MODULE-1

HUMAN RESOURCE MANAGEMENT INTRODUTION

 MEANING AND DEFINITION OF HRM
Meaning :Human resource management is organizing, coordinating, and managing an
organization's current employees to carry out an organization’s mission, vision, and goals. This
includes recruiting, hiring, training, compensating, retaining, and motivating employees.

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 social objectives are accomplished.”

According to Milkovich and Boudreau HRM is, “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.”
 IMPORTANCE OF HRM
There are some points of importance of human resource management in the industrial organization of the whole world. These
considerations can help to understand the importance of human resource management. We can say that there is important to
human resource management if all of these items are well managed. However, the following is a quick discussion of these points
1. Policy formulation
If HRM can effectively create a human resource policy, its importance may be acknowledged. It is the managerial insight into
human resources. If all these policies are formulated as per desire and for the fulfillment of organizational objectives.

2.Retaining employees and motivation for gaining goals

Human resources management (HRM) plays an important role in retaining employees and motivating them to accomplish the
company’s goal. By developing effective HR policies and practices, HRM helps directly in creating a positive work environment that
attracts and retains talented employees.

3. Policy execution
Efficient human resource management executes all human resource policies in accordance with the goals and objectives of an
organization. Efficient human resources can implement human resource policies effectively and indiscriminately.
4.Maintaining Quality Work Life
Maintaining the quality of work life is a major condition for organizations. HRM helps directly by ensuring that employees are
treated fairly and equitably, providing a framework for managing employee performance, and creating policies and procedures
that support a positive work environment. By addressing the needs of employees, HRM helps to maintain morale and
productivity, which in turn leads to better organizational outcomes.

5. Review of Employee Needs

Human resource management reviews employee needs, hopes, and aspirations from time to time and regularly. If all these
needs, hopes, and aspirations are properly assessed and fulfilled, there may be good labor-management relations.

6.Ensuring Safety & Security

Ensuring the safety and security of employees in the workplace adds to the importance of HRM. In a workplace of
audiences, guiding the safety of the employees in the work environment from harassment, physical injuries, fire
outrage, etc., and securing employees data from being leaked, hacked, or malware is an essential task of HR
management.
7. Building a corporate image
Building the corporate image of the organization and retaining its reputation is a vital aspect of human resource
management, which emphasizes the importance of HRM in an organization’s workflow.
History of HRM

1. Early Philosophy (Before 1900):

Robert Owen's initiatives laid the groundwork for current Human Resource Management. Owen, who is sometimes called the
father of HRM, first presented his theories in 1813 in his book "A New View of Society." He underlined how crucial it is to
strengthen service conditions and industrial relations. Owen was friendly, liberal, and paternalistic in his treatment of laborers.
Alongside his business, he constructed high-quality housing for his workers, did away with child labour, and made sure the
workplaces were safe.
2.Efficiency and Productivity Movement (1900–1920):
The efficiency and productivity movement began to take shape between 1900 and 1920. Taylor's introduction of scientific
management ideas dominated this era. Around this time, Taylor's Scientific Management Thought—which promoted the use of
scientific procedures in activities, job analysis and the scientific hiring and training of employees—became widely accepted.
Taylor's opposition to workers' groups and trade unionism signaled a change in management philosophy toward a methodical
and scientific approach.
3. The 1920–1930 Welfarism and Industrial Psychology Era:
The basis of human resource management, staff line organization, had solidified into a recognizable shape by1925. Industrial
psychologists revolutionized the field of human resource management by developing novel approaches like psychological testing,
interviews, worker training, and non-cash incentives. As a result, HRM became a specialized role.
4. Period of Human Relations (1930–1950):

Prof. Elton Mayo and associates' Hawthorne experiments signaled the start of a new era in which the significant impact of human
resources on productivity was acknowledged. During this time, it was stressed how important it is to treat employees as unique
people with moral, psychological, and social requirements. From seeing labor as a commodity to seeing it as a social
phenomenon, concepts changed. The 1940s and 1950s saw the emergence of new methods for hiring, onboarding, and training
employees as well as an increase in the focus on people-oriented management, trade union growth, and the expansion of fringe
benefits.

5. Modern Times (After 1950):

Post-1950, Human Resource Management entered a phase of modern development centered around the citizenship concept of
labour. Workers gained increased rights and involvement in decision-making processes. The notion of industrial democracy
imposed new responsibilities on human resource managers, expanding the discipline's scope. Since the 1960s, Human Resource
Management evolved into a behavioral science focusing on human elements and organizational behavior. The belief in 'open
social and industrial systems' gained traction in the 1970s, further shaping Human Resource Management as a recognized
profession managing human resources within organizations.
The history of Human Resource Management reflects a dynamic evolution from its early philosophical roots to its current state as
an interdisciplinary field encompassing organizational behavior, personnel management, industrial relations, and labor
legislation. As it continues to evolve, HRM remains responsive to the changing needs and dynamics of modern workplaces.
The evolution of Human Resource Management (HRM) has been influenced by historical eras:
•Industrial revolution era: saw the emergence of systematic HRM practices focused on recruitment, training, and
control of workers.
•Trade union movement era: workers organized to address common issues, leading to the adoption of grievance
handling systems and improved employee benefits.
•Social responsibility era: some employers adopted a paternalistic approach, offering concessions and welfare
schemes to manage labour interest.
•Scientific management era: introduced efficiency-focused methods like time studies to enhance productivity.
•Human relations era: highlighted the importance of human factors at work, emphasizing social aspects and
employee relations.
•Behavioral science era: explored human behavior in organizations, promoting self-direction and participation.
•Systems and contingency approach era: focused on holistic management of hr based on empirical data.
Today's hrm emphasizes the socio-psychological aspects of employees as crucial for organizational effectiveness. The
term "human resource management" has replaced "personnel management," reflecting a contemporary view of
employees as important assets in organizations. This evolution reflects broader societal changes and ongoing efforts
to balance employer interests with worker welfare.
Nature of HRM

 Pervasive Force
Human Resource Management is an inherent part of an organization. It is pervasive in nature and present
in all enterprises at all levels of management. It is the responsibility of each manager to select the right
candidate under him and pay attention to the development and satisfaction of each sub-ordinate.

