HUMAN RESOURCE

MANAGEMENT

MODULE 1
INTRODUCTION TO HRM
 INTRODUCTION
 Organizations are nothing but people.
 Every organization has more or less the same kind of resources
to work with – materials, equipment, land, buildings, finances
etc.,
 The only differentiating element between competing
organizations is the “people factor”.
 If the organization is able to utilize its human resources to best
advantage, there is nothing to stop the company from reaching
the top of the ladder.
 Thomas J Watson, founder of IBM once commented, “you can
get capital and erect buildings, but it takes people to build a
business.
 MEANING OF HRM
 Human Resource Management is a process of bringing people and
organizations together so that the goals of each are met.
 It is the art of procuring, developing and maintaining competent
workforce to achieve the goals of an organization in an effective
and efficient manner.
 According to Flippo, “Human Resource Management is the
planning, organizing, directing and controlling of the
procurement, development, compensation, integration,
maintenance and separation of human resources to the end that
individual, organizational and social objectives are accomplished.
 NATURE OF HRM

Pervasive in Nature Action Oriented

People Oriented Development Oriented

Integrating Mechanism Challenging Function

Auxiliary Service Inter-Disciplinary Function

Continuous Function
 SIGNIFICANCE OF HRM
 An organization’s success increasingly depends on the knowledge,
skills and abilities (KSAs) of employees, that distinguish an
organization from its competitors.
 With appropriate HR policies and practices an organization can
hire, develop and utilize best brains in the marketplace and deliver
results better than others.

 At the Corporate Level

 At the Individual Level
 At the Society Level
 At the National Level
 At Corporate Level

 Good human resource practices can help in attracting and

retaining the best people in the organization.
 Planning alerts the company to the types of people it will need in
the short, medium and long run.
 It helps in training people for challenging roles, developing right
attitudes towards the job and the company.
 Promotes team spirit among employees and developing loyalty
and commitment through appropriate reward system.
 At the Individual Level

 It promotes team work and team spirit among employees.

 It offers excellent growth opportunities to people who have the
potential to rise.
 It allows people to work with commitment.

At the Society Level

 Employment opportunities multiple

 Scarce talents are put to best use.
 Companies that pay and treat people well always race ahead of
others and deliver excellent results.
 At the National Level

 Effective use of human resources helps in exploitation of natural,

physical and financial resources in a better way.
 People with right skills, proper attitude and appropriate values
help a nation to get ahead and compete with the best in the world
leading to better standard of living and better employment.
 HISTORICAL EVOLUTION OF HRM

 Industrial Revolution
 Scientific Management
 Trade Unionism
 Human Relations Movement
 Human resource approach
 Industrial Revolution

 During this period machines were brought in, technology made

rapid progress, jobs were more fragmented where the worker did
only a small portion of the total job.
 Specialization increased speed and efficiency but left workers
with dull boring and monotonous jobs.
 Workers were treated as glorified machine tools.
 Employers were keen to meet production targets rather than
satisfy workers demands.
 Government did very little to protect the interests of workers.
 Scientific Management

 To improve speed and efficiency F W Taylor advocated scientific

management.
 It is a systematic analysis and breakdown of work into smallest
mechanical elements and rearranging them into their most
efficient combination.
 Employees should be trained carefully by supervisors to ensure
they performed the task exactly as specified.
 A differential piece rate system was also advocated to provide an
incentive for employees to follow the detailed procedures
specified by supervisors.
 Trade Unionism

 Workers joined hands to protect against the exploitative

tendencies of employers and the prohibitive, unfair labor practices
through unions.
 Unions tried to safeguard the interest of the workers through
collective bargaining, resolving the grievances of workers relating
to working conditions, pay and benefits, disciplinary actions, etc.,
 Human Relations Movement

The human relations movement led to the wide scale implementation

of behavioral science techniques in industry for the first time which
included,
 Supervisory training programmes
 Emphasizing support and concern for workers,
 Programmes to strengthen the bonds between labor and

management
 Counselling programmes whereby employees were encouraged to

discuss both work and personal problems with trained counsellors.

