Professional Documents
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HRM Unit 1
HRM Unit 1
UNIT I
Train people well enough so they can leave. Treat them well enough so they don’t want to."
DEFINITION OF HRM
HRM stands for Human Resource Management, which is the strategic approach to managing an organization's
human resources to achieve its objectives. HRM involves recruiting, selecting, training, developing,
compensating, and managing employees, as well as ensuring compliance with employment laws and
regulations. The primary goal of HRM is to create a positive work environment that promotes employee
engagement, productivity, and retention while achieving the organization's overall goals and objectives.
HRM is employee management with an emphasis on those employees as assets of the business. In this context,
employees are sometimes referred to as human capital. As with other business assets, the goal is to make
effective use of employees, reducing risk and maximizing return on investment (ROI)
ESSENTIALS OF HRM
Human Resource Management (HRM) is the strategic approach to managing employees in an organization. Its
primary objective is to ensure that the organization is able to achieve its goals and objectives by maximizing the
productivity and effectiveness of its employees. The essential components of HRM include:
1. Recruitment and selection: HRM involves identifying and hiring the right people for the job. This
includes attracting a pool of qualified candidates, screening and interviewing them, and selecting the
best fit for the organization.
2. Training and development: Once employees are hired, HRM is responsible for providing them with
the necessary training and development opportunities to enhance their skills and knowledge. This
includes on-the-job training, mentorship programs, and professional development courses.
4. Compensation and benefits: HRM manages employee compensation and benefits packages, including
salaries, bonuses, healthcare, retirement plans, and other incentives.
5. Employee relations: HRM is responsible for maintaining positive relationships between the
organization and its employees. This includes handling employee complaints, providing counseling
services, and creating a positive workplace culture.
6. Compliance: HRM ensures that the organization complies with all relevant laws and regulations related
to employment practices, such as equal opportunity employment laws, workplace safety regulations, and
labor laws.
7. Human resource information systems (HRIS): HRM uses HRIS to manage employee data, track
employee performance, and generate reports that help in decision making.
Overall, HRM is essential to the success of any organization. By managing its workforce effectively, an
organization can improve employee productivity, reduce turnover, and increase overall performance and
profitability.
According to Armstrong (1997): Human Resource Management can be defined as “ A strategic approach to
acquiring, developing, managing, motivating and gaining the commitment of the organization’s key
resource- the people who work in and for it.”
Scope of Human Resource Management.
9. Industrial relations
Another important area of Human Resource Management is maintaining co-ordinal relations with the union
members, employer-employee, and employee- employee. This will help the organization to coordinate with one
another for smooth working.
Human Resource Management functions can be classified into the following three categories.
➢ Managerial Functions
➢ Operative Functions
➢ Advisory Functions
1. Human Resource Planning - In this function of HRM, the number and type of employees needed to
accomplish organizational goals are determined. Research is an important part of this function,
information is collected and analyzed to identify current and future human resource needs and to
forecast changing values, attitudes, and behavior of employees and their impact on the organization.
2. Organizing - In an organization tasks are allocated among its members, relationships are identified, and
activities are integrated towards a common objective. Relationships are established among the employees so
that they can collectively contribute to the attainment of the organization's goal.
3. Directing - Activating employees at different levels and making them contribute maximum to the
organization is possible through proper direction and motivation. Taping the maximum potential of the
employees is possible through motivation and command.
4. Controlling - After planning, organizing, and directing, employees' actual performance is checked, verified,
and compared with the plans. If the actual performance is found to deviate from the plan, control measures are
required to be taken.
The Operative Functions of Human Resource Management are as follows:
1. Recruitment and Selection - Recruitment of candidates is the function preceding the selection, which brings
the pool of prospective candidates for the organization so that the management can select the right candidate
from this pool.
2. Job Analysis and Design - Job analysis is the process of describing the nature of a job and specifying the
human requirements like qualifications, skills, and work experience to perform that job. Job design aims at
outlining and organizing tasks, duties, and responsibilities into a single unit of work for the achievement of
certain objectives.
