Introduction to HRM

• Human resource management is a strategic approach to the effective

management of people in an organization, so that they help the
business gain a competitive advantage.
• HR is primarily concerned with the management of people within
organizations, focusing on policies and systems.
• Human Resource Management is the purpose of acquiring, training,
appraising, and compensating employees, and of attending to their
labor relations, health and safety, and fairness concerns.
• It represents a broad based understanding of the problems of people
and their management in view of the development of behavioral
science knowledge.
• Human resources overall purpose is to ensure that the organization is
able to achieve success through people.
• HR professionals manage the human capital of an organization and
focus on implementing policies and processes.
• HRM plays a strategic role in managing people and the workplace
culture and environment.
• If effective, it can contribute greatly to the overall company direction
and the accomplishment of its goals and objectives.
Features of HRM
• It is pervasive in nature as it is present in all enterprises.
• Its focus is on results rather than on rules.
• It tries to help employees develop their potential fully.
• It encourages employees to give their best to the organization.
• Its all about people at work, both as individuals & groups.
• It tries to put people on assigned jobs in order to produce good
results.
• it helps an organization meet its goals in the future by providing for
competent and well motivated employees.
• It tries to build and maintain cordial relations between people
working at various levels in the organization.
• It is a multi disciplinary activity, utilizing knowledge and inputs drawn
from psychology, economics etc.
Importance
• An organization cannot build a good team of working professionals
without good human resources.
• The key functions of Human Resource Management (HRM) team
include recruiting people, training them, performance appraisals,
motivating employees as well as workplace communication,
workplace safety and much more. The beneficial effects are follows:
Human Resource Planning – 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.
• Job analysis design – job analysis gives a detailed explanation about
each and every job in the company. it is a procedure for to determine
the duties and characteristics of a person occupying a position.
• Job analysis produces information regarding job descriptions(a list of
responsiilities) and job specifications(what kind of people to hire for
the job).
Recruitment & selection – this is one of the major responsibilities of
the HR team. The HR managers come up with plans and strategies for
hiring the right kind of people.
• They design the criteria which is best suited for a specific job
description. Their other tasks related to recruitment include
formulating the obligations of an employee and the scope of tasks
assigned to him /her.
• Based on these two factors, the contract of an employee with the
company is prepared. When needed, they also provide training to the
employees according to the requirement of the organization.
Orientation & induction – once the employees have been selected an
induction or orientation program is conducted. 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.
Training & 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 the existing staff that have a
lot of experience.
Performance appraisals – HRM encourages the people working in an
organization, to work according to their potential and gives them
suggestions that can help them to bring about improvement in it.
• The team communicates with the staff individually from time to time
and provides all the necessary information regarding their
performance and also defines their respective roles.
• Performance appraisals , when taken on a regular basis, motivate the
employees.
Compensation planning & remuneration – there are various rules
regarding compensation and other benefits. It is the job of the human
resource department to look into remuneration and compensation
planning.
Motivation, welfare, health & safety – motivation becomes important
to sustain the number of employees in the company. It is the job of
the HR department to look into different methods of motivation.
Apart from this, certain healthy and safety regulations have to be
followed for the benefits of the employees. This is also handled by HR
department.
Maintaining work atmosphere – this is a vital aspect of HRM because
of the performance of an individual in an organization is largely driven
by the work atmosphere or work culture that prevails at the
workplace.
• A good working condition is one of the benefits that the employees
can expect from an efficient human resource team.
• A safe, clean, and healthy environment can bring out the best in an
employee.
• A friendly atmosphere gives the staff members job satisfaction as
well.
Managing disputes – in an organization, there are several issues on
which disputes may arise between the employees and the employers.
Conflicts are almost inevitable.
• In such a scenario HR department which acts as a consultant and
mediator to sort out those issues in an effective manner.
• They take timely actions and prevent things from going out of hands.
Developing public relations – the responsibility of establishing good
public relations lies with the HRM to a great extent.
• They organize business meetings, seminars and various official
gatherings on behalf of the company in order to build up relationships
with other business sectors.
