HUMAN RESOURCE MANAGEMENT

HUMAN RESOURCE MANAGEMENT

Qs. “Human resource management is a proactive approach and

personnel management is a reactive approach to perform the
some set of functions related to managing human resources”.
Do you agree with this statement?

“Human resource management is a proactive approach and

personnel management is a Reactive approach to perform the some
set of functions related to managing human resources”.

Yes I agree with the statement. Let us go in detail with HRM and
Personnel Management.

Human Resource Management (HRM) is the function within an organization

that focuses on recruitment of, management of, and providing direction for
the people who work in the organization. Human Resource Management can
also be performed by line managers.

Human Resource Management is the organizational function that deals with

issues related to people such as compensation, hiring, performance
management, organization development, safety, wellness, benefits,
employee motivation, communication, administration, and training.

Human resource management (HRM) is the strategic and coherent

approach to the management of an organization's most valued assets - the
people working there who individually and collectively contribute to the
achievement of the objectives of the business. The terms "human resource
management" and "human resources" (HR) have largely replaced the term
"personnel management" as a description of the processes involved in
managing people in organizations. In simple sense, HRM means employing
people, developing their resources, utilizing, maintaining and compensating
their services in tune with the job and organizational requirement.

Facial appearance OF HRM

• Strategic i.e. planned, deliberate, seeking to achieve set objectives

• Capabilities i.e. people or resources with potential (knowledge, skills,
and attitudes) which can be developed to contribute to organizational
success.
• Competitive advantage – by tapping into and developing these
capabilities organization give themselves an edge over their rivals

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• Integrated – that the range of things under HRM (recruitment, selection

of employees, their training and development, how they are rewarded)
is locked at together not as separate things

HRM is very important to us for the following reasons

• Development and growth of the organization
• Creation of healthy culture in the organization
• Maintenance of Human Resources

Nucleus values of HRM

The core values of HRM states that human beings are the crucial aspects of
every organization. The greater is the commitment of the human resources
the more successful of the organization. An individual is a whole person. He
brings all aspects of his personality; attitudes, traits and behavior to the work
place. All people represent the organization. The building, equipment and
other resources productive only because they are being handled by the
hyper generic forced of humans. People are different from each other. They
vary in abilities, nature, personality; religion etc. people are also influenced
by social economic and environmental factors

FUNCTIONS OF HRM

Human resource management is a balancing act. At one extreme, you

hire only qualified people who are well suited to the firm's needs. At the
other extreme, you train and develop employees to meet the firm's needs.
Most expanding small businesses fall between the two extremes i.e., they
hire the best people they can find and afford, and they also recognize the
need to train and develop both current and new employees as the firm
grows.

• One function of personnel management deals with how to hire and

train the right people and addresses the characteristics of an effective
personnel system, such as:

1. Assessing personnel needs.

2. Recruiting personnel.
3. Screening personnel.
4. Selecting and hiring personnel.
5. Orienting new employees to the business.
6. Deciding compensation issues.

• Another function addresses the training and development side of

human resource management. A third function deals with how the
personnel system and the training and development functions come
together to build employee trust and productivity. These three

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functions stress the importance of a good human resource

management climate and provide specific guidelines for creating such
a climate.

• Understanding and relating to employees as individuals, thus

identifying individual needs and career goals.
• Developing positive interactions between workers, to ensure collated
and constructive enterprise productivity and development of a uniform
organizational culture.
• Identify areas that suffer lack of knowledge and insufficient training,
and accordingly provide remedial measures in the form of workshops
and seminars.
• Generate a rostrum for all employees to express their goals and
provide the necessary resources to accomplish professional and
personal agendas, essentially in that order.
• Innovate new operating practices to minimize risk and generate an
overall sense of belonging and accountability.
• Recruiting the required workforce and making provisions for expressed
and promised payroll and benefits.
• Implementing resource strategies to subsequently create and sustain
competitive advantage.
• Empowerment of the organization, to successfully meet strategic goals
by managing staff effectively

Major Categories of Human Resource Management Functions

Planning

a. Strategic Human Resource Management – The process of developing

and implementing HR policies and practices that directly support the
major objectives and competitive strategy of the organization.

b. Job Analysis – The process of obtaining and documenting information

about the major responsibilities, duties, and tasks of each job in an
organization, as well as the major types of knowledge, skills, and
abilities required to perform the job.

c. Legal Compliance – The process of developing human resource

policies and practices that meet the requirements of local, state, and
federal laws.

