Project on HRM Strategy

CHAPTER I
INTRODUCTION
Human Resource Management is An Art for Businesses, Science for Corporations, and a Subject for
Others.... Human Resource Management (HRM) act as a catalyst for overall development of
nations economy. HRM is a way of management that links people-related activities to the strategy
of a business or organisation. HRM is often referred to as "strategic HRM". It has several goals:

To meet the needs of the business and management (rather than just serve the interests of
employees);
To link human resource strategies / policies to the business goals and objectives;
To find ways for human resources to "add value" to a business;
To help a business gain the commitment of employees to its values, goals and objectives.
It is an approach to the management of people in an organization. Organizations are made up of
people i. e employees and function through them. It is the human resource which brings success and
prosperity to a business enterprise. Human Resource Management also called Personnel
Management, deals with various problems relating to manpower employed. Such problems include
personal planning, recruitment and selection, induction, performance appraisal, employee training
and development, promotions and transfer of employees, compensation payment, career planning
and participative management. The person who looks after personnel functions/ problems is called
Personnel/Human Resource Manager. HRM is relatively a new term for what was earlier called as
personnel management. The term HRM got popularity in the USA by 1970s. This is a management
function which helps managers to plan, recruit, select, train, develop, remunerate and maintain
members for an organization. HRM is the latest nomenclature use to denote personnel management.
The policies of management relating to personnel matters/problems are called policies. Human
Resource Management in a Business Context provides an international focus on the theory and
practice of people management. A thorough and comprehensive overview of all the key aspects of
HRM, including case studies, articles from HRM Guide and other sources, key concepts, review
questions and problems for discussion and analysis.

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The link between Human Resources and Business Strategy

All elements of the business strategy have implications for human resources, as illustrated in the
table below. The

challenge for management is to identify and respond to these HR challenges:

Examples of Key Strategy

Possible Human Resource
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Issues
Implications.

What markets should the

What expertise is required in these
business compete in?
markets? Do existing management

and employees theright experience

and skills.
Where the business should be
Where do we need our people? How
located to compete optimally?
many do we need?

How can we achieve

How productive is the workforce
Improvements in our unit
currently? How does this compare
production costs to
with competitors? What investment
remain competitive?
in the workforce (e.g. training,

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recruitment) and their equipment is

required to achieve the desired

improvement in productivity?

An important part of HRM is the Human Resources Plan. The purpose of this plan is to analyse the
strategic requirements of the business in terms of manpower - and then to find a way of meeting the
required demand for labour. This is the subject of a separate revision note.
Human Resource Management, in the sense of getting things done through people. It's an essential
part of every manager's responsibilities, but many organizations find it advantageous to establish a
specialist division to provide an expert service dedicated to ensuring that the human resource
function is performed efficiently. "People are our most valuable asset" is a clich which no member
of any senior management team would disagree with. Yet, the reality for many organizations is that
their people remain

Under valued
under trained
under utilized
Poorly motivated,
And consequently
Perform well below their true capability
The rate of change facing organizations has never been greater and organizations must absorb and
manage change at a much faster rate than in the past. In order to implement a successful business
strategy to face this challenge, organizations, large or small, must ensure that they have the right
people capable of delivering the strategy. The market place for talented, skilled people is
competitive and expensive. Taking on new staff can be disruptive to existing employees. Also, it
takes time to develop 'cultural awareness', product/ process/ organization knowledge and experience
for new staff members.As organizations vary in size, aims, functions, complexity, construction, the
physical nature of their product, and appeal as employers, so do the contributions of human
resource management. But, in most the ultimate aim of the function is to: "ensure that at all times
the business is correctly staffed by the right number of people with the skills relevant to the
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business needs", that is, neither overstaffed nor understaffed in total or in respect of any one
discipline or work grade.

DEFINATIONS OF PERSONNEL MANAGEMENT/HRM

1. According to Edwin Flippo:

Personnel 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.
2. According to George R. Terry:
Personnel management is concerned with the obtaining and maintaining of a satisfactory and
satisfied work force.

3. According to Michale Armstrong:

HRM is strategic approach to the acquisition, motivation, development and management of the
organizations human resources. It is develop to shaping an appropriate corporate culture, and
introducing programmes which reflects and support the core values of the enterprise and ensure its
success. VHRM is a process of bringing people and organizations together so that the goals of
each are met. It is a part of management process which is concerned with the management of
human resources in an organization.

FEATURES of HRM :
Organizational management Personnel administration Manpower management Industrial
management But these traditional expressions are becoming less common for the theoretical
discipline. Sometimes even employee and industrial relations are confusingly listed as synonyms,
although these normally refer to the relationship between management and workers and the
behavior of workers in companies.The theoretical discipline is based primarily on the assumption
that employees are individuals with varying goals and needs, and as such should not be thought of
as basic business resources, such as trucks and filing cabinets. The field takes a positive view of
workers, assuming that virtually all wish to contribute to the enterprise productively, and that the
main obstacles to their endeavors are lack of knowledge, insufficient training, and failures of
process.HRM is seen by practitioners in the field as a more innovative view of workplace
management than the traditional approach. Its techniques force the managers of an enterprise to
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express their goals with specificity so that they can be understood and undertaken by the workforce
and to provide the resources needed for them to successfully accomplish their assignments.

