UNIT -I

HRM: Significance - Definition and Functions – evolution of HRM- Principles - Ethical

Aspects of HRM- - HR policies, Strategies to increase firm performance - Role and position
of HR department –aligning HR strategy with organizational strategy - HRM – changing ,
global perspective challenges, environment – cross- cultural problems – emerging trends in
HRM.

1.1 INTRODUCTION TO THE HRM

Human resource 'management is that part of management which is directly concerned
with the people employed in an organization. It involves procuring, developing and
maintaining a competent work force so as to achieve the, goals of organization efficiently
and effectively. I,

In short, human resource management may be defined as obtaining, utilizing and

maintaining an effective and satisfied work force.
Human Resource Management may be defined as -the art of procuring, developing and
maintaining competent workforce to achieve organizational goals efficiently.
According to Invancevich and Glueck, "HRM is concerned with the most
effective use of people to achieve organizational and individual goals".
According to Byars and Rue, "HRM encompasses those activities that are
designed to provide for and coordinate the human resources of an organization".
According to Flippo, HRM is the planning, organizing, directing and controlling of
the procurement, development, compensation, integration, maintenance and separation
of human resources to the objectives are accomplished"
1.2 NATURE OF HRM
1. Broader Function
Human Resource Management is a comprehensive function because it is about
managing people in the organization. It covers all types of people in the organization:'-and
workers till the top level management.
2. People Oriented
Human resource is the core of all the processes of human resource management. So FIRM is
the process which brings people and organizations together so that their goals can be
achieved.
3. Action Oriented
Human resource management believes in taking actions in order to achieve individual and
organizational goals rather than just keeping records and procedures.

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4. Development Oriented.
Development of employees is an essential function of human resource management in
order to get maximum satisfaction from their work so that they give their best to the
organization.
5. Integrating Mechanism
HRM tries to build and maintain cordial relations between people working at various levels
in the organization.
6. Continuous Function
As human resource is a living factor among all factors of production therefore it requires
continuous improvement and innovations in order to get excellence. So it requires a
constant alertness and awareness of human relations and there importance in every day to
day operations.
1.3 CHARACTERISTICS OF HRM
The following are the characteristics of HRM.
Comprehensive Managerial Function
Human resource management is associated with managing the employees or people at
workplace. It manages all types of people from different levels. It manages managers,
supervisors, officers, workers etc
1. It is People Oriented
HRM deals with employees as individuals as well as groups and relates with the
organization. It brings people together with job, organization and environment in order to
achieve the _organizational goals. It aims at the overall development of individuals so that
they can fit best with the requirements. It trains these individuals accordingly.
2. It is Task Oriented
HRM focuses on the task achievement rather than, on recordkeeping and procedures. It
finds solutions to problems in order to achieve both organizational and individual objectives.
3. It is Development Oriented
HRM is concerned with development of both the organization as a whole and the
development of an individual in all dimensions. It develops an individual so that, he can
achieve organizational goals effectively.
4. Future Oriented
HRM helps an organization to achieve its future objectives by providing competent and well-
motivated personnel. Thus, it incorporates the personnel into an organization's long-term,
strategic plans.

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 5. It is Globally Oriented
In the present scenario HRM is a globally oriented function and is being practiced in all the
countries in almost all organizations. Many organizations treat the individuals fairly, with
respect and with sensitivity.
1.4 SCO PE OF HRM
The scope of HRM is very immense. HRM plays a vital role of a worker from the
time he enters into any organization till he leaves. HRM activities include —
1. Procurement: It the placements of right kind of personal to the right post. It includes
determination of manpower requirements. Job analysis, Nature and scope of requirement,
employee selection and placement of employment.
2. Training and Development: Training and Development is a must in any organization. It
prepares the worker to the actual situations in the orgnisation
3. Job Analysis and Job Description: Job analysis and job description involves the
studies of job requirements of the enterprise and assignment of well defined functions to jobs so
that qualified employees may be hired. It also forms the basis of wage determination.
4. Remuneration: Providing proper remuneration to the employees for the job done through
job analysis and job description. It includes determining wage rates, incentives, wage
payment, rewards and benefits and performance appraisal.
5. Welfare and Industrial Relations: It includes health and safety program, sanitary
facilities, recreational facilities etc.
1 .5 SIGNIFICANCE OF HRM
Significance of FIRM can be discussed at four levels which are as follows:
1. Cor porate Level
For an enterprise effective FIRM leads to attainment of its goal efficiently and effectively.
HRM helps enterprise in the following ways.
a. Hiring required skill set and retaining them through effective human resource planning,
recruitment, selection, placement, orientation and promotion policies.
b. Development of employees by enhancing necessary skills and right attitude among employees
through training, development, performance appraisals etc.
c. HRM also takes care of optimum utilization, of available human resource.
d. FIRM also ensures that organization has a competent team and dedicated employees in future.
2. Significance at Professional Level
•FIRM also leads to improved quality of work life, it enables effective team