• Sometimes, the HR department plays an active role in preparing the
business and marketing plans for the organization too.
Scope & objectives
Scope
Personnel aspect – this is concerned with manpower planning,
recruitment, selection, placement, transfer, promotion, training &
development, layoff and retrenchment, remuneration, incentives,
productivity etc.
Welfare aspect – it deals with working conditions and amenities such
as canteens, rest and lunch rooms, housing, transport, medical
assistance, education, health & safety, recreation facilities etc.
Industrial relations aspect – this covers union management relations,
joint consultation, collective bargaining, grievance & disciplinary
procedures, settlement of disputes etc.
Objectives
• To help the organization reach its goals.
• To ensure effective utilization and maximum development of human
resources.
• To ensure respect for human beings.
• To identify & satisfy the needs of individuals.
• To ensure reconciliation of individual goals with those of the
organization.
• To achieve & maintain high morale among employees.
• To provide the organization with well trained and well motivated
employees.
• To increase to the fullest the employee’s job satisfaction and self
actualization.
• To develop and maintain a quality of work life.
• To be ethically and socially responsive to the needs of the society.
• To develop overall personality of each employee in its multi
dimensional aspect.
• To enhance employees capabilities to perform the present job.
• To equip the employees with precision and clarity in transaction of
business.
• To inculcate the sense of team spirit, team work and inter team
collaboration.
Evolution of HRM
• A formal beginning of HRM functions in India was made in 1929,
when the Royal Commission on Labour was set up by the
Government of India.
• Two years later, the commission submitted its report recommending
the appointment of labour officers to look after the employment &
dismissal of workers as well as their working conditions.
• the scope of the function of Labour officer was widened during the
Second World War, when such facilities as housing, medical and
recreational, activities were added to their existing responsibilities.
• In the process the labour officer got designated as Welfare Officer (W.O.).
• The enactment of Industrial Disputes Act, 1946 and Factories Act, 1947
further added the management of leave, wages, bonus and retirement in
the scope of the function of the W.O.
• Growth in the business, competition and increasing size during sixties and
seventies led to the need for attracting and retaining talented people.
• Hence formulating policies on HR Planning, recruitment & selection,
training & development, performance & potential appraisal, compensation
management etc. also become a part of the functions of the W.O., who
now became the personal manager.
• With the increasing recognition of the importance of human
resources and their contribution to the survival of the organizations,
personnel function has now been called as Human Resource
Management functions.
• Some of the reasons for this transition have been the increasing cost
of labour, periodic stoppage of work, government legislations,
changes in production and distribution methodologies, information
technology and strategic use of employee contribution.
• Today, HRM function can be seen as the amalgam of organizational
behavior, personnel management, industrial relations & labour
relations.
HRM functions
Organizational behavior – it is a field of study that tries to examine
why people behave the way they do.
• It focuses on the behavior of the employees at the levels of an
individual, group and total organization.
• Such topics as motivation, job satisfaction, communication,
supervision, inter and inter group behavior, organizational
development, structures and designs are examined to develop
sensitivity to human factors in organizations.
Personnel Management - It studies policy formulation, and
implementation on such issues as human resource planning,
recruitment & selection, training & development, performance &
potential appraisal, promotions, transfers, quality of working life and
compensation management etc.
Industrial relations and labor legislations – deals with union
management relationship, union structure, collective bargaining,
grievance handling, discipline management and implementation of
various labor legislations.
Line & staff aspects of Human Resource
Management
• Conventionally, HR functions are divided into two categories: these are line
functions and staff (advisory) functions.
• Line functions are concerned with the management of HR department. HR
manager has to ensure that all activities relating to hiring and retaining
employees are smoothly carried out in his department. They include HR
planning, job analysis, recruitment & selection, induction training,
performance & potential appraisal, internal mobility, training &
development, compensation management, union management,
motivational schemes etc.
• Line authority gives managers the right to issue orders to other managers
or employees. It creates a superior-subordinate relationship.