THE SCOPE OF HUMAN RESOURCE MANAGEMENT

The scope of human resource management outlined below includes an outline of transformation and
development issues, tentative generic skills required in performing HRM roles, as well as the roles
of a human resource management practitioner (line management and HRM professionals). With
regard to the latter, the assumption is made that roles are inter-linked and interdependent, even
though these relationships may not be expressly stated in each case. Transformation and
development issuesKnowledge management which entails accumulating & capturing Knowledge in
large organisations for future application & use (organisation memory)

Reconciliation management
Work creation as opposed to job creation
Manage the transfer of HRM functions and skills to line management
Marketing of HRM to line management

Development of contextual approaches to HRM Multi-skilling and /or multi-tasking Increased

societal responsibility Managing people in virtual work environments Focus on deliverables rather
than doable Develop additional means of assessing HRM Appreciation and assessment of
intellectual capital Take HRM from a business partner to a business itself / Managing HRM as a
business unit Adviser / consultant to line management

Supportive generic skills

This is not intended to be final outline of human resource skills but the following have emerged
during the process as important skills for human resource practitioner to possess. These are:
Project management Consulting skills
Entrepreneurship Self management
Communication skills Facilitation skills
Presentation skills Skills for transforming groups into self-directed mutually controlled high
performing work teams
Trans-cultural skills
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Mediation & arbitration skills Financial skills Problem-solving Diagnostic skills

Core roles in Human Resource Management
The core roles of human resource management are grouped below into four categories. The titles of
the clusters are tentative, and are open for comment.
PLANNING AND ORGANISING FOR WORK, PEOPLE AND HRM Strategic perspective
Organisation design Change management Corporate Wellness management PEOPLE
ACQUISITION AND DEVELOPMENT Staffing the organisation Training & development Career
Management Performance Management Industrial relations ADMINISTRATION OF POLICIES ,
PROGRAMMES & PRACTICES Compensation management Information management
Administrative management Financial management

HRM vis--vis HRD

HRM (Human Resource Management)

As these two words cannot be one and the same nor synopsis. They are used in a different contexts
and they represent different concepts. At the same time HRD is at the centre of HRM. HRD is
examined in detail elsewhere. As a result of the fundamental changes in attitudes, approaches,
outlook, philosophy, perspective and practices emerged in the personnel area in the form of HRM
strategy, it has become a necessary for every organisation to develop skills, talent, potentialities,
capabilities and active of companys own people to meet the emerging challenges. Hence HRD
policies have been adopted by many companies. It is now-a-days spreading to many others. HRD
strategies are suppose to bring fourth necessary changes in skills, capabilities and attitude of people
who are required to cope with the emerging changes. Thus, HRD has become an integral part HRM.
The new HRD approach, that stress the need for developing the companys own people to suit the
update technology, modernisation of machinery and equipments and changing trends in attitudes
and approaches, necessities to develop individual employee in accordance with his aspiration and
potentialities on the one hand, and the companys requirement on the other. This is what the HRD
does. Quiet often organisation development (OD) programs are effectively integrated with the HRD
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programs. O fcourse, OD programs are the programms which the OD interventionists prescribed for
the effectiveness of the organisation. It need not be what the individuals members of the
organisation seek. HRD interventionists primarily seek to know what the individuals seek to have,
and then try to match it with the organisational needs. Training and development programs from
part of OD while training and development are the most decisive aspects of HRD too. At present,
therefore, the end result of both HRD and OD are pre-received as synonymous. Of course, no
change can be effectively and totally incorporated nor their result achieved, overnight. It need
constant effort and continuous monitoring for a considerably long period. This efforts must go on
simultaneously HRM strategy. HRM has its various tools like appraisal schemes feedback system,
quality circle and organisation development interventions, Team-grouping, MbO objective setting,
consensus in decision making, and so on. All such tools are useful in HRD also at present, however
training programms seem to dominated the HRD scene. An effective management information
system backed by information collecting, storing and retrial system and research and analysis must
be the basis for every HRD program.

Functions overview and strategy for HRM

These issues motivate a well thought out human resource management strategy, with the precision
and detail of say a marketing strategy. Failure in not having a carefully crafted human resources
management strategy, can and probably will lead to failures in the business process itself. These sets
of resources are offered to promote thought, stimulate discussion, diagnose the organizational
environment and develop a sound human resource management strategy for your organization. We
begin by looking at the seven distinguishable functions human resource management provide to
secure the achievement of the objective defined above. Following on from this overview we look at
defining a human resource strategy. Finally, some questions are posed in the form of a HRM
systems diagnostic checklist for you to consider, which may prove helpful for you to think about
when planning your development programs for the human resources in your organization, if they
are truly "your most valuable asset.

Function 1: Manpower planning

The penalties for not being correctly staffed are costly. Understaffing loses the business economies
of scale and specialization, orders, customers and profits. Overstaffing is wasteful and expensive, if
sustained, and it is costly to eliminate because of modern legislation in respect of redundancy
payments, consultation, minimum periods of notice, etc. Very importantly, overstaffing reduces the
competitive efficiency of the business. Planning staff levels requires that an assessment of present
and future needs of the organization be compared with present resources and future predicted
resources. Appropriate steps then be planned to bring demand and supply into balance.Thus the first
step is to take a 'satellite picture' of the existing workforce profile (numbers, skills, ages, flexibility,
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gender, experience, forecast capabilities, character, potential, etc. of existing employees) and then to
adjust this for 1, 3 and 10 years ahead by amendments for normal turnover, planned staff
movements, retirements, etc, in line with the business plan for the corresponding time frames.The
result should be a series of crude supply situations as would be the outcome of present planning if
left unmodified. (This, clearly, requires a great deal of information accretion, classification and
statistical analysis as a subsidiary aspect of personnel management.) What future demands will be is
only influenced in part by the forecast of the personnel manager, whose main task may well be to
scrutinize and modify the crude predictions of other managers. Future staffing needs will derive
from:
Sales and production forecasts The effects of technological change on task needs

Variations in the efficiency, productivity, flexibility of labor as a result of training, work study,
organizational change, new motivations, etc. Changes in employment practices (e.g. use of
subcontractors or agency staffs, hiving-off tasks, buying in, substitution, etc.) Variations, which
respond to new legislation, e.g. payroll taxes or their abolition, new health and safety requirements
Changes in Government policies (investment incentives, regional or trade grants, etc.) What should
emerge from this 'blue sky gazing' is a 'thought out' and logical staffing demand schedule for
varying dates in the future which can then be compared with the crude supply schedules. The
comparisons will then indicate what steps must be taken to achieve a balance.That, in turn, will
involve the further planning of such recruitment, training, retraining, labor reductions (early
retirement/redundancy) or changes in workforce utilization as will bring supply and demand into
equilibrium, not just as a oneoff but as a continuing workforce planning exercise the inputs to
which will need constant varying to reflect 'actual' as against predicted experience on the supply
side and changes in production actually achieved as against forecast on the demand side.

