Chapter 1 – Introduction to HRM

Human resource management refers to the set of programs, functions and activities
designed and carried out in order to maintain both employee as well as
organizational effectiveness. It consists of acquisition, development, motivation and
maintenance of human resources.

Characteristics of HRM

a) Human focus:
Human resource management is concerned with managing human resources
at work. It focuses on managing all kinds of human resources in an
organization. It covers all levels of people, including top level employees,
middle as well as lower lever employees.

b) Pervasive function:
Human resource management is a pervasive function of management. All
managers at various level in the organization perform it. Every manager from
top to bottom, working in any department has to perform HR functions. For
instance, all managers in any organization need to know how to motivate
employees, train them, appraise their performance and so forth.

c) Continuous in nature:
Human resource management is a continuous function. It must be performed
continuously if the organizational goals are to be achieved smoothly. It
requires a constant alertness and awareness of human relations and their
importance in every day operations.

d) Essential in all organizations:

Human resource management and its functions are required in all types of
organizations including manufacturing, trading and service organizations. It
is also required in government and social institutions. However, depending on
the nature of the organization, the HRM system may differ.

e) Dynamic:
Human resource management is a dynamic function whereby the procedures
and practices are influenced by environmental factors. For example, HR
department develops training and development programs to enhance the
innovative skills of employees in respond to technological change.

f) Integrated system:
Human resource management is an integrated system. It consists of
acquisition, development, utilization and maintenance functions. It takes a
systematic approach to the management of people in the organization.
 Objectives/Importance of HRM

a) Goal achievement:
Human resource management helps the organization to meet its goals
through a proper utilization of human resources. It includes achievement of
personal, organizational and societal goals.

b) Goal harmony:
Human resource management bridges the gap between employee’s individual
goals and organizational goals thereby resulting in goal harmony.

c) Productivity improvement:
High productivity is an important goal of every organization to get more
output from less input. Effective HRM is the key to increasing organizational
productivity. HRM continuously develops better quality employees and
improve the productivity in any organization.

d) Structure maintenance:
An organizational structure defines and assigns the task for each employee
working in the organization. In this regard, HRM helps to maintain
organizational structure by fulfilling vacancies at the right times. It ensures
the right number and kind of people, at the right place and at the right time.

e) Change management:
Human resource management also helps to manage change in the
organization. It adapts to changing environment. It promotes readiness to
change among employees. It follows flexible HR practices to motivate
employees to work to keep organization more flexible to respond to the
changing elements of the environment.

f) Quality of work life:

Quality of work life concentrates on creating a working environment that is
conducive to the satisfaction of employees’ needs. It aims to promote a
better quality of work life by giving employees adequate responsibility,
opportunities for participation, communication, learning and career
development to make them able to contribute to the success of the
organization.
 Components of HRM

a) Acquisition:
Acquisition begins with human resource planning. It includes the estimating
of demand and supplies of manpower and also the recruitment, selection,
placement and socialization of employees. It ensures the entry of the right
number of people at the right time and right place.

b) Development:
It is the process of improvising, molding, changing and developing the skills,
knowledge, creative ability, aptitude, attitude, values and commitment based
on present and future requirement both at the individual and organizational
level.

c) Motivation:
It is a process which inspires people to give their best to the organization
through the use of intrinsic (achievement, recognition, responsibility) and
extrinsic (job design, work scheduling, appraisal based incentives) rewards.
It is required to make employee committed to the work and improve
productivity.

d) Maintenance:
Maintenance is concerned with providing proper working conditions. These
conditions create positive employee attitude which is necessary to maintain
their commitment to the organization. Maintenance function ensures keeping
productive employees in the organization for a long time and deals with
safety and health, labor relations etc.
 Functions of HRM

a) Human resource planning:

HR planning is forecasting of need and availability of manpower in an
organization. It is prepared by HR department in consultation with other
departments. The demand for manpower is estimated on the basis of
expansion or contraction of current and future business operation whereas
manpower supply is determined by the internal and external availability of
people.

b) Job analysis:
It is concerned with collecting job relation information to make job
specification and job description. Job analysis helps in manpower planning,
recruitment and selection and other HR decisions.

c) Recruitment and selection:

Recruitment is a process of identifying prospective employees, stimulating
and encouraging them to apply for the particular job in an organization.
Selection is made then from the list of potential employees after recruitment.

