CH-1 Appreciate Importance of Human Resource

1.1 Introduction
1.2 Definition and Characteristics of Human Resource Management
1.3 Functions of Human Resource Management
1.5 Need for the Human Resource Management in Industrial Environment
1.6 Scope of Human Resource Management
1.7 Impact of Human Factors on Productivity and Industrial Harmony
1.8 Importance of providing Time to Time Suitable Training to Manpower
1.9 Role Model for a Good supervisor

1.1 Introduction:
 All the economic activities are carried out through the deployment of various
economic resources described through 7M’s by prof. George Terry. Men, Machine,
Materials, Money, Methods, Markets and Minutes.
 Among all these resources, men is a live resource while all other resources are
dead and thus, they are controlled by the men resource.
 In the present competitive world the success or failure of the economic entity is
contingent upon the men resource.
 The initial development of the management theory in the beginning of the 20 th
century by Frederick.W.Taylor gave importance to the non-human resources like
use of machine and materials.
 But in the due course, the importance of the human resources was recognized and
during 1924-1932 efforts were made to study of the human behaviour in
organization through the Hawthorne Experiments carried out by Elton Mayo in the
Western Electric Company of U.S.A.
 This "Behavioral science"pro founded that the efficient and effective use of the non-
human resources like machines, materials etc.
1.2 Definition and Characteristics of the Human Resource Management:
Definition :

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Human Resource Management (HRM) is defined as under:
1. "Human Resource Management is a process of procuring, developing and retaining
the competent people in the organization who contributes in achieving the
organizational goals efficiently and effectively."
2. According to Edwin Flippo, "Human Resource Management is the planning,
organizing, directing and controlling of the procurement, development,
compensation, integration, maintenance and separation of human resources to the
end that individual, organizational and social objectives are accomplished."
3. The National Institute of Personnel Management of India, defines personnel
management or human resources management as under : “Personnel
Management” of “HRM” is that part of management which is concerned with the
people at work and their relationship within on enterprise.”
Characteristics of Human Resource :
1. HR is a living resource.
2. HR is free from rated capacity.
3. Diversity in ability and willingness to work.
4. Maintenance and enhancement of resources.
5. Degree of exacting obedience and control.
6. The value reduction and accretion of resources.
7. HR needs human resource accounting.
8. HR can be classified into two categories.
9. Rewarding system.
10. HR is a perishable resource.
 HR is a living resource - Human Resource being a living resource has emotions,
demands, expectations, feelings, perceptions. They can think, show satisfaction or
dissatisfaction, resistance and acceptance. All emotional problems emanate from
them only. Because of this they need additional consideration like:-
Physical working conditions like light, air climate, cleanliness, noise, safety etc.
Minimum monetary rewards
Financial and non financial incentives.

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 Terms and conditions of job favorable to them.
 HR is free from rated capacity – HR is not subjected to any rated capacity like
material resource. Eg:- A cutting machine can cut 100 pieces in a minute. Human
resource can produce unlimited and miraculous results through novel ideas. There
are physical limitations but there is no limit to creativity and innovativeness.
 Diversity in ability and willingness to work - Each and every person differs from
other in matter of his ability and willingness to work. Normally, human beings by
nature never fully utilize the ability in him. So willingness is always less than ability.
This can be solved through proper motivation.
 Maintenance and enhancement of resources - Resources have to be taken care
off. Machines are maintained through repair and servicing, materials are maintained
through proper inventory control. Ability of human resource is not only maintained
but also enhanced through Training.
 The degree of exacting obedience and control - Non human resource work as
per instructions given by men. Eg:- Machine starts on switching it on and stops on
switching it off. Such strict control is not possible with men. HR has needs, motives
and expectations which makes them unique. Each human being requires a unique
way of handling.
 The value reduction & accretion of resources-Non human resources loses its
value with passage of time but value of human resource increase in form of
experience and enhanced skills and knowledge.
 HR needs human resource accounting-Expenses made for human resource are
treated as long term investments. Nowadays, organizations calculate in figure the
cost of investment and returns from human resource. This helps them keep the
people really working and find out those who are not adding to companys profits.
 HR can be classified into two categories
Workers rewarded in form of wages, working at shop floor level are called Blue collar
staff. They are further classified into skilled, semi-skilled and unskilled workers. They
work physically and earn less.
Office staff, executives rewarded in form of salaries, working in office is called White
collar staff. They work mentally and enjoy more earnings and benefits.
 Rewarding system there are two types of rewarding system for workers.
Time rate -Payment is made on basis of time spent at the work place. It assures quality
but fosters inefficiency. So supervision is required for proper time utilization.