3. Performance Appraisal - Human resource professionals are required to perform this function to ensure that
the performance of employees is at an acceptable level.
4. Training and Development - This function of human resource management helps employees acquire skills
and knowledge to perform their jobs effectively. Training and development programs are organized for both
new and existing employees. Employees are prepared for higher-level responsibilities through training and
development.
5. Wage and Salary Administration - Human resource management determines what is to be paid for different
types of jobs. Human resource management decides employee compensation which includes - wage
administration, salary administration, incentives, bonuses, fringe benefits, etc,.
6. Employee Welfare - This function refers to various services, benefits, and facilities that are provided to
employees for their well-being.
7. Maintenance - Human resources is considered an asset for the organization. Employee turnover is not
considered good for the organization. Human resource management always tries to keep their best-performing
employees with the organization.
8. Labour Relations - This function refers to human resource management interaction with employees
represented by a trade union. Employees come together and form a union to obtain more voice in decisions
affecting wages, benefits, working conditions, etc,.
9. Personnel Research - Personnel research is done by human resource management to gather employees'
opinions on wages and salaries, promotions, working conditions, welfare activities, leadership, etc,. Such
researches help in understanding employee satisfaction, employee turnover, employee termination, etc,.
10. Personnel Record - This function involves recording, maintaining, and retrieving employee-related
information like - application forms, employment history, working hours, earnings, employee absents and
presents, employee turnover, and other data related to employees.
Human Resource Management is expert in managing human resources and so can give advice on matters related
to human resources of the organization. Human Resource Management can offer advice to:
The personnel manager advises the top management in the formulation and evaluation of personnel programs,
policies, and procedures.
The personnel manager advises the heads of various departments on matters such as manpower planning, job
analysis, job design, recruitment, selection, placement, training, performance appraisal, etc.
HRM vs. HRD
Basis of
HRM HRD
Differentiation
The functions of HRM are reactive and are The functions of HRD are proactive and
Function usually applied to gaining holistic have to be applied consistently to enhance
organizational goals. the productivity of employees.
Most HRM processes are routine and have to be HRD processes are ongoing and not
Process
carried out as and when the need arises. occasional.
—PETER SCHUTZ
DEFINITION
Strategic Human Resource Management (SHRM) is a process of managing human resources that links the
workforce with the core strategies, objectives, and goals of an organization. It focuses on the following aspects
of HR operations:
1. Ensuring practices that foster flexibility and give a competitive advantage to the organization
Since it is essentially a contemporary approach to human resource management, the HR department has to play
a key role in making SHRM successful. HR managers need to gain a deeper understanding of SHRM in order to
be an active partner in creating company policies and implementing them.
Strategic HR management can be integrated into various functions including hiring, training, and rewarding the
workforce for their performance. The SHRM approach finds ways for the HR personnel to make a positive and
direct contribution to the company’s growth. There has to be a strategic plan related to every employee’s
development and retention in sync with the long-term business goals.
In the modern world, especially in the post-pandemic era, it is not easy for all businesses to overcome HR
challenges. There are various components of the HR ecosystem that can be confusing for employers and lead to
ineffective decisions. Consequently, there could also be a loss of productivity and a slowdown of business
growth.
Unlike a conventional system, companies that apply strategic human resource management principles, don’t
have HR as a department that is separate from other verticals such as IT, operations, or marketing. Rather, they
work in tandem with other departments to create an understanding of their goals. This helps in building
strategies that are well aligned with those goals and overall objectives of the company. Through such an
integrated HR management, the human resource department becomes a key enabler of the business growth, and
not just a mandatory service that is limited to hiring and paying the employees. Further, the strategic human
resource management also focuses on better utilization of talent and opportunities available within the
department to benefit other departments.