Function 2: Recruitment and selection of employees

Recruitment of staff should be preceded by An analysis of the job to be done (i.e. an analytical
study of the tasks to be performed to determine their essential factors) written into a job description
so that the selectors know what physical and mental characteristics applicants must possess, what
qualities and attitudes are desirable and what characteristics are a decided disadvantage In the case
of replacement staff a critical questioning of the need to recruit at all (replacement should rarely be
an automatic process). Effectively, selection is 'buying' an employee (the price being the wage or
salary multiplied by probable years of service) hence bad buys can be very expensive. For that
reason some firms (and some firms for particular jobs) use external expert consultants for
recruitment and selection.Equally some small organizations exist to 'head hunt', i.e. to attract staff
with high reputations from existing employers to the recruiting employer. However, the 'cost' of
poor selection is such that, even for the mundane day-to-day jobs, those who recruit and select
should be well trained to judge the suitability of applicants.
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The main sources of recruitment are:

Internal promotion and internal introductions (at times desirable for morale purposes) Careers
officers (and careers masters at schools) University appointment boards Agencies for the
unemployed Advertising (often via agents for specialist posts) or the use of other local media (e.g.
commercial radio) Where the organization does its own printed advertising it is useful if it has some
identifying logo as its trade mark for rapid attraction and it must take care not to offend the sex,
race, etc. antidiscrimination legislation either directly or indirectly. The form on which the applicant
is to apply (personal appearance, letter of application, completion of a form) will vary according to
the posts vacant and numbers to be recruited.It is very desirable in many jobs that claim about
experience and statements about qualifications are thoroughly checked and that applicants
unfailingly complete a health questionnaire (the latter is not necessarily injurious to the applicants
chance of being appointed as firms are required to employ a percentage of disabled people).Before
letters of appointment are sent any doubts about medical fitness or capacity (in employments where
hygiene considerations are dominant) should be resolved by requiring applicants to attend a medical
examination. This is especially so where, as for example in the case of apprentices, the recruitment
is for a contractual period or involves the firm in training costs.Interviewing can be carried out by
individuals (e.g. supervisor or departmental manager), by panels of interviewers or in the form of
sequential interviews by different experts and can vary from a five minute 'chat' to a process of
several days. Ultimately personal skills in judgment are probably the most important, but
techniques to aid judgment include selection testing for:
Aptitudes (particularly useful for school leavers) Attainments

General intelligence
(All of these need skilled testing and assessment.) In more senior posts other techniques are:
Leaderless groups Command exercises
Group problem solving
(These are some common techniques - professional selection organizations often use other
techniques to aid in selection.)
Training in interviewing and in appraising candidates is clearly essential to good recruitment.
Largely the former consists of teaching interviewers how to draw out the interviewee and the latter
how to xratex the candidates. For consistency (and as an aid to checking that) rating often consists
of scoring candidates for experience, knowledge, physical/mental capabilities, intellectual levels,
motivation, prospective potential, leadership abilities etc. (according to the needs of the post).
Application of the normal curve of distribution to scoring eliminates freak judgments.
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Function 3: Employee motivation

To retain good staff and to encourage them to give of their best while at work requires attention to
the financial and psychological and even physiological rewards offered by the organization as a
continuous exercise.Basic financial rewards and conditions of service (e.g. working hours per
week) are determined externally (by national bargaining or government minimum wage legislation)
in many occupations but as much as 50 per cent of the gross pay of manual workers is often the
result of local negotiations and details (e.g. which particular hours shall be worked) of conditions of
service are often more important than the basics. Hence there is scope for financial and other
motivations to be used at local levels.As staffing needs will vary with the productivity of the
workforce (and the industrial peace achieved) so good personnel policies are desirable. The latter
can depend upon other factors (like environment, welfare, employee benefits, etc.) but unless the
wage packet is accepted as 'fair and just' there will be no motivation.Hence while the technicalities
of payment and other systems may be the concern of others, the outcome of them is a matter of
great concern to human resource management.Increasingly the influence of behavioral science
discoveries are becoming important not merely because of the widely-acknowledged limitations of
money as a motivator, but because of the changing mix and nature of tasks (e.g. more service and
professional jobs and far fewer unskilled and repetitive production jobs).The former demand bettereducated, mobile and multi-skilled employees much more likely to be influenced by things like job
satisfaction, involvement, participation, etc. than the economically dependent employees of
yesteryear.Hence human resource management must act as a source of information about and a
source of inspiration for the application of the findings of behavioral science. It may be a matter of
drawing the attention of senior managers to what is being achieved elsewhere and the gradual
education of middle managers to new points of view on job design, work organization and worker
autonomy.

