Module 1

Introduction to Human Resource Management

Mr. Kumar Satyam

Amity University Jharkhand, Ranchi
 Meaning of HR
 The term human resources was first coined in the 1960s when the value of labour
relations began to garner attention and when notions such as motivation,
organizational behavior, and selection assessments began to take shape.

 Human resources is used to describe both the people who work for a company or
organization and the department responsible for managing resources related to
employees.

 Human resources are the people who make up the workforce of an organization,
business sector, or economy.

 "Human capital" is sometimes used synonymously with "human resources", although

human capital typically refers to a narrower effect (i.e., the knowledge the
individuals embody and economic growth).
 Likewise, other terms sometimes used include manpower, talent, labour, personnel,
or simply people.
 Meaning of HR
 It is the resource that resides in the knowledge, skills, and motivation of people.
Human resource is the least mobile of the four factors of production, and (under
right conditions) it improves with age and experience, which no other resource can
do.
It is therefore regarded as the scarcest and most crucial productive resource that
creates the largest and longest lasting advantage for an organization.

 Human Resources is also the function in an organization that deals with the people
and issues related to people such as compensation and benefits, recruiting and
hiring employees, on-boarding employees, performance management, training, and
organization development and culture.

 Human Resources evolved from the term: personnel, as the functions of the field,
moved beyond paying employees and managing employee benefits.
 Definition of HR
 William R. Tracey, in "The Human Resources Glossary“, defines Human
Resources as “the people that staff and operate an organization," as contrasted with
the financial and material resources of an organization.
A human resource is a single person or employee within your organization. Human
resources refer to all of the people you employ.

 Michael J. Jucius has defined human resources as “a whole consisting of inter-

related, inter-dependent and interacting physiological, psychological, sociological
and ethical components”.

 According to Leon C. Megginson “From the national point of view human

resources are knowledge, skills, creative abilities, talents, and attitudes obtained in
the population; whereas from the view-point of the individual enterprise, they
represent the total of the inherent abilities, acquired knowledge and skills as
exemplified in the talents and aptitude of its employees”.
 Definition of HR
 Sumantra Ghosal considers human resources as human capital. He classifies
human capita into three categories-intellectual capitals, social capital and emotional
capital.
Intellectual capital consists of specialized knowledge, tacit knowledge and skills,
cognitive complexity, and learning capacity.
Social capital is made up of network of relationships, sociability, and
trustworthiness.
Emotional capital consists of self-confidence, ambition and courage, risk-bearing
ability, and resilience.

It is clear from above definitions that human resources refer to the qualitative and
quantitative aspects of employees working in an organisation.
 Definition of HRM
In simple words, HRM is a process of making the efficient and effective use of human
resources so that the set goals are achieved.

 According to Flippo “Personnel management, or say, human resource management

is the planning, organising, directing and controlling of the procurement
development compensation integration, 4intenance, and separation of human
resources to the end that individual, organisational and social objectives are
accomplished”.

 HRM can be defined as a process of procuring, developing and maintaining

competent human resources in the organisation so that the goals of an organisation
are achieved in an effective and efficient manner.

In short, HRM is an art of managing people at work in such a manner that they give
their best to the organisation for achieving its set goals.
 Objectives of HRM
The primary objective of HRM is to ensure the availability of right people for right
jobs so as the organisational goals are achieved effectively.

This primary objective can further be divided into the following sub-objectives:
a. To help the organisation to attain its goals effectively and efficiently by providing
competent and motivated employees.
b. To utilize the available human resources effectively.
c. To increase to the fullest the employee’s job satisfaction and self-actualisation.
d. To develop and maintain the quality of work life (QWL) which makes employment
in the organisation a desirable personal and social situation.
e. To help maintain ethical policies and behaviour inside and outside the organisation.
f. To establish and maintain cordial relations between employees and management.
g. To reconcile individual/group goals with organisational goals.
 Objectives of HRM
Werther and Davis have classified the objectives of HRM into four categories:
1. Societal Objectives:
a. Legal Compliance
b. Benefits
c. Union-Management Relations

2. Organisational Objectives:
a. Human Resource Planning
b. Employee Relations
c. Selection
d. Training & Development
e. Appraisal
f. Placement
g. Assessment
 Objectives of HRM
3. Functional Objectives:
a. Appraisal
b. Placement
c. Assessment

4. Personal Objectives:
a. Training & Development
b. Appraisal
c. Placement
d. Compensation
e. Assessment
 Scope of HRM
The scope of HRM is, indeed, very vast and wide. It includes all activities starting from
manpower planning till employee leaves the organisation.