 People Oriented
Human Resource Management focuses on and values people at work both as individuals and groups. It
encourages people to develop their full potential and in return give the best to the organization.

 Action-Oriented
Human Resource Management does follow rules, records, and policies but it stresses the action. The focus
is on providing an effective and timely solution to employees for any problems, tensions, or controversies
faced by them.
 Future-Oriented
To sustain and grow in this competitive environment organizations follow long term strategic planning.
Effective Human Resource Management prepares people for current as well as future challenges,
especially working in an environment characterized by dramatic changes.

 Enhance Employee Relations
HRM helps to build a healthy relationship between the employees at various levels. It encourages mentoring and
counseling to help employees in times of need. It aims at creating a culture in the organization that is conducive to
learning and growth.
 Interdisciplinary Function
The knowledge that has influenced Human Resource Management is interdisciplinary in nature. It drives knowledge
from five major bodies: education, system theory, economics, psychology, and organizational behavior
 Team Spirit Development
HRM aims to maintain team spirit in the organization. This is because every organization needs group and
department unity to be effective. If people aren’t working towards one common goal, productiveness declines, and
opportunities for growth diminish.
 Continuous function:
HRM is continuous and never ending process rather than one action performed once. It has to be continuously
performed in the organization in order to get awareness of human relations from time to time.
Scope of Human Resource Management
Human resources are undoubtedly the key resources in an organization, the easiest and the most difficult to manage!
As organizations become more complex, the role of HR must adapt to keep up. In its most basic form, HRM is responsible for managing an
organization's workforce. This includes recruiting, hiring, and onboarding new employees. HRM also oversees employee relations, benefits, and
payroll.
In recent years, the scope of HRM has expanded to include strategic planning, talent management, and employee development. HR must now
partner with other departments to ensure that the organization's goals are met
The scope of HRM will continue to evolve as organizations become more complex and the workforce becomes more global. HR must be adaptable
and always ready to meet the changing needs of the business. It is all about developing and managing knowledge, skills, creativity, aptitude and
talent and using them optimally. Human Resource Management is not just limited to manage and optimally exploit human intellect. In other
words, we can say that it’s about developing and managing harmonious relationships at workplace and striking a balance between organizational
goals and individual goals. The scope of HRM is extensive and far-reaching. Therefore, it is very difficult to define it
concisely.
1. Human Resource Planning (HRP):
It is the first step of human resource management. HRP is a process through which the company makes an
assessment of the present manpower-the number of people employed, number of post vacant, whether
there is excess or shortage of staff and prepares plans and policies to deal with them accordingly. It also
estimates the future man power requirement. It matches the supply and availability of manpower with the
company’s purpose and makes the best person available for the job.
2. Job Analysis:

An important task of HRM is job analysis. It provides the basis for recruitment, training and development of staff.
Every job is analyzed to identify the inherent requirement of the job – “what the job demands of a worker”. Job
analysis provides a detailed picture of the nature of job, the skill and abilities required to perform the job, the duties
and responsibilities of the worker required for the job. This helps in the process of recruitment and selection, to
appoint the appropriate person for the job and also facilitates arranging training and development programmed for the
employees to match their skill and abilities with the job requirement.

3. Job Evaluation:
It forms the basis of wage and salary determination. Different jobs are compared and evaluated to determine the
relative importance of different jobs within the organization. The jobs are compared, graded and ranked. Job
evaluation determines how much pay to be affixed to the particular job on the basis of their importance in the
organization functioning. This helps to determine a fair wage and salary and to determine a rational pay structure.

4.Recruitment and Selection:

The company on the basis of human resource planning and job analysis identifies the requirement of personnel and
explores different internal and external sources from where manpower can be acquired. This process is called
recruitment. The right person is selected and put to work. The selection process involves steps like receiving
applications, tests, interviews, medical examination and final selection. Right selection and placement provides
employee satisfaction which improves their productivity and efficiency and benefits the organization.
5.Training and Development:
Human resource management is concerned with arrangement of training and development programmed for the newly
appointed staff as well as for existing employees. This helps to enhance the qualitative and quantitative performance of
the work force. Training helps the employees to cope up with the changing technological and other internal and
external work situations. Training and development make employees excel in their present post as well as make them
competent for future higher job responsibilities

6. Performance Appraisal:
It is a systematic method of evaluating the performance of employees. This helps to assess the efficiency, strength and
weakness of the employees. It is a controlling process whereby the employees’ performance is matched with the
standard level of performance and remedial measures taken in case actual performance does not meet the standard. It
helps the management in their decision-making relating to promotion, pay hike that may be rewarded if the employee
meets standard or outperforms the standard. It also helps the management to decide about the training and
development needs for employees, who needs up gradation and development of skill.

7. Employee Compensation benefits:

Human resource management performs the function of determining the pay structure for different employees on the
basis of qualification, efficiency, experience, nature of the job. It also determines rewards and incentives to be paid for
their contribution towards the organization. compensation and benefits administration can also help to attract and retain top talent.
By offering competitive salaries and benefits, employers can entice the best candidates to apply for open positions. And once hired, these
employees are more likely to stay with the company for the long term
8.Employee assistance
Each employee is unique in character ,personality, exceptions and temperament .by and large each one of them faces
problems everyday .some are personal some are official .in their case he or she remains worried .such worries must be
removed to make him or her happy and productive.

9.Industrial relations: it is the field of human resource management that deals with managing employees in businesses and organizations. The
scope of industrial relations includes aspects such as employee relations, labour relations. Healthy industrial and labour relations are very
important for enhancing peace and productivity in an origination.

10.Motivation, Welfare, and Safety

To retain employees and promote a healthy work culture, an organization needs to ensure its employees stay motivated. This
motivation can be in the form of monetary benefits, promotions, rewards, or recognition. HRM also encompasses the welfare of
employees, which includes providing medical aid, transportation facilities, housing facilities, daycare centers for the employees’
children, etc. Further, safety regulations, risk assessment, and implementation of corrective measures promote the safety and
well-being of the employees.

