Brilliant College of Commerce, Latur

Prof. Shrikant G. Pandya

B.com T.Y (SEM- V)

Subject: Human Resource Management

Chapter-1: Introduction to Human Resource Management

 Introduction and concept of HRM:

Human resource management (HRM or HR) is the strategic approach to the effective and efficient
management of people in a company or organization such that they help their business gain a
competitive advantage. It is designed to maximize employee performance in service of an
employer's strategic objectives. So, in simple words Human resource management (HRM) is the
process of employing people, training them, compensating them, developing policies relating to
them, and developing strategies to retain them.

 Definition of HRM

1. “Human Resource Management is concerned with obtaining the best possible staff for an
organization and having got them looking after them so that they want to stay and give their best
to their jobs.” - M. L. Cuming
2. “Human Resource Management as that part of the phase of management dealing effectively with
control and use of manpower as distinguished from other sources of power.” - Dale Yoder

 Nature of Human Resource Management:

1. Pervasive Force:
Human Resource Management is an inherent part of an organization. It is pervasive in nature and
present in all enterprises at all levels of management. It is the responsibility of each manager to
select the right candidate under him and pay attention to the development and satisfaction of each
sub-ordinate.

2. People Oriented:
Human Resource Management focuses on and values people at work both as individuals and
groups. It encourages people to develop their full potential and in return give the best to the
organization.

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3. Action-Oriented:
Human Resource Management does follow rules, records, and policies but it stresses the action.
The focus is on providing an effective and timely solution to employees for any problems,
tensions, or controversies faced by them.

4. Future-Oriented:
To sustain and grow in this competitive environment organizations follow long term strategic
planning. Effective Human Resource Management prepares people for current as well as future
challenges, especially working in an environment characterized by dramatic changes.

5. Development Oriented:
HRM continuously works towards the development of employees. There are various tools used to
make the employees reach their maximum potential. Training programs are held to help
employees enhance their skills and knowledge. Monetary and non-monetary reward structures are
tuned to motivate the employees.

6. Enhance Employee Relations:

HRM helps to build a healthy relationship between the employees at various levels. It encourages
mentoring and counseling to help employees in times of need. It aims at creating a culture in the
organization that is conducive to learning and growth.

7. Interdisciplinary Function:
The knowledge that has influenced Human Resource Management is interdisciplinary in nature. It
drives knowledge from five major bodies: education, system theory, economics, psychology, and
organizational behavior.

 Evolution of Human Resource Management:

The term “human resource management” is of recent origin. In its modern connotation, it came to
be used mainly from the 1980s onwards. During ancient times and for a long period in the
medieval era, production of goods was done mainly by skilled artisans and craftsmen. They
themselves owned the tools and instruments, produced articles and sold these in the market.
As such, the question of employer-employee or master-servant relationship did not arise in
their cases. They managed their affairs themselves and with the help of the family members.
However, many effluent craftsmen also employed apprentices and certain categories of hired
laborers. There existed a very close relationship between the master craftsmen and the
apprentices, and they themselves took care of the problems facing the apprentices and their family
members. The ancient and a major part of the medieval period also witnessed prevalence of
certain other distinct types of laborers. These comprised slaves, serfs and indentured laborers.

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 Objectives of Human Resource Management:
1. Achieve organizational goals:
HRM function starts here. One major HRM objective is to fulfil organizational goals. Utilizing
human resource to achieve business requirements and goals is very important for an effective
HRM. Organizational objectives include workforce handling, staff requirements like hiring and
onboarding, payroll management and retirement.

2. Work culture:
Work culture plays an important role in defining HRM and business performance. An HR
manager needs to be active while calling for strategies to foster better work culture. Automated
activities like leave approvals, reimbursement request acknowledgement, etc. can help you. Quick
operations and empowerment to employees help in creative positive vibes at workplace.

3. Team integration:
One of the prime roles and objectives of HRM is to make sure team co-ordinate efficiently. Easy
communication is the need for teams at an enterprise. An HR here must ensure a tool to assist in
making the integration easier and smooth. Proper connect between individuals is a must to ensure
productivity. To make the HR management a success, you need to search better integration
portals to make data availability easier for people. Functional objectives like team integration is to
produce streamlined operations and tasks.

4. Training and Development:

Workforce being effective and performing are two important and basic elements to work upon for
achieving your basic objectives at an organization. With proper training and providing future
opportunities, employees feel safe and organized. Effective employment is highly dependent upon
the training practices. Providing opportunities to employees is one great step to ensure workforce
management.

5. Employee motivation:
The prime objective of an HR folk is to keep things on right path. Keep distractions and negative
vibes away. For this the employees need to be attended and kept motivated throughout. How can
an HR motivate employees? Give powers to them. Take their views on things. Involve them into
weekly meets or decisions. Even if it is a fresher, let them join. Keep the morale always high.
Employee recognition like yearly appraisal based on their performance can to help.

6. Workforce empowerment:
Talking about employee motivation, nothing can work better than empowering them.
Empowering them with tools like ESS (employee self-service) portal can help save HR efforts
too. With the portal, employees can themselves apply for approvals and track them through their
mobile phone. Be it leave request, generating pays lip, checking PF account, remaining leaves,
upcoming holidays, manager details, or anything, HR intervention is least required. Now, you no
more need to knock on HR’s desk for small queries.

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7. Retention:
Providing leadership qualities and opportunities, healthy working area, and employee retention
are some prime objectives and deliverables of HR manager. Keeping employees retained and
motivated needs to be a top priority for HRM. Other than employee hiring, onboarding, and
training cycle, keeping the employees retained for long is the biggest challenge AKA objective of
the HR people. It often occurs that employees leave the organization within 2 months of
onboarding. It can be due to ineffective training management or rough hiring process.

8. Data and compliance:

Functional and organizational objectives also include managing company/ employee data and
managing compliances. Managing payroll compliances and keeping the company out of any
penalties or fine is huge challenge for HR people and managers. Even a small error or
miscalculation can owe you huge penalties and even may lose respect. When committing to tasks
like employment and payroll, you need to be careful about laws and regulations. Objective here is
to keep any unwanted claims at bay for smooth functioning.

 Functions of Human Resource Management:

Human Resource Management (HRM) is a systematic approach that works to fill the gap between
an organization and its employees. Functions of HRM have been developed by the Minister of
Human Resource Development to simplify the task of managing the human capital of the
organization. These works are broadly classified into three categories:
a) Managerial Functions
b) Operative Functions
c) Advisory Functions

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A) Managerial Functions:
Human resource management (HRM) is required at all levels of an organization. Top
management is responsible for strategizing and directing the successful application of such
schemes. In this process, they perform the following functions:
1. Planning:
Planning is the first and basic function of management and everything depends on the plan; before
thinking of anything else, management needs to be aware of the vacancies or workforce needs of
the organization. After that, they are very much required to formulate a strategy to meet future
requirements.

2. Organizing:
The purpose of human resources is to bring together the available human resources and physical
resources with the organization, the manager sets a framework for operative tasks. Along with
organizing everything related to HR and the organization, Human resource managers should be
well aware that organizing is a process of creating and organizing everything in a proper way to
avoid any confusion and conflict.

3. Directing:
Directing is a knowledge, discipline, and formal way of communicating to others what you expect
from them or an organization. Unless a human resource manager has the ability to direct, a human
resource manager cannot be said to be full-fledged. When the HR manager has the right guidance
capabilities, the manager instructs the team to act accordingly and provides appropriate guidance
to meet the organizational objective.

4. Controlling:
Human resource managers must have full knowledge of handling all matters related to human
resources, as they must be fully capable of thinking and deciding what should be done and what
should not be done They also need to know how employees should be treated and how not.
Simultaneously he sets the standard for management performance and subsequently analyzes the
results based on such criteria through performance evaluation and job analysis.

B) Operative Functions:
Operative functions are those that are performed at the departmental level or middle level and are
primarily concerned about the execution of plans and strategies created at the managerial level.
Below we have mentioned about various types of operative functions:

1. Procurement:
Acquisition of human resources is the primary function of a manager. This includes all
requirements of personnel, recruitment, and selection of suitable candidates, an appointment to
the right place of the workforce, and estimation of orientation.

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2. Training & Development:
Providing proper training to managers to develop the necessary skills and talents within the
employees and ensuring the correct development of the selected candidates is an important
function of HR. Overall, the success of an organization depends on how well employees have
trained for the job and their growth opportunities within the organizationThis increases the overall
efficiency and productivity of the workforce, resulting in better business as well as greater
profitability for the company.

3. Providing Compensation and Benefits:

Benefits and compensation are a major part of the total cost expenditure of any organization. It is
necessary to plug expenses, and at the same time, it is very necessary to pay employees well.
Therefore, the role of human resource management is to create packages such as bonuses,
benefits, and compensation for them to attract more employees in the workplace without
disturbing the company’s finances. By which he will be able to give more good production to the
company by doing his work with more interest.

4. Integration:
Integration means introducing new employees to the organization and their work or process. This
includes motivating employees through various financial and non-financial incentives, providing
job satisfaction, dealing with employee complaints through formal grievance procedures,
collective bargaining, labor participation in management, conflict resolution, development of
sound human relations, employee consultation, improving quality of work-life, etc.

5. Maintenance:
It is the most important function, it is related to saving and promoting the physical and mental
health of the employees, which aims to provide many types of fringe benefits like PF, life
insurance, accident insurance, health insurance, pension to the employees. It is necessary to
provide gratuity with various benefits and facilities such as allowances and other health and safety
measures.

