LECTURE 01

The HRM Environment

Jiveta Chaudhary – Facullty, DIAS
 Contents
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 Concept of HRM
 Nature of HRM
 Characteristics of HRM
 Aims of HRM
 Functions of HRM
 Roles of an HR Manager
 Evolution of HRM
 Human Resources and Strategy

Jiveta Chaudhary, Faculty, DIAS

3 Concept of HRM

Jiveta Chaudhary, Faculty, DIAS

 Concept of HRM
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 Strategic and coherent approach to the management

of an organization’s most valued assets – the people
working there, who individually and collectively
contribute to the achievement of its objectives.
 Human Resource Management is the process of
acquiring, training, appraising, and compensating
employees, and attending to their labor relations,
health, safety and fairness concerns
- Dessler

Jiveta Chaudhary, Faculty, DIAS

 Concept of HRM (Contd.)
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 Human Resource Management is that part of

management concerned with people at work and with
their relationships within the organization. It seeks to
bring together men and women who make up an
enterprise, enabling each to make his own best
contribution to its success both as an individual and
as a member of a working group.
- National Institute of Personnel management of India

Jiveta Chaudhary, Faculty, DIAS

 Concept of HRM (Contd.)
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 Human Resource Management may be defined as that

field of management which has to do with planning,
organizing and controlling the functions of procuring,
developing, maintaining and utilizing a labor force
such that the (a) objectives for which the company is
established are attained economically and efficiently;
(b) objectives of all levels of human resources are
served to the highest possible degree; and (c)
objectives of society are duly coincided and served.
- Jucius
Jiveta Chaudhary, Faculty, DIAS
 Concept of HRM (Contd.)
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 Human Resource Management is that branch of

management which is responsible on a staff basis for
concentrating on those aspects of relationship of
management to employees and employees to employees
and with the development of the individual and the group.
The objective is to attain maximum individual
development, desirable working relationship between
employers and employees and employees and employees,
and effective moulding of human resources as contrasted
with physical resources
- Scott
Jiveta Chaudhary, Faculty, DIAS
8 Nature of HRM

Jiveta Chaudhary, Faculty, DIAS

 Nature of HRM
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 People Oriented
 Action Oriented
 Future Oriented
 Individual Oriented
 Development Oriented
 Pervasive
 Continuous
 Science and Art
 Based on Human Relations
Jiveta Chaudhary, Faculty, DIAS
10 Characteristics of HRM

Jiveta Chaudhary, Faculty, DIAS

 Characteristics of HRM
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 Diversity of HRM
 Strategic Nature of HRM
 Commitment Orientation
 People as ‘Human Capital’
 Unitary Philosophy
 Individualistic
 Management driven activity
 Focus on Business Values
 Moral and Social Values
Jiveta Chaudhary, Faculty, DIAS
12 Aims of HRM

Jiveta Chaudhary, Faculty, DIAS

 Aims of HRM
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 Organizational Effectiveness
 Human capital Management
 Knowledge Management
 Reward Management
 Employee Relations
 Meeting diverse needs
 Bridging the gap between rhetoric and reality

Jiveta Chaudhary, Faculty, DIAS

14 Functions of HRM

Jiveta Chaudhary, Faculty, DIAS

 Functions of HRM
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 Managerial
 Planning
 Organizing
 Directing
 Controlling

 Advisory
 Advice to top management
 Advice to departmental heads

Jiveta Chaudhary, Faculty, DIAS

 Functions of HRM (Contd.)
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 Operative
 Employment
 T&D
 Remuneration
 Working Conditions
 Motivation
 Personnel Records
 Industrial Relations
 Separation

Jiveta Chaudhary, Faculty, DIAS

17 Roles of an HR Manager

Jiveta Chaudhary, Faculty, DIAS

 ROLES OF AN HR MANAGER
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 Policy Formulation
 Advisory Role
 Linking Pin Role
 Representative Role
 Decision –making role
 Mediator Role
 Leadership Role
 Welfare Role
 Research Role
Jiveta Chaudhary, Faculty, DIAS
19 Evolution of HRM

