Chapter 1 - Introduction to Human Resourse

Management (HRM)

As we know that the principal resources of an organization is the people. Without

which no organization can born and run. Thus people are that resources of
organization through which all activities are done to achieve the organizational
objectives. So the process of managing the human resources of an organization is
known as human resource management. It is mainly concerned with people’s
dimension in the organization. It means employing people, developing these
resources, utilizing, maintaining, and compensating their services with the job
and organizational requirement. Human resource is the primary resources of the
organization, so they should be managed effectively and efficiently to achieve
organizational goal. HRM is said to be the philosophy, policies, procedures and
practices releted to the management of productive human resources in and
organization.

According to Byars and Rue: “Human resource management encompasses those

activities designed to provide for and coordinate the human resources of an
organization.

Decenzo & Robbins: “HRM is a process of four function acquiring, development,

motivation and maintenance of human resources.”
In short HRM can be defined as the process of accomplishing organizational goals
by acquiring, retaining, terminating, developing and properly using human resources
in an organization.

Characteristics of HRM:

i) Action Oriented: Effective HRM focuses on action, rather than on record keeping,
written procedure or rules. It gives emphasis on the solution to employment problem
to achieve organizational objectives and facilitate employment development and
satisfaction in a dynamic environment.
ii) Human Approach: HRM is the process of managing people of an organization
with a human approach. It means employing people developing these resource,
utilizing, maintaining and compensating their services to the job and organizational
requirement. It is concerned with human aspects. Mainly it develops and utilize
human potential.

iii) Part of Management: HRM is a part of management principles and functions.

It involves managerial functions such as planning, implementing and controlling of
acquisition, development, utilization and ........ maintenance of human resources.

iv) Pervasive function: HRM is pervasive function of management. All level of

management perform it. Although the HR department is created under HR manager,
it should not be assumed that other managers are not free from its responsibility.

v) Continuous Process: HRM is a continuous process and it must be performed

continuously to achieve organizational goal smoothly. It is concerned with present
as well as future.

vi) Achievement of Goal: HRM aims to achieve organizational goal by managing

the human resources of an organization.

vii) HRM function: acquisition, development, motivation and maintenance.

Objectives of HRM
Objectives are predetermined goals to which individual or group activity in an
organization is directed. Effective management of human resources is the key to
organizational success. Corporate objectives and individual as well as social goals
influence the objectives of human resource management. The primary objectives of
HRM is to acquire, develop, motivate, and utilize the human resource to achieve
organizational goals in a dynamic environment. The various purpose of HRM is
given below:
a) Acquisition: One of the main purpose of HRM is to enable the organization to
obtain and retain the skilled committed and well motivated workforce to achieve
organizational objectives.

b) Achievement of organization goal: HRM always aim to achieve organizational

goal by an effective utilization of human resources.

c) Development of People: The another purpose of HRM is to enhance and develop

the inherent capacities of people, their contribution potential and employability by
providing continuous training and development opportunity.

d) To develop an environment in which team work and flexibility can flourish.

e) To ensure that people are valued and rewarded for what they do and achieve and
to give equal opportunities are available to all.

f) Improve quality of work life: Human resource management maintains and

improve physical and mental well- being of employee. HRM always aim to maintain
the quality of work life. Without this improvement, it is difficult to improve the
organizational performance.

Functions/ Components of HRM

In order to achieve organizational objectives, HRM must perform certain functions.

The main function performed by HRM can be classified into four category.

1) Acquisition: Acquisition means to place right number of people at right time in

the organization. The following activities are related with acquisition:

a) HR Planning: The HRM process begins with human resource planning. Planning
ensures organization that it has a right number of qualified people in the right job at
right time. This includes the estimation of demand and supply of labour.
b) Recruitment: Recruitment is the process of seeking and attracting prospective
candidate for the job vacancies. It ensures more people to apply for the job.

c) Selection: Selection means to choose the right candidate from among all the
prospective application. It involves reviewing the application form, psychological
testing, interviewing etc.

d) Specialization: The acquisition functions is completed when the selected

applicant have been placed in organization and have adopted to the organization’s
culture and environment.

