INTRODUCTION TO HRM

The organization is constituted of people and it functions through them, without people
organization's existence is not possible. There are various factors on which an organization is
dependent such as material, money, human resource, and machinery among which human
resources is believed to be the most important factor. This is because the use of physical resources
like tools, land, machines, and capital is dependent on how the human factor is used in various
operations.

All the resources in the environment depreciate with time, except for human beings, the human
resource does not depreciate with time. Human beings are the most valuable resource which
appreciate with time if a suitable environment is given to them they improve more as time
passes. Human resources consist of those people who are ready to share their skills and services
for the interest of the organization.

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 a 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.

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 labor and with trade unions, maintaining
employee’s safety, welfare and health by complying with labor 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.

Edwin Flippo defines- HRM as “planning, organizing, directing, controlling of procurement,

development, compensation, integration, maintenance and separation of human resources to the
end that individual, organizational and social objectives are achieved.”

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”.

Nature of HRM - Human resource management

The nature of human resource management - HRM is explained as follows:

1) Universal in Nature: HRM practices are common in every organization whether it is

government and nongovernment, public or private, educational or non-educational, corporate, etc.
in almost every area. Its existence is not only limited to the personnel functions preferably it is
common to all the functional areas, i.e. marketing, sales, production, finance, etc.

2) Action-Oriented: The focus of HRM is on action rather than on keeping records, written
procedures, or rules. The issues of employees at the workplace are resolved with the help of
rational policies.

3) Focused on People Dimension: HRM is basically focused on developing people at work both
at individual and group levels. It seeks to correlate the capabilities of employees with the
requirement of the job. It constantly tries to motivate people for better performance and higher
productivity.

(4) Growth-Oriented: The main concern of HRM is to fully develop the capabilities of the
employees and maintain the reward system according to the expectation of the employees. The
reward system should constantly motivate the employees to achieve standard performance.
Training is also offered to employees to discover and develop their potential. Job rotation is also
used to analyze the overall performance of the job.

5) Cordial Integration: The function of developing and re-structuring harmonious relations

among human resources in the organization is performed by HRM. It coordinates and controls the
human resources in the organization in such a manner to produce maximum results.

6) Challenging Function: The nature of people is very complex and dynamic. Hence, the
management of human resources demands very close supervision of the employees in the
organization. It is a very critical task to control and coordinate employees because of human
factors. HR manager is required to be very careful while controlling and dealing without hurting
their sentiments.
7) Supplementary Service: HR also plays a supportive role by assisting and advising
operational/functional managers. As specialist advisors, they supervise and guide other managers
to achieve their personnel tasks more effectively.

8) Multi-Disciplinary Function: HRM is crucial to an organization and so is the constitution of

its concept. It derives ideas, concepts, practices, and principles from various soft disciplines such
as sociology. anthropology, economics, psychology, etc. Understanding these disciplines is
essential because, like them, HRM also relates to and deals with human beings.

9) Ongoing Process: The function of HRM cannot be restricted to a particular time and date. It is
present in every department. Therefore, it is continuous in nature and is practised every second,
hour, day, and year in the organization.

10) Adjusting Demand and Supply: Manpower needs have to be planned well in advance as
suitable persons are available in future. If sufficient persons will not be available in future then
efforts should be .made to start recruitment process well in advance. The demand and supply of
personnel should be planned in advance.

Scope of Human Resource Management - HRM includes the following areas:

1) Procurement: It protects the organization from risks, it consists of recruitment of employees

and then selecting the most suitable candidate for the desired post in the organization. This is
followed by the generalization and settlement of people in their jobs.

2) Training and Development: HRM is concerned with the training and development facilities
provided to the new employees as well as for existing employees those who are already
experienced. It is important for employees as a training program can increase their performance in
the workplace. Training helps the employees to cope with the dynamic environment of the
organization. Training leads to the development of an organization and the employee himself. The
employees are encouraged to participate in organizational plans, which results in their
development.

3) Job Analysis and Job Description: It provides a clear picture of the job, skills, and abilities
required to perform the job, duties, and responsibilities of an employee towards the job. It creates
boundaries for employees. These are prepared for staffing qualified employees by studying the job
requirements of an organization and assigning definite functions to jobs. They also act as a base
for deciding the salaries of employees.

4) Compensation/Rewards: Compensation is given to employees as a result of the work they

have done. Compensation includes both monetary and non-monetary benefits monetary benefits
include overtime pay, sales commission, bonus, rewards, etc., non-monetary benefits include
company-paid car, flex time, health insurance, company-paid housing, stock opportunities, etc.
The amount of compensation that is to be given to employees is determined through job analysis
 and job evaluation. It involves determining wage rates, methods of wage payment, and
performance appraisal.

