HRM Module I

French Wendell – “Human Resource Management is the recruitment, selection, development,

utilisation of and accommodation to human resources by organisations.”
Pigors and Myers – “It is basically a method of developing potentialities of employees so that they
feel maximum satisfaction of their work and give their best efforts to the organization”.
Byars and Rue – “Human resource management encompasses those activities designed to provide for
and coordinate the human resources of an organization Human resource functions refer to those tasks
and duties performed in organizations to provide for and coordinate human resources”.
Ivancevich and Glueck – “Human resource management is the function performed in organizations’
that facilitate the most effective use of people (employees) to achieve organizational and individual
goals”.
Edwin Flippo defines HRM as- “planning, organizing, directing, controlling of procurement,
development, compensation, integration, maintenance and separation of human resources to the end
that individual, organizational and social objectives are accomplished”
French Wendell- “Personnel management is a major component of the broader managerial function
and has roots and branches extending throughout and beyond each organization. It is a major sub-
system of all organizations.”

FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

1. Human resource planning
2. Recruitment
3. Performance management
4. Learning & development
5. Career planning
6. Information sharing
7. Rewards & recognitions
8. Compensation & benefits
9. Industrial relations
10. Policy formulation
11. Health and safety
12. Personal well-being
13. Employee engagement
14. Compliance
15. Administrative responsibilities
1) Human resource planning
The principal function of HR is to know the future needs of the company. What sort of individuals
does the company need, and how many? Understanding this will shape the recruitment, determination,
execution of the executives, learning & development, and all other functions of HRM.
2) Recruitment
The second function of HR includes recruiting people to work for the organization and selecting the
best suitors. Recruiting individuals generally begins with an employer brand. Being an alluring
employer has many advantages and vice versa. For instance, a tobacco business that battles to pull in
talent because of its tainted reputation. With a reliable employer brand and the privilege of sourcing
policies, you’re almost halfway there. When candidates apply, the selection process is an HR’s
instrument to pick the best qualified and most potential candidates.
3) Performance management
Performance management is essential in ensuring that workers stay productive and engaged. Good
performance management includes sound leadership, clear goal-setting, and welcoming feedback.
Performance management tools include the (bi)annual performance evaluation, in which their
manager reviews the performance of the employee. It also incorporates 360-degree feedback tools in
which peers, directors, subordinates, and even clients evaluate the employee’s performance.
Performance management is additionally an instrument to close the gap between the workforce you
have today and the one you will need tomorrow. Probably the ideal approach to build your future
workforce is through Learning & Development (L&D). Performance management is one of the vital
functions of the HR department.
4) Learning & development
Empowering representatives to build the skills they require in the future is one of the fundamental
functions of HRM. Every organization understands the value of investing in the reskilling of its
employees. It is one of the vital functions of the HR department to lead these efforts in the right
direction.
5) Career planning
One of the vital functions of HRM includes career planning, guidance, and growth for employees.
Guiding employees about how their aspirations can align with the organization’s objectives helps to
engage and retain them.
6) Information sharing
One of the essential functions of human resource management is sharing information with employees;
this can be through a newsletter to keep everyone up to date with the latest news. It likewise involves
safety procedures, announcements of layoffs, mergers, or acquisition, or any other significant
occasion applicable for employees. Clear, straightforward, and ideal information sharing is critical in
building and keeping up help and successful organizational change.
7) Rewards & recognitions
Recognition & rewards, one of the many functions of HRM, is to appreciate employees’ efforts and to
sustain notable talent. Rewards and recognition make employees feel worthy of their work as the
appreciation serves as motivation. They can be financial or non-monetary rewards.
8) Compensation & benefits
This function of HR requires continual observation of industry pay benchmarks and keeping up with
the industry standards, including new and variable payment parameters in salary, simple pay
expectations, and faster processes. Money is the prime motivation that drives individuals to work.
Nonetheless, to retain individuals, this function is very important.
9) Industrial relations
Another crucial function of HR is managing and cultivating relationships with labor unions, other
forums, and their members.
10) Policy formulation
Policies are the backbone functions of Human Resource Management. An organization needs policies
that are tried and tested as much as it needs policies that are more up to date and sensitive. A
reasonable and well-defined policy framework structure covers all the minute aspects of a company
and its operations. Policies can control activities like better participation, standardized methods,
procedures & implementation, and proper communication, to name a few.
11) Health and safety
Devising and implementing health and safety regulations are one of the significant functions of HRM.
12) Personal well-being
Supporting and taking care of employees when they’re having personal problems that affect their
performance is a key function of HR. Emotional well-being is about helping employees when
circumstances don’t go as planned.
13) Employee engagement
Employee engagement, as one of the essential functions of human resource management, has gained
much attention over recent years affecting employee turnover positively to a considerable extent.
Furthermore, introducing exciting employee engagement initiatives can acquire new and brilliant
talent in the company. Organizations are putting significant sums in employee engagement to
convince employees that they matter.
14) Compliance
As an HR professional, seeing that your organization is complying with labor laws is one of the
crucial functions of HR. The HR management department understands these legal concerns and
ensures that the employee and the organization are protected. Compliance comprises the estimation of
leave, payroll legalization, govt. and tax reporting, etc.
15) Administrative responsibilities
One of the crucial functions of human resource management includes administrative responsibilities.
Operations like relocations, further upskilling, promotions, illness, leaves, and many more come
under this function.
Conclusion
The functions of HRM are not only limited up to these points but also includes activities and
initiatives that run under them. An HR department is the core of any company, similar to the nervous
system in the human body that oversees & controls everything. An organization with well-defined
functions of human resource management is organized and has a long way to endear.

