INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

INTRODUCTION
Human Resource Management (HRM) is a relatively new approach to managing people in
any organisation. People are considered the key resource in this approach. it is concerned
with the people dimension in management of an organisation. Since an organisation is a body
of people, their acquisition, development of skills, motivation for higher levels of
attainments, as well as ensuring maintenance of their level of commitment are all significant
activities. These activities fall in the domain of HRM. Human Resource Management is a
process, which consists of four main activities, namely, acquisition, development, motivation,
as well as maintenance of human resources.
Scott, Clothier and Spriegel have defined Human Resource Management as that branch of
management which is responsible on a staff basis for concentrating on those aspects of
operations which are primarily concerned with the relationship of management to employees
and employees to employees and with the development of the individual and the group.
Human Resource Management is responsible for maintaining good human relations in the
organisation. It is also concerned with development of individuals and achieving integration
of goals of the organisation and those of the individuals.
Northcott considers human resource management as an extension of general management,
that of prompting and stimulating every employee to make his fullest contribution to the
purpose of a business. Human resource management is not something that could be separated
from the basic managerial function. It is a major component of the broader managerial
function.
French Wendell, defines ―Human resource management as the recruitment, selection,
development, utilisation, compensation and motivation of human resources by the
organisation‖.
According to Edwin B. Flippo, ―Human resource management is the planning, organising,
directing and controlling of the procurement, development, resources to the end that
individual and societal objectives are accomplished‖. This definition reveals that human
resource (HR) management is that aspect of management, which deals with the planning,
organising, directing and controlling the personnel functions of the enterprise.
NATURE OF HUMAN RESOURCE MANAGEMENT
The emergence of human resource management can be attributed to the writings of the
human relationists who attached great significance to the human factor. Lawrence Appley
remarked, ―Management is personnel administration. This view is partially true as
management is concerned with the efficient and effective use of both human as well as non-
human resources. Thus, human resource management is only a part of the management
process. At the same time, it must be recognised that human resource management is inherent
in the process of management. This function is performed by all the managers. A manager to
get the best of his people, must undertake the basic responsibility of selecting people who
will work under him and to help develop, motivate and guide them. However, he can take the
help of the specialised services of the personnel department in discharging this responsibility.
The nature of the human resource management has been highlighted in its following features:
1. Inherent Part of Management: Human resource management is inherent in the process of
management. This function is performed by all the managers throughout the organisation
rather that by the personnel department only. If a manager is to get the best of his people, he
must undertake the basic responsibility of selecting people who will work under him.
2. Pervasive Function: Human Resource Management is a pervasive function of management.
It is performed by all managers at various levels in the organisation. It is not a responsibility
that a manager can leave completely to someone else. However, he may secure advice and
help in managing people from experts who have special competence in personnel
management and industrial relations.
3. Basic to all Functional Areas: Human Resource Management permeates all the functional
area of management such as production management, financial management, and marketing
management. That is every manager from top to bottom, working in any department has to
perform the personnel functions.
4. People Centred: Human Resource Management is people centred and is relevant in all
types of organisations. It is concerned with all categories of personnel from top to the bottom
of the organisation. The broad classification of personnel in an industrial enterprise may be as
follows:
(i) Blue-collar workers (i.e. those working on machines and engaged in loading,
unloading etc.) and white-collar workers (i.e. clerical employees),
(ii) Managerial and non-managerial personnel,
(iii) Professionals (such as Chartered Accountant, Company Secretary, Lawyer, etc.)
and nonprofessional personnel.
5. Personnel Activities or Functions: Human Resource Management involves several
functions concerned with the management of people at work. It includes manpower planning,
employment, placement, training, appraisal and compensation of employees. For the
performance of these activities efficiently, a separate department known as Personnel
Department is created in most of the organisations.
6. Continuous Process: Human Resource Management is not a ‗one shot ‘function. It must be
performed continuously if the organisational objectives are to be achieved smoothly.
7. Based on Human Relations: Human Resource Management is concerned with the
motivation of human resources in the organisation. The human beings can’t be dealt with like
physical factors of production. Every person has different needs, perceptions and
expectations. The managers should give due attention to these factors. They require human
relations skills to deal with the people at work. Human relations skills are also required in
training performance appraisal, transfer and promotion of subordinates.
PERSONNEL MANAGEMENT VS HUMAN RESOURCE MANAGEMENT
Contemporary Human Resource Management, as a part and parcel of management function,
underscores strategic approach to management in areas of acquisition, motivation, and
management of people at work. Human Resource Management derives its origin from the
practices of the earlier personnel management, which assisted in the management of people in
an organisation setup. Human Resource Management leverages setting up the systems and
procedures for ensuring efficiency, controlling and providing equality of opportunities for all
working for the organisation. Human Resource Management (HRM) differs from Personnel
Management (PM) both in scope and orientation. HRM views people as an important source
or asset to be used for the benefit of organisations, employees and society. It is emerging as a
distinct philosophy of management aiming at policies that promote mutuality-mutual goals,
mutual respect, mutual rewards and mutual responsibilities. The belief is that policies of
mutuality will elicit commitment, which in turn, will yield both better economic performance
and greater Human Resource Development (HRD). Though a distinct philosophy, HRM
cannot be treated in isolation. It is being integrated into the overall strategic management of
businesses. Further, HRM represents the latest term in the evolution of the subject. There are
several similarities between Human Resource Management (HRM) and Personnel
Management (PM).
(a) Both models emphasise the importance of integrating personnel/HRM practices with
organisational goals.
(b) Both models vest Personnel/HRM firmly in line management.
(c) Human Resource Management (HRM) and Personnel Management (PM) both models
emphasise the importance of individuals fully developing their abilities for their own personal
satisfaction to make their best contribution to organisational success.
(d) Both models identify placing the right people into the right jobs as an important means of
integrating personnel/HRM practice with organisational goals.
OBJECTIVES OF HUMAN RESOURCE MANAGEMENT
According to Scott, Clothier and Spriegal, the objectives of Human Resource Management,
in an organisation, is to obtain maximum individual development, desirable working
relationships between employers and employees and to affect the moulding of human
resources as contrasted with physical resources. The basic objective of human resource
management is to contribute to the realisation of the organisational goals. However, the
specific objectives of human resource management are as follows:
(i) To ensure effective utilisation of human resources, all other organisational
resources will be efficiently utilised by the human resources.
(ii) (ii) To establish and maintain an adequate organisational structure of relationship
among all the members of an organisation by dividing of organisation tasks into
functions, positions and jobs, and by defining clearly the responsibility,
accountability, authority for each job and its relation with other jobs in the
organisation.
(iii) To generate maximum development of human resources within the organisation
by offering opportunities for advancement to employees through training and
education.
(iv) To ensure respect for human beings by providing various services and welfare
facilities to the personnel.
(v) To ensure reconciliation of individual/group goals with those of the organisation
in such a manner that the personnel feel a sense of commitment and loyalty
towards it.
 (vi) To identify and satisfy the needs of individuals by offering various monetary and
non-monetary rewards. In order to achieve the above objectives, human resource
management undertakes the following activities:
a. Human Resource Planning, i.e., determining the number and kinds of
personnel required to fill various positions in the organisation.
b. Recruitment, selection and placement of personnel, i.e., employment function.
c. Training and development of employees for their efficient performance and
growth.
d. Appraisal of performance of employees and taking corrective steps such as
transfer from one job to another.
e. Motivation of workforce by providing financial incentives and avenues of
promotion.
f. Remuneration of employees. The employees must be given sufficient wages
and fringe benefits to achieve higher standard of living and to motivate them
to show higher productivity.
g. Social security and welfare of employees.
FUNCTIONS OF HUMAN RESOURCE MANAGEMENT
The main functions of human resource management are classified into two categories:
(a) Managerial Functions and (b) Operative Functions
(a) Managerial Functions: Following are the managerial functions of Human Resources
Management.
1. Planning: The planning function of human resource department pertains to the steps taken
in determining in advance personnel requirements, personnel programmes, policies etc. After
determining how many and what type of people are required, a personnel manager has to
devise ways and means to motivate them.
2. Organisation: Under organisation, the human resource manager has to organise the
operative functions by designing structure of relationship among jobs, personnel and physical
factors in such a way so as to have maximum contribution towards organisational objectives.
In this way a personnel manager performs following functions:
(a) preparation of task force;
(b) allocation of work to individuals;
(c) integration of the efforts of the task force;
(d) coordination of work of individual with that of the department.
3. Directing: Directing is concerned with initiation of organised action and stimulating the
people to work. The personnel manager directs the activities of people of the organisation to
get its function performed properly. A personnel manager guides and motivates the staff of
the organisation to follow the path laid down in advance.
4. Controlling: It provides basic data for establishing standards, makes job analysis and
performance appraisal, etc. All these techniques assist in effective control of the qualities,
time and efforts of workers.
(b) Operative Functions: The following are the Operative Functions of Human Resource
Management
1. Procurement of Personnel: It is concerned with the obtaining of the proper kind and
number of personnel necessary to accomplish organisation goals. It deals specifically with
such subjects as the determination of manpower requirements, their recruitment, selecting,
placement and orientation, etc.
2. Development of Personnel: Development has to do with the increase through training, skill
that is necessary for proper job performance. In this process various techniques of training are
used to develop the employees. Framing a sound promotion policy, determination of the basis
of promotion and making performance appraisal are the elements of personnel development
function.
3. Compensation to Personnel: Compensation means determination of adequate and equitable
remuneration of personnel for their contribution to organisation objectives. To determine the
7 monetary compensation for various jobs is one of the most difficult and important function
of the personnel management. A number of decisions are taken into the function, viz., job-
evaluation, remuneration, policy, inventive and premium plans, bonus policy and co-
partnership, etc. It also assists the organisation for adopting the suitable wages and salaries,
policy and payment of wages and salaries in right time.
4. Maintaining Good Industrial Relation: Human Resource Management covers a wide field.
It is intended to reduce strives, promote industrial peace, provide fair deal to workers and
establish industrial democracy. It the personnel manager is unable to make harmonious
relations between management and labour industrial unrest will take place and millions of
man-days will be lost. If labour management relations are not good the moral and physical
condition of the employee will suffer, and it will be a loss to an organisation vis-a-visa
nation. Hence, the personnel manager must create harmonious relations with the help of
sufficient communication system and co-partnership.
5. Record Keeping: In record-keeping the personnel manager collects and maintains
information concerned with the staff of the organisation. It is essential for every organisation
because it assists the management in decision making such as in promotions.
6. Personnel Planning and Evaluation: Under this system different type of activities are
evaluated such as evaluation of performance, personnel policy of an organisation and its
practices, personnel audit, morale, survey and performance appraisal, etc.
IMPORTANCE OF HUMAN RESOURCE MANAGEMENT
Human Resource Management has a place of great importance. According to Peter F.
Drucker, the proper or improper use of the different factors of production depend on the
wishes of the human resources. Hence, besides other resources human resources need more
development. Human resources can increase cooperation but it needs proper and efficient
management to guide it‖. Importance of personnel management is in reality the importance of
labour functions of personnel department which are indispensable to the management activity
itself. Because of the following reasons human resource management holds a place of
importance.
1. It helps management in the preparation adoption and continuing evolution of personnel
programmes and policies.
2. It supplies skilled workers through scientific selection process.
3. It ensures maximum benefit out of the expenditure on training and development and
appreciates the human assets.
4. It prepares workers according to the changing needs of industry and environment.
5. It motivates workers and upgrades them so as to enable them to accomplish the
organisation goals.
6. Through innovation and experimentation in the fields of personnel, it helps in reducing
casts and helps in increasing productivity.
7. It contributes a lot in restoring the industrial harmony and healthy employer-employee
relations.
8. It establishes mechanism for the administration of personnel services that are delegated to
the personnel department.
