Unit I Introduction to HRM & HRD

Concept of HRM, Objectives, Process, HRM vs. Personnel Management, HRM

Vs. HRD, Objectives of HRD, focus of HRD System, Structure of HRD System,
role of HRD manpower.

Human Resource Management: Meaning, Objectives, Scope and Functions

Human Resource Management is a management function concerned with hiring, motivating,

and maintaining workforce in an organisation. Human resource management deals with issues
related to employees such as hiring, training, development, compensation, motivation,
communication, and administration. Human resource management ensures satisfaction of
employees and maximum contribution of employees to the achievement of organisational
objectives.

According to Armstrong (1997), Human Resource Management can be defined as “a strategic

approach to acquiring, developing, managing, motivating and gaining the commitment of the
organisation’s key resource – the people who work in and for it.”

Nature of Human Resource Management

1. HRM is based on certain principles and policies contribute to the achievement of

organisational objectives.

2. HRM is a pervasive function – Human resource management is not specific to an individual

department, rather it is a broader function and spread throughout the organisation, it manages all
type of people from lower level to top level departments of the organisation.

3. HRM is people oriented – People or human resource is the core of all the activities of human
resource management. Human resource management works with and for people. It brings people
and organisation together to achieve individual and organisational goals.

4. HRM is continuous activity – All factors of production are required to be continuously updated
and improved to cope up with the changes and increased competition. Similarly, human resource
also continuously trained, developed, or replaced to face the next level of competition. Hence, it
is a continuous activity.

5. HRM is a part of management function.

6. HRM aims at securing maximum contribution.

7. HRM aims at optimum use of personnel power.

Scope of Human Resource Management

1. Personnel Aspect
Human Resource Planning – It is the process by which the organisation identifies the number of
jobs vacant.

Job Analysis and Job Design – Job analysis is the systematic process for gathering, documenting,
and analysing data about the work required for a job. Job analysis is the procedure for identifying
those duties or behaviour that define a job.

Recruitment and Selection – Recruitment is the process of preparing advertisements on the basis
of information collected from job analysis and publishing it in newspaper. Selection is the
process of choosing the best candidate among the candidates applied for the job.

Orientation and Induction – Making the selected candidate informed about the organization’s
background, culture, values, and work ethics.

Training and Development – Training is provided to both new and existing employees to
improve their performance.

Performance Appraisal – Performance check is done of every employee by Human Resource

Management. Promotions, transfers, incentives, and salary increments are decided on the basis of
employee performance appraisal.

Compensation Planning and Remuneration – It is the job of Human Resource Management to

plan compensation and remunerate.

Motivation – Human Resource Management tries to keep employees motivated so that

employees put their maximum efforts in work.

2. Welfare Aspect – Human Resource Management have to follow certain health and safety
regulations for the benefit of employees. It deals with working conditions, and amenities like -
canteens, creches, rest and lunch rooms, housing, transport, medical assistance, education, health
and safety, recreation facilities, etc.

3. Industrial Relation Aspect – HRM works to maintain co-ordinal relation with the union
members to avoid strikes or lockouts to ensure smooth functioning of the organisation. It also
covers - joint consultation, collective bargaining, grievance and disciplinary procedures, and
dispute settlement.

Meaning:

Before we define HRM, it seems pertinent to first define the term ‘human resources’. In common
parlance, human resources means the people. However, different management experts have
defined human resources differently. For example, Michael J. Jucius has defined human
resources as “a whole consisting of inter-related, inter-dependent and interacting physiological,
psychological, sociological and ethical components”.

According to Leon C. Megginson “From the national point of view human resources are
knowledge, skills, creative abilities, talents, and attitudes obtained in the population; whereas
from the view-point of the individual enterprise, they represent the total of the inherent abilities,
acquired knowledge and skills as exemplified in the talents and aptitude of its employees”.

Sumantra Ghosal considers human resources as human capital. He classifies human capita into
three categories-intellectual capitals, social capital and emotional capital. Intellectual capital
consists of specialized knowledge, tacit knowledge and skills, cognitive complexity, and learning
capacity.

Social capital is made up of network of relationships, sociability, and trustworthiness Emotional

capital consists of self-confidence, ambition and courage, risk-bearing ability, and resilience.
Now it is clear from above definitions that human resources refer to the qualitative and
quantitative aspects of employees working in an organisation.

Let us now define human resource management.

In simple words, HRM is a process of making the efficient and effective use of human resources
so that the set goals are achieved. Let us also consider some important definitions of HRM.

According to Flippo “Personnel management, or say, human resource management is the

planning, organising, directing and controlling of the procurement development compensation
integration, 4intenance, and separation of human resources to the end that individual,
organisational and social objectives are accomplished”.