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 3. Significance at Social Level
a. HRM plays important role in the society, it helps labour to live with pride and dignity by
providing employment which in turn gives them social and psychological satisfaction.
b. FIRM also maintains balance between open jobs and job seekers.
4. Significance at National Level
HRM plays a very significant role in the development of nation. Efficient and
committed human resource leads to effective exploitation and utilization of a nations natural,
physical and financial resources. Skilled and developed human resource ensures the
development of that country. If people are underdeveloped then that country will be
underdeveloped. Effective FIRM enhances economic growth which in turn leads to higher
standard of living and maximum employment.
1.6 FUNCTIONS OF HRM
The functions of HRM can be broadly classified into 2 categories: Managerial Functions
Operative functions
1) Managerial Functions
a) Planning: Planning is a predetermined course of action. During this phase the organizational
goals and formulation of policies and programmer to achieve the goals are determined. The
desired directions of future activities are cleverly charted. Planning is the starting managerial
function. Forecasting is one of the important elements of planning.
b) Organizing: It is the process in which the structure and allocation of jobs are determined.
Specific tasks, Departmentation, delegation of authority, 'communication channels, and
coordination of the work of subordinates are the major activities decided during the
organizing phase.
Staffing: This 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, selection, performance appraisal and management, compensation,
employee counseling, training and development of employees
d) Directing: It is the process of activating group efforts to achieve the desired goals. It includes
motivation, leading, communication activities; to achieve the goals of the organization.
e) Controlling: It is the process of setting standards for performance, checks the actual
performance with these standards and taking corrective actions as needed.

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 2) Operative Functions
a) Procurement: Involves processing the right kind of people to be placed in the organization.
It consists of job analysis, HR planning, recruitment, selection, placement, induction of new
employees.
b) Development: This function involves activities meant to improve the knowledge, skills,
aptitudes and values of employees so as to enable them to perform their job in effective manner.
c) Compensation: Compensation function involves determination of wages and salaries
matching with contribution made by employees to meet organizational goals. This function
ensures fair wages to employees. It consists of activities such as job evaluation, wages and salary,
administration, bonus, incentives etc.
d) Maintenance: It is connected with protecting and promoting employees while at work. For
this purpose, various benefits such as housing, medical, education, transport facilities etc. are
provided to the employees. Several social security measures such as provident fund, pension,
gratuity, group insurance etc. are also arranged.
1.7 EVOLUTION OF HRM
Human Resource Management in its simplest definition means management of
organization's manpower or workforce or human resources.
Evolution of HRM
The evolution of the concept of Human Resource Management is presented below.
1.Period before industrial revolution: The society was primarily 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
2. Period of industrial revolution (1750 to 1850):
Industrial revolution the conversion of economy from agriculture' based to industry
base:: Modernization and increased means if communication gave way to indent_ 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
Worker's 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

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 establishment of Labour unions. To deal with 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.
3. 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 Frederick W.
Taylor gave principles of scientific management (1857 o 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.
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.
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-
1) Recruitment and selection of skilled workforce.
2) Motivation and employee benefits
3) Training and development of workforce
4) Performance related salaries and appraisals.
4. Strategic Human Resource Management Approach
With increase in technology and knowledge base industries and as a result of global
competition, Human Resource Management is assuming more critical role today . Its major
accomplishment is aligning individual goals and objectives with corporate goals and
objectives. Strategic HRM focuses on actions that differentiate the organization from its
competitors and aims to make long term impact on the success of organization.

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 1.8 PRINCIPLES OF HRM
HRM is based on various principles which are as follows:
1) Principle of Individual Development: Every employee must be offered full and equal
opportunity 'to develop in order to realize his fullest potentialities. The individual employee must
be able to grow to his fullest capabilities.
2) Principle of Scientific Selection Procedure: Systematic and scientific procedures
must be employed in selection: A careful selection and proper usage of personnel tools and
techniques are necessary to promote scientific selection. A scientific matching of men and
jobs is essential. It is necessary to aid the line management in finding the right men for the right
jobs after a systematic study of jobs, men and sources of recruitment.
3) Principle of Incentive: It is necessary to recognise and reward good performance. If
we want an individual to contribute his best on his work, the principle of incentive must be
utilized, the incentive may be monetary or non-monetary and it is shaping and motivating them
in such a way that they will contribute their maximum to realization of organisational
objectives and goals.
4) Principle of Adequate Communication: As far as possible supply all relevant information to
the employees. The company policies, programmes, objectives and philosophy may be made
known to the employees. The channels and content of communication must be carefully
prepared and developed. Effective language and proper communication styles must be
adopted. All hurdles in the way of adequate communication must be removed.

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5) Principle of Participation: This principle is based on the consultative-participative
managerial philosophy where the employer-employee relations are of mutual trust,
confidence, and give-and-take. The employees through their representatives are consulted and
brought within the purview of participation in influencing decisions. The employees are offered
opportunities to come-up with their ideas, views, and suggestions to improve various
operations of the organisation. The employees must develop a sense of participation and
belonging and he must feel that he is contributing his mite to the growth of the organisation.

