HUMAN RESOURCE MANAGEMENT

CONCEPT OF HUMAN RESOURCE MANAGEMENT:

What exactly is human resource management? Many people find HRM to be an unclear and
strange concept. ‘This is not simply because of having variety of meanings to this term. This
confusion is mainly due to the different interpretations found in articles and books about
human resource management.
HRM is the philosophy of people management based on the belief that human resources are
extremely important for sustained business success. An organization acquires competitive
advantage by using its people effectively and utilizing their expertise to meet clearly defined
objectives. HRM is aimed at recruiting capable, flexible and committed people. Managing and
rewarding their performance and developing key competencies.
Human Resources Management (HRM) is concerned with the ‘people’ dimension in
management. It involves all the matters in an organisation regarding decision about people.
Frequently, the terms like HRM, Personnel Management, Personnel Administration, Labour
Management and Manpower Management are used interchangeably. All these terms refer to
the class of activities devoted to identifying the organisation’s need for people, attracting
them, designing their work, training them, motivating them, evaluating their performance,
administering their reward and maintaining cordial labour- management relations. These
functions exist in every organisation irrespective of the size and type of the organisation and
tourism organisations are no exception.
Meaning and Definition:
Human Resource Management is the process of recruitment, selection of employee,
providing proper orientation and induction, providing proper training and the developing
skills, assessment of employee (performance of appraisal), providing proper compensation
and benefits, motivating, maintaining proper relations with labour and with trade unions,
maintaining employee’s safety, welfare and health by complying with labour laws of concern
state or country.
Many great scholars had defined human resource management in different ways and with
different words, but the core meaning of the human resource management deals with how
to manage people or employees in the organization.
HRM is the study of activities regarding people working in an organization. It is a managerial
function that tries to match an organization’s needs to the skills and abilities of its employees.
Human resources management (HRM) is a management function concerned with hiring,
motivating and maintaining people in an organization. It focuses on people in organizations.
Human resource management is designing management systems to ensure that human talent
is used effectively and efficiently to accomplish organizational goals.

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HRM is the personnel function which is concerned with procurement, development,
compensation, integration and maintenance of the personnel of an organization for the
purpose of contributing towards the accomplishments of the organization’s objectives.
The National Institute of Personal Management (NIPM) of India has defined human resources
– personal management as “that part of management which is concerned with people at work
and with their relationship within an enterprise. Its aim is to bring together and develop into
an effective organization of the men and women who make up enterprise and having regard
for the well – being of the individuals and of working groups, to enable them to make their
best contribution to its success”.
According to the Invancevich and Glueck, “HRM is concerned with the most effective use of
people to achieve organizational and individual goals. It is the way of managing people at
work, so that they give their best to the organization”.
According to Dessler (2008) the policies and practices involved in carrying out the “people”
or human resource aspects of a management position, including recruiting, screening,
training, rewarding, and appraising comprises of HRM.
According to Thomas G. Spates, “Human resource management is a code of the ways of
organizing and treating individuals at work so that they will get the greatest possible
realization of their intrinsic abilities, thus attaining maximum efficiency for themselves and
their group and thereby giving to the enterprise of which they are a part its determining
competitive advantage and its optimum results.”
George Terry has succinctly stated that human resource management is concerned with the
obtaining and maintaining of a satisfied work force. He further clarified that HRM is concerned
with maximizing the effectiveness of the work force through application of sound and proved
personnel policies and practices.
According to Dale Yoder, “Human resource management is the function or activity aiding and
directing working men and women in maximizing their contributions and satisfactions in
employment”. It helps ‘workers’ including all those who work, from unskilled common
labourers to corporation presidents or public administrators, to combine their efforts with
those of others in providing the services and products we all want.
In the words of Flippo, “Human resource management is the planning, organizing, directing,
and controlling of the procurement, developments, compensation, integration and
maintenance and separation of human resources to the end that individual, organizational
and societal objective are accomplished.”
According to M L Cuming, “Human Resource Management is concerned with obtaining the
best possible staff for an organization and having got them looking after them, so that they
want to stay and give their best to their jobs.”
According to F E L Brech, Human Resource Management is that part of management progress
which is primarily concerned with the human constituents of an organization.
Edison defines, Human Resource Management as the science of human engineering.

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According to Leon C. Megginson, the term human resource can be thought of as, “the total
knowledge, skill, creative abilities, talents and aptitudes of an organization’s workforce, as
well as the values, attitudes and beliefs of the individuals involved.”
Human Resource Management is a process of bringing people and organization together so
that the goals of each are met. It is that part of the management process which is concerned
with the management of human resource in an organization. It tries to secure the best from
people by winning their whole hearted co-operation.
It may be defined as the art of processing, developing and maintaining competent workforce
to achieve the goals of an organization in an effective and efficient manner.
It is concerned with the most effective use of people to achieve organizational and individual
goals.
In short Human Resource Management (HRM) can be defined as the art of procuring,
developing and maintaining competent workforce to achieve the goals of an organization in
an effective and efficient manner.

Nature of HRM:
1. HRM Involves the Application of Management Functions and Principles. The functions
and principles are applied to acquiring, developing, maintaining and providing remuneration
to employees in organization.
2. Decision Relating to Employees must be Integrated. Decisions on different aspects of
employees must be consistent with other human resource (HR) decisions.
3. Decisions Made Influence the Effectiveness of an Organization. Effectiveness of an
organization will result in betterment of services to customers in the form of high quality
products supplied at reasonable costs.
4. HRM Functions are not Confined to Business Establishments Only but applicable to non-
business organizations such as education, health care, recreation and like.

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Evolution:

The historical evolution of HR can be drawn into six stages:

Stage I: Pre-Industrial Era (1400-1700 AD)
Stage II: Industrial Revolution and Factory System (1700-1900 AD)
Stage III: Scientific Management, Welfare Work and Industrial Psychology (1900-1935 AD)
Stage IV: Golden Age of Industrial Relations and Personnel Management Maintenance
Function (1935-1970)
Stage V: Control of Labour Tradition (1970-1990)
Stage VI: Professional Tradition (1990- till date)
Early Phase
Though it is said that Human Resource Management is a discipline of recent growth, it has
had its origin dating back to 1800 BC.
1. For example, the minimum wage rate and incentive wage plans are included in the
Babylonian Code of Hammurabi around 1800 BC.
2. The Chinese, as early as 1650 BC, had originated the principle of division of labour and they
understood labour turnover even in 400 BC.
3. Kautilya in India (in his book Arthasastra) made reference to various concepts like job
analysis, selection procedures, executive development, incentive system and performance
appraisal.

