Human Resource Management 5

Unit I: Introduction to Human Resource Management

Notes
Structure
1.1 Introduction
1.2 The Concept, Definition, Objectives and Significance of Human Resource
Management (HRM)
1.3 Functions of HRM
1.4 HR Policies
1.5 Challenges Faced by HRM
1.6 Changing Role of HRM
1.7 Summary
1.8 Check Your Progress Questions
1.9 Further Reading

Objectives
After reading this unit, you should be able to:
• Understand the concept and definition of human resource management and
how personnel management is different from human resource management
• Know the objectives and significance of HRM
• Know both the managerial and operative functions of HRM
• Understand the basics of HR policies
• Know the HR challenges before managers
• Understand the changing role of HRM

1.1 Introduction
You know that most of the problems in organisations are human and social, rather
than physical, technical or economic. You also know that it is not a mass of machines
and technical processes but a body of men that needs special attention, if the
organisation is to survive and flourish. That is, perhaps, why Akio Morita, the founder
of Sony Corporation once remarked that there is no magic in the success of Japanese
companies, in general, and Sony, in particular. The secret of their success lies in the
way they treat their employees. They view employees as the most valuable assets
of their companies, because it is the employees who supply the organisation with
their work, talent, creativity and drive. It is perhaps again for this reason that once a
company president remarked, “…I do not know of any major project backed by good
ideas, vigour, and enthusiasm that has been stopped by a shortage of cash. I do know
of industries whose growth has been partly stopped or hampered because they can’t
maintain an efficient and enthusiastic labour force, and I think, this will hold true even
more in future.”

In today’s highly volatile environment that triggers an avalanche of changes, only

those managers will survive who can best manage change and, for that, they must have
committed and devoted employees who do their jobs as if they are the owners of the
company. And in order to create such a scenario, managers need to make appropriate
use of techniques in the process of procurement, development, compensation,
integration and maintenance of employees. It is here that human resource management
steps in.

Since human resource management is the management of employees’ skills,

knowledge, abilities, talents, values, beliefs, attitudes, motivation, creative abilities, etc.,
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Notes it is essential that you should know the fundamentals and intricacies of this specialised
area of management.

1.2 The Concept, Definition, Objectives and Significance of Human

Resource Management
The Concept
The field of management of human resources, as a subject of study, is of relatively
recent origin. However, the concepts upon which recent management theory is based
have their roots in history. The status of labour prior to the industrial revolution was
extremely low and the human relationships between the employer and his employees
were characterised by “slavery”, “serfdom” and the “guild system”. Since slavery was
based on negative incentives, it proved to be ineffective as an economic system and
also as a system of employment. It was, therefore, replaced by serfdom in the feudal
system. The serfs were considered to be better than slaves as the former increased
productivity and needed less supervision. But with the growth of manufacturing and
commercial enterprises as prevailing economic forces, serfdom too disappeared
by the end of Middle Ages. This led to the development of the guild system involving
the master craftsman (the owner), the journeyman (the traveling worker) and the
apprentice. This marks the beginning of the management of human resources,
because this involved selection, training and development of workers, and symptoms
of collective bargaining over wages and working conditions. Since then, the approach
to managing human resources is undergoing a revolutionary change. Now the focus
is changing to ensure congruence between organisational objectives and people’s
aspirations as a strategy to motivate them.

Development of Human Resource Management Since 1915

At this point of discussion, you should also have a brief idea about the stages in the
development of human resource management since 1915. J. Berridge has classified
the evolution of human resource management into the following stages:

i) Welfare Stage (1915 to 1920s) - This stage involved provisions for welfare facilities.
Welfare Officers were also appointed in some factories during this stage.

ii) Personnel Administration Stage (1930s) - During this stage, activities like
recruitment and selection, basic training and record-keeping, etc., started taking
place in factories.

iii) Developing Stage (1940s and 1950s) - A whole range of personnel activities
emerged during this stage.

iv) Mature Stage of Personnel Management (1960s and 1970s) - During this stage,
personnel activities like manpower planning, OD, management development,
etc., came to the forefront. Personnel management not only got increasingly
professionalised, but also got sophisticated.

