UNIT I

Concept, Meaning and Definition of HRM, Nature of HRM, Scope of HRM, Objectives
of HRM, Functions of HRM, Role of HR Managers. Meaning of HRP, Objectives of
HRP, Need for HRP in Organizations, HRP Process.

MEANING OF HRM:
Different terms are used to connote HRM. They are: labour management, labour
administration, personnel management, labour-management relations, employer-employee
relations, industrial relations, personnel administration, personnel management, human capital
management, human asset management, and such like. Though these terms can be
differentiated widely, the basic nature of distinction lies in the scope or coverage and
evolutionary stage. Human Resource Management means employing people, developing their
resources, utilising, maintaining and compensating their services in tune with the job and
organisational requirements. It 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.
CONCEPT OF HRM:
Generally, HRM refers to the management of people in organizations. It comprises of the
activities, policies, and practices involved in obtaining, developing, utilizing, evaluating,
maintaining, and retaining the appropriate number and skill mix of employees to accomplish
the organization’s objectives. The goal of HRM is to maximize employees’ contributions in
order to achieve optimal productivity and effectiveness, while simultaneously attaining
individual objectives (such as having a challenging job and obtaining recognition), and societal
objectives (such as legal compliance and demonstrating social responsibility).
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.
According to Flippo, “Human Resource /Personnel Management may be defined as the
planning, organising, directing, and controlling of the procurement, development,
compensation, integration and maintenance and separation of human resources to the end that
individual, organisational and societal objectives are accomplished”
DEFINITIONS OF HRM:
 According to Flippo “Personnel management, or say, human resource management is the
planning, organising, directing and controlling of the procurement development
compensation integration, maintenance, and separation of human resources to the end that
individual, organisational and social objectives are accomplished”
 Human Resource 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.
 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.
 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.

NATURE OF HUMAN RESOURCE MANAGEMENT:

HRM has the following features.
1. A part of Management Discipline: HRM is a part of management discipline. It is not a
discipline in itself but is only a field of study. HRM, being a part of management process, draws
heavily from management concepts, principles and techniques and apply these in the
management of human resources.
2. Universal Existence: HRM is pervasive in nature. It is present in all enterprises. It permeates
all levels of management in an organisation.
3. Concerned with People: HRM is all about people at work, both as individuals and groups.
It tries to put people on assigned job in order to produce goods results. The resultant gains are
used to reward people and motivate them towards further improvement is productivity.
4. Action oriented: HRM focuses attention on action, rather than on record keeping, written
procedures or rules. The problems of employees are solved through rational policies.
5. Directed towards Achievement of Objectives: HRM is directed towards achievement of
organisational objectives by providing tools and techniques of managing people in the
organisation effectively.
6. Integrating Mechanism: HRM tries to build and maintain cordial relation between people
working at different levels in the organisation. It tries to integrate human assets in the best
possible manner for achieving organisational goals.
7. Development Oriented: HRM intends to develop the full potential of employees. The
reward structure is turned to the needs of employees. Training is provided to improve the skill
of employees. Every attempt is made to use their talents fully in the service of organisational
goals.
8. Continuous Process: HRM is not a one short deal. It cannot be practised only one hour each
day or one day a week. It requires constant alertness and awareness of human relations and
their importance in every day operations.
9. Comprehensive Function: HRM is concerned with managing people at work. It covers all
types of people at all levels in the organisation. It applies to workers, supervisors, officers,
manager and other types of personnel.
SCOPE OF HRM:
The scope of HRM is, indeed, very vast and wide. It includes all activities starting from
manpower planning till employee leaves the organisation. Accordingly, the scope of HRM
consists of acquisition, development, maintenance/retention, and control of human resources
in the organisation.

HRP

IR JA

Welfare R&S

HRM

Comp.
Induction
Mgt.

