UNIT-I

HUMAN RESOURCE MANAGEMENT

Unit-1 Syllabus

1. Human Resource Management Evolution of HRM

2. Meaning, Objectives, Scope, and importance of HRM
3. Human resource policies
4. Industry models of HRM: IT, Manufacturing and Project based industries
5. The role of a HR-Manager, skills and competencies
6. Functions of HRM

1- Human Resource Management Evolution of HRM

Evolution OF HRM: The evolution of the concept of Human Resource Management is presented
below:

Period before industrial revolution – The society was primarily an agriculture economy with
limited production. Number of specialized crafts was limited and was usually carried out within
a village or community with apprentices assisting the master craftsmen. Communication
channel were limited.

Period of industrial revolution (1750 to 1850) – Industrial revolution marked the conversion of
economy from agriculture based to industry based. Modernization and increased means if
communication gave way to industrial setup. A department was set up to look into workers’
wages, welfare and other related issues. This led to emergence of personnel management with
the major task as:

1. Worker’s wages and salaries

2. Worker’s record maintenance
3. Worker’s housing facilities and health care
An important event in industrial revolution was growth of Labour Union (1790) – The works
working in the industries or factories were subjected to long working hours and very less
wages. With growing unrest , workers across the world started protest and this led to the
establishment of Labor unions. To deal with labor issues at one end and management at the
other Personnel Management department had to be capable of politics and diplomacy, thus the
industrial relation department emerged.

Post Industrial revolution – The term Human resource Management saw a major evolution
after 1850. Various studies were released and many experiments were conducted during this
period which gave HRM altogether a new meaning and importance. A brief overview of major
theories release during this period is presented below:
Frederick W. Taylor gave principles of scientific management (1857 o 1911) led to the evolution
of scientific human resource management approach which was involved in.

1. Worker’s training
2. Maintaining wage uniformity
3. Focus on attaining better productivity
Hawthorne studies, conducted by Elton Mayo & Fritz Roethlisberger (1927 to 1940).
Observations and findings of Hawthrone experiment shifted the focus of Human resource from
increasing worker’s productivity to increasing worker’s efficiency through greater work
satisfaction.
Douglas McGregor Theory X and Theory Y (1960) and Abraham Maslow’s Hierarchy of needs (
1954) – These studies and observations led to the transition from the administrative and
passive Personnel Management approach to a more dynamic Human Resource Management
approach which considered workers as a valuable resource. As a result of these principles and
studies, Human resource management became increasingly line management function, linked
to core business operations. Some of the major activities of HR department are listed as.

1. Recruitment and selection of skilled workforce.

2. Motivation and employee benefits
3. Training and development of workforce
4. Performance related salaries and appraisals.
5. Strategic Human Resource Management Approach

With increase in technology and knowledge base industries and as a result of global
competition Human Resource Management is assuming more critical role today. Its major
accomplishment is aligning individual goals and objectives with corporate goals and
objectives. Strategic HRM focuses on actions that differentiate the organization from its
competitors and aims to make long term impact on the success of organization.
2- Meaning, Objectives, Scope, and importance of HRM:
Essentially, the Human Resource Management (HRM) is a management function that deals with
recruiting, selecting, training and developing human resource in an organization. It is concerned
with the “people” dimension in management. It includes activities focusing on the effective use
of human resources in an organization. It is concerned with the development of a highly
motivated and smooth functioning workforce. It also includes planning, acquire

According to Edwin B. Flippo, “Human resource management is the planning, organizing,

directing, and controlling of the procurement, development, compensation, integration,
maintenance and separation of human resources to the end that individual, organizational and
societal objectives are accomplished.”

The Indian Institute of Personnel Management defines HRM as, “Human resource management
is a responsibility of all those who manage people as well as being a description of the work of
those who are employed as specialists. It is that part of management which is concerned with
people at work and with their relationships within an enterprise. It applies not only to industry
and commerce but to all fields of employment.

Objectives:

1. To help the organization to reach its goals.

2. To ensure effective utilization and maximum development of human resources.
3. To ensure respect for human beings, identify and satisfy the needs of individuals.
4. To achieve and maintain high morale among employees.
5. To provide the organization with well-trained and well-motivated employees.
6. To develop and maintain a quality of work life
7. To enhance employee’s capabilities to perform the present job.

Personal objectives: Personal objectives help workers in attaining their personal goals,
at least insofar since these objectives boost the individual’s contribution to the
organization. Personal objectives of workers should be met if they’re to be maintained,
retained and motivated. Otherwise, staff performance and satisfaction might drop
giving rise to employee turnover.

