Human Resource Management

• During and after 1970s ,several changes took place in many countries
• Which led to the use of the term “Human Resource Management”.
• Human resource management is that part of management process which
develops and manages the human element of enterprise considering their
resourcefulness in terms of total knowledge ,skills, creative
abilities ,talents ,aptitudes and potentialities for effectively contributing to the
organisational objectives.
• Every individual working in an organisation is a part of its
• human resources . By mismanaging the human resources, a manager kills the
invaluable resourcefulness of his people.
• Ref: Human Resource Management by T.N. Chhabra
 Human Resource Management
• An organization is made up of four sources , namely, men,material, money and machinery.
Of these the first one is living one i.e human and other three are non- living i.e non-human.

• It is the human /people that make use of non-human resources.

• Hence people are most significant resources in an organization.

• Human resources appreciate with the passage of time.

• Better educated, more skilled , better aware of their interest and rights are some
distinguishing features of modern human resources.
• Ref: Human Resource Management by Dr. S S Khanka
• National Institute of Personnel Management (NIPM) of India has defined human
resource /personnel management as “that part of management which is concerned with
people at work and with their relationship within an enterprise. Its aim is to bring
together and develop into an effective organization of the men and women who make
up an enterprise and having regard for the well-being of the individuals and of working
groups, to enable them to make their best contribution to its success“.

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

human resources in the organization so that the goals of an organization 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 organization for achieving its set goals.

• Ref: Human Resource Management by Dr. S S Khanka

•
 Difference Between Personnel Management
and Human Resource Management
• There are differences of opinion so far as the comparison between PM and HRM. A
number of people mistakenly think that the PM and HRM are synonymous concepts .
• There are some others who treat the two concepts as different.
• According to Goss , HRM has three principal distinguishing features as compared to
PM. These are :
• - Emphasis not just on rule and contract , but beyond them
• - Focus on strategy
• - Individualisation of employee relations.

• Ref: Human Resource Management by Dr. S S Khanka

•
• Differences
• 1. Focus
• 2. Philosophy
• 3. Nature of Function
• 4.Pervasiveness
• 5. Motivation
• 6. Team-Work
• 7. Techniques
• 1. Focus
• Organisational interest is important in personnel management but, HRM projects development of individuals
in accordance with their needs and aspirations so that the individuals would be motivated to make their best
contribution .
• Ref: Human Resource Management by T.N. Chhabra
•
• 2. Philosophy
• HRM is primarily a philosophy ,an attitude and approach ,a policy and a practice , while PM is viewed as a
functional area of management.
• 3. Nature of Function
• PM has been traditionally viewed as ‘Staff function’ headed by Personal Manager. On the contrary, HRM
is a part and parcel of every line function.
• 4.Pervasiveness
• HRM is the concern of all managers from top to bottom in an organisation, while PM is mainly concern of
the Personnel Manager.
• 5. Motivation
• HRM concentrates more on motivation , morale-boosting, job satisfaction, while PM is primarily
concerned with selection, recruitment and appraisal of personnel etc.
• 6. Team Work
• HRM is more concerned with working with people, team building, and team work while PM is
interested in orderly way of administration of personnel policies and programs.
 Evolution and Development of HRM
• The evolution and development of HRM has inter-relationship with
that of management.
• However , in India , the origin of HRM is traced to the bigining of the
twentieth century with labour welfare in factories since 1920s.
• In fact, the seed of HRM were sown during the industrial revolution
1850s in Western Europe and USA.
• The wind gradually reached to India as well in the beginning of
• twentieth century.
• Ref: Human Resource Management by Dr. S S Khanka
• Scientific Management Era :
• The concept of scientific management was introduced by F.W.Taylor in the USA early in the
20th century.
• Based on his shop floor job experience , Taylor developed 4 principles of Scientific
management:
• - Development and use of scientific methods in setting work standards
• - Scientific selection and placement of workers best suited to perform a task
• - Clear cut division of work and responsibility
• Harmonious relation and close cooperation with workers to secure performance of work.

