Chapter no -1 [Introduction to HRM]

* Meaning of HRM –
Human Resource Management (HRM) is an operation in companies designed to
maximize employee performance in order to meet the employer's strategic goals and
objectives. More precisely, HRM focuses on management of people within companies,
emphasizing on policies and systems.
In short, HRM is the process of recruiting, selecting employees, providing proper
orientation and induction, imparting proper training and developing skills.
HRM also includes employee assessment like performance appraisal, facilitating proper
compensation and benefits, encouragement, maintaining proper relations with labor
and with trade unions, and taking care of employee safety, welfare and health by
complying with labor laws of the state or country concerned.
* Definition of HRM –
1) The most important asset of the organization is its employees, so the prime
responsibility of management is to manage human resource in effective manner
2) The first definition of human resource management is that it is a process that will
manage people in a company in a defined and structured way.
3) planning, organizing, directing, controlling of procurement, development,
compensation, integration, maintenance and separation of human resources to the end
that individual, organizational and social objectives are accomplished”
• Features of HRM
• 1) Directed towards Achievement of Objectives:
• Human resource management is concerned about working in order to achieve the
organizational objectives. It also provides tools and techniques to effectively manage the
human resources of the firm.
• 2) Development Oriented:
• Human resource management seeks the optimal or fuller utilization of worker’s capabilities
or potential. It turns the reward structure to the needs of employees for this. It also impacts
training in order to improve the skills of the employees.
• 3) Continuous Process:
• Human resource management is a continuous process in the sense that it is in operation
from the day an entity comes into existence till the day it winds up.
• 4) A Part of Management Discipline:
• Human resource management is an important component of management discipline.
Although it may not be regarded as a discipline in itself, but surely is a field of study.
• 5) People Oriented:
• Human resource management is concerned with employees both as individuals and as a
group in attaining goals.
• 6) Universal Existence:
• Human resource Management is a universal function in the sense that it is applicable in all
varieties of organizations. The principles and practices are applied everywhere irrespective
of size, nature, scope and purpose of the organizations.
• Importance of Human Resource Management -
1) Recruitment and Training
This is one of the major responsibilities of the human resource team. The HR managers come up with
plans and strategies for hiring the right kind of people. They design the criteria which is best suited for
a specific job description.
• 2) Performance Appraisals
HRM encourages the people working in an organisation, to work according to their potential and gives
them suggestions that can help them to bring about improvement in it. The team communicates with
the staff individually from time to time and provides all the necessary information regarding their
performances and also defines their respective roles.
• 3) Maintaining Work Atmosphere
This is a vital aspect of HRM because the performance of an individual in an organisation is largely
driven by the work atmosphere or work culture that prevails at the workplace. A good working
condition is one of the benefits that the employees can expect from an efficient human resource
team.
• 4) Managing Disputes
In an organisation, there are several issues on which disputes may arise between the employees and
the employers. You can say conflicts are almost inevitable. In such a scenario, it is the human resource
department which acts as a consultant and mediator to sort out those issues in an effective manner.
• 5) Developing Public Relations
The responsibility of establishing good public relations lies with the HRM to a great extent. They
organise business meetings, seminars and various official gatherings on behalf of the company in
order to build up relationships with other business sectors.
• 6) Building worker relationships
• Employee relations are important for increasing productivity. It also contributes significantly to the
success of a company. Employee relations strategies are used to ensure that an organization is
concerned about its employees’ overall well-being.
• 7) Policy Formulation
• If HRM can effectively create a human resource policy, its importance may be acknowledged. It is the
managerial insight into human resources. If all these policies are formulated as per desire and for the
fulfillment of organizational objectives.
• 8) Retaining Employees and Motivation for Gaining Goals
• Human Resources Management (HRM) plays an important role in retaining employees and motivating them
to accomplish the company’s goal. By developing effective HR policies and practices, HRM helps directly in
creating a positive work environment that attracts and retains talented employees.
• 9) Maintaining Quality Work Life
• Maintaining the quality of work life is a major condition for organizations. HRM helps directly by ensuring
that employees are treated fairly and equitably, providing a framework for managing employee
performance, and creating policies and procedures that support a positive work environment.
• 10) Increasing Profit and Productivity
• By helping to increase productivity and profit, human resource management helps directly to improve the
bottom line. Additionally, by ensuring that employees are properly managed and trained, human resource
management can help reduce turnover and improve employee satisfaction, both of which can also lead to
increased profits.
• 11) Producing Skilled Employees
• Producing employees who are easily adaptable to change is the main