Function 4: Employee evaluation

An organization needs constantly to take stock of its workforce and to assess its performance in
existing jobs for three reasons:To improve organizational performance via improving the
performance of individual contributors (should be an automatic process in the case of good
managers, but (about annually) two key questions should be posed: what has been done to improve
the performance of a person last year? what can be done to improve his or her performance in the
year to come?). To identify potential, i.e. to recognize existing talent and to use that to fill vacancies
higher in the organization or to transfer individuals into jobs where better use can be made of their
abilities or developing skills.To provide an equitable method of linking payment to performance
where there are no numerical criteria (often this salary performance review takes place about three
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spot managers and supervisors, not HR staffs, carry out evaluations. The personnel role is usually
that of:Advising top management of the principles and objectives of an evaluation system and
designing it for particular organizations and environments. Developing systems appropriately in
consultation with managers, supervisors and staff representatives. Securing the involvement and
cooperation of appraisers and those to be appraised. Assistance in the setting of objective standards
of evaluation / assessment, for example: Defining targets for achievement. Explaining how to
quantify and agree objectives. Introducing assessment. Eliminating complexity and duplication.
Publicizing the purposes of the exercise and explaining to staff how the system will be used.
Organizing and establishing the necessary training of managers and supervisors who will carry out
the actual evaluations/ appraisals. Not only training in principles and procedures but also in the
human relations skills necessary. (Lack of confidence in their own ability to handle situations of
poor performance is the main weakness of assessors.) Monitoring the scheme - ensuring it does not
fall into disuse, following up on training/job exchange etc. recommendations, reminding managers
of their responsibilities. Full-scale periodic reviews should be a standard feature of schemes since
resistance to evaluation / appraisal schemes is common and the temptation to water down or render
schemes ineffectual is ever present (managers resent the time taken if nothing else).Basically an
evaluation / appraisal scheme is a formalization of what is done in a more casual manner anyway
(e.g. if there is a vacancy, discussion about internal moves and internal attempts to put square pegs
into 'squarer holes' are both the results of casual evaluation). Most managers approve merit payment
and that too calls for evaluation. Made a standard routine task, it aids the development.
Developing a HRM strategy
Faced with rapid change organizations need to develop a more focused and coherent approach to
managing people. In just the same way a business requires a marketing or information technology
strategy it also requires a human resource or people strategy.
In developing such a strategy two critical questions must be addressed.What kinds of people do you
need to manage and run your business to meet your strategic business objectives? What people
programs and initiatives must be designed and implemented to attract, develop and retain staff to
compete effectively?
In order to answer these questions four key dimensions of an organization must be addressed. These
are:
Culture: the beliefs, values, norms and management style of the organization

Organization: the structure, job roles and reporting lines of the organization

People: the skill levels, staff potential and management capabilityHuman resources systems: the
people focused mechanisms which deliver the strategy - employee selection, communications,
training, rewards, career development, etc. Frequently in managing the people element of their
business senior managers will only focus on one or two dimensions and neglect to deal with the
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others. Typically, companies reorganize their structures to free managers from bureaucracy and
drive for more entrepreneurial flair but then fail to adjust their training or reward systems.When the
desired entrepreneurial behavior does not emerge managers frequently look confused at the
apparent failure of the changes to deliver results. The fact is that seldom can you focus on only one
area. What is required is a strategic perspective aimed at identifying the relationship between all
four dimensions.If you require an organization which really values quality and service you not only
have to retrain staff, you must also review the organization, reward, appraisal and communications
systems.The pay and reward system is a classic problem in this area. Frequently organizations have
payment systems which are designed around the volume of output produced. If you then seek to
develop a company which emphasizes the product's quality you must change the pay systems.
Otherwise you have a contradiction between what the chief executive is saying about quality and
what your payment system is encouraging staff to do.There are seven steps to developing a human
resource strategy and the active involvement of senior line managers should be sought throughout
the approach.

Steps in developing HRM strategy

Step 1: Get the 'big picture'

Understand your business strategy.
Highlight the key driving forces of your business. What are they? e.g. technology, distribution,
competition, the markets.
What are the implications of the driving forces for the people side of your business?
What is the fundamental people contribution to bottom line business performance?

Step 2: Develop a Mission Statement or Statement of Intent

That relates to the people side of the business. Do not be put off by negative reactions to the words
or references to idealistic statements - it is the actual process of thinking through the issues in a
formal and explicit manner that is important. What do your people contribute?

Step 3: Conduct a SWOT analysis of the organization

Focus on the internal strengths and weaknesses of the people side of the business. Consider the
current skill and capability issues. Vigorously research the external business and market
environment. High light the opportunities and threats relating to the people side of the business.
What impact will/ might they have on business performance?

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Consider skill shortages? The impact of new technology on staffing levels? From this analysis you
then need to review the capability of your personnel department. Complete a SWOT analysis of the
department - consider in detail the department's current areas of operation, the service levels and
competences of your personnel staff.
Step 4: Conduct a detailed human resources analysis

Concentrate on the organization's COPS (culture, organization, people and HR systems) Consider:
Where you are now? Where do you want to be? What gaps exists between the reality of where you
are now and where you want to be? Exhaust your analysis of the four dimensions.
Step 5: Determine critical people issues
Go back to the business strategy and examine it against your SWOT and COPS Analysis Identify
the critical people issues namely those people issues that you must address. Those which have a key
impact on the delivery of your business strategy.Prioritize the critical people issues. What will
happen if you fail to address them? Remember you are trying to identify where you should be
focusing your efforts and resources.
Step 6: Develop consequences and solutions
For each critical issue highlight the options for managerial action generate, elaborate and create don't go for the obvious. This is an important step as frequently people jump for the known rather
than challenge existing assumptions about the way things have been done in the past. Think about
the consequences of taking various courses of action. Consider the mix of HR systems needed to
address the issues. Do you need to improve communications, training or pay? What are the
implications for the business and the personnel function? Once you have worked through the
process it should then be possible to translate the action plan into broad objectives. These will need
to be broken down into the specialist HR Systems areas of: employee training and development
management development organization development.