 HUMAN RESOURCE APPROACH

 It was recognized each employee is a unique and highly complex

individual with different wants, needs and values.
 It assumes that the job or the task itself is the primary source of
satisfaction and motivation to employees.
 Emphasis of this approach is on individual involvement in the
decisions made in the organization.
 The managers’ basic job is to use the untapped human potential in
the service of the organization.
 The manager should create a healthy environment wherein all
subordinates can contribute to the best of their capacities.
 The environment should provide a healthy, safe, comfortable and
convenient place to work.
 MAJOR FUNCTIONS OF HRM

Managerial Functions Operative Functions

Planning Employment

Human Resource
Organizing Development

Directing Compensation

Controlling Human Relations

 MANAGERIAL FUNCTIONS
Planning
 This function deals with the determination of future course of
action to achieve desired results.
 Planning of personnel today prevents crisis tomorrow.
 The HR manager is expected to determine the personnel
programme regarding recruitment, selection and training of
employees.
Organizing
 This functions is primarily concerned with proper grouping of
personnel activities, assigning of different groups of activities to
different individuals and delegation of authority.
 Creation of a proper structural framework is its primary task.
 Organizing is considered to be the wool of the entire management
fabric and hence cannot afford to be ignored.
 Directing
 This involves supervising and guiding the personnel.
 To execute plans, direction is very essential.
 Many a time, the success of the organization depends on the
direction of things rather than its design.
 Direction consists of motivation and leadership.

Controlling
 Comprises measuring the employee’s performance, correcting
negative deviations and assuring an efficient accomplishment of
plans.
 It makes individual aware of their performance through review
reports, records and personnel audit programs.
 It ensures that activities are being carried out in accordance with the
stated plans.
 OPERATIVE FUNCTIONS
 Are related to specific activities of personnel management.
 Performed in conjunction with managerial functions.

Procurement Function

 The first operative function of HRM.

 It is concerned with procuring and employing people who posses
necessary skill, knowledge and aptitude.
A. Job Analysis – Is the process of collecting information relating
to the operations and responsibilities pertaining to the job.
B. Human Resource planning – Process of determining and
assuring that the organization will have an adequate number of
qualified persons, available at proper times.
C. Recruitment – Process of searching for prospective employees
and stimulating them to apply for the jobs in the organization.
D. Selection – Process of ascertaining qualifications, experience,
skill and knowledge of an applicant with a view of appraising
his/her suitability to the job in question.
E. Placement – Process that ensures 360 degree fit, matching the
employee’s qualifications, experience, skills with the job on offer.
F. Induction and Orientation – Are techniques by which a new
employee is rehabilitated in his new surroundings and introduced to
the practices, policies and people.
G. Internal Mobility – Movement of employees from one job to
another through transfers and promotions. Some employees leave an
organization due to various reasons leading to resignation, retirement
and even termination. This is called external mobility.
 DEVELOPMENT FUNCTION
Is a process of improving, molding, changing and developing the
skills, knowledge, aptitude, ability, values and commitment based on
present and future requirements both at the individual and
organizational level.

A. Training – Is a continuous process by which employees learn

skills, knowledge and abilities to further organizational and
personnel goals.
B. Executive Development – Is a systematic process of developing
managerial skills and capabilities through appropriate
programmes.
C. Career Planning and Development – It is the planning of one’s
career and implementation of career plans by means of education,
training and acquisition of work experiences. It includes succession
planning.
D. Human Resource Development – Aims at developing the total
organization. Creates climate that enables every employee to develop
and use his capabilities in order to further both individual and
organizational goals.
 MOTIVATION AND COMPENSATION
Is a process which inspires people to give their best to the
organization through use of intrinsic (achievement, recognition,
responsibility) and extrinsic (job design, work scheduling, appraisal
based incentives) rewards.
A. Job design – Organizing tasks, and responsibilities towards
having a productive unit of work is called job design.
B. Work Scheduling – Is an attempt to structure work,
incorporating the physical, physiological and behavioral aspects
of work.
C. Motivation – Combining forces that allow people to behave in
certain ways is an integral aspect of motivation. Managers try to
motivate people through financial and non financial rewards.
D. Job evaluation – Is the systematic process of determining the
relative worth of jobs in order to establish which jobs should be paid
more than others within the organization.
E. Performance Appraisal – Is a method of evaluating the behavior
of employees at the workforce and normally includes both the
quantitative and qualitative aspects of job performance.
F. Compensation administration – Is the process of dividing how
much an employee should be paid.
G. Incentives and Benefits – In addition to a basic wage structure,
most organizations nowadays offer incentive compensation based on
actual performance.
 MAINTENANCE
It aims at protecting and preserving the physical and psychological
health of employees through various welfare measures.