The National Institute of Personnel Management (NIPM) of India has defined human
resource/personnel management as “that part of management which is concerned with people at
work and with their relationship within an enterprise. Its aim is to bring together and develop
into an effective organisation of the men and women who make up an enterprise and having
regard for the well-being of the individuals and of working groups, to enable them to make their
best contribution to its success”.

According to Decenzo and Robbins “HRM is concerned with the people dimension in
management. Since every organisation is made up of people, acquiring their services, developing
their skills, motivating them to higher levels of performance and ensuring that they continue to
maintain their commitment to the organisation are essential to achieving organisational
objectives. This is true, regardless of the type of organisation-government, business, education,
health, recreation, or social action”.

Thus, HRM can be defined as a process of procuring, developing and maintaining competent
human resources in the organisation so that the goals of an organisation are achieved in an
effective and efficient manner. In short, HRM is an art of managing people at work in such a
manner that they give their best to the organisation for achieving its set goals.
Objectives:

The primary objective of HRM is to ensure the availability of right people for right jobs so as the
organisational goals are achieved effectively.

This primary objective can further be divided into the following sub-objectives:

1. To help the organisation to attain its goals effectively and efficiently by providing competent
and motivated employees.

2. To utilize the available human resources effectively.

3. To increase to the fullest the employee’s job satisfaction and self-actualisation.

4. To develop and maintain the quality of work life (QWL) which makes employment in the
organisation a desirable personal and social situation.

5. To help maintain ethical policies and behaviour inside and outside the organisation.

6. To establish and maintain cordial relations between employees and management.

7. To reconcile individual/group goals with organisational goals.

Werther and Davis have classified the objectives of HRM into four categories as shown in table
1.2.

Table 1.2: HRM Objectives and Functions:

Scope:

The scope of HRM is, indeed, very vast and wide. It includes all activities starting from
manpower planning till employee leaves the organisation. Accordingly, the scope of HRM
consists of acquisition, development, maintenance/retention, and control of human resources in
the organisation (see figure 1.1). The same forms the subject matter of HRM. As the subsequent
pages unfold, all these are discussed, in detail, in seriatim.

The National Institute of personnel Management, Calcutta has specified the scope of HRM
as follows:

1. The Labour or Personnel Aspect:

This is concerned with manpower planning, recruitment, selection, placement, transfer,

promotion, training and development, lay-off and retrenchment, remuneration, incentives,
productivity, etc.

2. Welfare Aspect:

It deals with working conditions, and amenities such as canteen, creches, rest and lunch rooms,
housing, transport, medical assistance, education, health and safety, recreation facilities, etc.

3. Industrial Relations Aspects:

This covers union-management relations, joint consultation, collective bargaining, grievance and
disciplinary actions, settlement of disputes, etc.
Functions:

We have already defined HRM. The definition of HRM is based on what managers do. The
functions performed by managers are common to all organizations. For the convenience of study,
the function performed by the resource management can broadly be classified into two
categories, viz.

(1) Managerial functions, and

(2) Operative functions (see fig. 1.2).

These are discussed in turn.

(1) Managerial Functions:

Planning:

Planning is a predetermined course of actions. It is a process of determining the organisational

goals and formulation of policies and programmes for achieving them. Thus planning is future
oriented concerned with clearly charting out the desired direction of business activities in future.
Forecasting is one of the important elements in the planning process. Other functions of
managers depend on planning function.

Organising:

Organising is a process by which the structure and allocation of jobs are determined. Thus
organising involves giving each subordinate a specific task establishing departments, delegating
authority to subordinates, establishing channels of authority and communication, coordinating
the work of subordinates, and so on.

Staffing:

TOs is a process by which managers select, train, promote and retire their subordinates This
involves deciding what type of people should be hired, recruiting prospective employees,
selecting employees, setting performance standard, compensating employees, evaluating
performance, counseling employees, training and developing employees.

Directing/Leading:

Directing is the process of activating group efforts to achieve the desired goals. It includes
activities like getting subordinates to get the job done, maintaining morale motivating
subordinates etc. for achieving the goals of the organisation.
Controlling:

It is the process of setting standards for performance, checking to see how actual performance
compares with these set standards, and taking corrective actions as needed.

(2) Operative Functions:

The operative, also called, service functions are those which are relevant to specific department.
These functions vary from department to department depending on the nature of the department
Viewed from this standpoint, the operative functions of HRM relate to ensuring right people for
right jobs at right times. These functions include procurement, development, compensation, and
maintenance functions of HRM.

A brief description of these follows:

Procurement:

It involves procuring the right kind of people in appropriate number to be placed in the
organisation. It consists of activities such as manpower planning, recruitment, selection
placement and induction or orientation of new employees.

