Human Resource Management

Human Resource Management (HRM) is the term used to describe formal systems devised for
the management of people within an organization. The responsibilities of a human resource
manager fall into three major areas: staffing, employee compensation and benefits, and
defining/designing work. Essentially, the purpose of HRM is to maximize the productivity of an
organization by optimizing the effectiveness of its employees. This mandate is unlikely to
change in any fundamental way, despite the ever-increasing pace of change in the business
world. As Edward L. Gubman observed in the Journal of Business Strategy, "the basic mission
of human resources will always be to acquire, develop, and retain talent; align the workforce
with the business; and be an excellent contributor to the business. Those three challenges will
never change."

Until fairly recently, an organization's human resources department was often consigned to lower
rungs of the corporate hierarchy, despite the fact that its mandate is to replenish and nourish what
is often cited-;legitimately-;as an organization's greatest resource, it's work force. But in recent
years recognition of the importance of human resources management to a company's overall
health has grown dramatically. This recognition of the importance of HRM extends to small
businesses, for while they do not generally have the same volume of human resources
requirements as do larger organizations, they too face personnel management issues that can
have a decisive impact on business health. As Irving Burstiner commented in The Small Business
Handbook, "Hiring the right people-;and training them well-;can often mean the difference
between scratching out the barest of livelihoods and steady business growth'¦. Personnel
problems do not discriminate between small and big business. You find them in all businesses,
regardless of size."

POSITION AND STRUCTURE OF HUMAN RESOURCE MANAGEMENT

Human resource department responsibilities can be subdivided into three areas: individual,
organizational, and career. Individual management entails helping employees identify their
strengths and weaknesses; correct their shortcomings; and make their best contribution to the
enterprise. These duties are carried out through a variety of activities such as performance
reviews, training, and testing. Organizational development, meanwhile, focuses on fostering a
successful system that maximizes human (and other) resources as part of larger business
strategies. This important duty also includes the creation and maintenance of a change program,
which allows the organization to respond to evolving outside and internal influences. Finally,
there is the responsibility of managing career development. This entails matching individuals
with the most suitable jobs and career paths within the organization.
Human resource management functions are ideally positioned near the theoretic center of the
organization, with access to all areas of the business. Since the HRM department or manager is
charged with managing the productivity and development of workers at all levels, human
resource personnel should have access to-;and the support of-;key decision makers. In addition,
the HRM department should be situated in such a way that it is able to communicate effectively
with all areas of the company.
HRM structures vary widely from business to business, shaped by the type, size, and governing
philosophies of the organization that they serve. But most organizations organize HRM functions
around the clusters of people to be helped-;they conduct recruiting, administrative, and other
duties in a central location. Different employee development groups for each department are
necessary to train and develop employees in specialized areas, such as sales, engineering,
marketing, or executive education. In contrast, some HRM departments are completely
independent and are organized purely by function. The same training department, for example,
serves all divisions of the organization.
In recent years, however, observers have cited a decided trend toward fundamental reassessments
of human resources structures and positions. "A cascade of changing business conditions,
changing organizational structures, and changing leadership has been forcing human resource
departments to alter their perspectives on their role and function almost overnight," wrote John
Johnston in Business Quarterly. "Previously, companies structured themselves on a centralized
and compartmentalized basis-;head office, marketing, manufacturing, shipping, etc. They now
seek to decentralize and to integrate their operations, developing cross-functional teams'¦. Today,
senior management expects HR to move beyond its traditional, compartmentalized 'bunker'
approach to a more integrated, decentralized support function." Given this change in
expectations, Johnston noted that "an increasingly common trend in human resources is to
decentralize the HR function and make it accountable to specific line management. This
increases the likelihood that HR is viewed and included as an integral part of the business
process, similar to its marketing, finance, and operations counterparts. However, HR will retain a
centralized functional relationship in areas where specialized expertise is truly required," such as
compensation and recruitment responsibilities.

HUMAN RESOURCE MANAGEMENT-;KEY RESPONSIBILITIES

Human resource management is concerned with the development of both individuals and the
organization in which they operate. HRM, then, is engaged not only in securing and developing
the talents of individual workers, but also in implementing programs that enhance
communication and cooperation between those individual workers in order to nurture
organizational development.
The primary responsibilities associated with human resource management include: job analysis
and staffing, organization and utilization of work force, measurement and appraisal of work
force performance, implementation of reward systems for employees, professional development
of workers, and maintenance of work force.
Job analysis consists of determining-;often with the help of other company areas-;the nature and
responsibilities of various employment positions. This can encompass determination of the skills
and experiences necessary to adequately perform in a position, identification of job and industry
trends, and anticipation of future employment levels and skill requirements. "Job analysis is the
cornerstone of HRM practice because it provides valid information about jobs that is used to hire
and promote people, establish wages, determine training needs, and make other important HRM
decisions," stated Thomas S. Bateman and Carl P. Zeithaml in Management: Function and
Strategy. Staffing, meanwhile, is the actual process of managing the flow of personnel into,
within (through transfers and promotions), and out of an organization. Once the recruiting part of
the staffing process has been completed, selection is accomplished through job postings,
interviews, reference checks, testing, and other tools.

