Human Resource Management (08MBA25) Module 1

MODULE-1 : HUMAN RESOURCE MANAGEMENT

Module Objectives:
Define the term Human Resource Management.
Describe the nature and scope of HRM.
Outline the historical evolution of HRM.
Differentiate between personnel Management and HRM.
List the features of HRM.
Discuss the functions of HRM.
Describe the objectives of HRM.
Understand personnel policies, procedures and programmes.
Describe the organization of HRM.
Pinpoint the line-staff aspects of the HRM
Describe the important roles played by a HR Manager.
Outline the competencies needed to become a HR Manager.
Discuss the factors influencing HRM.
Discuss the challenges in HRM.

Key words of the module:

Human Resource
Human Resource Management
Organization
Objectives
Policies
Human Resource Manager
Strategy

Module Content:

Introduction:
Organizations have to provide a healthy work climate in order to get the best out of people. To
utilize the capabilities of people fully, you need competent leadership willing to recognize,
reward and nurture talent at all levels. This is where human resource managers play a critical
role by bridging gaps between employee expectations and organizational requirements by
adopting appropriate human resource strategies and practices.

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Human Resources:
Human Resources can be considered as “the total knowledge, skills creative abilities, talents
and aptitudes of an organization’s workforce as well as the value, attitudes and beliefs of the
individuals involved.”

Human Resource Management:

In simple HRM means employing people, developing their resources, utilizing, maintaining and
compensating their services in tune with the job and organizational requirements.

Definitions:

According to Indian Institute of Personnel Management (IIPM):

Personnel Management is a responsibility of all those who manage people as well as being a
description of the work of those who are employed as specialists. It is that part of management
which is concerned with people at work and with their relationships within an enterprise. It
applies not only to industry and commerce but all fields of employment.

According to P. Subba Rao:

HRM is managing (planning, organizing, directing and controlling) the functions of employing,
developing and compensating human resources resulting in creating and developing human
relations and utilization of human resources with a view to contribute proportionately (due to
them) to the organizational, individual and social goals.

HRM may be defined as the art of procuring, developing and maintaining competent workforce
to achieve the goals of the organization in an effective and efficient manner.

Nature of HRM:
HRM is a management function that helps the managers recruit, select, train and develop
members of an organization. Obviously, HRM is concerned with the people’s dimension in
organizations.

Specifically, the following constitutes the core of HRM:

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Organizations are not mere bricks, mortar, machineries or inventories. They are people.
It is people who staff and manage organizations.
HRM involves the application of management functions and principles. The functions
and principles are applied to acquisitioning, developing, maintaining and remunerating
employees in organizations.
Decisions relating to employees must be integrated. Decisions on different aspect of
employees must be consistent with other HR decisions.
Decisions made must influence the effectiveness of an organization. Effectiveness of an
organization must result in betterment of services to customers in the form of high-
quality products supplied at reasonable costs.
HRM functions are not confined to business establishments only. They are applicable to
non business organizations, too, such as education, healthcare, recreation and the like.

Obviously HRM refers to a set of programmes, functions and activities designed and carried
out in order to maximize both employee as well a organizational effectiveness.

Scope of HRM:
Personnel aspect – Manpower planning, recruitment, selection, placement, transfer,
promotion, training & development, layoff and retrenchment, remuneration, incentives,
productivity, etc.
Welfare aspect – working conditions and amenities (canteens, crèches, rest and lunch
rooms, housing, transport, medical assistance, education, health and safety, recreation
facilities, etc.)
Industrial relations aspect – Union-management relations, collective bargaining,
grievance and disciplinary procedures, settlement of disputes, etc.