5) Employee Records: Employee records includes personal information such as employee's full
name, address, birth date, phone number, training, performance, achievements, absenteeism,
wages, salary, performance, etc. are maintained. The objective of storing the record is not only to
keep the information about the employees but to analyze their performance, evaluation,
termination, improvements and solve problems.

6) Employee Welfare: In HRM, the welfare aspect is focused on providing good working
conditions for workers. It includes programs for health and safety, sanitation facilities,
entertainment facilities, accommodations, education, security, etc.

7) Industrial Relations: HRM helps in maintaining pleasant relationships in the industry. It

comprises aspects such as collective bargaining, workers' participation in management, dispute
resolution, grievance management, etc.

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 followingways:
(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 andsocial
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 theemployees.
4. National Importance
Effective management of human resources will speed up the economic growth of nation. Thisin
turn leads to better standard of living and more job opportunities.
Human Resource Management: Objectives
• To help the organization reach its goals.
• To ensure effective utilization and maximum development of human resources.
• To ensure respect for human beings.Toidentify and satisfy the needs of individuals.
• To ensure reconciliation of individual goals with those of the organization.
• To achieve and maintain high morale among employees.
• To provide the organization with well-trained and well-motivated employees.
• To increase to the fullest the employee’s job satisfaction and self-actualization.
• To develop and maintain a quality of work life.
• To be ethically and socially responsive to the needs of society.
• To develop overall personality of each employee in its multidimensional aspect.
• To enhance employee’s capabilities to perform the present job.
• To equip the employees with precision and clarity in transactions of business.
• To inculcate the sense of team spirit, team work and inter-team collaboration.

Functions of Human Resource Management

Human Resource Management functions can be classified into the following three categories.

 Managerial Functions,
 Operative Functions, and
 Advisory Functions.

The Managerial Functions of Human Resource Management are as follows:

1. Human Resource Planning - In this function of HRM, the number and type of employees
needed to accomplish organizational goals are determined. Research is an important part of this
function, information is collected and analyzed to identify current and future human resource
needs and to forecast changing values, attitudes, and behavior of employees and their impact on
the organization.
2. Organizing - In an organization tasks are allocated among its members, relationships are
identified, and activities are integrated towards a common objective. Relationships are
established among the employees so that they can collectively contribute to the attainment of the
organization's goal.
3. Directing - Activating employees at different levels and making them contribute maximum to
the organization is possible through proper direction and motivation. Taping the maximum
potentialities of the employees is possible through motivation and command.
4. Controlling - After planning, organizing, and directing, employees' actual performance is
checked, verified, and compared with the plans. If the actual performance is found deviated from
the plan, control measures are required to be taken.
The Operative Functions of Human Resource Management are as follows:
1. Recruitment and Selection - Recruitment of candidates is the function preceding the
selection, which brings the pool of prospective candidates for the organization so that the
management can select the right candidate from this pool.
2. Job Analysis and Design - Job analysis is the process of describing the nature of a job and
specifying the human requirements like qualification, skills, and work experience to perform that
job. Job design aims at outlining and organizing tasks, duties, and responsibilities into a single
unit of work for the achievement of certain objectives.
3. Performance Appraisal - Human resource professionals are required to perform this function
to ensure that the performance of employees is at an acceptable level.
4. Training and Development - This function of human resource management helps employees
acquire skills and knowledge to perform their jobs effectively. Training and development
programs are organized for both new and existing employees. Employees are prepared for
higher-level responsibilities through training and development.
5. Wage and Salary Administration - Human resource management determines what is to be
paid for different types of jobs. Human resource management decides employee's compensation
which includes - wage administration, salary administration, incentives, bonuses, fringe benefits,
etc,.
6. Employee Welfare - This function refers to various services, benefits, and facilities that are
provided to employees for their well-being.
 7. Maintenance - Human resource is considered an asset for the organization. Employee
turnover is not considered good for the organization. Human resource management always tries
to keep their best performing employees with the organization.
8. Labour Relations - This function refers to human resource management interaction with
employees represented by a trade union. Employees come together and form a union to obtain
more voice in decisions affecting wage, benefits, working conditions, etc,.
9. Personnel Research - Personnel research is done by human resource management to gather
employees' opinions on wages and salaries, promotions, working conditions, welfare activities,
leadership, etc,. Such researches help in understanding employee satisfaction, employee
turnover, employee termination, etc,.
10. Personnel Record - This function involves recording, maintaining, and retrieving employee-
related information like - application forms, employment history, working hours, earnings,
employee absents and presents, employee turnover, and other data related to employees.
The Advisory Functions of Human Resource Management are as follows:
Human Resource Management is expert in managing human resources and so can give advice on
matters related to human resources of the organization. Human Resource Management can offer
advice to:
1. Advised to Top Management
The personnel manager advises the top management in the formulation and evaluation of
personnel programs, policies, and procedures.
2. Advised to Departmental Heads
The personnel manager advises the heads of various departments on matters such as manpower
planning, job analysis, job design, recruitment, selection, placement, training, performance
appraisal, etc.