Types of HRM Theories

1. Scientific management theory
Developed by Frederick Taylor, he was one of the first to study work performance scientifically.
Taylorism recommended that the scientific method should be used to perform tasks in the workplace,
as opposed to the leader relying on their judgment or the personal discretion of team members. Taylor
envisioned one best way to perform an organizational task.
Taylor's research focused on repetitive, routine tasks - rather than complex or problem-solving
activities. Each task was carefully specified and measured.
If these tasks could be standardized they could be made more efficient. For example, these types of
activities could be largely automated through the introduction of technology.
Taylor employed timing measures to routine tasks to identify efficiencies and reduce wasted effort.
He also sought to optimize equipment or resources employed in these routine tasks. By customizing
equipment (or technology) he was able to add efficiency to individual effort.
Further, Taylor proposed an award and punishment system to incentivize efficient practice.
Employees who adapted to efficient techniques were rewarded as a result of higher productivity.
Employees who were unable or unwilling to adapt were punished.
Taylorism, can be summarized as follows:
 Use the scientific method in planning activities - replace any existing practices or rules of
thumb.
 Separate the planning function from the actual work activity.
 Standardize the process, time, equipment, and costs across all processes.
 Workers must be selected and appropriately trained for his/her respective role.
 Time, motion and fatigue figures should be employed to determine the allocation of effort
between workers.
 Cooperate with or facilitate workers in the execution of their responsibilities.
 Work must have functional supervisors who have the knowledge to oversee the respective
field of work.
 Responsibilities should be specifically allocated between workers and managers.
 Provide financing incentives as motivation for employee productivity increases.
As you can imagine, this system is based upon principles of comparative advantage. Individuals are
prepared to perform specific tasks as part of a greater process. This specialization allows for greater
efficiency.
Negative aspects of Scientific Management Theory:
Taylor's principles functioned well for routine tasks, such as assembly lines or production facilities.
These principles did not function as well in organizations where knowledge and decision-making are
central at each level of the value delivery process. This is particularly true for service-based (rather
than product-based) industries.
Further, Taylor's principles garnered significant criticism for their effect on workers. Many argued
that it treated humans as beasts of burden, dehumanizing them. It often leads to poor working
conditions in which employers reaped greater benefits while employees earned very small increases in
compensation.
While the scientific theory focused exclusively on efficiency, it did little to understand the employee
or to develop the manager as a leader. Naturally, these shortcomings lead to subsequent innovations in
management theory
Major Contributors to Scientific Management Theory:
Frederic Taylor was the father of Scientific Management Theory. Other major contributors include:
  Henry L. Gantt (18611919) - Gantt was an industrial and mechanical engineer who focused
on project efficiency. He developed a series of charts that have become important tools in
management practice. He linked manager performance and benefits to the ability to
effectively train employees to be more productive. He also believed that businesses have a
social obligation to improvise the welfare of the society in which it operates.
 Carl G. Barth (18601939) - Barth was an engineer and mathematician. He was an advocated
and educator on scientific method. He is best known for improving upon the slide rule for use
in industrial operations.
 Horace K. Hathaway (18781944) - Hathaway was perhaps the most successful practitioner
of Taylors methods. He also contributed greatly to scientific method by writing extensively
on the implementation of these methods in various areas of the organization. The topics of his
writings include: executive functions, research organization, business development and sales,
manager responsibilities, financial statements, budgetary controls, comptroller functions, and
internal auditing.
 Morris L. Cooke (18721960) - Cooke was a practitioner of scientific management theory
who worked closely with Taylor. He implemented these principles in several government and
private industry positions in the areas of residential electricity, labor-management relations,
and land and water resource conservation. He wrote a text, Industrial Management (1907) that
strongly influenced Taylor.
 Sanford E. Thompson (18671949) - Thompson was an academic and practitioner who
worked closely with Taylor. He focused specially on efficiency through time studies and tool
development. With Taylor, he co-wrote Concrete Costs (1912) which focused on breaking
manual labor tasks into comparable time units.
 Frank B. Gilbreth (18681924). F. Gilbreth's performed early work on on "motion study. He
integrated his working into scientific management study to focus on efficiency and
standardization of task performance in organizations - particularly factories.
 Dr Lillian Moller Gilbreth (18781972) performed early micro-motion studies. These studies
furthered Taylors time studies by employing cameras to record micro-movements. L. Gilbreth
also devoted herself to the study of individual psychology within the organization.
 Harrington Emerson (18531931) - Emerson was an efficiency engineer and management
consultant. He employs a form of the scientific approach to manage that he labelled
Efficiency Management. While he never worked with Taylor, his principles of efficiency
closely matched this of Taylor. He added elements of functional management through the
idea of the line and staff organization. This model used a staff to advise a single line manager.
This manager would then direct the work efforts of line subordinates. He also developed a
compensation system that based employee compensation on efficiency percent. Basically,
employee efficiency is compensated based upon task completion - either higher or lower than
expectations.