Development:

This function involves activities meant to improve the knowledge, skills aptitudes and values of
employees so as to enable them to perform their jobs in a better manner in future. These
functions may comprise training to employees, executive training to develop managers,
organisation development to strike a better fit between organisational climate/culture and
employees.

Compensation:

Compensation function involves determination of wages and salaries matching with contribution
made by employees to organisational goals. In other words, this function ensures equitable and
fair remuneration for employees in the organisation. It consists of activities such as job
evaluation, wage and salary administration, bonus, incentives, etc.

Maintenance:

It is concerned with protecting and promoting employees while at work. For this purpose virus
benefits such as housing, medical, educational, transport facilities, etc. are provided to the
employees. Several social security measures such as provident fund, pension, gratuity, group
insurance, etc. are also arranged.

It is important to note that the managerial and operative functions of HRM are performed in
conjunction with each other in an organisation, be large or small organisations. Having discussed
the scope and functions of HRM, now it seems pertinent to delineate the HRM scenario in India.
HRM vs. Personnel Management

Human resource management is the new version of personnel management. There is no any
watertight difference between human resource management and personnel management.
However, there are some differences in the following matters.

1. Personnel management is a traditional approach of managing people in the organization.

Human resource management is a modern approach of managing people and their strengths in
the organization.

2. Personnel management focuses on personnel administration, employee welfare and labor

relation. Human resource management focuses on acquisition, development, motivation and
maintenance of human resources in the organization.

3. Personnel management assumes people as a input for achieving desired output. Human
resource management assumes people as an important and valuable resource for achieving
desired output.

4. Under personnel management, personnel function is undertaken for employee's satisfaction.

Under human resource management, administrative function is undertaken for goal achievement.

5. Under personnel management, job design is done on the basis of division of labor. Under
human resource management, job design function is done on the basis of group work/team work.

6. Under personnel management, employees are provided with less training and development
opportunities. Under human resource management, employees are provided with more training
and development opportunities.

7. In personnel management, decisions are made by the top management as per the rules and
regulation of the organization. In human resource management, decisions are made collectively
after considering employee's participation, authority, decentralization, competitive environment
etc.

8. Personnel management focuses on increased production and satisfied employees. Human

resource management focuses on effectiveness, culture, productivity and employee's
participation.

9. Personnel management is concerned with personnel manager. Human resource management is

concerned with all level of managers from top to bottom.

10. Personnel management is a routine function. Human resource management is a strategic

function
Key Differences between Personnel Management and Human Resource Management

The following are the major differences between Personnel Management and Human Resource
Management:

1. The part of management that deals with the workforce within the enterprise is known as
Personnel Management. The branch of management, which focuses on the best possible
use of the enterprise’s manpower is known as Human Resource Management.
2. Personnel Management treats workers as tools or machines whereas Human Resource
Management treats it as an important asset of the organization.
3. Human Resource Management is the advanced version of Personnel Management.
4. Decision Making is slow in Personnel Management, but the same is comparatively fast in
Human Resource Management.
5. In Personnel Management there is a piecemeal distribution of initiatives. However,
integrated distribution of initiatives is there in Human Resource Management.
6. In Personnel Management, the basis of job design is the division of work while, in the
case of Human Resource Management, employees are divided into groups or teams for
performing any task.
7. In PM, the negotiations are based on collective bargaining with the union leader.
Conversely, in HRM, there is no need for collective bargaining as individual contracts
exist with each employee.
8. In PM, the pay is based on job evaluation. Unlike HRM, where the basis of pay is
performance evaluation.
9. Personnel management primarily focuses on ordinary activities, such as employee hiring,
remunerating, training, and harmony. On the contrary, human resource management
focuses on treating employees as valued assets, which are to be valued, used and
preserved.

Conclusion

Human Resource Management has come up with an extension over Personnel Management,
which eradicated the shortcomings of the Personnel Management. It is quite essential in this era
of intense competition where every organization have to put their manpower and their needs first.

Nowadays, it is very challenging to retain and maintain good employees for a long time as they
are fully aware of their rights and any organization cannot treat them like machines. So, HRM
has been evolved to unite the organization with their employees for the attainment of a common
goal.

Human Resource Development: Features, Scope and Objectives

Development refers to a process of active learning from experience-leading to systematic and
purposeful development of the whole person, body, mind, and spirit. Thus, HRD is the integrated
use of training, organizational and career development efforts to improve individual, group, and
organizational effectiveness.

Definitions of HRD:

1. According to South Pacific Commission ‘human resource development is equipping people

with relevant skills to have a healthy and satisfying life’.

2. According to Watkins, ‘human resource development is fostering long-term work related

learning capacity at individual, group and organizational level’.