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM
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1. Industrial Revolution Era – 19th Century

2. Trade Union Movement Era – Close to the 19th Century
3. Social Responsibility Era – Beginning of 20th Century
4. Scientific Management Era – 1900-1920s
5. Human Relations Era – 1930s – 1950s
6. Behavioral Science Era – 1950s – 1960s
7. Systems and Contingency Approach Era – 1960 onwards
8. Human Resource Management Era – 1980 onwards

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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1. Industrial Revolution Era – 19th Century

 Place of work changed from decentralized locations

to centralized locations with large number of people

working together – FACTORIES
 Method of Production changed from manual to

mechanical
 Workforce migration led to problems of housing &

social isolation
 Use of machinery generated need for training of

unskilled workers

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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1. Industrial Revolution Era – 19th Century (Contd.)

 Hierarchy and non-personal contact b/w workers and

mgmt. owing to large workforce

 Three systems of HR were developed in order to

manage people in the factory system viz.,

 Recruitment of workers
 Training for workers
 Control of workers
 Basic philosophy of managing workers revolved
around master-servant relationship

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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2. Trade Union Movement Era - Close to the 19th

Century
 Workers’ Associations

 Basic Objective  safeguard workers’ interests and

solve work problems of child labor; long hours of

work and poor working conditions
 Other issues  Economic Problems and wages,

employee benefits and services

 Weapons  Strikes, walkouts, boycotts, etc.

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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2. Trade Union Movement Era - Close to the 19th

Century (Contd.)
 Led Managers and Organization to: -

 Adopt employee grievance handling systems

 Accept arbitration as a means of resolving conflicts of
rights
 Expansion of employee benefit programmes
 Clear definition of job duties
 Installation of rational & defensible wage structures,
etc.

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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3. Social Responsibility Era – Beginning of 20th Century

 Humanistic and Paternalistic approach

 Robert Owen: -
 Principal social and economic environments influence the
physical, mental, and psychological development of
workers. Therefore in order to increase productivity, it is
necessary to improve the conditions of employees by
removing them from an adverse environment or by
changing the environment with the provisions of more
satisfactory living and working conditions.
 Paternalistic Approach

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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3. Social Responsibility Era – Beginning of 20th Century

(Contd.)
 Paternalistic Approach
 Owner must take care of the labor
 Owen implemented this philosophy at the at his Cotton
Mill at Scotland by introducing facilities such as shower
baths & toilets; raising minimum age of employment to 11
years; shortening working hours from 12 to 10 etc.
 Critics’ view - This approach to welfare was more
compulsion than responsibility owing to
unionization.
Jiveta Chaudhary, Faculty, DIAS
 Evolution of HRM (Contd.)
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4. Scientific Management Era – 1900 – 1920s

 Fredrick W. Taylor

 Time and Motion Studies

 Scientific Management
 Replacing rule of thumb with science
 Harmony in group action
 Cooperation between management and workers
 Maximum outputs in place of restricted outputs, and
 Development of workers

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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4. Scientific Management Era – 1900 – 1920s

 Scientific Management Principles Relevant to HRM:
-
 Job Analysis (Time, Motion and Fatigue Studies)
 Standardization
 Scientific Selection and Training of Workers
 Financial Incentives
 Mental Revolution (Conflict to Cooperation)
 Improvement in Productivity
 Development of discipline of Human Engineering

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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4. Scientific Management Era – 1900 – 1920s

 Gantt introduced ‘task and bonus wage system’ that
eliminated penalties provided under Taylor’s wage
system (Guaranteed hourly rate; 20% bonus for
standard output & high piece rate for output above
standard output)
 Lilian Gilberth introduced concept of Psychology of
Management in 1914

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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5. Human Relations Era – 1930s – 1950s

 Hawthorne Studies – productivity of workers depends
on: -
 Social factors at the workplace
 Group formation and group influence
 Nature of leadership and supervision
 Communication
 To have better productivity management needs to take
care of human relations besides the physical conditions
 Concepts emerged  Social System, informal
organization, group influence, etc.
Jiveta Chaudhary, Faculty, DIAS
 Evolution of HRM (Contd.)
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6. Behavioral Science Era – 1950s – 1960s

 New insights rater than techniques

 Concept of human resource model

 Major contributions in the areas of motivation,

leadership, communication, organizational change
and development, group dynamics, etc.
 Maslow, Herzberg, Likert, Blake and Mouton,
Tannenbaum, etc.
 Major conclusions of the contributions: -

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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6. Behavioral Science Era – 1950s – 1960s (Contd.)