Staffing

a. HR Forecasting – The process of estimating (i.e., forecasting) labor

demand and supply to meet an organization’s operating needs.

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b. Employee Recruitment – The process of assessing the make-up of

the labor market and developing methods for contacting and
communicating with job applicants in the market.

c. Employee Selection – The process of assessing the knowledge, skills,

and abilities of job applicants in order to make accurate hiring
decisions.

d. Placement – is understood as the allocation of people to jobs. It is

the assignment or reassignment of an employee to a new or different
job.

e. Employee evaluation – is a process that starts with a psychological

or physiological deficiency or need that activates behavior or a drive
that is aimed at a goal or an incentive.

f. Transfer – involves a change in the job (accompanied by a change in

the place of the job) of an employee without a change in the
responsibilities or remuneration.

g. Separations – Lay-offs, resignations and dismissals separate

employees from the employers.

Development

a. Career Counseling and Planning – The process of obtaining relevant

information from employees (such as personality traits, aptitudes,
values, and job preferences) in order to assist in the planning of
careers within an organization.

b. Training and Development – The process of enhancing the knowledge

and skills of employees in order to increase job performance and
organizational effectiveness.

Training and development need = Standard performance – Actual

performance

Managing Workforce Utilization

The process of planning and assisting employees with organizational

separation, such as layoffs, sabbaticals, leaves-of-absence, retirement,
family and medical leave, etc. and managing employee turnover to
prevent excessive staffing costs.

Employees Rewarding

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a. Wage and Salary Development – The process of developing

internally and externally equitable wages and salaries for the jobs
within an organization.

b. Employee Benefits – The process of developing an effective and

competitive benefits package in order to maintain employee morale,
reduce employee turnover, and attract job applicants.

c. Pay Incentives – The process of developing and implementing

incentive pay plans, such as merit systems, bonuses, profit sharing,
etc., to attract and motivate a high performing workforce.

Maintaining Quality of Work Life and Discipline

a. Managing Employee and Labor Relations – The process of

maintaining awareness of employee attitudes, needs, and grievances,
and communicating effectively with employees to maintain positive
relations and high morale.

b. Safety and Health – The process of evaluating and maintaining a

safe and healthy work environment for employees.

c. Maintaining Employee Rights and Discipline – The process of

maintaining reasonable and statutory employee rights, such as privacy,
speech, and security, and providing consistent and fair disciplinary
policies to ensure positive relations with employees.

Participative management

Workers participation may broadly be taken to cover all terms of

association of workers and their representatives with the decision
making process, ranging from exchange of information, consultations,
decisions and negotiations to more institutionalized forms such as the
presence of workers members on management or supervisory boards
or even management by workers themselves as practiced in
Yugoslavia. (ILO)

Industrial relations

This is concerned with the systems, rules and procedures used by

unions and employers to determine the reward for effort and other
conditions of employment, to protect the interests of the employed and
their employers, and to regulate the ways in which employers treat
their employees.

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Trade Unions

These are voluntary organizations of workers or employers formed to

promote and protect their interests through collective action.

Disputes and their settlement

Industrial disputes mean any dispute or difference between employers

and employers, or between employers and workmen, or between
workmen and workmen, which is connected with the employment or
non-employment or terms of employment or with the conditions of
labour of any person.

Environmental and Organizational Challenges for HR Managers

Environmental Challenges
• Rapid change in technology and market competition.
• Workforce diversity – increased minority make-up of workforce.
• Globalization – organizations competing and building facilities abroad.
• Rise of Internet – increase marketing through Internet and information
search.
• Legislation – continued local, state, and federal legislation in HR
domain.
• Evolving work and family roles – dual career households requiring
accommodation.
• Skill shortages – low birth rates leading to shortages
of workers.

Organizational Challenges

• Attempts to minimize costs, improve quality, and provide product

innovations.
• Decentralization – distributing responsibility/authority to lower levels in
company.
• Downsizing – redefining competitive advantage, eliminating some
operations.
• Organizational restructuring – eliminating some operations, combining
functions, etc.
• Self-managed teams – used to increase quality and increase employee
commitment.
• Small businesses – maintain equitable HR policies to prevent loss of
employees.
• Organizational culture – managing culture to support diversity and
empowerment.
• Technology – implement new technology to increase production and

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quality.
• Outsourcing – moving work outside the company to reduce costs and
overcome labor shortages.