function of human resource management. By helping to directly shape the workforce, HR professionals can
create an organization that is better able to respond quickly and effectively to new opportunities and
challenges.
• 12) Developing Corporate Image
• Human resource management is critical for developing a strong corporate image. By ensuring that the
company’s employees are well trained and represent the brand in a positive light, HRM can help create a
favorable public perception of the organization. Additionally, by managing employee relations effectively,
HRM can minimize negative publicity and help maintain a productive workforce.
• Objectives of Human Resource Management
• The primary objective of human resource management is to ensure the availability of a productive
workforce to an organization. Hence, objectives of HRM are classified into the following four
categories:
• Societal Objectives
1. Legal compliance
2. Benefits
3. Union management relations
• Organizational Objectives
1. Human resource planning
2. Employee relations
3. Selection
4. Training and development
5. Appraisal
6. Placement
7. Assessment
• Functional Objectives
1. Appraisal
2. Placement
3. Assessment
• Personal Objectives
1. Training and development
2. Appraisal
3. Placement
4. Compensation
5. Assessment
• 1) Achieve Organizational Goals
• HRM function starts here. One major HRM objective is to fulfil organizational goals. Utilizing human
resources to achieve business requirements and goals is very important for an effective HRM.
• 2) Work Culture
• When it comes to handling HRM effectively and following objectives, employee and work environment are
the prior factors. Work culture plays an important role in defining HRM and business performance.
• 3) Team Integration
• One of the prime roles and objectives of HRM is to make sure the team coordinates efficiently. Easy
communication is the need for teams at an enterprise. An HR here must ensure a tool to assist in making
the integration easier and smooth.
• 4) Training and Development
• Workforce being effective and performing are two important and basic elements to work upon for
achieving your basic objectives at an organization. With proper training and providing future opportunities,
employees feel safe and organized.
• 5) Employee Motivation
• The prime objective of HR folk is to keep things on the right path. Keep distractions and negative vibes
away. For this, the employees need to be attended to and kept motivated throughout.
• 6) Workforce Empowerment
• Talking about employee motivation, nothing can work better than empowering them. Empowering them
with tools like ESS (employee self-service) portal can help save HR efforts too.
• 7) Retention
• Providing leadership qualities and opportunities, a healthy working area, and employee retention are some
prime objectives and deliverables of the HR managers. Keeping employees retained and motivated needs
to be a top priority for HRM.
• 8) Data and Compliance
• Functional and organizational objectives also include managing company/ employee data and managing
compliances. Managing payroll compliances and keeping the company out of any penalties or fines is a
huge challenge for HR people and managers.
• Scope of HRM
• 1) Prospects Of Employees
• Human resource management is concerned with planning adequate no. of manpower requirements. It
evaluates various job positions within the organizations and defines the skills required for such positions.
• 2) Employees Hiring
• It involves selecting the right employees for carrying out the required operations. On the basis of information
collected by analyzing the job positions, it does the function of designing and performing the whole
recruitment process of organization.
• 3) Employees Maintenance
• It aims at proper maintenance of employees by providing them required training and a proper working
environment. Newly recruited personnel’s are trained in accordance with organization needs for acquiring the
objectives.
• 4) Remuneration
• HRM ensures that all employees are paid fair remuneration as per their skills and performance level. It
examines the output of each employee which helps in deciding their incentives, salaries, increments and
promotions.
• 5) Employee’s Motivation
• Motivating employees for better performance from time to time is another key role played by HRM. It
motivates them by rewarding as per their efficiency and also taking care of their welfare facilities. Providing
various monetary and non-monetary benefits helps in boosting the morale of employees towards their roles.
• 6) Industrial Relations
• Proper cordial relation with union members is must for ensuring continuity of business activities. HRM
maintains good relationship with labors by fulfilling all of their needs timely. It resolves all conflicts arising
within enterprise and prevents labor strikes.
• Featurs of HRM –
• 1) A Part of Management Discipline:
• Human resource management is an important component of management
discipline. Although it may not be regarded as a discipline in itself, but surely is a
field of study.
• 2) Action Oriented:
• The focal point of managing human resources is ‘action’ instead of record keeping,
written procedures or rules.
• 3) Directed towards Achievement of Objectives:
• Human resource management is concerned about working in order to achieve the
organizational objectives.
• 4) Integrating Mechanism:
• One of the important objectives of human resource management is to recognize the
best possible manner to achieve the common goals.
• 5) Continuous Process:
• Human resource management is a continuous process in the sense that it is in
operation from the day an entity comes into existence till the day it winds up.
• Principles of HRM –
• 1) Principle of Recruitment and selection
• candidates and selecting the best ones to come and work in the company is a key HR responsibility.
People are the lifeblood of the organisation and finding the best candidates is an essential task.