3. The American Society for Training and Development defines HRD as follows: ‘human
resource development is the process of increasing the capacity of the human resource through
development. It is thus the process of adding value to individuals, teams or an organization as a
human system’.

Features of HRD:

1. Systematic approach:

HRD is a systematic and planned approach through which the efficiency of employees is
improved. The future goals and objectives are set by the entire organization, which are well
planned at individual and organizational levels.

2. Continuous process:

HRD is a continuous process for the development of all types of skills of employees such as
technical, managerial, behavioural, and conceptual. Till the retirement of an employee
sharpening of all these skills is required.

3. Multi-disciplinary subject:

HRD is a Multi-disciplinary subject which draws inputs from behavioural science, engineering,
commerce, management, economics, medicine, etc.

4. All-pervasive:

HRD is an essential subject everywhere, be it a manufacturing organization or service sector

industry.
5. Techniques:

HRD embodies with techniques and processes such as performance appraisal, training,
management development, career planning, counselling, workers’ participation and quality
circles.

Scope of HRD:

Human resource management (HRM) deals with procurement, development, compensation,

maintenance and utilization of human resources. HRD deals with efficient utilization of human
resources and it is a part of HRM.

Human resource being a systematic process for bringing the desired changes in the
behaviour of employees involves the following areas:

1. Recruitment and selection of employees for meeting the present and future requirements of an
organization.

2. Performance appraisal of the employees in order to understand their capabilities and

improving them through additional training.

3. Offering the employees’ performance counselling and performance interviews from the
superiors.

4. Career planning and development programmes for the employees.

5. Development of employees through succession planning.

6. Workers’ participation and formation of quality circles.

7. Employee learning through group dynamics and empowerment.

8. Learning through job rotation and job enrichment.

9. Learning through social and religious interactions and programmes.

10. Development of employees through managerial and behavioural skills.

Objectives of HRD:

The prime objective of human resource development is to facilitate an organizational

environment in which the people come first. The other objectives of HRD are as follows:
1. Equity:

Recognizing every employee at par irrespective of caste, creed, religion and language, can create
a very good environment in an organization. HRD must ensure that the organization creates a
culture and provides equal opportunities to all employees in matters of career planning,
promotion, quality of work life, training and development.

2. Employability:

Employability means the ability, skills, and competencies of an individual to seek gainful
employment anywhere. So, HRD should aim at improving the skills of employees in order to
motivate them to work with effectiveness.

3. Adaptability:

Continuous training that develops the professional skills of employees plays an important role in
HRD. This can help the employees to adapt themselves to organizational change that takes place
on a continuous basis.

HRD Functions:

HRD functions include the following:

1. Employee training and development,

2. Career planning and development,
3. Succession planning,
4. Performance appraisal,
5. Employee’s participation in management,
6. Quality circles,
7. Organization change and organization development.

INTERNAL & EXTERNAL FORCES OF HR ENVIRONMENT

Successful human resources strategy complements a company's mission and goals – so what
works for an industry giant won't necessarily be suitable for your small business. The factors
influencing HR activities aren't static: To maximize recruitment and retention, and to minimize
employee issues, small business managers must continually monitor internal and external
environmental factors and adjust HR strategy accordingly. To do that, it's important to know
what the internal and external factors can consist of.

The Internal Environment

According to Kotler and Armstrong the internal environment that affect human resource
practitioners comprises of customers, consumers, suppliers, compensation, new entrants and
competitors. HRM professionals should analyze their internal environments for the following
reasons:
 Compensation
The amount of compensation a business offers draws employees to an organization or keeps
them away. In an economy characterized by high unemployment rate and many qualified
individuals, compensation should be low. When there is a small number of a candidate, HRM
should attract them by increasing compensation in order for the company not to lose them to
competitors. A survey of compensation structure of an industry will help a company have
competitive offers in order to gain a competitive advantage over others in terms of attracting and
retaining employees. However, the offer should not be too high in such a way that they bring
losses to the company. Experienced staff should be given more compensation than recently
recruited graduates in the same job category.

 Employees Relations
Human resource activities must consider several factors like training their staff before promoting
them when their recruitment policies are based on internal promotion. They should monitor
retiring employees so that replacement arrangements are made in time. According to Purcell and
Boxall human resource department should be able to manage employee relations within the firm.

 Customers’ satisfaction
Change in customer preferences need to be taken into account since this affects service delivery.
HRM should hire employees who have the consumers’ interest at heart. Continuous training and
retraining is important in order to increase performance hence satisfaction.

 New entrants
These are businesses entering into an industry. New entrants offer competitive salaries that
attract employees. HRM should analyze their industry in order to know new entrants. This will
help them have strategies aimed at retaining in order prevent them from being poached by the
new entrants.