Evolution of HRM:
The field of HRM evolved both in India and elsewhere over a number of years to present level
of sophistication and use of proactive methods

The Industrial Revolution: During this period machine were brought in; technology
made rapid progress; jobs were more fragmented where the workers did only small
portion of the total job and the specialization increased speed and efficiency but
workers were left dull, boring and monotonous jobs. Workers were treated like glorified
machine tools. Employers were keen to meet production targets rather satisfy workers’
demands. Government did very little to protect the interests of workers.
Scientific management: Scientific Management theory is nothing but a systematic
analysis and breakdown of work into its smallest mechanical elements and rearranging
them into their most efficient combination. Individuals selected to perform the tasks
should be as perfectly matched, physically and mentally, to the requirements of the task

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as possible and that overqualified individuals must be excluded. Employees should also
be trained carefully by supervisors to ensure that they performed the task exactly as
specified by prior scientific analysis. A differential piece rate system was also advocated
to provide an incentive for employees to follow the detailed procedures specified by
supervisors.
Trade unionism: Workers joined hands to protect against the exploitative tendencies of
employers and the prohibitive unfair labour practices through unions. Unions tried to
improve the lot of workers through collective bargaining, resolving the grievances of
workers relating to working conditions, pay and benefits, disciplinary actions, etc.
Human relations movement: Hawthorne experiments demonstrated that employee
productivity was affected not only by the way the job was designed and the manner in
which the employees were rewarded economically, but by certain social and
psychological factors as well. The human relations movement led to the wide scale
implementation of behavioral science techniques in industry for the first time which
included supervisory training programmes, emphasizing support and concern for
workers, programmes to strengthen the bonds between labour and management and
counseling programmes whereby employees were encouraged to discus both work and
personal problems with trained counselors. The movement was also influenced by
growing strength of unions which gave workers the legal right to bargain collectively
with employers.
Human resources approach: The Human Resources approach assumes that the job or
the task itself is the primary source of satisfaction and the motivation to employees. The
emphasis in the human resource approach is on individual involvement in decision
made in the organizations. In addition this approach tries to improve workers’
satisfaction.

Difference between Personnel Management and HRM:

Sl Dimension Personnel Human Resource
No Management management
1 Employment Contract Careful delineation of written Aim t go beyond contracts
contracts
2 Rules Importance of devising clear Can do outlook, impatience
rules with rules
3 Guide to management Procedures Business need
action
4 Behavior referent Norms/customs and practices Values/Mission
5 Managerial task vis-à- Monitoring Nurturing
vis labour
6 Key relations Labour management Customer
7 Initiatives Piecemeal Integrated
8 Speed of decision Slow Fast

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9 Management role Transactional Transformational leadership

10 Communication Indirect Direct
11 Prized management Negotiation Facilitation
skills
12 Selection Separate, marginal task Integrated, Key task
13 Pay Job evaluation (fixed grades) Performance related
14 Conditions Separately negotiated Harmonization
15 Labour Management Collective bargaining contracts Individual contracts
16 Job categories and Many Few
grades
17 Job design Division of labour Team Work
18 Conflict handling Reach temporary truce Management climate and
culture
19 Training and Controlled access to courses Learning companies
development
20 Focus of attention for Personnel procedures Wide-ranging cultural,
interventions structural and personnel
strategies.
21 Respect for Labour is treated as a tool People are treated as assets to
employees which is expendable and be used for the benefit of an
replaceable. organization, its employees
and the society as a whole.
22 Shared interests Interests of the organization Mutuality of interests.
are uppermost.
23 Evolution Precedes HRM Latest in the evolution of the
subject
24 Locus of control External Internal
25 Organizing principles Mechanistic Organic
Top-down Bottom-up
centralized Decentralized

Features of HRM:
• Deals with employees both as individuals and as a group

• Concerned with the development of human resources

• Covers all levels (lower, middle and top)

• Applies to all types of organizations

• Aims at attaining the goals of an organization

• Aims at securing unreserved cooperation from all employees.

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HRM Functions:

HRM

Managerial Functions Operative Functions

Planning
Procurement Development Motivation Maintenance Integration Emerging
Organizing and Issues
Job Analysis Training Compensation Health and Grievance
Leading Safety Personnel
HR Planning Executive Job Design Discipline records
Controlling Development Employee
Recruitment Work Teams and Personnel
Welfare
Career scheduling Team work audit
Selection planning Social
Motivation Collective Personnel
Placement Security
Succession Bargaining research
Measures
planning Job Evaluation
Induction Participation HR
Human Performance Accounting
Internal Empowerment
resource Appraisal
Mobility
development HRIS
Compensation Trade Unions
strategies
administration Job stress
Employers’
Incentives and associations Mentoring
Benefits
Industrial Internation
Relations al HRM

Managerial Functions:

Planning: This function deals with the determination of the future course of action to achieve
desired results. Planning of personnel today prevents crises for tomorrow. The HR manager is
expected to determine the personnel programme regarding recruitment, selection and training
of employees.