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Stage I: Pre-Industrial Era (1400-1700 AD)
Beginning around 1400 AD and continuing until 1700 AD. This period is marked by an absence
of any formal Human Resource Management function within the organization. Several
dramatic changes occurred during this first stage that represent seeds from which modern
Human Resource Management later grew.
First, there was cessation of feudalism, release of labour from land and beginning of free
employment relationship on which modern labour markets are based.
Second, there was a shift from subsistence agriculture to a commercial mixed economy, the
rise of urban economy, a diffusion economic control and distribution of wealth and income.
Third, there was a spectacular growth of towns and villages along with a middle class that
included skilled craftsmen and merchants who were the forerunners of factory owners.
Stage II: Industrial Revolution and Factory System (1700-1900 AD)
The Industrial relations began in 18th century in the UK, in 19th century in the USA and in the
second half of 20th century in India. It was made possible by the replacement of human effort
and skill by the work of machines. One of the contributions of industrial relations was the
development of the ‘factory’ system. Factories greatly expanded production and created a
new class of workers and managers.It brought about division of work.It necessitated
supervising large number of workers. With the advent of factory system, personnel practices
became autocratic, based on Commodity concept of Labour. Labour was purchased at terms
designed to maximize the employer’s profit. Consequently, there was a total neglect of
“Human Factor”; the focus was upon materials, market and production.
Stage III: Scientific Management, Welfare Work and Industrial Psychology (1900-1935 AD)
Scientific Management and Welfare Work represent two separate and concurrent
movements that began in the 19th century and along with contribution from Industrial
Psychology, merged around the time of World War I to form the field of Human Resource
Management.
Scientific management represents an effort to deal with labour and management
inefficiencies through reorganisation of production methods and rationalization of work.
Welfare work is defined as anything done for comfort and improvement, intellectual or social
for the employees over and above wages paid, which is not the necessity of industry, not
required by law. It represents efforts to deal with labour problems by improving workers’
conditions.
Industrial psychology represented the application of psychological principles towards
increasing the efficiency of industrial workers.
Major Developments during this Stage:
1881-1891: Factories Act of 1881 and 1891 was passed showing concern for the worker’s
welfare. These acts were limited to working hours of women and children.

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1919: All India Trade Union Congress (AITUC) was formed.
International Labour Organisation was established as an autonomous organ of the League of
Nations in 1919. It has its headquarters at International Labour Office in Geneva, Switzerland.
The main objectives of social justice include:
(a) It adopted an International Labour Convention and recommended to protect the worker’s
claims in the event of the insolvency of their employer.
(b) It elaborated resolutions on the role of enterprises in employment growth, employment
policy as a component of overall development and the rights of migrant workers.

Stage IV: Golden Age of Industrial Relation and Personnel Management Maintenance
Function (1935-1970)
After the World War I, there was great depression. Following the depression, there was an
increased need for the practice of Human Resource Management as a result of a growth in
unions and collective bargaining. At this time, there was a shift in emphasis towards the
Industrial Relation Function of Human Resource Management.
During the period from 1945 to 1970, the primary focus of the employment relationship was
on industrial relations and this human resource management function rose in prominence.
The pro-union legislation was followed by World War II, which created an extraordinary
demand for labour, resulted in unprecedented union prestige and fuelled a phenomenal
growth in union membership.
The industrial relation side of human resource management experienced its golden age
between 1948 and 1958. The general focus of human resource management was on industrial
relations because the primary need of many organizations was to operate in collective
bargaining framework of labour relations.
Major changes during the Period:
1. The first step was the enactment of Industrial Disputes Act, 1947, which not only provides
for the establishment of permanent machinery for the settlement of industrial dispute but
also makes these awards binding and legally enforceable.
2. Another development was setting up of Indian Labour Conference— a tripartite body to
look into industrial relation problems in India. It was constituted with the objective of
establishing co-operative between government, employers and trade unions.
3. Another important feature was change in attitude of government towards labour and their
problems. Many labour laws were enacted to protect the interests of industrial workers
during 1947 to 1956. These laws cover many issues concerning labour such as seniority, wage
rates, paid holidays, disciplinary matters, social security etc.

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Stage V: Control of Labour Tradition (1970-1990)
The institution of the trade union, which is a product of capitalist industrialization, emerged
in Britain and other developed countries in the West in the 19th century, basically to protect
against the injustice and exploitation meted out to workers by the owners of Capital during
the course of industrialization. Labour movement in many countries started its own political
parties and engaged in struggle at both the political and economic fronts. Gradually, over the
years, the labour class got integrated into the larger society with the acceptance of their
demands by the employers, first for collective bargaining and then for worker’s participation
in management. This led to their rise to prominence and power in industry and society in the
20th century. But trade unions witnessed significant loss of membership during the 1980s and
1990s. Various reasons for the loss of control of labour tradition could be analyzed as follows:
1. Trade union developed not under the leadership of workers but under the leadership of
outsiders that is social workers and nationalist leaders. It was led by political leaders.
Moreover, the political leadership was internally divided on ideological lines.
2. Governments increasingly took upon themselves the wage-welfare functions of trade
unions for which it passed a plethora of labour legislations, protecting jobs of workers and
also providing for various welfare measures. This, however, further weakened trade unions
and impeded the growth of the system of collective bargaining in the industry. In fact, even
though India has probably the largest number of labour laws in the world, it does not have a
central law that provides for the recognition of trade unions.
3. There has been significant change in the social composition of the labour force. A new
generation of workers has emerged in their industries since the mid 50s or so, who are largely
from upper castes and who are also young, educated and urban in origin. To them, a trade
union constitutes not a movement, but an agency which has to provide them services in
return for their subscription and political support. They leave a union when it is unable to
provide them benefits and join those who promise to give them these benefits. Consequently,
inter-union rivalry is high and the recognized unions particularly face difficulty in retaining the
support of workers on a continuing basis.
4. In fact, rising unemployment and underemployment and increasing price have hit the
working class hard. Such a situation not only makes the workers primarily interested in
questions of job security, pay and other material rewards that is to strive for consumption,
which is conspicuous by its nature. This, in turn, makes them more individualistic.
5. The majority of Indian organizations are small and medium-sized and consequent size of
trade unions in these enterprises has to be small. The political fragmentation of the union
movement also contributes to its small size. This small size of unions also accounts for their
poor financial strength.
6. The nature of linkage between unions at different levels and political parties varies a great
deal from complete ‘ownership’ of unions by particular to allowing of different degrees of
autonomy to unions by parties like congress party. However, despite various weaknesses,
unions in India often enjoyed considerable power at both the national and bargaining levels,