2) Development of Human Resource: HRM is intended to improve the

performance of employees. Plans should be arranged for developing people at all
level because competent people will not remain competent forever. So that
additional development of human resources required time to time. The development
of human resources can be viewed in three process. The first is employee training
which gives emphasis on skill development to cope with the current changes. The
second is management development, which is concerned with enhancement of an
executive’s conceptual abilities. The third is career development which involves
carrier path of employee to match long term individual and organization needs.

3) Motivation of Human Resource: Highly motivated employee always tend to be

more productive and have lower rates of absenteeism, turnover and lateness. Thus
employee motivation is vital to the success of any organization.
The extrinsic factor such as job design. Working condition, job security, and
supervision and intrinsic factor such as achievement, recognition are the main factors
which affect the motivation of the employee. The employees of any organization
motivates towards his work when his needs are satisfied by the job, is doing. The
performance appraisal process and its outcome will affect the employee motivation.
If they think their efforts will be unfairly judged, motivation will decrease. The
reward or punishment that follow the appraisal and compensation and benefit
administration will influence motivation. A link should be established between
employee performance and compensation. The main aim of HRM is to increase the
productivity and performance of the employee by motivating them.
4) Maintenance of human resource: The final function of HRM is maintenance of
human resource. It is concerned with providing those working condition that
employee believe are necessary in order to maintain their commitment to the
organization. Organization are required to provide safe work environment free from
physical hazards and unhealthy condition. Labour relation is concerned with the
relationship between the organization and its employee. If there is good relationship
, there will be cooperation and a high level of commitment otherwise not. Thus
through these activities, we can expect to have competent otherwise not. Thus
through this activities, we can expect to have competent employee who are
committed to the organization and satisfied with their job.
HRM System
HRM is the process of managing people in the organization with a human approach.
Thus it is concerned with the people dimension in management. HRM can be viewed
from system prospective. A system is an organized set of interrelated and
integrated parts or objects in a manner of achievieing common goal. System consists
of components such as input, processing and outcomes which interact with
environmental dynamics. These components are interlinked through feedback and it
is a continuous process operates in a dynamics environment. This system provides a
conceptual structure for integrating the various components within the HRM system.

1) Input:
i) Organizational Plan: The organization’s plan and strategies needs for the future
determine of human resource . Various components of organizational plan such as
production plan, marketing plan, sales plan, plan for expansion and diversification
are used as the basis for developing human resources planning. This plan help in
estimating the demand of human resources that will be required for future.

ii) HRM Policies: HRM policies are general statement that serve to guide decision
making. They direct the action of HR activities towards the achievement of its goals.
HRM policies are there to serve three major function.
A) To reassure employees that they will be treated fairly and objectively,
B) To help managers make quick and consistent decision and
C) To give managers the confidence to resolve problems and to define their decision.
Organization can improve the performance of HR by the proper use of human
resources policies.
iii) HR plans: HR plans help to keep the organization supplied with the right people
when they are needed. It determines the human resources required by the
organization. It forecast the demand for HR by comparing the present supply of HR
with organization’s projected demand for HR.

iv) Job Analysis: Job analysis is the process of determining the tasks that make up
the job and the skill, abilities and responsibilities that are required of an individual
to successfully accomplish the job. This specify the job requirement.

v) Labour Market: Lobour market serves as the external sources of supply of HR

that are required for organization.
2) Processing: ( Same as the function of HRM)
3) Output of HRM system:
i) Quality of Work life(QWL) : Quality of work life refers to the quality of
relationship between employee and the total working environment of the
organization. QWL can be defined as the extent to which members of an
organization are able to satisfy personal needs through organizational process. It
concentrates on creating a working environment that is conductive to the satisfaction
of employee nees. QWL includes autonomy, recognition, belonging and external
rewards. It helps to increase productivity, organizational effectiveness and employee
satisfaction.

ii) Productivity: Productivity is the relationship between real inputs and real
outputs. It measure how well resources are combined and utilized to produce a result
desired by management. Higher productivity ensures lesser cost of production,
higher production and most effective utilization of available resources. This leads to
the satisfaction of every section of society, consumer, employees and employers.

iii) Readiness for change: Change is the part of organizational life. In fact the
survival, growth, and profitability of an organization depends on its ability to change
its structure and process in response to changing environment. Training is important
to reduce the fair associated with change. The management must creates a work
atmosphere that views change as a positive and progressive endeavor.
iv) Competitive Advantages: Globalization and liberalization of business are
bound to intensify competition. In such situation organization must obtain
competitive advantage to survive and successed. Competitive advantages is obtained
through efficient and creative workforce. Continuous improvement and innovation
are two essential objects to achieve and sustain competitive advantages.

