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1 Human Resource Management

Dr. Swapna Joshi

Introduction:

Human resource management (HRM) is the practice of recruiting, hiring, deploying and
managing an organization's employees. HRM is often referred to simply as human
resources (HR). A company or organization's HR department is usually responsible for
creating, putting into effect and overseeing policies governing workers and the relationship of
the organization with its employees. The term human resources was first used in the early
1900s, and then more widely in the 1960s, to describe the people who work for the
organization, in aggregate.

HRM is really employee management with an emphasis on those employees as assets of the
business. In this context, employees are sometimes referred to as human capital. As with
other business assets, the goal is to make effective use of employees, reducing risk and
maximizing return on investment (ROI)

Objectives of human resource management

The objectives of HRM can be broken down into four categories:

1. Societal objectives: Measures put into place that respond to the ethical and social needs or
challenges of the company and its employees. This includes legal issues such as equal
opportunity and equal pay for equal work.

2. Organizational objectives: Actions taken that help to ensure the efficiency of the
organization. This includes providing training, hiring the right amount of employees for a
given task or maintaining high employee retention rates.

3. Functional objectives: Guidelines used to keep the HR functioning properly within the
organization as a whole. This includes making sure that all of HR’s resources are being
allocated to its full potential.

4. Personal objectives: Resources used to support the personal goals of each employee. This
includes offering the opportunity for education or career development as well as
maintaining employee satisfaction.
Scope of Human Resource Management

The scope of HRM is extensive and far-reaching. Therefore, it is very difficult to define it
concisely. However, we may classify the same under following heads:

 HRM in Personnel Management: This is typically direct manpower management

that involves manpower planning, hiring (recruitment and selection), training and
development, induction and orientation, transfer, promotion, compensation, layoff and
retrenchment, employee productivity. The overall objective here is to ascertain
individual growth, development and effectiveness which indirectly contribute to
organizational development.

It also includes performance appraisal, developing new skills, disbursement of wages,

incentives, allowances, traveling policies and procedures and other related courses of
actions.

 HRM in Employee Welfare: This particular aspect of HRM deals with working
conditions and amenities at workplace. This includes a wide array of responsibilities
and services such as safety services, health services, welfare funds, social security and
medical services. It also covers appointment of safety officers, making the
environment worth working, eliminating workplace hazards, support by top
management, job safety, safeguarding machinery, cleanliness, proper ventilation and
lighting, sanitation, medical care, sickness benefits, employment injury benefits,
personal injury benefits, maternity benefits, unemployment benefits and family
benefits.

It also relates to supervision, employee counseling, establishing harmonious

relationships with employees, education and training. Employee welfare is about
determining employees’ real needs and fulfilling them with active participation of
both management and employees. In addition to this, it also takes care of canteen
facilities, crèches, rest and lunch rooms, housing, transport, medical assistance,
education, health and safety, recreation facilities, etc.

 HRM in Industrial Relations: Since it is a highly sensitive area, it needs careful

interactions with labor or employee unions, addressing their grievances and settling
the disputes effectively in order to maintain peace and harmony in the organization. It
 is the art and science of understanding the employment (union-management)
relations, joint consultation, disciplinary procedures, solving problems with mutual
efforts, understanding human behavior and maintaining work relations, collective
bargaining and settlement of disputes.

The main aim is to safeguarding the interest of employees by securing the highest
level of understanding to the extent that does not leave a negative impact on
organization. It is about establishing, growing and promoting industrial democracy to
safeguard the interests of both employees and management.

Functions:
The functions performed by managers are common to all organizations. For the convenience
of study, the function performed by the resource management can broadly be classified into
two categories, viz.

(1) Managerial functions, and

(2) Operative functions

These are discussed in turn.

(1) Managerial Functions:

 Planning:
Planning is a predetermined course of actions. It is a process of determining the
organisational goals and formulation of policies and programmes for achieving them. Thus
planning is future oriented concerned with clearly charting out the desired direction of
business activities in future. Forecasting is one of the important elements in the planning
process. Other functions of managers depend on planning function.

