Unit- I Human Resource Management

Introduction of HRM, Definition, Importance of HR, Objectives

of HRM, HR Policies- need- types & Scope

Evolution of HRM

HRM, a relatively new term, emerged during the 1970’s. Many people continue to refer
to the discipline by its older, more traditional titles, such as personnel management or
personnel administration.

HRM has evolved out of different terms such as Personnel Management, Personnel
Administration, Labour Relation, Industrial Relation and lately some experts have coined
new term Knowledge Management.

Concept of HRM

Human Resource Management is defined in terms of its proactive approach to managing

people in the organisation.

HRM is a management function that helps managers recruit, select, train and develop
members for an organisation.

Definition

“Human Resource management is a series of integrated decisions that form the

employment relationship; their quality contributes to the ability of the organisations and
the employees to achieve their objectives”.
- Milkovich and Boudreau

HRM is a management function of planning, organising, directing and controlling of the

procurement, development, compensation, integration, maintenance and separation of
human resources to the end that individual, organisational, and social objectives are
accomplished.

Features of HRM

• A Part of Management Discipline

• As a Process (HRM uses four basic process of mgt. – planning, organising,
directing and controlling in the area of recruitment, selection, development,
motivation and maintenance of the people in the organisation so as to achieve its
objectives).
• As a continuous process (not a one- stop action, which is seen as dynamic and
flexible)

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• Concerned with people (both present and potential)

• Directed towards achievement of the objectives

Difference between Personnel Management and HRM

• Personnel Management is a routine, maintenance- oriented administration

function: Human Resource Management places emphasis on a continuous
development of people at work.
• Personnel Management functions is mainly reactive and responds to the demands
of an organisation whenever they arise. HRM is proactive function- not only
present need but anticipates future needs and acts accordingly.
• PM is seen as independent function and sub- functions. HRM is viewed as a Sub-
system of the organisation.
• PM is a narrow view (concentrate mainly on improving the efficiency of
personnel in isolation without emphasizing the relevance in the organisation
context). HRM undertakes a system which is made not only to make people
efficient but to create a proper organisation culture.
• PM emphasis on economic rewards and traditional job design. HRM emphasis on
the satisfaction of higher needs for motivating people as challenging job,
creativity etc.

Functions of HRM

HRM is a process which works within the context of organisation as a system. Thus
HRM becomes a subsystem in the organisational context but a system in its own context.

HRM Functions

HR Development Performance and

HR Acquisition HRD System compensation
• HR Motivation and
Career Planning & Performance
Planning Maintenance
Development Management Industrial Relation
• Job and role Creating motivating
Training and Compensation IR System
analysis Environment
Development Management Discipline and grievance
• Recruitment Empowerment and
Organisation Incentives and benefits management
participation
• Selection Development Industrial Disputes
Safety and Health
• Orientation management
management
&
HR Mobility
• Placement

HR information System
HR Research
HR accounting
HR audit

HRM functions

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Objectives of HRM

The basic objective of HRM is to ensure that there are right people at right time and right
place. The basic objective generates several objectives of HRM like
 Proper staffing at all level of the organisation,
 Developing personnel at all level,
 Creating high- performance work culture,
 Improving the Quality of Work life, and
 Creating and sustaining competitive advantages for the organisation through human
resources.

Importance of HRM

Importance of HRM in three contexts, these are

 Organisational Importance
 Social Importance
 Professional Importance

Organisational Importance: It contributes to the achievement of organisational

objectives:
• By effective utilization of the human resources through motivating them and
changing their attitudes towards the work and the organisation.
• By developing personnel to meet the demands of the work effectively; and
• By ensuring to recruit and retain personnel in the organisation so that right people
are available at right time and at right place.

Social Importance: lies in the need satisfaction of personnel in the organisation, because
personnel are drawn from the society. Their effectiveness contributes to the welfare of the
society.
“A happy worker is not only happy at workplace but at home and in society too which is
positive contribution to the society”

• Maintaining a balance between jobs and job- seekers in terms of job requirements
and job- seekers abilities and aptitudes.
• Providing most productive employment from which socio- psychological
satisfaction can be derived.
• Utilising human capabilities effectively and matching rewards for the
contributions made by people.