 Major conclusions of the contributions: -
 People do not dislike work. Job itself is a source of motivation
and satisfaction for them
 Most people can exercise a great del of self-direction, self
control and creativity
 Manager’s basic job is to use the untapped human potential
 Manager should create healthy work environment
 Management should provide for self direction by subordinates &
they must be encouraged to participate
 Operating Efficiency can be improved by expanding subordinate
influence, self-direction and self control.

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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6. Behavioral Science Era – 1950s – 1960s (Contd.)

 Major conclusions of the contributions (Contd.): -
 Work satisfaction may improve as a ‘By-product’ of subords. making
full use of their potential
 The Behavioral Science Era Led to the development of: -
 Two way communication
 Employee participation in decision making
 Joint goal setting
 Management development
 Management of change
 Group Dynamics

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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7. Systems & Contingency Approach Era – 1960 onwards

 Systems approach suggests that any object must rely on a
method of analysis involving simultaneous variations of
mutually dependent variables
 Contingency Approach suggests that when a subsystem in an
organization behaves in response to another system or
subsystem, we ay that the response in contingent on the
environment. Hence, a contingency approach is an approach
where the behavior of one subunit is dependent on its
environmental relationship to other units or subunits that
have control over the consequences desired by that subunit.

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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7. Systems & Contingency Approach Era – 1960 onwards

 Implications: -
 Management action is contingent on action outside the system
or sub-system as the case may be
 Organizational action should be based on the behavior of action
outside the system so that the organization is integrated with
the environment
 Because of the specific organization-environment relationship,
no action can be universal. It varies from situation to situation.

Jiveta Chaudhary, Faculty, DIAS

 Evolution of HRM (Contd.)
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8. HRM Era – 1980 onwards

 Growth of PM took place because of the voluntary efforts of the
employees. Task of personnel manager was not confined only to the
recruitment of workers but also looking after their welfare and
handling their grievances. Jobs became more complex and needed
specialized skills and professionals. As a result T&D were
emphasized.
 Towards 90s HRM replaced the term PM

Jiveta Chaudhary, Faculty, DIAS

37 Systems and Contingency Approach in HRM

Jiveta Chaudhary, Faculty, DIAS

 Systems and Contingency Approach in
HRM
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 HRM is a subsystem of the Organization System

 HRM is a system comprising interrelated,
interconnected and interdependent sub-systems
 Features of HRM System: -
 Social System
 Open System
 Adaptive
 Dynamic
 Probabilistic
 Multilevel and Multidimensional
Jiveta Chaudhary, Faculty, DIAS
 Systems and Contingency Approach in
HRM
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 Features of HRM System (Contd.): -

 Multivariable
 Integrated Approach
 Subsystems in HRM System: -
Staffing Development
Subsystem Subsystem

IR Appraisal
Subsystem Subsystem
HRM
System
Maintenance Motivation
Subsystem Subsystem

Integration Compensation
Subsystem Subsystem
Jiveta Chaudhary, Faculty, DIAS
40 HR and Strategy

Jiveta Chaudhary, Faculty, DIAS

 Human Resources and Strategy
Company Mission

An investment perspective of HRM

Environmental Scanning: Environmental Scanning:

HR Environment HR Legal Environment

Strategy Formulation

HR Planning

Strategy Implementation: Strategy Implementation:

Wkfrce Utilizn & Empt. Practices Reward & Development Systems

Performance Impact of HR Practices

HR Evaluation