Functional Objectives: Functional objectives attempt to maintain the department’s

contribution at a level suitable for the organization’s requirements. Human resources
need to be adjusted to match the organization’s demands. The department’s level of
service should be customized to suit the business it assists.

Societal Objectives: The societal objectives are socially and ethically accountable for the
requirements and difficulties of society. In the process, they need to reduce the adverse
impact of such demands on the business. The failure of companies to utilize their
resources for society’s gain in ethical ways can result in restrictions. For instance, the
society may restrict human resource decisions to laws which enforce reservation in
employing and laws which deal with discrimination, safety or other such aspects of
societal concern.
Scope of HRM:

The scope of Human Resource Management refers to all the activities that come under
the banner of Human Resource Management. These activities are as follows.

1. Human resources planning: - Human resource planning or Human Resource Planning

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 Human Resource Management is job
analysis. Job analysis gives a detailed explanation about each and every job in the
company.
3. Recruitment and selection: - Based on information collected from job analysis the
company prepares advertisements and publishes them in the newspapers. 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 Human Resource
Management.
4. Orientation and induction: - Once the employees have been selected an induction or
orientation program is conducted. This is another important area of Human Resource
Management. 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 where 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 Human Resource 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 Human Resource 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 Human Resource 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 Human Resource Management 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.
Importance of HRM

Human Resource Management is related with effective utilization of human resources.

Importance concerned organization:

 Human Resource Management can help an organization to achieve to its objective
more efficiently and effectively in the following ways.
 Procurement of required talents through recruitment, selection, placement,
inducting, training, compensation and promotion policies.
 Secures co-operation of all employee of the organization for achieving goals.
 Proper utilization of human resources for the success of the enterprise.

Professional Importance:
Professional competency among employees can be achieved through the following
ways.
 Human resource management provides maximum opportunities to employees for
their Personnel development.
 Providing healthy relationship among employees
 Proper allocation of work among employees.
 Providing training facilities for the individual development of employees.

Social Importance:

HRM is important in social perspective also. It includes the following aspects:

 Human resource management enhances the dignity of labor.
 Provides suitable job to suitable person and it will help to satisfy the psychological and
social satisfaction of employees.
 Helps to provide reasonable compensation to workers, which leads them to have a good
standard of living. Effective management of human resources will speed up the
economic growth of nation. This in turn leads to better standard of living and more job
opportunities.

3- HRM Policies:

1. Identify the need

2. Develop strategies
3. Prepare a policy document
4. Implementation
5. Monitor and evaluate
4- HRM models

THE FOMBRUN MODEL

The Fombrun model: Being the first model (dates back to 1984), this emphasizes just four
functions and their interrelatedness. The four functions are: selection, appraisal, development
and rewards. These four constituent components of human resource management and are
expected to contribute to organizational effectiveness. The Fombrun model is incomplete as it
focuses on only four functions of HRM and ignores all environmental and contingency factors
that impact HR functions.

HARVARD MODEL

The Harvard model claims to be comprehensive in as much as it seeks to comprise six critical
components of HRM. The dimensions included in the model are: stakeholders, interests,
situational factors, HRM policy choices, HR outcomes, long-term consequences and a feedback
loop through. The outputs flow directly into the organization and the stakeholders.
 DAVID GUEST

Model was developed by David Guest in 1997 and claims to be much superior to other models.
This model claims that the HR manager has specific strategies to begin with, which demand
certain practices and when executed, will result in outcomes. These outcomes include
behavioral, performance related and financial rewards. The model emphasizes the logical
sequence of six components: HR strategy, HR practices, HR outcomes, behavioral outcomes,
performance results and financial consequences. Looking inversely, financial results depend on
employee performance, which in turn is the result of action oriented employee behaviors.
Behavioral outcomes are the result of employee commitment, quality and flexibility, which, in
turn are impacted by HR practices. HR practices need to be in tune with HR strategies which are
invariably aligned with organizational strategies.
 Warwick Model

This model was developed by two researchers, Hendry and Pettigrew of University of Warwick
(hence the name Warwick model). Like other human resource management models, the
Warwick proposition centers around five elements

 Outer context (macro environmental forces)

 Inner context (firm specific or micro environmental forces)
 Business strategy content
 HRM context
 HRM content

The Warwick model takes cognisance of business strategy and HR practices (as in the Guest
model), the external and internal context (unlike the Guest model) in which these activities take
place, and the process by which such changes take place, including interactions between
changes in both context and content. The strength of the model is that it identifies and
classifies important environmental influences on HRM. It maps the connection between the
external and environmental factors and explores how human resource management adapts to
changes in the context. Obviously, those organizations achieving an alignment between the
external and internal contexts will achieve performance and growth.
5- Role of HR:

Recruitment: This is the one function which is hand in glove with HR. Recruitment has been
one of the major responsibilities of the HR team. It is the job of HR personnel to plan and
devise strategic campaigns and guidelines for recruiting suitable candidates for a required job
description. They also have to serve as a mediator between the employer and the candidate
and communicate company policies and terms of the contract to the candidate before he is
hired. This is the first pillar of HR management that every HR manager starts with. It’s probably
one of the most important aspects of any HR professional’s career. The recruitment function
comprises 2 main objectives:
 Attract Talent: Attracting talent starts with first planning the requirement of manpower
in the organization. Gauging needs of the organization’s human resource requirements,
and accordingly putting a plan of action to fulfill those needs with placement of
“talented professionals”. That’s followed by creating an “employer brand” which will be
representative of the organization’s good image and portray an attractive impression in
the minds of potential candidates.
 Hire Resources: This is where the recruitment strategies are put in action. In the current
age, there’s ton of competition vying for the attention of the best talent in the market.
The HR manager needs to run all possible engines to go out there in the market and find
that one suitable gem.
Training: Not all is done once you’ve recruited a suitable candidate for the job. Many
organizations perform tasks a tad differently. Training employee is important to help the new
hires get acquainted with the organization’s work pattern. It is imperative for the HR
department to incorporate a training program for every new employee based on the skill set
required for their job. It will further also contribute towards employee motivation and
retention.
Professional Development: Closely related to training, developing your employees
professionally is an added bonus for the employee as well as the organization. Enrolling the
employee to attend conferences, trade shows, seminars etc. that may be in his personal
interest will make the employee feel cared-for and a vital part of the organization, thus
increasing employee engagement. It will be beneficial to the organization by way of the
employee’s added skill set.
Appraisals: Since HRM is a body meant for the employees, carrying out timely performance
appraisals is a given. Performance appraisals help in employee motivation by encouraging them
to work to their fullest potential. It also enables to give them feedback on their work and
suggest necessary measures for the same. This helps employees to have a clear view of what is
expected of them and what they are delivering. They can thus, work better towards improving
their performance and achieving targets.
Maintaining Work Culture : It is the duty of the HR to maintain a healthy, safe, and fun work
environment to ensure a level of comfort amongst the employees and eliminate any stressful or
awkward atmosphere that may hinder the performance of the staff. It is vital to have an
efficient work atmosphere, because an individual’s performance a largely dependent on the
surrounding he’s working in.
Conflicts: Where different people have different views, conflicts are almost inevitable. Whether
the dispute is amongst two or more employees or between the employee and the
management, an HR manager has the right to intervene and help map out a solution.
Employee Relations : The Human Resources is called so because its major responsibility is
dealing with the human part of the organization and this involves having great interpersonal
skills. An HR manager who sits in the office all day will not turn out to be good at building
connections with the employees and thus fail to serve the purpose of being an HR head. As an
HR person, employees should feel comfortable coming up to you with their problems and for
that, it is important that the HR team builds a good public image within the organization.
Rewards and Incentives :Rewarding the employees for a work well done imparts motivation
and at the same time induces a desire to excel at tasks in hope of obtaining rewards. It serves
as bait for inculcating a healthy competitive environment amongst employees to achieve
targets and meet deadlines. A reward need not be materialistic always. It could just be a word
of appreciation in front of all coworkers for a menial task done with complete honesty.
Legal Knowledge : This may seem the least glamorous of all, but is an important aspect of the
HRM. An HR manager should always be in compliance with the law. Whether it’s drafting new
policies or writing terms of a contract, it is the HR department’s job to build guidelines keeping
the laws in mind. This ensures an organization’s continued growth and existence. While drafting
policies, the HR should always ensure to be at an upper hand legally and keep the
organization’s practices in tune with the labor laws, tax laws, permissible working hours,
minimum wages, and a no-discrimination policy.
Management: Management is the most important job of an HR manager. It is what defines a
good HR manager. Management extends right from managing employees to managing the
employers and the whole HR department as well.
Payroll Management Once all the attendance monitoring, leave tracking, clock in/outs etc. is
tracked and monitored, it’s time for the most important aspect–calculating the payroll. Efficient
calculation of salaries, wage-cuts, reimbursements, and generation of pay slips amounts to the
role of HR managers in payroll management.
Competencies and Skills of HRM:
Multi-tasking: The HR managers are ones who deal with intermittent leave questions, personal
issues of employees, a recruitment task for a tough position, and more. An HR manager is not
one who deals a single aspect but many as the business moves fast and priorities also pace at
the same time. Hence the main skill for human resource management is the multitasking
capability to handle many tasks at a single time.
Recruitment and hiring: In order to be an effective hiring manager it is necessary to possess
strong interpersonal skills as well as decision making skills. Since they are to deal with the
interview process and hiring, the human resource leaders should be able to communicate in an