• Ref: Human Resource Management by Dr. S S Khanka

•-
• Taylor developed several techniques to introduce his scientific ideas in
management.
• The following are the important techniques developed by him :
•
• - Time study to analyse and measure the time taken in doing the various
elements of a job
• - Motion study involving close observation of the movements required to
perform a job with a view to eliminate the wasteful motions.
• - Standardisation of tools, equipments, working conditions
• Incentive wage plan with differential piece rate of wages for efficient and
inefficient workmen.
• Ref: Human Resource Management by Dr. S S Khanka
• Human Relation Era :
• It was between 1925 and 1935 , many experts expressed their opinions towards the human aspects of organisational
activities.
• Elton Mayo and his associates conducted a series of experiments from 1924 and 1932at Hawthorne plant of the
Western Electric Company in USA.
• The main findings of the Hawthorne Experiments :
• - Physical environment at the work place do not have any material impact on the efficiency of work
• - Favourable attitudes of workers and work team towards their work were more important factor.
• -Fulfilment of worker’s social and psychological needs had a beneficial impact on the morale and efficiency of workmen.
• - Employee groups based on social interactions and common interests exercised a strong influence on worker’s
performance.
• - More important motivators are job security , recognition , right to express their opinion on matters related to them .
•
• Based on these findings, the researchers developed a human relations approach to HRM.
•
• Ref: Human Resource Management by Dr. S S Khanka
 Role of HR in Strategic Management
•• : Meaning
•
• The term ‘Strategy’ is widely used in and presupposes importance . Strategy
means ‘generalship’. Thus strategy is associated with the long - term decision
taken at the top of the enterprise.
• Strategic Management is the process of formulating ,implementing and
evaluating business strategies to achieve organisational objectives.
• Strategic human resource management is to ensure that human resource
management is fully integrated in to strategic planning.
• Ref: Human Resource Management by Dr. S S Khanka
• The term ‘Strategy ‘ has been adapted from war and is used in business to reflect
the broad overall objectives and policies of an enterprise. It refers to firm’s overall
plan for dealing with and existing in its environment.
• Ref: Human Resource Management by T.N. Chhabra
• Role
• The formulation of organisational strategy is integrative with the formulation of functional strategies . Here
human resource strategy assumes more importance because it provides human resources for other functional
areas also.
• We must recognise that human resources integrally affect the overall strategy of an organisation .
• Basically any strategic process can be broken down in to two phases:
• - Strategy Formulation
• - Strategy Implementation
•
• Role in Strategy Formulation
• HRM proves a great help in scanning the existing (external) environment and thus identifies the specific
opportunities and threats of it for the organisation. HR also participates in strategy formulation process by
supplying information regarding the company’s internal strengths and weaknesses . Instances are available to
mention that the unique HR capabilities of an organisation serve as a driving force in strategic options and
strategy formulation. HRM plays a crucial role in the successful execution or implementation of company’s
strategic business plan.
•
• Ref: Human Resource Management by Dr. S S Khanka
• Role in Strategy Implementation
• HRM plays a crucial role in the successful execution or implementation of
company’s strategic business plan. HRM provides competent human resources to
other functional areas also.
• HRM supports strategy implementation in some other ways as well.
• For example , HR is today heavily involved in the execution of strategy in the form of
downsizing and restructuring strategies through outplacing employees, instituting
performance linked pay plans , reducing health care costs and retraining employees.
Even in an increasingly competitive global market place , instituting HR practices that
built employee commitment can help improve an organisation’s responsiveness.
•
• Ref: Human Resource Management by Dr. S S Khanka
 What is the Strategic Role of HRM ?
The prominent areas where the human resource manager can play strategic role are discussed below:
1. Providing Purposeful Direction : The HR manager must be able to lead people of the organisation
towards the desired direction involving people right from the beginning .
2. Building Core Competency : A core competence is a unique strength of an organisation which may not
be shared by others. This may be in the form of human resources, marketing capability or technological
capability. If the business is organised on the basis of core competency , it is likely to generate competitive
advantage.
