HUMAN RESOURCE MANAGEMENT

UNIT I Introduction
HUMAN RESOURCES Definition - The term human resources can be thought of as the total knowledge, skills, creative abilities, talents and aptitudes of an organizations workforce, as well as the value, attitudes and beliefs of the individuals involved. - Human Capital or Human Resources differs from other resources of the organization. HUMAN RESOURCE MANAGEMENT HRM may be defined as a set of policies, practices and programs designed to maximise both personal and organizational goals. It is the process of binding people and organizations together so that the objectives of each are achieved. - It is concerned with people dimensions in mgmt. & encompasses all those activities designed to coordinate for HR of an organization. - It aims at acquiring the services of people, developing their skills, motivating them to high levels of performance & ensure that they continue to maintain their commitment to organization. Nature of HRM 1. 2. 3. 4. 5. 6. 7. Inherent part of management Pervasive function Basic to all functional areas People centred Personnel activities or functions Continuous Process Based on Human Relations

Role of HR Manager 1. Advisory Role: HRM advises management on the solutions to any problems affecting people, personnel policies and procedures. a. Personnel Policies: Organization Structure, Social Responsibility, Employment Terms & Conditions, Compensation, Career & Promotion, Training & Development and Industrial Relations. b. Personnel Procedures: Relating to manpower planning procedures, recruitment and selection procedures, and employment procedures, training procedures, management development procedures, performance appraisal procedures, compensation procedures, industrial relations procedures and health and safety procedures.

2. Functional Role: The personnel function interprets and helps to communicate personnel policies. It provides guidance to managers, which will ensure that agreed policies are implemented. 3. Service Role: Personnel function provides services that need to be carried out by full time specialists. These services constitute the main activities carried out by personnel departments and involve the implementation of the policies and procedures described above. Role of HR Managers (Today) 1. Humanitarian Role: Reminding moral and ethical obligations to employees 2. Counselor: Consultations to employees about marital, health, mental, physical and career problems. 3. Mediator: Playing the role of a peacemaker during disputes, conflicts between individuals and groups and management. 4. Spokesman: To represent of the company because he has better overall picture of his companys operations. 5. Problem Solver: Solving problems of overall human resource management and long-term organizational planning. 6. Change Agent: Introducing and implementing institutional changes and installing organizational development programs 7. Management of Manpower Resources: Broadly concerned with leadership both in the group and individual relationships and labor-management relations. Scope of HRM The scope of HRM refers to all the activities that come under the banner of HRM. These activities are as follows 1.Human resources planning: - It refers to a process by which the company to identify the number of jobs vacant, whether the company has excess staff or shortage of staff and to deal with this excess or shortage. 2.Job analysis design: - Another important area of HRM is job analysis. Job analysis gives a detailed explanation about each and every job in the company. Based on this job analysis the company prepares advertisements. 3.Recruitment and selection: - Based on information collected from job analysis the company prepares advertisements and publishes them in the news papers. This is recruitment. A number of applications are received after the advertisement is published, interviews are conducted and the right employee is selected thus recruitment and selection are yet another important area of HRM. 4.Orientation and induction: - Once the employees have been selected an induction or orientation program is conducted. This is another important area of HRM. The employees are informed

about the background of the company, explain about the organizational culture and values and work ethics and introduce to the other employees. 5.Training and development: - Every employee goes under training program which helps him to put up a better performance on the job. Training program is also conducted for existing staff that have a lot of experience. This is called refresher training. Training and development is one area were the company spends a huge amount. 6.Performance appraisal: - Once the employee has put in around 1 year of service, performance appraisal is conducted that is the HR department checks the performance of the employee. Based on these appraisal future promotions, incentives, increments in salary are decided. 7.Compensation planning and remuneration: - There are various rules regarding compensation and other benefits. It is the job of the HR department to look into remuneration and compensation planning. 8.Motivation, welfare, health and safety: - Motivation becomes important to sustain the number of employees in the company. It is the job of the HR department to look into the different methods of motivation. Apart from this certain health and safety regulations have to be followed for the benefits of the employees. This is also handled by the HR department. 9.Industrial relations: - Another important area of HRM is maintaining co-ordinal relations with the union members. This will help the organization to prevent strikes lockouts and ensure smooth working in the company. Challenges before the HR manager/before modern personnel management Personnel management which is known as human resource management has adapted itself to the changing work environment, however these changes are still taking place and will continue in the future therefore the challenges before the HR manager are 1.Retention of the employees: - One of the most important challenge the HR manager faces is retention of labour force. Many companies have a very high rate of labour turnover therefore HR manager are required to take some action to reduce the turnover 2.Multicultural work force: - With the number of multi cultural companies are increasing operations in different nations. The work force consists of people from different cultures. Dealing with each of the needs which are different the challenge before the HR manager is integration of multicultural labour work force. 3.Women in the work force: - The number of women who have joined the work force has drastically increased over a few years. Women employees face totally different problems. They also have responsibility towards the family. The organization needs to consider this aspect also. The challenge before the HR manager lies in creating gender sensitivity and in providing a good working environment to the women employees.