d) Training and development:

It is needed to build the skill, ability and to motivate employees. HR
department provides training and development program to the employees as
per the organizational need.

e) Performance appraisal:
It is the process of evaluation of employees’ performance related to strength
and weakness. It is measured against criteria set previously. This function
helps in determining pay, promotion and also in taking disciplinary action.

f) Compensation and benefits:

Compensation and benefits are the rewards provided to employees against
their effort to work. They are the major tools to motivate employees in an
organization. Thus, HR manager must design them in effective manner to
attract qualified and skilled manpower at work.
g) Employee relation
HRM environment

HRM environment refers to the forces that create conditions for and influences on
organizational performance, HRM’s performance and outcomes.

Some of the environmental factors are as follows:

a) Globalization:
Globalization is the process by which transactions of business organizations
reach across borders. To meet global requirement, HRM has to think over its
policies as well as practices. Issues like selection of qualified employees with
language fluency to work in other countries, their training to work in an
international environment, and motivating them to work are pertinent to
HRM.

b) Technological advances:
Technological advances are also regarded as important aspects of the HRM
environment. These days technology is changing very rapidly and to cope
with it, organizations require skilled, innovative and motivated workforce. For
that HRM require to plan for education, training and development of the
workforce to upgrade their existing level of knowledge, skills and decision
making capacity to adapt to technology changes.

c) Workforce diversity:
The success of an organization depends on how effectively it can respond to
the situation of increasing diversity of workplaces. The challenge of HRM is to
make people accommodate to the diverse groups of people at workplace by
addressing their different lifestyles, cultural factors, family needs and work
styles. If managed properly, it can also increase creativity and innovation.

d) Nature of work:
Now a days the nature of work and job is changing. Mainly globalization and
technological advancements are causing changes in the nature of work and
jobs. Knowledge intensive high-tech jobs are replacing factory jobs. Most
employees are employed in producing and delivering services. Manufacturing
jobs are shifting to low wage countries such as China and India.

e) Legal trends:
Legal trends play a crucial role in business decision-making by affecting HRM
activities. Mainly, government laws and regulations, constitutions and other
legal documents have a great bearing on the selection and implementation of
HRM practices in the organization. These legal provisions regulate the
recruitment and selection procedures, employee relations, reward systems,
performance evaluation systems and other HR practices and activities.
 Challengers faced by HR manager

a) Globalization:
Globalization refers to the integration of national economy into a world
economy. Because of globalization HR manager face challenges of making
employees able to compete across the global markets, else organization will
lose foreign market opportunities and detain from competition.

b) Workforce diversity:
Modern organizations are becoming heterogenous in terms of ethnicity,
gender, age group etc. It is the challenge of HR manager to manage diverse
group of workforce as they have different knowledge, skill and behavior and
may require training, education, and awareness programs to make them
work according to organizational objective.

c) Contingent workforce:
Contingent workforce refers to part-time, temporary workers appointed for
short time contract. They are the workers who do not have regular full time
employment status and perform specific tasks. The challenge of HR manager
include attracting and retaining skilled contingent workers, adjusting to their
special needs and managing any conflict that may arise between core and
contingent workers.

d) Change management:
HRM must pay attention to innovation and change, otherwise organizations
would go out of business. It should play active role in fostering employee
commitment to change and effective management of change is most. How to
adjust employee’s competencies, knowledge and energy with such change
and how to keep pace with such change, all have become challenge for HRM.

e) Downsizing:
Downsizing is a strategy for reducing the number of employees in the
workforce, usually to improve organizational performance and selectively
lowering costs. HRM should be aware so that employees contributing the
most is retained and motivate them to work for achieving collective
organizational goal.

Differences between personnel management and human resource

management

Personnel management Human resource management

a) It assumes people as an input in a) It assumes people as a valuable
the production. resource of an organization.
b) It concerns only personnel
department.
c) It performs only routine
personnel functions for employee
satisfaction.
d) Job design is based on division of
labor.
e) Outcomes are satisfied
employees and increased
production.
b) It concerns all levels and functional
departments.
c) It develops and utilize human
potential for goal achievement.
d) Job design is based on team work.
e) Outcomes are increased
organizational effectiveness and better
organization culture for team work.