A. Health & Safety – Managers must ensure a work environment

that protects employees from physical hazards, unhealthy
conditions.
B. Employee Welfare – Includes the services, amenities and
facilities offered to employees within or outside the
establishment.
C. Social Security Measures – Includes workmen’s compensation,
maternity benefits, sickness benefits and medical benefits.
 INTEGRATION FUNCTION
This function tries to integrate the goals of organization with
employee aspirations through various employee-oriented programs.

A. Grievance Redressal – A grievance is any factor involving

wages, hours or conditions of employment that is used as
complaint against the employer.
B. Discipline – A force that prompts an individual or a group to
observe the rules, regulations and procedures which are deemed
necessary for attainment of the objectives.
C. Teams & Team work – They enhance employee involvement
and have the potential to create positive synergy.
D. Collective Bargaining – Is the process of agreeing on a
satisfactory labor contract between management and union.
E. Employee Participation & Empowerment – Participation means
sharing the decision making power with the lower ranks of an
organization in an appropriate manner.
F. Trade Unions and Employees association – It strives towards
providing economic and social benefits to the labor community.
G. Industrial Relations – Harmonious industrial relations between
the labor and management are essential to achieve industrial growth
and higher productivity.
 EMERGING ISSUES
Effective management of human resources depends on refining HRM
practices to changing conditions.

A. Personnel records – Such as files, cards are maintained to have

tangible record of what is happening in an organization.
B. Human resource audits – Refers to an examination and
evaluation of policies, procedures and practices to determine the
effectiveness of HRM
C. Human resource accounting – Measurement of the cost and
value of human resources to the organization.
D. HRIS – Is an integrated system designed to improve the
efficiency with which HR data is compiled.
E. Stress and Counselling – Companies are looking to promote the
physical and mental well being of employees through proper
counseling and employee development programs.
F. International Human Resource Management – Places greater
emphasis on a number of responsibilities and functions such as
relocation, orientation and training services to help employees adapt
to a new environment.
 PRINCIPLES OF HRM
Scientific
Individual Selection
Development Incentive
Procedure

Contribution to
National Adequate
Prosperity Communication
Principles
of HRM
Labor &
Participation
Management
Cooperation

Dignity Fair
Team
of Compensation
Spirit
Labor
 LINE & STAFF FUNCTIONS
Organizations divide their managers into 2 groups
 Line Management
 Staff Management

Line Managers
 Line Managers are those directly responsible for creating goods
and services.
 Their contributions to the organization can generally be assessed
in terms of their actual contributions and costs to the
organization’s bottom line.
 Operations managers, financial managers and marketing managers
are generally considered to have line functions.
 Staff Managers

 Are responsible for an indirect or support function that would

have costs but whose bottom line contributions were less direct.
 Legal, accounting and human resource departments are usually
thought of as staff functions.
 Their role is to support line management’s efforts to achieve
organizational goals and objectives.
 Today however many organization have blurred this distinction.
 Line functions of Human Resource Manager

 HR manager directs the activities of the people in his department.

