HRM Chapter one

CHAPTER ONE: INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

Objectives:
After studying this chapter, you would be able to:
1) Know the basic concepts of human resource management (HRM)
2) Be acquainted with the major human resource management functions.
3) Understand personnel issues under different schools of thoughts
1.1. Definition and Background of HRM
What is human resource management?
Before giving an answer to this question, it would be better to define "management" itself. The
reason to this is that human resource management belongs to the broader field of study and
practice known as management.
Management can be defined as the process of reaching organizational goals by working with
and through people and other resources. Management in all areas of life implies achieving
goals with effective and efficient use of organizational resources.
 Organizational resources can be grouped into four major categories:
 Human resources · Physical resources
· Financial resources · Information resources
Human resources are among the fundamental resources available to any organization.
Emphasizing the importance of human resources, some prominent writers define management
as the process of getting things done with and through other people.
Human resource management (HRM) is thus a part of the field of management. HRM can be
defined as the utilization of human resources to achieve organizational objectives. It can
broadly be seen as that function of all organizations which provides for effective utilization of
human resources to achieve both the objectives of the organization on one hand and the
satisfaction and development of employees on the other hand (Glueck, 1992).
 In defining and studying human resources management some points need to be
emphasized:
· Human resources management is concerned with the people dimension of the
organizational management.
· Human resource management is a pervasive activity, meaning a universal activity in
any type of organization: government, business, education, health, defense, recreation,
etc.
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· The human resource is said to be the most important element in an organization since
people make the decisions concerning all other organizational resources. Therefore,
getting and keeping good people is critical to the success of every organization,
whether profit or non-profit, public or private.
In an organization, managers at all levels must concern themselves with human resource
management at least to some extent. Basically, it has been said, managers get things done
through the efforts of others, which basically requires effective human resource management
(Monday & Noe, 1990).
A human resource manager is an individual who normally acts in an advisory, or "staff",
capacity, working with other managers to help them deal with human resource matters. The
human resource manager is primarily responsible for coordinating the management of human
resources to help the organization achieve its goals.
Some writers in the field and other management people may use such names as "personnel",
"personnel management", "manpower management", and "employee relations" to say the same
thing: human resource management, in fact HRM is more acceptable term to refer the same.
 Now, let us quote the following HRM definitions that collectively cover all the above five
core points.
1. Human resource management can be defined as the process of accomplishing organizational
objectives by acquiring, retaining, developing, and properly using the human resource in an
organization. (N. Dunning Thomas & John M. Invanevich, 2004).
2. Human resource management is the process of acquiring, training, appraising, and
compensating employees, and attending to their labour relations, health and safety, and
fairness concerns. (Dessler Gary, 2003)
3. Human resource management is the process of planning, organizing, directing and
controlling of the procurement, development, compensation, integration, maintenance, and
separation of human resources to the end that individual, organizational, and societal
objectives are accomplished. (Aswanthappa. K, 2002).
4. Human resources management refers to series of integrated decisions that form the
employment relationship; their quality contributes to the ability of the organization and the
employees to achieve their objectives. (Aswantappa K, 2002)
5. Human resource management is concerned with people dimension in management. Since
every organization is made up of people, acquiring their services, developing their skills,
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motivating them to higher level of performance and ensuring that they continue
maintaining their commitment to the organization are essential to achieving organizational
objectives. This is true, regardless of the type of organization- government, business,
education, health, recreation, or social action.
Thus, HRM refers to a set of programs, functions and activities, designed and carried out in
order to maximize organizational as well as employee’s effectiveness and efficiency. In other
words, HRM is a proper use of people, which involves understanding both individual and
organizational needs so that the full potential of human resources can be employed. This part
of the HRM suggests that it is important to match individuals over time to shifts in
organizational and human needs.
1.2. Importance of Human Resource Management
Studying HRM is important because it is people who are capable of deciding, implementing,
and controlling activities. Organizations are established not by gods, but by human beings. No
computer can substitute human brain, no machine can run without human intervention, and no
organization has the mandate to exist if it cannot serve the needs of the people. “you can get
capital and erect building, but it takes people to build a business” – Thomas J. Watson (founder
of IBM)
 The major Human Resource Management functions – which may be essential to
understand the importance of HRM
Human resource management functions are the set of activities performed in utilizing human
resources for better achievement of organizational objectives. Following are the major elements
(Mondy & Noe, 1990):
1. Human Resource Planning: Human resource planning (HRP) is the process of
systematically reviewing human resource requirements to ensure that the required numbers
of employees, with the required skills, are available when they are needed. HRP is the
process of matching the internal and external supply of people with job openings anticipated
in the organization over a specified period of time.
2. Recruitment: Recruitment is the process of attracting individuals in sufficient numbers and
encouraging them to apply for jobs with the organization. It is the process of identifying and
attracting a pool of candidates, from which some will later be selected to receive
employment offers.