2. Administrative management theory

Henri Fayol, a senior executive and mining engineer, developed this theory when he examined an
organization through the perspective of the managers and situations they might encounter; after
observing a work stoppage that he judged to be a management failure. He suggested that the
principles should not be rigid but that it should be left up to the manager to determine how they use
them to manage efficiently and effectively. In his 1916 book, Administration Industrielle et
Générale (Industrial and General Administration), Fayol proposed the following 14 principles of
management.
Initiative: This refers to the level of freedom employees should have to carry out their responsibilities
without being forced or ordered.
Equity: This principle implies everyone in the organization should be treated equally and that it
should be an environment of kindness.
Scalar chain: This principle says there should be a chain of supervisors from the top level of
management to the lower level and that communication generally flows from top to bottom. He
emphasized that there is no hard rule regarding the communication process through the chain of
command.
Remuneration of personnel: This principle refers to the assertion that there should be both monetary
and non-monetary remuneration based on performance levels to create a bond between the employee
and the organization.
Unity of direction: This principle asserts that there should be only one manager per department who is
in charge of coordinating the group activity to attain a single goal.
Discipline: According to this principle, employees should be respectful and obedient, and an
organization should outline rules and regulations that clarify rules, good supervision and a reward-
punishment system.
Division of work: This principle asserts that the overall action of management should be divided and
that team members should be given responsibilities based on their skills and interests to make them
more effective and efficient.
Authority and responsibility: According to this principle, there should be a balance between
authority—the right to give commands and make decisions—and responsibility—the obligation of an
employee to perform the tasks they’re designated.
Unity of command: This refers to the assertion that employees must get orders from only one
immediate supervisor and be accountable to that person only.
Subordination of individual interest to general interests: There must be harmony between the interests
of the individual and the organization, although the organizational interest should be given priority
since it will bring rewards for the individual.
Centralization: According to this principle, the topmost level of authority should be centralized to the
top level of management, who has the power to make the most important decisions in an organization.
Order: This principle asserts that for an organization to run smoothly, the right person must be in the
right job and that, therefore, every material and employee should be given a proper place.
Stability of tenure: According to this principle, employees must have job security to be efficient.
Espirit de corps: This refers to the belief that there must be a unified team contribution and that
cooperation is always greater than the aggregate of individual performances.
Although the majority of these management principles still hold true today, Fayol’s most significant
contribution to the field of management theory is his identification of the duties of management. His
original list of five management duties: foresight, organization, command, coordinate and control, has
been modified over time. Current theory identifies six management functions: planning, organizing,
staffing, leading, controlling and motivating. This list reflects the addition of two functions—staffing
and motivating—and the recategorization of the command and coordinate duties as leading.