Control Acquisition
Human Resource Audit Human Resource Planning
Human Resource Accounting Recruitment
Human Resource Information Selection
System Placement
Human
Resource
Management
Maintenance
Remuneration Development
Motivation Training
Health & Safety Career Development
Social Security Organisation Development
Industrial Relations Internal Mobility
Performance Appraisal
 Functions of HRM
The functions performed by Human Resource Management can broadly be classified
into two categories, as follows:
1. Managerial Functions
2. Operative Functions

1. Managerial Functions:
a. Planning
b. Organising
c. Staffing
d. Directing/Leading
e. Controlling
 Functions of HRM
2. Operative Functions: The operative, also called, service functions are those which
are relevant to specific department.
These functions vary from department to department depending on the nature of the
department.
Viewed from this standpoint, the operative functions of HRM relate to ensuring
right people for right jobs at right times.

These functions include:

a. Procurement
b. Development
c. Compensation
d. Maintenance
 Roles & Responsibilities of HR Manager
The following are the roles and responsibilities of HR Manager:
 Recruitment
• Attract Talent
• Hire resources
 Training
 Professional Development
 Appraisals
 Maintaining Work Culture
 Resolving Conflicts
 Employee Relations
 Rewards and Incentives
 Legal Knowledge
 Roles & Responsibilities of HR Manager
Few of the relatively newer responsibilities of human resources managers in the
modern work environment are as follows:
 Participate in Planning and Development
 Provide Employees with Career Assistance
 Find and Recruit Employees that Advance Company Objectives
 Serve as Leaders of Change
 Advocate for Employees
 Provide Support for Domestic Violence Victims
 Ensure No Cyber-bullying at Work
 HR Policies and Procedures
Meaning:
Human resource policies are continuing guidelines on the approach of which an
organization intends to adopt in managing its people. They represent specific guidelines to
HR managers on various matters concerning employment and state the intent of the
organization on different aspects of Human Resource management such as recruitment,
promotion, compensation, training, selections etc.

They therefore serve as a reference point when human resources management practices are
being developed or when decisions are being made about an organization's workforce.

A good HR policy provides generalized guidance on the approach adopted by the

organization, and therefore its employees, concerning various aspects of employment. A
procedure spells out precisely what action should be taken in line with the policies.

Each organization has a different set of circumstances and so develops an individual set of
human resource policies.
 HR Policies and Procedures
Purposes:
HR policies and procedures serve a number of purposes:
 They provide clear communication between the organization and their employees
regarding their condition of employment.
 They form a basis for treating all employees fairly and equally.
 They are a set of guidelines for supervisors and managers.
 They create a basis for developing the employee handbook.
 They establish a basis for regularly reviewing possible changes affecting
employees.
 They form a context for supervisor training programs and employee orientation
programs.
 HR Policies and Procedures
Development:
In developing HR Policies, there should be clear and consistent statement of the
organization's policies regarding all conditions of employment and procedures for their
equal and fair implementation.

In order to fulfill this objective, policies and procedures should be:

 Clear and specific, but provide enough flexibility to meet changing conditions.
 Comply with all appropriate law and regulation.
 Consistent amongst one another and reflect an overall true and fair view approach
to all employees.
 HR Policies and Procedures
Development…Contd.:
The process of developing HR policies involves the assessment of the following
factors:
 Identify the purpose and objectives which the organization wishes to attain
regarding its Human Resources department.
 Analysis of all the factors under which the organization's HR policy will be
operating.
 Examining the possible alternatives in each area where the HR policy statement is
necessary.
 Implementation of the policy through the development of a procedure to support
the policy.
 Communication of the policy and procedures adapted to the entire organization.
 Auditing the policy so as to reveal the necessary areas requiring change.
 Continuous revaluation and revision of policy to meet the current needs of the
organization.
 HR Policies and Procedures
Formulation:
HR policies should be developed for key HR management functions covering eight
commonly accepted responsibilities:
 Compensation and benefits
 Labour management relations
 Employment practices and placement
 Workplace diversity
 Health, safety and security
 Human resources information systems
 Human resource research
 Training and development
 HR Policies and Procedures
Formulation…Contd.:
The following steps should be taken when formulating or revising policies:
 Gain understanding of the corporate culture and its shared values.
 Analyze existing policies: both written and unwritten existing policies.
 Analyze external influences.
 Assess any areas where new policies are needed or existing policies are inadequate.
 Check with managers, preferably starting with the organization's leadership team,
on their views about HR policies and where they think could be improved.
 Seek the view of employees about the HR policies, especially to the extent for
which they are inherently fair and equitable and are implemented fairly and
consistently.
 Seek the view of the union's representatives.
 Analyze the information retained in the previous steps and prepare the draft
policies.
 Consult, discuss and agree on policies with management and union representatives.
 HR Policies and Procedures
Types:
HR policies could be classified on the basis of sources or description.

