Human Resource

1 Management:
Functions and Role
Human Resource Management - Meaning of HRM - Functions of HRM - Importance of HRM
- Process of HRM - Systems and Techniques - Objectives of HRM - Role of Human Resource
Manager - Duties and Responsibilities of Human Resource Manager - Typical Organisation Set
up of Human Resource Department - Evolution and Development of HRM - Questions for
Discussion.

INTRODUCTION
Information technology (IT) - a wonderful creation of man-brought significant shifts in our day to day life.
Indian software professionals made significant strides in the information technology industry of USA.
Employees of Rourkela Steel Plant turned the loss-making unit into a profit making company. Similarly,
employees of TISCO, acquired core competencies for their company which was affected by dumping
of steel from China. Most of the public sector companies like Hindustan Machine Tools Ltd. (HMT), and
Hindustan Cl.lbles Ltd., (HeL) became sick. Thus, the people make or mar an organisation. How to
induce the people to make an organisation but not to mar it? Every company or organisation is deeply
interested in having an answer to this question. The answer to this question centred around the following
areas:
• Getting the people who can make an organisation.
• Enabling those people to acquire required capabilities to make a successful organisation.
• Motivating them to contribute their resources continuously for running the organisation
successfully.
We need to know an important concept i.e., human resources. People with required skills to make
an organisation are generally referred to as human resources.

MEANING OF HUMAN RESOURCES

According to Leon C. Megginson, the term human resources can be thought of as "the total knowledge,
skills, creative abilities, talents and aptitudes of an orgollisation 's workforce, as well as the value, attitudes
and beliefs of the individuals involved." The term human resources can also be explained in the sense
that it is a resource like any natural resource. It does mean that the management can get and use the
skill, knowledge, ability etc. through the development of skills, tapping and utilising them again and
again by developing a positive attitude among employees. The aspect of 'attitude' among the human
resources aspects gained significance alongwith globalisation (see Box 1.1).
 2 Human Resources Management

The . process of Iiberalisation, , tiue attitude haue become market leaders.

globalisation and the consequent competi- Hence, it is suggested that:
tion made the business organisations to realise • Hauing the right attitude eleuates your
that the persons with positiue attitude haue attitude.
self commitment and motiuation and are • Try to maintain a positiue outlook and
loyal to the organisation. They see the posi- striue to adopt an attitude of gratitude.
tiue aspects and serues the customer.
Organisations hauing employees with posi- • Right attitude improues your aptitude.

Managing of these human resources deals with the above areas and also provides an answer to the
question referred above. Now, we shall discuss the meaning of human resources management and other
areas:

MEANING AND DEFINITION OF HRM

In simple sense, human resources management means employing people, developing their resources,
utilising, maintaining and compensating their services in tune with the job and organisational
requirements with a view to contribute to the goals of the organisation, individual and the society.
Michael J, Jucius defined Personnel Management as "the field of management which has to do
with planning, organising, directing and controlling the functions of procuring, developing, maintaining
and utilising a labour force, such that the -
(a) Objectives for which the company is established are attained economically and effectively,
(b) Objectives of all levels of personnel are served to the highest possible degree, and
(c) Objectives of society are duly considered and served,"
Human Resources Management (HRM) can be defined as managing (planning, organising,
directing and controlling) the functions of employing, developing and compensating human resources
resulting in the creation and development of human relations with a view to contribute proportionately (due
to them) to the organisational, individual and social goals.
Features of Human Resources Management
Features of human resources management include:
Human resources management is concerned with employees both as individuals and as a group
in attaining goals. It is also concerned with behaviour, emotional and sodal aspects of personnel.
It is concerned with the development of human resources, i.e. knowledge, capability, skills,
potentialities and attaining and achieving employee goals, including job satisfaction.
Human resources management covers all levels (low, m'iddle, and top) and categories
(unskilled, skilled, technical, professional, clerical and managerial) of employees. It covers
both organised and unorganised employees.
Human Resources Management: Fuctlons and Role 3

It applies to the employees in all types of organisations in the world (industry, trade, service,
commerce, economic, social, religious, political and government departments). Thus, it is
common in all types of organisations.
Human resources management is a continuous and never ending process.
It aims at attaining the goals of organisation, individual and society in an integrated approach.
Organisation goals may include survival, growth and development in addition to profitability,
productivity, innovation, excellence etc.
Individual employee-goals consist of job satisfaction, job security, high salary, attractive fringe
benefits, challenging work, pride, status, recognition, opportunity for development etc.
Goals of the society include equal employment opportunity, protecting the disadvantaged
sections and physically handicapped (See Box 1.2), minimisation of inequalities in the
distribution of income by minimising wage differentials, developing the society in general by
organising developmental activities etc.

More than 50 organisations, including come across a number of people who at some
HP-Campaq, United Breweries, BPL, point in their corporate careers had the desire to
Planetasia, MindTree, Aztec Software and TMG, do something for the not-so-fortunate. Most of
as well as senior executives on their own strength, us never know what, where and how to do it. "
are coming to the aid of the handicapped. The reach is bound to be enormous, if
NGOs will also be partners in this new entity, everything goes right. According to Dr.
called Bridge-IT, one of the first of its kind to Annapoorna Ravichandran, director, Mobility
pool in resources to make life a little better for India: "This is a good platform - we can reach
the physically disabled. out to the world because companies may have
Says l/antus Technologies CEO Binod us on their websites too. Companies like IBM
Singh, who isspear-headingthe initiative: "Hav- do have a preference for the disabled, we did
ing spent over 20. years in the industry, I have not know about such things till now."

(Source: Sunday Times of India, June 9, 2002, Bangalore, p.3.)

