LESSON 1

Human Resource Management :

LEARNING OBJECTIVES
After reading this lesson, you should be able to
(a) Define human resource management, and outline the objectives and scope of
human resource management.
(b) Discuss the significance of human resource management.
(c) Examine the environmental influence on HRM.
(d) Trace the recent developments in HRM

Introduction
This goes without saying that human resource is the most important asset of any
organization and unlike other resources the human resources could be developed and
increased to a limitless extent. Human resources mean the energies, skills, knowledge
and physical strength of the people at work. Human resources comprise the value of the
productive capacity of entire work force of any organization. To be specific and brief,
human resources refer to the aggregate of knowledge, skill, experience and health of
employees working in any organization. And development of human resource accounts
for the development of human side of the organization. The word HUMAN has five
letters and each letter speak of a distinct characteristic of human being as under:
H HEARS
U UNDERSTANDS
M MOVES
A ADJUSTS
N NEGOTIATES

Management is absolutely essential in the present times in all organizations,

irrespective of their origin, nature and ownership. Every enterprise, established with
profit motive or some social, religious or such like other purpose, requires efficient
management for its sustained progress. But, management has been viewed differently
by various scholars, depending upon their belief and comprehensions. Some regard it
as the force that runs a business and is responsible for its success or failure. Others
perceive it as a means for achievement of desired results through group efforts and by
utilizing both human and non-human resources. Still others deem management to be a
process comprising planning, organizing, staffing, directing and controlling. Also, some
look on it as an instrument for designing and maintaining an environment conducive to
the performance of individuals who are working together in a group towards the
accomplishment of some predetermined objectives.
Furthermore, some think that management merely implies certain tasks which
the managers are supposed to perform. Thus, there are numerous, opinions on what
‘management’ actually involves. And, no description, however, lengthy would be
considered satisfactory for fully and finally deducing the universally acceptable
connotation of this term. While an agreement on the exact definition of management
has not been reached, any definition of management must include three common
factors namely goals, limited resources and people.
First, goals are necessary because activities must be directed towards some
end. Second, there are limited resources. Economic resources are scarce, therefore,
the manager is responsible for their allocation. This requires not only that manager be
effective in achieving the goals that are established, but they are efficient in relation to
output to input. Managers then are concerned with the attainment of goals, which
makes them effective and with best allocations of scarce resources, which makes them
efficient.
The need for two or more people is the third and last requisite for management. It
is with arid through people that managers perform their work. Now, let us move from the
broad topic of management to the more specific topic of human resource management.

Meaning of Human Resource Management

Human Resource Management (HRM) is concerned with the “people” dimension
in management. Since every organization is made up of people, acquiring their
services, developing their skills, motivating them to high level of performance and
ensuring that they continue to maintain their commitment to the organization are
essential to achieving organizational objectives. This is true regardless of type of
organization may it be Government, business, education, health, recreation or social
action. Those organizations that are able to acquire, develop, stimulate and keep
outstanding workers will be both effective, able to achieve their goals, and efficient
(expanding the least amount of resources necessary). Those organizations that are
inefficient and ineffective risk the hazards of stagnating or going out of business.
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
laborers 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 objectives are accomplished.”
According to process system view, human resources management is the systematic
planning, development, and control of a network of interrelated process affecting and
involving all members of organization. These processes include:
• Human resources planning
• Job and work design
• Staffing
 • Training and development
• Performance appraisal and review
• Compensation and reward
• Employee protection and representation
• Organization improvement
According to another view, human resource management refers to the practices and
policies you need to carry out the people aspects of your management job. These
include:

• Conducting job analysis

• Planning labor needs and recruiting candidates
• Selecting job candidates
• Orienting and training new employees
• Managing wage and salaries
• Providing incentive and benefits
• Appraising performance
• Communicating
• Training and development
• Building employees’ commitment

