Module 1

Concept of Human Resources

• The term human resources may be
defined as the total knowledge, skills,
creative abilities, talents and aptitudes of
an organisation’s workforce, as well as the
values, attitudes, approaches and beliefs
of the individuals involved in the affairs of
the organisation.
 Elements of Human Capital
1. Intellectual capital
2. Social capital
3. Emotional capital
 Intellectual capital
• It consists of both the stock of knowledge,
skills and expertise that all members of the
organisation collectively possess and the
knowledge and expertise that may be
embedded in or owned by the organisation
including patents, IT based knowledge
systems or specialised process of work.
 Social capital
• Social capital relates to the structure,
quality and flexibility of the human
relationships (networks) both inside the
company and outside.
• External relationships have also been built
with customers, suppliers, enviornmental
pressure groups etc.
 Emotional capital

• Individuals need self-confidence and

courage to convert their knowledge and
relationships into effective action.
• Organisations require high energy and an
environment of pride, trust and openness
to create a bias for speedy action in
rapidly evolving markets.
 Nature of human factor
1. Social Man
2. Rational Man and Complex Man
3. Knowledge worker and wisdom worker
 Social Man

• Hawthorne studies by Elton Mayo;

Organisation is a social system and worker
is a human being.
 The following assumptions about human
beings can be derived from the reports of
Hawthorne experiments:
1. Human beings are basically motivated by
social needs and they obtain their basic sense
of identity through relationships with others.
2. They are more responsive to the social forces
of the peer group than to the incentives and
controls of management.
3. The amount of work to be done by a worker is
not determined by his physical capacity or the
management, but by the social norms.
4. Generally people don not act or react as
individuals, but as members of a group.
Rational Man and Complex Man
• Edgar Schein has given two sets of
assumptions.
Assumptions underlying the concept of
rational economic man are;
a. People are motivated primarily by economic
incentives.
b. Since economic incentives are under the
control of the organisation, people are
essentially passive agents to be manipulated,
motivated and controlled by the organisation.
c. People’s feelings are irrational and must be
prevented from interfering with their rational
calculation of self-interest.
d. So organisation must design in such a way as
to neutralize and control people’s feelings and
therefore their unpredictable traits.
Assumptions underlying the concept of
complex man are;
a. People are not only complex, but are
also highly variable.
b. People are capable of learning new
motives through their organisational
experiences.
c. People’s motives in different
organisations for different sub-parts of
the same organisation may be different.
Knowledge worker (KW)
Tend to follow a hectic life
pattern. He is usually a
roamer.
Thinks all knowledge is
objective
Primary focus is on control
the external environment
and other persons.
Is usually egoistic, but not
normally and truly effective
in performance.
Is commonly very right-
conscious
wisdom worker (WW)
Tend to follow an intense life
pattern.
Thinks all knowledge is
Subjective
Primary focus is on control
of self
Is usually humble, as also
truly effective in
performance.
Is prone to be much more
duty conscious.
Two approaches to managerial
effectiveness