Businesses that ensure collaboration amongst all teams, and synchronized working towards common objectives,
succeed faster. By applying strategic HR practices, employees can be analysed and the actions that will lead to
value addition for the company, can be identified. If a company’s HR personnel don’t know much about
strategic human resource management, they can enrol for HR courses online to understand the concepts
thoroughly and implement the same in the organization. There are various benefits of applying strategic human
resource management for any business. These include:
1. Increased job satisfaction
6. Productivity boost
However, to effectively implement SHRM, the business leader(s) and the HR head should be on the same page,
or else there could be several challenges faced, such as:
Characteristics of SHRM
Strategic human resource management is the issue where the strategic approach to managing human
resources is applied. Strategic human resource management possesses a number of distinctive features. These
are mentioned below:
Recognition of the External Environment: The environment outside the organization sometimes brings
opportunities for the organization, sometimes it becomes a threat. In this environment
the components are-
1. Law,
2. Economic situation,
3. Social and population change,
4. Domestic and international political power,
5. Technology
Strategic human resource strategies consider the threats and opportunities in each area in detail and try to
exploit the opportunities by minimizing the impact of the threats.
Impact of Competition: Competitive forces influence the organization’s human resource strategy to attract,
reward, and employ employees. These forces influence the local, regional and national labor markets. The
impact of labor market depends on wage rate, unemployment rate, working environment, level of facilities,
minimum wage law, reputation of competition etc.
Long-range Focus: The long-term outlook helps determine the long-term direction, style and basic approach of
the organization’s human resources. Strategies can be changed, but they are not always easy. It depends on
the organization’s interest, variability and management philosophy.
Choice and Decision making focus: The organization employs a variety of key human resource decision-
making strategies, so that employees are committed to that decision. In other words, the applied strategy must
have a vision to solve the problem or prevent the problem. Strategy always begs the question, what does the
organization want to do and why? The decision was taken with this question in mind and it was continued.
Consideration of all Personnel: The Human Resources Strategic Approach focuses on all employees of the
organization, whereas traditional human resource management focuses only on practical employees.
Integration with Corporate Strategy: Human resource strategies must be integrated with the overall laws and
regulations of the organization. That is, human resource strategy must be governed by the rules and regulations
of the organization.
Establish Linkage Between HR Policy and Practices with Overall Organizational Aims and
Environment: Human resource policy is formulated keeping in view the overall goals and environment of the
organization. Human resource policy is not something separate or outside the organization because all kinds of
activities are taken for the purpose of the organization.
Competency Based Performance Measure: In human resource strategic human resource management, the
policy is determined in such a way that the work is determined according to the qualifications of the employees
and then it can be measured and evaluated. In other words, in strategic human resource management, the
qualifications of the employees are given more importance.
Strategic human resource management is a strategy that explains how the organization can be targeted
using human resources. Strategic human resource management is the process of connecting human resources to
the organization’s goals and objectives in order to develop performance and organizational cohesion that
accelerate innovation, variability, and comparative advantage. In order to formulate it properly, some principles
have to be followed. And the goal is to permanently achieve comparative advantage. Various experts have given
favorable opinion in this regard. The main feature of strategic human resource management is that it takes into
account the opportunities and threats of the internal and external environment. As a result it is more effective.
Working of SHRM
Strategic Human Resource Management is essential for retaining the best talent and developing human
resources. It focuses on making employees feel valued and engaged so that they are motivated to stay with the
company. However, before moving forward, you will need to create a strategic HR planning process following
these steps.
Strategic HRM primarily focuses on resolving matters such as organizational culture, hierarchy structure,
effectiveness of operations, resource-role matching, and performance challenges. Ideally, there are 5 primary
objectives of SHRM approaches:
• Achieving Strategic Fit: Integration of workforce and material resources through a streamlined and
high ROI oriented operational model
SHRM (Strategic Human Resource Management) is the practice of aligning human resource strategies and
practices with the strategic goals of an organization. It involves the integration of human resource strategies
with the overall business strategy to achieve a competitive advantage. The main objective of SHRM is to ensure
that the organization's human resources are utilized effectively to achieve its strategic goals.