HRD Functions

Training and development (T&D) Organizational development Career development

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1. Training and Development (T&D):
Training improving the knowledge, skills and attitudes of employees for the short-term, particular
to a specific job or task e.g.,
Employee orientation
Skills & technical training Coaching
Counseling
Development preparing for future responsibilities, while increasing the capacity to perform at a
current job
Management training
Supervisor development

2. Organizational Development:
The process of improving an organizations effectiveness and members well-being through the
application of behavioral science concepts Focuses on both macro- and micro-levels HRD plays
the role of a change agent

3.Career Development:
Ongoing process by which individuals progress through series of changes until they achieve their
personal level of maximum achievement.
Career planning
Career management

Challenges before HR Management

In fact in the face of enornous and the rapid changes in the business environment in India backed by
liberalisation of economy, globalisation of business, modernisation of technology and large scale
employment, a need exist for a fresh look at the human resources. Multinationals, foreign investors
and NRIs entering the Indian business in a big way communist countris adopting the path of
capitalism and large scale technology transfer, all such factors necessitate a wider perspective of
human resoures in the days to come.some of the factors,which pose grater challagenes to the HRM
in future are :

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A larger, faster and greater growth of industrialization is expected in the next decade.
There is a possibility for more takeovers, acquisations and mergers in future in India.
With the presence and influence of more multinational and tranationals, as well as higher standards
and competitions, there is a possibility for many small indigenous units to be sick
There is a possibility for the emergence of many large and giand enterprises havening economies of
scale, leading the units without the merits of economies of scale and large scale production to wind
up.
ISO 9000 and other international standardization requirement are bound to dictate higher quality
specification making it difficult for less quality conscious business enterprises to survive.
Large investment and modernization would require highly skilled and technically trend people who
would replace less train, unskilled and redundant workforce.
Increasing number of industrial houses are bound to introduce scheme for golden handshake.
Import of technology may become more common in the days to come resulting in increasing
requirement of highly skill manpower.
Greater and greater training needs are bound to be identified for updating the technological
behavior skill.
There would arise greater needs for interpersonal skill, behavioral and counciling skills of executive
and hence greater training needs in his directions are bound to arise.
Greater privatization of business and increase of employment in the private sector may leads to
greater training needs in the private sector.
Quality of work life and quality circle programmes may receive greater acceptance.

HRM Challenges faced by Managers

The HR Managers of today may find it difficult because of the rapidly changing business
environment and therefore they should update their knowledge and skills by looking at the
organization's need and objectives. The HRM challenges are

1. Managing the Vision :

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Vision of the organization provides the direction to business strategy and helps managers to
evaluate management practices and make decisions. So vision management becomes the integral
part of Man management in future.
2. Internal environment :
Creating an environment which is responsive to external changes, providing satisfaction to the
employees and sustaining through culture and systems is a challenging task.
3. Changing Industrial Relations :
Both the workers and managers has to be managed by the same HRM Philosophy and this is a
daunting task for the managers.
4. Building Organizational capability :
Even in the adverse circumstances the employees have to be made to live in psychological state of
readiness to continually change.
5. Job Design & Organizational structure :
Instead of depending on foreign concepts we need to focus on understanding the job, technology
and the people involved in carrying out the tasks.
6. Managing the large work force :
Management of large workforce poses the biggest problem as the workers are conscious of their
rights.
7. Psycho-Social environment :
Nowadays employees participation required not only in performing job but also in democratizing
and humanizing the institution.
8. Employee Satisfaction :
Managers should be aware of techniques to motivate their employees so that their higher level
needs can be satisfied.
9. Modern technology :
There will be an unemployment due to modern technology and this could be corrected by assessing
manpower needs and finding alternate employment.
10. Computerized Information System :
This is revolutionary in managerial decision making and is having impact on coordination in the
organization.
11. Legal environment :
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To meet the changes in legal environment, adjustments have to be made to the maximum utilization
of human resources.
12. Managing Human Relations :
As the workforce comprises of both educated and uneducated, managing the relations will be of
great challenge.
In spite of all the problems HR Managers are able to overcome all these problems with the support
of management and employees. In the current business world managing employees are becoming
complex task and this can be handled effectively only by our great HR Leaders.
Employment & Structural Changes Human Resources in INDIA
India is a vast country with equally vast population, second only to china. According to official
admission about 300 million people in India are below poverty line. According to planning
commission, an annual income of Rs.7980 for rural and Rs.9120 for urban areas. Although the life
expectancy has increased during the years after independence, infant mortality is still very high--95
per 1000 births. Out of every 10 illiterates in the world, three are in India.
Every 7 out of 10 illiterates are women. About 25 % of girls are illiterate. The drop-out in school
ranged between 47 and 77 % during 1985-86, according to latest information available. During the
20 years after the adoption of constitution, the number of illiterate persons in the country had risen
from 300 million in 1951 to 387 million in 1971. According to 1981 census, the literacy rate
continues to be only 36%. School dropouts in the case of scheduled tribes are as much as 87.2% and
for scheduled castes 79%. India has also got one of the largest child labor populations in the world,
some 40 million mostly engaged in hazardous jobs. HUMAN RESOURCES DEVELOPMENT is
not an academic pursuit, nor isolated from the strategy and pattern of economic development. The
two are interrelated--one subserves the other. It cannot be gainsaid that despite diversified industrial
development during the planning period, the spectacular growth of public sector in building up
infrastructure, growth in agricultural sector, the vast human resources, urban and rural go largely
wasted and are hardly utilized.