NEW TRENDS IN HRM

MAINSTREAM economists perceive voluntary retirement as a measure to

shed the workforce whose marginal productivity is zero. Further, it is argued
that this could be introduced in an industrial organization for maintaining its
cost effectiveness in an increasingly competitive world. Moreover, voluntary
retirement is accompanied by technological modernization that warrants the
replacement of labor with capital. Technological modernization improves the
productivity of existing workforce so much so that a section of the existing
workforce becomes again redundant even as modernization enhances the
installed capacity of the technology. The workforce that becomes redundant
in this process has to retire or be retrenched.

The rationale behind the introduction of voluntary retirement scheme (VRS)

in India is that any organized industrial organization has to operate within the
existing legislative framework, which does not allow the organization to shed
the redundant workforce without adequate compensation.

Employers refer to VRS as 'golden handshake’; trade unions call it 'voluntary

retrenchment scheme', and for the government, it is 'unstated exit policy'
which means that an exit policy which may not exist on paper. VRS is one of
the strategies introduced in the early 1980s in central public sector
undertakings (PSUs) to reduce the so-called surplus or redundant workforce.
It gained publicity after the introduction of new economic policy in 1991. In
India, the government employs more than 70 per cent of the organized
workforce; it uses all its channels to reduce the organized sector of the
workforce without antagonizing the trade unions. It is envisaged in the new
economic policy that VRS can provide minimum sustenance security to the
retired individual and his family.

Trade unions play a crucial role in introducing the VRS in any organized
sector firm.

The main objective behind the scheme is to send out those who cannot be
retrained in new skills. The premise of the argument appears to be weak. The
liberalization policy, in its anxiety to modernize, restructure and globalize the
products of Indian industry, is wasting precious labor force that could have
been modernized through retraining and on the job training.
Precious skills and abilities of the retrenched workforce are equated with
worn out physical capital that may not be susceptible to repair or
modernization. Are human beings not capable of learning and modifying their
knowledge, skills and applying the same to produce higher output? The
current emphasis on restructuring does not allow such questions.
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The free economy and trade liberalization have ushered in the need for the
enterprises to have a competitive edge. Economic forces have led to
organizational cost cutting, changes in production processes, exploration of
new markets, plant relocations, modernizations, downsizing and structural
changes.

Organizational adjustment at all levels has become extremely imperative.

Over manning has crept into almost all industrial units on account of the
inability of the enterprises to reduce or adjust workforce as per the business
needs. The sort of cuts that only happened in heavy industries has now
become widespread. The days of nibbling away deadwood have long gone.
It's time for the organizations to realign and focus on the core competencies.

Personnel Management

In all organizations, there should be someone concerned with the welfare

and performance of persons who are a part of the operation. When an
individual or a team of individuals takes on this task of seeing to programs
and setting policies that impact everyone associated with the company, they
are engaged in the process of personnel management, sometimes referred
to as human resources (HR) management.

The function of a personnel manager usually begins with the staffing process.
The manager may be focused on screening and interviewing applicants, with
an eye to placing individuals with the right skill sets in the right position
within the company. Along with placement, the HR manager may also
oversee, or at least be involved in, the creation of entry level training
programs, as well as continuing education opportunities for existing
employees.

Determining company policies and procedures as they relate to personnel is

another important aspect of the personnel management process. HR
functions often include drafting vacation, sick leave, and bereavement
policies that apply to all employees. The personnel management team is also
often responsible for managing any healthcare program provided to the
employees as well.

One aspect of company organization that needs the input of effective

personnel management is the drafting of a company handbook. Establishing
operation policies and procedures, requirements for employment,

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commendation and disciplinary procedures, and even something as simple

as a dress code has to be compared with state and federal guidelines before
the handbook is ready for release to the company at large. Personnel
managers and the HR staff are ideal for drafting and reviewing the company
handbook.

Sometimes overlooked in the course of personnel management is the

emotional welfare of the employees. Increasingly, more personnel managers
understand that a well-adjusted employee is an asset to the company. To
this end, many people in charge of personnel management try to provide
opportunities for employees who are in need of counseling to receive support
from the company.