• The staff or advisory functions, refers basically to assisting other
mangers in performing their duties without creating human
problems. HR mangers may educate other managers on such issues as
sexual harassment, conducting surveys on various issues,
employment of employees belonging to special groups, helping in
setting up compensation packages, dealing with indiscipline, and
other problems of managing human resources. This is an important
function because it ensures smooth flow of activities in the
organization.
• Staff authority gives the managers the right to advise other managers
or employees. It creates an advisory relationship.
• Both these roles require the HR manger to focus on policy
formulation and /or review and implementation relating to
management of people in the organization.
Line managers
• The direct handling of people has always been an integral part of
every line manager’s duties, from president down to first line
supervisors.
• Line managers responsibilities for effective HR management falls
under these general headings:
oPlacing the right person on the right job.
oStarting new employees in the organization.
oTraining employees for jobs that are new to them.
oImproving the job performance of each person.
oGaining cooperation and developing smooth working relationships
oInterpreting the company’s policies & procedures
oControlling labor costs
oDeveloping the abilities of each person
o creating & maintaining department morale
oProtecting employees health & physical condition.
• In small organizations, line managers may carry out all these
personnel duties unassisted.
• But as the organization grows, they need the assistance, specialized
knowledge and advice of a separate HR staff.
• The HR department provides this specialized assistance.
Duties of HR managers
• In providing specialized assistance, the HR manager carries out three
distinct functions.
 A line function - the HR manager directs the activities of the people
in his or her own department, and perhaps in related areas.

A coordinative function – the HR manager also coordinates personnel

activities, a duty often referred to as functional authority. Here, he or
she ensures that line managers are implementing the firm’s human
resource policies and practices.
Staff (assist and advice) functions – assisting & advising line
managers is the heart of the human resource manager’s job.
• HR assists in hiring, training, evaluating, rewarding, counseling,
promoting and firing employees.
• It administers various benefit programs (health & accident insurance,
retirement, vacation and so on).
• It helps line managers comply with equal employment & occupational
safety laws, and plays an important role in handling grievances, &
labor relations.
• It carries out an innovator role, by providing up to date information
on current trends and new methods for better utilizing the company’s
employees.
• It plays an employee advocacy role, by representing the interests of
employees within the frame work of its primary obligation to senior
management.
• Examples of HR management specialties include :
oRecruiters – search for qualified job applicants.
oHR Development Specialists – manage employee development
activities in an integrated manner.
oEngagement & fun specialists – ensure that the workplace is fun filled and
enjoyable.
oEmployee welfare officer – take care of welfare amenities for employees
prescribed by law or otherwise.
oJob analysts – collect & examine information about jobs to prepare job
descriptions.
oCompensation managers – develop compensation plans and handle the
employee benefits program.
oTraining specialists – plan, organize, and direct training activities.
oEmployment/industrial relations specialists – advise management on all
aspects of union management relations.
Human capital management
• Human capital management (HCM) is the comprehensive set of
practices for recruiting, managing, developing and optimizing the
human resources of an organization.
• It is viewed as a comprehensive business management strategy that is
integrated with every aspects of the organization and takes a more
people centered and strategic approach to business than HRM.
• HCM provides greater emphasis on measurement, efficiency, and the
creation of value for the organization.
• HCM is an approach to employee staffing that perceives people as
assets(human capital)whose current value can be measured and
whose future value can be enhanced through investment.
• We can say that human capital is well employed human resource that
is actively engaged in meaningful, worthwhile work and delivering
some level of desired productivity.
• Human capital is the knowledge, skills & abilities that add value to an
organization. Human resources are the function within the company
responsible for managing human capital.
• Human resource function performs work according to the law and
company directives. HCM is related to all employees issues and other
elements such as employment, compensation and development etc.
• HCM views people as investments in human capital rather than costs.
Thus HCM sees employees as capital assets of the organization, much
like plant & equipment.
• Human capital is the skills, knowledge, & experience gained in an
organization by people that represents a value investment or resource
to that organization.