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3. Selection: Selection is the process of choosing from a group of applicants the individuals
best suited for a particular position. Whereas recruitment encourages individuals to seek
employment with a firm, the purpose of the selection process is to identify and employ the best
qualified individuals for specific positions.
4. Orientation: Orientation is the formal process of familiarizing new employees with the
organization, their job, and their work unit. Through orientation (also called socialization or
induction) new employees will acquire the knowledge, skills, and attitudes that make them
successful members of the organization.
5. Training and Development: Training and development aim to increase employee's ability
to contribute to organizational effectiveness. Training is a process designed to maintain or
improve performance (and skills) in the present job. Development is a program designed to
develop skills necessary for future work activities. It is designed to prepare employees for
promotion.
6. Compensation Administration: Compensation administration refers to the administration
of every type of reward that individuals receive in return for their services. In its boarder sense,
compensation represents all sorts of rewards that individuals receive as a result of their
employment.
7. Performance Evaluation: Performance evaluation is a formal system of periodic review
and evaluation of an individual's job performance.
8. Safety and Health: Safety involves protecting employees from injuries caused by work-
related accidents. Health refers to the employee’s freedom from illness and their general
physical and mental well-being. These aspects of the job are important because employees who
work in a safe environment and enjoy good health are more likely to be productive and yield
long-term benefits to the organization.
9. Promotions, transfers, demotions and separations: Promotions, transfers, demotions, and
separations reflect an employee's value to the organization. High performers may be promoted
or transferred to help them develop their skills, while low performers may be demoted,
transferred to less important positions, or even separated.
10. Human Resource Research: Human resource research is a systematic gathering,
recording, analyzing, and interpretation of data for guiding human resource management
decisions. Every human resource management function needs effective research.

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11. Other areas such as employee and labour relations, collective bargaining, employee rights
and discipline, and retirement are also concerns of human resource management.
1.3. Historical Development: an overview
American writers Terrey and Franklin (1996) mentioned about the 6 Ms of management, viz
Men and women, material, money, market and method. But among these, men and women - the
only living being- do the effective coordination and utilization of these human and non-human
resources. All the activities of any enterprise are initiated and Human resource gained more
attention as the workforce considered to be an important resource to gain competitive
advantage of organization and also it is helpful in utilizing the resources of an organization to
an optimum extent in order to achieve organizational goal.
Managing human resource is a complex process. As Harzing and Ruysseveldt said a better way
to understand the philosophy of human resource management demands a thorough
understanding about the evolution of the concept itself from the ancestral concept personnel
management. In 1990 due to liberalized government policies of various countries the human
resource started floating from one country to another.
Personnel, according to some writers, at least in a primitive form, have existed since the
beginning of group effort. Certain personnel functions, even though informal in nature, were
performed whenever people came together for a common purpose. During the course of this
century, however, the processes of managing people have become more formalized and
specialized, and a growing body of knowledge has been accumulated by practitioners and
scholars.
For many decades such responsibilities as selection, training and compensation were
considered basic functions constituting the area traditionally referred to as personnel. These
functions were performed without much regard for how they related to each other. From this
narrow view the world has seen the emergence of what is now known as human resources
management.
Human resources management (HRM), as it is currently perceived, therefore, represents the
extension rather than the rejection of the traditional requirements for managing personnel
effectively.

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1.4. HRM Objectives

The primary objective of HRM is to ensure the availability of competent and willing workforce
to an organization. Specifically, HRM objectives are four fold-societal, organizational,
functional and personal. (See fig. 1.1)

Personal objectives

Functional objectives

Organizational objectives

Societal Objectives
Fig. 1.1 Objectives of HRM

Societal objective: To be ethically and socially responsible to the needs and challenges of the
society while minimizing the negative impact of such demands upon the organization. The
failure of organizations to use their resources for the society’s benefit in ethical ways may lead
to restrictions. For example, the society may limit HR decisions through laws that enforce
reservation in hiring and laws that address discrimination, safety or other such areas of societal
concern.
Organizational Objectives: To recognize the role of HRM in bringing in about organizational
effectiveness. HRM is not an end in itself. It is only a means to assist other organization with its
primary objectives. Simply stated, the department exists to serve the rest of the organization.
Functional objective: To maintain the department’s contribution at a level appropriate to the
organization’s needs. Resources are wasted when HRM is either more or less sophisticated to
suit the organization’s demands. The department’s level of service must be tailored to fit the
organization it serves.
Personal objectives: To assist employees in achieving their personal goals, at least insofar as
these goals enhance the individual’s contribution to the organization. Personal objectives of

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employees must be met if workers are to be maintained, retained and motivated. Otherwise,
employee performance and satisfaction may decline and employees may leave the organization.

Review and Discussion Questions

1. Define " management".
2. What are the major categories of organizational resources?
3. What is human resource management (HRM)?
4. "HRM is a pervasive activity". Explain
5. Human resources are said to be the most important element in organizations. Why?
6. Define the following terms:
a) Human resource planning b) Recruitment c) Selection
d) Orientation e) Training and development
f) Compensation administration g) Performance evaluation

References:
1. Glueck, William, Personnel: A Diagnostic Approach, (Plano, Texas: Business Publications,
Inc. 1992).
2. Mondy, Wayne and Robert Noe, Human Resource Management, (Boston: Allyn and
Bacon, 1990).

3. Stoner, James and Edward Freeman, Management, (5 th Ed. Englewood Cliffs, NJ: Prentice
Hall 1992).

4. Rue, Leslie and Lioyd byars, Management: Skills and Applications, (6 th Ed., Illinois: Irwin,
1992).
5. Griffith, Francis, Administrative Theory in Education: Text and Readings, (Michigan:
Pendell Publishing Company, 1992).
6. Milkovich, George and John W. Boudreau Human Resource Management, (Homewood, Ill:
Irwin, 1991).
7. Griffin, Ricky, Management, (3rd Ed., Boston: Houghton Miffin Company, 1990).

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