The following are the roles of SHRM in strategy formulation and implementation:
Alignment of HR strategies with business strategies: SHRM helps in aligning human resource strategies with
business strategies. This ensures that HR strategies are consistent with the overall business goals of the
organization.
Recruitment and selection: SHRM plays a critical role in the recruitment and selection process. It helps in
identifying the right talent required to achieve the organization's strategic goals.
Training and development: SHRM ensures that the employees are provided with the necessary training and
development programs to enhance their skills and knowledge. This helps in achieving the strategic objectives of
the organization.
Performance management: SHRM helps in designing and implementing a performance management system
that is aligned with the organization's strategic goals. This ensures that the employees are performing to the best
of their abilities.
Compensation and benefits: SHRM helps in designing and implementing a compensation and benefits system
that is consistent with the organization's strategic goals. This ensures that the organization can attract and retain
the right talent.
Employee relations: SHRM helps in managing employee relations to ensure that the employees are motivated
to achieve the organization's strategic goals.
Barriers of SHRM
Barriers to successful SHRM implementation are complex. The main reason is a lack of growth strategy or
failure to implement one. Other major barriers are summarized as follows:
3. Interdepartmental conflict.
17. Economic and market pressures influenced the adoption of strategic HRM.
Linking HR strategy with business strategy involves aligning the organization's human resources goals and
practices with the overall business objectives. It is essential for organizations to align HR strategy with business
strategy to ensure that HR practices support the achievement of business goals. The following are some of the
ways in which HR strategy can be linked with business strategy:
1. Understanding business goals: HR professionals need to have a clear understanding of the organization's
business goals and strategies. This will help them to develop HR strategies that are aligned with the business
objectives.
2. Analyzing HR capabilities: HR professionals need to assess the organization's current HR capabilities and
identify areas that need improvement. This will help in developing HR strategies that are aligned with the
business goals.
3. Developing HR goals: Once the business goals and HR capabilities are identified, HR professionals can
develop HR goals that are aligned with the business objectives. These goals should be specific, measurable,
achievable, relevant, and time-bound.
4. Aligning HR practices: HR practices such as recruitment, selection, training and development, performance
management, compensation, and benefits should be aligned with the business goals. For example, the
recruitment and selection process should focus on identifying candidates who have the skills and experience
required to achieve the business objectives.
5. Continuous monitoring: HR professionals should continuously monitor HR practices to ensure that they are
aligned with the business goals. This will help in identifying any gaps and making necessary adjustments to
ensure that the HR practices continue to support the business objectives.
Roles and Responsibilities of an HR Manager
An HR manager’s job description should include the following obligations. However, while an HR manager’s
daily duties will vary from company to company, the following are the roles and responsibilities of an HR
manager:
• Create and put into action HR initiatives and strategies that are in line with the overall business plan.
• Improve ties between management and employees by responding to requests, grievances, or other issues.
• Support present and future company demands through growing, involving, inspiring, and preserving
human capital.
• Create and keep track of the organization’s overall HR strategies, methods, tactics, and procedures.
• Analyze the training requirements for a programme and keep an eye on it.
Both mergers and acquisitions present significant challenges to HR professionals. The M&A process requires
management of both organizations to consider all implications of a proposed merger or acquisition before
agreeing to one—which necessarily involves consideration of the "people issues" created by a proposed merger
or acquisition. HR professionals are often involved in the process by advising management on human resource
matters, including using surveys and other metrics to gather relevant data, identifying potential conflicts or HR
challenges between the two companies, integrating HR practices and company cultures after an M&A, and
managing talent decisions such as layoffs, to name a few.
• Attempting to maintain an internal status quo, or to effect change—either to facilitate or thwart (in the
case of a hostile takeover) a possible merger or acquisition, as instructed by upper management.
• Assuming that a merger or acquisition has been approved, discerning all aspects of the two separate
organizations and the one combined organization that will be affected.
• Communicating with employees at every step in the M&A process with both an appropriate level of
disclosure and an appropriate level of confidentiality.
• Devising ways to meld the two organizations most effectively, efficiently and humanely for the various
stakeholders.