.
Objectives of HRM
The primary objective of HRM is to ensure the availability of competent and willing workforce to the organization as
well as to meet the needs, aspirations, values and dignity of individuals/employees and having due concern for the
socio-economic problems of the community and the country. HRM objectives are broadly classified into four
categories.

 Societal Objectives
HRM is responsible for ensuring compliance with society’s legal and ethical standards at every level of the
organization. The activities of HRM should be socially responsible and fulfil society’s needs, demands, and
challenges. Therefore, HR managers must ensure that the available resources are used for society’s benefit. To
achieve this objective, HR managers develop programs that meet employees’ psychological, social, ethical, and
economic needs. Some examples of these programs include equal opportunities, compensation and benefits, and
community relations. By fulfilling the societal objectives of employees, HRM aims to motivate and retain productive
employees.
Example of Societal Objectives
McDonald’s aims to hire people from underrepresented communities by 2026. It has several diversity and inclusion
initiatives,. And also the company commits to reduce its greenhouse gas emissions by 36% by 2030.
By promoting diversity and inclusion, supporting employee development, promoting a safe and healthy work
environment, and engaging in CSR, McDonald’s is helping to create a better world for its employees, customers, and
the communities it serves.
 organizational Objectives
One significant objective of HRM is to ensure the availability of the correct number of employees with the right skills
at the right place. HRM goals and strategies are designed to optimize a business's performance by effectively
managing its employees. These objectives often include attracting and retaining top talent and positive inclusive
workplace culture..
Example of Organizational Objectives
A company offering a well-rounded benefits package, including a competitive salary, yearly bonuses based on
performance, and additional perks like flexible working hours and wellness programs, is actively working towards its
organizational objectives. This approach attracts top talent and nurtures a happy, motivated, and loyal workforce,
which take the company towards success.
 Functional Objectives
Human resource management is responsible for coordination within and among different functional departments of
the organization. It organizes and allocates the resources to achieve business objectives effectively. The objective of
HRM is to provide every functional department with employees who possess the required set of skills and
knowledge.
To fulfil this human resource management, HR managers must ensure the timely completion of functions by the
workforce. The functional objectives of human resource management have everything to do with the company’s
functioning. It involves the preparation of organizational policies, put into effect for anyone who joins the company.
This helps maintain a structure for the organization to work systematically.
 Personal Objectives
The personal HRM objective includes acquiring, developing, utilizing, and retaining efficient employees. This can be
possible if employees can accomplish organizational and individual goals. For this, employees should be provided
with adequate training and feedback on their performance. This helps employees identify areas for improvement
and rectify them. employees’ long-term association and commitment with an organization depend on their ability
to achieve personal goals. Therefore, HRM stresses the importance of fulfilling employees’ personal objectives and
increasing their contribution to the organization. HR managers must help the workforce create a work-life balance.
They should also be provided with adequate training and feedback on their performance. Why? Because it helps
employees identify weak areas and rectify them.

.Additional Objectives of Human Resource Management

 Accomplishing Organizational Goals
Organizational goal fulfilment is the starting point of human resource management. Effective HRM depends on
using human resources to achieve organizational objectives and requirements. An organization's goals include
workforce management and employee needs, such as hiring and training, payroll management, and retirement. To
accomplish organizational goals, HRM requires good planning and execution. HRM is useless without setting
targets, purposes, and allocations. When you know your available resources and action plan, achieving human
resource management objectives is relatively easy.
 Work Culture
Employees and workplace culture must be prioritized when managing human resources and achieving goals. Workplace culture
plays a significant role in determining HRM and organizational performance. A human resource manager must be involved when
promoting policies that encourage a better workplace culture. Automated procedures like approving leave requests and
providing healthy work place can be helpful. A quick line of business and employee empowerment contribute to a positive work
environment..
 Team Integration
The significant objective of HRM is to ensure the team is well organized. Effective communication between the company’s
different divisions and teams is essential. HR must ensure a solution is available to streamline the integration. Functional
objectives like team integration aim to streamline operations and activities. Effective interpersonal communication is necessary
to ensure efficiency.
 Training and Development
Employee productivity and performance are two essential elements that must coexist for a business to accomplish the objectives
of HRM. Employees feel organized and secure when they have adequate training and growth possibilities..
 Employee Motivation
The primary objective of human resource experts in HRM is to keep everything on track. Keep distractions and negative energy at
a distance. To accomplish this, the workers must always be looked after and motivated. How can HR motivate staff members?
Give them authority to make decisions, taking into account their perspectives. Invite them to meetings or decisions every week.
Let them participate in the business’s essential issues, even if they are new. Continue to be positive at all times. Measures of
employee appreciation, like annual performance-based assessments, can also be helpful in human resource management.
Function of HRM
1.Managerial Functions
2. Operative Functions
3.Advisory Functions.

1. Managerial functions:
The human resource manager is a part of the organizational management. So he must perform the basic managerial
functions of planning, organizing, directing and controlling in relation to his department..

 Planning:
To get things done through the subordinates, a manager must plan ahead. Planning is necessary to determine the goals
of the organization 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.
 Organizing:
Once the human resource manager has established objectives and developed plans and programs to reach them, he
must design and develop organization structure to carry out the various operations.
The organization 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;
 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 manager involves 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.
 Controlling:
it 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 organization. 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.
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, and maintenance of personnel of
the organization.
 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 organization. This involves recruitment, selection,
placement, etc. of the personnel.
 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 organization. Proper development of personnel is necessary to increase their skills in doing
their jobs and in satisfying their growth need.
 Compensation:
This function is concerned with the determination of adequate and equitable remuneration of the employees in the
organization of their contribution to the organizational 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
organization to pay, wage level afforded by competitors etc.
 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.
 Motivation:
Employees work in the organization for the satisfaction of their needs. In many of the cases, it is found that they do not
contribute towards the organizational 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.
 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 keeps many other records relating to
the behavior of personnel like absenteeism and labour turnover and the personnel programs and policies of the
organization.
3. Advisory functions:
Human resource manager has specialized education and training in managing human resources. He is an expert in his
area and so can give advise on matters relating to human resources of the organization.
He offers his advise to:
 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.
 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.
Models of HRM
1. The Fomburn, Tichy and Devanna Model

Being the first model (dates back to 1984), this emphasizes just four functions and their interrelatedness. The four
functions are selection, appraisal, development, and rewards. These four components of human resource management
and are expected to contribute to organizational effectiveness. The Fombrun model is incomplete as it focuses on only
four functions of HRM and ignores all environmental and contingency factors that impact HR functions.

