Human Resource Management (HRM)

The process of hiring and developing employees so that they become more valuable to
the organization.
Human Resource Management includes
conducting jobanalyses, planning personnel needs, recruiting the rightpeople for the job,
orienting and training, managing agesand salaries, providing benefits and incentives,
evaluatingperformance, resolving disputes, and communicating ith all employees at all
levels. !"amples of core #ualities of HR management are e"tensive $noledge of
the industry,leadership, and effective negotiation s$ills. %ormerly called personnel
management.
&ob 'nduction(
%irst step toards gaining an employees) commitment, it is aimed at introducing
the job and organization to the recruitand him or her to the organization. 't
involves orientationand training of the employee in the organizational culture, and shoing
ho he or she is interconnected to (and interdependent on) everyone else in the organization.
*ee also orientation.
Manpoer +lanning(
!stimating or projecting the number of personnel ith different s$ills re#uired over time or for
a project, anddetailing ho and hen they ill be ac#uired.
,hange Management
Minimizing resistance to organizational change through involvement of $ey players
and sta$eholders.
,-R+-R.T!/organizational culture
The values and behaviors that contribute to the uni#ue social
and psychological environment of an organization.
-rganizational culture includes an organization)s e"pectations, e"periences, philosophy, and
values that holdit together, and is e"pressed in its self0image, inneror$ings, interactions ith
the outside orld, and future e"pectations. 't is based on shared attitudes, beliefs,customs,
and ritten and unritten rules that have beendeveloped over time and are considered valid.
.lso called corporate culture, it)s shon in
(1) the ays the organization conducts its business, treats its employees, customers, and the
ider community,
(2) the e"tent to hich freedom is alloed in decision ma$ing, developing ne ideas, and
personal e"pression,
(3) ho poer and information flo through its hierarchy, and
(4) ho committed employees are toards collectiveobjectives.
't affects the organization)s productivity and performance, and provides guidelines on
customer care and service,product #uality and safety, attendance and punctuality,
andconcern for the environment. 't also e"tends to production0
methods, mar$eting and advertising practices, and to ne product creation. -rganizational
culture is uni#ue for every organization and one of the hardest things to change.
Performance Appraisal
The process by hich a manager or consultant (1)e"amines and evaluates
an employee)s or$ behavior by comparing it ith preset standards,
(2) documents theresults of the comparison, and (3) uses the results toprovide feedbac$ to
the employee to sho hereimprovements are needed and hy.
+erformance appraisals are employed to determine honeeds hat training, and ho ill be
promoted, demoted, retained, or fired.
Management of Employee Relations
,ommunications beteen management and employees concerning or$place decisions, grieva
nces, conflicts,problem resolutions, unions, and issues of collective bargaining.
Managing Labor/Industrial relations
The interaction between a company's upper management and the rest of its employees.
Productivity Improvement
. measure of the efficiency of a person, machine, factory, system, etc., in converting inputs
into useful outputs.
+roductivity is computed by dividing average output perperiod by the total
costs incurred or resources (capital,energy, material, personnel) consumed in that period.
+roductivity is a critical determinant of cost efficiency.
Career Development
The lifelong process of managing your or your employee)s or$ e"perience ithin or
beteen organizations. Many universities have a career development department that
offers informational and placement assistance to graduates ho are loo$ing to start
their careers in the business sector.
-rganizational 5evelopment (-5)
Theory and practice of planned, systematic change in theattitudes, beliefs, and values of
the employees through creation and reinforcement of long0term training programs. -5
is action oriented. 't starts ith a careful organization0ide analysis of the current situation
and of the futurere#uirements, and employs techni#ues of behavioral sciences such
as behavior modeling, sensitivity training, andtransactional analysis. 'ts objective is to enable
theorganization in adopting0better to the fast0changinge"ternal environment of
ne mar$ets, regulations, andtechnologies.
Mentoring and ,ounseling
!mployee training system under hich a senior or more e"perienced individual (the mentor)
is assigned to act as an advisor, counselor, or guide to a junior or trainee. The mentor is
responsible for providing support to, andfeedbac$ on, the individual in his or her charge.
Functions of HRM
HRM functions (also called processes) are carried out by the HR managers to fulfil the goals and objectives of
the organization. .s illustrated in %igure 1.1, they perform to sets of functions, namely managerial functions
and operative functions. The managerial functions are the basic functions performed by the HR managers in
their capacity as managers or heads of their on departments. 'n fact, all managers, irrespective of their
departments, perform these functions. The operative functions, on the other hand, are specialized activities
performed e"clusively by the HR managers, usually for all the departments. 6e shall first discuss the
managerial functions.
Managerial %unctions
%unctions li$e planning, organizing, staffing, directing and controlling constitute the core managerial functions
of an organization. The specific activities performed under each of these functions are e"plained as follos(
Planning 't is an effective tool to deal ith the future. 't involves the process of predetermining the
personnel programmes that are necessary to attain the organizational goals. 'n this conte"t, accurate
forecasting is vital to the success of any plan. +lanning is such a crucial function for an organization that it is
the $ey to all other managerial functions. The steps involved in planning are
!stablishing goals and objectives to be achieved
5eveloping rules and procedures
5etermining plans and forecasting techni#ues


