HUMAN RESOURCE

MANAGEMENT
The concept:
• The term human resources was first used in the early 1900s,
and then more widely in the 1960s, to describe the people who
work for the organization, in aggregate.
• popular depictions: “art and science”
• HRM is both the art of managing people by recourse to creative
and innovative approaches
• it is a science as well because of the precision and rigorous
application of theory that is required.
• According to the Invancevich and Glueck, “HRM is concerned with
the most effective use of people to achieve organizational and
individual goals. It is the way of managing people at work, so that
they give their be000st to the organization”.
• 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.”
BASIS PERSONNEL HUMAN RESOURCE
MANAGEMENT MANAGEMENT
Meaning The aspect of management that is The branch of management that
concerned with the work force and focuses on the most effective use of
their relationship with the entity is the manpower of an entity, to
known as Personnel Management. achieve the organizational goals is
known as Human Resource
Management.
Approach Traditional Modern

Treatment of manpower Machines or Tools 1assets

Type of function Routine function Strategic function

Basis of Pay Job Evaluation Performance Evaluation

Management role Transactional Transformational
Communication Indirec Direct
Labor Management Collective Bargaining Individual Contracts
Contracts
Decision Making slow fast
Focus Primarily on mundane Treat manpower of the
activities like employee organization as valued
hiring, remunerating, assets, to be valued,
training, and harmony. used and preserved
Functions of Human Resource Management
• Human Resource Management functions can be classified into the
following three categories.
• Managerial Functions,
• Operative Functions, and
• Advisory Functions.
Managerial functions:
• 1. Human Resource Planning - In this function of HRM, the number and type of
employees needed to accomplish organizational goals is determined. Research is
an important part of this function, information is collected and analyzed to
identify current and future human resource needs and to forecast changing
values, attitude, and behavior of employees and their impact on the organization.
• 2. Organizing - In an organization tasks are allocated among its members,
relationships are identified, and activities are integrated towards a common
objective. Relationships are established among the employees so that they can
collectively contribute to the attainment of the organization's goal.

• 3. Directing - Activating employees at different levels and making them

contribute maximum to the organization is possible through proper direction and
motivation. Taping the maximum potentialities of the employees is possible
through motivation and command.
• 4. Controlling - After planning, organizing, and directing, employees'
actual performance is checked, verified, and compared with the
plans. If the actual performance is found deviated from the plan,
control measures are required to be taken.
Operative functions:
• 1. Recruitment and Selection - Recruitment of candidates is the
function preceding the selection, which brings the pool of prospective
candidates for the organization so that the management can select
the right candidate from this pool.
• 2. Job Analysis and Design - Job analysis is the process of describing
the nature of a job and specifying the human requirements like
qualification, skills, and work experience to perform that job. Job
design aims at outlining and organizing tasks, duties, and
responsibilities into a single unit of work for the achievement of
certain objectives.
• 3. Performance Appraisal - Human resource professionals are required to perform this
function to ensure that the performance of employees is at an acceptable level.
• 4. Training and Development - This function of human resource management helps
employees acquire skills and knowledge to perform their jobs effectively. Training and
development programs are organized for both new and existing employees. Employees
are prepared for higher-level responsibilities through training and development.
• 5. Wage and Salary Administration - Human resource management determines what is
to be paid for different types of jobs. Human resource management decides employee's
compensation which includes - wage administration, salary administration, incentives,
bonuses, fringe benefits, and etc,.
• 6. Employee Welfare - This function refers to various services, benefits, and facilities that
are provided to employees for their well-being.
• 7. Maintenance - Human resource is considered an asset for the organization. Employee
turnover is not considered good for the organization. Human resource management
always tries to keep their best performing employees with the organization.
• 8. Labour Relations - This function refers to human resource management interaction
with employees represented by a trade union. Employees come together and form a
union to obtain more voice in decisions affecting wage, benefits, working conditions, etc.

