Introduction to HRM

Introduction to HRM
⚫ HRM is that process of management which develops and
manages the human element of an enterprise.
⚫ According to Flippo “Human Resource Management is the
planning,organising,directing and controlling of the
procurement,development,compensation,integration,maintenanc
e and reproduction of human resources to the end so that
individual,organisational and societal objectives are
accomplished.”
 Objectives
1.Societal Objectives
a. To manage human resource in an ethical and socially responsible manner
b. To ensure compliance with legal and ethical standards
c. To minimise the negative impact of societal demands upon the organisation
2.Organisational Objectives
a.HR department like any other department in the organisation should focus on
achieving the goals of the organisation first.
b.HR department should recognise its role in bringing about organisational
effectiveness
3. Functional Objectives
d. To maintain HRM department’s contribution at a level appropriate to the
organisation’s needs
e. The department’s level of service must be tailored to fit the organisation it
serves
f. HRM should employ the skills and abilities of the workforce effeciently
g. HRM should aim at providing well trained and well motivated employees.
 Objectives
4.Personnel Objectives
a.HRM should increase to the fullest extent the employees’
job satisfaction
b. It should meet the self actualisation needs of the
employees
c.HRM should assist the employees in achieving their
personal goals
d.HRM should maintain and develop the quality of work
life
e. HRM should also communicate the HR policies to all
the employees
 Nature of HRM
1.Integral part of the process of management – HRM cannot be separated
from the basic management function.This function is performed by all the
managers throughout the organisation rather than by the personnel
department only
2. Comprehensive Function – The main function of HRM is to manage people
at work.It is a comprehensive function which covers all types of people at all
levels in the organisation
3.Pervasive function – HRM is comprehensive as well as pervasive.It is not
only confined to industry alone.It is equally useful and necessary in
government,armed forces,sports organisations.
4. People Oriented – HRM is a people oriented function and is concerned with
employees as individuals as well as groups.It deals with human relationship
within an organisation.
5.Based on Human relations – HRM is concerned with the motivation of
human resources in the organisation
6. Continuous Process – HRM is a continuous process.It is not a one shot
function,rather it is a never ending exercise.
7.Science as well as art – HRM is a science as it contains an organised body of
knowledge consisting of principles and techniques.It is also an art.Handling
people is one of the most creative arts.
 Nature of HRM
8. Recent Origin – As compared to other areas of
management,HRM is comparatively a young discipline
9. Interdisciplinary – It involves application of
knowledge drawn from several disciplines like
sociology,anthropology,psychology,economics etc.
10. Basic to all functional areas – HRM is basic to all
functional areas of management such as production
management,financial management,marketing
management etc.Every manager working in any
department has to perform personnel function.The
function of personnel manager is advisory in nature.
 Importance of HRM
⚫ Importance for the organisation
a. Good HR practices help in attracting and retaining the best
people in the organisation
b. The right people can be fitted into new jobs properly only if
the management performs its HR function satisfactorily
c. HR planning alerts the organisation to the types of people it
will need in the short,medium and long run
d. HRD is essential for meeting the challenges of future.
• Importance for the employees – The human aspect of
organisations has become very important over the years.HRM
stresses on the motivation of employees by providing them
various financial and non financial incentives.Right
organisational climate is also stressed upon so that the
employees can contribute their maximum for achievement of
the organisational objectives
 Importance of HRM
• Importance for the society – Good HR efforts lead to
productivity gains to the society,since it enables the
managers to reduce costs,save scarce resources,enhance
profits and offer better pay,benefits and working
condition to the employees.
 Scope of HRM
1. The personnel Aspect – The aspect of HRM is concerned with
the manpower
planning,recruitment,selection,placement,induction,transfer,pro
motion,demotion,termination,training and
development,layoff,retrenchment,wage and salary
administration,incentives,productivity etc.