3. Bureaucratic management theory

At the end of the 19th century, it was German sociologist and author of The Protestant Ethic and the
Spirit of Capitalism (1905), Max Weber who was the first to use and describe the term bureaucracy.
This is also known as the bureaucratic theory of management, bureaucratic management theory or
the Max Weber theory. It focuses on structuring organizations in a hierarchy so there are clear rules
of governance. His principles for creating this system include a chain of command, clear division of
labor, separation of personal and organizational assets of the owner, strict and consistent rules and
regulations, meticulous recordkeeping and documentation and the selection and promotion of
employees based on their performance and qualifications.
This theory has played a key role in establishing standards and procedures that are at the core of most
organizations today.
4. Human Relations Theory
This approach had its origin in a series of experiments conducted by Professor Elton Mayo and his
associates at the Harvard School of Business at the Western Electric Company’s Hawthorne Works,
near Chicago; designed to improve productivity that laid the foundation for the human relations
movement. His focus was on changing working conditions like lighting, break times and the length of
the workday. These experiments are described below:
1. Illumination Experiments:
From these experiments, it was revealed that productivity could be increased not only by improving
the working environment, but also through informal social relations among the members of the
working group.
2. Relay Assembly Test Room Experiment
In this experiment a small homogeneous working group was constituted. Several new elements were
introduced in the work environment such as—shorter working hours, proper rest periods, improved
physical conditions, friendly supervision, free social interaction among the group members, and so on.
During the period of the experiment, productivity and morale increased. Productivity and morale were
maintained even if the improvements in the working conditions were withdrawn. The researchers
concluded that socio- psychological factors such as the feelings of being important, recognition,
participation, informal work group, non-directive supervision etc. held the key for higher productivity.
3. Mass Interviewing Programme:
A large number of workers were interviewed to know their perceptions and orientation on the working
life. The results again confirmed the importance of informal relation, social and psychological needs
and their impact on the behaviour of the workers.
4. Bank Wiring Observation Room Experiment:
A group of 14 workers was observed with regard to their work behaviour. The observation revealed
the informal production norms set by the workers and the existence of informal relations in the group.
The conclusions of the Hawthorne Experiments are pointed out below:
(i) A factory is not only a techno-economic unit but a psycho-social organisation also.
(ii) The workers spontaneously form small informal groups. The norms and values of such groups
have significant influence on the behaviour and performance of the workers.
(iii) Physical conditions of work have some influence on the workers’ morale and productivity. But
their inter-personal relations, attitude of the supervisors and other social and psychological factors
have a far greater influence.
(iv) Usually, the workers act or re-act not as individuals but as the members of a group.
(v) The workers are not mere economic men motivated by money alone. They respond to the total
work situation including recognition, participation etc.
(vi) The informal leaders play an important role in setting and enforcing group norms.
(vii) The managers must understand and recognise the inter-personal and group relations on the job.
Elton Mayo is known as the ‘Father of Human Relations Movement’. The Hawthorne Experiments
provided a landmark in the evolution of management thought. Many organisations initiated the
measures to improve relations with the workers. The managers were supposed to assume a new role
and to develop new concepts of authority, motivation and leadership.
However, the Hawthorne Experiments were criticised for lack of scientific analysis and research. It
was alleged that the researchers had certain pre-conceived perceptions and orientations. The
experiments were too narrow and small to provide generalisation.
5. Systems Management Theory
This theory asserts that businesses consist of multiple components that must work in harmony for the
larger system to function optimally. The organization’s success, therefore, depends on synergy,
interdependence and interrelations between subsystems. According to this theory, employees are the
most important components of a company, and departments, workgroups and business units are all
additional crucial elements for success.
Primary Characteristics of an Organizational System
 Sub-Systems - Each organization is a system made up of a combination of many sub-
systems. These sub-systems are inter-related.
 Holism - Each sub-system works together to make up a single whole system. Decisions made
in any subsystem affect the entire system.
 Synergy - The collective output of the whole system is greater than the sum of output of its
sub-systems.
 Closed and Open Systems - The whole organization is an open system made up of a
combination of open and closed sub-systems.
 System Boundary - The organization is separate from the external environment made up of
other systems.
5 Components of an Organizational System
 Inputs - Raw Materials, Human Resources, Capital, Information, Technology
 A Transformational Process - Employee Work Activities, Management Activities,
Operations Methods
  Outputs - Products or Services, Financial Results, Information, Human Results
 Feedback - Results from outputs influence inputs.
 The Environment - These components make up internal and external factors that affect the
system.
According to this theory, managers should evaluate patterns and events within the organization to
determine the best management approach. They need to collaborate and work together on programs to
ensure success.
6. Contingency management theory
Developed by Fred Fiedler, it describes how two main factors contribute to effective or successful
leadership and points them out as “the personality of the leader and the degree to which the situation
gives the leader power, control and influence over the situation” (p. 333-334). Leadership personality
can be broken up into two main motivation schools of thought for leaders. Leaders can be task
motivated or relationship motivated. The way that Fiedler suggests individuals determine their
motivation preference is through the Least Preferred Co-Worker Score or LPC. The second aspect that
Fielder says determines success is the specific situation and the degree to which the leader feels in
control of the outcome of their actions.
Gareth Morgan in his book Images of Organization summarized the main ideas underlying
contingency:
 Organizations are open systems that need careful management to satisfy and balance
internal needs and to adapt to environmental circumstances
 There is not one best way of organizing. The appropriate form depends on the kind of
task or environment one is dealing with.
 Management must be concerned, above all else, with achieving alignments and good fits
 Different types or specifics of organizations are needed in different types of environments
Fred Fiedler's contingency model focused on a contingency model of leadership in organizations. This
model contains the relationship between leadership style and the favorable-ness of the situation.
Fielder developed a metric to measure a leader's style called the Least Preferred Co-worker. The test
consists of 16-22 items they are to rate on a scale of one to eight as they think of a co-worker they had
the most difficulty working with. A high score indicates the test taker is relational in style and a low
score indicates the test taker is more task orientated in style. Situational favorable-ness was described
by Fiedler in terms of three empirically derived dimensions:
1. Leader-member relationship – high if the leader is generally accepted and respected
by followers
2. Degree of task structure – high if the task is very structured
3. Leader's position power – high if a great deal of authority and power are formally
attributed to the leader's position
Situations are favorable to the leader if all three of these dimensions are high.
Application of Fiedler’s Contingency Model:
1. Understand your leadership style - this information can be obtained by completing a
Least-Preferred Co-Worker Scale. Low LPC indicates a task-oriented leader and high
LPC indicates a relationship-oriented leader
2. Understand your situation - you have to describe your situation using the empirically
derived dimensions
3. Decide which leadership style is best - this is mostly determined by which
characteristics of a certain situation are low, unstructured, or poor, so the best fit
leader can come in and make that characteristic better in that circumstance
7. Theory X and Y
American social psychologist, Douglas McGregor, introduced X and Y theories in his book, “The
Human Side of Enterprise,” where he concluded that two different styles of management are guided
by their perceptions of team member motivations. Managers who assume employees are apathetic or
dislike their work use theory X, which is authoritarian. Theory Y is used by managers who believe
employees are responsible, committed and self-motivated. This is a participative management style
that gives rise to a more collaborative work environment, whereas theory X leads to micromanaging.
He concluded that large organizations may rely on theory X to keep everyone focused on meeting
organizational goals. Smaller businesses, where employees are part of the decision-making process
and where creativity is encouraged, tend to use theory Y.