effective manner and present the company also, and they should also be organized. There is a
tone set up for the complete HR process which is the HR manager whom the candidate meets
initially. Along with this, face-to-face skills are ones that influence top talent; the HR managers
should possess the skill where they are able to identify best practice process, so that competing
candidates can be evaluated.
Communication skills: The HR managers are ones who are able to express by ways of
communication in a clear manner and also in writing. There needs to be good communication
skill for HRM as the memos posted, policy handbooks, and posted information and more are
examples of their creation. One-to-one speaking or speaking to a large number of audiences is
another skill which HR managers require. The capability to listen with empathy is another skill
which an HR manager must require. The HR managers should possess the capability to clearly
understand the problems that has occurred before they could handle them, as they deal with a
number of issues on and off the job.
Negotiation: This is one another important skill that an HR manager needs to develop. He must
be successful enough and possess the capability to negotiate. At times when offer for an
employment is extended for an employee, negotiation also rolls out and has two varied sides. It
is only that a strong HR person would be the one who can work for both sides and conclude
with a solution which makes everyone involved quite happy.
Problem-solving and conflict management: Problem-solving as a combination is another skill
which is necessary for HR managers. It is a true fact that not all employees in an organization go
well with their co-workers or managers and hence there would be more chances for managing
conflicts and solving problems. It is the duty of a capable and effective HR manager to make
sure that employees work together in civil manner and this in turn leads to quick working
situation with quality output.
Compensation and benefits: An effective compensation system and benefit structures must be
developed by the HR professionals as they get along and work with the management. In order
to obtain new talents and retain them in the organization, compensation and benefits must be
framed in the right way. In order to assess the overall package as per the industry norms and
also to present insights to the managers, the employees should possess negotiation, analytical
and problem solving skills.
Performance evaluation: The needs of management and employees are balanced by the HR
managers and they are able to win trust from all concerns. The process of implementing
performance improvement process is challenging but is considered as a rewarding role for
human resources as they assist in ongoing professional development. When the evaluation is
done in a productive manner, developments are framed in a positive manner with assessment
skills and versatile communication. The human resources program is one which teaches about
conflict management skills and also understanding of the problem from both sides.
Training and development: Another important asset for a human resource management is the
training and development aspects. The HR managers should possess the programs which would
be one that solves human performance aspects and also reap good benefits to the organization.
To produce tangible results for the organization, the HR department should possess
presentation abilities, instructional design skills, and best training programs.
Deal with grey: The HR management must possess the capability to act with incomplete or also
best available information. They also need to have the knowledge as when to seek the help of
experts, professionals and colleagues.
Ethical and discrete: The main consciences of any organization are the HR managers and they
are also said to be the keepers of confidential information. The HR department is one that deals
with the top level of management and must follow and make sure that the regulations and
policies are followed in the right manner.
Change management: Flux is the state for almost all organizations. Matrices, task forces, teams
are used to perform their duties and also disperse as other forms. There are many hierarchies
that has squashed and there are about four or five generations which work. With the present
scenario, a number of people have been freaked out. All these changes have to be coped with
the HR and hence change management is a necessary skill.
Business insight: The human resource management has objectives, goals, budgets and people
to manage. The functioning of the human resource management in the organization along with
its strategic plans must be well understood by the HR management. They also require having a
good understanding of how other departments work and their performance measurement. The
HR management must also possess skills about contribution to the organizations like training,
development, staffing and other departments under their influence and control.
Fairness: There should be fairness demonstrated from the HR management towards all
employees. This intends that there should be a clear communication, the voices of people must
be heard and that all the policies are followed. The HR management must also make sure that
respect and privacy is also maintained.
Dedication: The main skill the HR management needs to possess is to assist, coach and develop
the employees. The main intention of the HR management should be remediation, continued
improvement and innovation. The HR professionals are also to make use of technology and
update themselves so that the HR function is improved.
Strategic orientation: It is the forward thinking professionals in the HR management who takes
responsibility for leadership role and also assist the management’s strategic way. There are few
skillsets which directs to business growth which include monitoring and filling the labor needs
of the organization, bringing in new skill sets for business growth, and revision of compensation
outlines.
Team orientation: The organizations have hierarchies which are headed with supervisors which
is mandatory for HR management. The HR managers should be ones who are able to
understand the team dynamics and work in order to bring in disparate individuals and develop
team work.
6- HRM functions: