Unit – I: Introduction of HRM:

• HRM is the art of Procuring, developing and maintaining competent workforce

to achieve organisational goals effectively.
• The process of employing people, developing their resources, utilising,
maintaining & compensating their service in tune with the job & organisational
requirements with a view to contribute to the goals of the organisation,
individual & the society.

DEFINITION

According to Wendell L French “ the human resource management refers to the

philosophy, policies, procedures, & practice related to the management of people
within an organisation.

According to Stephen P Robbins, HRM is a process consisting of the acquisition,

development, motivation & maintenance of human resources.

SCOPE OF HRM

The Scope of Human Resource management into the following aspects

1. The Personnel Aspect

This aspect of HRM is concerned with the manpower planning, recruitment,
selection, placement, induction, transfer, promotion, demotion, termination,
training & development, layoff & retrenchment, wage & salary administration,
incentives, productivity etc.
2. The Welfare Aspect:-
The welfare aspect is concerned with working conditions & amenities such as
canteens, crèches, rest rooms, lunch rooms, housing, transport, education,
medical help, health & safety, washing facilities recreation & cultural activities
etc.
3. The Industrial Aspect:-
This aspect is concerned with employees. It includes union management
relations, joint consultation, negotiating collective bargaining, grievance
handling, disciplinary actions, settlement of industrial disputes etc.
IMPORTANCE OF HRM

1. Importance for the Organisation:-

HRM is important for the organisation to the following:
• Good human resource practices help in attracting & retaining the best
people in the organisation.
• In order to make use of latest technology the appointment of right type
of persons is essential. The right people can be fitted into new jobs
properly only if the management performs its HR function satisfactorily.
• Globalisation has increased the size of the organisation who employ
thousands of employees in different countries. The performance of the
company depends upon the qualities of the people employed. This has
further increased the importance of HRM
• HR planning alerts the organisation to the types of people it will need in
the short , medium & long run.
• HR development is essential for meeting the challenges of future. The
importance of HRM has increased because of the shortage of really
managerial talent in the country.

2. Importance for the employees

• HRM stress on the motivation of employees by providing them various
financial & non-financial incentives.
• Right organisational climate is also stressed upon so that the employees can
contribute their maximum to the achievement of the organisational objectives.
• Effective management of HR promotes team wok & team spirit among
employees.
• It offers excellent growth opportunities to people who have the potential to rise.
• It also encourages people to work with diligence & commitment.

3. Importance for the society:-

Good HR efforts lead to productivity gains (ration of output to input) to the

society, since it enables the managers to reduce costs, save scarce resources,
enhance profits & offer better pay, benefits & working conditions to employees.
OBJECTIVES OF HRM

1) Societal Objectives :-
• To manage human resources in an ethical & socially responsible
manner.
• To ensure compliance with legal & ethical standards.
• To minimise the negative impact of societal demands upon the
organisation.
2) Organisational Objective:-
• HR department, like any other department in an organisation, should
focus on achieving the goals of the organisation first. If it does not meet
this purpose, the HR department cannot exist in the long run.
• HR department should recognise its role in bringing about
organisational effectiveness.
• HRM is not an end in itself. It is only a means to assist the organisation
with its primary objectives.
3) Functional Objectives:-
• To maintain the HRM departments contribution at a level appropriate to
the organisation’s needs. Resources are wasted when HRM is either
more or less sophisticated to suit the organisation’s demands.
• The department’s level of service must be tailored to fit the organisation
it serves.
• HRM should employ the skills & abilities of the workforce efficiently.
It should aim at making the people’s strength more productive &
beneficial to the organisation.
• HRM should aim at providing the organisation with well trained & well
motivated employees.
4) Personnel Objectives
• HRM should increase employees job satisfaction to the fullest extent.
• HRM should also meet the self actualisation needs of the employees. It
should stimulate every employee to achieve his potential.
• HRM should assist the employees in achieving their personal goals, at
least in so far as these goals enhance the individual’s contribution to the
organisation.
• HRM should develop & maintain a quality of work life. It makes
employment in the organisation a desirable, personal & social situation.
Organisational performance can never be improved without the quality
of work life.
 • The HRM should also communicate HR policies to all employees. It
will help the HRM in tapping the ideas, opinions, feelings, & the views
of the employees.

PERSONNEL MANAGEMENT

Meaning:- it is the process of Planning, organising, compensation, integration &

maintenance o people for the purpose of contributing to organisational individual &
societal goals.

Personnel management can be defined as obtaining, using & maintaining a satisfied

workforce.

Definition:- Acc. to Flippo “ personnel management is the planning, organizing,

compensation, integration & maintenance of people for the purpose of contributing to
organisational, individual & societal goals.

Acc, to Brech “ personnel management is that part which is primarily concerned with
human resources of organisation.