This is the first model to focus on only four functions and their interdependence. Selection, evaluation, development and incentives are the four
functions.
The model identifies four main HR processes to be performed in an organization.

•Selection – allocating people to tasks

•Appraisal – assessment for performance
•Rewards – deciding on the significance of compensation for results
•Development – improving workforce talent.

Pros

One of the biggest advantages of the Fombrun Model of HRM is its commitment to organizational growth.
Employees are considered as sources and competitive advantage which helps companies reduce costs.
Another advantage is the ability of managers to make quick decisions

Cons
The Fombrun HRM model is considered to be incomplete because it focuses only on the four HR functions
and ignores other factors impacting HRM. It is also criticized neglecting employee relationships when
focusing on managerial functions. This means it approaches HR as hard, not differentiating human
resources from other sources.
2.The Harvard Model of HRM
The Harvard model of HRM has been attributed to Michael Beer in 1984 and contributions from Paauwe and Richardson in 1997. It takes a
more holistic approach to HR and includes different levels of outcome.
This model comprises the following five components:

•It starts, on the left, with stakeholder interest. These stakeholders include shareholders, management, employee groups, government, and
more. These interests define the HRM policies.

•At the same time, situational factors influence these interests. Situational factors include workforce characteristics, unions, and all the other
factors that were also part of the 8-box model.
•Situational factors and stakeholder interests influence HRM policies. These include the core HR activities, such as recruitment, training, and
reward systems.
•When done well, HRM policies lead to positive HRM outcomes. These include the previously mentioned retention, cost-effectiveness,
commitment, and competence.

•These positive HRM outcomes lead to long-term consequences. These can be individual, organizational, and societal.
3.The Guest Model
The Guest model was developed in the late 1980s and 1990s by David Guest, a professor at King’s Business School in the United Kingdom. The
model positions the strategic role of HR and differentiates strategic HRM from traditional personnel management activities.
It was one of the first models to incorporate both the “hard” and “soft” perspectives of HRM. The model also positioned the impact of
HRM on business performance and acknowledged the vital role that organizational behavior plays in achieving performance
outcomes. The Guest model describes HR in terms of six interrelated dimensions of analysis that align with a specific business
strategy:
(1)The premise is that HRM starts with particular strategies that align with business intent;

(2) which in turn informs the practices and policies of HRM,

(3) that result in specific HRM outcomes, that lead to

(4) desired employee behaviors such as commitment and motivation, that collectively

(5) drives performance outcomes,

(6) which results in financial outcomes.

The inverse of this human resource management model is also true; financial outcomes will be influenced by performance,
which is driven by individual and organizational behavior. These behaviors result from specific HR outcomes as a result of
targeted HR practices and policies based upon a particular HR strategy.

4.The Warwick Model

Another noteworthy model of HRM was developed by researchers Hendry and Pettigrew from the University of Warwick in the
early 1990s. This model, although similar to both the Guest and Harvard models, contributes another perspective on aligning
HRM practices with external and internal contexts.
It provides a framework for exploring how HRM is influenced by external environmental forces which affect the internal reality of the
organization.
The model consists of the following elements:

•Outer context – The macro-environmental (political, economic, societal, technological, legal, environmental) factors that influence HR
policies.
•Inner context – The internal elements, such as organizational culture, technology, and leadership that influence HR policy and practice
and will be influenced by the outer context.
•Business strategy – The strategic intent of the business articulated in business objectives and goals, which is influenced by the inner
context of the organization, based upon the outer context, and in turn will influence the HRM context

•HRM content – The role, definitions of work, and HR outputs based upon the business strategy and influenced by the HRM context
•HRM context – The flow of HR work and aspects such as reward systems, employee relations, and work systems that are influenced by
the business strategy

This model emphasizes the importance of strategic HRM. In other words, HR must understand and anticipate these factors and be able
to adapt and change in response to their influences with effective business strategies.
5.The Ulrich Model
The Ulrich Model was proposed in David Ulrich’s 1996 book Human Resource Champions, which outlines four key roles the HR function
must take on:

•Administrative Expert: Handles the internal operations by overseeing HR processes and strategies for managing people.

•Employee Champion: Manages workforce competencies and employee engagement levels to improve productivity. Focuses on
maintaining a healthy employer-employee relationship.

•Change Agent: Works with managers and employees to launch initiatives that enhance company culture and advance the business.

Strategic Partner: Aligns HR strategies with the company’s business goals. Creates the best methods for developing and managing the
workforce to best support success.

This has also become known as Ulrich HR Business Partner model. The four roles do not have to be specific job titles, and HR
professionals can assume one or more of the roles within the scope of their responsibilities.
:
The strategic partner role in this model helped HR progress from a strictly administrative and transactional role into a meaningful contributor to
achieving organizational goals. In this strategic business partner affiliation, HR is connected with senior leadership, and people policies are
merged into the overall business strategy.

Ulrich revised his four-role business partner model in 2005, expanding on the functions and adding a fifth role. The five roles are: Employee
Advocate, Human Capital Developer, Functional Expert, Strategic Partner, and HR Leader.

Ulrich’s Human Resource Champions book also inspired another interpretation of the HR model for large organizations. It is of ten referred to as
the “Three-legged stool model” and sometimes the “Ulrich model.” Its premise is that HR operates in four key roles:

•Shared services – A centralized team accessed by employees and managers that handles routine administrative services and inquiries.

•Centers of excellence – Specialists that address more complex situations and requests. They support management in implementing HR
programs and policies.

•HR business partners – Strategic HR professionals who work with management to provide tactical guidance on people issues.

•HR leadership team – A team of HR leaders that design the HR function to deliver on its goals and priorities.
The term “three-legged stool” refers to the idea that leadership is the top of the stool and shared services, centers of excellence, and business
partners are its three legs.