• Dealing with the reality that M&As usually result in layoffs of superfluous employees under the
combined organization. This reality entails coordinating separation and severance pay issues between
the combining organizations.
• Proactively avoiding legal issues for violation of federal and state anti-discrimination laws and the
Worker Adjustment and Retraining Notification Act (WARN).
• Participating in the defense of lawsuits that may be brought as a result of a merger or acquisition.
• Addressing the ethical dilemmas involved, in which an HR professional may be required to eliminate his
or her own position, the position of a current co-worker, or the position of an HR counterpart in the
combining organization.
Aside from employee management, automation tools help in reducing paper use and organizing data entry.
Employees, for example, do not need to fill out paper forms that must then be entered by HR staff. All of this
can be done through a centralized system like membership management software.
Here are some examples of how technology is used in human resource management.
1. Employee Management
Employee management deals with helping employees in achieving their full potential. Additionally, it also helps
the company achieve its objectives. Its a comprehensive process that encompasses all aspects of human
resources. This includes recruitment, payroll management, and talent management.
An automated employee management system improves all these processes. It allows companies to have a more
standardized, systematic, and formal evaluation process.
For example, membership management software helps simplify administrative tasks. This includes handling
dues payments and accounts receivable. Such tasks can be completed within minutes with the right tools. By
using such software, a company can meet its goals without sacrificing employee satisfaction.
HR technologies that boost management and improve efficiency, such as taking the hassle out of payroll using
a gross-up calculator, result in the overall success of the company. Regardless of their size or industry,
organizations are striving to improve organizational performance.
Managers should make sure that all departments are improving their procedures and controls. They should also
have their operations focused on enhancing the company's competitiveness. All of these can happen with tools
like association management software.
2. Employee Engagement
Employee engagement applications are increasingly being used in performance management. These platforms
and apps employ a range of strategies to keep employees engaged in their work.
Association management software includes features that increase employee engagement. Applications with
posting and commenting features allow businesses to share information. On top of that, it also allows employees
to express their thoughts about it.
Additionally, gamification strategies also help engage employees by making apps enjoyable.
3. Performance Management
Employers have also started to automate processes for monitoring employees job performance. Most
performance management modules usually have interactive features. This allows for employee feedback in a
process known as continuous performance management.
Such performance management can significantly improve employee retention and productivity.
Businesses can start with technology-assisted appraisals. These appraisals keep track of important information
about employees. You can easily and quickly monitor their strengths and weaknesses. Additionally, it also
stores employees’ areas for improvement.
Individual performance management and skills data are used in workforce analytics. Based on the appraisal
results, applications use this data to create tailored learning programs for employees. These assist employees in
planning their career paths and developing their skill set effectively.
A lot of training nowadays is done digitally and tailored to individual needs. It enables HR teams to keep track
of progress and evaluate the effectiveness of established objectives. HR departments use online training
sessions and webinars for employee development. They're also great for teams that are spread out across the
country.
5. Recruitment
One of the most important functions of HR professionals is to hire people. Different technological solutions
help them in maintaining a seamless recruitment procedure. Today, the majority of job positions are advertised
online. Additionally, applications are processed through a single platform.
This makes reviewing application forms easier and faster. Recruiters use resume screening applications to
remove submissions that aren't a good fit for the job.
Simple things like overlapping leave requests can wreak havoc on a company's efficiency. The right HR
software ensures that professionals can monitor employee availability. It also helps manage schedules properly.
This enables the company to operate at maximum productivity throughout the year.
7. Documentation
The HR department is tasked to ensure that employees have timely access to important information. This
increases transparency within the company and fosters a culture of trust. Both of these are essential for
employee productivity.
Additionally, HR technology makes use of a cloud-based system to store important employee data. This
ensures that the data is available all throughout the day. Additionally, it makes sure that it is safeguarded even
in the case of a physical disaster.
Since all of the data is stored on cloud-based servers, paperwork is kept to a minimum. With a few clicks, you
can access documents, handbooks, and training manuals.