• 9. Personnel Research - Personnel researches are done by human resource management

to gather employees' opinions on wages and salaries, promotions, working conditions,
welfare activities, leadership, etc,. Such researches help in understanding employee
satisfaction, employee turnover, employee termination, etc,.
• 10. Personnel Record - This function involves recording, maintaining, and retrieving
employee-related information like - application forms, employment history, working
hours, earnings, employee absents and presents, employee turnover, and other data
related to employees.
•
Advisory Functions:
Human Resource Management is expert in managing human resources and
so can give advice on matters related to human resources of the
organization. Human Resource Management can offer advice to:

1. Advised to Top Management

• The personnel manager advises the top management in the formulation
and evaluation of personnel programs, policies, and procedures.
2. Advised to Departmental Heads
• The personnel manager advises the heads of various departments on
matters such as manpower planning, job analysis, job design, recruitment,
selection, placement, training, performance appraisal, etc.
Human Resource Development
• Development of human resources is essential for any
organisation that would like to be dynamic and growth-
oriented.
• Unlike other resources, human resources have rather unlimited
potential capabilities.
• Human Resource Development is the framework for helping
employees develop their skills, knowledge, and abilities, which in turn
improves an organization's effectiveness.
• Human resource development includes training a person after
he or she is first hired, providing opportunities to learn new
skills, distributing resources that are beneficial for the
employee's tasks, and any other developmental activities.
• Organizations have many opportunities for human resource development,
both within and outside of the workplace. Human resource development
can be formal or informal, and it can begin as soon as you onboard new
employees.
Informal learning could include:
• Coaching by managers
• Mentoring by more experienced employees
• Collaborating with highly trained colleagues
Formal development might include:
• onboard new employees.
• In-classroom training
• College courses
• Planned organizational change
• Internal training provided by staff or a paid consultant or facilitator
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.
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.
Challenges of Human Resource
Development
• Changing Workforce Demographics
• Around the world, demographic changes have already had a major impact
on HR departments. The labour forces have become increasingly diverse,
and this has forced organisations to make considerable changes to the way
in which they approach people management because it is very much
required to cope with the dynamics of the market.
• If we consider some more years, there may soon be no such thing as the
average worker, and workplaces could become so hugely diverse in terms
of gender, age and culture that the strategies used by the HR departments
of today may in time become completely redundant. These trends which
were changing so fast have several implications for HRD professionals.
• First, the organisations need to address racial and ethnic prejudices that
may persist, as well as cultural insensitivity and language differences.

• Second, organisations should continue to provide developmental

opportunities that will prepare women for advancement into the senior
ranks and provide safe-guards against sexual harassment with the
increasing numbers of women in the workforce.

• Third, the aging of the workforce highlights the importance of creating HRD
programs. These programs recognize and address the learning related
needs of older workers.
• Competing in Global Economy
• If we look at the U.S. companies, they prepare to compete in a global economy;
many are introducing new technologies that require more educated and trained
workers. In fact, at present in the United States, over one-half of all jobs require
education beyond high school. Thus, in order to be successful, the organisations
must hire employees with the knowledge to compete in an increasingly
sophisticated market.
• For competing in the global economy, it will require more than educating and
training workers to meet new challenges. In addition to retraining the workforce,
successful companies will institute quality improvement processes and introduce
change efforts.
• The workforce must learn to be culturally sensitive. The purpose is to
communicate and conduct business among different cultures and in other
countries. The developing managers to be global leaders have been identified as
a major challenge for organisations in this decade.
• Eliminating Skills Gap
• We had already discussed that for companies to compete successfully in a
global economy, they must hire educated workers. If we consider the
statistics, almost 30 per cent of today’s high school students fail to
graduate, and employers must confront the fact that many young adults
entering the workforce are unable to meet current job requirements.
• This skills gap poses serious consequences for American companies and for
example, how can trainees learn how to operate new equipment if they
cannot read and comprehend operating manuals? Furthermore, for new
employees to manipulate computer-controlled machines, they have to
understand basic math. The business community has a vested interest in
education reform and there are some encouraging signs, however.
• In order to bridge the skills gap, the other industrialized nations have
made systematic changes. For example, Japan and Germany, two of
the United States’ biggest competitors, have educational systems that
do a better job of teaching students basic skills.
• These are needed by most employers and among other things;
Germany emphasizes vocational education and school to work
transition programs so that school-age children can begin
apprenticeship programs as part of their formal education.
• Meeting the Need for Lifelong Individual Learning
• With the rapid changes that all organisations are facing, it is clear that
employees must continue the learning process throughout their careers in
order to meet these challenges. To make an ongoing investment in HRD,
this need for lifelong learning will require organisations.
• The term lifelong learning can mean different things to different
employees. For example, for semiskilled workers, it may involve more
rudimentary skills training to help them to build their competencies. This
learning may mean taking advantage of continuing education opportunities
o professional employees. This is particularly important for certified
professionals who are required to complete a certain number of continuing
education courses. This is to maintain their certificates and to managers,
lifelong learning may include attending management seminars that address
new management approaches.
• The challenges to HRD professionals are to provide a full range of learning
opportunities for all kinds of employees and one way that some organisations are
meeting this challenge is by establishing multimedia learning centers.
• These centres offer a variety of instructional technologies that can be matched to
each trainee’s unique learning needs and in this process, individual assessments
can determine academic deficiencies or gaps in employees’ performance
capabilities, while also pointing out their preferred learning styles.
• The self-motivated employees found to be deficient in arithmetic might be
trained in an interactive video program allowing them to set their own pace. A
multimedia learning centre could also provide teleconferencing facilities for
technical and professional employees to participate in a seminar that is being
conducted thousands of miles away because the participants are virtually
interacting.
• Facilitating Organisational Learning
• Chris Argyris, Richard Beckhard and more recently Peter Senge have recognized that if
organisations are going to make a fundamental change, they must be able to learn,
adapt, and change.
Senge advocates that a learning organisation must embrace the following five principles:
• Systems Thinking

