Unit -1

Introduction to HRM

Introduction// In all activities men and resources are involved. For a long time men or workers were
taken for granted. Greater accent was given to resources, production machinery and top managers. But at present in the modern large scale production of innumerable products with a wide market, (where sky is the limit) in the last few decades the importance of human resources and their development has come to the fore. The importance of human resources to any organization need not be over-emphasised. Human resource is the wealth of a nation and an organisation. The development process is wide and varied. In this lesson, let us understand the importance and concept of Human Resources Management.

(HRM). Concept of HRM Human Resources are considered as a very important asset of any organisation and
at the national as well. Other resources are of no avail without Human Resources. They

can be made more effective and purposeful. There is no limit in their abilities and their abilities can be continuously improved with training, skill, attitude and additional scientific gadgets and mechanies. Concept of HRM borders on, i. Men or personnel can do many wonderful things and take up any challenge. ii. iii. iv. They can be trained to do Necessary climate can be created to increase their efficiency. Environment and their liberties can be increased to create a congenial atmosphere.

Karen Legge has specified three elements of HRM as follows 1. Human resource policies should be integrated with strategic business planning and used to reinforce appropriate culture. 2. Human resources are valuable and a source of competitive advantage.
3. Human resources can be tapped most effectively by mutually consistent policies

which promote commitment and foster a willingness in employees to act flexibly in the interest of the adaptive organsiations pursuit of excellence. John Storey has specified four elements of HRM as follows: 1. A set of beliefs and assumptions. 2. A strategic thrust embodying decisions about people management. 3. The central involvement of line management 4. Dependence upon a set of levers to determine the employment Human Resources In the general parlance, human resources are people and their characteristics at work either at the national level or orgationsational level. Megginson has defined human resources as follows: From the national point of view, human resources are knowledge, skills, creative abilities, talents and attitudes obtained in the population; whereas from the viewpoint of the individual enterprise they represent the total of the inherent abilities, acquired knowledge and skills as exemplified in the talents and aptitudes of its employers Sumantra Ghosal considers human resources as human capital. He classifies human capital into three categories intellectual capital, social capital and emotional capital. Intellectual capital consists of specialized knowledge, tacit knowledge and skills, cognitive complexity and learning capacity. Social capital is made up of network of relationships, sociability, and trustworthiness. Emotional capital consists of selfconfidence, ambition and courage, risk-bearing ability and resilience. In simple words, HRM is a process of making the efficient and effective use of human resources so that the set goals are achieved.

Definition of HRM According to Flippo, Personnel Management, or say, human resources 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, Organisational and social objectives are accomplished. The National Institute of Personal Management (NIPM) of India has defined human resources personal management as that part of management which is concerned with people at work and with their relationship within an enterprise. Its aim is to bring together and develop into an effective organization of the men and women who make up enterprise and having regard for the well being of the individuals and of working groups, to enable them to make their best contribution to its success. According to Decenzo and Robbins, HRM is concerned with the people dimension in management. Since every organization is made up of people, acquiring their services, developing their skills, motivating them to higher levels of performance and ensuring that they continue to maintain their commitment to the organization is essential to achieve organsational objectives. This is true, regardless of the type of organization government, business, education, health or social action. HRM can be defined as a process of procuring, developing and maintaining competent resources in the organization so that goals of an organization are achieved in an effective and efficient manner. In other words HRM is an art of managing people at work in such a manner that they give best to the organisation.

Human Resource Management: Nature Human Resource Management is a process of bringing people and organizations together so that the goals of each are met. The various features of HRM include: It is pervasive in nature as it is present in all enterprises. Its focus is on results rather than on rules. It tries to help employees develop their potential fully. It encourages employees to give their best to the organization. It is all about people at work, both as individuals and groups. It tries to put people on assigned jobs in order to produce good results. It helps an organization meet its goals in the future by providing for competent and well-motivated employees. It tries to build and maintain cordial relations between people working at various levels in the organization. It is a multidisciplinary activity, utilizing knowledge and inputs drawn from psychology, economics, etc. Human Resource Management: Scope The scope of HRM is very wide: 1. Personnel aspect-This is concerned with manpower planning, recruitment, selection, placement, transfer, promotion, training and development, layoff and retrenchment, remuneration, incentives, productivity etc. 2. Welfare aspect-It deals with working conditions and amenities such as canteens, creches, rest and lunch rooms, housing, transport, medical assistance, education, health and safety, recreation facilities, etc. 3. Industrial relations aspect-This covers union-management relations, joint consultation, collective bargaining, grievance and disciplinary procedures, settlement of disputes, etc.

