HUMAN RESOURCE MANAGEMENT

UNIT - I
Management is defined as all the activities and tasks undertaken for archiving goals by
continuous activities like; planning, organizing, leading and controlling.
Management is a process of planning, decision making, organizing, leading, motivation
and controlling the human resources, financial, physical, and information resources of an
organization to reach its goals efficiently and effectively.
Threefold Concept of Management
To understand the definition of management and its nature, a threefold concept of
management for emplacing a broader scope for the viewpoint of management. We can say
management is a;
Management is an Economic Factor
For an economist, management is one of the factors of production together with land,
labour, and capital. As the industrialization of a nation increases, the need for management
becomes greater. The managerial resources of a firm determine, in large measure, its
productivity and profitability. Executive development, therefore, is more important for those
firms in a dynamic industry in which progress is rapid.
Management is a System of Authority
From an administrator’s point of view, management is a system of authority. Historically,
management first developed an authoritarian philosophy. Later on, it turned paternalistic.
Still, later, constitutional management emerged, characterized by a concern for consistent
policies and procedures for dealing with the working group. Finally, the trend of
management turned towards a democratic and participatory approach. Modern
management is nothing but a synthesis of these four approaches to authority.
Management is a Class and Status System
As viewed by a sociologist, management is a class-and-status system. The increase in the
complexity of relationships in modern society demands that managers become elite of brain
and education. Entry into this class of executives is being more and more dependent on
excellence in education and knowledge rather than family or political connections. Some
scholars view this development as a “Managerial Revolution”. But you might have a different
point of view about management but the purpose of it remains static; reach the goal
effectively and efficiently.

PRINCIPLE FUNCTIONS AND MANAGEMENT GURUS

Management is the process of directing people to achieve organizational
goals. It involves setting objectives, assigning responsibilities, monitoring
progress toward those objectives, and evaluating results.
Managers are responsible for developing plans, policies, procedures, and
systems that will help their organizations function effectively. They are
also responsible for deciding how best to allocate scarce resources among
competing demands.
A manager has many important duties, including:
• Planning - Developing strategies and tactics to meet the organization's
needs.
• Leading - Directing others to carry out assigned tasks.
• Delegating - Assigning jobs to other employees.
• Controlling - Monitoring the performance of employees and ensuring
they follow instructions.
• Organizing - Arranging work into logical steps.
• Allocating resources - Determining which activities should receive
priority attention.

What do Managers do - Various Models/Frameworks?

The following models or frameworks can be used to describe what
managers do.

 POLC Framework - Planning, Organizing, Leading and Controlling

 Luther Gullick proposed POSDCORB - Planning, Organizing,

Staffing, Directing, Coordination, Reporting & Budgeting.

 Harold Koontz and Cyril O'Donnell proposed POSDC - Planning,

Organizing, Staffing, Directing and Controlling.
POSDC Model:
Planning - Identify the problem or opportunity, set a goal, develop a
strategy, create a plan, evaluate its effectiveness, determine the following
action, control costs, monitor progress, make adjustments as necessary.
  It is the process of deciding in advance, what to do, when to do,
how to do it (process) , and who should do it (responsibilities).

 This bridges the gap from where the organization is to where it

wants to be.

Organizing - Establish priorities, assign responsibilities, establish rules,

delegate authority, establish standards, ensure compliance with
established rules, maintain records, communicate information, coordinate
activities.

 It is the process of organizing resources and developing

productive relationships amongst them to achieve organizational
goals.

 Optimum use of resources to achieve the goal.

 This includes a grouping of tasks, assigning responsibilities,

providing resources etc.

Staffing - Select qualified personnel, train them, supervise them, evaluate

their performance, remove unsatisfactory workers.

 The primary purpose is to put the right person in the right place.

 This includes human resource planning, selection, recruitment,

remuneration, transfer, appraisal & development of personnel.

Directing - Communicate directions, give orders, hold meetings, negotiate

agreements, direct subordinates.

 This includes influencing, guiding, supervising, communicating,

and motivating subordinates to achieve organizational goals.

Controlling - Monitor performance, review reports, evaluate results,

correct errors, change direction if needed.