To effectively manage these processes, human resources systems are planned,

developed and implemented through the combined efforts of all managers and human
resources specialists - and frequently all employees - in an organization. Overall, the
systems are intended to achieve organization-wide goals and contribute to
organizational effectiveness and productivity. From the foregoing definitions it may be
(i) HRM aims at getting the best results out of the employees. In other words, it
has the overall goal of securing the optimum contribution from the human
factor in business.
(ii) It does not, however, follow from above that this modem branch of business
management is geared to the exploitation of the employees. Good HRM helps
the employees develop their capacities to the full and derive the greatest
 satisfaction from their work. It, thus, looks to their needs, comforts and
grievances, As Scott, Clothier and Sprieged put it, four different angles or
elements of the employee-in his-work unit must be given due consideration.
There are:
(a) Capacities - referring to those abilities, to those attainments, inherited or
acquired, that a worker has, are capable of exercising, and must, to a certain
degree at least, exercise in his work.
(b) Interest - not only an individual’s desires, and ambitions, but also his
instinctive, impulsive tendencies, vague, bearing, and ill-defined carvings that
mayor may not stir him to his fullest action in performing his duties.
(c) Opportunities - not only opportunities for advancement, although, that is
included, but opportunities to exercise his capacities and satisfy his interests
also.
(d) Personality - the sum total of a worker’s reaction to his experiences and
environment. Personality in manifest by an individual’s reception by others.
Management has only a minor role in influencing personality, but the worker’s
personality has a great influence upon his opportunities.
(iii) Good HRM aims at promoting group satisfaction, building up what is known as
team spirit, because it is the joint effort that is more important.
(iv) The work related to human resources is of a continuous nature. In the words of
George Terry, it cannot be turned on and off like water from a faucet; it cannot be
practiced only one hour each day or one day a week. It required a constant
alertness and awareness of human relations and their importance in everyday
operations. It is, thus, a way of approach, a technique of thinking, a philosophy of
management which has to be kept in view at all times and at different levels of
the organization
Thus, human resource management refers to set of programs, functions and
activities designed and carried out in order to maximize both employees as well
as organizational effectiveness.
1.3. Objectives of HRM
 Since HRM is an integral part of management, its main objective is identical
with that of latter, survival and growth to help the organization to achieve its
objectives, HRM contributes by assuring a rich and continuous supply of human
resources. Further, to make organisation effective and efficient, HRM aims at
coordinated efforts of the competent managers and workers towards the ultimate
goal. The general objective of HRM is to contribute towards realization of firms
goals. The specific objectives of HRM include the following:
(a) Efficient utilization of people’s skills and abilities
HRM aims at utilizing the people’s skill and abilities, in order to achieve
organizational as well as individual goals. Efficient utilization of manpower
is beneficial not only to the organization but also to the employees and
consumers. Human resource manager should ensure that necessary
action is taken to make the fullest utilization of manpower.
(b) Provision of trained and motivated employees
The human resource manager provides to the organization well trained and
motivated employees, which is the most valuable asset of an organization. The
human resource manager, for achieving this objective, creates an environment
which is conducive to the growth of well-trained and well motivated employees.
The effectiveness of human resource manager is judged on the basis of right
type of person, at right place, at right time for an organization.
(c) Increased employees job satisfaction
HRM aims at providing facilities for employees thereby ensure job
