CHAPTER-1

CONCEPT OF HUMAN RESOURCE MANAGEMENT

BBS 2ND YEAR PREPARED BY: BIBEK KHADGI

CONCEPT OF HRM
Human resource management is an essential and vital management function which is focused on people dimension of an organization Humans are also crucial resources like land, capital and technology in absence of which all other resources may be useless Human resources are vital for achieving organizational objectives and better managed human resources achieve better results. So, human resource management is the function of managing the human energy and competencies i.e. their Knowledge, Skills, Attitudes and Potential.

Concept Contd
According to DeCenzo and Robbins Human resource management is comprised of the acquisition, development, motivation and maintenance functions. Thus, HRM (Human Resource Management) can be defined as the set of policies and practices concerned with managing the human energies and competencies for achieving the organizational objectives through proper acquisition, development, utilization and maintenance of peoples of an organization.

CHARACTRISTICS OR NATURE OF HRM

Human Focus It regards peoples as the vital resources and is focused towards several aspects of peoples. It emphasize on human energies and competencies and develop them Management Function Human resource is need of all organization So, all organization needs to manage its human resources or employees It is the staffing function of the management

Characteristics Contd..
Pervasive Function Human resource management should be emphasized by all managers but not only the HR managers In addition, HRM is needed for all employees i.e. from higher level to lower level employees The HRM responsibilities cannot be delegated to single person Continuous Commitment It is not one time and one shot activity HRM needs to be carried out till the organization exists It is concerned with present as well as future

 Dynamic HRM should change with time and business environment It should adapt to political, legal, socio-cultural, economic, technological and global environment changes System HRM follows the acquisition, development, utilization and maintenance Such functions needs to be carried out systematically and sequentially Mutually Oriented HRM promotes the mutual interest of employers and employees Such interests may be objectives, influence, respect, rewards and responsibilities etc.

Characteristics Contd

OBJECTIVES OF HRM
Goal Achievement Personal Goals: HRM helps employees to achieve their personal goals like financial soundness, compensation, development, career advancement etc. It ensures integration of personal with organizational goals HRM Goals: HRM ensures proper, timely and effective acquisition, development, utilization and maintenance of capable employees Organizational goals: HRM ensures better employees in organization which helps achieve the organizational goals such as profit, survival, growth, quality, industrial peace etc. Societal Goals: In way of achieving organizational objectives, HRM focuses in welfare of the employees, creates employment opportunities which is social responsibilities.

 Goal Harmony: Effective HRM ensures the clear understanding of the mutual goals of an organization and individual employee. Mutual understanding makes it easy to work out on those goals which are readily achieved. So, HRM creates goal harmony.
Structure Maintenance: While organization manages its human resource, it defines the organization structure and positions of the employees in various tasks and jobs. Productivity Improvement: HRM focuses on developing the employee competencies, motivating them and rewarding them based on their performance. In addition, HRM oversees the welfare, safety and quality of life of the employees. It makes the employee competent, satisfied and committed that helps in improving the productivity.

 Efficiency Promotion: Since HRM develops the competencies and makes proper utilization of HR, it cuts the cost for the organization. Cost cuts promotes efficiency in jobs. Reduce the wastes.
Change Management: Generally, employees have tendency to resist the changes. To prepare them adopt the changes, HRM plays vital role. HRM provisions for training and employee development which brings readiness to change in employees. Quality of Work Life: HRM considers the employees as the valuable resources. HRM emphasize on the welfare and development of the employees. Employees become satisfied and motivated. Their goals are achieved and quality of work life is improved.

Functions of HRM (Components)

HRM is not one time activity. It lasts till the organization exists right from the entry of the employees to exit. HRM intends to acquire competent employees, develop them, use them properly in obtaining organizational goals and retaining them in organization.

The major functions or components of the HRM are as follows: Acquisition Development Utilization Maintenance

 Acquisition: It is concerned with staffing the organization that ensures right number of right kind of employees at right time in right job. Followings are the important steps of acquisition function: Human resource planning: Predetermines the future need of human resource Job Analysis: It is formal and in depth study of jobs, its requirements and determines qualification and skills for various jobs. Recruitment: Preparing the pool of qualified candidates from which the final employees are to be selected. Selection: It is the process of choosing the qualified and right candidates among the recruits. Socialization: Preparing the employees to understand the job environment and the organizational culture.

 Development: HRM focuses on developing the competencies of individual employees so that they can perform the designated tasks better. Followings are the steps in development function of human resource management: Analyzing Developmental Needs: Identifying the future needs of human resource and their growth potential. Employees needs to be developed in order to delegate higher responsibilities. Employee Training: Training should focus on developing the job oriented skills required to perform present tasks. It can be on the job and off the job. Management Development: It targets to enhance the managerial capacities in higher level employees. Useful for succession planning. Career Development: Understanding the career goal of employees and making a path to reach that career goal.