v) Human Resource Management, Phase I (1980s) - During this period, HR and

business strategy were integrated to evolve strategic human resource management
approaches. Trade unions became less powerful. Hence, there was less focus
on industrial relations. HR managers became more business and management-
oriented. HR Directors started getting represented on corporate boards.

vi) Human Resource Management, Phase II (1990s and onward) - Since 1990s,
more emphasis is being laid on processes like culture management, team work,
learning organisations, empowerment, more flexible and delayered organisations,
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downsizing, strategic approach, evolving coherent HR policies. Also, borrowing and Notes
emulating the best practices are some of the other hallmarks of this stage.

In our country, since the 1990s, there is emerging a new human resource
management on account of the initiation of the process of globalisation and
liberalisation. As a result, the form and content of capitalist relations between the
various factors of production are undergoing a sea-change, leading to the emergence of
a new era of human resource management.

Definition of Human Resource Management

In the context of an individual enterprise, the term, ‘human resource’, represents the
total inherent abilities and acquired knowledge, skills as exemplified in the talents and
aptitude of its employees. Human resources are the human capital of an organization.
In so far as human resource management is concerned, according to one opinion, it
is the planning, organising, directing and controlling of the procurement, development,
compensation, integration, maintenance and separation of human resources so
that individual, organisational, and social objectives are accomplished. Thus human
resource management is concerned with the people dimensions in management
and looks after both the qualitative and quantitative aspects of human resources
of an organisation. It is concerned with acquiring the manpower for the organisation,
developing its skills, motivating it to higher levels of performance and ensuring that
it continues to maintain its commitment to the accomplishment of organisational
objectives.

Difference between ‘Personnel Management’ and ‘Human Resource Management’

You know that for quite a large number of people, ‘Personnel Management’ and
‘Human Resource Management’ are synonymous concepts because there are, lots of
similarities between the two. Up to the 1930s, the term ‘Personnel Management’ was in
vogue and the focus was on employer- employee relations. Studies on HR were initially
guided by Taylor’s scientific management principles and then graduated through the
Hawthorne studies to the behavioural school based on the theories of Abraham Maslow,
Herzberg, Douglas McGregor, etc.

However, some authors prefer to distinguish personnel management from the

management of human resources. This they do in terms of emphasis and approach,
rather than substance. For example, a few authors visualise management of human
resources as a perspective on personnel management and not personnel management
itself. The main differences between personnel management and human resource
management, according to Legge, are as follows:

 While personnel management is primarily concerned with non-managers,

management of human resources is aimed at the managerial staff.

 While personnel management attempts to influence line management,

management of human resources involves an integrated line-staff management
activity.

 While personnel management keeps itself detached from Organisational

Development (OD) and allied social-psychologically-oriented ideas,
management of human resources has utmost focus on the management of
corporate culture.

Human resource management differs from personnel management in terms of

its strategic nature also because human resource management is geared towards
a management and a business-oriented philosophy. It focuses on strategic activity
seeking to accomplish the total organisational interests. It gives importance to strategic
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Notes integration and strong cultures, stemming from top management vision and leadership.
It emphasises that people are committed to strategy, adaptable to change and
assimilated in the corporate culture.

Objectives of Human Resource Management

You know that human resource management is important for any organisation
if it wants to accomplish its objectives. The main objectives of human resource
management are:

 To acquire right men at right jobs at right time and in right numbers

 To train and develop the procured people adequately

 To compensate and reward them appropriately

 To integrate them into the organisation

 To motivate, satisfy and maintain high morale of the employees

 To ensure respect for the human resources employed in the organisation

 To add to the well being of the society.

Significance of Human Resource Management

You also know that getting results is the bottom line of managing and that, as a
manager, you will have to get these results through people. It is here that the human
resource management assumes significance. You can get desired results, only if you
have committed employees who do their jobs as if they own the company. Human
resource management ensures you such committed work force by helping you in:

 Hiring right people for the right jobs

 Orienting, training and developing them properly

 Compensating them adequately

 Motivating them through financial and non-financial rewards

 Providing them job satisfaction

 Appraising their performance

 Boosting their morale and ensuring their commitment

 Reducing the rate of high turnover

 Making them work as a team

 Making them do their best

1.3 Functions of Human Resource Management

The functions of the human resource management can be studied under two heads,
viz., (a) Managerial Functions, and (b) Operative Functions, as shown in Fig. 1.1

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Notes

(Fig. 1.1: Functions of human resource management)

(A) Managerial Functions

The human resource manager is basically a manager and, as such, he must
perform the basic functions of management in addition to his operative functions. Such
managerial functions are as follows:

(i) Planning - Defined in its simplest terms, planning is the determination of

anything in advance. It involves setting up of goals and objectives, laying down policies
and procedures, formulation of standards of evaluation and chalking out programmes
for attaining the desired goals of the organisation.

In so far as the HR Manager is concerned, he is required to determine in advance

a HR programme that will contribute towards achievement of goals specified for the
organisation. Thus, it involves planning of manpower requirements. Obviously, it is
necessary that the HR Manager should be an expert in the field of human resource
planning as well.

(ii) Organising - After plans have been developed and course of action
determined, organising is next in order. The process of organisation is essential for
accomplishing the objectives of the enterprise. Organising involves the establishment
of an organisation at structure through determination and grouping of activities, the
assignment of activities to the specified individuals and departments, defining roles,
establishing relationships, the delegation of authority to carry out the responsibility and
provision of coordination of men and work.

As so far as HR Manager is concerned, in order to execute the HR plans and

programme, he has also to form an organisation. He is required to design the structure
of relationships among (i) various jobs, (ii) various personnel, (iii) jobs and men, (iv) men
and machinery, (v) a specialised unit and the rest of the organisation, and (vi) other
physical factors. In case the relationships among the above are well defined, it will
leave practically no scope for any sort of confusion and thus lead to smooth sailing of
the organisation towards specific goals. The HR Manager is expected to procure the
resources necessary to carry out HR programme, design an appropriate system for
carrying out such programmes, and also establish lines of authority and communication
between the various people working with or receiving benefits from the HR programmes.
However, the development of a sound organisation required certain principles.

(iii) Directing - Having a plan and an organisation to execute it, the next step is
getting the job done. As the process of management is concerned with getting work
done through and with people, they require proper motivation. The management is
required to lead, guide, motivate, supervise, communicate and inspire them towards
improved performance.

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The HR Manager is also expected to do all the above things in getting people to
Notes go to work willingly and effectively. Though all managers must unavoidably direct their
subordinates, the HR Manager should possess exceptional expertise in this regard.

(iv) Controlling - Controlling is a very important function of management. In an

undertaking, control consists in verifying whether everything occurs in conformity with
the plan adopted, the instructions issued and the principles laid down. In this way,
controlling is a monitoring device. Through control, we evaluate, performance against
goals and plans. Two important things in the process of control are: (i) a comparison of
actual performance against set standards, and (ii) taking corrective actions, wherever
necessary..

The HR Manager, he measures the progress of HR programme along the lines

laid out in the programme and determines how effectively the desired HR objectives
are being met. Thus, we can say that through direct observation, supervision, reports,
records and audits, etc., the HR manager ensures that the enterprise is carrying out the
HR programme on the desired lines and, if necessary, takes corrective steps.

(v) Innovating - Needless to mention that the management is a creative task.

An organization cannot accomplish its desired objectives unless it brings novelty in
its product, practices, ideas, etc. Through the function of innovation, the organisation
prepares itself to face new challenges. We do not live in the past, but in future. Hence,
the organisation should be prepared to face challenges whether in technical, economic
or any other related fields and be also in a position to give new directions.

The HR Manager is also supposed to be innovative because, only then and

then alone, he can be successful in accomplishing the desired objectives of the HR
programme. He is required to introduce new ideas and practices and prepare his
personnel to face new challenges.