 On the basis of source: On the basis of their source, human resource policies
could be classified into:
• Originated Policies: These are the policies usually established by the senior
managers in order to guide their subordinates.
• Implicit Policies: These are the policies which are not formally expressed; they
are inferred from the behavior of managers. They are also known as Implied
Policies.
• Imposed Policies: Policies are sometimes imposed on the business by external
agencies such as government, trade associations and trade unions.
• Appealed Policies: Appealed policies arise because the particular case is not
covered by the earlier policies. In order to know how to handle some situations,
subordinates may request or appeal for the formulation of specific policies.
 HR Policies and Procedures
Types…Contd.:

 On the basis of description: On the basis of description, policies may be general

or specific.
• General Policies: These policies do not relate to any specific issue in
particular. General policies are formulated by an organization's leadership
team. This kind of policies is called 'general' because they do not relate to any
specific issue in particular.

• Specific Policies: These policies are related to specific issues like staffing,
compensation, collective bargaining etc. Specific policies must confirm to the
pattern laid down by the general policies.
 HR Policies and Procedures
Advantages:
The following advantages are achieved by setting up HR policies:
 They help managers at various levels of decision making to make decisions without
consulting their superiors. Subordinates are more willing to accept responsibility
because policies indicate what is expected of them and they can quote a written
policy to justify their actions.

 They ensure long term welfare of employees and makes for a good employer-
employee relationship as favouritism and discrimination are reduced. Well-
established policies ensure uniform and consistent treatment of all employees
throughout the organization.

 They lay down the guidelines pursued in the organization and thereby minimizes
the personal bias of managers.
 HR Policies and Procedures
Advantages…Contd.:
 They ensure prompt action for taking decisions because the policies serve as
standards to be followed. They prevent the wastage of time and energy involved in
repeated analyses for solving problems of a similar nature.

 They establish consistency in the application of the policies over a period of time
so that each one in the organization gets a fair and just treatment. Employees know
what action to expect in circumstances covered by the policies. Policies set patterns
of behavior and permit employees to work more confidently.
 HR Policies and Procedures
Influential Factors:
 Laws of the country
 Social values and customs
 Management philosophy and values
 Financial impact
 HRM as a competitive advantage
Business environment is changing environment and so is HR environment. The
changing environment of HRM includes work force diversity, economic and
technological change, globalisation, organisational restructuring, changes in the nature
of jobs and work and so on.

 Work Force Diversity

 Economic and Technological Change
 Globalisation
 Organisational Restructuring
 Changing Nature of Work
 Strategic HRM
Meaning:
Strategy:
 Strategy is a multi-dimensional concept going well beyond traditional competitive
strategy concepts.

 Strategies are broad statements that set a direction.

 Strategies are a specific, measurable, obtainable set of plans carefully developed with
involvement by an institution's stakeholders.

 These action statements are linked to an individual or individuals who are accountable
and empowered to achieve the stated result in a specific desired timeframe.

 They are patterns of action, decisions, and policies that guide a group toward a vision
or goals.
 Strategic HRM
Meaning:
Strategic HRM:
 Strategic human resource management is designed to help companies best meet the
needs of their employees while promoting company goals.

 Strategic human resource management is the proactive management of people. It

requires thinking ahead, and planning ways for a company to better meet the needs
of its employees, and for the employees to better meet the needs of the company.

 Strategic human resource management takes HR responsibilities/activities one step

further by aligning them with the goals of other departments and overall
organizational goals.
 Strategic HRM
Definitions:
Strategic HRM:
 Strategic human resource management can be defined as the linking of human
resources with strategic goals and objectives in order to improve business
performance and develop organizational culture that foster innovation, flexibility
and competitive advantage.

 Strategic human resource management is the practice of attracting, developing,

rewarding, and retaining employees for the benefit of both the employees as
individuals and the organization as a whole.

Strategic HRM utilizes the talent and opportunity within the human resources
department to make other departments stronger and more effective.
 Strategic HRM
Strategic HRM:
Strategic HRM, therefore, is concerned with the following:
1. Analyse the opportunities and threats existing in the external environment.