Organizing: This function is primarily considered with proper grouping of personnel activities,
assigning of different groups of activities to different individuals and delegation of authority.
Creation of a proper structural framework is his primary task.

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Directing: This involves supervising and guiding the personnel. Direction then consists of
motivation and leadership.

Controlling: Controlling function comprises measuring the employees’ performance, correcting

negative deviations and industrial assuring an efficient accomplishment of plans. It ensures that
the activities are being carried out in accordance with stated plans.

Operative Functions:

Procurement: It is concerned with procuring and employing people who possess necessary skill,
knowledge and aptitude.

Job Analysis: It is the process of collecting information relating to the operations and
responsibilities pertaining to a specified job.

HR Planning: It is the process of determining and assuring that the organization will have
adequate number of qualified persons, available at proper times, performing jobs which would
meet their needs and provide satisfaction for the individuals involved.

Recruitment: It is the process of searching for prospective employees and stimulating them to
apply for the jobs in the organization.

Selection: It is the process of ascertaining qualifications, experience, skill and knowledge of an

applicant with a view to appraise his/her suitability to the job in question.

Placement: It is the process of matching the employee’s qualifications, experience, skills and
interest with the job on offer. It is the HR manager’s responsibility to position the right
candidate at the right level.

Induction: It is the technique by which a new employee is rehabilitated in his new surroundings
and introduced to the practices, policies and people.

Internal Mobility: It is the movement of employees from one job to another through transfer
and promotion.

Development: It is the process of improving, moulding, changing and developing the skills,
knowledge, creative ability, aptitude, attitude, values and commitment based on present and
future requirements both at individual’s and organization’s level.

Training: It is a continuous process by which employees learn skills, knowledge, abilities and
attitudes.

Executive Development: It is a systematic process of developing managerial skills and

capabilities through appropriate programmes.

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Career planning: It is the planning of one’s career and implementation of career plans by means
of education, training, job search and acquisition of work experiences.

Succession planning: It implies identifying, developing and tracking key individuals for executive
positions.

Human resource development strategies: It creates a climate that enables every employee to
develop and use his capabilities in order to further both individual and organizational goals.

Motivation and Compensation: It is a process which inspires people to give their best to the
organization through the use of intrinsic and extrinsic rewards.

Job Design: Organizing tasks, and responsibilities towards having a productive unit of work.

Work scheduling: Scheduling work to motivate employees through job enrichment, shorter
work weeks, flexi time, work sharing and home work assignments.

Motivation: Combining forces that allow people to behave in certain ways. Managers generally
try to motivate people through properly administered rewards.

Job Evaluation: Job evaluation is the systematic process of determining the relative worth of
jobs in order to establish which jobs should be paid more than others within the organization.

Performance Appraisal: It is the method of evaluating the behavior of employees at the

workplace. This process involves determining and communicating to an employee how he or
she is performing and ideally, establishing a plan of improvement.

Compensation administration: It is process of dividing how much an employee should be paid.

Incentives and Benefits: In addition to a basic wage structure, most organizations nowadays
offer incentives compensation based on actual performance.

Maintenance: It aims at protecting and preserving the physical and psychological health of
employees through various welfare measures.

Health and Safety: HR Manager must ensure a work environment that protects employees from
physical hazards, unhealthy conditions and unsafe acts of personnel.

Employee Welfare: It includes the services, amenities and facilities offered to employees within
or outside the establishment for physical, psychological and social well being.

Social Security Measures: Management provides social security to their employees in adition to
fringe benefits.

Integration: This tries to integrate the goals of an organization with employee aspirations
through various employee oriented programmes.

Grievance redressal: A grievance is any factor involving wages, hours or conditions of

employment that is used as a complaint against the employer.

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Discipline: It is the force that prompts an individual or a group to observe the rules, regulations
and procedures, which are deemed necessary for the attainment of an objective.