Policy:
The term policy is derived from the Greek word “Politicia” relating to policy that is citizen and Latin
work “politis” meaning polished, that is to say clear.Policy refers "to specific guidelines, methods,
procedures, rules, forms, and administrative practices established to support and encourage work
towards stated goals."
Policies and procedures help enforce strategy implementation in several ways:
1. They save time by serving as precedents.
2. They aid in coordination.
3. They provide stability in the organization.
4. They help the manager to delegate authority without undue fear.
5. They serve as guides to thinking and action and thereby facilitate quick and accurate decisions.
6. They provide a more refined and flexible approach to recurring problems.
7. They translate objectives into a workable form.
8 More decisions can be taken at lower levels of hierarchy.
9. In the absence of a policy, similar questions must be considered time after time.
10. Policies can speed up decision-making by providing a blanket framework. They summarize the
past experiences.
11. Policies are one of the important means for building predictable behavioral patterns in an
organization. They ensure that the planned operations are not deviated unnecessarily.
12. Policies helps to achieve coordination.

Koontz and O'Donnell suggest that the following principles determine the potential effectiveness of
policies in relation to strategy implementation:
Policies should reflect objectives
Policies should be consistent
Policies should be flexible
Policies should be controlled
Policies may be written and formal or unwritten and informal.
Policies can exist for any functional tasks undertaken by the organization. Moreover, effective
decisions cannot be made without regard to their impact on other areas of the business. For example,
policy of minimizing the inventory may come at the expense of satisfying customers. Trade-offs are
generally required in this process.

Types of Policies
A. On the Basis of Source:
1. Originated Policies: Originated policies are formulated by top level management, by reference to
the objectives of the organization and their achievement. The purpose of these policies is to guide the
actions of their subordinates. Sometimes, these policies are formulated in active consultation with
managers at lower levels.
2. Implied Policies: Implied policies are those evolved by themselves when a series of decisions are
made by managers over a period of time. These policies exist in an unwritten form. They are not
consciously formulated but emerge from recurring managerial decisions.
3. Appealed Policies: Appealed policies are formulated at the higher managerial level in response to
appeals made by lower managerial levels. These policies may also exist in the form of precedents and
serve as guides for decisions in future.
4. Externally Imposed Policies: Externally imposed policies are those policies which are influenced
by the policies of the Government and other public agencies, trade unions, trade associations, etc.