This support often involves scheduling time during working hours for the
counseling sessions, and perhaps picking up the cost if insurance does not
cover counseling. As with continuing educational programs, counseling is
seen as another way that the company invests in the future relationship
between the employee and the employer. A good HR manager understands
this and will strive to make sure this sort of support is available.

Personnel management is concerned with the effective use of the skills of

people. They may be salespeople in a store, clerks in an office, operators in a
factory, or technicians in a research laboratory. In a business, personnel
management starts with the recruiting and hiring of qualified people and
continues with directing and encouraging their growth as they encounter
problems and tensions that arise in working toward established goals.

Role of personnel manager

1 personal role

a. Advisory –Advising management on effective use of human resources.

b. Manpower planning- recruitment, selection, etc.

c. Training and development of linemen.

d. Measurement of assessment of individual and group behavior.

2-welfare role

a. Research in personal and organizational problems.

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b. Managing services- canteens grain shops, transport co-operatives,

crèches, etc.

c. Group dynamics- group council ling, motivation, leadership,

communication, etc.

3 clerical roles

a. Time keeping

b. Salary and wages administration incentives.

c. Maintenance of records.

d. Human engineering- man machine relationship.

4 fire fighting legal role

a. Grievance handling.

b. Settlements of disputes.

c. Handling disciplinary actions.

d. Collective bargaining.

e. Joint consultation

To understand the personnel manager's job thinks of how you would deal
with the following examples of challenging employee situations:

The firm's employees - especially the most qualified ones - can get
comparable, if not better jobs with other employers.

When a firm faces a scarcity of supervisory and specialized personnel with

adequate experience and job capabilities, it has to train and develop its own
people. This can be time consuming and expensive.

The cost of hiring and training employees at all levels is increasing, for
instance, several thousand dollars for a salesperson. A mistake in hiring or in
slow and inefficient methods of training can be costly.

Personnel managers must comply with the law by employing, training and
promoting women and persons from minority groups. The problem in doing
so is that many of these employees have not had appropriate experience and
education in the past.

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Most employees, whether or not represented by labor unions, continue to

seek improvements in direct compensation, employee benefits, and working
conditions. All commitments must be based upon what the firm can afford,
comply with current practices of other employers, and be understood and
accepted by the employee. To do this, all employee policies and operating
procedures should be developed and negotiated with great care.

Some employees may not perform satisfactorily simply because their firm
offers competitive compensation, benefits, and working conditions. In
addition to these financial or physical compensations, they want
responsibility, the opportunity to develop, and recognition of
accomplishment in their jobs.

The law has established requirements for pension and other benefit plans,
and also bar mandatory retirement at age 65. Complying with such changes
presents real challenges.

Personnel management works to achieve practical solutions to such

problems. In large firms, it generally provides support to line management. In
this staff capacity, the personnel department has the responsibility to
develop and implement policies, procedures, and programs for recruitment,
selection, training, placement, safety, employee benefits and services,
compensation, labor relations, organization planning, and employee
development.

Often, the owner-manager of a firm also has to be the personnel manager. In

such a case it is necessary to have an overview of current trends and
practices in personnel management. All small businesses must staff their
operations. This involves bringing new people into the business and making
sure they are productive additions to the enterprise. Effective human
resource management matches and develops the abilities of job candidates
and employees with the needs of the firm. A responsive personnel system
will assist you in this process and is a key ingredient for growth

Management basically deals with all the persons working in the concern who
are responsible for managing an organization. Everyone in the organization
will have certain responsibilities and duties in the enterprise. Personnel
management includes planning and directing the applications, development
and utilization of human resource in the enterprise. Employees, unions,
public relationship also plays a key role in personnel management. So there
is a need for personnel Management and planning of the members play a
vital role in the Enterprise.

Personnel Management is an important branch in Management of any

business enterprise. It holds a key to all actions and successful management.
It is also concerned with human and social implications of change in internal

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organization and methods of working and of economic and social changes in

the community. The main aim is to establish a better coordination between
all the members from top level management to down below the subordinates
to have better cooperation, better focus to bring out innovative ideas, their
objectives, and understanding in the enterprise. Co-operative relationship is
achieved within the enterprise by creating harmonious relations, genuine
consultation and participation and system of effective communication.

