HRM works to maintain co-ordinal relation with the union members to avoid strikes or lockouts to
ensure smooth functioning of the organization. It also covers - joint consultation, collective
bargaining, grievance and disciplinary procedures, and dispute settlement.

NEED AND IMPORTANCE OF HRM

Some of the reasons for need of human resource management are: 1. For Good Industrial Relations 2.
Create Organizational Commitment 3. Meeting with Changing Environment 4. Change in Political
Philosophy 5. Enhanced Pressure on Employees and 6. Meeting Research and Development
Requirements.

Human resource management tries to create a better understanding between management and
employees.

It assists employees in attaining individual and organizational goals. This approach has been ga ining
the attention of management professionals in the last decade or so.

1. For Good Industrial Relations:

There is large spread unrest, labour- management disputes, lack of trust in each other, increasing
expectations of workers, growing of militancy in trade unions etc. These factors have generated a gap
among workers and managements. Both sides are blaming of exploitation by the other side. In the
absence of cordiality in an organization, the performance of workers is adversely affected.

HRM approach is needed to bring proper understanding among workers and management. The
workers are trained and developed to meet their individual and organizational objectives. The
workers are made to understand that various managerial actions will assist them in achieving their
aspirations and organization’s goal.

2. Create Organizational Commitment:

There is a humanization of work environment in industrially advanced countries like Japan, U.S.A.,
and Germany etc. Globalization of economy has exposed Indian industries to international
competition. An improvement in efficiency and quality of work can come only when workers
develop organizational commitment. HRM approach helps in creating a sense of pride for the
organization among the employees.

3. Meeting with Changing Environment:

The business environment is changing rapidly. Technological improvements have revolutionized

production processes. Automation has been introduced in office operations. Good communication
methods have revolutionized important areas of business.

Therefore, there is a need to cope with new and changing situation. The operational efficiency of
workers must cope up with a revolutionary change in the technology which necessitates a new
approach to manpower.

4. Change in Political Philosophy:

Political philosophy has also undergone a substantial change all over the world. The new approach is
to develop human resources properly for making their better use. In India, Central Government has
created a separate ministry as Human Resource Development and put it under a Senior Cabinet
Minister.

This shows the importance given to human resources in India, which opened up a door for a fresh
approach to human resource development in the industrial sector too.
5. Enhanced Pressure on Employees:

The technological innovations have made possible the use of sophisticated machines. The
installation, monitoring of machines, maintenance and controlling of operations etc., require large
number of trained and skillful personnel.

Technicians, repairers and service people are a lso necessary. The more the technical development
and automation, the more would be the dependence on human beings. There should, therefore, be
greater need for humane approach to manpower. Similarly, use of more capital- intensive methods
would result in greater productivity of men necessitating greater motivating and greater human
resources approach to management.

6. Meeting Research and Development Requirements:

Fresh initiatives and emphasis on research and development in the realm of industry also led to a new
policy of human resource development to cope with the increasing demand for technically capable
people. As a result of this, a need arose for a new approach to human resources.

Importance of Human Resource Management:

Human resources are the valuable assets of the corporate bodies. They are their strength. To face the
new challenges on the fronts of knowledge, technology and changing trends in global economy needs
effective human resource management. Significance of HRM can be seen in three contexts :
organizational, social and professional.

Organization Significance:

HRM is of vital importance to the individual organization as a means for achieving their objectives.

It contributes to the achievement of organizational objectives in the following ways:

1. Good human resource practice can help in attracting and retaining the best people in the
organization.

2. Developing the necessary skills and right attitudes among the employees through training,
development, performance appraisal, etc.

3. Securing willing cooperation of employees through motivation, participation, grievance handling,

etc.
4. Effective utilization of available human resources.

5. Ensuring that enterprise will have in future a team of competent and dedicated employees.

Social Significance:

Social significance of HRM lies in the need satisfaction of personnel in the organization. Since these
personnel are drawn from the society, their effectiveness contributes to the welfare of the society.
Society, as a whole, is the major beneficiary of good human resource practice.

i. Employment opportunities multiply.

ii. Eliminating waste of human resources through conservation of physical and mental health.

iii. Scare talents are put to best use. Companies that pay and treat people well always race ahead of
others and deliver excellent results.

Professional Significance:

Professional significance of HRM lies in developing people and providing healthy environment for
effective utilization of their capabilities.

This can be done by:

1. Developing people on continuous basis to meet challenge of their job.

2. Promoting team- work and team-spirit among employees.

3. Offering excellent growth opportunities to people who have the potential to rise.

4. Providing environment and incentives for developing and utilizing creativity.

FUNCTIONS OF HRM

The definition of HRM is based on what managers do. The functions performed by managers are
common to all organizations. For the convenience of study, the function performed by the resource
management can broadly be classified into two categories, viz.

(1) Managerial functions, and

(2) Operative functions
 (1) Managerial Functions:
 Planning:
Planning is a predetermined course of actions. It is a process of determining the organisational goals
and formulation of policies and programmes for achieving them. Thus, planning is future oriented
concerned with clearly charting out the desired direction of business activities in future. Forecasting
is one of the important elements in the planning process. Other functions of managers depend on
planning function.

 Organising:
Organising is a process by which the structure and allocation of jobs are determined. Thus,
organising involves giving each subordinate a specific task establishing departments, delegating
authority to subordinates, establishing channels of authority and communication, coordinating the
work of subordinates, and so on.