Principle of Fair Compensation: The wage and salary structure mast be fair and
equitable. A fair day's work .must receive fair day's wage and the personnel executive can
help in arriving at what is a fair day's pay or wage for a fair day's work. Apart from pay and
compensation, it is essential to provide good working conditions and environment, and
good tools and equipment for the employees.
7) Principle of Dignity of Labour: According to this principle any labour that is productive is
good and commendable. No job or task should be held as beneath one's station and neglected.
Essentially it must promote the notion that any job or task must be done as best one can.
8) Principle of Team Spirit: The promotion of the will to collaborate among the employees is
essential and esprit de corps must be nurtured. Without team spirit business success cannot be
achieved. Personnel policies and programmes must be so formulated that individuals
function together as a group to attain the predetermined ends.
Principle of Labour and Management Cooperation: According to this principle, such
an atmosphere should be created in the organisation that labour (the major factor of
production) and management consider each other indispensable. Labour should
understand that he cannot proceed in his work without the existence of management, and
management should understand that it has no identity without the existence of labour.
10) Principle of Contribution to National Prosperity: Employees must be educated,
through appropriate personnel programmes, to believe in the proposition that their
contribution to the achievement of company' goals will ultimately contribute to the economic
development and prosperity of the nation as a whole. The proposition offers a higher
purpose to the work of employees and they are likely to derive greater satisfaction in the
knowledge that their contribution along with that of management will result in greater
productivity and profits which brings prosperity to labour and management as well as the
nation.

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 1.9 ETHICAL ASPECTS OF HRM
The word "ethics" is derived from the Greek word "ethos", which refers to character,
guiding beliefs, standards or ideals that pervade (encompass) a group, community or people.
As far as HRM is concerned, what is ethical and what is unethical in general may not be easy
to answer. An organization's human resource policies and practices represent important forces
for shaping employee's behavior and attitudes. Thus, there is a close linkage between HRM
and ethics. Ethics in HRM can be defined as functioning and performing HRM policies and
practices with some standard norms and managing human resources so that mutual benefits
can be achieved. A number of critical ethical issues exist in the field of HRM as explained
below:
1) Recruitment and Selection
One of the most common problems that occur in hiring is that of discrimination and
harassment, pressure to hire a friend or family member, dealing with employees having
faked credentials, misleading advertisements. Guidelines for dealing with these kind of ethical
issues are as follows:
 When employers recruit new employees, they should tell the applicants about the true state
of the organisation. They should not mislead the applicants.
 Recruiters should always state clearly terms of employment.
 Recruiters should clearly set out the criteria of selection. These should before made known
to those who are involved in selection. Those Candidates should be given ample opportunity
to express themselves, so that enough information is generated to enable taking well-
informed decisions.
2) Training
Training of employees is perhaps the best way to foster ethical programmes of organisations.
Generally, training needs to focus on the culture of the organisation, its values, and
expectations. In addition to focusing on the contents of training, the employees should be
given to understand that these contents have to be seen in the light of the values cherished by
the organisation. To establish fairness, human resource managers should ensure that:
i) Training does not become a paid holiday.
ii) Those who require training should be sent to training. Substitutes should be discouraged.
iii) Organisations should regularly measure the capacity of trained personnel.
iv) Organisations should provide opportunities to utilize the learning acquired during training.

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 3) Performance Appraisal:
It is one area- that has always been a source of contention. Thus, to support a value-
oriented ethics programme, the 'appraisal process should incorporate concern for ethics
and fairness, both in the criteria for evaluation and the conduct of appraisal itself. The
performance goals must be supportive to the overall ethical goals of the organisation. They
should focus on means as well as on ends. Performance appraisal is important because
most organisations base their rewards (pay, promotion, etc.) on the basis of appraisal reports.
Hence, appraisal becomes the key to conveying information about fairness. It should be free
from bias and should be communicated honestly to the employees. Employees should be given
explanations, especially in case of negative outcomes. Human resource managers should take
these considerations in designing the appraisal system and training the supervisors on how
to conduct the appraisal fairly.
Reward System
Reward and punishment should also be evaluated in terms of fairness. Rewarding ethical
behavior and punishing unethical conduct reinforces ethical expectations from employees.
Routine ethical behavior does not deserve any reward. In fact rewards for normally expected
behavior may conflict with the employee's belief that ethical behavior by itself is a reward.
Reward for ethical conduct might be best presented in the long-term with promotion,
recognition, etc.
5)Race, Gender, Age, and Disability: The practice of treatment of employees according
to their race. Ethnic origin, sex, or disability has largely been stopped. A framework of laws
and regulations has evolved that has significantly improved workplace behaviour. No enterprise
today dare to publicly state it denies minorities, woman, and the disable opportunities for
employment, remuneration, and growth prospects different from those given to others. In this
environment the role of HR function is to:
i) Monitor the principles and norms of the enterprise to ensure that they reflect the values of the
society as expressed in its law.
ii) Monitor the selection, rewards, development and the appraisal system to ensure that they are
consistent with the principles and norms.
iii) Vigorously pursue violations and, when necessary, vigorously work to defend the enterprise
against unfounded allegations.
6) Privacy Issues
Privacy issues to protecting a person's private life from intrusive and unwarranted actions..The
employee believes that his or her religious, political, and social beliefs as well as personal

