Introduction to HRM

Edwin Flippo defies 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 achieved.”

Features of HRM or characteristics or nature

1. HRM involves management functions like planning, organizing, directing and
controlling.
2. It involves procurement, development, maintenance of human resource
3. It helps to achieve individual, organizational and social objectives
4. HRM is a mighty disciplinary subject. It includes the study of management
psychology communication, economics and sociology.
5. It involves team spirit and team work.

Evolution of HRM
The evolution of HRM can be traced back to Kautilya Artha Shastra where he
recommends that government must take active interest in public and private
enterprise. He says that government must provide a proper procedure for
regulating employee and employee relation.
In the medieval times there were examples of kings like Allaudin Khilji who
regulated the market and charged fixed prices and provided fixed salaries to their
people. This was done to fight inflation and provide a decent standard of living
During the pre independence period of 1920 the trade union emerged. Many
authors who have given the history of HRM say that HRM started because of
trade union and the First World War.
The Royal commission in 1931 recommended the appointment of a labour
welfare officer to look into the grievances of workers. The factory act of 1942
made it compulsory to appoint a labour welfare officer if the factory had 500 or
more than 500 workers.
The international institute of personnel management and national institute of
labour management were set up to look into problems faced by workers to
provide solutions to them. The Second World War created awareness regarding
workers rights and 1940’s to 1960’s saw the introduction of new technology to
help workers.
The 1960’s extended the scope of human resource beyond welfare. Now it was a
combination of welfare, industrial relation, administration together it was called
personnel management.
With the second 5 year plan, heavy industries started and professional
management became important. In the 70’s the focus was on efficiency of labour
wile in the 80’s the focus was on new technology, making it necessary for new
rules and regulations. In the 90’s the emphasis was on human values and
development of people and with liberalization and changing type of working
people became more and more important there by leading to HRM which is an
advancement of personnel management.

Scope of HRM/functions 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 :-

Human resource planning or HRP 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 know 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.

Significance/importance/need of HRM
HRM becomes significant for business organization due to the following reasons.

1. Objective :-
HRM helps a company to achieve its objective from time to time by creating a
positive attitude among workers. Reducing wastage and making maximum use of
resources etc.
2. Facilitates professional growth :-
Due to proper HR policies employees are trained well and this makes them ready
for future promotions. Their talent can be utilized not only in the company in
which they are currently working but also in other companies which the
employees may join in the future.

3. Better relations between union and management :-

Healthy HRM practices can help the organization to maintain co-ordinal
relationship with the unions. Union members start realizing that the company is
also interested in the workers and will not go against them therefore chances of
going on strike are greatly reduced.

4. Helps an individual to work in a team/group :-

Effective HR practices teach individuals team work and adjustment. The
individuals are now very comfortable while working in team thus team work
improves.

5. Identifies person for the future :-

Since employees are constantly trained, they are ready to meet the job
requirements. The company is also able to identify potential employees who can
be promoted in the future for the top level jobs. Thus one of the advantages of
HRM is preparing people for the future.

6. Allocating the jobs to the right person :-

If proper recruitment and selection methods are followed, the company will be
able to select the right people for the right job. When this happens the number of
people leaving the job will reduce as the will be satisfied with their job leading to
decrease in labour turnover.

7. Improves the economy :-

Effective HR practices lead to higher profits and better performance by companies
due to this the company achieves a chance to enter into new business and start
new ventured thus industrial development increases and the economy improves.
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.

The human resources are multidimensional 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 viewpoint 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: Defined

Human Resource Management: Nature

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 multidisciplinary 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,
creches, 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.

Human Resource Management: Beliefs

The Human Resource Management philosophy is based on the following beliefs:
• Human resource is the most important asset in the organization and can be
developed and increased to an unlimited extent.
• A healthy climate with values of openness, enthusiasm, trust, mutuality and
collaboration is essential for developing human resource.
• HRM can be planned and monitored in ways that are beneficial both to the
individuals and the organization.
• Employees feel committed to their work and the organization, if the organization
perpetuates a feeling of belongingness.
• Employees feel highly motivated if the organization provides for satisfaction of
their basic and higher level needs.
• Employee commitment is increased with the opportunity to dis¬cover and use
one's capabilities and potential in one's work.
• It is every manager's responsibility to ensure the development and utilisation of
the capabilities of subordinates.