• Person Mastery

• Mental Models

• Building Shared Vision

• Team Learning
• There has been tremendous interest in the concept of a learning
organisation in recent years. For example, according to a 1995 survey of
‘HRD executives; it reported that 94 per cent of the respondents felt that it
is important for an organisation to become a learning organisation.
• The above-mentioned principles emphasize that at the organizational level,
they also have implications at the group and individual levels. One
challenge to HRD professionals is to facilitate the transition of traditional
training programs to an emphasis on learning principles and tactics, on
how learning relates to performance, and more importantly, on the
relationship between learning and fundamental change.
• The HRD professionals must develop a solid understanding of learning
theory and be able to devise learning tools that enhance individual
development to do all these things successfully.
Changing Environment of Human
Resource Management (HRM)
• 1. Work force Diversity:
• Diversity has been defined as any attribute that humans are likely to use to
tell themselves, that person is different from me and, thus, includes such
factors as race, sex, age, values, and cultural norms’. The Indian work force
is characterized by such diversity that is deepening and spreading day by
day.
• It is likely to be more diverse as women, minority- group members, and
older workers flood the work force. With the increasing number of women
entering the work force due to a combination of factors like women’s
emancipation, economic needs, greater equality of sexes, education and so
on, additional pressures of managing a different set of problems at the
work place have arisen. As such, the number of women is on increase in all
walks of life i.e., teachers, lawyers, doctors, engineers, accountants, pilots,
parliamentarians and so on.
• However, increasing number of women in the work force has been
necessitating the implementation of more flexible work scheduling,
child care facilities, maternity and now paternity leave also and
transfer to location of husband’s place of posting.
• Also, as the work force ages, employers will have to grapple with
greater health care costs and higher pension contributions. On the
whole, the increased diversity of work force will place tremendous
demands on the HR management function.
• Further, creating unanimity from a diverse work force has also
become a challenge for HR manager. This is because, as several
experts’ put it; diversity is marked by two fundamental and
inconsistent realities operating today with it. One is that
organisations claim they seek to maximize diversity in the work
place, and maximize the capabilities of such a diverse work force.
• The other is that traditional human resources system will not
allow diversity, only similarity. These experts emphasize that
employers traditionally hire, appraise, and promote people who
fit a particular employer’s image of what employees should
believe and act like. At the same time, there is corresponding
tendency to screen out those who do not fit.
• 2. Economic and Technological Change:
• Along with time, several economic and technological changes have occurred that
have altered employment and occupational pattern. In India too, there is a
perceptible shift in occupational structure from agriculture to industry to services.
• The New Economic Policy, 1991 has led to liberalization and globalization giving
genesis to multinational organisations with their multicultural dimensions having
certain implications for HRM. The implications of globalization for HRM are
discussed subsequently. The Indian economy has already become an open
economy but it will be more so from April 2003 with the complete lifting of
quantitative restrictions (QRs) on imports in India.
• Technology has become the hallmark of the modem organisations. As such,
modem organisations have become the technology-driven organisations. So to
say, men are replaced by machinery. Manufacturing technology, for example, has
changed to automation and robotisation.
• Manufacturing advances like these will eliminate many blue-collar jobs, replacing
them with fewer but more highly skilled jobs. Similar changes are taking place in
office automation, where personal computers, word processing, and management
information system (MIS) continue to change the nature of office work.
• The explosive growth of information technology linked to the internet has
ushered in many changes throughout the organisation. One of the major changes
led by information technology is that it has hastened what experts call the “fall of
hierarchy”, i.e., managers depend less and less on yesterday’s “stick-to-the -chain-
of-command approach,” to their organising function.
• This is so because earlier it used to be, if one wanted information, one had to go
up, over and down through the organisation. Now, one just taps in. That’s what
broke down the hierarchy. Somuchso, now employees do not need to be present a
definite work place.
• Instead, they can work from their own places/ residences through the net. This
has given genesis to a new breed of organisations, called ‘virtual organisations.’
(VO).
• 3. Globalization:
• The New Economic Policy, 1991 has, among other things, globalised the Indian
economy. There has been a growing tendency among business firms to extend