HUMAN RESOURCES DEVELOPMENT

It should not be confined to short-run narrow sectional interests, but should have wider perspective
of social development towards a progressive direction for the benefits of our people at large. An
efficient and satisfied in organizational effectiveness and managerial excellence. Dynamic
employees are essential for any organization that would like to be dynamic and growth-oriented.
HUMAN RESOURCES DEVELOPMENT aims at developing such dynamism in employees along
with several other qualities that in combination make the organization perform well.The central
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theme in the HUMAN RESOURCES DEVELOPMENT approach is the development of the
individual and the development of work groups. The emphasis has shifted from Maximization of
performances and "compensation" towards "employee potential awareness creation" and
"employee potential realization." The Personnel function has reduced human resources in
organizations history and destiny. The employees are no longer cogs in the organisational wheels
but as the active agents shaping not only their own futures but also future of the organisation. The
HUMAN RESOURCES DEVELOPMENT approach, therefore, postulates a proactive rather than a
reactive approach.Human Resources are organic and complex and so is their development. While
education is an instrument for the general development of the individual, HUMAN RESOURCES
DEVELOPMENT in the context of an organisation refers to the improvement in the capacities and
capabilities of the personnel in relation to the needs of the organisation. It involves the creation of a
climate in which the flower of human knowledge, skill, capabilities and creativity care bloom. It
involves the setting up of systems through which human capabilities and potential can be identified
and topped to the mutual satisfaction of the individual and the organization.
HUMAN RESOURCES DEVELOPMENT, in the organizational context, is a process by which
employees of an organization are continuously held in a planned way. Human resources are thought
of as the total knowledge, skills, creative abilities, talents and aptitudes of an organisations workforce, as well as the values and attitudes of an individual involved. It is the sum total of inherent
abilities, acquired knowledge and skills represented by the talents and aptitudes of the employed
persons. The HUMAN RESOURCES DEVELOPMENT is concerned with the improvement of
the above said attributes of an individual as well as a group of persons. It is the process of
increasing the knowledge, the skills and the capacities of all the people in an undertaking and a
society.Human resources can be developed by providing formal education from elementary to the
higher level, technical and professional, on-the-job training, adult education programmes,
correspondence or distance education, improvement in the health of masses through medical
facilities and improvement in nutrition.The process of economic development tends to be associated
with fundamental structural change in an economy. These structural changes take place in the form
of sectoral composition as wll as occupational structure of the work force. Such a change emerges
as a result of rising productivity in agriculture and the industrial and the tertiary sectors. The size of
a country and its population has also an influence on the structural changes in the the economy
brought about by the process of economic growth.

HUMAN RESOURCES
Human resources are a term used to refer to how people are managed by organizations. The field
has moved from a traditionally administrative function to a strategic one that recognizes the link
between talented and engaged people and organizational success. The field draws upon concepts
developed in Industrial/Organizational Psychology and System Theory. Human resources have at
least two related interpretations depending on context. The original usage derives from political
economy and economics, where it was traditionally called labor, one of four factors of production
although this perspective is changing as a function of new and ongoing research into more strategic
approaches at national levels.
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This first usage is used more in terms of 'human resources development', and can go beyond just
organizations to the level of nations. The more traditional usage within corporations and businesses
refers to the individuals within a firm or agency, and to the portion of the organization that deals
with hiring, firing, training, and other personnel issues, typically referred to as 'human resources
management'.

MANAGEMENT
Human resource management's objective, on the other hand, is to maximize the return on
investment from the organization's human capital and minimize financial risk. It is the
responsibility of human resource managers in a corporate context to conduct these activities in an
effective, legal, fair, and consistent manner.

KEY FUNCTIONS
Human resource management serves these key functions:
Recruitment & Selection
Training and Development (People or Organization)

Performance Evaluation and Management

Promotions/Transfer
Redundancy
Industrial and Employee Relations
Record keeping of all personal data.
Compensation, pensions, bonuses etc in liaison with Payroll
Confidential advice to internal 'customers' in relation to problems at work
Career development
Competency Mapping
Time motion study is related to HR Function
Performance Appraisal

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MODERN ANALYSIS

Modern analysis emphasizes that human beings are not "commodities" or "resources", but are
creative and social beings in a productive enterprise. The 2000 revision of ISO 9001 in contrast
requires identifying the processes, their sequence and interaction, and to define and communicate
responsibilities and authorities. In general, heavily unionized nations such as France and Germany
have adopted and encouraged such job descriptions especially within trade unions. The
International Labour Organization also in 2001 decided to revisit, and revise its 1975
Recommendation 150 on Human Resources Development.One view of these trends is that a strong
social consensus on political economy and a good social welfare system facilitates labor mobility
and tends to make the entire economy more productive, as labor can develop skills and experience
in various ways, and move from one enterprise to another with little controversy or difficulty in
adapting. Another view is that governments should become more aware of their national role in
facilitating human resources development across all sectors.

EMPLOYMENT TREND
As person 38th round, there were 255.7 million persons employed in the usual status sense, that is
employed for major part of time of 365 days reference period. For the purposes of comparing the
38th round employment estimates with the 32nd and 27th round employment estimate, an estimate
of 31.7 million marginally employed obtained on the basis of usual subsidiary status of the nonworkers was added to 255.7 million to make it 287.4 million employed.
This number constituted 48.51% of the respective total population.in 1977-78, as per 32nd round,
the total employed which included marginal workers constituted 42.34% of the respective total
population. This indicated an overall increase of 6.17% in total employment in relation to
population during the period 1977-78 to 1983.

SECTORAL CHANGES IN INDIA

The sectoral composition of the working force, in general, indicates the type and level of economic
development of the country. One aspect of structural change manifests itself in the form of a change
in the industrial structure involving a greater shift of the working force to the tertiary sector and that
to the secondary sector from the primary sector of the economy. The sectoral composition of the
working force which had remined constant till 1971 is now-changing.