Figure 1.1 %unctions of HRM
Organizing -nce the plans are formulated, the ne"t step is to organize the men and material in order to
accomplish those plans. -rganizing is a process through hich the firm establishes its structure and
determines the authority, responsibility and accountability of each member in relation to the job. Thus,
organizing involves
7iving each member a specific tas$s
!stablishing departments and divisions
5elegating authority to the members
!stablishing channels of authority and communication
,reating a system to coordinate the or$s of the members
Staffing This function deals ith the creation and maintenance of human resources through employment,
compensation, benefits, training and development, and industrial relations measures. 't aims to put in place
HR policies in order to deal ith age fi"ation, or$ing conditions, and promotional opportunities for
prospective employees. The steps involved in the staff function are
5etermining the type of people to be hired
Recruiting prospective employees and selecting the best ones from them
,ompensating the employees
Training and developing the employees
*etting performance standards and evaluating the employees8 performance
,ounselling the employees
Directing 5irecting is the sum of several activities li$e communication, leadership and motivation. 5irecting,
as a function, aims at securing illing cooperation from the individuals and the groups to achieve the
predetermined goals. 't includes the folloing activities(
7etting or$ done through subordinates
!nsuring effective to0ay communication for the e"change of information ith the subordinates
Motivating subordinates to strive for better performance
Maintaining the group morale
Controlling ,ontrolling is the process of chec$ing the efficiency of the individuals and the groups in fulfilling
the plans and goals through follo0up measures. 't is essential for continuous improvement in the managerial
activities. The processes involved in controlling are
!stablishment of standard performance
Measurement of actual performance
,omparison of actual performance ith the standard one to find the deviation
'nitiation of corrective actions, if there are any deviations
9e"t, let us loo$ at the operative functions.
-perative %unctions
*taffing is one of the managerial functions. :ut this function is normally performed by the HR managers for all
the departments of the firm. 'n most organizations, the HR department establishes personnel policies and
coordinates the HR functions of all the departments. This function is also called the operative function or HRM
function. 't includes, amongst others, the processes of hiring, training, compensating, appraising and retaining
employees, and attending to their labour relations, health and safety, and e#uality concerns (see %ig. 1.2).
.ndres
;
has carried out a detailed study on the functions of HRM and commented(
In most organizations, the personnel or HR department establishes policies and coordinates
functions such as job analysis, personnel planning, the recruitment and selection of
employees, training and development, performance appraisal, compensation and employee
benefits, labour relations, employee discipline and control, and occupational health and safety.
6e shall no discuss the operative functions of HRM.
Procurement +rocurement refers to a series of activities underta$en by the HR managers for filling the
present and future vacancies of the organization. The activities include job analysis and designing, HR
planning, recruitment and, finally, the selection of suitable employees. Here, job analysis refers to both the
determination of specific tas$s and responsibilities connected to a job and identifying the s$ills, $noledge and
abilities re#uired for the job holder. HR planning involves choosing and placing the right person at the right job
and at the right time. Recruitment involves gathering a pool of applicants from hich suitable employees may
be selected. <astly, selection involves screening, testing, intervieing and hiring the most suitable employees
for the organization.