C) Advisory Functions:

1. Advised to Top Management:

Personnel manager advises the top management in formulation and evaluation of personnel
programs, policies and procedures. He also gives advice for achieving and maintaining good
human relations and high employee morale.

2. Advised to Departmental Heads:

Personnel manager offers advice to the heads of various departments on matters such as
manpower planning, job analysis and design, recruitment and selection, placement, training,
performance appraisal, etc.

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 Importance of Human Resource Management:

1. Maintain quality of work life:

Quality of work life is the perception of employees regarding the relationship between working
condition with management. Simply, it is the relationship between employees and total work
environment. Quality of work life is concerned with the employee’s perception of physical as well
as psychological wellbeing at workplace and it can be obtained by maintaining work autonomy,
work freedom, job recognition, belongingness, rewards, etc.

2. Increase productivity and profit:

Human resource management ensures right quality and quantity of personnel in workplace, apart
from which, it creates opportunities to facilitate and motivate individual and group of employees
to grow and advance their career. Motivated employees work hard to meet their personal career
goal which directly influences productivity of organization. Minimizing cost and maximizing
profit is the essence of productivity.

3. Produce employees who are easily adaptable to change:

Human resource management performs various functions, among which training and development
of employees is one of the vital ones. Training and development programs keep employees
updated with skills necessary to adjust with alteration of organization’s environment, structure
and technology.

4. Match demand and supply of human resource:

Human resource management probes existing human resource in certain interval of time to
identify if the company has adequate number of workers or not. In case when company has
inadequate human resource, human resource management performs activities like recruitment and
selection to balance the need. In the same way, it lay-off inefficient employee in case when the
company has excessive employees.

5. Retain employees and motivate them to accomplish company’s goal:

Utilizing human resource to their fullest and maintaining them in the company for a long term is a
major function of human resource management. Under this function, HRM performs tasks like
providing fringe benefits, compensation and rewards to the deserving employees. These activities
do not only help in retaining employees in the company but also in achieving organization’s goal
effectively.

6. Recognize merit and contribution of employee:

Human resource management performs timely appraisal of employee’s performance in order to
recognize excellent and poor workers. The excellent workers are then rewarded as a return for
their contribution.

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7. Create a feeling of belongingness and team spirit in the employee:
Human resource management designs job on the basis of teamwork. As teamwork demands
contribution from every team member, HRM focuses on making each and every employee feel
valued so that employee contributes best from their side.

8. Sustain business in the market:

Human resource management makes sure that the company has the best employee because
promising employees are capable of taking their company ahead in the race by delivering
excellent results. This guarantees organization’s success and stability in future.

9. Resolve conflicts:
In any company, either big or small, conflicts may arise between any parties/group. Conflicts are
inevitable and they should not be ignored. Human resource management acts as a consultant to
sort out such conflicts timely and conduct other organizational activities smoothly.

10. Develop corporate image:

Every company should maintain good public image in order to sustain in the market. Any
individual would like to work for companies which are known for moral and social behavior. On
the other hand, companies that do not treat their employees in a good manner can run through
employee deficiency and even collapse.

 Role & Qualities of HR manager:

1. Sympathetic Attitude:
A good personnel manager must have a humane approach to human resource problems.
Regardless of the problems faced by the employees, he must have a sympathetic attitude while
dealing with them.

2. Quick Decisions:
He should display the ability to make quick decisions. Let’s assume that there is a conflict
between a superior and an employee in the organization. When the HR manager tries to mediate
and put an end to the conflict, he might have to make some quick decisions. He should be
mentally alert and therefore not get caught unawares.

3. Integrity:
Being the head of the personnel or human resource department, an HR manager should display
integrity. Honesty and frankness are the hallmarks of a good human resource manager. At no time
can the employees doubt the integrity of the personnel manager.

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4. Patience:
He should be extremely patient and not someone who loses his temper easily. While dealing with
employees, it is important to be a good listener, especially when an employee is voicing his
concerns. And good listening skills require a lot of patience. Further, since employees tend to talk
to the HR manager about their problems, they can get agitated and verbally abusive. In such
situations, it is imperative that the HR manager keeps his cool and controls the situation.

5. Formal Authority:
He should depend on his formal authority alone. In fact, an effective HR manager earns his
informal authority of influencing people through his interpersonal skills.

6. Leadership:
Good leadership skills are essential to guide the employees towards achieving the organization’s
objectives. He should also keep people motivated and encourage them to use their skills for the
overall good of the enterprise.

7. Social Responsibility:
He should have a sense of social responsibility. Further, he must encourage employees to
discharge their social obligations to different segments of society. After all, a good human
resource manager isn’t only about the organization. He also needs to look at the broader human
resource element.

8. Good Communication Skills:

Another essential quality of a human resource manager is that he must possess good
communication skills. In fact, since a major part of his role involves interacting with employees,
unions, and management, being a good communicator is a must.

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