• 2) Principle of Performance management
• Once employees are on board, performance management becomes important. Performance
management is the second pillar of HR. It is about helping people to perform at their best at work,
in order to improve the company's results.
• 3) Principle of Learning and development
• People are the product of their life experiences, the country and time in which they grew up, and a
range of cultural influences. Within HR, learning and development ensures that employees adapt
to changes in processes, technology and societal or legal developments.
• 4) Principle of Succession planning
• Succession planning is the process of making contingency plans for the departure of key employees
from the company. If, for example, a key senior manager leaves, having a replacement ready will
ensure continuity and can result in significant savings for the company.
• 5) Principle of Fair Reward:
• Labour should be given proper compensation for the work. This develops industrial peace. History
itself shows that all strikes, lockouts and breakages in the Indian factories are because of the
dissatisfaction of the workers arising mainly due to improper way of rewarding the workers for
their work.
• 6) Principle of Effective Utilisation of Human Resources:
• The development of personnel management is for the effective use of the human resources. It is needful that
man should be thought as man. He should be asked to do the work that he can do and for his development
proper training be provided.
• 7) Principle of Compensation and benefits
• Another fundamental element of HR is pay and benefits. Fair compensation is essential to motivate
and retain employees. One of the fundamental principles of HR management in relation to
compensation is to ensure equity and fairness.
• 8) Principle of Human resource information system
• The last two fundamental HR elements are not HR practices, but tools for improving HR. The first is
the human resources information system, or HRIS. An HRIS supports all of the cornerstones discussed
above.
• 9) Principle of HR data and analytics
• The last of the HR fundamentals revolves around data and analytics. Over the past fifty years, HR has
taken a big step forward in becoming more data-driven.
• 10) Principle of Effective Communication:
• There must be effective medium of communication between the management and the workers.
Communication means that, orders of higher authorities are conveyed in a proper way.
• 11) Principle of Maximum Individual Development:
• This principle stresses on the personnel development of every person working in an organisation. By
this principle, workers are able to fulfil the objectives of an organisation with the minimum cost,
hence giving them occasion to develop, themselves to the maximum extent of their capabilities
• 12) Principle of High Morale:
• It is essential to have a high morale for the workers organisation and work. With this purpose, ideal
wage policy should be offered in the organisation.
• 13) Principle of Team Spirit:
• Team spirit must be developed in the workers. They should work collectively and they should feel
collective responsibility for the execution of the objectives of the organisation, with this intention,
they must have the sense of the cooperation, unity and mutual trust.
• Role of HR manager –
• 1. Hiring and recruitment
• One of a human resources manager's primary roles is locating and hiring new talent for their
company. This process can include locating talent through online sources, recruitment agencies
and physical ads.
• 2. Creating job description and design
• Job description and design is the process of determining which professional roles are necessary
for a team or department and defining those roles.
• 3. Planning and schedules
• Another role that HR managers manage is planning for company events and creating schedules.
Depending on the size of the company, the nature of the work and how many employees there
are in each department, the HR manager may determine when each staff member works, or they
may delegate that task to other leaders within the company.
• 5. Documenting rules and regulations
• HR managers create documentation for rules and regulations, communicate this important
information to employees and create procedures for training employees on these policies.
• 6. Performance management
• Performance management allows companies and teams to ensure each of their staff members is
producing value for the company that equals their compensation. To use performance
management, the HR manager may implement systems for monitoring productivity, suggesting
solutions for issues and offering potential improvements in workflow.
• 7. Developing workplace atmosphere
• HR managers understand that developing a welcoming and conducive workplace atmosphere is
important for improving productivity, employee satisfaction and staff engagement levels.
• 8. Conflict resolution
• Conflict resolution is necessary when employees have disputes and disagreements. The
HR manager can develop a standard procedure for settling problems and providing
conflict resolution.
• 9. Ensuring employee health and safety
• HR managers support employee health and safety by assessing potential risks and
supplying staff members with protection, depending on the organisation and industry.
• 10. Positive reinforcement
• An HR manager affects positive reinforcement by working directly with staff members
and advising their leaders. Positive reinforcement is the act of providing a reward when a
staff member shows good behaviour or contributes to excellent work.
• 11. Recording and reporting
• Successful HR managers record and report the performance of their department, metrics
for staff productivity and satisfaction, risk analysis and accidents or incidents. Recording
and reporting is an important part of the HR manager's position, as it allows them to
protect themselves and the company in sensitive situations by documenting meetings
and incidents.