Figure 1.2 -perative %unctions of HRM
Development 5evelopment here refers to both employees8 training and management development. HR
managers are responsible for conducting and supervising training and development programmes for
employees. The purpose of a training and development programme is to increase the employees8
competencies in their job by improving their $noledge, s$ills and abilities. Training and development is idely
accepted as a method for enhancing the employee s$ills, increasing the individual and organizational
performance, improving the employee morale, and achieving the business groth and success.
Compensation ,ompensation refers to the determination of the pay scale and other benefits for the
employees. !stablishing and maintaining the pay system of an organization is one of the principal jobs of the
HR managers. They must devise ays to ensure fair and e#uitable pay rates. 'n addition, HR managers should
regularly manage the performance evaluation system of the organization, and continuously design reard
systems such as performance0lin$ed incentive plans and bonus and fle"ible or$ schedules. :o" 1.4 outlines
the fle"ible schedules offered by companies li$e ':M.
Maintenance The maintenance function aims at retaining efficient and e"perienced employees in the
organization. This calls for creative HR practices. 'n this regard, HR managers are responsible for offering a
ide range of HR programmes covering occupational safety, health promotion and physical fitness, canteen
facilities, recreation activities, transportation programmes, employee suggestion schemes, career counselling
and groth for creating a positive or$ environment. :o" 1.= highlights one of the HR policies of 'nfosys.
Integration 't consists mainly of industrial relations and aims at ensuring good relations beteen the
management and the employees. HR managers have to implement industrial relations programmes that ould
ensure ethical and fair treatment in disciplinary action, grievance redressal, and career management
processes. They should also counsel the employees and the management to prevent and, hen necessary,
resolve disputes over labour agreements or other labour relation issues.
't is to be understood here that the functions of HRM can vary idely from one organization to another,
depending upon its nature, size, and objectives. %or instance, a smaller organization may follo a shorter HRM
process ith a greater emphasis on functions li$e procurement and compensation and little or no priority for
activities li$e training and development and industrial relations maintenance. -n the contrary, large
organizations may pursue a longer and more comprehensive HRM process to meet the re#uirements of both
the management and the or$force. :o" 1.> shos the HR statements of select companies.
Box 1. !obile "or#ing at IB!
-ne of the ays companies retain their employees is by offering them fle"ible or$ schedules and the option
of or$ing from home. . company that has consistently been appreciated for this benefit is ':M. *ome of
':M)s or$place fle"ibility programmes include individualized daily or$ schedules, fle"ible (or compressed)
or$0ee$s, regular part0time, remote/mobile or$ options and mobility alloances. !mployees are offered
support services so that even if they or$ from home, they stay connected. :e it donloading files, chec$ing
and replying to mail, or lin$ing to the electronic library, ':M or$ers can dial into the ':M netor$ and get
connected. +eople can opt to or$ at home in case of personal emergencies as ell. 'n 'ndia, ':M has offered
mobile or$ options since 2??3.

$dapted from( .ibm.com./innovation/in/hr.
Box 1.% HR and the "ell&Being of 'mployees
-ne of the HR policies really appreciated by employees is that pertaining to their families8 health and safety.
'ncreasingly, companies are providing life insurance and accident coverage that ill help reassure their
employees and give them a sense of security. 'nfosys is a good e"ample. *tarting from 2??2, it has a tie0up
ith the <ife 'nsurance ,orporation of 'ndia that provides ade#uate coverage for all its employees. The
coverage levels have substantially risen over the years, in tune ith the overall 'nfosys social security and
employee benefit initiatives. 'n 2??;, the coverage amount as a record0brea$ing Rs. 24?,??? million. .s
Mohandas +ai, the HR head of 'nfosys, said, @'nfosys believes in providing ade#uate life, accident and medical
insurance cover to its employees in a holistic measure.A

$dapted from( .rediffmail.com.