Professional Importance: lies in developing people and providing appropriate

environment for effective utilization of their capabilities. This can be done by;
• Developing people on continuous basis to meet the challenges of their jobs.
• Maintaining the dignity of personnel at the workplace.
• Providing proper physical and social environment at the workplace to utilize the
capabilities of the people effectively; and

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• Providing environment and incentives for developing and utilising creativity.

Human Resource Policy

A policy is a statement or general understanding which provides guidelines to members

of the organisation for making decision in respect to any course of action.

The organisation is required to formulate policies in different areas which are necessary
for achieving organisational goals. The policies may be required for various functional
areas to guide as how the HR functions can be performed and how these functions
interact among themselves and with their environment.

HR policies may be defined as follows:

HR policies provide guidelines for a variety of employment relationships and identify the
organisation intentions in recruitment, selection, development, promotion, compensation,
motivation and integration of human resource.

Formulation of HR Policies

External factors

Organisational HR Policy Policy Policy in Review

Philosophy Philosophy alternatives Choice action

Internal factors

Features of HR Policy

• A policy provides guidelines to the members of the organisation for deciding a

course of action and, thus restrict their freedom to action.
• Policy provides and explains what a member should do rather than what he is
doing.
• A policy limits an area within which a decision is to be made and assures that the
decision will consistent with and contributive to objectives.
• A policy are generally expressed in qualitative, conditional, or general way.

Objectives of HR Policy

A policy in any area has two objectives: general objectives and specific objectives. The
general objectives should express organisational approach towards the particular area or

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function, that is Human Resources underlying their importance and role in achieving
organisational objectives on a long term basis.

The specific objectives are related to the specific activities of that area that is recruitment,
development, appraisal, HR mobility, incentive systems, IR, etc.

HR policy should aim at:

• To enable the organisation to have adequate, competent and trained personnel at

all level.
• To provide such conditions of employment that enables the personnel to develop a
sincere sense of unity with the organisation and to carry out their duties in most
willing and effective manner;
• To provide and create a sense of responsibilities on the part of those who directly
deal with human resources to adopt a humanistic approach with a guaranteed
protection of the fundamental rights of the employees and their dignity.
• To develop conditions for mutual trust and cooperation between those who mange
and those who are managed at all level of the organisation.

Scope and need of HR Polices

Ideally policies should exist in all critical areas of HRM. The criticality of an area
depends on its contributions to the achievement of HRM objectives. From this point of
view policies are required to the following areas:

Acquisition of Personnel: Policy decisions are required in all areas relevant for acquiring
personnel for an organisation. The policies should be formulated on the following issues:
• Minimum and desirable educational qualification required.
• Preferred sources of recruitment.
• Reservations of positions at different levels for certain specified categories of
personnel such as SC/ SCST, BC, handicapped, ex- serviceman, women etc.
• Selection methods and tools to be used for selecting personnel.
• Probation period for new employee.

Training and Development: In the area of training and development policies should cover
the following items.
• Training as a continuous process or shift process.
• Organisations to provide training and development.
• On- the Job training or Off the job training and their relative emphasis.
• In- company training or Outside training
• Budget for training.
• Approaches to measure the effectiveness of the training.

HR Mobility: In the area of HR Mobility, policies are required on the following issues.

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• The degree to which the higher level position to be filled by promotion from
within or outside recruitment.
• Basis of promotion- merits or seniority or both.
• Transfer of the employees and the basis and periodicity of transfers.
• Basis of demotion if it is effected.
• Retention strategies.
• Lay-off and its basis
• VRS for employees.
• Age of retirement for various categories.

Working conditions and work schedules: Policies in these areas cover the following
items.
• Working condition to be provided in offices and factories.
• Office and factory timings with rest schedules.
• Shift durations.
• Overtime work.
• Alternative work schedule
• Degree of safety provisions in factories.
• Leave with or without wages/ salaries.

Industrial Relations: In the area of industrial relations, policies are required on the
following issues:
• Degree to which proactive approach is to be adopted.
• Recognition of trade union
• Stand to be taken in dealing with the trade unions
• Preventive measures to be taken for maintaining industrial peace.
• Degree of involvement of employees in sorting out their problems.
• Degree of discipline and disciplinary actions to be taken.
• Levels at which industrial disputes are to be settled.

Types of HR policies

 Formulated Policy
 Implied policy
 Imposed policy
 Appealed Policy