Current status of HRM in India

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Over many centuries India has absorbed managerial ideas and practices from around the world.
Early records of trade, from 4500 B.C. to 300 B.C., not only indicate international economic and
political links, but also the ideas of social and public administration. This treatise presented notions
of the financial administration of the state, guiding principles for trade and commerce, as well as the
management of people. Increasing trade, that included engagement with the Romans, led to
widespread and systematic governance methods by 250 A.D. During the next 300 years, the first
Indian empire, the Gupta Dynasty, encouraged the establishment of rules and regulations for
managerial systems, and later from about 1000 A.D. Islam influenced many areas of trade and
commerce. A further powerful effect on the managerial history of India was to be provided by the
British system of corporate organisation for 200 years. Clearly, the socio cultural roots of Indian
heritage are diverse and have been drawn from multiple sources including ideas brought from other
parts of the old world. Interestingly, these ideas were essentially secular even when they originated
from religious bases.In the contemporary context, the Indian management mindscape continues to
be influenced by the residual traces of ancient wisdom as it faces the complexities of global
realities. One stream of holistic wisdom, identified as the Vedantic philosophy, pervades managerial
behaviour at all levels of work organisations. This philosophical tradition has its roots in sacred
texts from 2000 B.C. and it holds that human nature has a capacity for self transformation and
attaining spiritual high ground while facing realities of day to day challenges (Lannoy 1971). Such
cultural based tradition and heritage can have a substantial impact on current managerial mindsets
in terms of family bonding and mutuality of obligations. The caste system, which was recorded in
the writings of the Greek Ambassador Megasthenes in the third century B.C., is another significant
feature of Indian social heritage that for centuries had impacted organisational architecture and
managerial practices, and has now become the focus of critical attention in the social, political and
legal agenda of the nationOne of the most significant areas of values and cultural practices has been
the caste system. Traditionally, the caste system maintained social or organisational balance.
Brahmins (priests and teachers) were at the apex, Kshatriya (rulers and warriors), Vaishya
(merchants and managers) and Shwdra (artisans and workers) occupied the lower levels. Those
outside the caste hierarchy were called untouchables. Even decades ago, a typical public
enterprise department could be dominated by people belonging to a particular caste. Feelings
associated with caste affairs influenced managers in areas like recruitment, promotion and work
allocation (Venkatranam & Chandra 1996). Indian institutions codified a list of lower castes and
tribal communities called scheduled castes and scheduled tribes. A strict quota system called,
reservation in achieving affirmative equity of castes, has been the eye of political storm in India in
recent years. The central government has decreed 15 per cent of recruitment is to be reserved for
scheduled castes, and a further seven and half per cent for scheduled tribes. In addition, a further 27
per cent has been decreed for other backward castes. However, the liberalisation of markets and
global linkages have created transformation of attitudes towards human resource (HR) policies and
practices (Khalilzadeh-Shirazi & Zagha 1994, Gopalan & Rivera 1997). Faced with the challenge
of responding to the rationale of Western ideas of organisation in the changing social and economic
scenario of Indian organisation, practitioners are increasingly taking a broader and reflective
perspective of human resource management (HRM) in India.

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This manuscript has three main parts. In the first part is provided an overview of important
historical events and activity that has influenced contemporary managerial tenets, the second part of
the manuscript describes the emerging contemporary Indian HRM practices and indicates some
interesting challenges. Much of the second part is also summarised on four informative Figures.
The concluding section, the third part of the manuscript, succinctly integrates the two preceding
parts.

VALUE OF CONTEXT OF HRM IN INDIA

The managerial ideologies in Indian dates back at least four centuries. Arthshastra written by the
celebrated Indian scholar-practitioner Chanakya had three key areas of exploration, 1) public policy,
2) administration and utilisation of people, and 3) taxation and accounting principles (Chatterjee
2006). Parallel to such pragmatic formulations, a deep rooted value system, drawn from the early
Aryan thinking, called vedanta, deeply influenced the societal and institutional values in India.
Overall, Indian collective culture had an interesting individualistic core while the civilisational
values of duty to family, group and society was always very important while vedantic ideas
nurtured an inner private sphere of individualism.There has been considerable interest in the notion
that managerial values are a function of the behaviours of managers. England, Dhingra and Agarwal
(1974) were early scholars who contended that managerial values were critical forces that shape
organisational architecture. The relevance of managerial values in shaping modern organisational
life is reflected in scholarly literature linking them to corporate culture (Deal & Kennedy 1982),
organisational commitment and job satisfaction (OReilly, Chatham & Caldwell 1991), as well as
institutional governance (Mowday, Porter & Steers 1982). Thus, understanding the source of these
values and in particular societal work values (which link the macro-micro relationships and in turn
organisational practices) had become a popular line of enquiry, and a great deal of evidence has
been presented to support the importance of national culture in shaping managerial values. One of
the most widely read formulations of this literature is the seminal work of Hofstede (1980) who
popularised the notion of clustering culture in generic dimensions such as power distribution,
structuring, social orientation, and time horizons. In turn, these dimensions could be employed to
explain relevant work attitudes, job incumbent behaviors and the working arrangements within
organisational structures. Two of these dimensions were individualism and collectivism.