Human Resource Management: Objectives

• To help the organization reach its goals.

• To ensure effective utilization and maximum development of human resources.
• To ensure respect for human beings. To identify and satisfy the needs of
individuals.
• To ensure reconciliation of individual goals with those of the organization.
• To achieve and maintain high morale among employees.
• To provide the organization with well-trained and well-motivated employees.
• To increase to the fullest the employee's job satisfaction and self-actualization.
• To develop and maintain a quality of work life.
• To be ethically and socially responsive to the needs of society.
• To develop overall personality of each employee in its multidimensional aspect.
• To enhance employee's capabilities to perform the present job.
• To equip the employees with precision and clarity in trans¬action of business.
• To inculcate the sense of team spirit, team work and inter-team collaboration.

Human Resource Management: Functions

In order to achieve the above objectives, Human Resource Management undertakes
the following activities:
1. Human resource or manpower planning.
2. Recruitment, selection and placement of personnel.
3. Training and development of employees.
4. Appraisal of performance of employees.
5. Taking corrective steps such as transfer from one job to another.
6. Remuneration of employees.
7. Social security and welfare of employees.
8. Setting general and specific management policy for organizational relationship.
9. Collective bargaining, contract negotiation and grievance handling.
10. Staffing the organization.
11. Aiding in the self-development of employees at all levels.
12. Developing and maintaining motivation for workers by providing incentives.
13. Reviewing and auditing man¬power management in the organization
14. Potential Appraisal. Feedback Counseling.
15. Role Analysis for job occupants.
16. Job Rotation.
17. Quality Circle, Organization development and Quality of Working Life.

Human Resource Management: Major Influencing Factors

In the 21st century HRM will be influenced by following factors, which will work
as various issues affecting its strategy:
• Size of the workforce.
• Rising employees' expectations
• Drastic changes in the technology as well as Life-style changes.
• Composition of workforce. New skills required.
• Environmental challenges.
• Lean and mean organizations.
• Impact of new economic policy. Political ideology of the Govern¬ment.
• Downsizing and rightsizing of the organizations.
• Culture prevailing in the organization etc.

Human Resource Management: Futuristic Vision

On the basis of the various issues and challenges the following suggestions will be
of much help to the philosophy of HRM with regard to its futuristic vision:
1. There should be a properly defined recruitment policy in the organization that
should give its focus on professional aspect and merit based selection.
2. In every decision-making process there should be given proper weightage to the
aspect that employees are involved wherever possible. It will ultimately lead to
sense of team spirit, team-work and inter-team collaboration.
3. Opportunity and comprehensive framework should be provided for full
expression of employees' talents and manifest potentialities.
4. Networking skills of the organizations should be developed internally and
externally as well as horizontally and vertically.
5. For performance appraisal of the employee’s emphasis should be given to 360
degree feedback which is based on the review by superiors, peers, subordinates as
well as self-review.
6. 360 degree feedback will further lead to increased focus on customer services,
creating of highly involved workforce, decreased hierarchies, avoiding
discrimination and biases and identifying performance threshold.
7. More emphasis should be given to Total Quality Management. TQM will cover
all employees at all levels; it will conform to customer's needs and expectations; it
will ensure effective utilization of resources and will lead towards continuous
improvement in all spheres and activities of the organization.
8. There should be focus on job rotation so that vision and knowledge of the
employees are broadened as well as potentialities of the employees are increased
for future job prospects.
9. For proper utilization of manpower in the organization the concept of six sigma
of improving productivity should be intermingled in the HRM strategy.
10. The capacities of the employees should be assessed through potential appraisal
for performing new roles and responsibilities. It should not be confined to
organizational aspects only but the environmental changes of political, economic
and social considerations should also be taken into account.
11. The career of the employees should be planned in such a way that
individualizing process and socializing process come together for fusion process
and career planning should constitute the part of human resource planning.

To conclude Human Resource Management should be linked with strategic goals

and objectives in order to improve business performance and develop
organizational cultures that foster innovation and flexibility. All the above
futuristic visions coupled with strategic goals and objectives should be based on 3
H's of Heart, Head and Hand i.e., we should feel by Heart, think by Head and
implement by Hand