Organization, utilization, and maintenance of a company's work force is another key function of
HRM. This involves designing an organizational framework that makes maximum use of an
enterprise's human resources and establishing systems of communication that help the
organization operate in a unified manner. Other responsibilities in this area include safety and
health and worker-management relations. Human resource maintenance activities related to
safety and health usually entail compliance with federal laws that protect employees from
hazards in the workplace. These regulations are handed down from several federal agencies,
including the Occupational Safety and Health Administration (OSHA) and the Environmental
Protection Agency (EPA), and various state agencies, which implement laws in the realms of
worker's compensation, employee protection, and other areas. Maintenance tasks related to
worker-management relations primarily entail: working with labor unions; handling grievances
related to misconduct, such as theft or sexual harassment; and devising communication systems
to foster cooperation and a shared sense of mission among employees.

Performance appraisal is the practice of assessing employee job performance and providing
feedback to those employees about both positive and negative aspects of their performance.
Performance measurements are very important both for the organization and the individual, for
they are the primary data used in determining salary increases, promotions, and, in the case of
workers who perform unsatisfactorily, dismissal.
Reward systems are typically managed by HR areas as well. This aspect of human resource
management is very important, for it is the mechanism by which organizations provide their
workers with rewards for past achievements and incentives for high performance in the future. It
is also the mechanism by which organizations address problems within their work force, through
institution of disciplinary measures. Aligning the work force with company goals, stated
Gubman, "requires offering workers an employment relationship that motivates them to take
ownership of the business plan."
Employee development and training is another vital responsibility of HR personnel. HR is
responsible for researching an organization's training needs, and for initiating and evaluating
employee development programs designed to address those needs. These training programs can
range from orientation programs, which are designed to acclimate new hires to the company, to
ambitious education programs intended to familiarize workers with a new software system.
"After getting the right talent into the organization," wrote Gubman, "the second traditional
challenge to human resources is to align the workforce with the business-;to constantly build the
capacity of the workforce to execute the business plan." This is done through performance
appraisals, training, and other activities. In the realm of performance appraisal, HRM
professionals must devise uniform appraisal standards, develop review techniques, train
managers to administer the appraisals, and then evaluate and follow up on the effectiveness of
performance reviews. They must also tie the appraisal process into compensation and incentive
strategies, and work to ensure that federal regulations are observed.
Responsibilities associated with training and development activities, meanwhile, include the
determination, design, execution, and analysis of educational programs. The HRM professional
should be aware of the fundamentals of learning and motivation, and must carefully design and
monitor training and development programs that benefit the overall organization as well as the
individual. The importance of this aspect of a business's operation can hardly be overstated. As
Roberts, Seldon, and Roberts indicated in Human Resources Management, "the quality of
employees and their development through training and education are major factors in
determining long-term profitability of a small business'¦. Research has shown specific benefits
that a small business receives from training and developing its workers, including: increased
productivity; reduced employee turnover; increased efficiency resulting in financial gains; [and]
decreased need for supervision."

Meaningful contributions to business processes are increasingly recognized as within the

purview of active human resource management practices. Of course, human resource managers
have always contributed to overall business processes in certain respects-;by disseminating
guidelines for and monitoring employee behavior, for instance, or ensuring that the organization
is obeying worker-related regulatory guidelines. Now, increasing numbers of businesses are
incorporating human resource managers into other business processes as well. In the past, human
resource managers were cast in a support role in which their thoughts on cost/benefit
justifications and other operational aspects of the business were rarely solicited. But as Johnston
noted, the changing character of business structures and the marketplace are making it
increasingly necessary for business owners and executives to pay greater attention to the human
resource aspects of operation: "Tasks that were once neatly slotted into well-defined and narrow
job descriptions have given way to broad job descriptions or role definitions. In some cases,
completely new work relationships have developed; telecommuting, permanent part-time roles
and outsourcing major non-strategic functions are becoming more frequent." All of these
changes, which human resource managers are heavily involved in, are important factors in
shaping business performance.

