Topic 1: Nature, scope and Functions of Human Resource Management

-French Wendell “personnel management is the recruitment, selection, development, utilization,

compensation and motivation of human resource of the organization.

-The aspect of management that is concerned with the work force and their relationship with the entity is
known as Personnel Management.

-The primary functions of the personnel management are divided into two categories:

1. Operative Functions: The activities that are concerned with procurement, development, compensation,
job evaluation, employee welfare, utilization, maintenance and collective bargaining.

2. Managerial Function: Planning, Organizing, Directing, Motivation, Control, and Coordination are the
basic managerial activities performed by Personnel Management.

-Human resource management may be defined as that part of management process which develops and
manages the human element of the enterprise considering their resourcefulness in terms of total
knowledge, skills, creative abilities, talents, aptitudes and potentialities for effectively contributing to the
organizational objectives.

Definition of Human Resource Management

Human Resource Management is that specialized and organized branch of management which is
concerned with the acquisition, maintenance, development, utilization and coordination of people at work,
in such a manner that they will give their best to the enterprise.

-It refers to a systematic function of planning for the human resource needs and demands, selection,
training, compensation, and performance appraisal, to meet those requirements.

-Human Resource Management is a continuous process of ensuring the availability of eligible and willing
workforce i.e., putting the right man at the right job. In a nutshell, it is an art of utilizing the human resources
of an organization, in the most efficient and effective way. HRM covers a broad spectrum of activities which
includes:

• Employment

• Recruitment and Selection

 • Training and Development

• Employee Services

• Salary and Wages

• Industrial Relations

• Health and safety

• Education

• Working conditions

• Appraisal and Assessment

Key Differences Between Personnel Management and Human Resource Management

The following are the major differences between Personnel Management and Human Resource
Management:

1.The part of management that deals with the workforce within the enterprise is known as Personnel
Management. The branch of management, which focuses on the best possible use of the enterprise’s
manpower is known as Human Resource Management.

2. Personnel Management treats workers as tools or machines whereas Human Resource Management
treats it as an important asset of the organization.

3.Human Resource Management is the advanced version of Personnel Management.

4. Decision Making is slow in Personnel Management, but the same is comparatively fast in Human
Resource Management.

5. In Personnel Management there is a piecemeal distribution of initiatives. However, integrated distribution

of initiatives is there in Human Resource Management.

6. Decision Making is slow in Personnel Management, but the same is comparatively fast in Human
Resource Management.

7. In Personnel Management there is a piecemeal distribution of initiatives. However, integrated distribution

of initiatives is there in Human Resource Management.
Nature of HRM:

1. HRM involves management functions like planning, organizing, directing and controlling.

2. It involves procurement, development, maintenance and management of human resource.

3. It helps to achieve individual, organizational and social objectives.

4. HRM is a mighty disciplinary subject. It includes the study of management psychology

communication, economics and sociology.

5. It involves team spirit and team work.

6. HRM is a pervasive function of management. It is performed by all managers at various levels in

organization.

7. HRM is people centered and is relevant in all types of organizations.

8. HRM is not a „one shot‟ function. It must be performed continuously if the organizational objectives
are to be achieved smoothly.

Scope of Human Resource Management

The scope of HRM refers to all the activities that come under the banner of HRM. The activities are as
follows

1. Human resources planning: – Human resource planning is a process by which the company to identify
the number of jobs vacant, whether the company has excess staff or shortage of staff and to deal with this
excess or shortage.

2. Job analysis design: – Another important area of HRM is job analysis. Job analysis gives a detailed
explanation about each and every job in the company. Based on this job analysis the company prepares
advertisements.

3. Recruitment and selection: – Based on information collected from job analysis the company prepares
advertisements and publishes them in the newspapers. A number of applications are received after the
advertisement is published, interviews are conducted and the right employee is selected thus recruitment
and selection are yet another important area of HRM.
4. Orientation and induction: – Once the employees have been selected an induction or orientation program
is conducted. The employees are informed about the background of the company. They are told about the
organizational culture and values and work ethics and introduce to the other employees.

5. Training and development: – Every employee goes under training program which helps him to put up a
better performance on the job. Training program is also conducted for existing staff that have a lot of
experience. This is called refresher training. Training and development is one area were the company
spends a huge amount.

6. Performance appraisal: – Once the employee has put in around 1 year of service, performance appraisal
is conducted i.e. the HR department checks the performance of the employee. Based on these appraisal
future promotions, incentives, increments in salary are decided.

7. Compensation planning and remuneration: – There are various rules regarding compensation and other
benefits. It is the job of the HR department to look into remuneration and compensation planning.

8. Motivation, welfare, health and safety: – Motivation becomes important to sustain the number of
employees in the company. It is the job of the HR department to look into the different methods of
motivation. Apart from this certain health and safety regulations have to be followed for the benefits of the
employees.

9. Industrial relations: – Another important area of HRM is maintaining co-ordinal relations with the union
members. This will help the organization to prevent strikes lockouts and ensure smooth working in the
company.

Functions of Human Resource Management Includes:

1. Managerial Functions

2. Operative Functions

Managerial Function Includes:

1. Planning

-One of the primary function where number & type of employees needed to accomplish organizational
goals are determined. Research forms core HRM planning which also helps management to collect,
analyze and identify current plus future needs within the organization.
2. Organizing

-Organization of the task is another important step. Task is allocated to every member as per their skills
and activities are integrated towards a common goal.

3. Directing

This includes activating employees at different levels and making them contribute maximum towards
organizational goal. Tapping maximum potentialities of an employee via constant motivation and command
is a prime focus.

4. Controlling

Post planning, organizing and directing, performance of an employee is checked, verified and compared
with goals. If actual performance is found deviated from the plan, control measures are taken.

Operative Function Includes:

1. Recruitment/Hiring

-Hiring is a process which brings pool of prospective candidates who can help organization achieve their
goals and allows managements to select right candidates from the given pool.

2. Job Analysis & Design

Describing nature of the job like qualification, skill, work experience required for specific job position is
another important operative task. Whereas, job design includes outlining tasks, duties and responsibilities
into a single work unit to achieve certain goal.

3. Performance Appraisal

Checking and analyzing employee performance is another important function that human resource
management has to perform.

4. Training & Development

This function allows employees to acquire new skills and knowledge to perform their job effectively.
Training and development also prepare employees for higher level responsibilities.

5. Salary Administration
Human Resource Department also determines pays for different job types and incudes compensations,
incentives, bonus, benefits etc. related with a job function.

6. Employee Welfare

This function takes care of numerous services, benefits and facilities provided to an employee for their well-
being.

7. Maintenance

Minimizing employee turnover and sustaining best performing employees within the organization is the key.
Minimizing ROI within HR department is also a key goal for Human resource management team.

8. Labor Relations

Labor relation is regards to the workforce who work within a trade union. Employees in such domain form a
union/group to voice their decisions affectively to the higher management.

9. Personal Research

-Research is a vital part of human resource management. It is performed to keep a check on employee
opinion about wages, promotions, work condition, welfare activities, leadership, employee satisfaction and
other key issues.

10. Personal Record

-This function involves recording, maintaining and retrieving employee related information including
employment history, work hours, earning history etc.