CONTROL
HRIS HRA HR AUDIT

ACQUISITION Human resource planning Succession planning Recruitment selection

HRM

MAINTINANCE Remuneration Motivation Health & safety Social security Industrial relation Performance appraisal

DEVELOPMENT training career development organization development internal mobility

Human Resource Management: Objectives To help the organization reach its goals. To ensure effective utilization and maximum development of human resources. To ensure respect for human beings. To identify and satisfy the needs of individuals. To ensure reconciliation of individual goals with those of the organization. To achieve and maintain high morale among employees. To provide the organization with well-trained and well-motivated employees. To increase to the fullest the employee's job satisfaction and self-actualization. To develop and maintain a quality of work life. To be ethically and socially responsive to the needs of society. To develop overall personality of each employee in its multidimensional aspect. To enhance employee's capabilities to perform the present job. To equip the employees with precision and clarity in transaction of business. To inculcate the sense of team spirit, team work and inter-team collaboration. Human Resource Management: Functions 1. Manegrial Function 2. Opertaive functions For both the thing pls refer to V.S.P Rao In order to achieve the above objectives, Human Resource Management undertakes the following activities: 1. Human resource or manpower planning. 2. Recruitment, selection and placement of personnel. 3. Training and development of employees. 4. Appraisal of performance of employees. 5. Taking corrective steps such as transfer from one job to another. 6. Remuneration of employees. 7. Social security and welfare of employees. 8. Setting general and specific management policy for organizational relationship. 9. Collective bargaining, contract negotiation and grievance handling. 10. Staffing the organization. 11. Aiding in the self-development of employees at all levels. 12. Developing and maintaining motivation for workers by providing incentives. 13. Reviewing and auditing manpower management in the organization 14. Potential Appraisal. Feedback Counseling.

15. Role Analysis for job occupants. 16. Job Rotation. 17. Quality Circle, Organization development and Quality of Working Life. Human Resource Management: Futuristic Vision On the basis of the various issues and challenges the following suggestions will be of much help to the philosophy of HRM with regard to its futuristic vision: 1. There should be a properly defined recruitment policy in the organization that should give its focus on professional aspect and merit based selection. 2. In every decision-making process there should be given proper weightage to the aspect that employees are involved wherever possible. It will ultimately lead to sense of team spirit, team-work and inter-team collaboration. 3. Opportunity and comprehensive framework should be provided for full expression of employees' talents and manifest potentialities. 4. Networking skills of the organizations should be developed internally and externally as well as horizontally and vertically. 5. For performance appraisal of the employees emphasis should be given to 360 degree feedback which is based on the review by superiors, peers, subordinates as well as self-review. 6. 360 degree feedback will further lead to increased focus on customer services, creating of highly involved workforce, decreased hierarchies, avoiding discrimination and biases and identifying performance threshold. 7. More emphasis should be given to Total Quality Management. TQM will cover all employees at all levels; it will conform to customer's needs and expectations; it will ensure effective utilization of resources and will lead towards continuous improvement in all spheres and activities of the organization. 8. There should be focus on job rotation so that vision and knowledge of the employees are broadened as well as potentialities of the employees are increased for future job prospects. 9. For proper utilization of manpower in the organization the concept of six sigma of improving productivity should be intermingled in the HRM strategy. 10. The capacities of the employees should be assessed through potential appraisal for performing new roles and responsibilities. It should not be confined to organizational aspects only but the environmental changes of political, economic and social considerations should also be taken into account. 11. The career of the employees should be planned in such a way that individualizing process and socializing process come together for fusion process and career planning should constitute the part of human resource planning. To conclude Human Resource Management should be linked with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility. All the above futuristic visions coupled with strategic goals and objectives should be based on 3 H's of Heart, Head and Hand i.e., we should feel by Heart, think by Head and implement by Hand. Human Resource Management: Major Influencing Factors In the 21st century HRM will be influenced by following factors, which will work as various issues affecting its strategy: Size of the workforce. Rising employees' expectations Drastic changes in the technology as well as Life-style changes. Composition of workforce. New skills required. Environmental challenges. Lean and mean organizations. Impact of new economic policy. Political ideology of the Government. Downsizing and rightsizing of the organizations. Culture prevailing in the organization etc. Growth & development of HRM in India 1.Early Phase- The government then took an active interest in the operation of public & private sector organization & provided systematic procedures for regulating employer employee relationship.

2.Legal Phase- In the view of legal compulsions & the enumeration of duties ,the entire approach of organization towards their personnel was to comply with the laws & keep the welfare officers busy with routine functions. 3.Welfare Phase-During 1960s ,the personnel function began to expand beyond the welfare aspect ,with labour welfare , industrial relations & personnel administration integrating into the emerging profession called personnel management. 4.Development Phase-In 1970s concern for welfare shifted towards developmental aspects of human resources. Period Development Outlook Emphasis Status

19201930 19401960 19701980 1990s

Beginning Struggling for recognition Achieving Sophisticatio n Promising

Legalistic Technical Professional & Legalistic Philosophical

Statutory, Welfare, Paternalism Paternalism Regulatory conformanc e Human values, productivity through people