Personnel management should designed in such a way it will have the

capability to respond to the changes. Maintain a good relationship within the
organization; meet the enterprise social and legal responsibilities. Human
relations have to be nurtured constantly in the enterprise. Only the
enterprise, which is conscious of this need, can achieve their targets by
efficiently handling their available resources for a particular process.

Qualities of a Personnel Manager:

To be successful in his job, a personnel manager must be a specialist in

organization theory and as such be an effective adviser to top management
in organizational matters as well as being able to organize his own
dept/division in such a manner as to minimize frictions, promote goodwill and
release the latent energies of his own people and associates to be expended
on their primary assignments.

He should be real expertise in personnel administration- knowledge of

relevant laws, procedures, and techniques and of developments in theory
and practice in comparable economics, behavioral sciences’ contribution to
personal management, a bent for research in man- management, and should
have a adequate knowledge of behavioral sciences which study the reactions
of individuals and groups to particular sets of conditions and environments is
an organization or a factory.

Other important qualities that a personnel manager should posses

are: -

1. A mind with a capacity for creative thinking, for analyzing situations and
reasoning objectively.

2. He should know the problem solving techniques and have an ability to

inspire, motivate and direct employees.

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3. A devoted sense of vocation and faith in humanity.

4. Capacity for leadership, a sense of social responsibility and a standard of

social justice.

5. Personal integrity so that employees may repose confidence in him.

6. Capacity for persuasion, coupled with patience and tolerance.

7. A friendly, approachable nature, which is tactful and sympathetic, and

pleasing personality, a well groomed appearance, sophisticated taste and
habits, and capable of working with and through other people.

8. Initiative and decision making ability.

9. Mobility of facial expression (which encourages confidence, conveys

interest, registers sympathy allays distrust) and finally,

10. An ability to generate trust among his colleagues and develop

acceptability, recognition for himself and his ideas of communication with
readiness and fluency.

11. Readiness’s to co-operate the subordinates in times of difficulty and

never to interfere or thrust his advice on theirs.

12. A promptitude in giving them the feedbacks in their handling on

personal matter whenever necessary in the interest of functioning of the
organization and establish personal policies of the company.

The objectives of personnel management in any working organization

are, to bring development of individuals, maintain safe and effective
environmental conditions, utilize the available resources, to ensure job
satisfaction among workers. What is the entire objective to be focused?

• Social.
• Personnel.
• Enterprise.
• Union.

Social objective is concerned about how the enterprise creates new

employment opportunities, how the productivity of the enterprise can be
maximized, bring satisfaction to the work force, avoidance of wastage of
resources and promote a healthy relationship between the human and the
social welfare.

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Personnel objectives specify the needs of the members by providing job

security, maximizing the development of the members; provide proper
working environmental conditions to workers. Enterprise objective is to bring
a balance between demand and supply of the personnel and maintain
competent workers in the enterprise. Union objective deals with formulation
of personnel policies in consultation with unions and self-discipline within the
enterprise.

Financial and physical resources required for a particular process to be done,

and the members of the organization. Personnel Management is responsible
for both the enterprise operating system and the workers. Other areas in
which personnel management is expected to help the workers are include
maintenance of personnel records, determination of wage policy, methods
and rates of remuneration.

COMPARISON

Personnel Management - Personnel Management is thus basically an

administrative record-keeping function, at the operational level. Personnel
Management attempts to maintain fair terms and conditions of employment,
while at the same time, efficiently managing personnel activities for
individual departments etc. It is assumed that the outcomes from providing
justice and achieving efficiency in the management of personnel activities
will result ultimately in achieving organizational success.
Human Resource Development - Human resource management is concerned
with the development and implementation of people strategies, which are
integrated with corporate strategies, and ensures that the culture, values
and structure of the organization, and the quality, motivation and
commitment of its members contribute fully to the achievement of its Goals.

HRM is concerned with carrying out the SAME functional activities

traditionally performed by the personnel function, such as HR planning, job
analysis, recruitment and selection, employee relations, performance
management, employee appraisals, compensation management, training
and development etc. But, the HRM approach performs these functions in a
qualitatively DISTICNT way, when compared with Personnel Management.