Personnel and Human Resource Management (HRM)

HRM is the modern term for what has traditionally been referred to as personnel
administration or personnel management. HRM is the term increasingly used to
refer to the philosophy, policies, procedures, and practices related to the
management of people in the organization. Some view personnel management or
perhaps modern personnel management means the same thing. Change in
terminology reflects the increased significance associated with the management of
people in organization as well as border prospective from which the field is currently
viewed. One should clearly understand that HRM is not only personnel mgmt. rather
it is only the part of HRM. In the past personnel management had a strong functional
focus, that is personnel specialists were primarily concerned with the administration
of specific employee related function such as living, training, wage setting and
disciplinary action. HRM is emerged out of personnel functions, and personnel
mgmt. can not be isolated from HRM.

The difference between HRM and personnel management are as follows:

1. HRM is primarily a philosophy, policies, procedures and practices related to the
management of people while personnel mgmt is a functional area and function.

2. HRM must remain at the center of management. It is concern of all managers from
top to button in an organization, while personnel mgmt is mainly the concern of
personnel managers.

3. HRM makes effort primarily to satiety the human needs of the people at work
which motivates the people to make their best contribution for the achievement of
organization goals and objectives, while personnel management maintains rules,
principles and legal provisions in maintaining the people.
4. Human values and individual needs are given priority in HRM, while personnel
management gives emphasis on efficient administration.

5. HRM is an integrated approach accommodating all the aspects of acquisition,

development, motivating and maintenance of human resources, where as personnel
management is primarily concerned with recruitment, selection, and administration
of manpower.

Outcomes of HRM
Quality of Work Life(QWL):
QWL refers to the quality of relationship between employees and the total working
environment of the organization . QWL can be defined as the extent to which
members of an organization are able to satisfy personal needs through organizational
process. Thus QWL concentrates on creating a working environment that is
conductive to the satisfaction of worker needs. Thus QWL concentrates on creating
of working environment that is suitable and gives satisfaction to the workers. Barry
A. Stein provides us with following five procedures or policies, that makes the work
less routine and more rewarding for the employee.

a) Autonomy/ Freedom: It deals with the amount of freedom...... that employee can
exercise in their job.

b) Recognition: It involves being valued by others in the company. An employee's

contribution to the organization is noticed and appreciated.

c) Belonging: It refers to being part of the organization. An individual who belongs

to an organization is one who shares the organization’s values and is regarded as
being valuable part of the firm.

d) Progress and Development: Progress and development refer to the internal

reward available from the organization, challenge, and accomplishment.
e) External Reward: External rewards are usually in the form of salary and benefits
but also include promotion and status.Personnel and Human Resource Management
(HRM)
HRM is the modern term for what has traditionally been referred to as personnel
administration or personnel management. HRM is the term increasingly used to
refer to the philosophy, policies, procedures, and practices related to the
management of people in the organization. Some view personnel management or
perhaps modern personnel management means the same thing. Change in
terminology reflects the increased significance associated with the management of
people in organization as well as border prospective from which the field is currently
viewed. One should clearly understand that HRM is not only personnel mgmt. rather
it is only the part of HRM. In the past personnel management had a strong functional
focus, that is personnel specialists were primarily concerned with the administration
of specific employee related function such as living, training, wage setting and
disciplinary action. HRM is emerged out of personnel functions, and personnel
mgmt. can not be isolated from HRM.