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lifestyle are private matters and should be safeguarded from being snooped or analyzed.
Exceptions are permitted grudgingly only V; her-. Involvement is clearly involved. For example,
it may not be inappropriate to into an employee's private matter if it is suspected that he or she
discusses competitor, through e-mail messages, the specification of newly developed product:
not yet launched into the market.
7) Safety and Health
Much of the industrial work is hazardous. This is because of the extensive use c high
speed and noisy machinery, production processes requiring high temperature. an increasing
reliance on chemical compounds. Accidents, injuries and illnesses are likely to occur under
these circumstances. Over past decade, new categories of accident and illness have emerged,
including the fast growing job safety problem of office injuries.
8) Re-Structuring and Lay-Offs
Re-structuring and consequent lay-offs have become relevant because of poor
management, but incompetence does not become unethical. There are ethical
implications in the process by which termination decisions are made and actions taken. For
example, if re-structuring requires closing a plant, the process by which that plant is chosen, how
the news will be communicated, and the timeframe for completing the layoffs are ethically
important. If conducted in an atmosphere of fairness and equity and with dignity of the
affected individuals in mind, the action is ethical.
1.10 HR POLICIES
Definition of Human Resource Policy
A policy is a plan of action. Brewster and Richbell defined personnel policies as, "a set
of proposals and actions that act as a reference point for managers in their dealings with
employees. Personnel policies constitute guides to action. They furnish the general standards
or bases on which decisions are reached. Their genesis lies in an organization's values,
philosophy, concepts and principles". Personnel policies guide the course of action intended
to accomplish personnel objectives.
Broadly speaking, thus, policies are broad statements, which express the
organization's principles and philosophy towards its human resource group, intentionally broad,
so that they may be applied to various situations. Policies do not include detailed statements
describing specifically how the policy, is to be implemented. Policies are implemented by
procedures.
Characteristics of a Sound Personnel Policy

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 1) Related to Objectives: Policies must be capable of relating objectives to functions,
physical factors and company personnel.
Easy to Understand: Policies should be stated in definite, positive, clear and understandable
language.
3) Precise: Policies should be sufficiently comprehensive and prescribe limits and yardsticks for
future action.
4) Stable as well as Flexible: Personnel policies should be stable enough to assure people
that there will not be drastic overnight changes. They should be flexible enough to keep the
organization in tune with the times.
5) Based on Facts: Personnel policies should be built on the basis of facts and sound
judgment and not on personnel feelings or opportunistic decisions.
6) Appropriate Number: There should be as many personnel policies as necessary to
cover conditions that can be anticipated, but not so many that they become confusing or
meaningless.
Just, Fair and Equitable: Personnel policies should be just, fair and equitable to internal as
well as external groups. For example, a policy of recruitment from within may limit
opportunities to bright candidates from outside; and a policy of 'recruitment from outside only'
would limit promotional avenues to promising internal candidates. To ensure justice, it is
necessary to pursue both the policies scrupulously and to apply them carefully.
8)Reasonable: Personnel policies must be reasonable and capable of being
accomplished. To gain acceptance and commitment from employees, they should be
'conditioned by the suggestions and reactions of those who will be affected by the policy'.
Review: Periodic review of personnel policies is essential to keep in tune with changing times
and to avoid organizational complacency or managerial stagnation. For instance, if the
current thinking is in favour of worker's participation in management, the personnel
policy should be suitably adjusted to accommodate the latest fad, accepted by many in the
organization.
Types of Personal Policies
1) Originated Policies: These are established by top management deliberate, so as to
guide executive thinking at various levels.
2) Appealed Policies: These are formulated to meet the requirements of certain
situations which have not been covered by the earlier policies. Such requests usually came
from subordinates who fail to handle the cases on guidance offered by existing policies.

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3) Imposed Policies: These are formed under pressure from external agencies such as
government, trade associations and unions. And growth chart.
4) Specific Policies: These policies cover specific issues such as hiring, necessary and
bargaining. Such policies, however, should be in line with the basic income
framework offered by the general policies.
5) Better Control : As personnel policies specify the relationship shared between
6) Written or Implied Policies: Implied policies are inferred from the behaviour of
members (such as dress code, gentle tone while talking to customers, not getting angry while at
work, etc.). Written policies, on the other hand, spell out managerial thinking on paper so that
there is very little room for loose interpretation.
Advantages of Policies
Policies are useful instructional devices, offer many advantages to the personnel working at
various, levels. These are:
1) Delegation: They help managers operating at different levels to act with
confidence without the need for consulting superiors every time.
2) Uniformity: They increase the chances of different people at different levels of
the organization making similar choices, when independently facing similar situations.
1) They make the actions of organizational members more consistent.
4) Standards of Efficiency:
Policies can also serve as standards in the execution of work. They enable the management
to see if they have been translated into action by various groups in the organization or
not. In the light of actual performance, existing policies may be subjected to
amendment/refinement.
Confidence: Policies make the employees aware of where they standard in the organization
and create confidence in them while confronting routine and recurring problems. They
reduce chances of misinterpretation, misrepresentation and friction.
6)Speedy Decisions: Policies can speed up decision making by providing a blanket
framework within which personnel decisions can be made. They summarize past
experience.
Coordinating Devices: Personnel policies help in achieving coordination. If organizational
members are guided by the same policies, they can predict more accurately the actions and
decisions of others. They ensure a steady course of action and prevent unwarranted
deviations from planned operations.