Important Objectives of Human Resource Management

1. Organizational Objectives:
HRM is a means to achieve efficiency and effectiveness. It serves other functional areas, so as to
help them to attain efficiency in their operations and attainment of goals to attain efficiency.
Acquiring right man for the right job at right time in right quantity, developing through right
kind of training, utilizing the selected workforce, and maintaining the workforce are the
organizational objectives of HRM. Succession planning is an important issue to be taken up as a
contemporary organizational objective.
2. Functional Objectives:
HRM performs so many functions for other departments. However, it must see that the
facilitation should not cost more than the benefit rendered.

3. Personal Objectives:
In today’s world there is shortage of requisite talent. Employees are encouraged by competitive
firms to change the jobs. HRM has the responsibility to acquire, develop, utilize, and maintain
employees. This would be possible only when the HRM helps employees to achieve their
personal goals to get their commitment. Creating work-life balance for the employees is a
personal objective.

4. Societal Objectives:
HRM must see that the legal, ethical, and social environmental issues are properly attended to.
Equal opportunity and equal pay for equal work are the legal issues not to be violated. To take
care of farmers (whose land has been acquired for the factory) and tribal’s (who are displaced by
industries and mining companies) are the ethical issues.

The results are clear when these issues are not taken care of. To help the society through
generating employment opportunity, creating schools and dispensaries, helping women
empowerment are the social responsibility issues.

Human Resource Management Challenges

1. Environmental Challenges
2. Organizational Challenges
3. Individual Challenges

Environmental Challenges: The environmental challenges are related to the external forces that
exist in the outside environment of an organization & can influence the performance of the
management of the organization. These external forces are almost out of control of the
management of the organization. These can be regarded as threats to management & should be
handled in a proactive manner.

Following are the list of human resource management challenges that considered as the
environmental challenges.

1. Rapid Change
2. Work Force Diversity
3. Globalization
4. Legislation
 5. Technology
6. Job & Family Roles
7. Lack of Skills

1. Rapid Change

The world is changing at a faster rate because change is constant from several centuries. So the
management of the organizations should be quickly adaptive to the changing requirement of the
environment otherwise they become obsolete from the market. The human resource management
of an organization plays a basic role in response to the environmental change. The HR
department should adopt such policies that can avail the new opportunities of the environment &
keep the organization away from the newly emerging threats.

2. Work Force Diversity

The changing environment provides both the opportunities & threats to the human resource
management of the organization. The HR manager should adopt such policies that can make
possible the diverse work force of employees. Although on one hand diversity creates big
problem but in the long run, the survival & performance of the organization is flourished.

3. Globalization

One of the serious issue that today’s organizations are facing is the issue of globalization. The
world is converting into global business and severe competition is started between domestic &
foreign companies. Such competition results in the laying off the effective workforce of the
organization. The HR department can play an important role in keeping the culture of the
organization as global & wider.

4. Legislation

It is the old environmental challenge that is faced by organization since many decades. There are
certain labor laws that are declared by the government for the benefits of the working employees.
Some of these laws are disadvantageous to the interests of the organizations so it is a one of the
big challenges for the HRM to implement all those labor laws within the organizations. If any of
such law is violated, serious actions are taken by the relevant government authority that may
result into serious penalty for the management of the organization.

5. Technology

The technology is also growing with great speed especially in the field of computer &
telecommunication. New methods are emerging that quickly dominates the older ones & makes
them obsolete. Therefore the skills required by the employees also changes with the changing
technology & this would compels the worker to advance the skills three to four times throughout
their working lives. So there comes a burden on the HR department to constantly update the
skills & expertise of their employees.
6. Job & Family Roles

In recent years, dual-career families are increasing in which both the wife & husband work. This
creates a serious burden on the women that they have to give time to their families also. In many
organizations the policies of HR favors the employment of more than 10 years. The working
hours of the organizations are also strict and tight for the employees. Moreover, the selection &
training procedures are two tough and time consuming so most of the talented women hesitate to
join any organization which would result in the wastage of talent and potential. Even working
men also suffer from these employment policies because they do not properly give time to their
families. So the challenges for the HRM increases with this particular issue & special favorable
working policies are needed to be employed in all organizations.

7. Lack of Skills

The service sector development is expanding due to many reasons like change in the tastes &
preference of customers, technological change, legal change etc. All of this affected the structure
and managing style of the business organizations. The skills required in the employment of
service sector is also advancing but the graduates of the technical colleges & universities are
groomed according to the latest requirements. Therefore most of the employees lack the standard
required skills to perform their duties and it becomes a big challenge for HRM to properly train
these new & old employees to become an efficient & effective workers.