Teams and Team work: Teams enhance employee involvement and have the potential to create
positive synergy.

Collective Bargaining: It is the process of agreeing on a satisfactory labour contract between

management and labour.

Employee participation: Participation means sharing the decision-making power with the lower
ranks of an organization.

Empowerment:

Trade Unions: Trade union is an association either of employees or independent workers.

Industrial Relations: Harmonious industrial relations between labour and management are
essential to achieve industrial growth and higher productivity.

Emerging Issues:

Personnel records: Personnel records are maintained to have tangible record of hat is actually
happening in an organization and to formulate appropriate HR policies and programmes from
time to time.

HR audit: HR audit refers to an examination and evaluation of policies, procedures and

practices to determine the effectiveness of HRM.

HR research: It is the process of evaluating the effectiveness of human resource policies and
practices and developing more appropriate ones.

HR Accounting: It is the measurement of the cost and value of human resources to the
organization.

HRIS: HRIS is an integrated system designed to improve the efficiency with which HR data is
compiled.

Job stress: Companies are closely looking at what should be done to promote the physical and
mental well being of employees through proper counseling and employee development
programmes.

International HRM: International business is important to almost every business today and so
firms must increasingly managed with a clear global focus.

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Objectives of HRM:
The objectives of HRM may be as follows:

To create and utilize an able and motivated workforce, to accomplish the basic
organizational goals.
To establish and maintain sound organizational structure and desirable working
relationships among all the members of the organization.
To secure the integration of individuals and groups within the organization by
coordination of the individual and group goals with those of the organization.
To create facilities and opportunities for individual or group development so as to match
it with the growth of the organization.
To attain an effective utilization of human resources in the achievement of
organizational goals.
To identify and satisfy individual and group needs by providing adequate and equitable
wages, incentives, employee benefits and social security ad measures for challenging
work, prestige, recognition, security, status, etc.
To maintain high employee morale and sound human relations by sustaining and
improving the various conditions and facilities.
To strengthen and appreciate the human assets continuously by providing training and
development programmes.
To consider and contribute to the minimization of socio-economic evils such as
unemployment, under-employment, inequalities in the distribution of income and
wealth and to improve the welfare of the society by providing employment
opportunities to women and disadvantaged section sections of the society, etc.
To provide an opportunity for expression and voice in management.
To provide fair, acceptable and efficient leadership.
To provide facilities and conditions of work and creation of favorable atmosphere for
maintaining stability of employment.

HRM policies, procedures and programmes:

After the establishment of objectives of HRM, human resources policies are to be
formulated. Policies are the general statements that guide thinking and action in decision
making.

Definition of Personnel Policy:

A policy is a plan of action. Brewster and Richbell defined HRM policies as, “a set of
proposals and actions that act as a reference point for managers in their dealings with
employees”. “Personnel policies constitute guide to action. They furnish the general
standards or basis on which decisions are reached. Their genesis lies in an organization’s
values, philosophy, concepts and principles”. Personnel policies guide the course of action

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intended to accomplish personnel objectives. The following example helps to understand

the personnel policy clearly.

Example:

Personnel Policy of ABB India:

Satisfied customers and motivated employees are of vital importance to ABB’s long term
competitiveness. Each employee shall:

Understand his/ her role.

Have the necessary empowerment.
Take responsibility.
Develop his/her competence, knowledge, will and ability.
Clearly defined objectives for both the individual and the work team shall be the
cornerstone of our activities.
Respect for, and confidence in the individual shall characterize our work
environment. This must be safe and stimulating.
The local unions shall be natural co-operation partners.
Each manager at ABB shall continually develop his/her management skills and
leadership so as to be able to assume full responsibility for the employees.
Planning discussions shall be held at least once a year with each individual
employee.
The goal of our learning organization is to achieve a continuous development of
competence, internal mobility as well as employee development and to provide
career opportunities consistent with abilities.
Ethics, equal opportunities and an open and honest exchange of thoughts and
ideas are the corner stone of our actions.
The implementation of the personnel policy is a strategic issue in which we must
all participate.