satisfaction of the individuals. This objective focuses on employees’ needs
rather than organizational needs.
(d) Communicating HRM policies to all concerned
HRM aims at communicating its policies to all concerned in their own
language. Effective communication helps in building organization image
among its employees, Government and public in general. Through
effective communication, policies, goals of organization can be achieved
(e) Development and maintenance of quality of work life.
 HRM develops and maintain qualify of work life that makes work
environment more meaningful to the employees life. It is a programme of
building an ideal work environment to promote maximum employees
satisfaction consistent with maximum organization growth. The premise of
quality of work life is having a work environment where an employee’s
activities become more important. This means implementing procedures
that make work less routine and more rewarding for the employee. These
policies include autonomy, recognition, belongingness progress and
development and external rewards. Autonomy deals with the amount of
freedom that employees can exercise in their job. Recognition involves
being value by others in the company. An individual contribution to the
organization is noticed and appreciated. Belongingness refers to being
part of organization. Progress and developments refers to internal rewards
available from organization; challenge and accomplishment. Finally
external rewards which are usually in the form of salary and benefits, also
includes promotion, rank and status. Taken together, these components
provides for quality of work life for the individuals. If the quality of work life
is lacking, then workers productivity may suffer.
1.4 Scope of Human Resource Management
Following is the scope of human resource management explained by experts
in this area:
(a) Human Resources Planning
Human Resources Planning is the process of assessing the organization’s
human resources needs in light of organizational goals and making plans to
ensure that a competent, stable work force is employed. The planning
process includes an analysis of skill levels among employees and in the
external labor market, of current and expected job openings, of plans for
expanding or reducing staff throughout the organization, and of the external
legal environment. The planning process, then, is, closely related to the
staffing process and depends also on the overall strategic plans of the
organization. The systems designed to control and direct the human
 resources planning process include such devices and computerized records
of employees’ skills and qualification, forecasts of the number of employees
with certain skills who are likely to leave over the next year, analysis of the
extent to which affirmative action goals have been met; and confidential
organization charts showing possible candidates for promotion to various
executive positions
(b) Job and Work Design
Job and work design specifies the tasks to be performed by individuals
and groups within the organization, and establishes the rules, schedules and
working conditions under which people perform those tasks. Through careful
design, or circumstance, or both, events converge to create jobs to which
people are assigned and the conditions surrounding these jobs. Some of the
systems- used to help manage the process of job design include techniques
such as time and motion study and work simplification, which aims at making
jobs easy to learn and workers more efficient. Other job design systems, such
as job enrichment involve techniques to restructure jobs to make them more
interesting and challenging. Periodic discussions within a work team about
the allocation of tasks can be considered a job design system
(c) Job Analysis
Job analysis, an outgrowth of job design, is the process of investigating
the tasks and behavior associated with a particular job. Various systems used
in job analysis include observations of workers as they perform their jobs,
interviews and questionnaires. Typically the information obtained from job
analysis is used to write job descriptions and to establish what is required of
the person who will perform each job. In turn, job descriptions are useful in
the staffing process, especially in recruiting, hiring, and training new
employees.
(d) Recruitment