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Piece rate - Payment is made on basis of production i.e. per unit. It assures more
production but sacrifices quality and needs supervision.
 HR is a perishable resource- It must be used or it will go waste. It cannot be
accumulated. Past inactive time cannot be used in future. Loss of time results in
wastage of human resource.
1.3 Functions of the Human Resources Management (HRM) :
Functions of HRM

Managerial Functions Hardcore HRM functions

1. Planning 1. Procurement
2. Organising 2. Development
3. Directing 3. Compensation
4. Controlling 4. Integration
5. Maintenance
Managerial functions
1. Planning - It is forecasting of future. It is a mental process. What functions are to
be performed and when, what resources you will require and how much? All such
answers would be plotted on a paper.
2. Organising -It is formal establishment of human relationship in Organisation.
(superior, subordinate, peer) It is also providing non-human resources and
allocating them. It is giving of authority and responsibility to people.
3. Directing -This function deals with guiding people, showing them right direction
to work through, communication, leadership and motivation.
4. Controlling - It deals with co-ordinating efforts of people, comparing them with
planned activities and if there are gaps, trying to fill them. It is co-ordinating group
efforts for common objectives.
Hardcore HRM functions
1. Procurement - It is deciding and getting source of manpower and quality human
resource. This function deals with selection, training, induction and placement on
the job.

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 2. Development -This function deals with training, promotion, transfer and
separation.
3. Compensation -It deals with performance appraisal, motivation and appropriate
rewarding to human resources.
4. Integration -It deals with handling grievances, settling disputes, development of
cohesive relations and unity among man power in organization for same goal
achievement.
5. Maintenance - It encompasses with social security measures, employee benefits
etc.
1.5 Need for the Human Resource Management in the Industrial Environment :
 Human resources are needed for conducting the business activity.
 This is well recognized in the inclusion of the men in the six basic resources (6 M's -
men, machines, materials money, methods and markets) needed for carrying out
any form of economic activities viz trading, manufacturing or rendering the services.
 The importance of the human resource came to the doubt under following two eras
of the growth of business activity.
I. Era of the industrial revolution
II. Information revolution
 The need for the management of the human resources in the industrial environment
has become imperative due to the following factors:
(1) Social system :
 Any organization is a social system and in such a system, the interpersonal
relations developes formally and informally.
 The behaviour of the person affects the other person in the organization.
 The social system is an open system. Two same qualified persons getting two
differing rewards for the same work necessitates some adjustments.
(2) Social equilibrium :
 The process of social equilibrium necessitates some adjustment in the human
resources.

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 The mission and self-actualization of an individual is required to be fulfilled. Thus,
the turnover of the employees in the form of promotion, transfer and resignation
becomes a natural process.
(3) Dysfunctionality in the operating activities :
 The organizational goals and the personal objectives sometimes remain in conflict.
 The human resources sometimes gives priority to the attainment of the personal
objectives at the cost of the organizational objectives.
 The HRM strives to develop the goal congruence between the organization and the
individual.
(4) Emotional involvement:
 An employee works for the organization under a contractual obligation.
 However, alongwith an economic contract, the psychological contract is implied.
 The psychological environment caused by the interpersonal relations affect the
emotional involvement of an employee in the form of loyalty, honesty, commitment
and dedication.
(5) Value system :
 The employees are coming from the society. The behaviour of the employees reflect
the value system they represent. Thus, the value system affect the efficiency and
the behaviourof the employees.
(6) Role diversity :
 The same person plays different roles in the different organizational situations.
 When an employee is promoted then for his other peers he becomes the superior.
(i) Role perception
(ii) Role model
(iii) Role conflict
(iv) Role ambiguity
(7) Status differentials:
 The employees are empowered in the organization through the delegation of
authority

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The status of a person is adjudged on the basis of the following:
(i) Job description as per status, e.g. deputy manager or assistant manager.
(ii) Scale of facilities, e.g. location, size and facilities in the office.
(ii) Authority level and privileges.
(iv) Status symbol through dress code etc.
1.6 Scope of the Human Resource Management (HRM) :
 The human resources management is an important area of the management.
Traditionally it was considered as one of the following four areas of the
management, viz. production management, marketing management, financial
management and the personal management. But modern HRM has replaced
personal management and enhanced its scope of activities.
1. Manpower planning- It is estimation of human needs based on workload and
employee turnover and growth requirements.
2. Recruitment, Selection and Placement- It is the process of finding out source
of man power, making proper selection based on screening and placing right
person on a right place.
3. Training & Development- Development of human resource through training
which will enhance their ability and knowledge.
4. Motivation -Motivating people to develop willingness to work upto ability to work.
5. Rewards and Compensation- Reward system should be such that encourage
performance. Moreover bonus, incentives etc would further motivate employees.
6. Group dynamics & behavioural management- to understand behaviour of
employees, appreciating and fulfilling psychological needs.
7. Productivity and morale - providing opportunity for increasing productivity and
enhancing morale.
8. Industrial relations- encouraging cohesive and harmonious industrial
relationship and maintaining them.

1.7 Impact of Human Factor on Productivity and Industrial Harmony:

(1) Human resource and productivity.