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1 .1 1 STRATEGIES TO INCREASE FIRM PERFORMANCE
Human resource management practices usually reflect a strategy of managing people as
assets. Thus, expenditure on FIRM practices is viewed as investment in HR that will
ultimately result in economic returns (valued added) to the firm. Even though there is some
evidence suggesting the potentially significant contribution of HR investment perspective.
These firms believe that an investment perspective is only the way of managing FIR to
enhance performance. Some firms adopt another approach for managing HR to enhance
business performance — they manage HR as an expense or cost that must be contained or
reduced.
The relationship between HRM and business performance rests on logic — better
deployment and utilization of HRM practices should result in better firm performance. This
relationship was assumed with little evidence available to support the assumption. It was in
the 1980s that serious efforts were directed towards testing the linkage between FIRM and
firm's performance.
It is not simple task to demonstrate a direct linkage between HRM and a firm's
performance. The linkage Is mediated by HR performance measures, such as improved employee
satisfaction, higher organizational capabilities, etc. the model proposed by Rao also
emphasized that HR practices result in positive HR outcomes, such as a proactive culture,
employee commitment, and competence. The HR outcomes, in turn, influence the business
goals of the organization.
Bratton also demonstrated that HRM strategy, policies, practices and systems
directly influence the HR/Employee performance measures at both the individual:
eve: and the team level. Examples of performance measures at the individual level
are absenteeism, resignations, commitment, etc. At the team level, the examples
are group dynamics, processes, and performance. Individual employee and team
measures in turn, affect organizational performance.

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A number of organizational performance measures may be used including productivity
ratios, product and service quality, and return on investment (ROI)

Many financial variables used as measures of organizational performance are profit-related

indices. These measures may relate to the operating performance or the financial performance
of the firm. Profits, market share, and ROI are measures of the
financial performance of the firm. Labour productivity, product or service quality, and perceptual
measures of goal attainment are measures of operating performance. Labour productivity is
defined as the quantity or volume of the major product or service that the organization
provides and is expressed a rate (productivity per worker or per unit of time).

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 However, the linkage between HRM and a firm's performance is complicated because
employee HR performance measures are only one set of variables that impact, a firm's
performance. Other variables such as the economy, technology, industry, etc. also affect a
firm's performance.
1.1 2 ROLE AND POSITION OF HR DEPARTMENT
Human Resource Manager plays a vital role in the modem organization. He plays
various strategic roles at different level in the organization. Human Resource Manager has to
play different rules like conscience role, moderator role, spokesman role, and a problem —
solver role etc.
i) The Conscience Role: The conscience role is that of a humanitarian who reminds the
management of its morals, and obligations to its employees.
The Councellor: The personnel manager counsels and guides the employees who are
facing various problems like health, children education; mental, physical and career etc. the
personnel manager counsels and offers suggestions to-solve the problems of the employees.
iii) The Moderator: As a moderator the personnel manager plays the role of a peace maker. He
settles the disputes between employees and the management. He acts as a liaison and
communication link between and employees and management.
iv) The Spokesman: Personnel manager is a frequent spokesman or representative of a
company.
The problem — solver: He acts as a problem — solver with respect to the issues that
involve human resource management and overall long range organizational planning.
vi) The Change agent: He acts as a change agent and introduces changes in various existing
programs.
HR manager also plays other roles like Welfare role, clerical role, as a specialist and as
a controller.
Role of HR Executives
'HRM is a part of every manager's job. Let us look at the different roles arc,'
responsibilities of HR managers in this context. However, it has to be noted that in a dynamic
working environment, the boundaries of any role cannot be clearly defined: therefore, the
following should be considered only a broad outline. The specialist role of the HR manager
takes a number of forms:
1: T he Service Provider
Managers need information to make decisions on various employee related issues like
deployment of personnel. An HR specialist can help b_y providing information on market

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statistics of personnel availability, pay rates etc. HR specialists can also interpret the complex
labor laws and legislations that are applicable in day-to-day work.
This categorization of the work of an HR specialist is not definitive. As mentioned earlier,
there will often be an overlap between the different roles the HR professional must assume.
For example, in the area of advice on legislations concerning employment, there is often little
distinction between 'service' and 'consultancy'.
2. The Executive
Though HRM is a part of every manager's job, yet HR specialists typically carry out
certain HR activities like recruitment, compensation, etc.
3. The Facilitator
A large number of organizational activities require an HR professional to play the role
of a facilitator. For example, HR acts as a facilitator when training and development
activities are planned and conducted and performance appraisals are done. One of the
responsibilities of an HR specialist is also to ensure that other managers who undertake such
activities are well equipped to de so.
4. The Consultant
Managers face many problems while supervising employees. These problems may be
due to lack of motivation, lack of training, a job misfit or grievances related to pay. Managers
seek the advice of HR specialists to resolve such problems smoothly. Thus, the HR
professional plays the role of an internal management consultant in this area.
5. The Auditor
HR specialists are responsible for ensuring that all members of the management perform
their respective roles concerned with the effective use of human resources.
HRM, in recent times, has been transformed into playing a crucial role in
management which includes recruiting, inspiring, developing and carefully managing a
firm's human resources. It needs to dedicate itself to devise various programs to instill the
proper corporate values in its personnel to make sure the firm succeeds.
HRM needs to continue to be proactive, which means it always adopts a
`prevention is better than cure' policy. HR managers endeavor to predict issues that may
develop rather than finding solutions after a problem occurs.