Procedures:

Policies are general instructions whereas procedures are specific applications. A procedure is a
well thought out course of action. It prescribes the specific manner in which a piece of work is
to be done. Procedures are called “action guidelines”. They are generally derived from policies.
Where policies define a broad field, procedures show a sequence of activities within that area.
The emphasis is on chronological, step-by-step sequence of required actions.

Example of policy and procedure:

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Pay Policy of Andhra Bank:

The bank believes in paying at least the prevailing scale of salary for similar work in comparable
organizations. The bank also believes in giving consideration to significant changes in the cost of
living.

The procedure is:

Fix the pay of clerks, cashiers, typists equal to the lowest pay given by any public sector bank in
the country. Fix the pay of officers according to the recommendations of the Pillai Committee.

Further, personnel rules and programmes help in translating procedures into concrete action.
Personnel rule spells out specific required action or non action allowing no discretion.

For example:

Paying bonus of 8.33 % of the salary (consisting of pay plus dearness allowance) on March 31,
2009 to all the confirmed employees who had completed minimum one year of continuous service
as on March 31, 2009.

Personnel programmes are complex set of goals, policies, procedures, rules, steps to be taken,
resources to be employed, and other elements necessary to carry out a given course of action.

Organization of HRM:
The structure of a personnel department depends on various factors such as nature and size of
the organization, managerial preference to structure operations, external forces. Small firms
have only a single section, headed by a personnel officer taking care of everything. Medium
sized firms may create a separate personnel department having experts in the personnel field
supported by administrative staff. In large firms the structure of the HR Department may take
various shapes, depending on organizational resources, competitive pressures and total
employee strength.

HR department in Line Organization:

In this structure authority flows in a direct line from supervisors to subordinates. Managers
have full authority in their areas of operation and are responsible for final results.

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Chief Executive

Personnel Manager

Recruiting Officer Training Manager Compensation Welfare

Manager Officer

Assistants Assistants Assistants Assistants

HRM department in a Functional Organization:

Here all activities of an organization are divided into various functions. Each functional area is
headed by a specialist who directs the activities of that area for the entire organization.

Chief Executive

Personnel Manager

Recruiting Officer Training Manager Compensation Welfare

Manager Officer

Assistants Assistants Assistants Assistants

HR Department in Divisionalised organizational structure:

The HR manager at divisional/branch level is responsible to the local divisional/branch manager

in a line sense and subordinate to the Manager-HR at the head office in a staff or functional
sense.

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Managing Director

General Manager

Manager Manager Manager Manager Manager HR

Marketing Finance Production R&D

Manager Manager Manager

Southern Region Central Region Northern Region

Deputy Manager Deputy Manager Deputy Manager

Marketing Production HR

Branch Manager Branch Manager Branch Manager

Nagpur New Delhi Mumbai

Officer Officer Officer HR

Marketing Production

HR Department in Matrix Organization Structure:

In a matrix organization structure, employees have two superiors, in that they are under dual
authority. One chain of command is functional and the other is a project team.

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Managing Director

General Manager

Manager Manager Manager

Automobile Machines Electricals

Supporting Functional Assistance to projects

Production Marketing HR Finance

HR Group
Project A
HR Group
Project B
HR Group
Project C

Line and staff responsibility of a Personnel/HR Manager:

Personnel/HR Manager in a line responsibility:

The HR manager has the responsibility of attaining the goals of their respective departments by
striking a harmonious balance between resources, facilities and personnel.

Personnel/HR Manager in a staff function:

Staff functions related to personnel manager are advising, assisting, guiding, suggesting,
counseling and providing information to line managers.

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Roles of HR Manager:
They perform mainly three types of roles, while meeting the requirement of employees and
customers.

Administrative roles:

Policy maker: The HR Manager helps management in the formation of policies. He also
helps in interpreting personnel policies in an appropriate manner.
Administrative expert: The administrative role of an HR manager is heavily oriented to
processing and record keeping.
Advisor: The HR manager performs his functions by advising, suggesting, counseling and
helping the line managers in discharging their responsibilities relating to grievance
redressal, conflict resolution, employee selection and training.
Counselor : The HR Manager discusses various problems of employees relating to work
and advises them on minimizing and overcoming problems, if any.
Welfare officer: As a welfare officer he is expected to take care of safety, health and
welfare of employees. The HR managers are often asked to oversee if everything is in
line with the company legislation and stipulation.
Legal consultant: HR manager interprets and implements the labour laws for the
organization.