 Organising:
Organising is a process by which the structure and allocation of jobs are determined. Thus
organising involves giving each subordinate a specific task establishing departments,
delegating authority to subordinates, establishing channels of authority and communication,
coordinating the work of subordinates, and so on.
  Staffing:
TOs is a process by which managers select, train, promote and retire their subordinates This
involves deciding what type of people should be hired, recruiting prospective employees,
selecting employees, setting performance standard, compensating employees, evaluating
performance, counseling employees, training and developing employees.

 Directing/Leading:
Directing is the process of activating group efforts to achieve the desired goals. It includes
activities like getting subordinates to get the job done, maintaining morale motivating
subordinates etc. for achieving the goals of the organisation.

 Controlling:
It is the process of setting standards for performance, checking to see how actual performance
compares with these set standards, and taking corrective actions as needed.

(2) Operative Functions:

The operative, also called, service functions are those which are relevant to specific
department. These functions vary from department to department depending on the nature of
the department Viewed from this standpoint, the operative functions of HRM relate to
ensuring right people for right jobs at right times. These functions include procurement,
development, compensation, and maintenance functions of HRM.
A brief description of these follows:
 Procurement:
It involves procuring the right kind of people in appropriate number to be placed in the
organisation. It consists of activities such as manpower planning, recruitment, selection
placement and induction or orientation of new employees.

 Development:
This function involves activities meant to improve the knowledge, skills aptitudes and values
of employees so as to enable them to perform their jobs in a better manner in future. These
functions may comprise training to employees, executive training to develop managers,
organisation development to strike a better fit between organisational climate/culture and
employees.

 Compensation:
Compensation function involves determination of wages and salaries matching with
contribution made by employees to organisational goals. In other words, this function ensures
equitable and fair remuneration for employees in the organisation. It consists of activities
such as job evaluation, wage and salary administration, bonus, incentives, etc.

 Maintenance:
It is concerned with protecting and promoting employees while at work. For this purpose
various benefits such as housing, medical, educational, transport facilities, etc. are provided
to the employees. Several social security measures such as provident fund, pension, gratuity,
group insurance, etc. are also arranged.

It is important to note that the managerial and operative functions of HRM are performed in
conjunction with each other in an organisation, be large or small organisations. Having
discussed the scope and functions of HRM, now it seems pertinent to delineate the HRM
scenario in India.

Importance of Human Resource Management:

Human resources are the valuable assets of the corporate bodies. They are their strength. To
face the new challenges on the fronts of knowledge, technology and changing trends in global
economy needs effective human resource management. Significance of HRM can be seen in
three contexts: organisational, social and professional.
 1. Organisation Significance:

HRM is of vital importance to the individual organisation as a means for achieving their
objectives.

It contributes to the achievement of organisational objectives in the following ways:

1. Good human resource practice can help in attracting and retaining the best people in the
organisation.

2. Developing the necessary skills and right attitudes among the employees through training,
development, performance appraisal, etc.

3. Securing willing cooperation of employees through motivation, participation, grievance

handling, etc.

4. Effective utilisation of available human resources

5. Ensuring that enterprise will have in future a team of competent and dedicated employees.

2. Social Significance:

Social significance of HRM lies in the need satisfaction of personnel in the organisation.
Since these personnel are drawn from the society, their effectiveness contributes to the
welfare of the society. Society, as a whole, is the major beneficiary of good human resource
practice.

i. Employment opportunities multiply.

ii. Eliminating waste of human resources through conservation of physical and mental health.

iii. Scare talents are put to best use. Companies that pay and treat people well always race
ahead of others and deliver excellent results.

3. Professional Significance:

Professional significance of HRM lies in developing people and providing healthy

environment for effective utilisation of their capabilities.
This can be done by:
1. Developing people on continuous basis to meet challenge of their job.

2. Promoting team-work and team-spirit among employees.

3. Offering excellent growth opportunities to people who have the potential to rise.

4. Providing environment and incentives for developing and utilising creativity.

4. National significance:

HRM plays a vital role in the development of a nation. The effective exploitation and
utilization of a nation’s natural , physical , and financial resources require an efficient and
committed manpower. Quality of human resources brings a wide difference in the
development between the countries with similar other resources. Thus the level of countries
development depends on the skills, attitude and values of its human resources. Effective
management of human resources helps to speed up the process of economic growth which, in
turn leads to higher standards of living and fuller employment.