(vi) Representing - In the long run, the success of an organisation depends upon
the image it has been able to create in the eyes of its customers, the Government,
employees, trade unions, financers, suppliers and society, etc. The managers have
got the responsibility of representing the organisation before all the groups mentioned
above. They have to project an image of the management as also of the organisation
before the groups referred to above. This is possible only when the management is well
informed and is faithful to the objectives of the enterprise.

The Human Resource Management is, therefore, required to frame HR programmes

and policies that create a good image of the management and the organisation in the
eyes of the employees, trade unions, government, society, etc., and fulfil the wishes of
the employees in conformity with the policies laid out by the management.

(vii) Coordinating - Coordination is the essence of management. In the absence of

proper coordination, the organisation is unlikely to accomplish the desired objectives.
Coordination has assumed greater significance in the wake of the increasing number of
personnel and complexities in the organisation.

The HR Manager is supposed to bring about coordination in its various activities and
resources. He has to ensure harmony between individuals’ and organisation’s goals
and make the individuals see how their jobs contribute towards the accomplishment
of the dominant goals of the enterprise. He has to make the personnel know and
understand the objectives of the organisation.

(viii) Decision Making - Decision making is involved in practically every function

of the management. The success of an organisation depends to a large extent on the
quality of the decision making. It should be prompt and judicious.
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The HR Manager can enhance programme effectiveness through a more judicious
decision making. He should first identify a personnel problem that calls for action. Notes
It needs experience, background and alertness. Then the HR manager is required
to determine possible alternative solutions. In this regard, he can be successful only
if he has creative imagination and adequate interpersonal contacts. It should be
followed by collection and analysis of facts concerning the problem. In this connection,
modern techniques can be utilised. Ultimately, the HR Manager is to make a decision
for the solution of the problem. He has to exercise his choice. He must see that his
choice of decision should be as much acceptable to the employees as possible. At
times, acceptance of a programme is more important than the technical quality of the
personnel programme.

(B) Operative Functions

Managerial functions, as stated earlier, are common to all types of managers.
Operative functions, on the other hand, are the specialised functions related to a
particular field. Operative functions in case of HR management arise out of the fact
that the required human resources have to be procured, developed, compensated,
integrated and maintained. These functions may also be called ‘service functions’
or ‘staff functions’, because the primary role of a personnel manager is advisory in
nature. Operative functions of the human resource management are as follows:

i) Procurement of Personnel - This is the first operative function of a human

resource manager. It is concerned with obtaining the proper kind and right number of
personnel at the right time and at the most economical rates so that the organisational
goals could be appropriately accomplished. It deals specially with such subjects as HR
planning, recruitment and selection, induction and placement. Hence, it involves:
(a) anticipating HR requirements in future. This can be possible by estimating
vacancies to be caused by future promotions, transfers, resignations,
dismissals, retirements, deaths, technological changes, government policies,
etc.
(b) adopting scientific methods and techniques in the process of recruitment and
selection
(c) orienting the employee to the organisation. It may be done by telling the new
employee something about the company and its products, specific employee
services, such as safety measures, welfare programmes, etc. and introducing
him to the important personnel of the organisation. Then the new employee
may be entrusted to his supervisor for further induction in technical aspects
(d) placing him in the right job.
ii) Development of Personnel - Having obtained personnel, the next step is
to develop them. Due to rapid changes in technology, the realignment of jobs and
ever growing complexities, training and development programmes are unavoidable;
otherwise the enterprise cannot compete with other organisations. Obviously, the HR
manager is required to assess the needs of training and development at different levels
of workers, supervisors and managers; plan and prepare training and development
programmes for different levels or personnel; provide training material, staff and
other related things; conduct the training and development programmes followed by
evaluation of results; and making suggestions.

iii) Compensation - Compensation function involves the payment of adequate

and equitable remuneration to the employees for their contribution towards the
accomplishment of objectives of the enterprise. No doubt, financial incentives
play a vital role in boosting the morale of the personnel, yet the importance of non-
monetary compensation cannot be undermined. All said and done, wages are still a
potent motivator. The compensation function includes such things as job evaluation,
formulating wage policies, wage systems; incentive and premium plans, bonus policy,
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etc. As monetary income plays an important role to fulfil the physiological and some of
Notes the psychological needs, it is a highly morale booster.