2. Formulate strategies that will match the organisation’s (internal) strengths and
weaknesses with environmental (external) threats and opportunities. In other
words, make a SWOT analysis of organisation.

3. Implement the strategies so formulated.

4. Evaluate and control activities to ensure that organisation’s objectives are duly
achieved.
 Strategic HRM
Benefits:
• Identifying and analyzing external opportunities and threats that may be crucial to
the company's success.
• Provides a clear business strategy and vision for the future.
• To supply competitive intelligence that may be useful in the strategic planning
process.
• To recruit, retain and motivate people.
• To develop and retain highly competent people.
• To ensure that people development issues are addressed systematically.
• To supply information regarding the company's internal strengths and weaknesses.
• To meet the expectations of the customers effectively.
• To ensure high productivity.
• To ensure business surplus thorough competency.
 Strategic HRM
Scope:
The scope of Strategic HRM ranges from such matters as:
• The overall organizational structure
• Mergers & acquisitions
• Recruitment policies

To:
• Employees’ punching cards
• The smoking/non-smoking policy
• Casuals on Saturdays
 HRD Strategies in Organisations
Human Resource Development (HRD):
Human Resource Development (HRD) is the framework for helping employees
develop their personal and organizational skills, knowledge and abilities.

A set of systematic and planned activities designed by an organization or HR

department to provide its members with the necessary skills to meet current and future
job demands.

HRD Strategies:
HRD Strategies are the plans that defines how the human resources would be utilized
through the use of an integrated array of training, organizational development and
career development efforts to achieve individual, organizational objectives.
 HRD Strategies in Organisations
Major HRD Strategies:
• Communications Strategy: In today’s changing scenario, it is essential to educate
and train employees about the change.

• Accountability And Ownership Strategy: Employee’s accountability and

ownership leads to higher productivity and customer acceleration.

• Quality Strategy: Quality needs to be fostered in the employees through training

and development.

• Cost Reduction Strategy: Every employee’s contribution in savings is crucial as

small contributions from each employee can be pooled by organizations to save
substantial savings at the end of a given period and enhance its competitive
strategy.
 HRD Strategies in Organisations
Major HRD Strategies...Contd.:
• Intrapreneurship Strategy: Every employee needs to be an independent entrepreneur,
who can generate ideas and bring them to reality by using the existing resources and
support of the organisation to create innovative and creative products and services.

• Culture Building strategy: Organisations valuing its employees have a sustainable

competitive edge over competitors because employees are highly charged, motivated
and committed to the organisation.

• Systematic Training Strategy: The planning and organization of formal on-job

training and off-job training leads to improving vital employee characteristics, build
and sustain appropriate work culture and brings in more professionalism in action.

• Learning Strategy: Continuous development and learning environments promote self

development of employees, of self and by self.
 HRD Strategies in Organisations
Goals of HRD:
• To enable the capability of each employee as an individual in relation to her/his
present & future role.

• To develop relationship between each employee & his/her supervisor.

• Integration of people development with the organizational development.

• To develop team spirit in people working in an organization.

• To develop the human resources philosophy for the entire organization & get the
top management committed to it openly.

• To develop cooperation & collaboration among different units of the organization.

 HRD Strategies in Organisations
Goals of HRD...Contd.:
• Maximization of learning opportunities for individuals in an organisation.

• To maintain the overall health of an organisation.

• Balancing of change & adaptation.

• HRD is needed to develop competencies.

• Create environment for the trainees conducive to their character building.

• Promote a culture of creativity, innovation, human development, respect and

dignity.
 HRD Strategies in Organisations
Goals of HRD...Contd.:
• Provide opportunity for development of different level of employees.

• Need based training programs.

• Prepare newly inducted staff to perform their work with high level of competency
and excellence.
 Business Strategy
Definition:
Business strategy can be understood as the course of action or set of decisions which
assist the entrepreneurs in achieving specific business objectives.

It is the master plan that the management uses to secure a competitive position in the
market, carry on its operations, please customers and achieve the desired ends of the
business.

In business, it is the long-range sketch of the desired image, direction and destination
of the organisation.
 Business Strategy
It is a scheme of corporate intent and action, which is carefully planned and flexibly
designed with the purpose of:
• Achieving effectiveness,
• Perceiving and utilising opportunities,
• Mobilising resources,
• Securing advantageous position,
• Meeting challenges and threats,
• Directing efforts and behaviour and
• Gaining command over the situation.
 Business Strategy
Thus,
A business strategy is a set of competitive moves and actions that business uses to
attract customers, compete successfully, strengthening performance, and achieve
organisational goals. It outlines how business should be carried out to reach the desired
ends.