3. Creating Competitive advantage : In today’s globalised market place , maintaining a competitive
advantage is the foremost goal of any business organisation. There are two important ways a business can
achieve competitive advantage . The first is cost leadership which means firm aims to become low –cost
leader. The Second competitive strategy is differentiation under which the firm seeks to be unique in the
industry.
4. Facilitation of Change : The HR manager will be required to act as ‘Change Agents’ through greater
involvement in environmental scanning and development planning. The HR function will be more creative
and less mechanistic.
5. Managing Workforce Diversity : In modern organisations , management of diverse workforce is a great
• 7.Empowerment of Human Resources : Empowerment means authorising every
member of a society or organisation to take control of his or her own destiny and
realising his /her potential to the full. It involves giving more power to those who
have ,at present, little control over what they do and little ability to influence the
decisions being made made around them .
• 8. Total Quality Management (TQM) : TQM is a dynamic process involving all levels in
an organisation to promote never ending improvement in the efficiency and
effectiveness of all elements of a business. The goal of TQM is to mobilise the entire
workforce in pursuits of specific company goals with the primary aim of achieving
customer satisfaction with regard to quality , price , delivery and after sales service.
TQM is nothing but an understanding and performance of role by each and every
individual in the pursuit of quality improvement.
• Ref: Human Resource Management by T.N. Chhabra
• Nature of Human Resource Management
• The nature of HRM has been highlighted in its following features :
• 1. Inherent part of management : HRM is inherent in the process of management . This function is
performed by all the managers throughout the organisation rather than by the personnel department
only. If a manager is to get the best of his people , he must undertake the basic responsibility of selecting
people who will work under him.
• 2.Pervasive function : It is performed by all managers at various levels in the organisation Every
manager from managing director to the foreman is required to perform the personnel function on a
continuous basis. A manager may secure advice and help in managing people from experts.
• 3. Basic to all functional areas : Personnel management permeates all the functional areas of
management such as production management, marketing management, financial management. Though
the personnel department is created under the supervision of a person designated as ‘Personnel
Manager’ , it should not be assumed that the other managers are relieved of this responsibility.
• 4. People centred : Personnel management is people centred and is relevant in all types of
organisations . It is concerned with all categories of personnel from top to bottom of the organisation.
• 5. Personnel activities or functions : It involves several functions concerned with the management of
people at work. It includes manpower planning , employment, placement ,training, appraisal and
compensation of the employee.
•organisational objectives are to be achieved smoothly.
• 7. Based on human relation : Personnel management is concerned with the motivation of human resources in the
organisations. Every person has different needs , perceptions and expectations. The manager should give due
attention to these factors. They require human relation skills to deal with the people at work.
•
• Objectives of HRM /PM
• ------------------------------------
• The specific objectives may be outlined as follows :
• - To procure right types of personnel for right jobs at the right time
• - To provide right kind of training to personnel to increase their productivity.
• - To ensure effective utilisation of human resources.
• - To ensure development of human resources.
• - To identify and satisfy the needs of individuals by offering various monetary and non-monetary rewards.
• - To ensure respect for human being by providing various services and welfare facilities.
• - To ensure reconciliation of individual /group goals with those of the organisation in such a manner that a
personnel feel a sense of commitment and loyalty towards . It.
• - To achieve and maintain high morale among employees in the organisation.
• Scope of HRM
• The Indian Institute of Personnel Management (IIPM) has laid down the scope of personnel
management as follows :
• 1. The Welfare aspect –concerned with working conditions ,amenities such as canteens , creches,
housing, ,schools, recreation.
• 2. The Labour or Personnel aspect – concerned with recruitment , placement of employees,
remuneration ,promotion, incentives
• 3. The Industrial Relations aspect : - concerned with trade union negotiation , settlement of
industrial disputes, etc.
• All these aspects are concerned with human element in industry as distinct from the mechanical .