The difference between HRM and personnel management are as follows:

1. HRM is primarily a philosophy, policies, procedures and practices related to the
management of people while personnel mgmt is a functional area and function.
2. HRM must remain at the center of management. It is concern of all managers from
top to button in an organization, while personnel mgmt is mainly the concern of
personnel managers.
3. HRM makes effort primarily to satiety the human needs of the people at work
which motivates the people to make their best contribution for the achievement of
organization goals and objectives, while personnel management maintains rules,
principles and legal provisions in maintaining the people.
4. Human values and individual needs are given priority in HRM, while personnel
management gives emphasis on efficient administration.
5. HRM is an integrated approach accommodating all the aspects of acquisition,
development, motivating and maintenance of human resources, where as personnel
management is primarily concerned with recruitment, selection, and administration
of manpower.

Outcomes of HRM
Quality of Work Life(QWL):
QWL refers to the quality of relationship between employees and the total working
environment of the organization . QWL can be defined as the extent to which
members of an organization are able to satisfy personal needs through organizational
process. Thus QWL concentrates on creating a working environment that is
conductive to the satisfaction of worker needs. Thus QWL concentrates on creating
of working environment that is suitable and gives satisfaction to the workers. Barry
A. Stein provides us with following five procedures or policies, that makes the work
less routine and more rewarding for the employee.

a) Autonomy/ Freedom: It deals with the amount of freedom that employee can
exercise in their job.

b) Recognition: It involves being valued by others in the company. An employee's

contribution to the organization is noticed and appreciated.

c) Belonging: It refers to being part of the organization. An individual who belongs

to an organization is one who shares the organization’s values and is regarded as
being valuable part of the firm.

d) Progress and Development: Progress and development refer to the internal

reward available from the organization, challenge, and accomplishment.
e) External Reward: External rewards are usually in the form of salary and benefits
but also include promotion and status.Personnel and Human Resource Management
(HRM)
HRM is the modern term for what has traditionally been referred to as personnel
administration or personnel management. HRM is the term increasingly used to
refer to the philosophy, policies, procedures, and practices related to the
management of people in the organization. Some view personnel management or
perhaps modern personnel management means the same thing. Change in
terminology reflects the increased significance associated with the management of
people in organization as well as border prospective from which the field is currently
viewed. One should clearly understand that HRM is not only personnel mgmt. rather
it is only the part of HRM. In the past personnel management had a strong functional
focus, that is personnel specialists were primarily concerned with the administration
of specific employee related function such as living, training, wage setting and
disciplinary action. HRM is emerged out of personnel functions, and personnel
mgmt. can not be isolated from HRM.
The difference between HRM and personnel management are as follows:
1. HRM is primarily a philosophy, policies, procedures and practices related to the
management of people while personnel mgmt is a functional area and function.
2. HRM must remain at the center of management. It is concern of all managers from
top to button in an organization, while personnel mgmt is mainly the concern of
personnel managers.
3. HRM makes effort primarily to satiety the human needs of the people at work
which motivates the people to make their best contribution for the achievement of
organization goals and objectives, while personnel management maintains rules,
principles and legal provisions in maintaining the people.
4. Human values and individual needs are given priority in HRM, while personnel
management gives emphasis on efficient administration.
5. HRM is an integrated approach accommodating all the aspects of acquisition,
development, motivating and maintenance of human resources, where as personnel
management is primarily concerned with recruitment, selection, and administration
of manpower.

Outcomes of HRM
Quality of Work Life(QWL):
QWL refers to the quality of relationship between employees and the total working
environment of the organization . QWL can be defined as the extent to which
members of an organization are able to satisfy personal needs through organizational
process. Thus QWL concentrates on creating a working environment that is
conductive to the satisfaction of worker needs. Thus QWL concentrates on creating
of working environment that is suitable and gives satisfaction to the workers. Barry
A. Stein provides us with following five procedures or policies, that makes the work
less routine and more rewarding for the employee.

a) Autonomy/ Freedom: It deals with the amount of freedom that employee can
exercise in their job.

b) Recognition: It involves being valued by others in the company. An employee's

contribution to the organization is noticed and appreciated.

c) Belonging: It refers to being part of the organization. An individual who belongs

to an organization is one who shares the organization’s values and is regarded as
being valuable part of the firm.
d) Progress and Development: Progress and development refer to the internal
reward available from the organization, challenge, and accomplishment.

e) External Reward: External rewards are usually in the form of salary and benefits
but also include promotion and status.