2. The welfare Aspect – The welfare aspect is concerned with
working conditions and amenities such as
canteens,creches,restrooms,lunchrooms,housing,transport,educ
atin,medical help,health,safety,recreational and cultural
activities etc.
3. The Industrial Relations Aspect – It includes union
management relations,joint consultation,negotiating,collective
bargaining,grevience handling,disciplinary action,settlement of
industrial disputes etc.
 Functions of HRM
⚫ Identifying and developing persons – The success of every organisation
depends upon the quality of person it employs.Persons are prepared for taking
up different jobs as every person is not suitable for every job.Persons are
assigned jobs as per their aptitudes.
⚫ Retaining suitable persons – The rapid development of technology is
bringing in new challenges everyday.Modernisation of various
techniques,computerisation and data processing,revolution in communication
techniques have resulted in a demand for trained and highly skilled persons.
⚫ Creating work culture – HRM approach emphasises the development of
employees potentialities and using it for achieving organisation goals.Human
resource policy is backed by human values,understanding and concern for
welfare of people
⚫ Educating managerial personnel - There is a need to educate
executives,managers and top management regarding various aspects of HR
approaches adopted by the organisation.
⚫ Conducting research – HRM will be successful only if we know the
aspirations and expectations of various persons working in the organisation
⚫ Developing a communication system – HRM develops a system of
communication where policies of management are properly communicated to
the lowest level of hierarchy and feed from lower levels is conveyed to the top
management.
 Limitations of HRM
⚫ Recent Origin – HRM is of recent origin,so it lacks universally
approved academic base.
⚫ Lack of to management support – HRM must have the support of top
level management inorder to bring good results
⚫ Improper Implementation – Human Resource Management should
be implemented by assessing the training and development needs of
employees.
⚫ Inadequate Information –Human Resource Management requires
implementation of programmes such as career palnning on the job
training,development programmes,counselling etc.There ia a need to
create an atmosphere of learning in the organisation.
⚫ Inadequate Information – Some organisations do not have requisite
information about their employees.In absence of adequate information
the system cannot be implemented properly.
 Systems Approach To HRM
⚫ An enterprise cannot work in isolation.It depends on its external
environment.It is a part of larger system such as the industry to
which it belongs,the economic system and the society.
⚫ The enterprise receives the inputs,transforms them and exports the
output to the environment.The inputs from internal environment
include people,capital,managerial skills,technical knowledge etc.It
is the task of the managers to transform various inputs into
outputs.Though managers do not have control over external
environment still they have to respond to it.
 Organisational Design
⚫ Two issues are important while discussing the organisation for HR
department-
1. Place of HR department in the overall organisational setup
2. Composition of HR department.
HR department in the overall organisational set up
⚫ All managers in a sense are HR managers since they get involved in activities
like recruitment,interviews,selection and training.Yet most of the
organisations have a separate HR department with its own top manager.The
status or place of the HR department in the overall organisational structure
depends upon the size of the organisation.In smaller organisation there may
not be a seperate HR manager at all.The line managers may carry out all the
personnel duties.But as the size of organisation grows the line mangers need
asistance,specialised knowledge and assistance of an expert human resource
staff.In doing so the HR manager carries out three distinct functions-
1. Line function
2. Coordinative function
3. Staff function
 Organisational Design
⚫ Line function – A line manager is one who is authorised
to direct the work of subordinates and responsible for
accomplishing organisational goals
⚫ Coordinative function – The HR managers have to
ensure that line managers are implementing the
organisation’s HR objectives,policies and procedures
⚫ Staff functions – A staff manager is one who assists and
advices the line managers.
Composition of HR department
A typical HR department is headed by an executive,under
whom will be managers-HR manager,Administration
manager,HRD manager,Industrial relations managers
and so on.
 HRM Environment
⚫ Environment is an important variable in
HRM.Organisations are greatly influenced by the
changes taking place in internal as well as external
environment.