 Controlling is the process of checking if progress is being made

towards the goals and acting, if necessary, to correct any
deviation.
HUMAN RESOURCE MANAGEMENT:
Human: refer to the skilled workforce in the organisation.
Resource: refer to limited availability or scarce.
Management: refer to maximise or proper utilisation and make best use of limited and a
scarce resource.
The success of any organization depends upon how it manages its resources. While several
resources are the non–human resource such as land, capital, and equipment, it is the human
resource and its management which is at the heart of an organization’s success.
Human Resource (HR) refers to all the people who work in an organization called personnel.
Human Resource Management refers to the organizational function which includes practices
that help the organization to deal effectively with its people during the various phases of the
employment cycle. HRM is management function concerned with hiring, motivating, and
maintaining people in an organisation. It focuses on people in the organisation.
Human resource management is the strategic approach to nurturing and supporting
employees and ensuring a positive workplace environment. Its functions vary across
different businesses and industries, but typically include recruitment, compensation and
benefits, training and development, and employee relations.
Definition:
According to Edwin B. Flippo, “Human resource management is the planning, organizing,
directing, and controlling of the procurement, development, compensation, integration,
maintenance and separation of human resources to the end that individual, organizational
and societial objectives are accomplished.”
The Indian Institute of Personnel Management defines HRM as, “Human resource
management is a responsibility of all those who manage people as well as being a
description of the work of those who are employed as specialists. It is that part of
management which is concerned with people at work and with their relationships within an
enterprise. It applies not only to industry and commerce but to all fields of employment.”
According to Tead and Metcaff, “Human resource management is the planning, supervision,
direction and co-ordination of those activities of an organization which contribute to
realising the definite purpose of that organization, with an animating spirit of co-operation
and with a proper regard for the well-being of all the members of the organization.”
Milkovich and Boudreau view HRM as, “A series of integrated decisions that form the
employment relationship; their quality contributes to the ability of the organizations and the
employees to achieve their objective.”

SCOPE OF HRM
The scope of HRM is indeed vast. All major activities in the working life of a worker -from the
time of his or her entry until he or she leaves- come under the purview of HRM.

According to Dale Yoder, the scope of human resource management consists of the
following functions:
 Setting general and specific management policy for organisational relationships, and
establishing and maintaining a suitable organisation for leadership and co-operation.
 Collective bargaining, contract negotiation, contract administration and grievance
handling.
 Staffing the organisation, finding, getting and holding prescribed types and number
of workers.
 Aiding in the self-development of employees at all levels providing opportunities for
personal development and growth as well as for acquiring requisite skill and
experience.
 Developing and maintaining motivation for workers by providing incentives.
 Reviewing and auditing manpower management in the organisation.
  Industrial relations research – carrying out studies designed to explain employee
behavior
The Indian Institute of Personnel Management has described the scope of human resource
management into the following aspects:
i. The Labour or Personnel Aspect: It is concerned with manpower planning,
recruitment, selection, placement, induction, transfer, promotion, demotion,
termination, training and development, layoff and retrenchment, wage and salary
administration (remuneration), incentives, productivity, etc.

ii. The Welfare Aspect: This aspect is concerned with working conditions and amenities
such as canteens, creches, rest rooms, lunch rooms, housing, transport, education,
medical help, health and safety, washing facilities, recreation and cultural facilities,
etc.

iii. The Industrial Relations Aspect: This is concerned with the company’s relations with
the employees. It includes union-management relations, joint consultation,
negotiating, collective bargaining, grievance handling, disciplinary actions,
settlement of industrial disputes, etc.
All the above aspects are concerned with human element in industry as distinct from the
mechanical element.
OBJECTIVES OF HRM:
The primary objective of HRM is to ensure the availability of a competent and willing
workforce to an organization. Apart from this, there are other objectives too.
Specifically, HRM objectives are four fold: societal, organisational, functional, and personal.

i. Societal Objectives: The societal objectives are socially and ethically responsible for
the needs and challenges of society. While doing so, they have to minimize the
negative impact of such demands upon the organisation. The failure of organisations
to use their resources for society’s benefit in ethical ways may lead to restrictions.
For example, the society may limit human resource decisions to laws that enforce
reservation in hiring and laws that address discrimination, safety or other such areas
of societal concern.

