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SCHOOL OF
MANAGEMENT STUDIES

HUMAN RESOURCE MANAGEMENT

UNIT I
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Unit 1 INTRODUCTION

Human Resource Management-Meaning, Definition, Nature, Scope, Importance and Role of

HRM, Evolution of HRM – Operative and Managerial Functions, Difference between HRM

and Personnel Management Qualities, Roles and Responsibilities of HR Manager, Structure of

HRM Department- Challenges and Issues in HRM

HUMAN RESOURCE MANAGEMENT

Human Resource Management is a relatively new approach to managing human beings in any
organization. Human beings are considered as the key resource in this approach. Since an
organization is a body of people, their acquisition, development of skills, motivation for higher
levels of attainments, as well as ensuring maintenance of their level of commitment are all
significant activities. All these activities fall in the domain of Human Resource Management.
Human Resource Management is responsible for maintaining good human relations in the
organization. It is also concerned with development of individuals and achieving integration of
goals of the organization and those of the individuals.
Human Resource Management, or HRM, is the practice of managing people to achieve better
performance. For example, if you hire people into a business, you are looking for people who fit
the company culture as they will be happier, stay longer, and be more productive.
Meaning of HRM
Human resource management is organizing, coordinating, and managing employees within an
organization to accomplish its mission, vision, and goals. This includes recruiting, hiring, training,
compensating, retaining, and motivating employees
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DEFINITIONS OF HRM
Human resources management (HRM) is a management function concerned with hiring,
motivating and maintaining people in an organization. It focuses on people in organizations.
Human resource management is designing management systems to ensure that human talent is
used effectively and efficiently to accomplish organizational goals.
According to Edwin Flippo , HRM as “planning, organizing, directing, controlling of procurement,
development, compensation, integration, maintenance and separation of human resources to the
end that individual, organizational and social objectives are achieved.”
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 best to the organization”.
According to Dessler (2008) the policies and practices involved in carrying out the people or
human resource aspects of a management position, including recruiting, screening, training,
rewarding, and appraising comprises of HRM.

NATURE OF HRM
Organization is consists of men, machine and materials but the HRM is the one which
organize and manage the organization.
 HRM recruit, develop, maintain and remunerating the employees in organization.
 The decisions related to employees are taken by HRM.
 The HRM systematically approach in handling man power resources.
 HRM is an ongoing activity.
It is interdisciplinary, Combination of Sociology, psychology, economics and so on
 It is based on Human Relations: Human Resource Management is concerned with the
motivation of human resources in the organization.
 It is people centered: Human Resource Management is people centered and is relevant in all
types of organizations. It is concerned with all categories of personnel from top to the bottom of
the organization.

SCOPE OF THE HRM

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Human resources planning: – Human resource planning is a process by which the company to
identify the number of jobs vacant, whether the company has excess staff or shortage of staff and
to deal with this excess or shortage.
Job analysis design: – Another important area of HRM is job analysis. Job analysis gives a
detailed explanation about each and every job in the company. Based on this job analysis the
company prepares advertisements.
Recruitment and selection: – Based on information collected from job analysis the company
prepares advertisements and publishes them in the newspapers. A number of applications are
received after the advertisement is published, interviews are conducted and the right employee is
selected thus recruitment and selection are yet another important areas of HRM.

Orientation and induction: – Once the employees have been selected an induction or orientation
program is conducted. The employees are informed about the background of the company. They
are told about the organizational culture and values and work ethics and introduce to the other
employees.

Training and development: – Every employee goes under training program which helps him to
put up a better performance on the job. Training program is also conducted for existing staff that
have a lot of experience. This is called refresher training. Training and development is one area
where the company spends a huge amount.

Performance appraisal: – Once the employee has put in around 1 year of service, performance
appraisal is conducted i.e. the HR department checks the performance of the employee. Based on
these appraisal future promotions, incentives, increments in salary are decided.

Compensation planning and remuneration: – There are various rules regarding compensation
and other benefits. It is the job of the HR department to look into remuneration and compensation
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planning.

Motivation, welfare, health and safety: – Motivation becomes important to sustain the number of
employees in the company. It is the job of the HR department to look into the different methods of
motivation. Apart from this certain health and safety regulations have to be followed for the
benefits of the employees.

Industrial relations: – Another important area of HRM is maintaining co-ordinal relations with
the union members. This will help the organization to prevent strikes lockouts and ensure smooth
working in the company

IMPORTANCE OF HRM
Human Resource Management is related with effective utilization of human resources.
The importance of HRM can be discussed as:

1.Organizational Importance
Human Resource Management can help an organization to achieve to its objective more efficiently
and effectively in the following ways:
(a) Procurement of required talents through recruitment, selection, placement, inducting,
training, compensation and promotion policies.
(b) Secures co-operation of all employee of the organization for achieving goals.
(c) Proper utilization of human resources for the success of the enterprise.
(d) Ensure a future team of efficient competent workers required for the organization.