 Competition
The degree of competition affects HRM’s power to recruit workers who can meet a company’s
standards. Experienced workers always want to work in reputable organizations. Small
organizations with a lower brand image have to invest their resources in getting qualified people
to work for the organization. In this case, HRM will have to advance its recruitment procedures
and attend trade union fairs in order to advertise the company and draw applicants closer. It is
also important to have structures put in place to retain employees in a business environment
characterized with cut throat competition

The External Environment

The external environment that can affect any business operation can be summarized as PESTEL
(political, economic, social, technological, environmental and legislative factors). PESTEL
changes are continuously impacting on human resource policies These factors affect the internal
operations regardless of the fact that they are outside the organization. The reasons why these
factors should be understood by the HR practitioners are:
Economic:
Economic forces include growth rate and strategy, industrial production, national and per capita
incomes, money and capital markets, competitions, industrial labour and globalisation. All these
forces have significant influence on wage and salary levels. Growing unemployment and
reservation in employment also affect the choice for recruitment and selection of employees in
organisations.

Political:
Political environment covers the impact of political institutions on HRM practices. For example,
democratic political system increases the expectations of workers for their well being.

The total political environment is composed of three institutions:

1. Legislature:
This is called Parliament at the central level and Assembly at the state level A plethora of labour
laws are enacted by the legislature to regulate working conditions and employment relations.

2. Executive:
It is the Government that implements the law. In other words, the legislature decides and the
executive acts.

3. Judiciary:
This is like a watchdog above the two. It ensures that both the legislature and the executive work
within the confines of the constitution and also in the overall interest of the people. These affect,
in one way or the other, all HR activities from planning to placement to training to retention and
maintenance.

Technological:
Technology is a systematic application of organised knowledge to practical tasks.

Technological advances affect the HR functions in more than one way:

First; technology makes the job more intellectual or upgraded.

Second, it renders workers dislocated if they do not equip themselves to the job.

Third, job becomes challenging for the employees who cope with the requirements of technology
Fourth, technology reduces human interaction at the work place. Finally job-holders become
highly professionalized and knowledgeable in the job they perform.

Demographic:
Demographic variables include sex, age, literacy, mobility, etc. Modem work force is
characterized by literate, women and scheduled caste and scheduled tides workers. Now, workers
are called knowledge workers’ and the organisations wherein they work are called ‘knowledge
organisations’.
As such, the traditional line of distinction between manual and non-manual workers is getting
blurred. Employees are demanding parity in remuneration and responsibility among various
categories and levels of employees.

Unit II Human Resource Policies & Strategies Introduction, role of HR in

strategic management, HR policies & Procedures, HR Programme., developing
HR policies and strategies, Strategic control, Types of Strategic control,
Operational Control System, Functional and grand strategies, Strategy factors.

HUMAN RESOURCE POLICIES

• Predetermined established guideline towards the attainted of accepted goals and objectives.

• Guidelines facilitate properly designed efforts to accomplish the strategic intent.

―A policy is a man-made rule of pre-determined course of action that is established to guide

the performance of work toward the organisation objectives. It is a type of standing plan that
serves to guide subordinates in the execution of their tasks.

Policy Differentiated from Objectives , Programmes and Procedure

Flippo definition of policy

 ―is the man made rule of pre determined course of action that is established to guide the
performance of work toward the organization objectives.‖Yoder

―A policy is a pre determined, selected course established as a guide towards accepted goals
and objectives. They establish the framework of guiding principles that facilitate delegation to
lower levels and permit individual managers to select appropriate tactics or programmes.

―Personnel Polices are those that individual have developed to keep them on track towards
their personnel objectives.

Human resource policies are the formal rules and guidelines that businesses put in place to hire,
train, assess, and reward the members of their workforce. These policies, when organized and
disseminated in an easily used form, can serve to preempt many misunderstandings between
employees and employers about their rights and obligations in the business place. It is tempting,
as a new small business owner, to focus on the concerns of the business at hand, and put off the
task of writing up a human resource policy. All business analysts and employment lawyers will
advise a new business owner to get a policy down on paper, even if it is a simple one drafted
from a boilerplate model. Having policies written is important so that it is clear to all what the
policies are and that they are applied consistently and fairly across the organization. Moreover,
when issues concerning employee rights and company policies come before federal and state
courts, it is standard practice to assume that the company's human resource policies, whether
written or verbal, are a part of an employment contract between the employee and the company.
Without clearly written policies, the company is at a disadvantage.

Personnel Polices refer to principles and rules to conduct which “Formulate, redefine, break
into details and decide a number of actions” that govern the relationship with employees in the
attainment of organizational objectives.