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especially till the early 1970s or so, because of their linkage with political parties and the
support they got from the governments in power.
Stage VI: Professional Tradition (1990-till Date)
With the passage of time, personnel management has become mature and professionalized.
Professional management is that management where decision-making rests with professional
managers, where there has been a divorce between capital and control and where owners of
business are functionless owners.
Specialized formal education: It requires advanced, specialized formal education and training.
Besides, they should also have specialized in some discipline of management (like production,
finance, marketing, personnel etc.)
At this stage, personnel management became a professional field of management.
Academic Qualification of Personnel Manager: An occupation in order to be called as a
profession should possess advanced specialized formal education and training.
1. Qualification varies from organization to organization and from one state to another state
of a country. It has undergone several changes from time to time. The list of qualification
includes Post Graduate degree or diploma in Social Science, Sociology, Social Work, Personnel
Management and Industrial Relation, Labour Welfare, Labour Laws, MBA with specialization
in Human Resource Management and Industrial Relations.
2. There is no specific educational qualification prescribed for the post of Personnel
Management in India. Technical managers without any experience or qualification are posted
as Personnel Managers in public sector organizations like Indian railways, BHEL, SAIL. There
has been increased importance to acquire knowledge or degree for the post of Human
Resource manager.
Following are the characteristics of professional institution:
1. Professional bodies: A profession is organized as a body with its own experts. The
professionals have developed a number of administrative societies, associations and
institutions, which have a large membership of those who have qualified in personnel affairs.
The National Institute of Personnel Management, the Indian Labour Economics Society, All
India Management Association, International Personnel Management Association and
American Society of Personnel Administration are some of such bodies.
2. Members of the profession must maintain at all times an attitude towards their work and
society, be interested, in continued acquisition of skills and knowledge, have a sense of
trusteeship, individual initiative and a right to expert and received financial recognition.
3. Code of Ethics: Various professions like Medicine, Accountancy have ethical codes. But the
personnel profession does not have such ethical codes.
It cannot, therefore, be concluded, from the above analysis, that personnel management in
India completely possesses the characteristics to be called as a profession. The situation may

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change in the years ahead, where organization requirements for professionally qualified
people might increase

Scope of HRM:
The scope of Human Resources Management extends to:

• All the decisions, strategies, factors, principles, operations, practices, functions, activities
and methods related to the management of people as employees in any type of organization.

• All the dimensions related to people in their employment relationships, and all the dynamics
that flow from it.
The scope of HRM is really vast. All major activities in the working life of a worker – from the
time of his or her entry into an organization until he or she leaves it comes under the purview
of HRM. American Society for Training and Development (ASTD) conducted fairly an
exhaustive study in this field and identified nine broad areas of activities of HRM.
These are given below:

• Human Resource Planning

• Design of the Organization and Job

• Selection and Staffing

• Training and Development

• Organizational Development

• Compensation and Benefits

• Employee Assistance

• Union/Labour Relations

• Personnel Research and Information System

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a) Human Resource Planning: The objective of HR Planning is to ensure that the organization
has the right types of persons at the right time at the right place. It prepares human resources
inventory with a view to assess present and future needs, availability and possible shortages
in human resource. Thereupon, HR Planning forecast demand and supplies and identify
sources of selection. HR Planning develops strategies both long-term and short-term, to meet
the man-power requirement.
b) Design of Organization and Job: This is the task of laying down organization structure,
authority, relationship and responsibilities. This will also mean definition of work contents for
each position in the organization. This is done by “job description”. Another important step is
“Job specification”. Job specification identifies the attributes of persons who will be most
suitable for each job which is defined by job description.
c) Selection and Staffing: This is the process of recruitment and selection of staff. This involves
matching people and their expectations with which the job specifications and career path
available within the organization.
d) Training and Development: This involves an organized attempt to find out training needs
of the individuals to meet the knowledge and skill which is needed not only to perform current
job but also to fulfil the future needs of the organization.

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e) Organizational Development: This is an important aspect whereby “Synergetic effect” is
generated in an organization i.e. healthy interpersonal and inter-group relationship within the
organization.
f) Compensation and Benefits: This is the area of wages and salaries administration where
wages and compensations are fixed scientifically to meet fairness and equity criteria. In
addition labour welfare measures are involved which include benefits and services.
g) Employee Assistance: Each employee is unique in character, personality, expectation 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 more productive and happy.
h) Union-Labour Relations: Healthy Industrial and Labour relations are very important for
enhancing peace and productivity in an organization. This is one of the areas of HRM.
i) Personnel Research and Information System: Knowledge on behavioral science and
industrial psychology throws better insight into the workers expectations, aspirations and
behaviour. Advancement of technology of product and production methods have created
working environment which are much different from the past. Globalization of economy has
increased competition many fold. Science of ergonomics gives better ideas of doing a work
more conveniently by an employee. Thus, continuous research in HR areas is an unavoidable
requirement. It must also take special care for improving exchange of information through
effective communication systems on a continuous basis especially on moral and motivation.