• 12. Managing compensation and benefits
• Compensation and benefits is a subject that HR managers thoroughly understand, and
creating the best compensation and benefits packages for employees can increase
retention and bring more value to the company.
Challenges of HRM –
1) . Attracting Top Talent
• As the demand for highly trained professionals at the ‘top of their game’ grows, it becomes
a challenge for HR managers to attract the best talents. Managers should pay attention to
how well an employee fits into the organization; along with the job role
2) . Developing The Leaders of Tomorrow
• HR Managers constantly face the challenge of mentoring and developing the future pillars
of an organization. This is one of the trickier challenges HR Managers face because a lot of
employees have a poor relationship with their managers.
• 3) . Building a Culture of Continuous Learning
• Learning is a key factor in any organization. Upskilling employees help a company to gain an
edge in the market however, it is a difficult challenge in HRM. Likewise, employees feel
stimulated, engaged, and gain development opportunities.
• 4) . Globalization
• HR managers often deal with teams and workforces in geographically distributed areas. A
company’s customer demographic is also more diverse. HR managers are tasked with
devising new plans and strategies to build an inclusive workforce that leverages the
technology of the 21st century.
• 5) . Managing The Turnover Rates
• One of the largest challenges of HRM is the challenge of reducing the turnover rates in an
organization. One solution to this is to create a quality employee experience. High turnover
rates in any organization lead to an increase in cost and use of resources.
• 6) . Looking After Health & Safety
• Maintaining health and safety standards ranks very high on any HR Managers
priority list. The general well-being of employees is what keeps an organization
running and growing
• 7) . Compliance with Laws and Regulation
• Many HR professionals struggle with keeping track of laws as well as regulations
applicable to the company. Also, this one of the crucial challenges in HRM. Not
having the correct policies in place can affect the company’s growth and resources.
• 8) . Productivity
• The constant effort to enhance employee productivity has become the new business
norm. Not only Managing but also maintaining high employees productively needs
quick, smart, and consistent procedures and also, HR professionals are tasked with
keeping a track of all employees, addressing their issues & filling the gaps.
• 9) . Relationships With Customers
• Customer service is arguably the most critical factor in an organization’s long term
success. Especially, Customers can quickly use social media platforms to express their
displeasure if they aren’t satisfied.
• 10) . Financial Management
• A CFO or a financial consultant is crucial for any organization, no matter how small it
is. A financial advisor helps in making robust financial calls regarding cash flows,
profit margins, reducing costs as well as help to increasing productivity.
• Evolution of HRM
• 1) Evolution of HRM- The Industrial Revolution
• Managing workers at companies began at the time of the Industrial Revolution during the late
eighteenth century. Before this era, many large organizations existed, but without the advanced
technology, it was hard to maintain them.
• 2) Evolution of HRM (Human Resource Management)- Period of Trade Unionism
• Soon after the factory system surfaced, many employees began to get together to discuss their
common dilemmas. Every employee was forced to work for long hours under dangerous conditions,
for practically no wage.
• 3) Evolution and development of HRM- Social Responsibility
• As seen above, the earlier employers were not sympathetic towards their workers and their needs.
With time, they started to realize the importance of every employee and started giving them the
importance that they deserve.
• 4) Evolution and growth of HRM- Scientific management
• The scientific management era began in 1900 and reached its peak by 1930. It was a major
revolution and thus has managed to stay somewhat alive to date. Handling everything manually
was getting exhausting for the employees and was hampering their productivity and efficiency.
• 5) Evolution of Human Resource Management- Introduction to HRM
• As time changes, the techniques need to change too. With the coming of advanced technology, a
need for a better system emerged to ha
• 6) Recruitment
• In today’s competitive business world, recruitment has become a wearying task. Recruitment
companies are competing with each other neck-to-neck, to find the best potential candidate for
their firms.
• Functions of HRM –
• 1) Functions of Human Resource Management
• Planning
• Organizing
• Directing
• Controlling
• i) Planning
• A manager must plan ahead in order to get things done by his subordinates. It is also
important to plan in order to give the organization its goals.
• Also, planning helps establish the best procedures to reach the goals. Further, some effective
managers devote a substantial part of their time to planning.
• ii) Organizing
• After the human resource manager establishes the objectives and develops plans and
programs to achieve them, he needs to design and develop the organization’s structure to
carry out the different operations.
• iii) Directing
• The HR Manager can create plans, but implementing the plans smoothly depends on how
motivated the people are. The directing functions of HRM involve encouraging people to work
willingly and efficiently to achieve the goals of the organization.
• iv) Controlling
• Controlling is all about regulating activities in accordance with the plans formulated based on
the objectives of the organization. This is the fourth function of the HRM and completes the
cycle. In this, the manager observes and subsequently compares the results with the set
standards.
• Difference between HRM and Personal management –

