UNIT ONE

An Overview of Human
Resource Management
 Definition and Background
Human resources:
The total knowledge, skills, creative abilities, talents and
aptitudes of an organization’s workforce, as well as the
values, attitudes, approaches and beliefs of the
individuals involved in the affairs of the organization.
Alternative Terms for HR: ‘personnel’, ‘people at work’,
‘manpower’, ‘staff’ and ‘employees’, ‘human assets’ and
‘human capital’
National vs. Enterprise Viewpoint:
• National: Population Skills and Talents
• Enterprise: Employee Abilities and Knowledge
Jucius Michael calls these resources, ‘human factors;
which refer to “a whole consisting of inter-related, inter-
dependent and interacting physiological, psychological,
sociological and ethical components”
 Definition…
Human Resource Management:
Is the planning, organizing, directing and controlling of
the procurement, development and compensation,
integration, maintenance and reproduction of human
resources to the end that individual, organizational and
societal objectives are accomplished
Policies, practices and systems that influence
employees’ behavior, attitude and performance
Is the effective management of people at work
A strategic and coherent approach to the management
of an organization’s most valued assets- the people
Evolution of HRM: From Guilds to Modern HRM
Key historical milestones:
Traced to England, where carpenters, leather workers &
other craftspeople organized themselves into guilds
(forerunners of trade unions)
Further developed with the arrival of the Industrial
Revolution in the latter part of the 18th c.( brought a
widening gap between workers and owners)
Robert Owen: father of personnel management
Frederick W. Tylor: father of scientific management
Hugo Munsterberg: industrial psychology
The drastic changes in technology, organizations growth,
rise of unions, government concern and intervention
concerning working people resulted in the development of
personnel departments around the 1920s. Early personnel
administrators were called welfare secretaries
 Evolution…
Another early contributor to HRM was called the human
relations movement. Two Harvard researchers, Elton Mayo
(father of human resource management) and Fritz
Roethlisberger. Hawthorne studies
Industrial revolution era — 19th century
Trade union movement era — close to the 19th century
Social responsibility era — beginning of the 20th century
Scientific management era — 1900-1920s
Human relations era — 1930s-1950s
Behavioral science era — 1950s-1960s
Systems and contingency approach era – 1960 onwards
Human resource management era — 1980 onwards
 Evolution…
Peter Drucker, a respected management scholar and
consultant, made a statement about personnel
management that reflected its blue-collar orientation.
Drucker stated that the job of personnel was “partly a file
clerk, partly a housekeeper, partly a social worker’, and
partly freighting, heading off union trouble”.
In the past, HRM was called the personnel department. This
department was in charge of hiring people and dealing with
the paperwork related to employment.
More recently, however, the personnel department has
been divided into human resource management and human
resource development, as these functions continue to
evolve. More recently, HR departments often contain
“people” and “culture”
 Concept of Personnel Management
Personnel management has been traditionally viewed
as an inherent part of management which is concerned
with the human resources of an organization.
Its objective is the maintenance of better human
relations in the organization by the development,
application and evaluation of policies, procedures and
programs relating to human resources to optimize their
contribution towards the realization of organizational
objectives.
In other words, personnel management is concerned
with getting better results with the collaboration of
people.
 Difference b/n HRM & Personnel

Management
While personnel Management was designed to respond to the
organizational objective like profit maximization, HRM visualized
human elements of enterprise as important resources. Hence,
development of human resources is the most crucial aspect of
HRM.
Personnel Management has been viewed as a staff function
headed by personnel manager who is responsible for
procurement, training, compensation and appraisal. On the
contrary, HRM is a part and parcel of every line function (cannot
be isolated from leading and directing/actuating). Thus HRM
includes not only manpower, compensation, appraisal, etc., but
also career planning and development, counselling, motivation
and potential appraisal.
Personnel Managers often operated through pressure tactics &
coercive measures i.e. threats of punishments. But HRM aims to
achieve workers’ cooperation through team building, mutual
understanding and motivation.
Nature of Human Resource Management
Inherent part of Management: performed by all the
managers throughout the organization
Pervasive Function: performed by all managers at
various levels in the organization
Basic to all Functional Areas
People-centred: is concerned with all categories of
personnel: Blue collar and white collar workers,
managerial and non-managerial & Professionals
Involves several personnel Activities or Functions
Continuous Process
Based on Human Relations
Challenging function
Science as well as art
Four Fundamental principles of HRM
1. Human resources are the most important assets an
organization has and their effective management is
the key to its success
2. Personnel policies and procedures for the
achievement of corporate objectives and strategic
plans
3. The corporate culture and the values, organizational
climate and managerial behavior that emanate from
that culture must be managed;
4. HRM is concerned with integration - getting all the
members of the organization involved and working
together with a sense of common purpose.
 Importance of HRM
1. Corporate/Enterprise Significance:
Attracting and retaining the required talent through
HRP, R&S, placement, orientation, compensation and
promotion policies.
Developing the necessary skills and right attitudes
among the employees through training, development,
performance appraisal, etc.
Securing willing cooperation of employees through
motivation, participation, grievance handling, etc.
Utilizing effectively the available human resources.
Ensuring that the enterprise will have in future a team
of competent and dedicated employees.
 Importance...
2. Professional significance:
Providing maximum opportunities for personal
development of each employee.
Maintaining healthy relationships between
individuals, and different work groups.
Allocating work properly.
 Importance...
3. Social significance: Sound human resource
management has a great significance for the
society. It helps to enhance the dignity of labor in
the following ways:
Providing suitable employment that provides social and
psychological satisfaction to people.
Maintaining a balance between the jobs available and
the jobseekers in terms of numbers, qualifications,
needs and aptitudes.
Eliminating waste of human resources through
conservation of physical and mental health.
 Importance...
4. National Significance: The effective exploitation
and utilization of a nation's natural, physical and
financial resources require an efficient and
committed manpower.
There are wide differences in development between
countries with similar resources due to differences in
the quality of their people.
Countries are underdeveloped because their people are
backward.
The level of development in a country depends primarily
on the skills, attitudes and values of its human
resources.
 HRM Objectives

Organizational effectiveness
Human capital management
Knowledge management: Enhancing learning and
performance
Reward management: Motivation & commitment
Employee relations: Creating productive relations
Meeting diverse needs: Balancing stakeholder
needs and diversity
Bridging the gap between rhetoric and reality:
Challenges in implementing HR policies
 Specific Objectives of Personnel Management

Ensure effective utilization & development of HRs

Establish and maintain an adequate organizational structure
of relationships
To generate maximum development of HR
To ensure respect for human beings by providing various
services and welfare facilities to the personnel.
To ensure reconciliation of individual/group goals with those
of the organization
To identify and satisfy the needs of individuals by offering
various monetary and non-monetary rewards.
To achieve and maintain high morale among employees
 Scope of HRM
Major HR activities from entry to exit of an employee
HR Planning
Design of Organization and Job
Selection and Staffing
Recruitment and selection of staff
Training and Development
Organizational Development
Compensation and Benefits
Employee Assistance
Union-Labour Relations
Personnel Research and Information System
 Role of HRM
Strategic Partner Role – Turning strategy into results by building
organizations that create value;
Change Agent Role – Making change happen, and in particular, help
it happen fast
Employees Champion Role – Managing the talent or the
intellectual capital within a firm
Administrative Role – Trying to get things to happen better, faster
and cheaper.