their sales or manufacturing to new markets aboard. The rate of globalization in
the past few years in India has been nothing short of phenomenal.
• Globalization increases competition in the international business. Firms that
formerly competed only with local firms, now have to compete with foreign
firms/competitors. Thus, the world has become a global market where
competition is a two-way street.
• Globalization has given genesis to the multinational corporations (MNCs). The
MNCs are characterised by their cultural diversities, intensified competition,
variations in business practices and so on. As an international business expert
puts it, ‘the bottom line is that the growing integration of the world economy into
a single, huge market place is increasing the intensity of competition in a wide
range of manufacturing and service industries.
• Given these conditions, from tapping the global labour force to
formulating selection, training and compensation policies for
expatriate employees have posed major challenges for HRM in
the next few years. This has underlined the need for studying
and understanding HRM of multinational organisations or
international organisations separately.
• 4. Organisational Restructuring: (Corporate Downsizing)
• Organisational restructuring is used to make the organisation competitive.
From this point of view, mergers and acquisitions of firms have become
common forms of restructuring to ensure organisational competitiveness.
The mega-mergers in the banking, telecommunications and petroleum
companies have been very visible in our country. Downsizing is yet another
form of organisational restructuring.
• As a part of the organisational changes, many organisations have
“rightsized” themselves by various ways like eliminating layers of
managers, closing facilities, merging with other organisations, or out
placing workers. There has been a practice to flatten organisations by
removing several layers of management and to improve productivity,
quality, and service while also reducing costs. Whatever be the form of
restructuring, jobs are redesigned and people affected.
• One of the challenges that HRM faces with organisational
restructuring is dealing with the human consequences of
change. For example, the human cost associated with
downsizing has been much debated and discussed in the
popular press. As such, HRM needs to focus on the changed
scenario uniquely and that is not so simple. Thus, management
of HR activities has become crucial for HR managers.
• 5. Changing Nature of Work:
• Along with changes in technology and globalization, the nature of jobs and work
has also changed. For example, technological changes like introduction of fax
machines, information technology, and personal computers have allowed
companies to relocate operations to locations with lower wages. There is also a
trend toward increased use of temporary or part-time workers in organisations.
• One most significant change in the nature of work is that it has changed from
manual to mental/ knowledge work. In this context, the management expert Peter
Drucker’s views are worth citing. He said that the typical business will soon bear
little resemblance to the typical manufacturing company of 30 years ago.
• The typical business will be knowledge-based, an organisation composed largely
of specialists who direct and discipline their own performance through organized
feedback from colleagues, customers, and headquarter. For this reason, it will be
what he calls an information-based organization.
• As a result, the organizations are giving and will give growing
emphasis on their human capital i.e., the knowledge, education,
training, skills, and expertise of employees, the expense of
physical capital like equipment, machinery and physical plants
This growing emphasis on education and human capital has,
among other things, changed the nature of economy as service-
oriented economy.
• In the changed economic scenario, jobs demand a certain level
of expertise that is far beyond that required of most workers 20
or 30 years ago. This means that companies are relying more on
employee’s creativity and skills, i.e., employee’s brain power.
• 6. Work-Life Balance:
• As a result, the organizations are giving and will give growing
emphasis on their human capital i.e., the knowledge, education,
training, skills, and expertise of employees, the expense of physical
capital like equipment, machinery and physical plants This growing
emphasis on education and human capital has, among other things,
changed the nature of economy as service-oriented economy.
• In the changed economic scenario, jobs demand a certain level of
expertise that is far beyond that required of most workers 20 or 30
years ago. This means that companies are relying more on
employee’s creativity and skills, i.e., employee’s brain power.
• This increased pressure has affected the life of worker at an
organization in many ways. It is not only harming the social norms but
also causing many physical and psychological diseases such as heart
problem, weak immune system, stiff muscles, exhaustion and
jumpiness etc. Increased working hours means there will be very less
time to be spend with family and community. If an employee is not
mentally satisfied or balanced, he will not be able to perform his
duties with due diligence and care.