Business strategy equips the top management with an integrated framework, to

discover, analyse and exploit beneficial opportunities, to sense and meet potential
threats, to make optimum use of resources and strengths, to counterbalance weakness.
 Business Strategy
Levels of Business Strategy:
• Corporate level strategy: Corporate level strategy is long-range, action-oriented,
integrated and comprehensive plan formulated by the top management. It is used to
ascertain business lines, expansion and growth, takeovers and mergers,
diversification, integration, new areas for investment and divestment and so forth.

• Business level strategy: The strategies that relate to a particular business are known
as business level strategies. It is developed by the general managers, who convert
mission and vision into concrete strategies. It is like a blueprint of the entire
business.

• Functional level strategy: Developed by the first line managers or supervisors,

functional level strategy involves decision making at the operational level
concerning particular functional areas like marketing, production, human resource,
research and development, finance and so on.
 HRM
Trends and Practices:
1. Employee experience: More than the engagement of employees at workplace, the
focus has shifted to employee experience. More than mere engagement,
concentration is now given to enhancement of company culture, and performance
management.

2. Advanced people analytics: Companies have moved far ahead from just the back
office data to utilizing the best of people analytics. Reporting through the
dashboards has outdated in most of the companies and focus is more on predictive
models.

3. Learning management systems: Despite the position of the employees or their

experience, learning new skills is important to stay updated. That is why constant
learning is now a novel trend in the HR sector. Providing learning opportunities to
employees is the key for any company that is eyeing for progress.
 HRM
Trends and Practices...Contd.:
4. Augmented reality: One can undoubtedly say that VR and AR are the key trends in
today’s HR market which offers an upper hand for learning market and performance
support for organizational staff.
The simulation process is the highlighted feature that aids employees in preparing
themselves to how to respond to real life situations.

5. Productivity of HR process: Earlier the focus was covering the automation of areas
like record keeping, performance appraisal, resume capture, interview and hiring,
compensation and assessment.
However, the focus is now shifted to productivity of the overall HR process than just
automating sections.

6. Digitized rewards and recognition: Receiving praise and recognition is the key to
help employees to trigger their performance level and these are undoubtedly true
motivators for most of them. However, the present trend has taken this a step forward
as rewards and recognition is now becoming digitised.
 HRM
Trends and Practices...Contd.:
7. Online skill assessments: The trend of using online skill assessments is now seen
in companies as it is proving effective as an optimal talent management tool.
It comes in the form of surveys, quizzes, tests, and exams that offers a platform for
companies to learn what their employees actually know and even a chance for self
assessment for employees.

8. Biometric time tracking and security: This is another recent trends in human
resource management that offers a lot of room for minimizing attendance fraud risk
by using biological markers to recognize employees. Companies are now using
facial or iris recognition and fingerprint scanning.

9. Enhanced employee engagement: When it comes to employee engagement, it has

moved forward a lot from mere basic activities. The scenario is now digitized and
employees are offered lots of wellness and fitness apps. The goal is to ensure
proper work and life balance.
 HRM
Trends and Practices...Contd.:
10. Transformation of leadership: Unlike in the past, leadership is not always about
leading a team or managing them. The digitalised world has put forward
possibilities of networked organisations than bring more success than with just
delegation of authority.

11. Targeted recruitment: One of the mostly discussed trends in HR sector is targeted
recruitment which is processed through social media and cognitive assessment.
Companies are utilizing the possibilities of cognitive technologies that come in the
form of predictive algorithms, natural language processing and self-learning.
At time of recruitment, they use tools that consider career experiences and skills to
provide a fit score to see if the candidate matches the organizational requirements.
 HRM
Trends and Practices...Contd.:
12. Wearable Tech: Work place health can be monitored more systematically through
this emerging HR trend. These wearable tech possibilities can make a huge impact
on employees working on high pressure situations.
These devices are designed to track several features like heart rate, pupil dilation,
body temperature, and similar areas. Management can analyze these points to get a
deeper insight into stress and pain points of employees. They can reframe the
strategies accordingly to improve their workplace experience.

13. Performance management: Unlike in the past when the performance was
evaluated through monthly meetings or quarterly reviews, the present trend shows
the shift of focus to real time feedback.
Apart from logistic benefits, this instant feedback can help managers to put up
conversations about personal and professional development.
The real time open-dialogue conversations in fact help employees to benefit from
constructive criticisms that give them a large room for improvement on the go.