Scope of Human Resource Management

1. Personnel Aspect
Human Resource Planning – It is the process by which the organization identifies the number
of jobs vacant.
Job Analysis and Job Design – Job analysis is the systematic process for gathering,
documenting, and analyzing data about the work required for a job. Job analysis is the
procedure for identifying those duties or behavior that defines a job.
Recruitment and Selection – Recruitment is the process of preparing advertisements on the
basis of information collected from job analysis and publishing it in newspaper. Selection is
the process of choosing the best candidate among the candidates applied for the job.
Orientation and Induction – Making the selected candidate informed about the organization’s
background, culture, values, and work ethics.
Training and Development – Training is provided to both new and existing employees to
improve their performance.

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Performance Appraisal – Performance check is done of every employee by Human Resource
Management. Promotions, transfers, incentives, and salary increments are decided on the
basis of employee performance appraisal.
Compensation Planning and Remuneration – It is the job of Human Resource Management to
plan compensation and remunerate.
Motivation – Human Resource Management tries to keep employees motivated so that
employees put their maximum efforts in work.
2. Welfare Aspect
Human Resource Management have to follow certain health and safety regulations for the
benefit of employees. It deals with working conditions, and amenities like - canteens, crèches,
rest and lunch rooms, housing, transport, medical assistance, education, health and safety,
recreation facilities, etc.
3. Industrial Relation Aspect
HRM works to maintain co-ordinal relation with the union members to avoid strikes or
lockouts to ensure smooth functioning of the organisation. It also covers - joint consultation,
collective bargaining, grievance and disciplinary procedures, and dispute settlement.

Objectives of HRM:
The primary objective of HRM is to ensure the availability of competent and willing workforce
to an organization. The specific objectives include the following:
1) Human Capital: assisting the organization in obtaining the right number and types of
employees to fulfill its strategic and operational goals
2) Developing Organizational Climate: helping to create a climate in which employees are
encouraged to develop and utilize their skills to the fullest and to employ the skills and abilities
of the workforce efficiently
3) Helping to maintain performance standards and increase productivity through effective job
design; providing adequate orientation, training and development; providing performance-
related feedback; and ensuring effective two-way communication.
4) Helping to establish and maintain a harmonious employer/employee relationship
5) Helping to create and maintain a safe and healthy work environment
6) Developing programs to meet the economic, psychological, and social needs of the
employees and helping the organization to retain the productive employees
7) Ensuring that the organization is in compliance with provincial/territorial and federal laws
affecting the workplace (such as human rights, employment equity, occupational health and
safety, employment standards, and labour relations legislation). To help the organization to
reach its goals

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8) To provide organization with well-trained and well-motivated employees
9) To increase the employees satisfaction and self-actualization
10) To develop and maintain the quality of work life
11) To communicate HR policies to all employees.
12) To help maintain ethical polices and behavior.
The above stated HRM objectives can be summarized under four specific objectives: societal,
organizational, and functional and personnel.

1) Societal Objectives: seek to ensure that the organization becomes socially responsible to
the needs and challenges of the society while minimizing the negative impact of such
demands upon the organization. The failure of the organizations to use their resources for
the society’s benefit in ethical ways may lead to restriction.
2) Organizational Objectives: it recognizes the role of HRM in bringing about organizational
effectiveness. It makes sure that HRM is not a standalone department, but rather a means to
assist the organization with its primary objectives. The HR department exists to serve the rest
of the organization.
3) Functional Objectives: is to maintain the department’s contribution at a level appropriate
to the organization’s needs. Human resources are to be adjusted to suit the organization’s
demands. The department’s value should not become too expensive at the cost of the
organization it serves.
4) Personnel Objectives: it is to assist employees in achieving their personal goals, at least as
far as these goals enhance the individual’s contribution to the organization. Personal
objectives of employees must be met if they are to be maintained, retained and motivated.
Otherwise, employee performance and satisfaction may decline giving rise to employee
turnover.

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IMPORTANCE OF HUMAN RESOURCE MANAGEMENT:
Human Resource Management is related with effective utilization of human resources. The
importance of HRM can be discussed as:
1. Importance concerned with individual organization
Human Resource Management can help an organization to achieve to its objective more
efficiently and effectively in the following ways:
(a) Procurement of required talents through recruitment, selection, placement, inducting,
training, compensation and promotion policies.
(b) Secures co-operation of all employee of the organization for achieving goals.
(c) Proper utilization of human resources for the success of the enterprise.
(d) Ensure a future team of efficient ancompetent workers required for the organization.
2. Professional Importance
Professional competency among employees can be achieved through the following ways.
(a) Human resource management provides maximum opportunities to employees for their
personnel development.
(b) Providing healthy relationship among employees
(c) Proper allocation of work among employees.
(d) Providing training facilities for the individual development of employees.
3. Social Importance
HRM is important in social perspective also. It includes the following aspects:
(a) Human resource management enhances the dignity of labour.
(b) Provides suitable job to suitable person and it will help to satisfy the psychological and
social satisfaction of employees.
(c) Helps to provide reasonable compensation to workers, which leads them to have a good
standard of living.
(d) Helps to maintain a balance between jobs and job seekers in terms of numbers,
qualification, aptitude etc.
(e) Takes health and safety measures which ensures physical and mental health of the
employees.
4. National Importance
Effective management of human resources will speed up the economic growth of nation. This
in turn leads to better standard of living and more job opportunities.

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Functions of HRM:
Human Resources management has an important role to play in equipping organizations to
meet the challenges of an expanding and increasingly competitive sector. Increase in staff
numbers, contractual diversification and changes in demographic profile which compel the
HR managers to reconfigure the role and significance of human resources management. The
functions are responsive to current staffing needs, but can be proactive in reshaping
organizational objectives. All the functions of HRM are correlated with the core objectives of
HRM (Table 1.1). For example personal objectives is sought to be realized through functions
like remuneration, assessment etc.

HR management can be thought of as seven interlinked functions taking place within

organizations, as depicted in Figure 1.3 Additionally, external forces—legal, economic,
technological, global, environmental, cultural/geographic, political, and social—significantly
affect how HR functions are designed, managed, and changed. The functions can be grouped
as follows:

) Strategic HR Management: As a part of maintaining organizational competitiveness,

strategic planning for HR effectiveness can be increased through the use of HR metrics and

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HR technology. Human resource planning (HRP) function determine the number and type of
employees needed to accomplish organizational goals. HRP includes creating venture teams
with a balanced skill-mix, recruiting the right people, and voluntary team assignment. This
function analyzes and determines personnel needs in order to create effective innovation
teams. The basic HRP strategy is staffing and employee development.