4.Handicapped employees: - This section of the population normally faces a lot of problems on the job, very few organization have jobs and facilities specially designed for handicapped workers. Therefore the challenge before the HR manager lies in creating atmosphere suitable for such employees and encouraging them to work better. 5.Retrenchment for employees: - In many places companies have reduced the work force due to changing economic situations, labourers or workers who are displaced face sever problems. It also leads to a negative atmosphere and attitude among the employees. There is fear and increasing resentment against the management. The challenge before the HR manager lies in implementing the retrenchment policy without hurting the sentiments of the workers, without antagonizing the labour union and by creating positive attitude in the existing employees. 6.Change in demand of government: - Most of the time government rules keep changing. While a lot of freedom is given to companies some strict rules and regulations have also been passed. The government has also undertaken the disinvestment in certain companies due to which there is fear among the employees regarding their job. The challenge before the HR manager lies in convincing employees that their interest will not be sacrificed. 7.Initiating the process of change: - Changing the method of working, changing the attitude of people and changing the perception and values of organization have become necessary today. Although the company may want to change it is actually very difficult to make the workers accept the change. The challenge before the HR manager is to make people accept change. Functions of HRM a) Managerial Functions of HRM 1. Planning: Plan and research about wage trends, labor market conditions, union demands and other personnel benefits. Forecasting manpower needs etc. 2. Organizing: Organizing manpower and material resources by creating authorities and responsibilities for the achievement of organizational goals and objectives. 3. Staffing: Recruitment & Selection 4. Directing: Issuance of orders and instructions, providing guidance and motivation of employees to follow the path laid-down. 5. Controlling: Regulating personnel activities and policies according to plans. Observations and comparisons of deviations b) Operational Functions of HRM 1. Procurement: Planning, Recruitment and Selection, Induction and Placement 2. Development: Training, Development, Career planning and counseling. 3. Compensation: Wage and Salary determination and administration 4. Integration: Integration of human resources with organization. 5. Maintenance: Sustaining and improving working conditions, retentions, employee communication 6. Separations: Managing separations caused by resignations, terminations, lay offs, death, medical sickness etc.

Historical Development of Human Resource Management STAGE I: Pre Industrial Era (1400 A.D. to 1700 A.D.) Absence of any formal HRM function. Cessation of feudalism Shifts from agriculture to mixed economy Growth of towns and villages

STAGE II: Industrial revolution and the Factory system (19th Century) Industrial relation in UK late 18th century, USA 19th century, India second half of 20th century Replacement of man by machine due to industrialization Factory system replaced the old cottage system Emergence of factory new class of workers and managers Delegation of authority & assignment of responsibilities Three systems of HRM were developed recruitment of workers, training of workers and control of workers but the basic philosophy of managing workers revolved around master-servant relationship

STAGE III: Trade Union Movement Era (Close to the 19th Century) Workers started to organize themselves based on their common interests to form workers associations/trade unions To safeguard themselves from long hours of work, poor working conditions, employment of child labor, wages, employee benefits etc. They started using such weapons as strikes, slowdowns, walkouts, boycotts etc for the acceptance of their demand

STAGE III: Social Responsibility Era (Beg. of the 20th Century) Factory owners started adopting a more humanistic and paternalistic approach towards workers.

STAGE IV: Scientific Management, Welfare Work (1900-1920) Scientific Management improves inefficiencies through reorganizations of production and rationalization of work. Scientific management principles relevant to management of workers are as follows: Job Analysis, Standardization, Scientific selection and training of workers, Financial incentives, Mental revolution Welfare work improve labor problem by working conditions Industrial Psychology application of psychological principle for improving working conditions

STAGE V: Human Relation/Industrial psychology Era (1930-1950) Early focus of HRM was on increasing human relations The emphasis was on increasing productivity through discovering the need of workers Under this approach the manager become responsible for integrating employees into the work situation that would motivate them The concept of social system, informal organization, group influence and non-logical behavior entered the field of management of personnel

STAGE VII: Behavioral Science Era (1950-60) Behavioral scientists have been goal and efficiency oriented and consider understanding of human behavior to be the major means to the ends. Major contributions of the behavioral scientists are in the areas of motivation, leadership, communication, organizational change and development, group dynamics.

STAGE VIII: Systems and Contingency Approach Era (1960 onwards) Management action is contingent on action outside the system or subsystem as the case may be. Organizational action should be based on the behavior of action outside the system so that the organization is integrated with the environment. Because of the specific organization-environment relationship, no action can be universal. It varies from situation to situation.

STAGE IX: Human Resource Management Era (1980 onwards) - Industrial relations department came into existence Personnel management to human resource management