CHALLENGES OF HUMAN RESOURCE MANAGEMENT

Changes in socio-economic and political conditions are bound to bring about changes in the
environment within the organizations. The personnel managers of today may find themselves
obsolete because of the rapidly changing business environment, and therefore they should
constantly update their knowledge and skills by looking at the organization‘s needs and objectives.
Some of the important challenges are:

i. Vision penetration: Evolving the right vision is an entrepreneurial or top management function,
but its utility increases immensely if it percolates, and is understood and accepted down the line.
Vision not only provides the fuel and direction to business strategy, but also helps managers
evaluate management practices and make decisions. Penetration of vision shall therefore become
an important, integral part of man management in future.
ii. Internal environment: Creating an environment, which is responsive to external changes,
providing satisfaction to the members of the organization, and sustaining it through culture, useful
traditions, practices, and even systems, will become another important dimension of managing
managerial personnel.

iii. Change in industrial relations: The practice of IR has undergone sea change. The notion that
workers must be disciplined at the manager‘s will have to be buried. Development of workers may
need simpler and appropriate inputs, but both the workers and managers must be managed and
developed by the same set of assumptions and HRM philosophy of the company.

iv. Building organizational capabilities: The paradigm of managing managers would include not
only assisting them to acquire new skills and knowledge and to evaluate environmental changes
to evolve business strategies, but also to live in a psychological state of readiness to continually
change.

v. Job design and organizational structure: In designing organizations, we will, hopefully, soon
give up uncritical acceptance of foreign concepts and fads like quality circles, TQM, etc. Instead
of these, organizational structure and design will primarily be based on (i) task approach, i.e.
understanding of the intricacies of technology, jobs and functions to be performed to achieve
organizational tasks, and (ii) people approach, which takes cognizance of their strengths,
idiosyncrasies, aspirations and relationships at work.

vi. Increasing size of workforce: The organizations are ever increasing in size and complexity,
multiplying the number of people working therein. The management of an increased workforce
poses serious problems and challenges especially since the workers are becoming more conscious
of their rights.

vii. Changing psycho-social system: In the traditional bureaucratic mode, the organizations were
designed to perform technical functions with strict compartmentalization of work functions. But
in future, human participation will be required not only in technical functions but also in
establishing the democratic humanistic system.

viii. Satisfaction of higher level needs: The workers are becoming much aware of their higher level
needs. The awareness is likely to intensify further in the future workforce. Therefore managers
would be required to evolve appropriate techniques of motivating the workers and getting work
from them.

ix. Equalitarian social system: Major developments that have taken place in the last four decades
have been due to the desire of the organization‘s members to have greater say and influence in
organizational functioning. Thus, contemporary organizations are putting lesser emphasis on the
hierarchical structures and thus moving towards a more equalitarian social system. Thisis going
to be more common in days to come.

x. Technological advances: In the wake of technological advances new jobs will created and many
jobs will become redundant. Unemployment resultingfrom modernization could be liquidated
by properly assessing manpower needs and training of redundant employees in alternate skills.
xi. Computerized information system: It will play a revolutionary role in managerial decision
making. It will also have an increasing impact in coordination and at strategic levels.

xii. Changes in legal environment: To meet with the increasing changes in the legal environment,
necessary adjustments will have to be made so that greater utilization of human resources can be
achieved.

xiii. Management of human relations: The new generation workforce comprising educated and
conscious workers will ask for higher degree of participation and avenues for self-fulfillment. It
is rather difficult to motivate many of the new generation workers than their predecessors. This
is partly due to change in their value system and higher levels of professional competency.

Human Resource Planning

Human resource is the most important asset of an organization. Human resources planning
are the important managerial function. It ensures the right type of people, in the right
number, at the right time and place, who are trained and motivated to do the right kind of
work at the right time, there is generally a shortage of suitable persons.
The enterprise will estimate its manpower requirements and then find out the sources from
which the needs will be met. If required manpower is not available then the work will suffer.
Developing countries are suffering from the shortage of trained managers. Job opportunities
are available in these countries but properly trained personnel are not available. These
countries try to import trained skill from other countries.
In order to cope up with the human resource requirements, an enterprise will have to plan in
advance its needs and the sources. The terms human resource planning and manpower
planning are generally used interchangeably. Human resource planning is not a substitute
for manpower planning. Rather thelatter is a part of the former i.e., manpower planning is
integrated with human resource planning.