• Ref: Human Resource Management by T.N. Chhabra

• Functions of Human Resource Management
•The Human Resource Department plays an important role in the efficient management of human resources. The
Personnel department gives assistance and provides service to all other departments on personnel matters.
•There are three categories of functions which the Personnel Manager is expected to perform. These include :
• 1. Managerial
• 2. Operative
• 3. Advisory functions
•
• 1. Managerial
•The HR Manager is a part of organisational management . So he must perform the basic managerial functions . These
functions are discussed below :
• 1. Planning : To get things done through the subordinates , a manager must plan ahead. For a HR Manager ,planning
means the determination of personnel programs that will contribute to the goals of the enterprise i.e. anticipating
vacancies , planning job requirements , job descriptions, determination of sources of recruitment.
• 2. Organising : Once the HR Manager has established the objective and developed plans , he must design and
develop organisation structure to carry out the various operations. The organisation structure basically includes the
following :
• a. Grouping of personnel activity logically into functions or positions.
• b. Assignment of different functions to different individuals
• c. Delegation of authority according to the task assigned.
• Ref: Human Resource Management by T.N. Chhabra
• 3. Directing : The direction function of the personnel manager involves encouraging people to work willingly and
effectively for the goals of the enterprise . The direction function is meant to guide and motivate the people to accomplish
the personnel programs. The personnel manger can motivate the employees in an organisation through career planning ,
salary administration , developing cordial relationship ,provision of safety requirements.
• 4. Controlling : Controlling is concerned with the regulation of activities in accordance with the plans, which in turn
have been formulated on the basis of the objectives of the organisation. It involves observation and comparison of results
with the standards and correction of deviation that may occur.
•
• 2. Operative
• The operative functions are those tasks or duties which are specifically entrusted to the human resource or personnel
department. These are discussed below :
• a. Employment: The first operative function of HR is the employment of proper kind and number of the persons
necessary to achieve the objectives of the organisation. This involves recruitment, selection, placement etc. of the
personnel.
• b. Development : Training and development of personnel is a follow up of the employment function. It is the duty
of management to train each employee properly to develop technical skills for the job for which he has been employed
and also to develop him for the higher jobs in the organisation. Proper development of personnel is necessary to increase
their skills in doing their jobs.
• c. Compensation : This function is concerned with the determination of adequate and equitable remuneration of
•d. Maintenance ( Working condition and Welfare ) : Employees must be provided with good working conditions so that they
can like their work and work place and maintain their efficiency. Working conditions certainly influence the motivation and
morale of the employees. These include measures taken for health, safety and comfort of the work force.
• e. Motivation : Employees work in the organisation for the satisfaction of their needs. The HR Manager helps the various
departmental managers to design a system of financial and non financial rewards to motivate the employees.
•f Personnel Records : The HR Department maintains the records of the employees working in the enterprise. It keeps full
records of their training , achievements, transfer , promotion etc. It also preserves many records relating to the behaviour of
the personnel , like absenteeism.
• g. Industrial Relations : These days , the responsibility of maintaining good industrial relations is mainly discharged by the HR
Manager. The HR Manager can do a great deal in maintaining industrial peace in the organisation as he is deeply associated
with the various committees on discipline, labour welfare, safety , grievance. He helps in laying down the grievance procedure
to redress the grievances of the employees.
•h. Separation : Since the first function HR management is to procure the employees , it is logical that the last should be the
separation and return of that person to the society. The Personnel Manager has to ensure the release of retirement benefits
to the retiring personnel in time.
• 3. Advisory functions
•HR Manager has specialised education and training in managing human resources . . He is an expert in his area. He offers his
advice to :
• 1. Top Management and
• 2. Departmental Heads.
•
• 1. Top Management : He advises the top management in
formulation and evaluation of personnel programs , policies and
procedures. He also gives advice for achieving and maintaining good
human relations and high employee morale.
• 2. Departmental Heads : Personnel Manager offers advice to the
heads of various departments on matters such as manpower planning
, job analysis, recruitment , selection ,training , placement ,
performance appraisal etc.