The traditional social ethos from the ancient roots, which was developed over centuries, underwent
profound transformation during the British rule. Consequently, in the contemporary context
multiple layers of values (core traditional values, individual managerial values, and situational
values) have emerged (Chatterjee & Pearson 2000). Though the societal values largely remain very
much anchored in the ancient traditions they are increasingly reflecting corporate priorities and
values of global linkages. But in the arena of globalisation where priorities of consumerism,
technological education, mass media, foreign investment and trade union culture predominate,
newer tensions are becoming evident. For instance, contemporary Indian multi national companies
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and global firms in India have started shifting their emphasis to human resources with their
knowledge and experience as the central area of attention in extending new performance boundaries
(Khandekar & Sharma 2005). Considerable research evidence attests to this trend with particular
relevance to greenfield organisations with little or no historical baggages in their organisational
culture (Settt 2004, Roy 2006).

Within Indian traditions the choice of individualistic or collectivistic behavior depends on a number
of culturally defined variables. The dynamics of these variables are underpinned through three key
elements guiding Indian managerial mindscapes. These three constructs are Desh (the location),
Kaal (the timing), and Patra (the specific personalities involved). Sinha and Kunungo (1997) claim
that the interaction of these three variables determines the guidelines for decisional cues. This
managing or nurturing of the outer layer of collectivism in an inner private sphere of individualism
is expressed in Figure 1 which demonstrates the behavioural anchors in Indian organisational life.

Progress of personnel management in India

Personnel management - The renewed emphasis on the importance of human
resources in the 1980s and 90s drew attention to the way in which people
management was organized. Specifically, this meant a critical review of the functions
of personnel management. Personnel management has been a recognized function in
the USA since NCR opened a personnel office in the 1890s. In other countries the
function arrived more slowly and came through a variety of routes. This excerpt from
Human Resource Management in a Business Context looks at Personnel
Management from a historical perspective.

Specialist Personnel Functions:

Recruitment - advertising for new employees and liaising with employment agencies.
Selection - determining the best candidates from those who apply, arranging interviews,
tests and references.

Promotion - running similar selection procedures to determine progression within the

organization.

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Pay - a minor or major role in pay negotiation, determination and administration.
Performance assessment - coordinating staff appraisal and counseling systems to
evaluate individual employee performance.

Grading structures - as a basis for pay or development, comparing the relative

difficulty and importance of functions. Training and development - coordinating or
delivering programmes to fit people for the roles required by the organisation now
and in the future. Welfare - providing or liaising with specialists in a staff care or
counseling role for people with personal or domestic problems affecting their work.
Communication - providing an internal information service, perhaps in the form of
staff newspapers or magazines, handouts, booklets, videos. Employee Relations handling disputes, grievances and industrial action, often dealing with unions or staff
representatives. Dismissal - on an individual basis as a result of failure to meet
requirements or as part of a redundancy, downsizing or closure exercise, perhaps
involving large numbers of people. Personnel administration - record-keeping and monitoring
of legislative requirements related to equal opportunities and possibly pensions and tax.

Management theory
The human relations and human factors approaches were absorbed into a broad
behavioral science movement in the 1950's and 1960's. This period produced some
influential theories on the motivation of human performance. For example, Maslow's
hierarchy of needs provided an individual focus on the reasons why people work. He
argued that people satisfied an ascending series of needs from survival, through
security to eventual 'self-actualization'. In the same period, concepts of job design
such as job enrichment and job enlargement were investigated. It was felt that people
would give more to an organization if they gained satisfaction from their jobs. Jobs
should be designed to be interesting and challenging to gain the commitment of
workers - a central theme of HRM. By the 1970s most managers participating in formal
management training were aware of: Theory X and Theory Y (McGregor, 1960); of
Maslow and Herzberg's motivation theories; and knew where they should be in terms of
the managerial grid (Blake and Mouton, 1964). These theorists advocated participative,
'soft' approaches to management. However, only a minority of managers in the USA
received such training, with even fewer in other countries. Most operational managers concerned with production, engineering, or distribution - had worked their way up from
low-level jobs: they were probably closer in spirit to F.W. Taylor than the theorists of
the 1950s and 1960s. This contrasted with personnel departments with a higher
proportion of people who had received academic training; additionally, 'personnel'
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was an area where women were prevalent - as opposed to production which was male
dominated. Were women naturally more open to human relations concepts than men?

Development of the personnel specialism

Personnel management has been a recognized function in the USA since NCR opened a
personnel office in the 1890s. American personnel managers worked within a unitarist
tradition, identifying closely with the objectives of their organization. It was natural for
HRM to emerge comparatively smoothly from this perspective. In other countries the
personnel management function arrived more slowly and came from a number of routes.
Moreover, its orientation was not entirely managerial. In Britain its origins can be traced
to the 'welfare officers' employed by Quaker-owned companies such as Cadburys. At an
early stage it became evident that there was an inherent conflict between their activities
and those of line managers. They were not seen to have a philosophy compatible with
the worldview of senior managers. The welfare officer orientation placed personnel
management as a buffer between the business and its employees. In terms of
'organizational politics' this was not a politically viable position for individuals wishing
to further their careers, increase their status and earn high salaries.

Management thinking
Like fashions in hairstyle and clothing, management ideas come and go. Today's bestselling management concept will not survive long before being overtaken by the next
'big idea'. Significantly, however, a consistent theme has prevailed for more than two
decades: the most successful organizations make the most effective use of their
people - their human resources. The emergence of HRM was part of a major shift in
the nature and meaning of management towards the end of the twentieth century. This
happened for a number of reasons. Perhaps most significantly, as we will see in Part 2
of this book, major developments in the structure and intensity of international
competition forced companies to make radical changes in their working practices .
From the 1970s onwards, managers in the industrialized countries felt themselves to be
on a roller-coaster of change, expected to deliver improved business performance by
whatever means they could muster. Their own careers and rewards were increasingly
tied to those improvements and many were dispatched to the ranks of the unemployed
for not acting quickly and imaginatively enough. Caught between the need to manage
decisively and fear of failure, managers sought credible new ideas as a potential route
for survival.
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