1 CHAPTER : INTRODUCTION TO HRM

Definition - Edwin Flippo defines HRM as planning, organizing, directing, controlling of procurement, development, compensation, integration , maintenance and separation of human resources to the end that individual, organizational and social objectives are achieved. Features of HRM or characteristics or nature 1. HRM involves management functions like planning, organizing, directing and controlling 2. It involves procurement, development, maintenance of human resource 3. It helps to achieve individual, organizational and social objectives 4. HRM is a multidisciplinary subject. It includes the study of management psychology communication, economics and sociology. 5. It involves team spirit and team work. 6. It is a continuous process. Evolution of HRM The evolution of HRM can be traced back to Kautilyas Artha Shastra where he recommends that government must take active interest in public and private enterprise. He says that government must provide a proper procedure for regulating employee and employee relation In the medieval times there were examples of kings like Allaudin Khalji who regulated the market and charged fixed prices and provided fixed salaries to their people. This was done to fight inflation and provide a decent standard of living During the pre independence period of 1920 the trade union emerged. Many authors who have given the history of HRM say that HRM started because of trade union and the First World War. The Royal commission in 1931 recommended the appointment of a labour welfare officer to look into the grievances of workers. The factory act of 1942 made it compulsory to appoint a labour welfare officer if the factory had 500 or more than 500 workers. The international institute of personnel management and national institute of labour management were set up to look into problems faced by workers to provide solutions to them. The Second World War created awareness regarding workers rights and 1940s to 1960s saw the introduction of new technology to help workers. The 1960s extended the scope of human resource beyond welfare. Now it was a combination of welfare, industrial relation, administration together it was called personnel management. With the second 5 year plan, heavy industries started and professional management became important. In the 70s the focus was on efficiency of labour while in the 80s the focus was on new technology, making it necessary for new rules and regulations. In the 90s the emphasis was on human values and development of people and with liberalization and change in style of working people became more and more important there by leading to HRM which is an advancement of personnel management.

Scope of HRM/functions of HRM Start with defn of HRM-------------------------The scope of HRM refers to all the activities that come under the banner of HRM. These activities are as follows 1. Human resources planning :Human resource planning or HRP refers to a process by which the company to identify the number of jobs vacant, whether the company has excess staff or shortage of staff and to deal with this excess or shortage. 2. Job analysis design :Another important area of HRM is job analysis. Job analysis gives a detailed explanation about each and every job in the company. Based on this job analysis the company prepares advertisements. 3. Recruitment and selection :Based on information collected from job analysis the company prepares advertisements and publishes them in the news papers. This is recruitment. A number of applications are received after the advertisement is published, interviews are conducted and the right employee is selected thus recruitment and selection are yet another important area of HRM. 4. Orientation and induction :Once the employees have been selected an induction or orientation program is conducted. This is another important area of HRM. The employees are informed about the background of the company, explain about the organizational culture and values and work ethics and introduce to the other employees. 5. Training and development :Every employee goes under training program which helps him to put up a better performance on the job. Training program is also conducted for existing staff that have a lot of experience. This is called refresher training. Training and development is one area were the company spends a huge amount 6. Performance appraisal :Once the employee has put in around 1 year of service, performance appraisal is conducted that is the HR department checks the performance of the employee. Based on these appraisal future promotions, incentives, increments in salary are decided. 7. Compensation planning and remuneration :There are various rules regarding compensation and other benefits. It is the job of the HR department to look into remuneration and compensation planning. 8. Motivation, welfare, health and safety :Motivation becomes important to sustain the number of employees in the company. It is the job of the HR department to look into the different methods of motivation. Apart from this certain health and safety regulations have to be followed for the benefits of the employees. This is also handled by the HR department. 9. Industrial relations :Another important area of HRM is maintaining co-ordinal relations with the union members. This will help the organization to prevent strikes lockouts and ensure smooth working in the company.