What are Policies and Procedures?

A Policy is a formal statement of a principle or a rule which all members of an organization are
bound to follow.

Procedure tells the members of the organisation how to carry out or implement policy.
So while policies are WHAT are to be done by the members of the organisation, written in the
form of statements or rules, procedures tell the members HOW TO carry out these policies,
written in the form of instructions.

It can be said that the HR department and its policies and procedures are the real backbone and
foundation of a company. As the HR team is responsible for recruiting the right people in the
company, and there after managing these people and their needs, queries, and various problems.
Without a strong HR team and even stronger policies and procedures, no organisation could run
smoothly. As every individual working in an organisation is different, each individual has their
own set of wants, needs, aspirations, problems, and how they plan on fixing these problems. An
entire load of all this falls upon the HR department of an organisation.
Why Do We Need HR policies:

Human resource policies are always a must in all types of organizations as they need to cater and
meet the needs of all types of people. There are different natured people, not surprisingly all go
well with each other. Few people might have a habit of accepting what are the norms, few might
want to relax the rules but still written policies have the power to make people stick to the
regulations of the organisation.

Here are few most common reasons why any kind of organisation needs HR policies and the
main purpose of a HR policy.

1. HR policies are not only for effectively drawing rules for employees but also to recognise their
needs, respect their thoughts.

2. HR policies are needed because every individual has a different opinion on all things. Not all
need to accept others view. Hence, HR policies will make everyone respect and follow same
rules.

3. A well-written HR policy will reduce the conflict among employees as well as help the higher
officials in the organisation to take correct decisions based on the official rules and regulations.

4. A good HR policy will not only maintain the wellness of the organisation inside but it also will
create a good corporate image among the society as well as job seekers too.

Even before employees are hired into a company, the HR team must sit and draft out its set of
policies and procedures. It is these policies which every employee of an organisation is bound to
follow, in order to assure harmony in the organisation.

There are four major key elements that an organisation must keep in mind when drafting out
their HR Policies and Procedures. These major elements are: Roles, Rules, Consequences and
Tools.

1. HR Policy Roles:

One of the first most important tasks of building an HR policy is to have a clear formation of
employee Roles. Role definition is a crucial part of establishing clear performance expectations
from employees. Each and every employee in an organization must be clear about his role and
how much he can exercise his powers within his role. Only when role definition is made clear to
each employee, that he will know what exactly is expected of him, and what he can expect from
the company. If an employee’s role is not made clear to him, he may exercise rights which are
beyond his powers and jurisdiction.

2. HR Rules & Regulations:

In every workplace, employees and employers need to share a clear and mutual understanding of
what is acceptable and what is not. Certain people feel it is essential to have clear, written rules
in every organisation, while others are more comfortable with having no set of rules. If we took
the case of the latter, this would mean having no discipline and no punishments for wrong
behaviour or action. You might fall victim to the effects of someone else’s bad behaviour, and
without any clear set of rules and policies, that person could not be held responsible for his
actions. This would have a derogatory effect not only on the people working in the organisation
but also on the organisation as a whole. On the other hand, if an employer relies on a loose set of
rules which have not been documented; it is easy for people to assume these rules are open to
interpretation. The result would be a working environment which would be out of tune with the
ultimate goal of the organisation.

3. Consequences of Poor Human Resource Policies:

Every individual in an organisation has their own set or principles, morals and ethics. Is it not
necessary that two people working under the same roof would share a set of values. But when
this set of people join together to work in a professional environment, and if they are each
allowed to exercise their perceptions of right and wrong behaviour, chaos would surely ensue.

In order to keep the workplace a professional and pleasant environment, certain sets of rules or
policies and procedures are made. Even with formal documentation, certain people have a
tendency to test their limits. To prevent exactly this from happening, along with the set of
policies and procedures, the company must also decide beforehand what their policy towards
employees exhibiting bad behaviour is. The company head must sit with the HR team and decide
what they consider over the line behaviour, or inappropriate behaviour. Not only that, they must
also decide what the appropriate consequences of these behaviours should be.
After these are decided, it must be explained to all employees, so that each employee is aware of
their roles, the rules and regulations of working in the company, what appropriate and
inappropriate behaviour is, and how the company will deal with inappropriate behaviour. Ground
rules must be set out, employees must be told what behaviours might lead to immediate
termination.

Consequences for inappropriate behaviour, while it may sound harsh to some, are the only way
an organisation will be able to succeed. This ensures that their best employees are retained, and
their new employees are well trained to be an asset for the company. In order to build a good
company, it is essential for employees to be able to work together peacefully. This is attainable
by having a proper set of policies and procedures in a company.