An organization needs people for its present and future vacancies.

Recruitment is the process of exploring the sources of suitable people and taking
effective measure for obtaining them. It is designed to attract as many candidates
as possible from inside and outside the organization so than an objective
selection of the most talented persons can be done.
(e) Selections and placement
Having identified the candidates eligible for the posts, the management
should proceed with the selection of right candidates and their placement.
Selection is the process of testing the ability, skill and aptitude of the
candidates. It is done to find out those candidates who are best suited to the
specific jobs. Placement is the process of assigning a job to an accepted
individual for which he is best suited. Selection and placement may or may
not occur simultaneously. When candidate are chosen for specific jobs,
selection and placement go together, but when a large number of candidates
are selected for avoid of jobs, placement is generally done only by importing
training.
(f) Socialization
After an employee has been selected and placed at a specific job, the next
logical step is to introduce him to the culture of the organization, through
socialization. It is a process of transmitting the key values, norms, policies
and objectives of the company to the employees with a view to shaping their
attitudes, thought and behavior and assimilating them into the dominant
culture of the company. It enables a new employee to understand the
organization better and makes him or her feel at home at his work
environment. This is extremely important to his motivation and performance in
the organization.
(g) Training and Development Process
Although the two terms are generally put together, they are not identical in
meaning. Training is a learning process that seeks to bring about a
permanent improvement in the ability and behavior of employees by enabling
them to learn new skill, knowledge, attitude and behavior so that they can
become better performers. It is mostly intended for operating employees.
Development is a much broaden concept than 8 training. It is basically an
 educational process which is directed to increase the conceptual ability of
employees to understand and apply knowledge in terms of cause and effect
relationship, in the organizational situation. It is generally intended for
managerial people training and development programs which essential for
enhancing the quality and potential of human resources for improving the
standards of performance and productivity of an Organization.
(h) Performance appraisal and review
It is a process of ascertaining how effectively an employee is performing his
job. The object of the appraisal is to determine the present state of efficiency
of an employee in order to establish the actual need for training and
motivation. It also serves to indicate the areas of weakness in employee
performance so that measures for skill improvement and prayer motivation
may be taken to remedy the situation. Although performance appraisal is
central to training and development programs, it provides valuable information
to the entire spectrum of HRM. It can offer important feedback information on
the effectiveness of recruitment, selection, motivation and compensation
systems. Hence, appraisal methods should be most carefully chosen and
designed to meet the multiple requirements of HRM.
(i) Accommodation
The accommodation process refers to the extent to which management
listens and responds to or accommodates the needs, wants, and complaints
(or grievances) of organization members. People working in organizations
expect to be treated fairly; moreover, they feel they have the right to be heard
and to be respected as individuals. Morale is severely affected when there is
a sense of unfair treatment or when workers perceive that management does
not care about their feelings, complaints, and suggestions. Systems for
managing the accommodation process include questionnaires, suggestion
boxes, an “open-door” philosophy and formal grievance procedures. The
effectiveness with which the accommodation process is managed varies
within organizations and depends on a number of factors such as prevailing
leadership style and management philosophy.
(j) Fair Compensation System
A fair compensation system for rewarding the employees is the most
important prerequisite to attracting and maintaining the employees.
Compensation in a narrow sense refers to the wages and salaries which are
paid to the employees in return for their services. But its meaning is often
extended to include all kinds of payments and benefits offered to the
employees in lieu of their services. However, the amount of money paid to an
employee is the most important form of compensation as it enables the
receiver to satisfy most of his or her needs. The crucial point about monetary
compensation is that it should be fair from the point of view of both the
employer and the employee. Although a fair compensation is difficult to
define, it should be taken to mean the amount that is adequate for the
demands and requirements of the job.
(k) Employee Benefits and Services
In addition to fair monetary compensation, employees should be provided
with a number of nonmonetary benefits and services which are no less
important. The benefits are provided mostly in the form of paid holidays and
vacations, pensions and retirement benefits, accident and life insurance
benefits, etc. Services that are generally offered to the employees include
social and recreational activities, medical and transport facilities, housing,
credit cooperatives, discounts in purchases and cafeteria. These benefits are
provided to all the members of an organization regardless of their
performance. As such they are intended mainly for the maintenance of
employees, research studies indicate that although employees prefer money