Know
Training Technical ledge
skills Policies and
procedures workers

Managerial
effectiveness

Education & Principles and Wisdom

Values workers
Development vision
 Management assumptions about
people
• Theory X and Theory Y by Douglas
McGregor
 Assumptions about Theory X or
Autocratic managers
a. The average human being has an
inherent dislike of work and will avoid it, if
he can.
b. The average human being is lazy and
avoids responsibility.
c. The average human being prefers to be
directed, wishes to avoid responsibility,
has relatively little ambition and wants
security above all.
 Assumptions about Theory Y
a. The average human being doesn’t
inherently dislike work. Depending upon
controllable conditions, work may be a
source of satisfaction or a source of
punishment.
b. The average human being will exercise
self-direction and self-direction and self-
control in the service of objectives to
which he is committed.
 Personnel Management
• Personnel Management is the planning,
organising, directing and controlling of the
procurement, development, compensation,
integration, maintenance and reproduction
of human resources to the end that
individual, and societal objectives are
accomplished.
- Flippo
Human Resource Management
• Human Resource Management is the
process of acquiring, training, appraising
and compensating employees and
attending to their labour relations, health ,
safety and fairness concerns.
Difference between HRM & Personnel
Management
1. Focus:
2. Philosophy: HRM represents the
humanisation of management while
personnel management is concerned with
managing personnel.
3. Nature of function:
4. Pervasiveness: HRM is the concern of all
managers from top to bottom in an
organisation, while personnel management
is mainly the concern of the personnel
manager.
 Difference between HRM &
Personnel Management
5. Motivation:
6. Team-work:
7. Techniques: Traditional personnel
managers operated through pressure
tactics but HRM aims to achieve worker’s
cooperation through team building, mutual
understanding and motivation.
 Nature of Human Resource
Management
1. Inherent part of management
2. Pervasive function
3. Basic to all functional areas
4. People Centred
5. Personnel Activities or Functions
6. Continuous Process
7. Based on human relations
 Objectives of HRM
• To procure right type of personnel for right
jobs at the right time.
• To provide right kind of training to personnel
to increase their productivity
• To ensure effective utilisation of human
resources
• To identify and satisfy the needs of
individuals by offering various monetary and
non-monetary rewards.
• To achieve and maintain high morale among
employees in the organisation by securing better
human relations.
 Scope of HRM
• Manpower planning
• Recruitment, selection and placement
• Training and development
• PA
• Motivation of workforce by providing
financial incentives and avenues of
promotion
• Remuneration of employees
• Social security and welfare of employees
• Reveiew and audit of personnel policies
Human Resource Development
• HRD may be defined as a continuous
process to ensure the development of
employee competencies, dynamism,
motivation and effectiveness in a systematic
and planned way.
• HRD is a process concerned with an
organised series of learning activities
designed to produce behavioural changes in
the human resources in such a way that they
acquire desired level of competence for
present and future roles.
 Advantages
• Acquire or sharpen capabilities required to
perform various functions associated with
their present or expected future roles.
• Develop their general capabilities
• Develop an organisational culture in which
superior-subordinate relationships, team
work are strong.
 Nature of HRD
1. System perspective – It is concerned with
providing learning experience for the
organisational members to develop their
competencies.
HRD is viewed as a system consisting of
several interdependent and interrelated
sub-systems. These includes; PA ,
potential appraisal, role analysis, training,
job enrichment, communication etc.
 2. Behavioural science
knowledge
• HRD makes use of principles and
concepts of behavioral science for the
development of people. It uses knowledge
drawn from psychology, physiology etc. for
planning and implementing various
programmes for the development of
individuals.
• 3. Continuous process
4. Quality of work life –
At the organisation level, it is
concerned with improving the quality of
work life so as to achieve greater
satisfaction of employees and higher level
of productivity.
 Objectives of HRD
• Development of human resources
• Develop the constructive mind and overall
personality of each employee.
• Develop and maintain high motivation
level of employees.
• Strengthen superior – subordinate
relationship
• Develop the sense of team spirit, team
work etc.
 HRD Culture
• It is characterised by openness,
confrontation, trust, autonomy, proaction
etc.
 HRD Climate
• It is a global expression of what the
organisation is. Organisational climate is
the manifestation of the attitudes of
organisational members toward the
organisation itself.
 HRD Matrix
• It identifies the interrelationships between
HRD instruments, process, outcomes and
organisational effectiveness.
 HRD subsystems ( mechanisms or
instruments)
1. Performance appraisal
• Setting standards for performance
• Communicating the standard to the
employees
• Measuring the performance
• Comparing the actual performance with
the standard set.
2. Potential appraisal
It provides necessary data which helps in
preparing career plans for individuals.
3. Feedback counselling
Identifying training needs
4. Training
5. Role analysis
 6. Career planning
• Identifying and organising skills, interests,
work – related needs and values
• Converting these inventories into general
careers, fields and specific job goals.
• Testing the possibilities against the
realities of the organisation or the job
market.
7. Job rotation
8. Quality circle
QC is a small group of employees doing
similar or related work who meet regularly
to identify, analyse and solve product
quality problems and to improve general
operation.
 Objectives of QC
• To develop, enhance and utilise human
resource effectively
• To satisfy the workers’ psychological
needs to motivate them
• To improve supervisory skills of
employees like leadership, inter-personal
and conflict resolution
• To utilise the skills through participation
9. Reward system
10. Organisation Development
OD is a planned change strategy aimed at
developing and revitalizing the adaptive
capacities of organisations.
11. Quality of working life
12. Human resource planning
It is the process aimed at ensuring that the
organisation will have adequate number of
qualified persons available at proper time,
performing jjobs which would meet the
needs of the organisation and also provide
satisfaction for the individuals involved.
HRD climate variables/HRD Processes
• OCTAPAC Culture:charas of HRD climate
1.Openness
It refers to freedom to express ideas,
opinions, views, etc.
2. Confrontation
It refers to coflict, dispute to evolve effective
and efficient suggestions and solutions to a
given problem. There is a dire need to
confront problems and issues rather than
avoid them.
3. Trust
Trust means belief, confidence, faith. One
cannot order others to trust, it comes only
through their experience.
4. Autonomy
It refers to freedom. Freedom to do a thing
in the way on wants, tends to act as a
morale booster. Creativity in the individual
is not discouraged while working for
achieving objectives.
5. Proaction
It refers to planning in advance, the state of
alertness / preparedness etc.
6. Authenticity
It refers to genuine, actual.
7. Collaboration
It refers to cooperation, participation,
teamwork etc.
 HRD outcome variables
• More competent people
• Better developed roles
• Higher work commitment and job involvement
• More problemsolving
• Better utilization of human resources
• Higher job satisfaction and work motivation
• Better organisational health
• More team work, synergy and respect for each
other.
 Organisational Effectiveness
• A sound HRD system is perhaps the most
important element in organisational
effectiveness which not only ensures
smooth performance but also long-term
survival and growth of the organisation.
 HRD can play effective role in;
• Optimising the use of employees for the
growth of the organisation
• Enabling employees to grow with the
organisation
• Promoting collaboration and team spirit.
• Maximising the effectiveness of the
employees and organisation
• Maximising managerial effectiveness.
Providing a favorable work enviornment
• Achieving good employer-emplyee
relationships.
 • HRD Model
Human Resource Development Plans or Interventions