Organizational Challenges

The organizational challenges for the HRM are related to the factors that are located inside the
organization. Although these challenges are evolved as a byproduct of the environmental
challenges but these can be control by the management of the organization to much extent. The
proactive HR managers take notice of such challenges in advance and take corrective measures
before these would convert into serious issues. The human resource management challenges
within the organization include competitive position & flexibility, organizational restructuring &
issues of downsizing, the exercise of self managed teams, development of suitable organizational
culture etc.

When the workforce of an organization is effectively used in combination with other factor of
production, the opportunities of the environment are availed & the threats are eliminated. The
competitive position of the organization can be influenced by the policies of HR in the following
ways.

 Controlling Costs
 Improving Quality
 Developing Distinctive Capabilities
 Restructuring

1. Controlling Costs
An organization can avail the competitive position by lowering its cost & strengthening its cash
flows. For this purpose, the labor cost of the organization is minimized through effective
compensation system that adopts innovative reward strategies for good performances. In this
way the favorable behaviors of the employees are rewarded so the organization would get the
ultimate advantage. Moreover the policies of compensation should keep the labor cost under
control. The effective employees should be selected that keep with the organization for a longer
duration & proper training should also be provided to these employees. The HR department
should also restore the work of the employees along with the improvement in the health & safety
issue of working environment. All of these efforts would limit the cost of labor.

2. Improving Quality

The quality improvement can lead an organization towards competitive advantage. The total
quality management programs are employed that improves all the processes within the
organization which would ultimately result in the improvement of the final product or service.

3. Developing Distinctive Capabilities

Another method of gaining competitive advantage is to employ the people that have distinct
capabilities to develop extra ordinary competence in specific area.

4. Restructuring

Another technique is the restructuring of the organization in which the methods of performing
different functions are altered positively. In case of HR department, the majority of functions are
still performed within the organization.

In some organizations the major functions of HR department are now transferred to the other
parties in the shape of outsourcing, shared service center etc. The sizes of HR department in
those organizations are shrinking because most of functions are performed by outsiders. But in
most of the organizations the HR manager performs all the relevant functions of HRM. The HR
department is now involved in the mission oriented & strategic activities.

Individual Challenges

The decisions related to the specific individual employees are included in the individual
challenges for the HRM. The organizational issues are also affected by the fact that how
employees are treated within the organizations. The problems related to the individual level are
as follow.

01- Productivity

02- Empowerment

03- Brain drain

04- Ethics & social responsibility

05- Job insecurity

06- Matching people & organization

1. Productivity

Productivity is defined as the measure of the value that an employee can add to the final product
or service of the organization. The increased output per employee is reflected as increased
productivity. Ability & motivation are two important factors that affect the employee
productivity. The ability of the employee can be improved by the hiring & replacement along
with the proper training & career development. On the other high quality of work life serves as
accelerator to the motivational factor of the employees.

2. Empowerment

In the modern days many organizations make changes in such a way that their individual
employees exert more control on their work as compared to their superiors. This individual
control of employees is called empowerment which helps the employees to work with
enthusiasm, commitment & learn new skills because they are more make normal decisions about
their work by themselves & hence enjoy their work.

3. Brain Drain

One of the challenges for HRM is the detachment of the key potential employees from the
organization which link with the competitors for higher remunerations etc. In such cases the
organization loses its intellectual property & in many situations the leaving employees at the
higher levels also take with them the potential lower level employees. This brain drainage is
becoming serious issue in the high-Tec companies.

4. Ethics & Social Responsibility

Under this challenge, the organizations make an effort to benefit some portion of the society.
This is now considered to the social responsibility of the organization to show favorable behavior
towards the society. The ethics serves as the basic principle for the socially behavior of the
organizations. Within organizations, the HR departments develop a code of conduct & principles
of code of ethics that serve as the guidance for the personal behavior of the employees of the
organizations. The employees also expect from the management to show favorable decisions.

5. Job Insecurity

In the recent years, restructuring & downsizing develops the sense of insecurity of job within the
employees of the organizations. Now many employees only desire to get a steady job rather than
a job with promotional future. Even most successful organizations lay off its employees in the
period of cut throat competition. The stock market also shows favorable results when layoffs has
been made. All these things create a fear among employees about the insecurity of their jobs
which would hinder their effective performance.

6. Matching People & Organizations

It has been proved from the research that the HR department contributes to the profitability of the
organization when it makes such policies of employee selection in which those employees are
selected & retained that best suits the culture of the organization & its objectives. For example it
is proved from research that those employees would become beneficial for the high-Tech
companies that can work in risky, uncertain environment having low pay. In short it is an
important challenge for the HR department to hire and keep such employees whose abilities &
strengths would match the requirements & circumstances of the organization.