The external and Internal environment are as follows :-
External Environment – The external environment
consists of those factors which affect an organisation’s
HR resources from outside the organisation.The job of
HR manager is to identify these external factors and to
balance the demands and expectations of external
factors with the internal requirements and achieve the
organisational goals efficiently and effectively.External
factors include-
 External Environment
1. Economic factors- Economic factors include all the economic
forces which affect the HR function.Highly relevant economic
factors are the suppliers,customers,competitors and globalisation
a. Suppliers – Suppliers are those who provide human resources to the
organisation.The suppliers include the
universities,colleges,employment exchanges,consultancy firms
etc.The quality of inputs of employees depends upon the suppliers
b. Customers – Customers are considered the kings.They want high
quality products at reasonable prices.So each and every employee in
the company must contribute towards achieving the quality of goods
c. Competitors – Competition in a particular industry plays a very
important role in the HR functions and activities.Due to competition
employees with particular skills are hard to obtain the organisation
will have to train their own employees through proper
planning,training and development activities.
 External Environment
d. Globalisation – Due to globalisation the HR managers are
required to play challenging roles and create competitive
advantage for their concern.Today business environment has
become highly volatile in nature.Changes of various kinds hit the
firm from all angles.Successful managers are those who anticipate
and adjust to changes quickly
2. Political-legal factors – HR palnning,recruitment and
selection,placement,training,remuneration,employee
relations,terminations are governed by constitutional provisions.
3. Social and cultural factors – Nowadays the society at large has
become more demanding.Firms cannot operate in isolation,they
are stuck with the society.A firm has to operate by public consent
to satisfy the society’s needs.
HR manager has to deal with people keeping in mind their cultural
values.The attitudes of workers towards work is a result of their
culture.Time dimensions which influences HRM has its roots in
culture
 External Environment
4. Technological factors – Technological advancements can create
new competitive advantages that are more powerful then existing
ones.New technologies compel people to learn new skills or to
upgrade their existing skills.New technological advancements
also lead to downsizing of workers.Technological changes lead
to collaborative team work.
5. Unions – With the formation and recognition of trade unions the
issues relating to employees interest are no longer determined by
the unilateral actions of the management.These have to be
discussed with union representatives.
6. Professionalism – Job holders and seekers have become highly
professionalised and knowledgeable but on the other hands
problems faced are also serious.It is difficult to motivate such
employees as traditional incentives hardly affect these
employees.Retaining such employees is also a difficult job.
 Internal Environment
⚫ Internal environment comprises of the factors which affect
an organisation’s human resources from inside the
organisation’s boundaries.Some of the internal factors are –
1. Mission – Mission is the very purpose and justification for
the existence of a firm.At various levels people must carry
out assigned tasks keeping the overall mission of the firm
in mind.
2. Policies – Policies tell people what they may or may not
do.Objectives show the destination but the route towards
the destination is shown by the policies
3. Organisational culture – Organisational culture is the sum
total of shared values,beliefs and habits within an
organisation.Understanding the type of culture that prevails
within a firm is important inorder to formulate appropriate
HR policies and strategies
 Internal Environment
4. Organisational conflicts – There is often conflict between organisational
culture and employees attitude.Conflict arises due to following qualities
–
a. Personal goal vs organisational goal
b. Personal ethics vs organisational ethics
c. Right vs duties
d. Obedience vs duties
e. Discipline vs autonomy
f. Authority vs responsibility
g. Leadership vs followership
5.Organisational structure - Basically there are two types of
organisational structures – tall and flat.Tall or pyramid structure is
suitable for companies that are labour oriented.here the authority is
vested at the top and the pyramid shows the hierarchy of positions.Flat
organisations are suitable to technology oriented companies.Flat
organisational structure indicates decentralisation of authority.
 Internal Environment
6. HR Systems – HR organisations today are creating
HRD departments,introducing participative management
and quality circles providing free flow of
communication and enhancing the status of the
employees.The study of HR environment enables HR
experts to become proactive in their approach to
personnel aspects.