ii. Organisational Objectives: The organisational objectives recognise the role of

human resource management in bringing about organisational effectiveness. Human
resource management is not an in itself; it is only a means to assist the organisation
with its primary objectives. Simply stated the human resource department exists to
serve the rest of the organisation.

iii. Functional Objectives: Functional objectives try to maintain the department’s

contribution at a level appropriate to the organisation’s needs. Human resources are
to be adjusted to suit the organisation ’s demands. The department’s level of service
must be tailored to fit the organisation it serves.

iv. Personal Objectives: Personal objectives assist employees in achieving their

personal goals, at least in so far as these goals enhance the individual’s contribution
to the organisation. Personal objectives of employees must be met if they are to be
maintained, retained and motivated. Otherwise, employee performance and
satisfaction may decline giving rise to employee turnover.
FUNCTIONS OF HRM:
Human Resources management has an important role to play in equipping organizations to
meet the challenges of an expanding and increasingly competitive sector. Increase in staff
numbers, contractual diversification and changes in demographic profile which compel the
HR managers to reconfigure the role and significance of human resources management.
Human Resource or Personnel Department is established in most of the organisations, under
the charge of an executive known as Human Resource/Personnel Manager. This department
plays an important role in the efficient management of human resources.
Some of the major functions of human resource management are as follows:
 Managerial Functions
 Operative Function
 Advisory Function
1. MANAGERIAL FUNCTIONS:
The Human Resource Manager is a part of the organisational management. So he must
perform the basic managerial functions of planning, organising, directing and controlling in
relation to his department. These functions are briefly discussed below:
1.1 Planning: To get things done through the subordinates, a manager must plan ahead.
Planning is necessary to determine the goals of the organisation and lay down policies and
procedures to reach the goals. For a human resource manager, planning means the
determination of personnel programs that will contribute to the goals of the enterprise, i.e.,
anticipating vacancies, planning job requirements, job descriptions and determination of the
sources of recruitment.
The process of personnel planning involves three essential steps.
 i. A supply and demand forecast for each job category is made. This step requires
knowledge to both labour market conditions and the strategic posture and goals of
the organization.
ii. Net shortage and excess of personnel by job category are projected for a specific
time horizon.
iii. Plans are developed to eliminate the forecast shortages and excess of particular
categories of human resources.
1.2. Organizing: Once the human resource manager has established objectives and
developed plans and programs to reach them, he must design and develop organisation
structure to carry out the various operations. The organisation structure basically includes
the following:
i. Grouping of personnel activity logically into functions or positions;
ii. Assignment of different functions to different individuals;
iii. Delegation of authority according to the tasks assigned and responsibilities involved;
iv. Co-ordination of activities of different individuals.
1.3. Directing: The plans are to be pure into effect by people. But how smoothly the plans
are implemented depends on the motivation of people. The direction function of the
personnel involved encouraging people to work willingly and effectively for the goals of the
enterprise.
In other words, the direction function is meant to guide and motivate the people to
accomplish the personnel programs. The personnel manager can motivate the employees in
an organisation through career planning, salary administration, ensuring employee morale,
developing cordial relationships and provision of safety requirements and welfare of
employees.
The motivational function poses a great challenge for any manager. The personnel manager
must have the ability to identify the needs of employees and the means and methods of
satisfy those needs. Motivation is a continuous process as new needs and expectations
emerge among employees when old ones are satisfied.
1.4. Controlling: Controlling is concerned with the regulation of activities in accordance with
the plans, which in turn have been formulated on the basis of the objectives of the
organisation. Thus, controlling completes the cycle and leads back to planning. It involves
the observation and comparison of results with the standards and correction of deviations
that may occur.
Controlling helps the personnel manager to evaluate the control the performance of the
personnel department in terms of various operative functions. It involves performance
appraisal, critical examination of personnel records and statistics and personnel audit.
2. Operative Functions:
The operative functions are those tasks or duties which are specifically entrusted to the
human resource or personnel department. These are concerned with employment,
development, compensation, integration and maintenance of personnel of the organisation.
The operative functions of human resource or personnel department are discussed below:
2.1. Employment: The first operative function of the human resource of personnel
department is the employment of proper kind and number of persons necessary to achieve
the objectives of the organisation. This involves recruitment, selection, placement, etc. of
the personnel.