2.Professional Importance
Professional competency among employees can be achieved through the following ways.
(e) Human resource management provides maximum opportunities to employees for their
personnel development.
(f) Providing healthy relationship among employees
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(g) Proper allocation of work among employees.

(h) Providing training facilities for the individual development of employees.

3.Social Importance
(i) Human resource management enhances the dignity of labour.
(j) Provides suitable job to suitable person and it will help to satisfy the psychological and social
satisfaction of employees.
(k) Helps to provide reasonable compensation to workers, which leads them to have a good
standard of living.
(l) Helps to maintain a balance between jobs and job seekers in terms of numbers,
qualification, aptitude etc.
(m) Takes health and safety measures which ensures physical and mental health of the
employees.

4.National Importance
Effective management of human resources will speed up the economic growth of nation. This in
turn leads to better standard of living and more job opportunities.

ROLE OF HRM
Human Resource Management undertakes the following activities:
1. Human resource or manpower planning.
2. Recruitment, selection and placement of personnel.
3. Training and development of employees.
4. Appraisal of performance of employees.
5. Taking corrective steps such as transfer from one job to another.
6. Remuneration of employees.
7. Social security and welfare of employees.
8. Setting general and specific management policy for organizational relationship.
9. Collective bargaining, contract negotiation and grievance handling.
10. Staffing the organization.
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11. Aiding in the self-development of employees at all levels.

12. Developing and maintaining motivation for workers by providing incentives.
13. Reviewing and auditing manpower management in the organization
14. Potential Appraisal Feedback Counseling.
15. Role Analysis for job occupants.
16. Job Rotation.
17. Quality of work life

EVOLUTION OF HRM
Awareness regarding HRM was felt during the industrial revolution around 1850 in Western
Europe and U.S.A. Only during the beginning of 20th century, it was felt in India. The evolution of
the concept of Human Resource Management can be categorized as follow

Period before industrial revolution – The society was primarily an agriculture economy with
limited production. Number of specialized crafts was limited and was usually carried out within a
village or community with apprentices assisting the master craftsmen. Communication channel
were limited.
Period of industrial revolution (1750 to 1850) – Industrial revolution marked the conversion
of economy from agriculture based upon industry. Modernization and increased means of
communication gave way to industrial setup. A department was set up to look into workers’ wages,
welfare and other related issues. This led to emergence of personnel management with the major
task as
 Workers’ wages and salaries
 Worker’s record maintenance
 Worker’s housing facilities and health care

An important event in industrial revolution was growth of Labour Union (1790) the works working in the
industries or factories were subjected to long working hours and very less wages. With growing unrest,
workers across the world started protest and this led to the establishment of Labour unions. To deal with
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labour issues at one end and management at the other Personnel Management department had to be capable
of politics and diplomacy, thus the industrial relation department emerged

Post Industrial revolution – The term Human resource Management saw a major evolution after
1850. Various studies were released and many experiments were conducted during this period
which gave HRM altogether a new meaning and importance.
A brief overview of major theories release during this period is presented below

1. Frederick W. Taylor gave principles of scientific management (1857 to 1911) led to the
evolution of scientific human resource management approach which was involved in
 Worker’s training
 Maintaining wage uniformity
 Focus on attaining better productivity.

2. Hawthorne studies, conducted by Elton Mayo & Fritz Roethlisberger (1927 to 1940). –
Observations and findings of Hawthorne experiment shifted the focus of Human resource from
increasing worker’s productivity to increasing worker’s efficiency through greater work
satisfaction.

3.Douglas McGregor Theory X and Theory Y (1960) and Abraham Maslow’s Hierarchy of needs
(1954) – These studies and observations led to the transition from the administrative and passive
Personnel Management approach to a more dynamic Human Resource Management approach
which considered workers as a valuable resource.As a result of these principles and studies, Human
resource management became increasingly line management function, linked to core business operations

Some of the major activities of HR department are listed as-

 Recruiting and selecting skilled workforce.
 Motivation and employee benefits
 Training and development of workforce
 Performance related salaries and appraisals.
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FUNCTIONS OF HRM
The functions of human resources management may be classified as:
Managerial function
Operative function

Managerial Functions
Planning: Planning means forecasting or predicting the future activity in a specific manner or structure. It
is the basic function and essential for all the organization.

Organizing: It is collection or joining of all the resources available within the organizational and outside, in
order to achieve the organizational goal with efficiency.

Staffing: It involves appointing the right man for the right job at the right time. The management is to
analyse the human resource, see if he is suitable for the job and accordingly allocate the work in the
organization
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Directing: It is showing the correct path or correct way to achieve the organizational goal within the
specified time.