In 2008, Ulrich, together with Jon Younger and Wayne Brockbank, expanded on this model of HR service delivery, identifying five roles: Service
centers, Corporate HR, Centers of expertise, Embedded HR, and Operational HR.
Challenges to hrm

1. Recruitment and Selection

One of the major challenges faced by human resource managers is recruitment and selection. As technology advances, new HR
management tools and techniques are developed. As a result, HR professionals find it challenging to find a suitable candidate
who fits job requirements and adapt to technological changes. They will have to make some changes in their recruitment
methods, including offering new training services to ensure quality results.

2.Leadership Development
Leadership development is another one of the biggest challenges for HR in 2022. You see, it is crucial that you nurture employees
with leadership skills and help them advance their careers. This is a strategic initiative that should be handled carefully to retain
the best employees. In addition, HR professionals must ensure they provide essential tools and structures to select and develop
future leaders of their organizations.

3. Managing a Diverse Workforce

Hiring a diverse workforce means that you bring onboard employees with a broader range of skills and different experiences that
can maximize productivity. However, managing such workers is one of the HR challenges in many organizations. For instance,
handling frequent disagreements and encouraging effective communication between a diverse workforce with different
backgrounds can leave other employees feeling neglected. In this regard, HR professionals must develop an organizational
culture through various team-building activities.
4.Employee onboarding :it presents a complex challenge for HR teams, primarily due to the need to effectively integrate new
hires into the organizational culture in a manner that fosters engagement, productivity, and retention from day one. This task is
made more intricate by the diverse backgrounds of new employees, the increasing prevalence of remote and hybrid work
environments, and the rapid pace of technological change.
5. Engaging Employees
Besides talent acquisition challenges, HR departments struggle to keep their workforce engaged and maximize productivity. You
see, as your business grows, you will also alter its structure, work plan, and even internal processes. Getting your workers to
adapt to this change require effective communication. Let them know the benefits of the changes and why their input is crucial
in taking the business to a higher level. Consider having frequent meetings and let them know about recent developments.
Regular feedback is also essential to identify areas that need extra attention.

6.Compensation and Benefits

Structuring employee compensation and benefits is another emerging challenges of HRM. Businesses have to keep up with their
competitors to retain the best talent. This can cause a strain on small businesses that are yet to generate the same revenue large
organizations do. In this regard, HR managers with small payroll budgets should consider employee rewards programs for the
best-performing individuals. Incentive programs can also be a solution to low salaries and employee benefits.
7.Adapting innovation: Technology is constantly changing. Businesses must be quick to adapt, or risk being left in the dust by
their competitors. The challenge for small business owners is getting employees to embrace innovation and learn new
technology .here they have to make sure that their team understands the why, when, and how. Set clear goals for the adoption
of initiatives, and provide employees with the training they need to get comfortable with it.
8.Retaining the Best Talent
This is one of the most common challenges of HRM faced by organizations. With employers competing for the best employees,
retaining them requires a structured onboarding plan. Remember that employee turnover can be costly and have an adverse
effect on your business growth. To maintain the best talent, you should also create a conducive work environment, provide room
for career development, and motivate them to perform better.
9.Change Management:-
As they say, change is inevitable in every sphere of life. In the business sector, changes are constantly happening, whether in the
form of new competition in the market, new leadership, merger or acquisition of a company, changes in organizational culture,
or implementation of new technology. Unfortunately, many employees have a tough time adapting to the changes in the
workplace, which eventually impacts their productivity and work efficiency. It also disturbs communication in a workplace,
increases employee resistance, and stagnates an organization's growth.

10.Maintaining Workers’ Health and Safety at Workplace

HR professionals must ensure that the workplace is conducive enough to accommodate employees without affecting their
health. For instance, if there are types of machinery that require skills to operate, let the employees know the dangers of using
them. Their health should also be a priority since healthy and safe workers will keep your business running and growing.
Workload and stress levels are also other human resource management issues and challenges that can be handle1d by allocating
tasks equally and planning for activities that help manage stress.
11.Budget limitations
Money problems are a big obstacle for many HR departments. When there’s not enough cash, it’s really hard to pay people as
much as they deserve. This makes it tougher to get and keep the best workers. Imagine you’re an HR manager at a company with
500 employees. You know your pay rates are lower than other similar businesses in the area. You’d love to bump everyone up by
10% or more to match the market. But the owners say there’s just no room in the budget. In a study, 61% of HR managers said
that budget cuts can directly affect employee performance in an organization. having messy, unfair pay scales is another
common money issue may be one department pays a lot more than another for similar work . Or new hires are getting bigger
salaries than loyal long time staff.
Roles of HR Manager

Ideally, the human resource manager should concentrate on dealing with human problems. Just as the finance manager assesses
costs, the marketing manager emphasizes customers, the human resource manager is people-centered. Some of the important
roles of HR manager of a human resource manager in an organization are discussed below:

1.Advisory Role:
The Advisory role of the human resource manager is of crucial importance. Line managers are generally confronted with a variety
of problems in their day-to-day operations. These problems may include grievances over the distribution of overtime work,
annual increases in pay, transfer, promotion, disciplinary action, and so onThe HR manager helps the top management in the
formulation of policy on wages and salary administration, transfer, promotion, appraisal and welfare activities, etc. In all such
matters, a human resource manager can offer useful advice because he is familiar with the human resource policies and
practices, labor agreements and labor laws, etc.

2.linking pin role:

The human resource manager attempts to achieve and maintain good industrial relations in the organization. He is responsible
for setting up various committees on discipline, labor welfare, grievance, safety, etc. e gives authentic information to the trade
union leaders regarding the personnel policies and programs of the organization. He helps in redressing the grievances among
the laborers. He also conveys the views of the trade unions to the top management. Thus, he acts as a linking pin between the
management and the workers..
3.Adiministrative expert role: The administrative role of an HR manager is heavily oriented toward processing and
record-keeping. Maintaining employee files, and HR-related databases, processing employee benefit claims, answering
queries regarding leave, medical, and transport facilities, and submitting required reports to regulatory agencies are
examples of the administrative nature of HR management. These activities must be performed efficiently and effectively
to meet changing requirements of employees, customers, and the government.