9 to anything else, they strongly desire to take a part of their compensation in
the form of benefits and services. In most of the cases an employee’s
decision to stay with or leave the organization will be influenced by the
number of benefits and services provided. Therefore, an organization should
be to offer as many advantages as possible to its employees.
(l) Safety and Health Care Programs
 Safety and health care programs are essential to the maintenance of
employees. Industrial safety implies that the working conditions in or around
the factory or mines should be free from the danger of accidents and health
hazards. An accident is a tragic incident which has human, social and
economic dimensions. It results in tremendous mental and physical sufferings
for the injured apart from the loss of earnings. The organizations suffer
enormous financial loss in terms of compensation payable to the injured,
damaged equipment and loss of production.
Hence, every precaution should be taken to protect the employees from
the damage of accidents. In addition to adequate safety measures, training
and education program should be organized to create safety consciousness
among the people. The setting up of a separate safety department can go a
long way in eliminating or reducing the hazards of accidents.
Apart from accidents, workers in an industrial organization is often
exposed to certain health hazards and occupational diseases. Proper steps
like provision for cleanliness, safe disposal of waste and effluents, proper
ventilation and lighting should be taken to protect the health of the
employees. Moreover, efficient medical service and recreational activities can
greatly contribute to the physical and mental wellbeing of the employees.
(m) Collective Bargaining
The collective bargaining process refers to those events that establish a
formal agreement between workers and management regarding such matters
such as wages and employee benefits, hours of work, working conditions
and. grievance procedures. The process includes both the negotiation and
administration of the labour-management contract.
(n) Organizational Development
The integrated approach which is followed for the simultaneous
development of people and organization is called organization development
(OD). It may be defined as a comprehensive program of building a climate of
improved decision-making adaptability and higher performance in an
organization. It is, in fact, a long-term process of deliberately changing the
 organization by training and developing managerial people so as to make it more
dynamic and effective in meeting the challenge of competition, adaptation and
growth. OD programmes are mainly characterized by planned approach to
change, emphasis on group rather than individual, participation in external
change agents, use of intervention strategy and action research. It includes such
complex process as grid training, survey feed back, team building and
transactional analysis.
1.5 Significance of Human Resource Management
Human Resource Management is of utmost important from at least three
standpoints, social, professional and individual enterprises.
(i) Social Significance
The effective management of human resources is likely to serve the goals of
our society. It can serve the following goals:
 It can help to maintain an even balance of jobs and job holders to raise living
standards of individuals in society. *
 It can help people to avail the best most productive and most gainful jobs where
they can be most satisfy and effective.
 It can help to ensure the best protection and conservation of human resources to
prevent its wasteful or careless use.
 It can help people to take decisions with minimum direction and control
(ii) Professional Significance
From professional standpoint, the management of human resources is also of
great significance. It can provide motivation for effective teamwork by providing
desirable working conditions and policies. Specifically, it can serve following
professional goals.
* It can help in maintaining the dignity of individual members.
* It can help in providing maximum opportunities for personality development of each
participant in the organization.
* It can help in improving employees working skills and capacity thereby increasing
productivity and standard of living.
* It can provide healthy relationship between different work groups so that work is
effectively performed. * It can ensure conservation of human resources by correcting
errors of wrong placement and proper reallocation of work
(iii) Individual Enterprise Significance
The management of human resource management has also significance from
stand points of the objectives of the individual enterprise. It can help the individual
enterprise to achieve its goal by:
* obtaining capable people through scientific recruitment and selection techniques.
Enterprise can identify proper sources of manpower supply and select the suitable
candidates among available personnel.
* using proper training and development techniques, the existing manpower can be
effectively and efficiently utilized. The proper training and development programmes
help the employees to learn new techniques of production, thereby increasing
productivity and quality of product. Training programmes also prevent industrial
accidents and manpower obsolescence. Thus, ultimately helps in improving
organizational climate.
* maintaining the willingness of people to work through equal provisions of opportunities
for satisfaction of human needs not only physiological and security but also need of
love, esteem and self actualization.
1.6 Environmental Influence on HRM
A number of environmental factors influence the work of a HR manager. He
cannot perform his job in a vacuum. These factors influence the organization through
human resources. The term ‘environment’ here refers to the totality of all factors which
influence both the organization and personnel sub-system.