) Equal Employment Opportunity: Compliance with equal employment opportunity (EEO)
laws and regulations affects all other HR activities.

) Staffing: The aim of staffing is to provide a sufficient supply of qualified individuals to fill
jobs in an organization. Job analysis, recruitment and selection are the main functions under
staffing.
Workers job design and job analysis laid the foundation for staffing by identifying what
diverse people do in their jobs and how they are affected by them.
Job analysis is the process of describing the nature of a job and specifying the human
requirements such as knowledge, skills, and experience needed to perform the job. The end
result of job analysis is job description. Job description spells out work duties and activities of
employees.
Through HR planning, managers anticipate the future supply of and demand for employees
and the nature of workforce issues, including the retention of employees. So HRP precedes
the actual selection of people for organization. These factors are used when recruiting
applicants for job openings. The selection process is concerned with choosing qualified
individuals to fill those jobs. In the selection function, the most qualified applicants are
selected for hiring from among the applicants based on the extent to which their abilities and
skills are matching with the job.

) Talent Management and Development: Beginning with the orientation of new employees,
talent management and development includes different types of training. Orientation is the
first step towards helping a new employee to adjust himself to the new job and the employer.
It is a method to acquaint new employees with particular aspects of their new job, including
pay and benefit programmes, working hours and company rules and expectations.
Training and Development programs provide useful means of assuring that the employees
are capable of performing their jobs at acceptable levels and also more than that. All the
organizations provide training for new and in experienced employee. In addition, organization
often provide both on the job and off the job training programmes for those employees
whose jobs are undergoing change.
Likewise, HR development and succession planning of employees and managers is necessary
to prepare for future challenges. Career planning has developed as result of the desire of
many employees to grow in their jobs and to advance in their career. Career planning
activities include assessing an individual employee’s potential for growth and advancement
in the organization.

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Performance appraisal includes encouraging risk taking, demanding innovation, generating or
adopting new tasks, peer evaluation, frequent evaluations, and auditing innovation
processes.
This function monitors employee performance to ensure that it is at acceptable levels. This
strategy appraises individual and team performance so that there is a link between individual
innovativeness and company profitability. Which tasks should be appraised and who should
assess employees’ performance are also taken into account.

) Total Rewards: Compensation in the form of pay, incentives and benefits are the rewards
given to the employees for performing organizational work. Compensation management is
the method for determining how much employees should be paid for performing certain jobs.
Compensation affects staffing in that people are generally attracted to organizations offering
a higher level of pay in exchange for the work performed. To be competitive, employers
develop and refine their basic compensation systems and may use variable pay programs such
as incentive rewards, promotion from within the team, recognition rewards, balancing team
and individual rewards etc. This function uses rewards to motivate personnel to achieve an
organization’s goals of productivity, innovation and profitability. Compensation is also related
to employee development in that it provides an important incentive in motivating employees
to higher levels of job performance to higher paying jobs in the organization.
Benefits are another form of compensation to employees other than direct pay for the work
performed. Benefits include both legally required items and those offered at employer’s
discretion. Benefits are primarily related to the area of employee maintenance as they
provide for many basic employee needs.

) Risk Management and Worker Protection: HRM addresses various workplace risks to
ensure protection of workers by meeting legal requirements and being more responsive to
concerns for workplace health and safety along with disaster and recovery planning.

) Employee and Labour Relations: The relationship between managers and their employees
must be handled legally and effectively. Employer and employee rights must be addressed. It
is important to develop, communicate, and update HR policies and procedures so that
managers and employees alike know what is expected. In some organizations,
union/management relations must be addressed as well. The term labour relation refers to
the interaction with employees who are represented by a trade union. Unions are
organization of employees who join together to obtain more voice in decisions affecting
wages, benefits, working conditions and other aspects of employment. With regard to labour
relations the major function of HR personnel includes negotiating with the unions regarding
wages, service conditions and resolving disputes and grievances.

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Human Resource Management Functions:
Some of the major functions of human resource management are as follows:
1. Managerial Functions
2. Operative Functions
3. Advisory Functions.
Human Resource or Personnel Department is established in most of the organizations, under
the charge of an executive known as Human Resource/Personnel Manager. This department
plays an important role in the efficient management of human resources.
The personnel department gives assistance and provides service to all other departments on
personnel matters. Though personnel or human resource manager is a staff officer in relation
to other departments of the enterprise, he has a line authority to get orders executed within
his department. (i) Managerial, (ii) Operative and (iii) Advisory functions.
1. Managerial Functions:
The Human Resource Manager is a part of the organisational management. So he must
perform the basic managerial functions of planning, organising, directing and controlling in
relation to his department.
There functions are briefly discussed below:
1. Planning: To get things done through the subordinates, a manager must plan ahead.
Planning is necessary to determine the goals of the organisation and lay down policies and
procedures to reach the goals. For a human resource manager, planning means the
determination of personnel programs that will contribute to the goals of the enterprise, i.e.,
anticipating vacancies, planning job requirements, job descriptions and determination of the
sources of recruitment.
The process of personnel planning involves three essential steps.
Firstly, a supply and demand forecast for each job category is made. This step requires
knowledge to both labour market conditions and the strategic posture and goals of the
organisation.
Secondly, net shortage and excess of personnel by job category are projected for a specific
time horizon.
Finally, plans are developed to eliminate the forecast shortages and excess of particular
categories of human resources.
2. Organizing: Once the human resource manager has established objectives and developed
plans and programs to reach them, he must design and develop organisation structure to
carry out the various operations.
The organization structure basically includes the following:

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(i) Grouping of personnel activity logically into functions or positions;
(ii) Assignment of different functions to different individuals;
(iii) Delegation of authority according to the tasks assigned and responsibilities involved;
(iv) Co-ordination of activities of different individuals.
3. Directing: The plans are to be pure into effect by people. But how smoothly the plans are
implemented depends on the motivation of people. The direction function of the personnel
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. The personnel manager can motivate the employees in
an organisation through career planning, salary administration, ensuring employee morale,
developing cordial relationships and provision of safety requirements and welfare of
employees.
The motivational function poses a great challenge for any manager. The personnel manager
must have the ability to identify the needs of employees and the means and methods of
satisfy those needs. Motivation is a continuous process as new needs and expectations
emerge among employees when old ones are satisfied.
4. Controlling: Controlling is concerned with the regulation of activities in accordance with
the plans, which in turn have been formulated on the basis of the objectives of the
organisation. Thus, controlling completes the cycle and leads back to planning. It involves the
observation and comparison of results with the standards and correction of deviations that
may occur.
Controlling helps the personnel manager to evaluate the control the performance of the
personnel department in terms of various operative functions. It involves performance
appraisal, critical examination of personnel records and statistics and personnel audit.
2. Operative Functions:
The operative functions are those tasks or duties which are specifically entrusted to the
human resource or personnel department. These are concerned with employment,
development, compensation, integration and maintenance of personnel of the organisation.
The operative functions of human resource or personnel department are discussed below:
1.Employment: The first operative function of the human resource of personnel department
is the employment of proper kind and number of persons necessary to achieve the objectives
of the organisation. This involves recruitment, selection, placement, etc. of the personnel.
Before these processes are performed, it is better to determine the manpower requirements
both in terms of number and quality of the personnel. Recruitment and selection cover the
sources of supply of labour and the devices designed to select the right type of people for
various jobs. Induction and placement of personnel for their better performance also come
under the employment or procurement function.

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2.Development: Training and development of personnel is a follow up of the employment
function. It is a duty of management to train each employee property to develop technical
skills for the job for which he has been employed and also to develop him for the higher jobs
in the organisation. Proper development of personnel is necessary to increase their skills in
doing their jobs and in satisfying their growth need.
For this purpose, the personnel departments will device appropriate training programs. There
are several on- the-job and off-the-job methods available for training purposes. A good
training program should include a mixture of both types of methods. It is important to point
out that personnel department arranges for training not only of new employees but also of
old employees to update their knowledge in the use of latest techniques.
3.Compensation: This function is concerned with the determination of adequate and
equitable remuneration of the employees in the organisation of their contribution to the
organisational goals. The personnel can be compensated both in terms of monetary as well
as non-monetary rewards.
Factors which must be borne in mind while fixing the remuneration of personnel are their
basic needs, requirements of jobs, legal provisions regarding minimum wages, capacity of the
organisation to pay, wage level afforded by competitors etc. For fixing the wage levels, the
personnel department can make use of certain techniques like job evaluation and
performance appraisal.
4.Maintenance (Working Conditions and Welfare): Merely appointment and training of
people is not sufficient; they must be provided with good working, conditions so that they
may like their work and workplace and maintain their efficiency. Working conditions certainly
influence the motivation and morale of the employees.
These include measures taken for health, safety, and comfort of the workforce. The personnel
department also provides for various welfare services which relate to the physical and social
well- being of the employees. These may include provision of cafeteria, rest rooms,
counseling, group insurance, education for children of employees, recreational facilities, etc.
5. Motivation: Employees work in the organisation for the satisfaction of their needs. In many
of the cases, it is found that they do not contribute towards the organisational goals as much
as they can. This happens because employees are not adequately motivated. The human
resource manager helps the various departmental managers to design a system of financial
and non-financial rewards to motivate the employees.
6. Personnel Records: The human resource or personnel department maintains the records
of the employees working in the enterprise. It keeps full records of their training,
achievements, transfer, promotion, etc. It also preserves many other records relating to the
behaviour of personnel like absenteeism and labour turnover and the personnel programs
and policies of the organisation.
7. Industrial Relations: These days, the responsibility of maintaining good industrial relations
is mainly discharged by the human resource manager. The human resource manager can help
in collective bargaining, joint consultation and settlement of disputes, if the need arises. This

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is because of the fact that he is in possession of full information relating to personnel and has
the working knowledge of various labour enactments.
The human resource manager can do a great deal in maintaining industrial peace in the
organisation as he is deeply associated with various committees on discipline, labour welfare,
safety, grievance, etc. He helps in laying down the grievance procedure to redress the
grievances of the employees. He also gives authentic information to the trade union leaders
and conveys their views on various labour problems to the top management.
8. Separation: Since the first function of human resource management is to procure the
employees, it is logical that the last should be the separation and return of that person to
society. Most people do not die on the job. The organisation is responsible for meeting certain
requirements of due process in separation, as well as assuring that the returned person is in
as good shape as possible. The personnel manager has to ensure the release of retirement
benefits to the retiring personnel in time.
3. Advisory Functions:
Human resource manager has specialized education and training in managing human
resources. He is an expert in his area and so can give advice on matters relating to human
resources of the organization.
He offers his advice to:
1. Advised to Top Management:
Personnel manager advises the top management in formulation and evaluation of personnel
programs, policies and procedures. He also gives advice for achieving and maintaining good
human relations and high employee morale.
2. Advised to Departmental Heads:
Personnel manager offers advice to the heads of various departments on matters such as
manpower planning, job analysis and design, recruitment and selection, placement, training,
performance appraisal, etc.

Personnel Management vs. Human Resource Management:

Both the terms refer to the one and the same function of the management and that is
managing the people at work. However, Human Resource Management is mainly focused on
best utilizing the man power by understanding their strength and weaknesses and engaging
them in different occupations so that their productivity can be increased. Therefore, training
and development and employee engagements are part of it. Personnel Management, on the
other hand, is mainly concerned with maintaining good employee- employer relationship and
activities connected with it. Therefore, Personnel Management mainly works around
Industrial/ Employee/ Labour Relations and activities connected with grievance handling,
negotiations, enforcement of labour statute, looking after welfare of employees and so on.