Operational roles:

Recruiter: HR manager is involved in the talent acquisition process for the organization.
Trainer, developer, and motivator: HR Managers find skill deficiency from time to time,
offer meaningful training opportunities and bring out the potential of people through
intrinsic and extrinsic rewards which are valued by employees.
Coordinator/linking pin: The HR manager is often deputed as a linking pin between
various divisions/ departments of an organization.
Mediator: The HR manager acts as the friction between the employees and the
management with the sole objective of maintaining industrial harmony.
Employee champion: HR managers carries out all kinds of work like-
 Placing people on the right job
 Charting a suitable career path
 Rewarding good performance
 Resolving differences
 Adopting family-friendly policies
 Ensuring fair and equitable treatment
 Striking balance between employee expectations and Organisational
requirements
 Representing workers' problems and concerns to management

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Strategic roles:

Change agent: HR Manager tries to build the organization’s capacity to embrace and
capitalize on change.HR manager helps an organization indentify the key success factors
for change and assess the organization’s strengths and weaknesses regarding each
factor. It makes sure that the change initiatives that are focused on creating high
performing teams, reducing cycle time for innovation or implementing new technology
are defined, developed and delivered in a timely manner.
Strategic partner: HR manager must deliver strategic services cost effectively by building
the competent and consumer oriented workforce. While implementing strategies, HR
should develop appropriate ways to restructure work processes smoothly.

Qualities of HR Manager:
Personal Attributes: initiative, resourcefulness, depth of perception, maturity in judgment,
analytical ability, intellectual integrity, freedom from bias and should be thorough with labor
laws.

Intelligence: skills to communicate, articulate, moderate, understand, command over

language, mental ability and tact in dealing with people intelligently, ability to draft
agreements, policies, etc.
Educational skills: possess learning and teaching skills, teach employees about the
organizational growth, need for and mode of development of individuals, etc.
Discriminating skills: ability and discretion to discriminate between right and wrong,
between just and unjust, merit and demerit.
Executing skills: execute the management’s decisions regarding personnel issues with
speed, accuracy and objectivity. He should be able to set standards of performance,
while coordinating, controlling, and creating productive work spaces.

Experience and Training: previous experience in HRM, training in psychological aspects of

human behavior, labor legislations.

Professional attitudes: He should have patience and understanding and the ability to listen
before offering advice. He should have the knowledge of various disciplines like technology,
engineering, management, sociology, psychology, philosophy, human physiology, economics,
commerce and law.

HR Manager as a strategic partner:

In today’s organizations, to guarantee their viability and ability to contribute, HR managers
need to think of themselves as strategic partners. In this role, the HR person contributes to the
development of and the accomplishment of the organization-wide business plan and objectives.

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The HR business objectives are established to support the attainment of the overall strategic
business plan and objectives. The tactical HR representative is deeply knowledgeable about the
design of work systems in which people succeed and contribute. This strategic partnership
impacts HR services such as the design of work positions; hiring; reward, recognition and
strategic pay; performance development and appraisal systems; career and succession
planning; and employee development.

Factors influencing HRM:

Technological Factors: An organization’s technology is the process by which inputs
from an organization’s environment are transformed into outputs. The impact of
technology on HRM are as follows:
 New skills required: As new technologies are developed and implemented, there
is an urgent need to upgrade existing employees skills and knowledge if the
organization wants to survive, flourish in a competitive world.
 Downsizing: New technologies have decimated many lower-end jobs with
frustrating regularity. Increased automation has reduced employee head counts
everywhere.
 Collaborative work: Technological change has resulted in hierarchical distinctions
being blurred and more collaborative team work where managers, technicians
and analysts work together on projects.
 Telecommuting: The rapid advances in technology have led to the relocation of
work from office to home.
 Internet and intranet resolutions: Internet and information technology have
enabled companies to become more competitive by cutting costs.