Individual development plan Organisational development

plan

Skill+knowledge+attitude Work culture+ Dev. Plans +facility

Development Dev.
Quality of working life

Trained and developed employees

Healthy organisation climate

Organisational effectiveness
 System approach to HRM
• According to Cleland and King, “ A system
may be defined as an assemblage or
combination of things or parts forming a
complex or unitary whole.
• It is a set of correlated members, or a
coordinated body or complex of methods,
plans and procedures.
 Organisation as a system
1. Inputs
• Human resources
• Raw materials
• Capital
• Technology
• Information
2. Enviournment (Feedback)
• Employees
• Managerial Processes
3. Output
• Goods and services
 The important sub-systems of a
business firm;
1. Human resource system – Dealing with
the human resources
2. Production system – Consisting of
production function
3. Finance system – Dealing with finance
function
4. Marketing system – Looking after
marketing function
5. R&D system – Monitoring the discovery of
new ideas, technology, methods etc.
 HR system has the following
sub-systems:
a. Employment
b. Training and Development
c. Compensation
d. Maintenance or employee welfare and
services
e. Personnel records and research etc.
 HRM System
• HR System must be an open and dynamic
system if it has to achieve its objectives
which include
• Quality of work life
• Productivity
• Readiness to change
 Quality of work life
• It involves implementing policies and
procedures that make the work more
rewarding for the employee.
• These include autonomy, recognition,
belonging, development, external
rewards,etc.
1. Autonomy deals with the amount of
freedom that employees can exercise in
their job.
2. Recognition involves being valued by
others in the organisation.
3. Belonging refers to being part of the
organisation.
4. Development refers to the internal
rewards available from the organisation;
challenge and accomplishment.
5. External rewards
Which are usually in the form of salary
and benefits also include promotion, rank
and status.
Productivity
Readiness to change
 Strategic HRM
• Strategic management can be viewed as
the action plan of the organisation
regarding its survival and growth in the
given evironment taking into account the
opportunities and threats, strength and
weaknesses and the creativity and the
flexibility required to meet the unforeseen.
 SHRM
• SHRM is the pattern of planned human
resource development and activities
intended to enable an organisation to
achieve its goals.

- Wright and McMohan

 SHRM
• SHRM is the linking of HRM with strategic
goals and objectives in order to improve
business performance and develop
organisational cultures that foster
innovation and flexibility.

- Truss and Gratton

 HR problems while implementing
strategies
• Disruption of social and political structures.
• Failure to match individuals’ aptitude with
implementation tasks.
• Inadequate top management support for
implementation activities.
 Strategic HR issues
• Employment Employability
• Careers
• HR diversity
• Training and Development
 Traditional HR vs. SHR
– Focus on employee relation - focus is on
partnerships with internal and external groups
– Transactional in nature – transformational in
nature (helps people to adopt, learn and act
quickly)
– Initiatives of employees are slow, reactive and
fragmented – fast, proactive and integrated.
– Controlled by tight regulations – controlled by
whatever is necessary to succeed.
– Job design is tight division of labour,
independence and specialisation - Job design
is organic, specialisation is replaced by cross
training and independence is replaced by