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Personnel Management is thus basically an administrative record-keeping function, at the
operational level. Personnel Management attempts to maintain fair terms and conditions of
employment, while at the same time, efficiently managing personnel activities for individual
departments etc. It is assumed that the outcomes from providing justice and achieving
efficiency in the management of personnel activities will result ultimately in achieving
organizational success.
Human resource management is the new version of personnel management. There is no any
watertight difference between human resource management and personnel management.
However, there are some differences in the following matters.
1. Personnel management is a traditional approach of managing people in the organization.
Human resource management is a modern approach of managing people and their strengths
in the organization.
2. Personnel management focuses on personnel administration, employee welfare and labor
relation. Human resource management focuses on acquisition, development, motivation and
maintenance of human resources in the organization.
3. Personnel management assumes people as a input for achieving desired output. Human
resource management assumes people as an important and valuable resource for achieving
desired output.
4. Under personnel management, personnel function is undertaken for employee's
satisfaction. Under human resource management, administrative function is undertaken for
goal achievement.
5. Under personnel management, job design is done on the basis of division of labor. Under
human resource management, job design function is done on the basis of group work/team
work.
6. Under personnel management, employees are provided with less training and
development opportunities. Under human resource management, employees are provided
with more training and development opportunities.
7. In personnel management, decisions are made by the top management as per the rules
and regulation of the organization. In human resource management, decisions are made
collectively after considering employee's participation, authority, decentralization,
competitive environment etc.
8. Personnel management focuses on increased production and satisfied employees. Human
resource management focuses on effectiveness, culture, productivity and employee's
participation.
9. Personnel management is concerned with personnel manager. Human resource
management is concerned with all level of managers from top to bottom.
10. Personnel management is a routine function. Human resource management is a strategic
function.

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HRM and Personnel Management (PM)
The difference between HRM and PM is a subject of discussion amongst HRM experts. They
do not hold identical views about the similarities and dissimilarities between HRM and PM.
According to Lowry, for example, PM and HRM are the successive stages of the same concept
without any difference in the concept. In his words, “Human Resource Management is just
the continuing process of personnel management – it is not different. ”
But another HR expert differed with this contention and identified major differences between
HRM and PM in the areas of management’s responsibility, skill acquisition, reward
management, planning perspective, conflict perception, and so on. Let us look at the
similarities first.
Similarities between HRM and PM The basic elements common to HRM and PM are as
follows: Business Strategy: Both form the basis for the evolution of HR and PM strategy.
Matching People: Choosing the right people for the right job and developing them to achieve
their maximum level of competence remain the priority of both HRM and PM.
Prominence of Line Authority: HRM, similar to PM, recognizes that the primary responsibility
for managing people stays with line managers.
Identical Core Elements: Techniques like selection, training, development, compensation and
performance management are common to both HRM and PM.
Emphasis on Communication and Participation: HRM and PM provide equal importance to
the communication process and workers’ participation in decision making. We shall now
discuss the differences between these two concepts.

HRM PM
HRM is proactive in nature. It is not only PM is mainly reactive in nature. It satisfies
concerned with the present organizational itself by ensuring peaceful labour–
conditions but foresees future necessities management relations in the present.
and then acts appropriately.
HRM, as a resource-centred activity, focuses PM, which is basically employee-centred,
more on the managerial aspects, in terms of aims at hiring, training, compensating and
delegating the responsibility of HRM to line maintaining the existing workforce of the
authority and management development. organization.
HRM emphasizes open-ended contracts, PM emphasizes the strict observance of
which can be modified depending upon the defined rules, procedures and contracts that
demands of the business. Management govern the relationship between the
assumes the responsibility to motivate the workforce and the management; for
employees and constantly inspires example, collective bargaining and
performance based on team spirit. employment contracts.
HRM is based on the principle that better PM considers job satisfaction and morale as
performance itself is a cause of job a source of better performance. It works on
satisfaction and morale.

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 the foundation that a contented worker is a
productive worker.
HRM seeks to develop the competencies of PM is a regular, status quo-based
the employees on a sustained basis. Skill administrative function: Employees get
formation and development are recognized uniform rewards based on job evaluation
as the main characteristics of HRM. and job worth.
HRM emphasizes autonomous work groups, PM emphasizes monetary rewards and
challenging jobs, and creativity for conventional job designs like job
motivating the people. The management simplification and rotation to encourage
assumes the responsibility to motivate the people to improve their performance.
employees and continuously encourage the
performance based on unity of goals.

Role of HRM:
The role of HRM is to plan, develop and administer policies and programs designed to make
optimum use of an organizations human resources. It is that part of management which is
concerned with the people at work and with their relationship within enterprises. Its
objectives are: (a) effective utilization of human resources, (b) desirable working relationships
among all members of the organizations, and (c) maximum individual development. Human
resources function as primarily administrative and professional. HR staff focused on
administering benefits and other payroll and operational functions and didn’t think of
themselves as playing a part in the firm’s overall strategy.
HR professionals have an all encompassing role. They are required to have a thorough
knowledge of the organization and its intricacies and complexities. The ultimate goal of every
HR person should be to develop a linkage between the employee and organization because
employee’s commitment to the organization is crucial.
The first and foremost role of HR personnel is to impart continuous education to the
employees about the changes and challenges facing the country in general and their
organization in particular. The employees should know about the balance sheet of the
company, sales progress, and diversification of plans, share price movements, turnover and
other details about the company. The HR professionals should impart such knowledge to all
employees through small booklets, video films and lectures.
The primary responsibilities of Human Resource managers are:

• To develop a thorough knowledge of corporate culture, plans and policies.

• To act as an internal change agent and consultant

• To initiate change and act as an expert and facilitator

• To actively involve in company’s strategy formulation

• To keep communication line open between the HRD function and individuals and groups
both within and outside the organization

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• To identify and evolve HRD strategies in consonance with overall business strategy.

• To facilitate the development of various organizational teams and their working relationship
with other teams and individuals.

• To try and relate people and work so that the organization objectives are achieved efficiently
and effectively.

• To diagnose problems and determine appropriate solution particularly in the human

resource areas.