Economic Challenges: Nowadays the world is shrinking in all major respects. People,
goods capital and information are moving around the globe as never before. In the new
global marketplace, HR managers are required to play a challenging role and create a
competitive advantage for the firm.

Political Factors: Political stability, political parties and their ideologies, formation of
new political parties splits in and amalgamation of existing parties influence the
functioning of trade unions in an organization. This in turn, leads to formation of new
unions or splitting up of existing unions.

Social Factors: Social impacts have to be carefully evaluated before undertaking any
action programme.

Local and Governmental issues: The government has come out with complex set of
rules and regulations on the employment policy of the organizations by reserving a
certain number of jobs of all categories to certain sections of the community. So the

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management has to abide by the rules and regulations of the government imposed from
time to time.

Unions: The unions have turned increasingly to governmental action as a means of

achieving their objectives in addition to using the more traditional actions.

Workforce Diversity: Diversity in the field of HRM can be defined as the situation that
arises when employees differ from each other in terms of age, gender ethnicity,
education etc. These factors influence the management of workforce.

Mission: At various levels, people must carry out assigned tasks keeping the overall
mission of the firm in mind.

Policies: Policies offer guidance for thinking. Policies are to be considered while making
decisions.

Organizational culture: The challenge of HR managers is to adjust to the culture of the

organization. They have to choose best paths that best reflect the culture of the firm
and the attitudes of the people.
Organizational structure: Organizations consist of people who are united by a common
purpose. The approaches adopted to manage people in different types of organization
structure differ.

HR systems: The HR system in an organization is not only a unique sub-system but also a
principal and central sub-system, as it operates and control all other sub-system.

Challenges in HRM:
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: 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

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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 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: 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 educated and uneducated,
managing the relations will be of great challenge.

Review Questions:
1. Define HRM. Outline its objectives.
2. Explain in brief the nature and scope of HR function in an organization.
3. Discuss the historical evolution of HRM.
4. Differentiate between personnel management and human resources management.
5. Explain the features of HRM.
6. What are the various functions of HRM?
7. Describe the objectives of HRM.
8. Define HR Policies, Procedures and Programmes.
9. Explain the line-staff relationship of HRM.
10. What are the various roles played by a HR Manager?
11. What are the qualities required for a person to become HR Manager?
12. Discuss the factors influencing HRM.
13. Discuss the challenges in HRM.

Department of Management Studies, SDMCET, Dharwad

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Human Resource Management (08MBA25) Module 1

Case Study:
National Bank of India is the biggest commercial bank in the country with its head office at
Mumbai. It has 6,000 branch offices across the country. It has been managing these branches
with 20 regional offices located in important places in the country. One of those regional offices
is located in Agra.

Mr. Kamlesh Sharma is the Regional Manager of Agra Region and Mr. Shankar Dayal is the HR
Manager at Agra Regional Office. Mr. Purohit is working as the Chief HR Manager at the central
office, Mumbai. Earlier, the central office used to select candidates for different job and allot
them to different regions. But the bank has recently decided to decentralize the hiring process
and hence asked all the Regional Managers to select their own candidates. Mr.Kamlesh Sharma
asked various departmental heads at regional office and branch managers to rewrite job
description, job specialization, estimate man power needs and send them directly to him.
Mr.Shankar Dayal has received a letter to this effect in the capacity of head of personnel
department in the regional office. Immediately he met Mr.Kamlesh Sharma and told him that
his job was to prepare job description, job specification, estimate manpower for the entire
region and as such, he would be authorized to do all those functions instead of departmental
heads at the regional office and branch managers. But the regional manager did not accept his
request and told Mr.Shankar Dayal that things would go according to his own instructions. Mr.
Shankar Dayal told the regional Manager not to discount his request and restore his positional
authority.

Questions:

1. What is the main problem in this case?

2. What should be done to resolve the conflict between the Regional Manager and the
Regional HR Manager?

References:
Human Resource Management- V.S.P. Rao

Human Resource Management- K. Ashwatappa

Essentials of Human Resource Management and Industrial Relations - P. Subba Rao

Department of Management Studies, SDMCET, Dharwad

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