Definition of Human Resource Planning

According to E.W. Vetter, human resource planning is “the process by which a management
determines how an organization should make from its current manpower position to its
desired manpower position.
Through planning a management strives to have the right number and the right kind of
people at the right places, at the right time to do things which result in both the organization
and the individual receiving the maximum long range benefit.”

Dale S. Beach has defined it as “a process of determining and assuring that the organization
will have an adequate number of qualified persons available at the proper times, performing
jobs which meetthe needs of the enterprise and which provide satisfaction for the individuals
involved.”

In the words of Leon C. Megginson, human resource planning is “an integration approach
to performing the planning aspects of the personnel function in order to have a sufficient
supply of adequately developed and motivated people to perform the duties and tasks
required to meet organizational objectives and satisfy the individual’s needs and goals of
organizational members.”

On the analysis of above definitions, human resource planning may be viewed as foreseeing
the human resource requirements of an organization and the future supply of human
resources and making necessary adjustments between these two and organization plans, and
foreseeing the possibility of developing the supply of human resources in order to match it
with requirements by introducing necessary changes in the functions of human resource
management.

Here, human resource means skill, knowledge, values, ability, commitment, motivation etc.,
in addition to the number of employees. Though accomplishment of organizational
objectives and goals is the primary concern of the human resource planning, concern for the
aspirations of the people and their well-being has equal importance in it. In fact, the human
resources planning must result in humanization of work environment.
Features of Human Resource Planning:
The following features of human resource planning can be derived:
1. Well Defined Objectives:
Enterprise’s objectives and goals in its strategic planning and operating planning may form
the objectives of human resource planning. Human resource needs are planned on the basis
of company’s goals. Besides, human resource planning has its own objectives like
developing human resources, updating technical expertise, career planning of individual
executives and people, ensuring better commitment of people and so on.

2. Determining Human Resource Needs:

Human resource plan must incorporate the human resource needs of the enterprise. The
thinking will have to be done in advance so that the persons are available at a time when
they are required. For this purpose, an enterprise will have to undertake recruiting, selecting
and training process also.
3. Keeping Manpower Inventory:
It includes the inventory of present manpower in the organization. The executive should
know the persons who will be available to him for undertaking higher responsibilities in the
near future.

4. Adjusting Demand and Supply:

Manpower needs have to be planned well in advance as suitable persons are available in
future. If sufficient persons will not be available in future then efforts should be .made to
start recruitment process well in advance. The demand and supply of personnel should be
planned in advance.

5. Creating Proper Work Environment:

Besides estimating and employing personnel, human resource planning also ensures that
working conditions are created. Employees should like to work in the organisation and they
should get proper job satisfaction

LIMITATIONS:-
Human resource planning can be defined as the process of identifying the number of people
required by an organization in terms of quantity and quality. All human resource
management activities start with human resource planning. So we can say that human
resource planning is the principle/primary activity of human resource management.
Although HRP is a very advantageous method it has some limitations which can be
explained as follows

1. The future is uncertain: - The future in any country is uncertain i.e. there are political,
cultural, technological changes taking place every day. This effects the employment
situation. Accordingly the company may have to appoint or remove people. Therefore HRP
can only be a guiding factor. We cannot rely too much on it and do every action according
to it.

2. Conservative attitude of top management: - Much top management adopts a

conservative attitude and is not ready to make changes. The process of HRP involves either
appointing. Therefore it becomes very difficult to implement HRP in organization because
top management does not support the decisions of other department.

3. Problem of surplus staff: - HRP gives a clear out solution for excess staff i.e.
Termination, layoff, VRS. However when certain employees are removed from company
it mostly affects the psyche of the existing employee, and they start feeling insecure,
stressed out and do not believe in the company. This is a limitation of HRP i.e. it does not
provide alternative solution like re-training so that employee need not be removed from the
company.

4. Time consuming activity: - HRP collects information from all departments, regarding
demand and supply of personnel. This information is collected in detail and each and every
job is considered. Therefore the activity takes up a lot of time.

5. Expensive process: - The solution provided by process of HRP incurs expense. E.g.
VRS, overtime, etc. company has to spend a lot of money in carrying out the activity.
Hence we can say the process is expensive.