Controlling: Controlling as a function that concerns on regulating the person or monitoring him whether he
performs in a better way to achieve the common goal efficiently.

Coordinating: It is a type of support function. It involves accumulating the work to achieve the task.

Operative Functions
Procurement: Procurement refers to a series of activities undertaken by the human resource manager filling
the present and future vacancies of the organization

. • Job Analysis
• HRP
• Recruitment and Selection

Development: Development refers to both employees training and management development. Human
resource managers are responsible for conducting and supervising training and development programmes
for employees

. • Career planning
• Workers Training
• Executive development
• Organisational Development

Compensation: Compensation refers to determination of the pay scale and other benefits for the
employees. HR manager must ensure fair and equitable pay rates, Reward system incentive plans bonus and
flexible work schedules.

Maintenance: It aims at retaining efficient and experienced employees in organisation. The HR managers
are responsible for offering occupational safety, Health promotion, Physical fitness, Canteen facilities,
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Recreation activities, transportation programmes, Employee suggestion schemes and creating a positive
work environment

. • Employee well being

• Social security
• Workers
• Job Rotation
Integration: It aims at ensuring good relations between the management and the employees.
• Industrial Relations
• Discipline
• Grievance
• Dispute settlement
• Collective bargaining

DIFFERENCE BETWEEN HUMAN RESOURCE MANAGEMENT AND PERSONNEL

Human Resource Management Personnel Management

01.HRM Is Proactive in nature; it is not only PM is Mainly reactive in nature. It satisfies

concerned with the present organizational itself ensuring peaceful labour management
conditions but foresees future nesessities and relations the present.
the acts appropriately.

02.HRM is a resource centered focuses more on PM which is basically employee-centered aims

the managerial aspects; in term of delegating at hiring. Training compensating and
the responsibility of HRM to line authority. maintaining the organization.
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03.The term used in broader sense, refers to the The term however used To refers the task of
task of managing people belonging to the managing the employees of the concern.
different sections of the society.

04.measures are taken for the over all progress Measures are taken to satisfy economic
of the employee i.e. his economics social and needs of the employee.
psychological needs are fulfilled.

05.The amount spent on the employee is viewed The amount spent on the employees is seen as
as an investment. expenditure incurred.

06.HRM seeks to develop the competencies of Employees get uniform reward based on job
the employees on a sustained basis. evaluation and job worth.

QUALITIES OF GOOD HR MANAGER

1. Good Communication
2. Educational Qualification
3. Discriminating Skill
4. Leadership Qualities
5. Fair and honest in his dealing
6. Ability to take a decision independently
7. Professional altitude
8. Ability to solve complex HR problems
9. Experience (of his/her specific field)
10. Personality
11. Risk taking
12. Creative and innovative
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ROLES/ RESPONSIBILITIES OF HR MANAGER

Human Resource Manager is one of the most important key to open a lock hanging on the door of success
in an organisation. If a Human Resource Manager is efficient enough to handle and to take out best from his
team members any oragnisation, it can achieve more from his target goals. Human Resource manager plays
a very important role in hierarchy and also in between the higher management and low level employees.
Stated below are major responsibilities of Human Resource Manager:-

 Other: Documenting rules and regulations, conflict resolution, and disciplinary actions
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STRUCTURE OF HR DEPARTMENT
ORGANIZATIONAL STRUCTURE OF HRM DEPARTMENT
HR MANAGER
ADMINISTRATIVE MANAGER
1.Canteen
2.Medical
3.Transport
4.Public relations
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5.Legal
HRD MANAGER
1.Training and development
2.Counselling
3.Appraisal
 Performance appraisal
 Potential appraisal
PERSONNAL MANAGER
1.Recrutment and selection
2.Job analysis and design
3.Compensation
4.Orientation and placement
IR MANAGER
1.Safety and healthy
2.Welfare
3.grievance
Challenges and issues HRM
 Change management
HRM may need to focus on training to develop competencies for managing change. HR
managers should also ensure their role aligns with the needs of the changing organization.
 Leadership development
HRM should nurture employees' leadership skills and help them advance their careers. This is a
strategic initiative that should be handled carefully to retain the best employees.
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 Compensation
HRM should ensure employees receive fair and competitive pay, benefits, and perks while
keeping costs under the budget.
 Diversity
HRM should be extra careful while handling a team of employees belonging to different races,
cultures, and gender.
 Embracing new technology
HRM should keep up with the latest technology trends and adopt new tools and systems to help
streamline the HRM system.
 Training and development
HRM should assess employee training and development needs before implementing HRM. HRM
should also consider people's ambitions and needs while developing human resource policies.
 Attracting talented employees

HRM faces challenges in attracting and retaining talented employees. With manual HR processes, it can be
difficult to implement talent management strategies that improve employee retention.