iv) Integration - Having procured, developed, and adequately compensated the

personnel, there comes the problem of integration of individual, organisational and
societal interests. In the absence of adequate and reasonable reconciliation among
the above interests, it is difficult to achieve the desired objectives of the organisation.
Integration, thus, refers to prevention of conflicting interests so as to maintain
harmonious relations between both the elements in the enterprise, viz., the capital
and the labour. This function primarily emphasises on labour-management relations,
free flow of communication, grievance handling, maintaining discipline in the industry,
etc. Thus, a HR manager is required to prepare rules and code of conduct, administer
disciplinary measures, effectively use the existing machinery for prevention and
settlement of disputes and grievances, arrange for employee counselling, encourage
collective bargaining, etc.

v) Maintenance of Personnel - This last operative function of human resource

management is perhaps the most important function. It refers to sustaining and
improving the conditions that have already been established. This, of course, means
that all the operative functions referred to above should remain in continuance. This
functions involves the maintenance of physical conditions and positive attitudes of
employees towards the enterprise. Obviously, the HR manager is required to arrange
for proper health/medical services, viz., providing medical treatment, periodical medical
check-up of employees in health matters through talks, literature, documentary
films, etc., to arrange for adequate safety measures by ensuring that the concerned
personnel are imparted safety instructions and that the safety rules and instructions
are properly and effectively enforced, statutory requirements with regard to safety
measures are met both in letter and spirit, periodical safety inspections by competent
persons are regularly conducted, and all possible preventive steps are taken. Similarly,
the HR manager is required to arrange for security measures both for the personnel
and the organisation especially against fire, theft and sabotage, etc. In order to do
this, he is required to arrange for security guards, alarms raising devices, fire - fighting
equipment and adequate force of trained personnel in fire-fighting and framing of
security rules, etc. The HR manager is also required to chalk out effective welfare
plans having provision for indoor and outdoor games, cultural and social activities,
recreational activities, and picnics, etc. Maintenance function also requires research on
HR policies and practices to ensure betterment in future.

The ultimate objective of all the functions, both managerial and operative, is to attain
the objectives of the enterprise. The existence of HR management in an organisation
can be justified only when along with procurement, development, compensation,
integration, and maintenance of personnel, it also contributes substantially towards the
accomplishment of basic objectives of the enterprise on the one side, and discharges
its responsibility towards the community, on the other.

1.4 HR Policies
HR policies are directed at the approach the organisation intends to adopt in
managing its people. HR policies serve as the basis for converting espoused values in
use, or enacting them.

Need and justification of HR Policies

HR policies are necessary because they:
i) Provide a sound basis for making decisions
ii) Facilitate meaningful and effective HR management
iii) Restrain discrimination and undesirable behaviour towards employees
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iv) Restrain injustice
v) Help in decentralisation of authority Notes
vi) Save time
vii) Bring continuity and uniformity in HR decisions
viii) Help in accomplishing organisational goals

Formulation and Implementation of HR Policies

HR policies may be of two types, viz., formal, and informal. About informal
HR policies, Michael J. Jucius has rightly observed that many personnel policies
undoubtedly have just grown. In such instances, everyone seems to know, without
being told and without knowing where it originated, that a certain type of decision will
be made in certain situations. Such policies are informal and, as such, their framing
or establishment cannot be analysed. However, some useful comments can be made
about formal HR policies. Most of the HR policies should be framed by higher level of
management with the advice and assistance of staff of the HR department. Framing
of HR policies is also affected by consultation and advice of employees, day to day
problems faced by the management, social and political changes, and international
happenings, etc. It is the responsibility of an efficient and effective HR manager to
get HR policies framed and make necessary changes and amendments from time to
time whenever necessary. In the framing of policies, weightage should be given to the
views, advice and suggestions of such people who come into frequent contact with the
employees of the organisation. Such people make a lot of relevant information available
for the formation of HR policies. When the rough draft is ready, it should be sent to
the representatives of employees, departmental heads and experts for their perusal,
comments and suggestions, if any. Maximum attention should be paid to the comments,
criticism and observations made by the employees, because they are the people who
are most affected by HR policies. Then ultimately, the HR policies should be finally
drafted and issued.