 Activities include HR planning, Job analysis, recruitment and
selection, induction, training and development, compensation
management, etc.,
 He or she exerts line authority within the HR department.
 Staff function of Human resource manager

 Refers basically to assisting other managers in performing their

duties without creating problems.
 HR assists in hiring, training, evaluating, rewarding, counselling,
promoting and firing employees.
 Helps line managers in complying with safety laws and equal
employment laws.
 Plays important role in handling grievances and labor relations.
 Acts as an innovator by providing up to date information on
current trends and new methods for better utilizing company’s
human resources.
 Plays an employee advocacy role, by helping to define how
management should be treating employees.
 HR COMPETENCIES
1. Credible Activist
 Credibility comes when HR professionals do what they promise,
build personal relationships of trust and can be relied on.
 As activists, HR professionals learn how to influence others in a
positive way through clear, consistent and high impact
communications.

2. Culture and Change Steward

 As stewards of culture, they respect past culture and also can help
to shape a new culture.
 They weave the cultural standards into HR practices and
processes.
 They develop disciplines to make changes happen throughout the
organization.
3. Talent Manager/Organizational Designer

 Talent management focuses on competency requirements and how

individuals enter and move up, across or out of the organization.
 Organization design focuses on how a company embeds capability
into the structure, processes and policies that shape how a
organization works.
 HR professionals ensure that the company’s means of talent
management and organizational capabilities are aligned with
customer requirements and strategy, integrated with each other
and working effectively and efficiently.
4. Strategy Architect
 HR professional contributes to the building of the overall strategy
by linking the internal organization to external customer
expectations.

5. Operational Executor
 HR professional executes operational aspects of managing people
and organizations.
 Policies need to be drafted, adapted and implemented.
 Employees has various administrative needs like relocation,
training, etc., and HR managers ensure that these basic needs are
efficiently dealt through technology, shared services or
outsourcing.
6. Business Ally
 HR professionals contribute to the success of a business by
knowing the social context or setting in which their business
operates.
 They know who are customers, why they buy the company’s
products or services.
 Have good understanding of the parts of the business like finance,
marketing, R&D and how they work together.

7. Technology Proponent
 HR professionals need to use technology for delivering
administrative services like payroll processing, benefits etc.,
 Need to use technology to help people stay connected with each
other, for improving communication, connecting inside employees
to outside customers.
 INSTITUTIONS OF REPUTE WHICH IMPART
HRM EDUCATION IN INDIA
1. National HRD Network (NHRDN) – Largest professional
forum for HR professionals in India. Association of professionals
committed to promote HRD movement in India. Located in
Ahmedabad.
2. Indian Society of Training & Development (ISTD) – Is a
premiere national institution devoted to the cause of human
resource development through trainers with international
affiliations.
3. National institute of personnel management (NIPM) –
Established in 1980 and has head office in Calcutta. Engaged in
personnel management, industrial relations, labor welfare and
human resource management. Mission is concern for human
excellence.
4. All India Management Association (AIMA) – Created as an
apex body of professional management with active support of the
Government of India and Industry in 1957. Is a group to pool
management thoughts in the country.

5. Academy of HRD (AHRD) – Founded in 1990. Has launched and

nurtured number of activities and programs to make HRD a vital part
of a comprehensive management strategy.
 PROFESSIONAL ASSOCIATIONS IN HRM
 Depending on the job, HR professionals may need considerable
knowledge about employment regulations, finance, tax law, statistics
and information systems.
 For HR specialists, the largest organizations is the Society for
Human resource management (SHRM) which consists more than 1
lakh members worldwide. Its mission include
1. Provide its members with ongoing government and media
representations, equips human resource practitioners to become
leaders and decision makers in their organizations.
2. Strive to be the voice of the profession on HRM issues.
3. Facilitate the development and guide HRM profession
4. Establish, monitor and update the standards of the profession.

Other associations include American society for T&D, IPMA,

American compensation association, academy of management, etc.,
 CHALLENGES OF HRM
 Globalization  Knowledge management
 New Technology  Changing power structures
 Managing Change  Challenge related to training
 Market Challenges  Challenge of diversity and
 Containing Costs equality
 Demographic challenges  Challenge of pertaining to
 Partnership between line organization culture
management and staff  Challenge of emerging
management workplace issues
 Skill shortages