DIFFERENCES BETWEEN PERSONNEL MANAGEMENT & HRM

PERSONNEL MANAGEMENT HRM

It is a traditional approach to managing It is modern approach to managing people
people in the organisation. in the organisation.
It focuses on personnel administration, It focuses on acquisition, development,
employee welfare, & labour relation. motivation & maintenance of HR in the
organisation.
It assumes people as input for achieving It assumes people as in important &
the desired output. valuable resource for achieving the
desired output.
It undertaken for employee satisfaction. It undertaken for goal achievement.
Job design is done on the basis of division Job design function is done on the basis
of labour. of group work/teamwork.
Employees are provided with less training Employees are provided with more
& development opportunities. training & development.
Decisions are made by the top Decisions are made collectively after
management as per the rules & regulation considering employee’s participation,
of the organisation authority, decentralization, competitive
environment etc.
It focuses on increased production & It focuses on effectiveness, culture,
satisfied employees productivity & employee’s participation.
It is concerned with the personnel It is concerned with all levels of managers
manager. from top to bottom.
It is a routine function. It is a strategic function.
FUNCTIONS OF HRM(MANAGERIAL FUNCTION
Managerial function includes
a) Planning:-
It is pre-determined course of action. Planning pertain to formulating
strategies of personnel programmes & changes in advance that will
contribute to the organisational goals.
In other words it involves planning of HR, requirements, selection, training
etc.
b) Organising:- an organisation is a means to an end. It is essential to carry
out the determined course of action. Acc. to J.C Massie, an organisation is a
structure & a process by which a co-operative group of human beings
allocates its task among its members, identifies relationship & integrates its
activities towards a common objective.
c) Directing:- activating employees at different level & making them
contribute maximum to the organisation is possible through proper direction
& motivation. Taping the maximum potentialities of the employees is
possible through motivation & command.
d) Controlling:- after planning, organizing, & directing the actual
performance of employees is checked, verified & compared with the plans.
It the actual performance is found deviated from the plan, control measures
are required to be taken.

ii) OPERATIVE FUNCTIONS

the operative functions of HRM are related to specific activities like

1) Employment:-

It is concerned with securing & employing the people possessing the required
kind & level of human resources necessary to achieve the organisational
objectives. It includes

i) Job Analysis:- it is the process of study & collection of information

relating to the Role & Responsibilities of a specific job.
ii) HR Planning:- it is a process for determination & assuring that the
organisation will have an adequate number of qualified persons,
available at proper times, performing jobs, which would meet the needs
of the organisation & which would provide satisfaction for the
individuals involved.
 iii) Recruitment:- it is the process of searching for prospective employees
& stimulating them to apply for jobs in an organisation.
iv) Selection:- it is the process of ascertaining the qualifications,
experiences, skills, knowledge etc of an applicant with a view to
appraising his/her suitability to a job.
v) Placement:- it is the process of assigning the selected candidate with
the most suitable job in terms of job requirements. It is matching
employee specifications with job requirements.
vi) Induction & Orientation:- Induction & orientation are the techniques
by which a new employee is rehabilitated in the changed surrounding &
introduced to the practices, policies, purposes & people of the
organisation.

2. Human Resource Development:-

It is the process of improving, moulding & changing the skills, knowledge,
creative ability, aptitude, values, commitment etc based on present & future job
organizational requirements. It includes.
i) Performance Appraisal:- it is the systematic evaluation of individuals
with respect to their performance on the job & their potential for
development.
ii) Training:- it is the process of imparting to the employees technical &
operating skills & knowledge.
iii) Managerial Development:- it is the process of designing & conducting
suitable executive development programmes so as to develop the
managerial & human relations skill of employees.
iv) Career Planning & Development:- it is the planning of one’s career &
implementation career plans by means of education, training, job search
& acquisition of work experience. It includes internal mobility &
external mobility.
v) Transfer:- it is process of placing employees in the same level jobs
where they can be utilized more effectively in consistence with their
potentialities & needs of the employees & the organisation.
vi) Promotion:- it deals with upward reassignment given to an employee in
the organisation occupy higher position which commands better status
or pay keeping in view in human resources of the employees & the job
requirements.
vii) Demotion:- it deals with downward reassignment to an employee in the
organisation.
 viii) Retention Management:- employers prefer to retain more talented
employees while they retrench less talented employees. Employers
modify existing human resource strategies & craft new strategies in
order to pay more salaries, provide more benefits & create high quality
of work life to retain the best employees.

3) Compensation :-

It is the process of providing adequate, equitable & fair remuneration to the

employees. It includes

i) Wage & salary Administration:- it is the process of developing &

operating a suitable wage & salary programme
ii) Incentives:- it is the process of formulating administrating & reviewing the
schemes of financial incentives in addition to regular payment of wages &
salary.
iii) Fringe Benefits:- these are the various benefits at the fringe of the wage.
Management provides these benefits to motivate the employees & to meet
their life’s contingencies. Ex:- housing facilities, canteen facilities, medical
facilities, disablement benefits etc.
iv) Social Security Measures:- management provide social security to their
employees in addition to the fringe benefits. These includes worker men
compensation, maternity benefits for women , medical benefits , retirement
benefits lie PF, pension, gratuity etc.

4)Human Relations:-

It is the 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 cooperatively & with economic, psychological & social
satisfaction.

5. Industrial relations:-

It refers to the study of relations among employee, employer, government & trade
unions. It includes Trade union, collective bargaining, Quality circles etc,.

6. Recent Trends in HRM:-

HRM has been advancing at a fast rate. The recent trends in HRM includes Quality of
work life, Total quality in human resources, HR accounting, audit & research &
Recent techniques of HRM.
HR MANAGER

A person who headed with HRM department. Or A person who is charge of the
department that deals with the employment, training, support, records etc, of
company.

Role of HR Manager

1. The conscience role:- the conscience role is that of humanitarian who reminds
the management of its morals & obligations to its employees.
2. The Counsellor :- employees who are dissatisfied with the present job
approach the personnel manager for counselling. In addition employees facing
various problems like marital, health, children’s education/marriage, mental,
physical & career problems.
3. The Mediator:- as a Mediator, the Personnel Manager plays the role of peace
maker. He settles the disputes between employees & the management. He acts
as a liaison & communication link between both of them.
4. The spokesman:- he is a frequent spokesman for or representative of the
company.
5. The Problem Solver:- he acts as a problem solver with respect to the issues
that involve human resources management & overall long range organisational
planning.
6. The Change Agent:- he acts as a change agent & introduces changes in varios
existing programmes.
 HRM POLICY

➢ Policy is predetermined course of action established to guide the performance

of work towards accepted objectives.
➢ In organisational context” policy is a statement or general understanding which
provides guideline to member of the organisation for making decision in
respect to any course of action.
➢ Acc. to Edwin B Flippo a policy is rule or pre-determined course of action
established to guide an organisational towards its objectives.

NEED/IMPORTANCE OF HRM POLICY

1. To Achieve the Objectives of the Organization:

Policies guide the employees to take action for achieving the objectives of the
organization. Hence, they must be known and well understood by everyone in order to
concentrate efforts on the objectives.
2. To Bring Uniformity in Decisions:
HR policies furnish the general standard on which decisions are taken. Various line
authorities take decisions in an organization keeping in view the HR policies. Thus,
uniformity of action is maintained in similar cases.
3. To Delegate Authority:
HR policies make delegation of authority possible, which means assigning the work to
others and give them authority to do it. HR policies help executives at various levels
of decision centres to act with confidence without consulting the superiors every time.
HR policies give a manager liberty to choose the alternatives provided and to decide
upon the action.
4. To Achieve Better Control:
HR policies specify relationships among organization, management and workers.
Therefore, each group works for the achievement of the larger objectives of the
organization without any policy conflicts. Thus, HR policies provide better control.
5. To Evaluate Efficiency:
HR policies serve as standards in execution of work. Efficiency of a group may be
evaluated by its performance in the light of the policy. After assessing whether
organization has achieved the desired results set in the policy, HR policy may be
amended or a new policy may be formulated in the light of the actual performance.
6. To Create Confidence among Employees:
HR policies provide the workers a security against exploitation and create confidence
in employees who may know where they stand in the organization.
7. To Motivate:
HR policies introduce the employees to the objectives of the organization. It guides
the workers in achieving the objectives. They work enthusiastically and with loyalty
to get those objectives.
8. To Guide the Management:
HR policies provide guidance to management in relation to the HR problems. HR
policies decide how to get the work done by the people or how to behave with them.

CHARACTERISTICS OF SOUND HRM POLICY

While developing sound personnel policies management should pay attention to the
following things:

1. Related to Objectives:- Policies must be capable of relating objectives functions,

physical factors and Organisational personnel.
2. Easy to Understand: Policies should be stated in define, positive, clear and
understandable language.

3. Precise: Policies should be sufficiently comprehensive and prescribe limits and

yardsticks for future action.

4. Stable as well as Flexible: Personnel policies should be stable enough assure people
that there will not be drastic overnight changes. They should be flexible enough to keep
the organization in tune with the times.

5. Based on Facts: Personnel policies should be built on the basis of facts and sound
judgment and not in personal feelings or opportunistic decision.

6. Appropriate Number: There should be as many personnel policies as necessary to

cover conditions that can be anticipated, but not so many policies as to become confusing
or meaningless.

7. Fair & Equitable:- policies should be just fair & equitable to internal as well as
external groups. Eg:- a policy of recruitment from within may limit opportunities to bright
candidates from outside & a policy of recruitment from outside only a would limit
promotional avenue to promising internal candidates.

8. Reasonable:- policies must be reasonable & capabable of being accomplished. To gain

acceptance & commitment from employees, the policy should be conditioned by the
suggestions & reactions of those who are affected by the policy.

9. Review:- periodic review of policies is essential to keep in tune with changing times &
avoid organizational complacency or managerial stagnation,