Once the HR policies are framed, there comes the problem of their transmission
and application. As a matter of fact, it is the middle management and the first line
supervisors who will be more concerned with the transmission and application of
policies. Middle management should be responsible for communicating the policy to
operating levels. Here communication involves a lot of functions, e.g., interpretation of
policies, clarification of areas of uncertainty and misunderstanding and also imparting
training to lower level staff in policy application.

As far as the line supervisors are concerned, they should be responsible for
implementing HR policies. In some cases, the HR department should also be
responsible for adopting HR policies in their respective fields.

Contents of HR policy
i) Recruitment and selection
ii) Training and development
iii) Transfer and promotion
iv) Evaluation, wage and incentive
v) Labour welfare and social security

However, there is no rigidity with the above. The above elements can be contracted
or expanded depending upon local conditions and other economic, social and political
factors. Even sub-policies can be prepared for each of the above elements, if need be.
The above elements and statements are just guidelines. Adjustments are always possible.

Characteristics of an Ideal HR policy

An ideal HR policy should have the following features:
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i) It should contribute to organisational goals

Notes ii) It should make the employees conscious of their importance and place in the
organization
iii) It should be in writing
iv) It should create a sense of security
v) It should encourage cooperation between the management and employees
vi) It should be flexible
vii) It should aim at creating opportunities for the development of employees
viii) It should be clear on all HR matters
ix) It should be consistent
x) It should be controlled
xi) It should be taught

1.5 Challenges Faced By Hrm

In the current scenario, organisations are confronted with a large number of HR
challenges. The organisations that deal with these challenges effectively are likely to
be successful. The rest, become past history. The fast and ever changing internal and
external environments pose a big challenge before human resource management. For
example, in the 1950s, in our country, the employees were employed to work, not to
question ‘why’ but only ‘to-do-and-die’. The workers were, therefore, to be ‘controlled’.
A decade later, ‘controlling’ was replaced by ‘managing’. In the late 1970s, ‘personnel’
came to be called ‘human resources’ and new concepts and theories like that of TQM,
Kaizen, QWL, empowerment, participative management, etc., became more and more
acceptable. Today, employees do not like being treated as puppets - blamed, belittled or
bossed.

According to their primary focus, the HR challenges faced by managers have been
categorised by Gomez- Megia, Balkin and Candy into the following types:
a) Environmental Challenges (which are largely beyond the management’s control)
i) Rapid Change

ii) The Internet revolution (requiring greater communication skills, breaking

down of labour market barriers, job redefinition, online learning, SMS, emails,
etc.

iii) Workforce diversity

iv) Globalisation

v) Government legislation

vi) Evolving work and family roles (e.g., dual career families)

vii) Rise of service sector and skill shortage

b) Organisational Challenges
i) Competitive position: cost, quality, or distinctive capabilities

ii) Decentralisation

iii) Downsizing

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iv) Organisational restructuring
Notes
v) Self-managed work teams

vi) The growth of small businesses

vii) Organisational culture

viii) Outsourcing
c) Individual Challenges
i) Matching people and organisations

ii) Ethics and social responsibilities

iii) Productivity

iv) Empowerment

v) Brain drain

vi) Job insecurity

Besides the above, mergers and acquisitions, take-overs, privatisations, trade

unions, political instability, global economic down-turns, inflationary trends, more
demanding customers, etc., have also posed a number of challenges before HR
managers.

Thus you will find that in the times to come, human resource management is likely to
emerge as a more powerful functional area attracting the attention of all concerned and
making significant contribution to the industrial world.