Challenges before the HR manager/before modern personnel management Personnel management which is know as human resource management has adapted itself to the changing work environment, however these changes are still taking place and will continue in the future therefore the challenges before the HR manager are 1. Retention of the employees :One of the most important challenge the HR manager faces is retention of labour force. Many companies have a very high rate of labour turnover therefore HR manager are required to take some action to reduce the turnover 2. Multicultural work force :With the number of multi cultural companies are increasing operations in different nations. The work force consists of people from different cultures. Dealing with each of the needs which are different the challenge before the HR manager is integration of multicultural labour work force. 3. Women in the work force :The number of women who have joined the work force has drastically increased over a few years. Women employees face totally different problems. They also have responsibility towards the family. The organization needs to consider this aspect also. The challenge before the HR manager lies in creating gender sensitivity and in providing a good working environment to the women employees. 4. Handicapped employees :This section of the population normally faces a lot of problems on the job, very few organization have jobs and facilities specially designed for handicapped workers. Therefore the challenge before the HR manager lies in creating atmosphere suitable for such employees and encouraging them to work better. 5. Retrenchment for employees :In many places companies have reduced the work force due to changing economic situations, labourers or workers who are displaced face severe problems. It also leads to a negative atmosphere and attitude among the employees. There is fear and increasing resentment against the management. The challenge before the HR manager lies in implementing the retrenchment policy without hurting the sentiments of the workers, without antagonizing the labour union and by creating positive attitude in the existing employees. 6. Change in demand of government :Most of the time government rules keep changing. While a lot of freedom is given to companies some strict rules and regulations have also been passed. The government has also undertaken the disinvestment in certain companies due to which there is fear among the employees regarding their job. The challenge before the HR manager lies in convincing employees that their interest will not be sacrificed. 7. Initiating the process of change :Changing the method of working, changing the attitude of people and changing the perception and values of organization have become necessary

4 today. Although the company may want to change it is actually very difficult to make the workers accept the change. The challenge before the HR manager is to make people accept change. 8. Employee discipline and grievance procedure: The HR manager should be able to introduce disciplinary measures in the organization in such a manner that he brings impartiality in the procedure and he should inform employees about the grievance procedure of the organization so that any employee who has a grievance knows what he needs to do and whom he has to approach. The procedure should be implemented in the true spirit only then will the employees believe and take interest in the working of the organization. Implementing the right procedure and maintaining the right discipline is the challenge for the HR manager. OBJECTIVES OF HRM Start with defn of HRM and features of HRM Then explain 1. Individual objectives 2. Organizational objectives 3. Social objectives Then explain all the points from the answer- functions of HRM Advantages/benefits/Significance/importance/need of HRM HRM becomes significant for business organization due to the following reasons. 1. Objective :HRM helps a company to achieve its objective from time to time by creating a positive attitude among workers. Reducing wastage and making maximum use of resources etc. 2. Facilitates professional growth :Due to proper HR policies employees are trained well and this makes them ready for future promotions. Their talent can be utilized not only in the company in which they are currently working but also in other companies which the employees may join in the future. 3. Better relations between union and management :Healthy HRM practices can help the organization to maintain co-ordinal relationship with the unions. Union members start realizing that the company is also interested in the workers and will not go against them therefore chances of going on strike are greatly reduced. 4. Helps an individual to work in a team/group :Effective HR practices teach individuals team work and adjustment. The individuals are now very comfortable while working in team thus team work improves. 5. Identifies person for the future :Since employees are constantly trained, they are ready to meet the job requirements. The company is also able to identify potential employees who can be promoted in the future for the top level jobs. Thus one of the advantages of HRM is preparing people for the future. 6. Allocating the jobs to the right person :If proper recruitment and selection methods are followed, the company will be able to select the right people for the right job. When this happens the number