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 1 .1 3 ALIGNING HR STRATEGY WITH ORGANISATIONAL STRATEGY
With rapid changes in the business environment, organisations are increasingly looking
at human resource as a unique asset that can provide sustained competitive advantage and
increase productivity. People are viewed among the most important resources to firms
hence, HR strategy would be central to achieve competitive advantages. Firms should
view HR strategy as an important tool for integrating competencies inside organisation
and for matching employment capabilities with organisational strategy, and investigate
how various combinations of capabilities can lead to competitive advantage. So, it is
believed to be important that the management of the human resources should be in perfect fit
with the management of the organisation as a whole and its strategic plans.
To properly align HR with an organization's strategy, firms should:
1) Recognise that the HR department and its duties are a strategic asset, instead of the
traditional administrative function of being a cost centre, focused on compliance. This
administrative role works on efficiency and is therefore a commodity. If an organisation fails
to recognise this commodity, it misses the opportunity to allow HR to become strategic. This
administrative mindset needs to evolve into a focus on value creation. In order to achieve this
focus, HR must first recognise that it needs to play a strategic role, and top management must
support HR's role by accepting HR into the strategic planning initiatives. The alignment
between HR and the strategy of an organisation begins with a strategy-focused professional.
2) Create HR system needs in alignment with the organization's strategy. HR needs to ensure
that employees are strategically focused. Every element of the HR function, from hiring,
compensation, reviews, training, etc... Needs to be developed in order to enlarge the human
capital in the organisation. Becoming more strategic does not mean that HR can ignore its
administrative duties. Rather, to become more strategic, HR must not only recognise its
administrative role, but also expand its influence beyond administrative towards a strategic role.
Efficient administrative work builds HR's creditability and remains the foundation upon which to
build a strategic influence in the organisation.
1 .1 4 H RM AT GLOBAL PERSPECTIVE CHALLENGES
Today's business environments becoming extremely complex &turbulent. Tits has
given new challenges to HR managers. The following are the major forces influencing HRM in
future, thereby affecting the practices of HRM:
1. Work life balance
Balancing work & life assumes relevance when both husband & wife are employed.
Work-life balance has become a major challenge to the HR manager as more women are

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 tracking up jobs to add to finances of their families or to become careerists. In India, working
women now account for 15 percent of the total urban female population of 150 million. The
number is likely to increase as more number of girls is coming out of colleges and
universities with degrees in their hands.
Organizations should undertake work-life balancing programs, as in their absence both
men & women will be exposed to stress, depression, and anxiety. The programs aiming at
work-life balance include.
 Childcare at or near workplace
 Job sharing Care for sick children & employees
 On-site summer camp •
 Training supervisors to respond to work & family needs of employees Flexible work
scheduling
 Sick leave policies
The organizations that have developed work-life balance programs have found happier &
more productive employees.
2. Diversity Management
Employees of organizations are becoming increasingly heterogeneous. Diversity, if
properly managed can increase creativity & innovation in organizations as well as improve
decision making by providing different perspectives on problems. If diversity is not managed
effectively, it leads to higher turnover, increased interpersonal conflict & more difficult
communication
Diversity, if managed effectively, offers competitive advantage to a firm in several ways.
The following guidelines will help the HR managers to manage diversity effectively:
 Top management commitment to value diversity is a pre-requisite.
 Organize diversity training programs that provide diversity awareness & educate
employees on cultural & gender differences & how to respond to these in the workplace.
 Have a support group set by an employer to provide a nurturing climate for employees who feel
isolated.
 Accommodate female employee needs, such as child care & job sharing, to prevent their
turnover.
 Have apprenticeship programs in which promising prospective employees are groomed,
before they are lures on a permanent basis.
Institute diversity audit to review the effectiveness' of organizations diversity management
programs.

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3. Quality of Work Life
Quality of work life is ensured when members of an organization are able to satisfy
their important personal needs through their experiences in the organization. The HR
manager should focus on the following factors which can contribute to QWL.
iv) Opportunity to use & develop creativity, such as work autonomy, nature of supervision, use
of multiple skills, workers role in the total work process.
Respect for the individuals personal rights, such as application of the principles of natural
justice and equity, acceptance of the right to free speech, & right to personal privacy in respect
of the worker's, off the-job behavior.
iv)Work & family life, including transfers, schedule of hours of work, travel
requirements, overtime requirements & so forth.
It is worth that often the conditions that contribute to motivation (equitable salaries,
financial, incentives, etc) will also contribute to QWL.
4. HR Issues in Mergers & Acquisitions
The following are the tasks of HR manager in managing M & As:
 Composition of new board
D Deciding who will occupy which job
D. Assessing culture
 Undertaking human capital audit
Effective communication
D Retaining talent
 Aligning performance evaluation & record systems
 Managing the transition
5. E -H R
When HR departrrients make use of Internet and related technologies to support their
activities, the process becomes e — HRM (where e stands for electronic). e — HRM is the
complete integration of all HR systems and processes based on -inter dependent tools &
processes.
Fully developed E-HRM could provide the data gathering tools, analysis
capabilities, and decision support resources for HR professional to hire, pay, promote. terminate,
assign, develop, appraise & reward employees in ways that fully engage them in managing
their own outcomes, maximize the contribution of each employee, & support execution of
firms strategy. Typical e-enabled HR activities include e-recruitment, e, selection, e-
learning, e-performance management & e-compensation.