PA T&D

1. Human Resources Planning: - Human resource planning or Human Resource Planning

refers to a process by which the company to identify the number of jobs vacant, whether
the company has excess staff or shortage of staff and to deal with this excess or shortage.
2. Job Analysis Design: - Another important area of Human Resource Management is job
analysis. Job analysis gives a detailed explanation about each and every job in the company.
3. Recruitment and Selection: - Based on information collected from job analysis the
company prepares advertisements and publishes them in the newspapers. This is
recruitment. A number of applications are received after the advertisement is published,
interviews are conducted and the right employee is selected thus recruitment and selection
are yet another important area of Human Resource Management.
4. Orientation and Induction: - Once the employees have been selected an induction or
orientation program is conducted. This is another important area of Human Resource
Management. The employees are informed about the background of the company, explain
about the organizational culture and values and work ethics and introduce to the other
employees.
5. Training and Development: - Every employee goes under training program which helps
him to put up a better performance on the job. Training program is also conducted for
 existing staff that have a lot of experience. This is called refresher training. Training and
development is one area where the company spends a huge amount.
6. Performance Appraisal: - Once the employee has put in around 1 year of service,
performance appraisal is conducted that is the Human Resource department checks the
performance of the employee. Based on these appraisal future promotions, incentives,
increments in salary are decided.
7. Compensation Planning and Remuneration: - There are various rules regarding
compensation and other benefits. It is the job of the Human Resource department to look
into remuneration and compensation planning.
8. Motivation, Welfare, Health and Safety: - Motivation becomes important to sustain the
number of employees in the company. It is the job of the Human Resource department to
look into the different methods of motivation. Apart from this certain health and safety
regulations have to be followed for the benefits of the employees. This is also handled by
the HR department.
9. Industrial Relations: - Another important area of Human Resource Management is
maintaining co-ordinal relations with the union members. This will help the organization
to prevent strikes lockouts and ensure smooth working in the company.
OBJECTIVES OF HRM:
The primary objective of HRM is to ensure the availability of right people for right jobs so as
the organisational goals are achieved effectively. This primary objective can further be divided
into the following sub-objectives:
1. To help the organisation to attain its goals effectively and efficiently by providing
competent and motivated employees.
2. To utilize the available human resources effectively.
3. To increase to the fullest the employee’s job satisfaction and self-actualisation.
4. To develop and maintain the quality of work life (QWL) which makes employment in the
organisation a desirable personal and social situation.
5. To help maintain ethical policies and behaviour inside and outside the organisation.
6. To establish and maintain cordial relations between employees and management.
7. To reconcile individual/group goals with organisational goals.
Table 1.1: HRM Objectives and Functions:
FUNCTIONS OF HRM:
Human Resource Management is the management of human resources in the organisation and
is concerned with the creation of harmonious working relationships among its participants and
bringing about their utmost individual development. In fact, H.R.M. undertakes all those
activities which are concerned with the human elements or relations as well as with material
elements in an organization and the functions listed therein. The main objective of these
functions is to bring together expertise in a scientific way and to create attitude that motivate a
group to achieve its goals economically, effectively and speedily.
The functions of H.R.M can be broadly classified into two broad categories:

MANAGERIAL OPERATIVE
FUNCTIONS FUNCTIONS
• Planning • Procurement
• Organising • Development
• Directing • Compensation
• Controlling • Integration
• Maintenance
1. Managerial Functions: A managerial function of HRM involves, planning, organizing,
directing and controlling. All these functions influence the operative functions.
(a) Planning: HR administration should be able to predict trends in wages in labour market, in
union demands, in other benefits, in personnel policies and programmes. The task of
forecasting personnel needs in relation to changes in production or seasonal variations and the
levelling out of differences in production is extremely important both for employees and for
management. Therefore planning or decision making has to be undertaken much in advance of
an action, so that unforeseen or anticipated problems and events may be properly handled. This
is also stressed by the saying “Good Managers make thing happen.”
(b) Organizing: An organisation is a means to an end. It is essential to carry out the determined
course of action. A complex relationship exists between the specialized departments and the
general department as many top managers are seeking the advice of personnel manager. Thus,
organization establishes relationships among the employees so that they can collectively
contribute to the attainment of company goals.
(c) Directing: Directing the subordinates at any level is a basic function of the managerial
personnel. Directing is involved with getting persons together and asking them through either
command or motivation to work willingly and effectively for the achievement of designated
goals. Directing deals not only with the dissemination of orders, within an organisation units
and department but also with the acceptance and execution of these orders by the employees.
Thus, direction is an important managerial function in building sound industrial and human
relations besides securing employee contributions.
(d) Controlling: After planning, organizing and directing the various activities of the H.R.M,
the performance is to be verified in order to know that the personnel functions are performed
in conformity with the plans and directions. Controlling also involves checking, verifying and
comparing of the actual with the plans, identifications of deviations, if any, and correcting of
identified deviations. This action and operation are adjusted to pre-determined plans and
standard through control.
2. Operative Functions: The operative functions of HRM are related to specific activities of
personnel management. All these functions are interacted by managerial functions. Further,
these functions are performed in conjunctions with managerial functions.
(a) The procurement function: It is concerned with the obtaining of a proper kind and number
of personnel necessary to accomplish our organisations goals. It deals with specifically with
such subjects as the determination of manpower requirements, their recruitment, selection and
placing, induction, follow-up, transfer, lay-offs, discharge and separation etc.
(b) The development function: It is concerned with the personnel development of employees
by increasing their skills through training so that job performance is properly achieved.
Drafting and directing training programmes for all levels of employees providing vocational
counselling’s, conferences and appraising employees potential and performance are undertaken
under this function.
(c) The compensating function: It is concerned with securing adequate related to wage
surveys, establishment of job classification, job descriptions and job analysis, merit 14 ratings,
the establishments of wage and wage structure, wage plans and policies of wage systems,
incentives and profit sharing plans and policies of wage systems.
(d) The integration function: It is a process of interaction among human beings. Human
relations is an area of management in integrating people into work situation in a way that
motivates them to work together productively, co-operatively and with economic,
psychological and social satisfaction. This includes:
 Understanding and applying the models of perceptions, personality, learning intra and
interpersonal relations, intra and inter group relations.
 Motivating the employees.
 Boosting employee morale.
 Developing communication skills.
 Developing the leadership skills.
 Redressing employee grievances properly in time by means of a well formulated grievance
procedures.
 Handling disciplinary cases by means of an established disciplinary procedure.
 Counselling the employees in solving their personal, family and work problems and
releasing their stress, strain and tensions.
 Improving quality of work life of employees through participation and other means.

(e) The maintenance function: It deals with sustaining and improving the conditions that have
been established specific problems of maintaining the physical conditions of employees’
(health and safety measures) and employees’ service programmes are the responsibilities of the
personnel department.

ROLE OF HUMAN RESOURCE MANAGER:

The role of human resource manager may be analysed as follows:
 As a Specialist: Human resource manager is an expert. As a specialist, he advises the heads
of different functional departments on various aspects of human resource management,
such as human resource planning, recruitment, selection, orientation, training, appraisal,
compensation, etc. with his counsel and suggestions, functional managers can perform
these functions successfully.
 As an Information Source: The human resource manager provides valuable information
about labour market, labour laws and other related areas. Such information is necessary for
the formulation of proper policies and procedures about human resources. He serves as a
record keeper and researcher to provide the required information.
 As a change Agent: The resource manager can serve as an internal change agent to initiate
and spear head necessary improvements in human resource practices. As a consultant, he
can provide necessary infrastructure and support for organizational development. He helps
 in introducing and implementing major institutional changes in the organization. He is an
innovator in human resource matters.
 As a Controller: The human resource manager assists line mangers in effective
implementation of human resource policies and programmes. His advice and service is
essential for monitoring and controlling the progress.
 As a Liaison Man: Very often the human resource manager in asked to act as a linking pin
between different departments/ divisions of an organization.
 As a Housekeeper: The human resource manager looks after the safety. Health, welfare,
etc. of employees.
 As a Fire Fighter: In union-management relations, the human resource manager act as a
shock absorber. He is the management’s defence against trade union activists. He acts as a
trouble shooter.

HUMAN RESOURCE PLANNING:

Human resource planning is important for helping both organizations and employees to prepare
for the future. The basic goal of human resource planning is to predict the future and based on
these predictions, implement programmes to avoid anticipated problems. Very briefly humans
resource planning is the process of examining an organization’s or individual’s future human
resource needs for instance, what types of skills will be needed for jobs of the future compared
to future human resource capabilities (such as the types of skilled employees you already have)
and developing human resource policies and practices to address potential problems for
example, implementing training programmes to avoid skill deficiencies.