Thus, the role of human resource management is very important in an organisation and it
should not be undermined especially in large scale enterprises. It is the key to the whole
organisation and related to all other activities of the management i.e., marketing, production,
finance etc. Human Resource Management is concerned with the managing people as an
organizational resource rather than as factors of production. It involves a system to be
followed in business firm to recruit, select, hire, train and develop human assets. It is
concerned with the people dimension of an organization. The attainment of organizational
objectives depends, to a great extent, on the way in which people are recruited, developed and
utilized by the management. Therefore, proper coordination of human efforts and effective
utilisation of human and others material resources is necessary.
FUTURE CHALLENGES BEFORE THE MANAGERS
Because of continuous changing socio-economic, technological and political conditions, the
human resource managers of the future shall have to face more problems in the management
of labour. The human resource managers of today may find themselves obsolete in the future
due to changes in environment if they do not update themselves some of the important
challenges which might be faced by the managers in the management of people in business
and industry are discussed below:
1. Increasing Size of Workforce: The size of organisations is increasing. A large number of
multinational organisations have grown over the years. The number of people working in the
organisation has also increased. The management of increased workforce might create new
problems and challenges as the workers are becoming more conscious of their rights.
2. Increase in Education Level: The governments of various countries are taking steps to
eradicate illiteracy and increase the education level of their citizens. Educated consumers and
workers will create very tough task for the future managers.
3. Technological Advances: With the changes coming in the wake of advanced technology,
new jobs are created and many old jobs become redundant. There is a general apprehension
of immediate unemployment. In the competitive world of today, industry cannot hope to
survive for long with old technology. The problem, of unemployment resulting from
modernisation will be solved by properly assessing manpower needs and training of
redundant employees in alternate skills.
4. Changes in Political Environment: There may be greater government ‘s interference in
business to safeguard the interests of workers, consumers and the public at large. Government
‘s participation in trade, commerce and industry will also pose many challenges before
management. The Government may restrict the scope of private sector in certain areas in
public interest. It does not mean chances of co-operation between the Government and
private sector are ruled out. In fact, there will be more and more joint sector enterprises.
5. Increasing Aspirations of Employees: Considerable changes have been noted in the worker
of today in comparison to his counterpart of 1950s. The workers are becoming more aware of
their higher-level needs and this awareness would intensify further in the future workers.
6. Changing Psychosocial System: In future, organisations will be required to make use of
advanced technology in accomplishing their goals while satisfying human needs. In the
traditional bureaucratic model, the organisations were designed to achieve technical functions
with a little consideration given to the psychosocial system. But future management would be
required to ensure effective participation of lower levels in the management of the
organisation system.
7. Computerised Information System: In the past, the automation of manufacturing processes
had a major effect upon the systems of production, storage, handling and packaging, etc.
More recently, there has been and, in the future, there will be the impact of revolutionary
computerised information system on management. This revolutionary development would
cover two primary areas of personnel management which are as follows:
(a) The use of electronic computers for the collection and processing of data, and
(b) The direct application of computers in the managerial decision-making process.
8. Mobility of Professional Personnel: Organisations will expand the use of ―boundary
agents‖ whose primary function will be achieving coordination with the environment. One
interesting fact will be an increase in the mobility of various managerial and professional
personnel between organisations. As individuals develop greater technical and professional
expertise, their services will be in greater demand by other organisations in the environment.
9. Changes in Legal Environment: Many changes are taking place in the legal framework
within which the industrial relations systems in the country are now functioning. It is the duty
of the human resource or personnel executive to be aware of these changes and to bring about
necessary adjustments within the organisations so that greater utilisation of human resources
can be achieved. This, indeed, is and would remain a major challenge for the personnel
executive.
10. Management of Human Relations: On the ‗industrial relations ‘front, things are not
showing much improvement even after so many efforts by the government in this direction.
Though a large number of factors are responsible for industrial unrest but a very significant
cause is the growth of multi unions in industrial complexes having different political
affiliations. Under the present conditions, it appears that inter-union rivalries would grow
more in the coming years and might create more problems in the industry. Management of
human relations in the future will be more complicated than it is today. Many of the new
generation of employees will be more difficult to motivate than their predecessors. This will
be in part the result of a change in value systems coupled with rising educational levels.
Greater scepticism concerning large organisations and less reverence for authority figures
will be more common. Unquestioning acceptance of rules and regulations will be less likely.