4.Welfare officer role: The personnel manager is expected to be the Welfare Officer of the company. As a welfare
officer, he provides and maintains (on behalf of the company) canteens, hospitals, crèches, educational institutes, clubs,
libraries, conveyance facilities, co-operative credit societies, and consumer stores. Under the Factories Act, Welfare
officers are expected to take care of the safety, health, and welfare of employees. The HR managers are often asked to
oversee if everything is in line with the company legislation and stipulation.

5.Legal consultant role: The personnel manager plays a role in grievance handling, settling of disputes, handling
disciplinary cases, doing collective bargaining, enabling the process of joint consultation, interpretation and
implementation of various labor laws, contacting lawyers regarding court cases, filing suits in labor courts, industrial
tribunals, civil courts and the like.

6.Procurer’s role: it is a process of discovering sources of manpower and employing effective measures for attracting
that manpower in adequate numbers to facilitate the selection of an efficient working force in an organization.
"Winning the war for talent” has become an important job of HR managers in recent times in view of the growing
competition for people possessing requisite knowledge, skills, and experience. HR managers have to use their
experience to good effect while laying down lucrative career paths for new recruits without, increasing the financial
burden to the company.
7.Leadership Role: The human resource manager provides leadership and guidance to the employees and their
groups. He ensures effective communication in the organization and influences the employees for extending their
cooperation in attaining the organizational objective.

8.Mediator’s Role: The personnel manager acts as a mediator in case of friction between two employees, groups
of employees, superiors, and subordinates, and employees and management with the sole objective of maintaining
industrial harmony. He act as middle person with trade unions and top management. In order to sort out problems
which are airside in the process of settlement of disputes.

9.Counsellor’s Role: The personnel manager discusses various problems of the employees relating to work, career,
their supervisors, colleagues, health, family, social, financial, education of children medical treatment etc., and advises
them on minimizing and overcoming problems if any.

10. Coordinator’s role: The HR Manager is often deputed to act as a linking pin between various
divisions/departments of an organization. The whole exercise is meant to develop rapport with divisional heads, using
the communication skills of HR executives to the maximum possible extent. Ensuring fair and equitable treatment to all
people regardless of their background. Striking a happy balance between the employee’s personal/professional and
the larger organizational needs.

11.Maintance role: HR Manager plays an important role in maintaining all the activities like , excellence highly skilled
workers by providing attractive compensation package ,introducing reward management , career planning and
development ,welfare fringe benefits and social security schemes .suitable policies are formulated ,programmed are
designed ,necessary measures are taken to implement schemes for growth and development of employees ,with and
through the active efforts of the HR manager.
What are HR policies?
Human resource (HR) policies are guidelines that outline employee expectations, organizational obligations, disciplinary
procedures and behavior standards. These are often written guidelines that HR includes in an employee handbook for employees
to reference as needed. Each policy helps companies with a structure in which teams can work in a positive and productive way.

1. Employee Contract
An employment contract is a legal document that binds both employee and employer. It outlines all the significant terms and
conditions of the association: Job role and description, Type of role (Part-time, Full-time, Contract, Freelance),Probation period (if
any),Tenure, Remuneration and benefits, Confidentiality. An employment agreement policy should include: A clear description
of the employee’s job duties and responsibilities, Details about compensation, including salary, bonuses, and benefits,
Information about employee benefits, such as health insurance, retirement plans, and paid time off, Provisions for terminating
the employment relationship, including notice periods, severance pay.

2.Code of Conduct and Ethical Standards

Establish guidelines for employee behavior, professionalism, and ethical practices within the organization. Define acceptable
conduct, conflict of interest policies, and procedures for reporting unethical behavior. The Employee Code of Conduct policy is
among the policies every organization should have. A code of conduct policy outlines the expected behavior and standards of
business conduct for employees within a company.
•It serves as a framework to ensure a positive, inclusive, and ethical workplace culture.
•The policy details the behavioral expectations for employees towards colleagues, supervisors, and the organization.
•It emphasizes open communication, professionalism, respect, and adherence to laws.
3.Working Hours
The working hours policy defines: Standard working hours: What are the expected working hours and how many days do
employees have to work? Some Indian companies opt for a 6-day workweek and some for a 5-day workweek. You will also
see working hours vary from 8 to 9 working hours. Break: How much break are employees legally supposed to get? As per
the Companies Act, any employee working for more than five hours must get at least half an hour break. Overtime: How
many overtime hours are permissible per the labour laws? In India, an employee can extend up to 12 hours per day, but
they still need to work within the weekly upper limit of 48 hours. After crossing the weekly limit, employees are eligible for
overtime pay.

4.Leave Policy

A leave policy gives employees an idea of how many leaves they are eligible for. The main types of leaves to define in the
leave policy are: Public holidays and festivals: India has three public holidays: Republic Day, Independence Day and Gandhi
Jayanti. Apart from these three holidays, you must also give holidays for festivals or any state events, which vary from state
to state. Sick leaves: How many leaves can employees take for sickness? Casual leaves: How many short-term leaves can
employees take for personal reasons or unforeseen events? Earned leaves: Earned leaves are paid leave granted based on
the number of days one has worked in the company. Employees can use it for sickness, vacations or any personal
reasons. Compensatory off: Employees are eligible for compensatory off for additional days/hours they worked in holidays.
Maternity leave: How many leaves can a new mother take? As per the Maternity Benefit Act 1961, a working woman is
allowed a paid maternity leave of 26 weeks for the first two children and three months for subsequent children. Paternity
leave: How many leaves can new fathers take? There are no laws related to parental leave. Typically, employers offer 15
days of parental leave in India. Leave without pay: If an employee exhausts all the leaves, how much additional leave
without pay can they still take after which they would be up for termination?
5.Wages and Timekeeping : Managing employee payroll is a crucial aspect of legal compliance. In the wages policy, you can
define: Minimum wages: Indian labour laws already state minimum wages, but it's better to check market norms and minimum
wages for every role. Payment frequency: How frequently should employees get payments: weekly, bi-weekly or monthly?
Monthly payments are the most common. You can also define on which day an employee will get the salary: 1st working day of
the month, last working day of the month or any particular date of the month Overtime pay: How do you keep track of time and
how much overtime pay will employees get for working additional hours? Deductions: What are the deductions in the salary?
Standard deductions are advance tax, professional tax, provident fund, gratuity fund and health insurance premium.
6. Performance Management and Appraisal: The performance management policy gives a framework for assessing employee
performance: frequency of appraisals, rating system and review process. The policy creates transparency for employees on how
their performance will be evaluated. Lastly, the policy will also outline how you will address performance issues. Will employees
enter any performance improvement program (PIP) or what will disciplinary consequences be for not meeting performance
expectations.