4. HR Tools:

Tools are defined as the resources you provide to the employees in your organisation who are
incharge of managing other employees. Whether you have provided them with the employee
handbook, company policy manual and procedures guides, and simple forms to use when faced
with problems such as inappropriate behaviour from an employee. Providing in-house training or
even hiring experts to provide training to employees regarding work culture, policies, how to
address issues and grievances, and correct training on appropriate and inappropriate workplace
behaviour should be provided.
These tools, if provided before hand to employees, will help save a lot of productive time and
resources when dealing with rules and regulations and consequences of wrong actions.

The purpose of HR Policies and Procedures:

1. Organisational Structure:

Human resource policies and procedures can differ from organisation to organisation. Yet, they
are simple, straight forwards ground rules which every employee of an organisation must abide
by. The HR policies provide guidelines on employer-employee interaction, behaviour,
appropriate work behaviours, work schedules, employment laws, conflict resolution, disciplinary
measures and health and safety measures. These policies and procedures are what provide
foundation and structure to any organisation.

2. Legal Issues:

The HRM policies and procedures of an organisation are made to comply with the laws and
regulations of a country. These HR policies and procedures are made to prevent lawsuits as far as
possible, in case of problems faced as the workplace. Employees are required to be informed
about these policies and procedures and their legal implications to ensure smooth operations in
an organisation.

3. Supervision Guide:

HR policies and practices provide employees with the right tools, guides and resources on how to
manage employee and employment matters in an organisation. This greatly helps organisations
streamline their workflow and run like a well-oiled engine. The HR policies and procedures
allow supervisors and managers to train, guide and manage new or existing employees. They
also provide formal guidance on how to manage grievances at the workplace.

4. Consistency:

HR practices, policies and procedures help an organisation in maintaining consistent practices in

the workplace. Consistent application of HR policies and procedures help prevent dissatisfaction
amongst employees, as sudden changes in schedules, benefits or roles and responsibilities can
create an unhealthy working environment.

Why Develop an HR policy?

 Help employees and employers run the organisation in a smooth and efficient manner.
 Help take human resource decisions, make and manage policies and hr guidelines for the
employees of the organisation to follow.
 Documenting all organisational policies and procedures, rules, regulations,
communicating the same to the employees.
 Saves countless hours of productive time and funds.
  Defines management hr standards for making decisions on various organisational as well
as personal issues.
 Protect the legal interest of the company as well as define the legal obligations of the
employees towards the organisation.

The importance of HR Policies and Procedures:

The following points show us why are policies and procedures important for human resource
management process.

 HR policies and procedures ensure every employee of the organisation is looked after; his
needs respected and proper benefits are given to them for their work.
 They help address complaints, problems and grievances of employees and solve them
appropriately.
 They protect employees from wrong behaviour from other employees or even from the
organisation itself.
 Helps train and develop employees who are consistent with the needs of the organisation.
 Helps employees receive adequate compensation.
 Helps maintain discipline in the workplace.
 Provide paid vacations and holidays to eligible employees.

How Do You Effectively Communicate HR Policies and Procedures to Employees?

 Make sure the written documentation or guidelines made by the organisation are easily
understood by all employees to avoid inconsistency and confusion.
 Ensures all managers and supervisors are well trained and able to provide training to new
employees as well.
 Ensure all employees and employers are properly trained in appropriate and inappropriate
workplace behaviour and work culture norms.
 Periodically review the policies and guidelines to ensure they are appropriate and up to
date.

Features of a sound HR Policy

• Definite, positive, clear and easy to understand

• Written

• Reasonable stable

• Supplementary to all other policies of the orgn and the public policy.
 Recognition and individual relationship between the mgmt and the employees

• Based on the facts

• Provide two way communication

• Supported by the mgmt, employees and the union

• Progressive

• Measurable

• Uniform for the entire organization

• Practically applicable

Aims and objective of Personnel polices

• Enable the orgn to carry out the main objectives

• Awareness of items in policies and to secure the co operation

• Sense of unity with the enterprise

• Provide competent , adequate and trained personnel for all levels and types of
management

• To protect the common interest of all parties

• Recognize the role trade unions in the organization.

• Efficient consultative service.

• Management leadership

• Delegating the human relations

• Co operative understanding

• Security of employment

• Opportunity for growth

• Payment of fair and adequate wages

• To recognize the work and accomplishments

• To create the sense of responsibility.

Principles of HR policy

• Right man in the right place

• Train everyone for the job to be done

• Make the orgn a coordinated team

• SS the right tools and right conditions of work

• Give security with opportunity , incentive , recognition

• Look ahead, plan head for more and better things.

Human Resource Management Policies:

Employment Policies:

Guideline of the recruitment and selection process of new employees, as well as their orientation.