1.6 Changing Role of Hrm

Over the years, trends are changing about the way firms are managed. These
revolutionary trends - like accelerating product and technology change, demographic
change, trends towards service society and information age, have dramatically
increased the degree of competition in all industries. Not surprisingly, to cope up
with these changes and to help companies achieve such structural and cultural
transformations, the role of HR management is also changing. Indeed, HRM has
actually undergone several changes since its origin as follows:

In the early 1900s, the personnel people firstly took the responsibility of hiring and
firing from supervisors, ran payroll department and administered benefit plans. The
job was largely to make sure that all the rules and procedures were followed. With the
increase in the role of technology, the function of HR department also expanded and
encompassed employee selection, training and promotion.

The emergence of labour unions n 1920s led to the second phase in HR

management and a new emphasis was laid on protecting the firm in its interaction with
unions.

During the 1960s-1970s, HR management got increasingly professional and

sophisticated and HR people started taking more interest in HR planning, organisational
development, industrial relations and became more business and management
oriented. In this phase, HRM people continued to provide expertise in areas like-
recruitment, screening and training- in an elaborated form.
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Notes Today, HRM is speeding through and its role is shifting from a guide to that
of a strategic partner and a change agent. The metamorphosis of personnel into
human resource management reflects the competitive business environment
today.

In today’s flattened, downsized and high performing organisations, the HR

department, is no longer solely focusing on administrative work and transactional
duties. Companies now realise that strong information about individuals is a highly
valuable organisational resource that can be used to drive efficiencies throughout the
business.

Emerging Roles
 Linking HR strategy to business strategy- many organisations are conducting
HR planning

 Automating HR processes - progressive organisations have introduced

automated workforce management processes to reduce cost and cycle time of
HR processes with the additional aim of improving user satisfaction

 Outsourcing HR activities - smaller HR staff serving as strategists and

consultants to managers.

 Measuring Return on Investment of HR programmes.

In brief, you will come across the following changing role of HRM:

Changing Role of HRM

From To
Job analysis Competency assessment
Personnel management HR management
Rule maker Consultant
Functional orientation Business orientation
One size fits all Tailored programmes
Centralised decision making Decentralisation and empowerment
Focus on activities Focus on impact

1.7 Summary
This unit has attempted to familiarise you with the concept of HRM and defined HRM
as the planning, organising, directing, and controlling of the procurement, development,
compensation, integration, maintenance and separation of human resources. Having
distinguished personnel management from HRM and pointing out the objectives and
significance of HRM, the managerial functions and operating functions of HRM have
been discussed at length. A brief discussion about HRM policies spells out how the HR
policies are formulated and implemented. While discussing the challenges faced by
HRM, three types of challenges, viz., environmental changes, organisational challenges
and individual challenges, have been discussed in detail. In the end, the challenging
role of HRM has been discussed and emerging role of HRM has been brought out.

1.8 Check Your Progress Questions

 Briefly explain the concept of HRM and coin a suitable definition of HRM.

 Discuss, in brief, the operative functions of HRM.

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 Why should an organisation have its own HR policies? How are these formulated Notes
and implemented by an organisation?

 Discuss, in brief, the challenges faced by HRM? Also, explain the changing role of
HRM.

1.9 Short Answer Questions

1. What are the managerial functions of HR Manager?

2. What is procurement?

3. Define HR Policy.

4. Identify the categories of HR challenges.

5. The role of HRM is changing from ‘rule maker’ to ‘.........…..’

1.10 Long Answer Questions

1. “It is the operative functions of HR manager that distinguish him from other
functional managers.” Discuss.

2. Discuss, in detail, the development of HRM since 1915.

3. “Due to the rapid changing economic scenario, the role of HR Manager is

changing substantially.” Discuss.

1.11 Further Reading

 Rao, V.S.P, 2004, Human Resource Management, Excel Books, New Delhi.

 Aswathappa,K., 2008, Human Resource Management , Tata Mc Graw-Hill, New

Delhi.

 Dessler, G, 1988, Human Resource Management , Prentice-Hall of India

Private Ltd., New Delhi.

 Rao, P.S., 2007, Essentials of Human Resource Management and Industrial Relations,
Himalaya Publishing House, Delhi.

 Sharma, D.C. and Sharma R.C., 1988, Personnel Management and Industrial
Relations, S.J. Publications, Meerut.

Amity Directorate of Distance & Online Education