Main Differences between Personnel Management and HRM

• Personnel management is workforce centered, directed mainly at the

organization’s employees; such as finding and training them, arranging
for them to be paid, explaining management’s expectations, justifying
management’s actions etc. While on the other hand, HRM is resource –

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centered, directed mainly at management, in terms of devolving the

responsibility of HRM to line management, management development
etc.
• Although indisputably a management function, personnel management
has never totally identified with management interests, as it becomes
ineffective when not able to understand and articulate the aspirations
and views of the workforce, just as sales representatives have to
understand and articulate the aspirations of the customers.
• Personnel Management is basically an operational function, concerned
primarily with carrying out the day-to day people management
activities. While on the other hand, HRM is strategic in nature, that is,
being concerned with directly assisting an organization to gain
sustained competitive advantage.
• Personnel mean employed persons of an organization. Management of
these people is personnel management (PM). Human resource
management (HRM) is the management of employees’ knowledge,
aptitudes, abilities, talents, creative abilities and skills/competencies.
• PM is traditional, routine, maintenance-oriented, administrative
function whereas HRM is continuous, on-going development function
aimed at improving human processes.
• PM is an independent function with independent sub-functions. HRM
follows the systems thinking approach. It is not considered in isolation
from the larger organization and must take into account the linkages
and interfaces.
• PM is treated like a less important auxiliary function whereas HRM is
considered a strategic management function.
• PM is reactive, responding to demands as and when they arise. HRM is
proactive, anticipating, planning and advancing continuously.
• PM is the exclusive responsibility of the personnel department. HRM is
a concern for all managers in the organization and aims at developing
the capabilities of all line managers to carry out the human resource
related functions.
• The scope of PM is relatively narrow with a focus on administering
people. The scope of HRM views the organization as a whole and lays
emphasis on building a dynamic culture.
• PM is primarily concerned with recruitment, selection and
administration of manpower. HRM takes efforts to satisfy the human
needs of the people at work that helps to motivate people to make
their best contribution.
• Important motivators in PM are compensation, rewards, job
simplification and so on. HRM considers work groups, challenges and
creativity on the job as motivators.
• In PM improved satisfaction is considered to be the cause for improved
performance but in HRM it is the other way round (performance is the
cause and satisfaction is the result).

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• In PM, employee is treated as an economic unit as his services are

exchanged for wages/salary. Employee in HRM is treated not only as
economic unit but also a social and psychological entity.
• PM treats employee as a commodity or a tool or like equipment that
can be bought and used. Employee is treated as a resource and as a
human being.
• In PM employees are considered as cost centers and therefore,
management controls the cost of labor. HRM treats employees as profit
centers and therefore, the management invests in this capital through
their development and better future utility.
• PM’s angle is that employees should be used mostly for organizational
benefits and profits. HRM angle emphasizes on the mutual benefits,
both of employees and their families and also the company.
• PM preserves information and maintains its secrecy. In HRM
communication is one of its main tasks which take into account
vertical, lateral and feedback type communication.

The human resources are much broader compare to the term personal either
in the component level or in coverage or even in the macro level. The human
resources includes the resources of all the people who contribute their
services to the attainment of organizational goals and others who contribute
their services in order to create hurdles in the attainment of organizational
goals. Further, human resources include human values, ethos and the like.

HRM is more proactive than Personnel Management. Whereas personnel

management is about the maintenance of personnel and administrative
systems, HRM is about the forecasting of organizational needs, the continual
monitoring and adjustment of personnel systems to meet current and future
requirements, and the management of change.

Proactive vs. Reactive Management

In order to properly address these issues, I'll first define the terms proactive
and reactive.

• Proactive - Anticipating events such as problems, markets, trends, and

consumer demands and planning ahead for them.
• Reactive - Reacting to events when they occur with little to no
anticipation of events.

First of all, I must state that all management must be both proactive and
reactive to survive. Obviously when significant events happen it is necessary
to react to them. But the reaction most of the time should be planned and

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well thought out. The best management is primarily proactive rather than
reactive. Good management is proactive first and reactive second. During
the course of my career, I have seen many organizations fail to make money
because they were reactive. Wars have been started because of
governments that were more reactive than proactive.

Reactive Failure Example

Some number of years ago I had the opportunity to get in on the ground floor
when a company was beginning to design their own line of personal
computers. It seems they had been selling a low end computer system that a
third party was making for them and they were selling like hotcakes. They
were all excited about this new market. So they were putting together a
team of digital designers and were excited about bringing this new product
to market in a very aggressive six month schedule. At the same time they
were laying off personnel who worked in a part of their company where sales
were not very good. I turned the opportunity down.