5 of people leaving the job will reduce as the will be satisfied with their job leading to decrease in labour turnover. 7. Improves the economy :Effective HR practices lead to higher profits and better performance by companies due to this the company achieves a chance to enter into new business and start new ventured thus industrial development increases and the economy improves. DIFF BETWEEN HR AND PM Start with the defn and features of HRM-----------PM preceded HRM. HRM differs in scope and orientation it views people as an asset and aims at promoting mutuality mutual goals and respect, gives rewards and responsibility. It believes its policies will obtain commitment. PM has limited scope and inverted orientation. Views labour as a tool which can be manipulated for the benefit of the organization and replaced when it s worn out. The dept itself was not treated with respect and was treated as activity meant to hire new employees and maintain records. It was never considered a strategic tool. DIMENSION PM HRM Employment contract beyond contract Rules rules Guide to mgmt actn Mgl task Speed of decision Mgmt role Communicn Pay Labour mgmt Job design Trng & dvpt Shared interests interests Evolution careful delineation of written contract devise clear rules procedures monitoring slow transactional indirect job evaluation collective bargaining contract division of labour controlled access to courses interest of orgn uppermost preceeds hrm aim to go

impatient with business need nurturing fast transformational direct performance related indl contract team work learning cos mutuality of latest in the evoln

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2. Principles of HRM Given the external environment and resources, an organization selects global objectives and a strategy to realize the objectives. These objectives influence the HRM-policy: for example, choosing agricultural activities instead of building roads will result different demand for skills or personnel. In general, HRM activities can be both operational and strategic. Operational HRM concentrates on short- term efforts to meet current, immediate needs of the organization: "Next week we need a book keeper". These activities are carried out without regard to the organizations future tasks. In strategic HRM, all projects, activities etc. are related to the formulation and implementation of overall strategic plans. The organizational strategy, overall goals and this mission of the organization provides the basis for the HRM strategy, which in turn gives rise to the HRM operational activities. Most organizations tend to concentrate on operational HRM, because operational tasks are easier to justify (current need) and because many people involved in HRM processes do not know what action is appropriate from the strategic point of view (because they were not involved in the strategic planning). Afghan Development Association: Human Resource Management Manual Often, strategic plans are not available, in which case HRM can not function strategically. In this case, it will not be able to prepare the organization for any future development, because it will have no basis for preparing its employees for the future, or for hiring personnel in time. This easily results in a qualitative and/or quantities human resource shortage.

Human resources management is guided by very important aspects. These aspects are essential for any business to succeed. Principles of Human Resources Management have been well summarized in 10Cs. Comprehensiveness. This involves the proper management of all aspects of the people you are working with bearing in mind that human resources is the most valuable resource your firm has. This means that the financial, health, transportation, tools and anything employees need to work should be well taken care of. Cost-effectiveness. Companies should ensure that they remunerate their employees accordingly. The employees reward system should be able to sustain the organization. Control. Firms should be able to take charge of their employees and ensure that productivity and quality is achieved and maintained. Control should be exercised carefully so that it does not seem like tyranny. Coherence. All the steps taken by a firm in the management of human resources must be in line with the mission and vision of the firm. Human Resources managers should direct their focus on what the company needs and employee abilities.

7 Communication is very important in every organization. Through communication, firms can ensure there is flow of information that is necessary for efficiency. Creativity is key if a firm is to be efficient in human resources management. Firms should adopt new ways of human resources management as long as it fits their companies. Competence. It is an organizations responsibility to ensure that their employees are skilled to do their duties. Because the competence of a firm depends on that of its employees, firms should do everything to increase employee capabilities for example, by training them. Credibility. Firms must ensure that they remain the best brand to most of their clients by maintaining their credibility. They should put in place strategies that ensure all employees have a clear sense of direction to a common goal. Change is inevitable for businesses. The fastest business to embrace change in management of their human resources is better placed to produce better results. Commitment. Every organization has objectives which they intend to meet both for themselves and for their clients. To meet these goals, firms need committed staff therefore it is the firms responsibility to keep their employees motivated so as to ensure they are committed to the organizations course.