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UNIT – I

Human Resource Management – Significance and Scope – Objectives and Functions –


Personnel Management Vs HRM – Global Human Resource Management – Strategic Human
Resource Management

Introduction

Human resources may be defined as the total knowledge, skills, creative abilities, talents
and aptitudes of an organization’s workforce, as well as the values, attitudes, approaches
and beliefs of the individuals involved in the affairs of the organization. It is the sum total
or aggregate of inherent abilities, acquired knowledge and skills represented by the talents
and aptitudes of the persons employed in the organization.
Human resources are multi dimensional in nature. From the national point of view,
human resources may be defined as the knowledge, skills, creative abilities, talents and
aptitudes obtained in the population; whereas from the view point of the individual
enterprise, they represent the total of the inherent abilities, acquired knowledge and skills
as exemplified in the talents and aptitudes of its employees.
Human Resource Management: Nature, Scope and objectives
Human Resource Management is a process of bringing people and organizations together
so that the goals of each are met. The various features of HRM include:
● It is pervasive in nature as it is present in all enterprises.

● Its focus is on results rather than on rules.

● It tries to help employees develop their potential fully.

● It encourages employees to give their best to the organization.

● It is all about people at work, both as individuals and groups.

● It tries to put people on assigned jobs in order to produce good results.

● It helps an organization meet its goals in the future by providing for competent and
well-motivated employees.

● It tries to build and maintain cordial relations between people working at various levels
in the organization.

● It is a multi-disciplinary activity, utilizing knowledge and inputs drawn from psychology,


economics, etc.

Human Resource Management: Scope


The scope of HRM is very wide:
1. Personnel aspect-This is concerned with manpower planning, recruitment, selection,
placement, transfer, promotion, training and development, layoff and retrenchment,
remuneration, incentives, productivity etc.

2. Welfare aspect-It deals with working conditions and amenities such as canteens, crèche,
rest and lunch rooms, housing, transport, medical assistance, education, health and
safety, recreation facilities, etc.

3. Industrial relations aspect-This covers union-management relations, joint consultation,


collective bargaining, grievance and disciplinary procedures, settlement of disputes, etc.

Functions of HRM:

☆ Operative Functions
1. Recruitment: This is the most challenging task for any HR manager. A lot of attention
and resources are required to draw, employ and hold the prospective employees. A lot
of elements go into this function of recruitment, like developing a job description,
publishing the job posting, sourcing the prospective candidates, interviewing, salary
negotiations and making the job offer.
2. Training and Development: On the job training is the responsibility of the HR
department. Fresher training may also be provided by some companies for both new
hires and existing employees. This Fresher training is mainly done to make the
employees up to date in their respective areas as required by the company. This
function makes the employees understand the process and makes it easy for them to
get on their jobs with much ease. During the process of the training and development,
the results are monitored and measured to find out if the employees require any new
skills in addition to what he/she has.
3. Professional Development: This is a very important function of Human Resource
Management. This function helps the employees with opportunity for growth,
education, and management training. The organization undertakes to sponsor their
employees for various seminars, trade shows, and corporal responsibilities. This, in
turn, makes the employees feel that they have been taken care by their superiors and
also the organization.
4. Compensation and Benefits: A company can attain its goals and objectives if it can
acclimatize to new ways of providing benefits to the employees. Some of the benefits
given by companies are listed below for our understanding:
1. Working hour flexibility
2. Extended vacation
3. Dental/Medical Insurance
4. Maternal/Paternal Leave
5. Education Reimbursement for children
5. Performance Appraisal: The employees of any organization will be evaluated by the
HR department as per the performance. This function of Human Resource
Management is to help the organization in finding out if the employee they have hired
is moving towards the goals and objectives of the organization. On the other hand, it
also helps the company to evaluate whether the employees needs improvement in
other areas. It also helps the HR team in drawing certain development plans for those
employees who have not met the minimal requirements of the job.
6. Ensuring Legal Compliance: To protect the organization this function plays a crucial
role. The HR department of every organization should be aware of all the laws and
policies that relate to employment, working conditions, working hours, overtime,
minimum wage, tax allowances etc. Compliance with such laws is very much required
for the existence of an organization.

☆ Managerial Functions
1. Planning: This function is very vital to set goals and objectives of an organization. The
policies and procedures are laid down to achieve these goals. When it comes to
planning the first thing is to foresee vacancies, set the job requirements and decide the
recruitment sources. For every job group, a demand and supply forecast is to be made,
this requires an HR manager to be aware of both job market and strategic goals of the
company. Shortage versus the excess of employees for that given job category is
determined for a given period. In the end, a plan is ascertained to eliminate this
shortage of employees.
2. Organizing: The next major managerial function is to develop and design the structure
of the organization. It fundamentally includes the following:
1. Employees are grouped into positions or activities they will be performing.
2. Allocate different functions to different persons.
3. Delegate authority as per the tasks and responsibilities that are assigned.
3. Directing: This function is preordained to inspire and direct the employees to achieve
the goals. This can be attained by having in place a proper planning of career of
employees, various motivational methods and having friendly relations with the
manpower. This is a great challenge to any HR manager of an organization; he/she
should have the capability of finding employee needs and ways to satisfy them.
Motivation will be a continuous process here as new needs may come forward as the
old ones get fulfilled.
4. Controlling: This is concerned with the apprehension of activities as per plans, which
was formulated on the basis of goals of the company. The controlling function ends the
cycle and again prompts for planning. Here the HR Manager makes an examination of
outcome achieved with the standards that were set in the planning stage to see if there
are any deviations from the set standards. Hence any deviation can be corrected on the
next cycle.