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E-HRM has the potential to change all traditional HRM functions The most
common practices in e-recruitment are:
a)adding recruitment to existing organizational websites
b)using special recruitment websites
c)developing interactive fools for processing applications and
d)Using software for on-line screening of applications.
6. HR scorecard
The HR scorecard measures the HR functions effectiveness and efficiency in producing
employee behaviors needed to achieve the company's strategic goals.
Management ultimately judges the HR function & its initiatives based on whether they
create value for the company, where "Value Creation" means contributing in a measurable
way to achieving the company's strategic goals. HR creates value by engaging in activities
that produce the employee behaviors the company needs to achieve these strategic goals.
The HR scorecard is a concise measurement system. It shows the quantitative standards,
or "Metrics" the firm uses to measure HR activities, and to measure the employee behaviors
resulting from these activities, & to measure the strategically relevant organizational outcomes of
those employee behaviors.
In so doing', it highlights, in a concise but comprehensive way, the casual link between
the HR activities, the emergent employee behaviors and the resulting firm-wide 'gtrategic
outcomes & performance.
7. Whistle blowing policy
When an employee thinks that his/her firm is resorting to some act that is unethical or
harmful to public, he/she "blows the whistle" by reporting alleged organizational misconduct
to the public or to top executives.
Whistle blowing refrains the firm from indulging in unethical and harmful practices.
In most cases, the whistle blower faces grave harms (even physical elimination as it
happened to Manjunath, an IIM graduate with the Indian Oil Corporation. He was murdered as
he complained about the adulteration of petrol to the authorities. Ranging from lost jobs and
careers to lost friendship & resentment among co-workers.
Whistling blowing also geo-paradise the well-being of the firm, disrupting its work and in
some cases resulting in lost contracts and lost jobs & even closure as has happened to
Enron.
8. I n d u s t r i a l r e l a t i o n s d y n a m i c s . The role of the HR manager in
industrial relations is very important.

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 If an organization has a motivated, competent & trouble-free workforce, the credit partly
must go to the HR department. The blame goes to the same department of the opposite
occurs.
Through better recruitment & hiring, induction, training & development, safety &
health, remuneration, welfare, communication channels & other practices, the HR department
can contribute of the quality of work life (QWL) of the employees. QWL refers to fair
remuneration, safe & healthy environment, opportunities for growth, & the like. Better QWL
leads to motivation & satisfaction. Motivated & satisfied employees have no reason to indulge
in strikes or gheraos.
9. Outsourcing
Increasingly many large firms are getting their HR activities done by outside suppliers
and contractors. Employee hiring, training & development an maintenance of statutory
records are the usual functions contracted out to outsiders.
P & G has signed a 10-year, $400 million deal with IBM to handle employee services.
IBM will support almost 98,000 of P & G employees in nearly 80 countries with services
such as payroll processing, benefits & administration, compensation, planning & travel &
expense management.
Outsourcing has its negative side. The relevance of HR departments is at stake. If
outsourcing is carried to the logical end, a firm can do without on HR department. In addition,
apprehensions are expressed about the lost jobs in HR functions. It is a big challenge before
the HR manager to prove that his/her department is as important as any other function in
the organization.
10. Employer Branding
Means involving employees in the communication and .characterization of a company's
brand. Minchington (2005) defines Employer Branding as "the image of the organization as
a 'great place to work'" in.the minds of current employees and key stakeholder in the external
market (active and passive candidates, clients, customers and other key stakeholders).
Strong employer brands have employer value. propositions (EVP's) which are
communicated in company actions and behaviors and evoke both emotive (e.g. I feel ood
about working here) and tangible benefits (this organization cares about my career development)
for current and prospective employees.
These organizations segment and communicate EVP's which reflect the image that the
organizations want to portray to its target audience. A company's employer brand is reflected

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in the actions and behaviors of leaders and is affected by company policies, procedures, and
practices.
11. Employee branding
Is an indirect branding effect in which the communication of company employees serves to
characterize their company' employer brand. The term also refers to the effects that company
employees have on the image of their employer and the employer brand by publicly voicing
their on their place of work. The term employee branding was created on the basis of the
term employer branding.
12. Competency mapping
Is the process of identification of the competencies required to perform
successfully a given job or role or a set of tasks at a given point of time. It consists of breaking
a given role or job into its constituent tasks or activities and identifying the competencies
(technical, managerial, behavioral, conceptual knowledge, an attitudes, skills, etc) needed to
perform them successfully. Competency assessment is the assessment of the extent to
which a given individual or a set of individuals possess these competencies required by a
given role or set of roles or levels of roles.
1 .1 5 CROSS CULTURAL PROBLEMS
Cross-cultural problems in international human resource management can be seen to occur
from two viewpoints which are as follows:
Managers: Problems in cross-cultural management exist due to the
i) Insufficient Awareness of Existence of Differences: Managers are not aware
of the very existence of the cultural dimension of management.
ii) Insufficient Understanding: Managers know about the existence of culture, but
they do not understand this issue and thus underestimate the cultural impact and do
not have any need to deal with it.
iii) Insufficient Willingness. Managers knowingly decided not to deal with culture. Such
decision of theirs is usually connected with one or more of the following reasons:
a) Managing of 'cultural dimensions is not a sufficient priority for them
(they understand that its cultural aspects are important, but they are not as urgent for
them as pressure to reach results thuS they focus their energy on economic issues or
technical problems and they do not have enough time to manage cultural
differences);
b) They experience fear of the unknown (dealing with financial problems is safer and
more comfortable, because it enables falling back on numbers and facts - to