• To provide co-ordination and support services for the delivery of HRD programmes and
services

• To evaluate the impact of an HRD intervention or to conduct research so as to identify,

develop or test how HRD In general has improved individual and organizational performance.
Different management gurus have deliberated different roles for the HR manager based on
the major responsibilities that they full fill in the organization. Few of the commonly accepted
models are enumerated below.
Pat Mc Lagan has suggested nine roles that are played by HR practitioners
1. To bring the issues and trends concerning an organization’s external and internal people to
the attention of strategic decision makers and to recommend long term strategies to support
organizational excellence and endurance.
2. To design and prepare HR systems and actions for implementation so that they can produce
maximum impact on organizational performance and development.
3. To facilitate the development and implementation of strategies for transforming one’s own
organization by pursuing values and visions.
4. To create a positive relationship with the customer’s by providing them with the best
services; to utilize the resources to the maximum and to create commitment among the
people who help the organization to meet the customers needs whether directly connected
or indirectly connected to the organization.
5. To identify the learning needs hence to design and develop structured learning
programmes and materials to help accelerate learning for individuals and groups.
6. To enable the individuals and groups to work in new situations and to expend and change
their views so that people in power move from authoritarian to participative models of
leadership.
7. To help employees to assess their competencies, values and goals so that they can identify,
plan and implement development plans.
8. He also assists the individual employee to add values in the workplace and to focus on the
interventions and interpersonal skills for helping people change and sustain change.

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9. He assesses the HRD practices and programmes and their impact and to communicate
results so that the organization and its people accelerate their change and development.
According to Dave Ulrich HR play’s four key roles.
1. Strategic Partner Role-turning strategy into results by building organizations that create
value;
2. Change Agent Role- making change happen, and in particular, help it happen fast
3. Employees Champion Role—managing the talent or the intellectual capital within a firm
4. Administrative Role—trying to get things to happen better, faster and cheaper.
The role HR in organizations has undergone an extensive change and many organizations have
gradually oriented themselves from the traditional personnel management to a human
resources management approach. The basic approach of HRM is to perceive the organization
as a whole. Its emphasis is not only on production and productivity but also on the quality of
life. It seeks to achieve the paramount development of human resources and the utmost
possible socio-economic development.
Current Classification of HR roles:
According to R.L Mathis and J. H. Jackson (2010) several roles can be fulfilled by HR
management. The nature and extent of these roles depend on both what upper management
wants HR management to do and what competencies the HR staff have demonstrated. Three
roles are typically identified for HR. The focus of each of them, as shown in Figure 1.4 is
elaborated below:

1. Administrative Role of HR
The administrative role of HR management has been heavily oriented to administration and
recordkeeping including essential legal paperwork and policy implementation. Major changes
have happened in the administrative role of HR during the recent years. Two major shifts
driving the transformation of the administrative role are: Greater use of technology and
Outsourcing.
Technology has been widely used to improve the administrative efficiency of HR and the
responsiveness of HR to employees and managers, more HR functions are becoming available
electronically or are being done on the Internet using Web-based technology. Technology is

26
being used in most HR activities, from employment applications and employee benefits
enrollments to e-learning using Internet-based resources.
Increasingly, many HR administrative functions are being outsourced to vendors. This
outsourcing of HR administrative activities has grown dramatically in HR areas such as
employee assistance (counseling), retirement planning, benefits administration, payroll
services, and outplacement services.
2. Operational and Employee Advocate Role for HR
HR managers manage most HR activities in line with the strategies and operations that have
been identified by management and serves as employee “champion” for employee issues and
concerns.
HR often has been viewed as the “employee advocate” in organizations. They act as the voice
for employee concerns, and spend considerable time on HR “crisis management,” dealing
with employee problems that are both work-related and not work-related. Employee
advocacy helps to ensure fair and equitable treatment for employees regardless of personal
background or circumstances.
Sometimes the HR’s advocate role may create conflict with operating managers. However,
without the HR advocate role, employers could face even more lawsuits and regulatory
complaints than they do now.
The operational role requires HR professionals to cooperate with various departmental and
operating managers and supervisors in order to identify and implement needed programs and
policies in the organization. Operational activities are tactical in nature. Compliance with
equal employment opportunity and other laws is ensured, employment applications are
processed, current openings are filled through interviews, supervisors are trained, safety
problems are resolved, and wage and benefit questions are answered. For carrying out these
activities HR manager matches HR activities with the strategies of the organization.
3. Strategic Role for HR
The administrative role traditionally has been the dominant role for HR. However, as Figure
1.4 indicates that a broader transformation in HR is needed so that significantly less HR time
and fewer HR staffs are used just for clerical work.
Differences between the operational and strategic roles exist in a number of HR areas. The
strategic HR role means that HR professionals are proactive in addressing business realities
and focusing on future business needs, such as strategic planning, compensation strategies,
the performance of HR, and measuring its results. However, in some organizations, HR often
does not play a key role in formulating the strategies for the organization as a whole; instead
it merely carries them out through HR activities.
Many executives, managers, and HR professionals are increasingly seeing the need for HR
management to become a greater strategic contributor to the “business” success of
organizations. HR should be responsible for knowing what the true cost of human capital is
for an employer. For example, it may cost two times key employees’ annual salaries to replace

27
them if they leave. Turnover can be controlled though HR activities, and if it is successful in
saving the company money with good retention and talent management strategies, those
may be important contributions to the bottom line of organizational performance.
The role of HR as a strategic business partner is often described as “having a seat at the table,”
and contributing to the strategic directions and success of the organization. That means HR is
involved in devising strategy in addition to implementing strategy. Part of HR’s contribution
is to have financial expertise and to produce financial results, not just to boost employee
morale or administrative efficiencies. Therefore, a significant concern for chief financial
officers (CFOs) is whether HR executives are equipped to help them to plan and meet financial
requirements.

Principles of HRM
The word principle means, the fundamental truth or law as basis of reasoning or actions.
Human resource management is a very extensive area of operation, there should be certain
principles or laws through which they can be governed. These principles are laid down with
an objective that it proves as a guide for all types of organizations.
Characteristics of Principles
The characteristics of these principles should be that they are universally applicable and are
easy to be followed in any type of organization. The HR principles are:
1. A fundamental or universal truth.
2. Generally applicable to originations.
3. It guides managers in formulating policies, programs and procedures. For example,
principles of fair remuneration, principles of scientific selection of workers.
4. It is applicable at all levels of the organization.
5. It is dynamic in nature and leads to employee motivation and satisfaction.

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