7.Employee Grievance and Redressal Procedures :Establish a fair and transparent mechanism for employees to report grievances
and concerns without fear of retaliation. Outline procedures for investigating and addressing employee grievances promptly and
impartially. According to section 9C of the Industrial Disputes Act, 1947 of India, it is mandatory to form a Grievance Redressal
Committee (GRC) in an organization having at least 20 employees, to resolve any conflicts/disputes between employees. Not
every employee is the same in the organization. While some employees will be delighted, some may have grievances and
disputes. Grievance Redressal manages employee dissatisfaction or complaints (e.g., favoritism, workplace harassment, or wage
cuts). The Grievance Redressal policy holds the process by which the employees can report such complications in order to receive
a proper solution.
8.Non-Discrimination
Non-discrimination policy ensures employees are safe from bullying, harassment and discrimination regardless of age, race, color,
religion, gender or sexual orientation. Important conditions of the non-discrimination policy are: Equal employment
opportunity: You must give equal employment opportunities to all employees regardless of age, race, color, religion, gender or
sexual orientation. Prohibited discrimination and harassment: Discrimination or harassment in any form based on age, race,
color, religion, gender or sexual orientation should be prohibited. Prevention of sexual assault: You must follow Prevention of
Sexual Harassment (PoSH) guidelines in India to create a safe working environment for women. Grievance redressal: How can
employees report any discrimination, harassment or assault? Also, what would be the process to address these grievances?

9.Employee Benefits :You have to offer benefits as per the market norms and labour laws. Top benefits offered by employers
which you can mention in the benefits policy are: Provident fund: Employee provident fund is a retirement scheme for
employees. Both employee and employer have to contribute 12% of salary monthly. Gratuity fund: Employees get an incentive
for continuing with an organization for more than five years. They get 15 days of additional pay as gratuity for every year of
service. Health insurance: Most companies give health insurance to employees and dependents. Typically, employers pay for the
employees. It's the employer's choice whether or not to pay for the dependents.

10.Dress code policy: Companies should be clear about the applicable dress codes, whether they be specific uniforms or general
guidelines. These dress codes may apply within the property of the company and also outside of the workplace when
representing the company.
11.IT and Data Security Policies
Define guidelines for the appropriate use of company IT resources, including internet access, email, and software usage.
Ensure data security and confidentiality by outlining protocols for data protection, information sharing, and data privacy
compliance. IT and data security policies are essential to meet compliance requirements and prevent security breaches. You
can define guidelines related to: Usage of company internet, email and software, Confidentiality of company data, Usage of
personal devices in the office: laptops, smartphones, tablets, Universal Serial Bus (USB), etc.

12..Rewards and Recognition: A rewards and recognition policy motivates employees to bring their best foot forward. The
policy encourages employees to do great work by transparently mentioning: Types of rewards or incentives they can get for
outstanding performance, Criteria for selecting employees for rewards, Processes by which they can claim any rewards.
human resources accounting and auditing:
 Human resource accounting
it is the procedure to recognize and report the investments made in the Human Resources of an Organization that are
currently not accounted for in the conventional accounting practices. It is an expansion of the Accounting Principles of
matching the costs and revenues and of organizing data to converse significant information. Normally, human resource
Accounting (HRA) engages accounting for the organization's management and employees as human capital that provides
future benefits. In the human resource accounting approach, expenditures associated with human resources are reported as
assets on the balance sheet in contrast to the conventional accounting approach which treats costs related to a company's
human resources as expenses on the income statement that decrease profit.

Concept and historical review of Human Resource Accounting

In the decade of 1960, many researchers developed procedures of accounting for organizational human resource asset. It is
based on the established notion that all expenditure of human capital formation is regarded as a charge against the revenue of
the period as it does not create any physical asset. But this concept has changed and the cost incurred on any asset (as human
resources) should be capitalized as it yields benefits quantifiable in financial terms. Human Resource Accounting indicates
accounting for people as the organizational resources. It is the measurement of the cost and value of people to organization. It
involves measuring costs incurred by private firms and public sectors to recruit, select, employ, train and develop employees
and judge their economic value to the organization. Human resource accounting is a complicated way to determine in financial
terms the effectiveness of the personal manager activities and the use of people in an organization. It is process of accounting
people as an organization resource.
According to American accounting association committee, Human Resource Accounting is the process of identifying and
measuring data about human resource and identifying and measuring data about human resource and communicating this
information to interested parties. Likert (1971) explained that Human Resource Accounting serves several purposes in an
organization. It provides cost/value information for taking management decisions about acquiring, allocating, developing, and
maintaining human resources in order to attain cost-effectiveness. It permits management employees to scrutinize effectively the
use of human resources. Jasrotia (2004) emphasized the need for human resource accounting on India. The investigator
concentrated on the remarkable shift from manufacturing to service rendering in the Indian economy where success of
organizations depends on the knowledge and intellectual capabilities of personnel. The suggestion from the research was that
Indian government should make the accounting and reporting of human resources mandatory for every organization just like as it
is adopted in Denmark from the year 2015.
HRA provides effective basis of human asset control, that is, whether the asset is appreciated, depleted or conserved. It assists in
the development of management principles by classifying the financial consequences of various practices. Main goals of Human
Resource Accounting is to provide cost value information about acquiring, developing, allocating and maintaining Reallocating
and maintaining HR, enable management to effectively monitor the use of HR, enable management to effectively monitor the
use of HR, find whether human asset is appreciating or depreciating, find whether human asset is appreciating or depreciating
over a period of time, assist in the development of effective management practices, to motivate individual persons in the
organization, increase their worth by training, in planning physical resource. The human resource accounting is done to provide
cost value information for making appropriate and effective management decisions about acquiring, allocating, developing and
maintaining human resources in order to achieve cost effective organizational objectives. Leading management scholar,
Flamholtz (1979) explains the human resource accounting model as "psycho-technical systems" (PTS) approach to organizational
measurement. This approach indicated that, the two functions of measurement are process functions in the process of
measurement and numerical information from the numbers themselves.
Therefore important role of human resource accounting is to present numerical measures. The HRA measurement process
facilitates to increase recognition that human capital is vital to the organization's short and long-term productivity and
expansion.
Benefits of Human Resource Accounting
There is several advantage of using human resource accounting. These include foresee the changes, provides different methods
of testing , Increase productivity, brings high return, helps individual employee to aspire, provides scope for advancement,
throws light on the strength and weaknesses of existing workforce and helps potential investors to judge a company
Limitations of Human Resource Accounting
Human resource accounting is not easy to value human asset. It results in dehumanizing human resource.
There is no evidence. HR is full of measurement problem. Employees and Unions may not appreciate the
ideas. This process is lack of Empirical evidence.
In India, companies do not give much consideration to issues related to human resource accounting. In
India this concept is struggling for recognition and has not been initiated as a system. Indian companies
act does not necessitate company to provide information related to workers cost in their annual report.
Though, since last decade, there is awareness toward measurement and reporting of human asset. In
India, Human resource accounting was first utilized in public sector by Bharat Heavy Electrical ltd (BHEL) in
financial year 1972-73. Afterward, other organization both in public and private organization started to
provide information related to human resource in the annual report.