Employment Status And Records:

Provides access to individual employee accounts, personal files, background checks and
performance reviews.

Employee Benefits:

Written terms and conditions defining employee benefits such as paid leave, insurance, holiday
and employee reimbursements.

Payroll:

Policies related to employee salary and wage, deductions and advances.

Workplace Guidelines:

Guidelines defining work arrangements like conveyance, flex time and use of company assets.

Employee Conduct:

Defining appropriate workplace behaviours and norms, conduct of employees, preventive

measures to check substance abuse, harassment and workplace violence.
E- Policies:

These are guides informing employees on proper usage of the organisations information and fair
use of the internet.

Benefits of HR Policies and Procedures:

Recruitment and Employment:

Human resources are responsible for all the functions of advertisement, recruitment, selection,
training and development of an organisation. Recruitment, selection and training of new
employees are done based on the HR policies developed for the company.

Compensation and Evaluation:

Human resources team members are responsible for conducting proper market survey and job
analysis to determine adequate compensation of employees. Performance review and job
evaluation are also conducted by the human resources team in lines of the HR policies so as to
provide standardisation and unbiased reviews. The HR policies do not state the quantitative
measurement of compensation, employees must receive; but they state that each employee must
be adequately compensated for his\her input.

Training and Development:

HR policies include the tools and resources available to the employers to provide proper training
to employees. They also help new employees as well as old employees get enough assistance in
case of added responsibilities.

Grounds For Termination:

HR policies contain guides and information on grounds for termination of employees. These
policies help protect the organization from harmful employees. They also provide clear cut
ground rules for the violation of any company policies or rules, which call for corrective
measures, or in the worst case scenario, termination of the contract of an employee.

While HR policies and procedures may be developed in every organization, it is eventually up to

the staff members and employees to put them into action, and provide a safe working
environment for all.

SUBJECTS COVERED BY COMPANY HR POLICIES

Small business owners should make sure that they address the following basic human resource
issues when putting together their personnel policies:

 Equal Employment Opportunity policies

 Employee classifications
 Workdays, paydays, and pay advances
 Overtime compensation
 Meal periods and break periods
 Payroll deductions
 Vacation policies
 Holidays
 Sick days and personal leave (for bereavement, jury duty, voting, etc.)
 Performance evaluations and salary increases
 Performance improvement
 Termination policies
 A broad spectrum of issues can be addressed in human resource policies, depending on
the nature of the business in question. Examples of such issues include promotion
policies; medical/dental benefits provided to employees; use of company
equipment/resources (access to Internet, personal use of fax machines and telephones,
etc.); continuity of policies; sexual harassment; substance abuse and/or drug testing;
smoking; flextime and telecommuting policies; pension, profit-sharing, and retirement
plans; reimbursement of employee expenses (for traveling expenses and other expenses
associated with conducting company business); child or elder care; educational
assistance; grievance procedures; employee privacy; dress codes; parking; mail and
shipping; and sponsorship of recreational activities.

ADVANTAGES OF FORMAL HUMAN RESOURCE POLICIES

 Small business owners who have prepared and updated good personnel management
policies have cited several important ways in which they contribute to the success of
business enterprises. Many observers have pointed out that even the best policies will
falter if the business owners or managers who are charged with administering those
policies are careless or incompetent in doing so. But for those businesses that are able to
administer their HR policies in an intelligent and consistent manner, benefits can accrue
in several areas:
 Communication with employees. A well written and thoughtfully presented human
resource policy manual can establish the tone that a new business person wishes to
maintain within his or her business. Such a policy also serves to disseminating
information about what employees may expect from the company as well as what the
employer expects from the employees regarding work performance and behavior while
on the job.
  Communication with managers and supervisors. Formal policies can be helpful to
managers and other supervisory personnel faced with hiring, promotion, and reward
decisions concerning people who work under them.

 Time Savings. Prudent and comprehensive human resource management policies can save
companies significant amounts of management time that can then be spent on other
business activities, such as new product development, competitive analysis, marketing
campaigns, etc.

 Curbing litigation. Members of the legal and business communities agree that
organizations can do a lot to cut off legal threats from disgruntled current or ex-
employees simply by creating—and applying—a fair and comprehensive set of personnel
policies.

A HR department or Human Resources Department is an essential part of any company, be it a

start-up, or an established company; no matter how big or small the business is. But few people
actually understand the importance of HR policies and procedures.

HR department of any company are the people who have been hired as employees of a company
to select, recruit, assess new candidates, as well as create the procedures and HR policies of
companies. It is not necessary for two companies to share the same HR policies, but it is
necessary for the employees to follow the policies and procedures of their own company.