B. On the Basis of different Levels:

1. Basic Policies:Policies which are followed by top management level are called as basic policies.
Example: branches will be opened in different place where the sales exceed Rs. Five, lakhs.
2. General Policies:These policies affect the middle level management and more specific than basic
policies.
Example:Payment will be provided for overtime work only if it is allowed by the management.
3. Department Policies:These policies are highly specific and applicable to the lower levels of
management.
Example:Tea will be provided free for workers in night shifts.

C. On the Basis of Managerial Functions:

1. Planning Policies:Planning policies involve the future course of action. Mere policies are
formulated as to achieve the targets regarding the future. Planning policies may formulate for whole
organisation or for divisional departments.
2. Organisation Policies:These policies are highly specific to organisational goals and objectives.
3. Motivation and Control Policies:Here policies are formulated to motivate people and control the
activities, which lead to achieve the organisational objectives with the fullest satisfaction of
employees.

D. On the Basis of Dissemination:

1. Written statements—Explicit policies: are in writing or included in the manual or records are called
explicit policies. In case of written statements adequate media should be used.
Eg: Bulletins / notice boards, News releases, Company manuals or handbooks.
2. Oral dissemination—Implicit policies: are disseminated merely by word of mouth through the key
people in an organisation. They are not in writing or not included in the manuals or records but are
well understood and practised are called implicit policies.

Types of HR Policies:
Company HR policies and procedures must be regularized among the employees of the organization
to avoid all the uncertain issues that might arise. The initial responsibility of any employee will be to
get synced with the work culture of the organization. HR policies help them give an idea about the
do’s and don’ts one must follow. Some of the top human resource policies are,
 Job agreement terms
 Attendance
 Behaviour
 Requests
 Safety
Workplace Policies:
Usually, an employee handbook is a documented format which comprises all the important policies of
the organization. The policies mentioned should also intend to communicate the company advantages
and expectations of their employees.
The company handbook for employees also considers various factors like niche, size, industry and
location of the company. Some key policies are,
1. At-will employment
2. Employee conduct, attendance and punctuality
3. Employment classifications
4. Meal and break periods.
5. Leave and time-off benefits
6. Safety and health
7. Timekeeping and pay
8. Anti-harassment and non-discrimination
Important documents and forms:
For every employee, individual files need to be maintained by the employer which comprises of
important documents and forms related to federal, state, and local laws. Also, these laws directly
operate with HR policies and procedures.
1. Hiring forms
2. Receipt of company property
3. Absence leave
 4. Business expenses
5. Handbook acknowledgements
6. Performance and discipline
7. Reasonable accommodation requests
Areas where policies are commonly established:
1. Code of Conduct
2. Confidentiality
3. Conflict of Interest
4. Compensation
5. Overtime
6. Working conditions
7. Attendance
8. Hours of Operations
9. Termination
10. Recruitment
11. Privacy
12. Employee Information
13. Bereavement Leave
14. Compassionate Leave
15. Vacation
16. Sick Leave
17. Maternity, Parental, and Adoption Leave
18. Unpaid Leave
19. Performance Management
20. Discrimination and Harassment
21. Health and Safety
22. Accident Reporting
23. Family Leave
24. Short Term Disability, Long Term Disability
25. Grievance/Conflict Resolution
26. Learning and development
27. Benefits and Eligibility
28. Jury Duty
29. Formal complaint process
30. Disciplinary
31. Workplace Violence
32. Alcohol and Drug Use Policy
33. Use of Company Equipment