☆ Advisory Functions
1. Top Management Advice: HR Manager is a specialist in Human Resource
Management functions. She/he can advise the top management in formulating policies
and procedures. He/she can also recommend the top management for the appraisal of
manpower which they feel apt. This function also involves advice regarding
maintaining high-quality human relations and far above the ground employee morale.
2. Departmental Head advice: Under this function, he/she advises the heads of various
departments on policies related to job design, job description, recruitment, selection,
appraisals.

Personnel Management Vs HRM

Personnel management focuses on administrating people. On the contrary, the prime focus
of Human Resources Development is to build a dynamic culture.

1. Personnel management deals with employees, their payroll and employment laws. On
the other hand, Human Resources Management deals with the management of the work
force, and contributes to an organization’s success.

2. HRM basically deals with developing personnel management skills. It is Human


Resources Management that develops a team of employees for an organization.

3. While Personnel management is considered to be reactive, Human Resources


Management is stated to be proactive.

4. Personnel management focuses on administrating people or employees. On the other


hand, the prime focus of Human Resources Development is to build a dynamic culture.

5. Personnel management is independent from an organization. On the contrary, Human


Resources Management forms an integral part of a company or an organization.

Global Human Resource Management


With the advent of globalization, organizations - big or small have ceased to be local, they
have become global! This has increased the workforce diversity and cultural sensitivities
have emerged like never before. All this led to the development of Global Human Resource
Management.

Even those organizations who consider themselves immune to transactions across


geographical boundaries are connected to the wider network globally. They are in one way
or the other dependent upon organizations that may even not have heard about. There is
interdependence between organizations in various areas and functions.

The preliminary function of global Human Resource Management is that the


organization carries a local appeal in the host country despite maintaining an
international feel. To exemplify, any multinational / international company would not like
to be called as local, however the same wants a domestic touch in the host country and
there lies the challenge.

We may therefore, enumerate the objectives of global HRM as follows:

1. Create a local appeal without compromising upon the global identity.


2. Generating awareness of cross cultural sensitivities among managers globally and
hiring of staff across geographic boundaries.
3. Training upon cultures and sensitivities of the host country.

The strategic role of Human resources Management in such a scenario is to ensure that
HRM policies are in tandem with and in support of the firm’s strategy, structure and
controls. Specifically, when we talk of structures and controls the following become worth
mentioning in the context of Global HRM.

▪ Decision Making: There is a certain degree of centralization of operating decision


making. Compare this to the International strategy, the core competencies are
centralized and the rest are decentralized.
▪ Co-ordination: A high degree of coordination is required in wake of the cross
cultural sensitivities. There is in addition also a high need for cultural control.
▪ Integrating Mechanisms: Many integrating mechanisms operate simultaneously.

Global HRM and the Staffing Policy

Here also the role is no different i.e. hiring individuals with requisite skills to do a
particular job. The challenge here is developing tools to promote a corporate culture that is
almost the same everywhere except that the local sensitivities are taken care of.

Also, the deciding upon the top management or key positions gets very tricky. Whether to
choose a local from the host country for a key position or deploy one from the
headquarters assumes importance; and finally whether or not to have a uniform hiring
policy globally remains a big challenge.
Nevertheless an organization can choose to hire according to any of the staffing policies
mentioned below:

▪ Ethnocentric: Here the Key management positions are filled by the parent country
individuals.
▪ Polycentric: In polycentric staffing policy the host country nationals manage
subsidiaries whereas the headquarter positions are held by the parent company
nationals.
▪ Geocentric: In this staffing policy the best and the most competent individuals hold
key positions irrespective of the nationalities.

Geocentric staffing policy it seems is the best when it comes to Global HRM. The
human resources are deployed productively and it also helps build a strong cultural
and informal management network. The flip side is that human resources become a
bit expensive when hired on a geocentric basis. Besides the national immigration
policies may limit implementation.

Global HRM therefore is a very challenging front in HRM. If one is able to strike the
right chord in designing structures and controls, the job is half done. Subsidiaries are
held together by global HRM, different subsidiaries can function operate coherently only
when it is enabled by efficient structures and controls.

Strategic Human Resource Management

In this competitive world, as the competition is increasing every day, thus, the
organizations are focusing on the human resource programs which are centered on long
term goals. The primary goal of human resource management is to focus on increasing the
productivity of the employees by focusing on the external as well as internal obstacles.
SHRM not only emphasizes on achieving the organizational goals where as it also gives
importance to the all around development of its manpower. This can be done by providing
training and development, taking their contribution in the decisions, by management
games etc. This will ultimately make them feel stick with the organization and hence, they
give their best in order to enhance the productivity of the organization.

In SHRM, Human Resource Managers play a major role as they identify the key HR areas
where these strategies can be implemented in the long run. It also emphasizes on the
communication between HR and top management so that the management can know about
the needs of its employees and work on motivating its employees.
Features of Strategic Human Resource Management

The key features of SHRM are as follows:-

● There is a relation between HR policies and practices and the overall goals of the
organization.
● It gives importance to HR interventions so that the problems and disputes arising
within the organization can be easily sort out.
● Many of the responsibility of the top management are devolved down the line.
Approaches of SHRM

SHRM involves the following two approaches:-

● It emphasizes HR activities with the competency based performance activities.


● It emphasizes on linking HR activities with bringing profit to the organization.
Benefits of SHRM

● It helps in finding the threats and opportunities of the organization which can bring
success to the organization.
● It helps in building a clear business strategy.
● It emphasizes on employee recruitment, retention and motivating them.
● To have a close eye on the performance of the employees and provide training and
development to them
● To attain high productivity
● To meet the expectations of customers effectively