Before these processes are performed, it is better to determine the manpower requirements
both in terms of number and quality of the personnel. Recruitment and selection cover the
sources of supply of labour and the devices designed to select the right type of people for
various jobs. Induction and placement of personnel for their better performance also come
under the employment or procurement function.
2.2. Development: Training and development of personnel is a follow up of the
employment function. It is a duty of management to train each employee property to
develop technical skills for the job for which he has been employed and also to develop him
for the higher jobs in the organisation. Proper development of personnel is necessary to
increase their skills in doing their jobs and in satisfying their growth need.
For this purpose, the personnel departments will device appropriate training programs.
There are several on- the-job and off-the-job methods available for training purposes. A
good training program should include a mixture of both types of methods. It is important to
point out that personnel department arranges for training not only of new employees but
also of old employees to update their knowledge in the use of latest techniques.
2.3. Compensation: This function is concerned with the determination of adequate and
equitable remuneration of the employees in the organisation of their contribution to the
organisational goals. The personnel can be compensated both in terms of monetary as well
as non-monetary rewards.
Factors which must be borne in mind while fixing the remuneration of personnel are their
basic needs, requirements of jobs, legal provisions regarding minimum wages, capacity of
the organisation to pay, wage level afforded by competitors etc. For fixing the wage levels,
the personnel department can make use of certain techniques like job evaluation and
performance appraisal.
2.4. Maintenance (Working Conditions and Welfare): Merely appointment and training of
people is not sufficient; they must be provided with good working, conditions so that they
may like their work and workplace and maintain their efficiency. Working conditions
certainly influence the motivation and morale of the employees. These include measures
taken for health, safety, and comfort of the workforce. The personnel department also
provides for various welfare services which relate to the physical and social well-being of the
employees. These may include provision of cafeteria, rest rooms, counseling, group
insurance, education for children of employees, recreational facilities, etc.
2.5. Motivation: Employees work in the organisation for the satisfaction of their needs. In
many of the cases, it is found that they do not contribute towards the organisational goals as
much as they can. This happens because employees are not adequately motivated. The
human resource manager helps the various departmental managers to design a system of
financial and non-financial rewards to motivate the employees.
2.6. Personnel Records: The human resource or personnel department maintains the
records of the employees working in the enterprise. It keeps full records of their training,
achievements, transfer, promotion, etc. It also preserves many other records relating to the
behaviour of personnel like absenteeism and labour turnover and the personnel programs
and policies of the organisation.
2.7. Industrial Relations: These days, the responsibility of maintaining good industrial
relations is mainly discharged by the human resource manager. The human resource
manager can help in collective bargaining, joint consultation and settlement of disputes, if
the need arises. This is because of the fact that he is in possession of full information relating
to personnel and has the working knowledge of various labour enactments.
The human resource manager can do a great deal in maintaining industrial peace in the
organisation as he is deeply associated with various committees on discipline, labour
welfare, safety, grievance, etc. He helps in laying down the grievance procedure to redress
the grievances of the employees. He also gives authentic information to the trade union
leaders and conveys their views on various labour problems to the top management.
2.8. Separation: Since the first function of human resource management is to procure the
employees, it is logical that the last should be the separation and return of that person to
society. Most people do not die on the job. The organisation is responsible for meeting
certain requirements of due process in separation, as well as assuring that the returned
person is in as good shape as possible. The personnel manager has to ensure the release of
retirement benefits to the retiring personnel in time.
3. Advisory Functions:
Human resource manager has specialised education and training in managing human
resources. He is an expert in his area and so can give advice on matters relating to human
resources of the organisation. He offers his advice to:
3.1. Advised to Top Management: Personnel manager advises the top management in
formulation and evaluation of personnel programs, policies and procedures. He also gives
advice for achieving and maintaining good human relations and high employee morale.
3.2. Advised to Departmental Heads: Personnel manager offers advice to the heads of
various departments on matters such as manpower planning, job analysis and design,
recruitment and selection, placement, training, performance appraisal, etc.
The functions are responsive to current staffing needs, but can be proactive in reshaping
organizational objectives. All the functions of HRM are correlated with the core objectives
of HRM (Table 1).
For example- Personal objectives is sought to be realized through functions like
remuneration, assessment etc.