Structure of HR Department:
The Conventional Structure
Under the conventional HR structure, each of the functions would fall under a different section within
the HR department. Each section would have a head (e.g. you’d have a recruitment manager, training
manager, etc). The different section heads would report to the Human Resources Manager.
Depending on the size of the organization, the HR Manager might report to the VP Human Resources.
The section heads might also have other subsections beneath them e.g. the compensation and benefits
functions may be separated.
This approach certainly creates a clear structure, with well defined roles. Most HR departments are
actually structured this way. And it works (often excellently). However, it isn’t the only structure.
There a few other approaches.
The Delegation Structure
Rather than concentrate all functions within the HR department, some functions can be delegated to
other departments. For instance, training and development can be moved to specific departments i.e.
the marketing department trains its members, the production department does the same, etc. Similarly,
the discipline and conflict resolution function can be delegated as well.
This structure can still maintain a fairly hierarchical structure i.e. there are certain things which the
other departments will still refer to the HR. For instance, the training and development of
departmental managers can still be handled by the HR department. Similarly, serious disciplinary
issues which require adverse actions are referred to the HR department.
However, this approach can also begin to create a horizontal structure. For instance, rather than refer
every difficult disciplinary case to the HR, departmental heads can consult with one another.
Similarly, they can compare notes and share best practices on employee training and development.
Ultimately, a delegation structure can have two advantages. First of all, it frees up the HR to deal with
more critical and highly technical functions (e.g. ensuring compliance with laws like FCRA).
Secondly, it empowers departments to take responsibility of some issues which concern their staff.
This can actually be a good thing since departments are sometimes resentful about what they
consider “excessive interference” by the HR.
The Automation/Outsourcing Structure
With the increasing popularity of Human Resource Information Systems (HRIS), some HR functions
can be automated. For instance, compensation and benefits administration can be automated. Training
and development can also be automated (by using Learning Management Systems).
Automation can introduce new structures. This is because most HRIS can perform different HR roles.
For example, a HRIS can be used for both recruitment tracking and benefits administration. This
potentially combines two distinct sections into one. Also, given the nature of HRIS, they are most
likely to be managed by the IT department. This brings into play new reporting relationships and
hierarchies.
The same case applies when certain human resource functions are outsourced. Outsourcing occurs
when the HR department feels ill-equipped to carry out certain functions. These functions are then
contracted to certain individuals or companies.
Outsourcing creates horizontal reporting structures. This is because outside contractors don’t share the
same status as employees. For instance, a recruitment manager will report to the HR manager from
the position of a subordinate. However, a consultant contracted to carry out recruitment on behalf of
the company will report to the HR manager, but not as a subordinate.
The Absent Structure
This may sound quite outlandish, but some organizations have thrown out the HR department
altogether. For some reason, they haven’t deemed a formal structure necessary for the achievement of
their goals. They have simply split up all HR functions within the different organizational
departments.
Operating without an HR structure has produced mixed results. One cleaning company with 900
employees is doing remarkably well without an HR department. Another company got slapped with a
fine of $19 million for a sex discrimination incident which any competent HR would have spotted out
(the company has since hired an executive-level HR and set up a department structure). This Wall
Street Journal article examines the organizations which kicked out the HR department. Click here to
read more.
In a nutshell, the structure of an HR department is critical to the smooth running of the various HR
functions. This ultimately influences the overall performance of an organization. Fortunately, there
numerous inventive ways to structure HR department. A few of them have been mentioned above.
Therefore, whatever the ultimate goal of your organization, you can find the perfect HR department
structure to help you achieve it.