 Utilization: Like any other resources, the human resources should also be utilized productively for better performance and increased productivity. Human resources can be utilized efficiently through: Motivation: Motivated employees put their best efforts while doing their jobs. Performance Appraisal: Employee performance can be evaluated whether or not it meets the standard performance. Performance appraisal helps in finding out the actual performance which can be used to utilized the employees in better way. Compensation Management: Effective utilization involves the lowest cost and fair compensation structure for employees. Compensation packages includes money, promotion, benefits and services.

 Maintenance: It is concerned with retention of the competent and skillful employees in the organization. It is ensured that employees are loyal and committed to the organization. Maintenance function can be carried out by following means: Employee Discipline: Employee adheres to the rules and regulations of the organization. There is less risk of disciplinary problems. Labor Relations: Organization tries to maintain the harmonious labor relations between employees, management and unions. For this organization treats all the employees fairly and equally. Employee welfare: Employee health, safety, sports, recreation and other facilities are promoted.

Human Resource Management System

Human resource management has system characteristics that consists of input-processing-output and feedback components. HRM operates within internal and external environment HRM system provides framework for integrating the various components within the HRM system. HRM system entails that Human Resource Management should not be a haphazard and unstandardized procedure rather it should follow the certain standard steps making a integrated system.

Human Resource Management System

Inputs of HRM System Organizational plan, HR plan, competencies, human energy and abilities, human resource inventory and information, job analysis, labor market etc. works as the input for HRM system. All of these inputs for HRM system makes the organization able to execute various HRM functions effectively. Processing of HRM System The inputs of HRM system are processed by the organization in carrying out various functions of HRM. Such functions are acquisition, development, utilization and maintenance of the employees.

 Outputs of HRM System The outputs of the HRM system are categorized into two major forms. Goals achievement, Quality of work life, Productivity, Profits, Readiness for change etc. are organization related outputs. In other hand, Commitment, Competence, Congruence, Cost effectiveness are employee related output.
Feedback of HRM System Feedback system of HRM provides in formation whether the outcome from the HRM system is actually meeting the standard and desired goals are achieved. If not, it assess the problems that exist in the inputs and processing of the HRM system. It resembles the control system of HRM.

HRM Outcomes
Quality of Work Life Quality of work life is the relationship between the employees and total job environment. It is employees perception of physical and psychological well being at work. Quality of work life can be ensured through autonomy in jobs, recognition, rewards, belongingness of the organization etc. These factors encourages freedom, decision making power, higher responsibilities and reputation etc. so that quality of work life improves. Quality of work life is represented by equity in compensation, safe and healthy working environment, development of human capacities, social relevance and responsibilities and total life space.

 Productivity It is the efficiency relationship between the input and output or ratio of input to output.
Productivity increases due to various components like technology, innovation, learning, motivation and performance - reward linkage. Technology makes the production efficient while innovation develops new products. Likewise, motivation keeps the employees willing to work better.

 Readiness to Change Generally, employees have tendency to resists the change. They resist change due to fear of unknown, job security, habitual resistance, misunderstanding, poor communication, lack of involvement in decision making, vested interest and other social factors.
However, HRM ensures proper awareness, education and communication of change, its need, its process and other various aspects. In addition. Employees are involved in decision making. Key roles are given to employees and negotiation are carried out through labor unions and whole organization.

Challenges of HRM or Contemporary HRM Issues

HRM operates in dynamic i.e. ever changing environment. The environmental factors like Political-legal, Economic, Sociocultural, and Technological (PEST) affects the HRM and poses various challenges. So, organization need to review and restructure its HRM practices based on such changes in environment failing which may degrade the productivity of an organization. Some of the contemporary issues or challenges of the Human Resource Management are as follows:

 Globalization: Business organization are crossing the border of one country. Organization are present in different countries in search of new market, cheaper raw materials, labors etc. So, as the business are growing global, the HRM practices needs to be innovative to face such challenges. Complexity: Modern organizations are complex. They operate in various product and service ranges. Such a complex operation of business requires proper management of competent and committed human resource which is challenge for human resource managers. Technological Change: Technology is changing rapidly due to which employees are required to have skills on using the new technology. This poses HRM a challenge to avoid the skill deficiencies.

 Workforce Diversity: The composition of workforce is becoming very vague and diverse in terms of age, gender, skills, culture and ethnicity and others. Managing such numerous aspects of the human resources or employees is challenging tasks. Less Attached Employees: Employees tends to be freelancer and work independently. So, they are less attached to their jobs i.e. less loyal and committed to the organization. It creates higher turnover rates that increases the costs for the organization. New HRM Concerns: HR outsourcing has been increasing, social responsibility and total quality management has increase. New concerns like reservations, equal employment opportunity etc. brings difficulties in managing the Human resources.

 Management of Change: Due to tendency of resistance to change, it is tough task to manages the change in an organization. Organization needs to assure the employees that the change is for good and their unknown fear should be removed.
Learning Organizations: Todays organization are knowledgebased. Continuous learning and updating of knowledge is highly essential for organization. It is difficult to expand the employee capacity through continuous learning.

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