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 manage "soft" problems means to deal with people, behavior, emotions, make
decisions, in a different way, which causes discomfort, fear and uncertainty); and
c) Care of cultural integration is not "attractive" enough for them (cultural
integration is not easy to measure, its contribution cannot be expressed in money and
thus it is not possible to prove success - "Opening a new factory improves image.
But dealing with culture does not").
iv) Insufficient Level of Abilities and Skills: Managers may be aware of the
need "to do something about it" and they may even try to do it, but they fail due to
lack of intercultural competences (which is due to lack of knowledge, intercultural
sensitiveness, lack of appropriate skills, etc.).
2) Workers: Success of cooperation depends to a great extent on abilities of workers
who operate in multi-cultural conditions. These workers should meet certain
conditions of successful fulfilling of everyday tasks in a multinational company.
Unfortunately, cooperation in international conditions is often not as successful as
Managers originally expected. Most frequent reasons are
i)Different Cultural Environments: Not understanding cultural differences in the
environment of the partner companies. It is not always possible to reach mutual
understanding, despite the fact that the same language of communicating and
corresponding techniques is used: Habits based on long-term traditions may be
different in different countries and the efficiency of mutual cooperation depends to
a great extent on how much effort the workers from different cultural
environments exercise to come into agreement.
ii)Misunderstandings or Conflicts: Misunderstandings or conflicts represent
serious obstructions of successful cooperation; appear especially due to the fact
that ideas about certain cultures are deeply rooted and as - such they are
considered to be generally true. In the process of meeting and cooperation
spontaneous reactions occur and thus it can happen that the way the partner acts
is seen as something imperfect or even funny. In this way. Cultural differences
may easily cause different perception, misunderstanding, and missing each
other.
iii)Different Perception: Problems caused by different perception, ways of thinking, and
behavior of members of different cultures may exist on more levels.
1 16 EMERGING TRENDS IN HRM
Some of the recent trends that are being observed in the field of HRM are as follows:

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1) HR Outsourcing
Outsourcing is a word that combines the three terms outside, sourcing and using. The
term outsourcing describes the procurement of resources from external suppliers that
were generated within the sourcing organisation. It is the delegation of a human
resources process or processes, to an external HR provider that specializes in this
service. This provider takes charge of managing and administering the outsourced
services for its client.
Increasingly, many large firms are getting their HR activities done by outside suppliers
and contractors. Employee hiring, training and development, and maintenance of
statutory records are the usual functions contracted out to outsiders.
Six Sigma: To survive in the world of uncertainty, organisations have introduced Six Sigma
practices. It is a quality improvement programme with a goal to reduce the number of
defects to as low as 3.4 pans per million. It relies on the use of Normal Distribution to
predict defective rates. It uses rigorous analytical tools with leadership from the top and
develops a method for sustainable improvement. These practices improve organisational
values and helps in creating defect free product or services at minimum cost. The employer
must create a process map for HR department to clearly understand HR functions
and prepare for implementing six sigma.
Quality Management Standard: The revised Quality Management Standard ISO 9001
and ISO 9004 of 2000 focused more on people-centric organisation and reflect following
best management practices: Customer focused organisation; ii) Leadership i i i)
Involvement of people iv) System approach to management
v) Continual improvement:
1 .1 7 HRM VS PERSONNEL MANAGEMENT
Personnel management is concerned with people at work and their
relationships with each other. It may be defined as a set of programmes, functions
and activities designed to maximize both personal and organisational goals.
According to. Breach, "Personnel management is that part of management process
which is primarily concerned with the human constituents of an organisation"..
According to Richard Calhoon, "Personnel management involves the
task of handling the human problems of an organisation and is devoted to
acquiring, developing, utilizing and maintaining an efficient work-force".
HRM is a broad concept and personnel management is part of it. HRM views human
resource as important asset for the development of organisation. On the other hand,

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 personnel management has limited scope and views human resource as a labour and
utilize them for the benefit of the organisation.
Difference between personnel management and HRM is explained below:

Basis of Difference. Personnel Management ' HRM

Careful-delineation of written
1) Employment Contract Aim to go beyond contract
contracts
Can do, outlook, impatience with
2) Rules• Importance of devising clear rules
rule
Guide to Management
3) Procedures Business need
Action .
4) Behavior Referent - Norms/Customs and practices . Values/mission '

Managerial Task vis a

5) Monitoring Nurturing
vis Labour
6). Key Relations Labour management Customer

7) Initiatives Piecemeal Integrated

8) Speed of Decision Slow F a s t

9) Management Role Transactional leadership Transformational leadership

10) Communication Indirect Direct

Prized Management
11) Negotiation Facilitation
Skills
12) Selection - Separate, marginal task Integrated, key task

13) Pay Job evaluation (fixed grades) Performance related

14) Conditions Separately negotiated Harmonization

15) Labour Management Collective-bargaining contracts Individual contracts

Job Categories and

16) Many Few .
Grades

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17) Job Design Division of labour ., Team work

18) Conflict Handling Reach temporary truce Manage climate and culture -.

Training and
19) Controlled access to courses Learning companies.
Development
20) •Focus of Attention for Personnel procedures Wide-ranging, cultural, structural
Interventions and personnel strategies
21) Respect for Employees Labour is treated as a tool which is People are treated as assets to be
expendable and used for the benefit of an
replaceable organisation, its employees and the
22) society as
Shared Interests superior Interests ofathe
whole
organisation are Mutuality of interests
most
Latest in the evolution of the
23) Evolution Precedes HRM—
subject

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