HR technology can be used to disseminate information in a timely and useful manner. Some examples include
Talent Management Software and AI-powered chatbots.
HR is now needed to collaborate with other departments inside the organization. They've traditionally shared
responsibilities with payroll. Today, they are required to share information and resources with other
departments. These include the legal department, executives, and team leaders.
The best management systems make sharing easier. They ensure that all departments have the information they
require to complete their tasks. This type of technological integration is important. It helps firms develop a
corporate community, track employee behavior, and boost engagement and productivity.
Conclusion
Technology has brought about the beneficial transformation that is required in the HR department. Technology
that centralizes administrative tasks helps put HR professionals’ priorities into more important tasks. A list of
association management companies can help you choose the best management software.
You can also look for association management software reviews online to help you decide. Remember that
these applications and software should cater to your company’s needs. So it’s best to look for software that
meets your needs.
However, you should keep in mind that technological breakthroughs can’t compete with humans. Some roles
and tasks are better off done by humans. While this is true, technology is still important to businesses.
Following specific technological trends build a reputation for a business in the market.
Technology has had a significant impact on the role of HR in recent years. Here are some of the ways in which
technology has changed the HR function:
• Recruitment: Technology has made it easier for HR to find and attract talent. Online job boards, social
media platforms, and applicant tracking systems (ATS) have all made the recruitment process more
efficient and effective.
• Training and development: With the rise of e-learning platforms, HR can provide training and
development opportunities to employees at any time and from any location. This has made it easier for
employees to develop new skills and for organizations to promote continuous learning.
• Performance management: Technology has made it possible for HR to track and analyze employee
performance data more easily. This has led to more data-driven performance management systems,
which help HR to identify areas for improvement and provide more targeted feedback to employees.
• Employee engagement: HR can use technology to create more engaging employee experiences. For
example, mobile apps can be used to share company news, provide benefits information, and enable
social interactions among employees.
• Data analytics: HR can use data analytics to gain insights into workforce trends and identify
opportunities for improvement. This can help HR to make more informed decisions and to develop more
effective strategies for managing the workforce.
Human Resource Management (HRM) is closely linked with Total Quality Management (TQM) as both share a
common goal of achieving organizational excellence. TQM is a management philosophy that emphasizes
continuous improvement and quality in all aspects of an organization's operations, while HRM is concerned
with managing people within the organization.
In order to achieve TQM, it is essential to have an effective HRM system in place. HRM plays a crucial role in
the implementation of TQM by ensuring that the organization's human resources are properly trained,
motivated, and empowered to contribute to the organization's quality objectives.
HRM is responsible for recruiting and selecting employees with the right skills, knowledge, and attitudes to
support the organization's quality objectives. HRM also plays a role in training and development programs to
improve employee skills and knowledge, including quality-related training.
In addition, HRM is involved in performance management and appraisal systems, which are crucial for
providing feedback to employees on their contribution to quality goals. This feedback is used to identify areas
for improvement and to reward employees for their contributions to quality.
Overall, HRM and TQM are closely linked, and both are essential for achieving organizational excellence.
Effective HRM practices help to create a culture of quality within the organization, while TQM provides a
framework for continuous improvement and quality in all aspects of the organization's operations.
Human Resource Management (HRM) has a direct link with productivity in organizations. HRM is responsible
for managing the human resources of an organization, including recruitment, selection, training and
development, performance management, and compensation.
Effective HRM practices can lead to higher levels of productivity in several ways:
1. Recruitment and selection: HRM can identify the right talent for the job, which can result in higher
productivity.
2. Training and development: HRM can provide employees with the necessary skills and knowledge to perform
their jobs effectively, leading to increased productivity.
3. Performance management: HRM can monitor and evaluate employee performance, providing feedback and
coaching to improve productivity.
4. Compensation and benefits: HRM can provide competitive compensation and benefits packages to attract and
retain the best talent, leading to higher levels of productivity.
5. Employee engagement: HRM can create a work environment that fosters employee engagement, resulting in
increased productivity.