Their attitude of layoffs rather than retraining indicated that they did not
value longevity on the part of employees. This was not why they failed. A few
years later I learned that the design team had successfully designed their
computers and brought the product to market successfully and on schedule.
However sales were apparently lackluster and the whole idea of bringing
computers to market was abandoned by the company. I wonder what
happened to those dedicated individuals who worked so hard.

The reason for the failure was reactive management or actually it was lack of
proactive management. By the time the management realized there was
such a great market for computers, so had everyone else. The only
companies that remained in the personal computer market were those that
had foreseen the opportunity early, already had designs ready, and were set
to produce product to meet the demand. Of course we know who these
companies were.

How to be Proactive

So the question is how can one organization forsee a future event and be
ready for it when other organizations fail to do this? What do they do?

• They plan for short and long term.

• They work closely with technical and marketing staff to determine
marketing opportunities that may be opening up.
• They encourage innovation.
• They pretest markets.

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• They take polls.

They take calculated risks.

Proactive Successes

When I worked for the telephone industry they had a planning and
forecasting section. They projected increases or reductions in the customer
demand curve based on forecasting and trends. Based on these projections,
we adjusted construction schedules to add additional facilities sooner when
more demand was forecasted or to delay construction of new facilities when
projected demand decreased. Setting schedules in this way obviously was
much more efficient and saved a great deal of unnecessary expense. In
many industries, proactive management is essential.

Other examples of proactive successes include:

• IBM - Personal Computers

• Compaq - Personal Computers
• Motorola - Cellular Phones

Shortages of Goods or Services

When you hear of an increase price of goods or services to a shortage of

supply there are only two possibilities:

1. A conspiracy by the industry to cause prices to be artifically high in

order to increase profits.
2. A lack of proactive management and planning for increased demand by
the industry involved.

Reactive Successes?

Any reactive management successes are more likely due to dumb luck rather
than skill. If anyone is aware of reactive successes due to reactive
management, it would be worth sending us an e-mail.

Managers are either reactive or proactive, supportive

Reactive managers are often punitive without meaning to be so, but
proactive managers can also instill fear in employees. The best managers are
proactive and supportive.

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Management style includes being proactive or reactive, supportive or

punitive. The best managers are proactive and supportive. Reactive
managers don’t really manage at all.

The Reactive Management Style

This style is very common. Such managers are often punitive as well.
Reactive managers don’t really enjoy the management process. They got
promoted by being functional experts. In management they still want to do
what they most enjoy doing – devise expert solutions. They may hold regular
meetings on a proactive basis, but they want competent subordinates who
can get on with their work without bothering them. However, they want
subordinates to come to them if they have a problem.

The Punitive Reactive Manager

No one likes to hear about problems. Reactive managers with a punitive style
don’t mean to be mean. They just get annoyed when they hear that a project
might be off the rails. They may not even lose their temper but their irritation
is still visible in their tone of voice and body language. Their immediate
priority is to fix the problem. They convey the message that they hope their
subordinates have learned from their mistake and won’t let it happen again.
This is punitive: it instills a fear of failure in team members and makes them
hesitate to inform managers about problems in future. A punitive style
increases the likelihood of further errors and an early departure from the
company.

HRM is a proactive in the sense that it is trying to provide employee of any

organization with enabling environment that will allow them to execute their
assigned responsibilities, so that, the organizational objective(s) can be
achieved. These include things like selection process, recruitment, training,
compensation etc. Meanwhile, Personnel Management is a management
process that usually deals with complicated issues of trade unions like
collective bargaining, mediation, post service issues etc.
As far as the delineation of Personnel Management as a Proactive approach
is concerned there can be no quarrel.Its very existence is to develop a
corporate work culture and a viable management culture that DEVELOPS TOP
QUALITY PERSONNEL FOR EVERY LEVEL OF FUNCTION AT OPTIMAL COSTS.
Personnel management is by and large reactive in nature, but befor the HRD
function got separated it was the personnel Manager who did the pro active
part of management and raised the loyal work force. So, to classify Personnel
function as entirely reactive is not fair. Even in the current scenario,
Personnel Managers who are proactive are able to reduce the reactive
response work considerably and promote the corporate interests.

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