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(2) Relationship between morale and productivity.
(3) Impact of human element on the industrial harmony.
Each aspect is briefly explained as under:
(1) Human resources and productivity:
 The productivity is defined as a ratio of output to input.
 It is formulated as under:
 Productivity = Output/Input
 Inputs are men, machines, materials, money and methods employed while outputs
are sales. Organisation can adopt any one of the following strategies to increase
productivity of its inputs.
1. Getting more output from same input.
2. Getting same output from less input.
3. Getting more output from less input.
Here, only human resource would be helpful being free from rated capacity in
implementation of any of the above strategies.
(2) Relationship between morale and productivity
 Dr. Elton Mayo conducted a series of Hawthorne Experiments during 1924-1932 at
Western Electric Company in U.S.A. One of these experiments concluded that there
exist a strong positive relationship between Morale and Productivity. This
relationship can be again classified into 3 categories.
1. Direct and Proportionate relationship - morale is independent variable and
productivity is a dependant variable. Here, increase in productivity would be in
exact proportion of increase in Morale. Productivity/Morale = 1
2. Increase in productivity at decreasing rate - Here increase in productivity would
be less compared to morale. Productivity/Morale < 1
3. Increase in productivity at increasing rate - Here, increase in productivity is more
than increase in morale.
Productivity/Morale > 1.
(3) Impact of Human Element on Industrial Harmony :

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  The human element in an organization is represented by the human groups. The
interpersonal personal relationship in the form of superior, subordinate and peer is
developed in two forms - formal human groups and the informal human groups.
Their relative forms and characteristics are classified as under:
Table 1.1 Forms of group

Formal Groups Informal Groups

This group is formed under the formal
authority delegated by higher
management. It is considered as
a"command group" headed by a group
leader and his subordinates.
Such groups are formed spontaneously
through some linkage like caste,
creed,sex, culture, hometown, co-
dweller, traveller or similar
characteristics. The are known as
"Friendship group" tie with come
common characteristic.

A formal group can also be formed under Sometime an informal group is formedby
the authority of the management. e.g. A the members having some common
task-force or a working group formed to interest. Sometime an informal group is
study a particular problem or a task e.g.A formed by the members having some
working group appointed by the Reserve common interest. Such group is known
Bank of India to study the lending pattern as an"Interest Group". e.g. An
of working capital of the commercial association of Small Scale Industry
banks. Such group is headed by a promoters former to make a
chairman. It gets dissolved at the representation to the government about
conclusion of the study. the SS1 problems.

Impact of human element on Industrial Harmony- It refers to high degree of co-

operation, co-ordination, cohesiveness, unity and team spirit and peaceful environment
free of disputes.
Factors affecting industrial harmony
1. External conditions- organization structure, authority structure, policies and
procedures, rules, available resources, culture, values, etc.

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 2. Group member characteristics - individual features and competence
3. Group structure- Formal relationship, role of each member, norms of group,
status of each person, size of group etc.
4. Group task - size of task, individual involvement, flow of communication
5. Group decision making- imposed or participative decision making.
1.8 Importance of providing time to time suitable training to manpower:
 Every person is a full-of potentialities. This natural gift has to be developed through
time to time training.
 The time to time training is required for every person who is exposed to a new type
of work or new type of environment.
 Even refresher training is required for experienced operators and executives.
 Training is considered a long exercise.
 one critical distinction between physical growth and mental growth is beautifully
described by the following quotients, wherein physical growth is denoted by
denominator and the mental growth by the numerator :
IQ : Intelligence quotient =Intelligent age / Physical age
EQ: Emotional Quotient =Emotional age / Physical age
SQ : Spiritual age = Spiritual age / Physical age
AQ : Action age =Action age / Physical age
1.9 Role Model for a Good Supervisor:
 Generally, it is the human resource, who controls all non-human resource through
the managerial inputs. Such human resources are formally organized in a pyramid
structure form and their interpersonal relationships are established in the form of
superior, subordinate and peer.
 The typical organization structure of a composite textile company for the production
department is presented as under:

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 Fig : 1.1 Formal Organization structure (securidoor.com)

President

Production Manager Marketing Manager Financial Manager Human Resources Manager

Supervisor (Spinning) Supervisor (Wearing) Supervisor (Processing)

Large number of operators

 They have to handle a large number of operators coming from different cultures,
educational background and diverse values etc.
 The supervisors are translating the philosophies, strategies and expectations of the
top management to the operating level.
 The supervisors have to blend both the skills the managerial skill as well as the
operative skill.

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 The good supervisor's role is crucial in any organization because he is a trainer,
facilitator, mentor and motivator.
Types of skills as well as qualities of a good person:
(1) Technical skill : He must possess high degree of technical skill but operating staff
refers him for any problem or uncomfortable situation.
(2) To be Facilitator : He should put all the operators working under him in a
confortable situation, in case of any problems accuring in the working environment.
(3) Trainer: A supervisor has to be trainor. As he is required to influence the behaviour
of operating staff, he should train them before they are actually put on the required
position either front-office or back office.
(4) Communicator : A supervisor is a link the upper level managerial staff and the
lower level non-managerial people like operators or workers. He must possess the good
and effective communication skill.
(5) Mentor : A supervisor has to act as a friend, philosopher and guide. As he has to
deal with illiterate and poor workers, they attend the duties along with many family,
financial and other problems.
(6) Motivator : A supervisor has to motivate workers to bring up their willingness to
work up to his ability level.
(7) Humanitarian approach: A supervisor has to be person - oriented rather than
product-oriented.

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