To summarize, Human resource accounting evaluates the employees' performance in terms of costs and
contributions of employees. The fundamental reason for developing HR Accounting is to reduce problems
arising from the valuation of intangible assets. HRA provides an insight on employees as assets and a
profile to the enterprise and thus improves its status. HRA investigates to keep intelligent human capital.
Human resource accounting considers human resources as equivalent to other assets in the
organization. Organizations that are using human resource accounting process are Infosys, Steel authority
of India, Southern Petrochemicals, Industries Corporation of India Ltd, Mineral and Metals Trading
Corporation of India Hindustan Zinc Ltd, Associated cement Companies Ltd, Madras Refineries Ltd, Oil
India ltd Oil and Natural Gas Commission and Cement Corporation of India.
They need investment over time to make them productive. Such investment relates to the recruiting, exercise, and
development costs, which are capitalized and amortized over an assumed probably productive life for the human
resource, taking into account attrition and eventual deterioration, HR Accounting system attempts to evaluate the
value of human resources of an organization in a systematic manner and record them in the financial statement to
converse their worth with changes in time.

Human Resource Audit

Auditing has been a usual practice in the field of finance, particularly because it is a constitutional obligation.
However, in case of Human Resource, there is no legal binding to implement auditing. Some of the companies favor
the process of Human Resource audits. Human resource audit is a tool which appraises effectiveness of human
resource functions of an organization.
Concept and scope of human resource audit:
The Human Resource Audit is an organized official process, which is designed to investigate the strategies, policies,
procedures, documentation, structure, systems and practices with respect to the organization's human resource
management. It systematically and scientifically evaluates the strengths, constraints, and developmental needs of
the existing human resources in order to improve organizational performance. The human resource audit is based
on the principle that human resource processes are dynamic and must constantly be redirected and revived to
remain responsive to the changing needs. Human Resource Audits are not regular practices aimed at problem
solving. Instead of directly solving problems, HR audits, help in providing insights into probable causes for existing
and future dilemmas.
Human resource audit is conducted to ensure compliance, improve HR practices, train managers of company, prepare for
potential government audit or litigation, gain an understanding of department's environment, and show a "good faith effort
and correct errors. Basic principles of audits are to identify the Scope, develop a Questionnaire, collect Data, benchmark
Findings, provide Feedback about Results, create Action Plans and foster Climate of Continuous Improvement.
The main intent of audit in human resource is to clarify desired practices of HR work and roles within the organization (HR
Department, Line Managers), to establish a baseline for future improvement, to evaluate current effectiveness, to standardize
practices across multiple sites within a division or company, to assess current knowledge and skills required of HR
practitioners and to improve performance levels to key customers within the organization.

There are two types of audit that include internal and external audit.
Internal audit: The internal audit is conducted by the company's own staff as a part of their control activities
.External audit: The external audit is conducted by outsiders specifically employed for this purpose. The advantage is to get
the employed for this purpose is unbiased evaluation by competent people of the manpower management function.
Benefits of Human Resource Audit
Human resource audit has many advantages. Human resource audit helps to find out the proper contribution of the HR
department towards the organization. It enhances the professional image of the HR department of the organization, reduce
the HR cost, motivate the HR personnel, find out the problems and solve them smoothly, provides timely legal requirement.
Human resource audit has effective Performance Appraisal Systems and Systematic job analysis. It has smooth adoption of
the changing business attitude.
To summarize, Human resource audit denotes people and the processes that are responsible for efficient working in
organizational functions. Human resource audit can qualify its effectiveness within an organization. Human Resource
audits may achieve many objectives, such as ensuring legal compliance; helping maintain or improve a competitive
advantage; establishing efficient documentation and technology practices; and identifying strengths and weaknesses in
training, communications and other employment practices. Human Resource auditing is something that many
companies do yearly, just as they audit their financial information. This gives them an accounting of their personnel and
the efficiency with which the organization as an entity deals with its people, from recruiting to firing. Human resource
audit helps senior management to guarantee compliance with wage-and-hour laws and the myriad of other
employment and benefits-related statutes. It examines the effectiveness and costs of HR policies and practices and their
role in the organizations strategic planning and benchmark actual against desired performance and develops an action
plan for addressing shortfalls. HR audit saves money by identifying and correcting inefficiencies and compliance
problems .This process allows a company to get a general thought of where it stands so that it can rectify any potential
problems and plan for the future. Human Resource Accounting benefits the company to determine how much
investment it has made on its employees and how much return it can anticipate from this asset.