 Staffing:
TOs is a process by which managers select, train, promote and retire their subordinates This involves
deciding what type of people should be hired, recruiting prospective employees, selecting employees,
setting performance standard, compensating employees, evaluating performance, counselling
employees, training and developing employees.

 Directing/Leading:
Directing is the process of activating group efforts to achieve the desired goals. It includes activities
like getting subordinates to get the job done, maintaining morale motivating subordinates etc. for
achieving the goals of the organisation.

 Controlling:
It is the process of setting standards for performance, checking to see how actual performance
compares with these set standards, and taking corrective actions as needed.

(2) Operative Functions:

The operative, also called, service functions are those which are relevant to specific department.
These functions vary from department to department depending on the nature of the department
Viewed from this standpoint, the operative functions of HRM relate to ensuring right people for right
jobs at right times. These functions include procurement, development, compensation, and
maintenance functions of HRM.
A brief description of these follows:

 Procurement:
It involves procuring the right kind of people in appropriate number to be placed in the organisation.
It consists of activities such as manpower planning, recruitment, selection placement and induction or
orientation of new employees.

 Development:
This function involves activities meant to improve the knowledge, skills aptitudes and values of
employees so as to enable them to perform their jobs in a better manner in future. These functions
may comprise training to employees, executive training to develop managers, organisation
development to strike a better fit between organisational climate/culture and employees.

 Compensation:
Compensation function involves determination of wages and salaries matching with contribution
made by employees to organisational goals. In other words, this function ensures equitable and fair
remuneration for employees in the organisation. It consists of activities such as job evaluatio n, wage
and salary administration, bonus, incentives, etc.

 Maintenance:
It is concerned with protecting and promoting employees while at work. For this purpose, virus
benefits such as housing, medical, educational, transport facilities, etc. are provided to the employees.
Several social security measures such as provident fund, pension, gratuity, group insurance, etc. are
also arranged.

It is important to note that the managerial and operative functions of HRM are performed in
conjunction with each other in an organisation, be large or small organisations. Having discussed the
scope and functions of HRM, now it seems pertinent to delineate the HRM scenario in India.

SUMMARY

Human Resource Management (HRM) is the function within an organization that focuses o n
recruitment of, management of, and providing direction for the people who work in the organization.
HRM is moving away from traditional personnel, administration, and transactional roles, which are
increasingly outsourced. HRM is now expected to add value to the strategic utilization of employees
and that employee programs impact the business in measurable ways. Effective HRM enables
employees to contribute effectively and productively to the overall company direction and the
accomplishment of the organization's goals and objectives.

KEY WORDS/ABBREVIATIONS

 Ability: A competence to perform an observable behavior or a behavior that results in an

observable product.
 Compliance: Adherence to laws, court decisions, regulations, executive orders, and other
legal mandates governing affirmative action and equal employment opportunity.
 Skill: A present, observable competence to perform a learned act.
 Work behavior: Any activity performed to achieve the objectives of the job. Work behaviors
involve observable (physical) components and unobservable (mental) components. A work
behavior consists of the performance of one or more tasks. Knowledge, skills, and abilities are
not behaviors, although they may be applied to work behaviors.
 HRD – Human Resources Development
 HRM – Human resource Management

LEARNING ACTIVITY

1. What functions does a human resource department normally perform?

……………………………………………………………………………………………..……
…………………………………………………………………………………………………..

2. With business going global and competition becoming intense today HR has travelled a long way
from its conventional role as a support function to being a strategic business partner in the
present technology leveraged era. Discuss this statement by citing suitable examples from your
own organization.

……………………………………………………………………………………………..……
…………………………………………………………………………………………………..

UNIT END QUESTIONS (MCQ AND DESCRIPTIVE)

A. Descriptive Types Questions

1. Define HRM? What are its functions?
2. Elaborate about the nature of HRM and its relevance in present scenario.
 3. Explain the scope of HRM
4. State need of HRM in organization.
5. Write a short note on importance of HRM.

B. Multiple Choice Questions

1. Human Resource Management (HRM) functions are broadly classified into managerial
functions and operative functions. The basic managerial functions of HRM are
a. Planning, organizing, directing and controlling
b. Job analysis, human resource planning, job specification and directing
c. Induction, human resource planning, job analysis and controlling
d. Induction, planning, organizing and recruitment

2. ________ are the resources that provide utility value to all other resources.
a. Men
b. Material
c. Money
d. Machinery

3. Identify the managerial function out of the following functions of HR managers.

a. procurement
b. development
c. organizing
d. performance appraisal

4. Which of the following is an example of operative function of HR managers?

a. planning
b. organizing
c. procurement
d. controlling
5. The scope of human resource management includes
a. procurement
b. development
c. compensation
 d. All of the above

Ans wers:
1-a, 2-a, 3-c. 4-c, 5-d

SUGGESTED READINGS

 Aswathappa, K. (2002). Human Resource Management. New Delhi: Tata McGraw-Hill.

 Dessler, G. (2012). Human Resource Management. New Delhi: Prentice-Hall of India.
 Rao, V.S.P. (2002). Human Resource Management: Text and cases. New Delhi: Excel Books.
 Decenzo, A. & Robbins P Stephen. (2012). Personnel/Human Resource Management. New
Delhi: Prentice-Hall of India.
 Ivancevich, M John. (2014). Human Resource Management. New Delhi: Tata McGraw-Hill.
 Mamoria, C.B. (2002). Personnel Management. Mumbai: Himalaya Publishing House.