Clerical Administrative & Legalistic Management Executive

Development of HRM in India 1860-Employers & workmen's (Dispute act was passed 1890-1st Lab our Organization was formed 1919-All India Trade Unions Congress (AITUC) was formed. 1936-Pyment of wages act was passed. 1946-Industrial Employment Act was passed. 1947-Industrial Disputes Act was passed 1959-The Employment Exchange Act was passed. 1970-The Contract Lab our Act was passed. 1995-emphasised on HRD, ,Management of cultural diversity ,team work etc. Globalization & liberalization has increased the importance of HRM 1998-Tqm in HRM, empowering the employees & developing empowered teams & integrated HRM. 21st century people realized that HRM is the core competency area. Emerging trends of Hrm in Globalized Economy:1. Globalization Trends- In this globalized era personnel managers or the hr managers are required to play challenging roles to create a competitive advantage for the firm. 2. Technological Trends-Organisations that employ appropriate technologies enjoy a competitive advantage. 3. Trends in the nature of work- Modern employess cannot be managed as were their predecesors. High Tech Jobs Service Jobs Knowledge Work & Human Capital Nature of Work: Implications for HR 4. Workforce Demographic Trends-Different compositions of the employees working in an organization belonging to different age group have to be measured carefully. 5. Political & Legal Factors-One of the important challenges facing the personnel manager is the awareness of legislation enacted by the government at the centre & the state. 6. Social Factors- The actions of the business are monitored and evaluated very closely by the society.

7. Strategic HRM- Strategic planning regarding hrm is required. 8. Creating High Performance Work System-Need of this competitive age 9. Measuring the HRM teams Performance/ Metrics-with the help of matrics measuring an employees performance in an organization. 10. Managing with Technology/Outsourcing-sometimes outsourcing people who are acquiented with the new & advance technology. 11. Effective HR practices-Effective Hr policies & practices are required. 12. Work Force Diversity-Hr managers have to deal with changing trends in the work force diversity. Composition Women at Work Changes in Employees Values Level of Education 13. Managing with the HR Scorecard Process-rating employees with the help of scorecard process 14. Changes in the 21st century impacting HRM Scope for promotions More Scope for Talented Employees

Emerging Trends in Managing Human Resources If we trace back the history of business environment, in the early years, trading patterns and markets were stable, technology was static, customers were passive, speed in getting to market was secondary, competition was limited to sectors and regions, and hierarchies were generally accepted in all walks of life. No more, since 1960s, America and much of the rest of the world has been almost continually buffeted by change. Customers demand that businesses do it better, faster, cheaper; employees want to control more than the Stop button on the assembly line. The twentieth century saw nations around the world become part of the global village, with trade barriers between them reduced or removed completely. Globalization of trade and economy are taking deep roots in India. The holistic paradigm shift to a single global company has opened up new economic opportunities. Events of the last five years of the previous century have focused our attention on knowledge industries. Quality human resources have therefore become an important base with which to respond to the emerging environment. The knowledge workforce in particular has a vital role to play in the emergence of the digital economy. A look at the trends in managing people in this dynamic industry reflects that Attracting, Managing, Nurturing talent and Retaining people has emerged to be the single most critical issue in lieu of the enormous opportunities spun off by the market. The new avatar of talent is the knowledge professional who is innovative, business savvy, quick on the uptake, has an instinctive ability to network, and possessing unbridled ambition. They are propelled by an urge to experiment, scan new avenues that can spur their creativity. The knowledge professional will gravitate to an organization that is flexible, has strong values, a robust performance ethic and provides challenging work on latest technology. This has led to companies proactively taking measures on three fronts. First, companies create an organizational ambience where talent can bloom. Second, they put in place systems that help unleash their potential and third, they build a reward and recognition mechanism that provides value for people. Profound systemic changes have been seen in the way companies are structured. The concepts of leadership and managing people gave undergone a radical rethink. Cubicles, hierarchies and rigid organization structures of the past, have now given way to open work environment, flat structure with informality being a general rule and empowerment of individuals. Today work itself is centered around projects, which have virtual teams working on them. This work structure has led to a culture of flexi time, round the clock accessibility to the workplace. Also catching up fast is the trend of workstations at home, remote access, video-conferencing and reporting by exception. To stay one step ahead of the aspirations of their people, companies are continuously striving to provide an intellectually stimulating environment. Few examples being, in-house libraries, continuous up gradation of knowledge and skills, knowledge sharing, building relationships with academia thus enabling knowledge workers to pursue multiple careers within a single company. Coming times will see sabbaticals forming part of the organization culture, corporate universities dotting the new horizon, competing companies bunching together to setup knowledge networks. Companies today are constantly striving towards enhancing the quality of work life and also the personal life of its employees and this does not stop with the employee buts gets extended to his / her family as well. In-house health clubs, yoga and meditation centers to relieve stress, sports and cultural activities, employee get-togethers with invitations to come over with families, day care centers and many of the like are being provided by companies. With the increasing size of the companies, the top down communication model of yesteryears has been replaced by bottom up, cross level communication thereby encouraging people to voice their opinions and feelings. Open house sessions, mentoring, online chats on the intranet have emerged to be the communication enablers. The new economy has given rise to a culture of working in teams. Today no job in the knowledge industry can be performed in isolation. Since working in teams is not a passing fad, companies are now designing compensation structures, which rewards team performance in addition to individual performance. To conclude, change is here to stay, and we need to understand that all the practices that are working today may not necessarily work tomorrow. Customers expectations, market changes and strategic decisions will derive the tools to managing the human assets.