Table of External and Internal factors Influencing Personal Function

External Factors Internal Factors
 Technological factors  Mission
 Economic challenges  Policies
 Policies  Organizational
culture
  Political factors  Organizational
 Social Factors structure
 Local and Government  HR Systems
issues
 Unions
 Employer’s demands
 Workforce diversity

The external environment consists of those factors (Table 1.1) which

affect an organization’s human resources from outside the organization. Each of
these external factors separately or in combination can influence the HR function
of any organization. The job of a HR manager is to balance the demands and
expectations of the external groups with the internal requirements and achieve
the assigned goals in an efficient and effective manger. Likewise, the internal
environment also affects the job of a HR manager. The functional areas,
structural changes, specific cultural issues peculiar to a unit, HR systems,
corporate policies and a lot of other factors influence the way the HR function is
carried out. The HR manager has to work closely with these constituent parts,
understand the internal dynamics properly and devise ways and means to
survive and progress. In addition to these, the personnel manages has to grapple
with the problem of workforce diversity.
1.8 Recent Developments in HRM
The HR environment is changing and so is the role of HRM, to adapt the
changing trends. The human resource managers of today may find themselves
obsolete tomorrow in the changed business environment if they do not adapt HR
practices suiting to the environment. As such, new role or practices have
emerged to successfully respond to the changes. Some of the important HR
practices are discussed here:
(a) Flatter Organization: Physical organization was the norm of
yesterday. The pyramidal shape of organizations is converted into flat
organizations reducing the ten-twelve levels to five-seven levels. The
 increasing number of flat organization abounds in the country. One
main feature of flat organization, among other things, is that there are
more people to report to the managers, they will be less able to meddle
in the work of their subordinates
(b) Employee Empowerment: Gone are days when managers were
exercising formal power over employees to get work done from them.
The changes occurred in attitude and awareness of employees over
the period has rendered this mode of managing employees as
obsolete. Under the changed conditions when employee has become,
what is popularly termed as a ‘knowledge worker’, the employees need
to be provided with greater autonomy through information sharing and
provision of control over factors that affect performance. This is,
experts say, turning the typical organization upside down. Granting
sanction to the employees to make decisions in their work matters is
called ‘employee empowerment’.
(c) Team work: The concept of division of labour i.e., specialized function
introduced by Adam Smith remained in practice for a long period till the
twentieth century. But, given the process-oriented work nature of
modern organizations, single-function concept has ceased to its
relevance. Modern organsiation, or say, MNCs rely more on multi-
function of workers so that workers do not remain confined to a single
function but can do more than one function. This is particularly so in
case of increasing concern for downsizing by the organizations. As
such, a worker’s contribution to organization becomes more as a
member of the team. The managerial implications are that these
workers need to be managed accordingly as a team, not an individual
in isolation. In other words, managers need to follow a holistic
approach of management for managing such workers. 360 degree
appraisal may be such as example.
(d) Ethical Management: As the issues faced by the HR managers have
increased in number and complexity, so have the pressures and
challenges of working ethically. Ethical issues pose fundamental
questions about fairness, justice, truthfulness, and social responsibility.
Concerns have been raised about the ethical standards used by
managers and employees, particularly those in business organisations.
The most common unethical incidents exhibited by employees have
been cheating on expense account, paying or accepting bribes and
kickbacks, forging signature, lying to supervisors, employees’ alcohol
or drug abuse, and falsification of records.
Ethics means doing just or right. In this sense, ethics deals with what
“ought” to be done. For the HR manager, there are ethical ways in
which the manager ought to act relative to a given human resource
issue. However, determining specific (ethical) actions is not always
easy. Ethical issues in HRM often have dimensions such as extended
consequences, multiple alternatives, mixed outcomes, uncertain
consequences, and personnel effects. Then, the real problem of HR
manages is how to deal with these ethical dimensions? Researchers
have suggested some guidelines that can help HR managers respond
to the ethical elements:
 Does the behaviour or result achieved comply with all applicable
laws, regulations, and government codes?
 Does the behaviour or result achieved comply with all
organizational standards of ethical behaviour?
 Does the behaviour or result achieved comply with professional
standards of ethical behaviour?
It is clear from the above points that just complying with the laws
and regulations cannot guarantee ethical behaviour. Instead,
organizational members need to be guided by values and codes of
behaviour. One way to include ethical behaviour in organizations is to
conduct training of employees and HR managers. Training of
employees and HR managers in ethics compliance has been found to
reduce the incidence of ethical problems
Exercise 1

1. What do you understand by HRM? Discuss in brief.

2. Discuss brief explanation of objectives of HRM.
3. Write a short-note on Scope of HRM.
4. Discuss in brief importance of HRM.
6. Write a short-note on ethical management.