Creating an HR Department in a Startup or New Facility

Many small organizations start out with the owner or a non-HR executive handling employment
issues. Someone must oversee administrative duties and policies concerning pay and benefits,
unemployment compensation, withholding taxes and administering workers' compensation, if
applicable. As organizations grow, department managers may handle general employee issues, while
accounting or finance handles payroll. Or organizations may use outside consultants to address
temporary needs.
The strategy of spreading HR duties among various managers and departments, or hiring HR help on
an as-needed basis, may be satisfactory up to a point. However, when additional federal laws kick in,
maintaining a focus on myriad compliance laws while growing the business can become difficult.
Having an HR professional onsite is more efficient to address issues such as hiring, firing, leave
management, training, discipline, policy development and enforcement, and benefits. At this point, a
small organization may want to think about establishing a dedicated HR department.
HR professionals serve many roles within an organization: compliance advisor, employee relations
counselor, benefits administrator, recruiter and safety coordinator, to name a few. Where to start
depends on where the organization is in its evolution. For example, if the employer were in a high-
growth phase, then establishing benefits and determining the most appropriate recruiting practices
would be high priorities. HR would determine what to prioritize next based on organizational strategy,
direction and compliance requirements. There is no one best way to implement an HR department, but
establishing a plan that best meets the organization's goals while maintaining legal compliance is
necessary. An employer should consider the following when building an HR department from the
ground up:
 HR staffing plan.
 HR budget.
 Tax obligations.
 Payroll system/administration.
 Companywide staffing plan.
 Job descriptions.
 Pay structure.
 Benefits plans.
 Employee handbook.
 Safety procedures.
 Employment posters.
 Hiring procedures.
 Personnel files.
 Performance evaluation process.
Starting an HR Department in an Existing Organization
Being charged with establishing a human resource department in an existing organization can appear
overwhelming. Often HR professionals are just not sure where to start. The key to success, as with
most things, is to begin by listening, observing and learning about the organization. Finding out what
the expectations are for the new job and the human resource department is essential. HR professionals
can start by asking questions such as the following:
 What was the purpose for creating this new department?
 Who made the decision to create the position, and who understands the inner workings of the
organization and knows the key decision-makers?
 How were human resource activities handled in the past and by whom?
 What is the culture of the workplace?
Answers to these questions can best be gathered by conducting a needs assessment through informal
interviews with key staff members and management, along with the HR manager's own assessment of
the human resource policies currently in place. This type of assessment, or HR audit, helps determine
an action plan for HR activities and staffing.
- HR ASSESSMENT OR AUDIT
Even in an organization without a formal HR department, HR-related policies have been created, and
tasks are being performed. Instead of starting from scratch, HR professionals can take stock of what
HR activities are currently being done in the organization and evaluate them. HR audits can help
evaluate the effectiveness and performance of HR programs and services and expose opportunities to
enhance, change or remove programs and processes. Before conducting an audit, HR managers should
determine where to start. The overall HR health of the organization can be evaluated, followed by a
more in-depth consideration of each functional area, as well as each program and service offered, so
that the HR manager can make sure the organization is in compliance, is administered efficiently and
cost-effectively, and is meeting employee and management needs.
Certain areas of HR oversight may make organizations particularly vulnerable to fines and other
sanctions. Most lawsuits can be traced to issues related to hiring, performance management, discipline
or termination. Some additional risk areas to carefully review include misclassification of exempt and
nonexempt jobs, inadequate HR files, inaccurate time records, and insufficient documentation.
 - CREATE AN ACTION PLAN
Next, HR professionals should create a plan and share it with senior management to gain input and,
most important, buy-in. The next step is to summarize overall impressions and prioritize specific
action items based on the assessment results, keeping in mind budget implications for each item.
HR managers should classify these projects and actions as high, medium and low priority, according
to legal compliance and benefit to the organization. Next, they should develop a timeline for action on
the highest-priority items that can be accomplished in the next three to six months; included would be
cost projections, why the tasks need to be done and the anticipated end results. When presenting a
plan to senior management, HR professionals should be prepared, brief and direct, and anticipate what
questions might be asked. They should also discuss how these actions will affect the bottom line—
demonstrating how a human resource department benefits the organization's operations in terms of
profit, productivity, increased business, reduced liability and employee satisfaction.
- DETERMINING HR STAFF STRUCTURE
There is no one best way to structure a human resource department. Of course, the size of an
organization affects the number of staff in HR. Other factors include employer growth, culture,
organizational structure, strategy, industry and client needs.
When an organization determines that more than one HR staff member is necessary, it must decide
what level of HR positions is needed. Many employers have a two-person HR department: an HR
manager or senior generalist position and an HR generalist or HR administrator. An administrative
position can be helpful for organizations that have a heavy administrative workload (such as filing,
benefits administration and payroll). Other organizations may decide to hire an HR generalist to assist
with recruiting and general employee and benefits issues, freeing the manager to concentrate on more
complex employee relations issues and strategic HR and business issues. As an organization's needs
grow and the HR department expands, the employer may choose to transition from hiring HR
generalists to hiring HR specialists for recruiting, benefits, compensation and other tasks to provide
more in-depth support to the various HR areas of responsibility. Organizations may also investigate
whether outsourcing one or more HR activities would be cost-effective.
Skills and Qualifications needed to work in HR
Working in HR takes a special type of person who is comfortable solving problems, improving
processes, measuring achievements, developing systems, dealing with an organization's culture and,
most importantly, working with people.
Real-time job analysis software from Burning-Glass.com was used to examine over 200,000 HR job
postings over the past 12 months. The data helped us identify the top 10 HR skills in highest demand:
 Employee relations
 Onboarding
 HRIS (human resource information systems)
 Customer service
 Scheduling
 Performance management
 Administrative support
 New-hire orientation
 Data entry
 Project management
“We must understand people and the vision of the company, while working as organizers, mediators,
and planners,” Dass says. “It’s a fascinating, tricky, and very rewarding field.” Dass emphasizes that
human resources is a field of continuous learning and of watching people develop each year. “It’s
incredibly fulfilling, like planting seeds and watching a garden grow. As our employees flourish, so
does our company.”
Another one of the most enjoyable parts of working in HR is the variety of tasks you handle,
according to Zhih. “With HR it is easy to weave your hobby into a job—if you like writing, you can
create original descriptions for open positions. If you like parties, you can handle organizing team
building events and so on.” You can gravitate toward what you like—or even specialize as your career
develops.

Reference Sites:
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