Parameters of Human resource

Personnel management
comparison management
Human resource
Personnel management
management defines the
Definition defines the relationship
achievement of an
between the entity.
organizational entity.
Human resource
Personnel management is
management is
Approach Method approached by the
approached by the
traditional method.
modern method.
Employees are treated like Employees are treated as
Treatment of employees.
machines. assets.
Human resource
Personnel management
Function type management has a
has a routine function
strategic function.
Payment is done based on Payment is done based on
Payment
job evaluation performance evaluation.
 Human Resource
Basis For Comparison Personnel Management
Management
An essential branch of
An aspect of management management that deals
that is concerned with with making the optimum
Meaning employees at work and usage of organizational
their relationships within human resources to
the company. achieve the organizational
goals.
Working for the growth &
Objective Managing people at work development of the
workforce

Approach Traditional Modern

Treatment of manpower Machines or Tools Resource & Asset

Type of function Routine function Strategic function

Basis of Pay Job Evaluation Performance Evaluation

Management Role Transactional Transformational
Communication Indirect Direct
Collective
Labor Management Bargaining Individual Contracts
Contracts
Initiatives Piecemeal Integrated
Management Actions Procedure Business needs
Decision Making Slow Fast
Job Design Division of Labor Groups/Teams
Recruitment &
staffing, Equal
employment
Employee hiring,
opportunity, HR
remunerating,
Major Functions development,
training, and
Remuneration,
harmony.
Employee relations,
Continuos growth,
etc.
• Challenges befor HRM –

• 1. Retention of the employees :-

• One of the most important challenge the HR manager faces is retention of labour force. Many
companies have a very high rate of labour turnover therefore HR manager are required to take
some action to reduce the turnover.
• 2. Multicultural work force :-
• With the number of multi cultural companies are increasing operations in different nations. The
work force consists of people from different cultures. Dealing with each of the needs which are
different the challenge before the HR manager is integration of multicultural labour work force.
• 3. Women in the work force :-
• The number of women who have joined the work force has drastically increased over a few years.
Women employees face totally different problems. They also have responsibility towards the family.
The organization needs to consider this aspect also. The challenge before the HR manager lies in
creating gender sensitivity and in providing a good working environment to the women employees.
• 4. Handicapped employees :-
• This section of the population normally faces a lot of problems on the job, very few organization
have jobs and facilities specially designed for handicapped workers. Therefore the challenge before
the HR manager lies in creating atmosphere suitable for such employees and encouraging them to
work better.
• 5. Retrenchment for employees :-
• In many places companies have reduced the work force due to changing economic
situations, labourers or workers who are displaced face sever problems. It also
leads to a negative atmosphere and attitude among the employees. There is fear
and increasing resentment against the management. The challenge before the HR
manager lies in implementing the retrenchment policy without hurting the
sentiments of the workers, without antagonizing the labour union and by creating
positive attitude in the existing employees.
• 6. Change in demand of government :-
• Most of the time government rules keep changing. While a lot of freedom is given
to companies some strict rules and regulations have also been passed. The
government has also undertaken the disinvestment in certain companies due to
which there is fear among the employees regarding their job. The challenge before
the HR manager lies in convincing employees that their interest will not be
sacrificed.
• 7. Initiating the process of change :-
• Changing the method of working, changing the attitude of people and changing
the perception and values of organization have become necessary today. Although
the company may want to change it is actually very difficult to make the workers
accept the change. The challenge before the HR manager is to make people accept
change.