OBJECTIVES OF HRP:
The main objective of having human resource planning is to have an accurate number of
employees required, with matching skill requirements to accomplish organisational goals.
In other words, the objectives of human resource planning are to:
1. Ensure adequate supply of manpower as and when required.
2. Ensure proper use of existing human resources in the organisation.
3. Forecast future requirements of human resources with different levels of skills.
4. Assess surplus or shortage, if any, of human resources available over a specified period of
time.
5. Anticipate the impact of technology on jobs and requirements for human resources.
6. Control the human resources already deployed in the organisation.
7. Provide lead time available to select and train the required additional human resource over
a specified time period.

NEED FOR AND IMPORTANCE OF HRP:

1. Human resource planning meets the organisation need for right type of people in right
number at right times.
2. By maintaining a balance between demand for and supply of human resources, human
resource planning makes optimum use of human resources, on the one hand, and reduces labour
cost substantially, on the other.
3. Careful consideration of likely future events, through human resource planning might lead
to the discovery of better means for managing human resources. Thus, foreseeable pitfalls
might be avoided.
4. Manpower shortfalls and surpluses may be avoided, to a large extent.
5. Human resource planning helps the organisation create and develop training and succession
planning for employees and managers. Thus, it provides enough lead time for internal
succession of employees to higher positions through promotions.
6. It also provides multiple gains to the employees by way of promotions, increase in emolu-
ments and other perquisites and fringe benefits.
7. Some of the problems of managing change may be foreseen and their consequences miti-
gated. Consultations with affected groups and individuals can take place at an early stage in
the change process. This may avoid resistance for change.
8. Human resource planning compels management to asses critically the strength and weak-
nesses of its employees and personnel policies on continuous basis and, in turn, take corrective
measures to improve the situation.
9. Through human resource planning, duplication of efforts and conflict among efforts can be
avoided, on the one hand, and coordination of worker’s efforts can be improved, on the other.
10. Last but no means the least, with increase in skill, knowledge, potentialities, productivity
and job satisfaction, organisation becomes the main beneficiary. Organisation is benefitted in
terms of increase in prosperity/production, growth, development, profit and, thus, an edge over
its competitors in the market.

HRP PROCESS
Human resource planning is a process through which the right candidate for the right job is
ensured. For conducting any process, the foremost essential task is to develop the
organizational objective to be achieved through conducting the said process.
Six steps in human resource planning are presented in Figure.

1. Analysing Organizational Objectives:

The objective to be achieved in future in various fields such as production, marketing, finance,
expansion and sales gives the idea about the work to be done in the organization.
2. Inventory of Present Human Resources:
From the updated human resource information storage system, the current number of
employees, their capacity, performance and potential can be analysed. To fill the various job
requirements, the internal sources (i.e., employees from within the organization) and external
sources (i.e., candidates from various placement agencies) can be estimated.
3. Forecasting Demand and Supply of Human Resource:
The human resources required at different positions according to their job profile are to be
estimated. The available internal and external sources to fulfil those requirements are also
measured. There should be proper matching of job description and job specification of one
particular work, and the profile of the person should be suitable to it.
4. Estimating Manpower Gaps:
Comparison of human resource demand and human resource supply will provide with the
surplus or deficit of human resource. Deficit represents the number of people to be employed,
whereas surplus represents termination. Extensive use of proper training and development
programme can be done to upgrade the skills of employees.
5. Formulating the Human Resource Action Plan:
The human resource plan depends on whether there is deficit or surplus in the organization.
Accordingly, the plan may be finalized either for new recruitment, training, interdepartmental
transfer in case of deficit of termination, or voluntary retirement schemes and redeployment in
case of surplus.
6. Monitoring, Control and Feedback:
It mainly involves implementation of the human resource action plan. Human resources are
allocated according to the requirements, and inventories are updated over a period. The plan is
monitored strictly to identify the deficiencies and remove it. Comparison between the human
resource plan and its actual implementation is done to ensure the appropriate action and the
availability of the required number of employees for various jobs.