Human resources management is a responsibility of all line managers and a function of staff
managers in an organisation.
It is concerned mostly with managing human resources at work.
Human resources management is the central sub-system of an organisation and it permeates
all types of functional management, viz., production management, marketing management
and financial management.
- Human resources management aims at securing unreserved co-operation from all employees in
order to attain predetermined goals.
Further, the analysis shows that most of the definitions are oriented towards the functions and
objectives of human resources management. As such, the detailed discussion about the ful)ctions and
objectives of HRM will help us to understand the term HRM more clearly and objectively.
 4 Human Resources Management

Having discussed the meaning of HRM, now we shall discuss the similar terms of HRM.
Similar Terms: Various terms are used to denote human resources management. These terms are:
labour management, labour administration, personnel management, personnel administration, human
capital management, human asset management, employment administration, employee-employer rela-
tions, union management relations, industrial relations and the like.
Under the labour management concept, the employees are treated just like a commodity which can
be purchased, used and thrown. Therefore, it deals with employment, wages and firing. The concept of
industrial relations deals with relations among employees, trade unions, employers and the government.
Therefore, it covers trade unions, disputes, grievances, discipline, collective bargaining and participative
management.
The latestterm in this direction is Human Resources Development (HRD). Some view that HRM and
HRD are one and the same. Infact, some organisations changed their personnel management department
as Human Resources Management Department while other organisations changed them as Human
Resources Development Department. But HRD is the developmental aspect of HRM·. Thus, HRD is a part
of HRM. HRD deals with the training, management development, career planning and development and
organisation development.
The most prominent and the closest one to the term human resources management is personnel
management.
Differences Between Personnel Management and Human Resources
Management
Personnel Management is different from Human Resources Management. Personnel means
persons employed. Hence, personnel management views the man as economic man who works for
money or salary. Human resources management treats the people as human beings having economic,
social and psychological needs. Thus, HRM is broader in scope compared to personnel management
(See Box 1.3). John Storey differentiated personnel management from human resources management.
Exhibit 1.1 presents the differences between these two.

IMPORTANCE OF HUMAN RESOURCES MANAGEMENT

Human resources plays a crucial role in the development process of modern economics. Arthur Lewis
observed, "there are great differences in deuelopment between countries which seem to haue roughly
equal resources, so it is necessary to enquire into the difference in human behauiour." It is often felt that
though the exploitation of natural resources, availability of physical and financial resources and
international aid play prominent roles in the growth of modern economies, none of these factors is more
significant than efficient and committed manpower. It is infact said that all development comes from
the human mind.

Human Resources in the Nation's Well-being

A nation with abundance of physical resources will not benefit itself unless human resources make
use of them. Infact, human resources with right attitude are solely responsible for making use of national
resources and for the transformation of traditional economies into the modern industrial and knowledge
economies (See Box 1.4).
Human Resources Management: Fuctlons and Role 5

Mr.Bhat, Personnel Manager of IVS The M.D. immediately contacted the

Group approached the Managing Director hospital and informed them that the com-
and appraised him of. the absence of pany will pay Rs.one lakh tomorrow and
Mr.Perumal, Driver for the past 30 days and asked them to conduct the surgery on
requested him to approve the show-cause Mr.Perumal's wife tomorrow itself.
notice to be served to Mr.Perumal as per the The M.D . ordered Mr.Bhat to arrange
Labour Rules in force . to issue a cheque for Rs.one lakh and also
The Managing Director said to Mr.Bhat: pay Rs.lO,OOO to Mr.Perumal to meet inci-
when Mr.Perumal, has been absent for the dental expenses as grant. Mr.Perumal was
total month, your duty is in Mr.Perumal's surprised at the decision of the M.D. and
house but not in the company. Go immedi- emotionally touched his feet. The M.D. told
ately to Mr.Perumal's house and report to me Mr.Bhat, problems of our employees are our
before 5 p.m. today. problems, treat them as human beings.
Mr.Bhat went to Mr.Perumal's house This news spread in the entire company
and found that Mr.Perumal has been in dis- within no time and the employees felt highly
tress as he has been trying to mobilise Rs.one secured. The productivity level in the com-
lakh to get the treatment to his sick wife in a pany doubled in the following month itself.
reputed hospital in Chennai. Mr.Bhat Mr.Bhat then understood that his com-
alongwith Mr.Perumal met the M.D. of the pany follows human resources policy, but not
company at 3.00 p.m. and appraised him of personnel policy and therefore, he should be
the reason for his distress and absenteeism a HR Manager.
for a month.

In the words of Thyagarajan, Managing workers." As Adi B. Godrej, Chief Executive

Director, Glaxo, "organisations that have world Officer, Godrej puts it, "all corporate strengths
class ambitions will need to have right attitude are dependent on right attitude people. "

Man vis-a-vis Machine

Most of the problems in organisational sections are human and social rather than physical, technical
or economic. No industry can be rendered efficient so long as the basic fact remains unrecognised that it
is prinCipally human. It is not a mass of machines and technical processes but a body of men.
Personnel Management and General Management
Management of an organisation in modern economies is not only complex and sophisticated but
it is also vital influencing the economic growth of a country.
One of the fundamental tasks of management is to manage human resources in the service of the
economic objectives of the enterprise. Successful management depends not solely, but Significantly
upon the ability to predict and control human behaviour.
 6 Human Resources Management

Exhibit 1.1
DIFFERENCES BETWEEN PERSONNEL MANAGEMENT AND HRM
Dimension PM HRM
Beliefs and Assumptions
Contract Careful delineation Aim to be 'beyond contract'
of written contracts. 'can do' outlook,
Rules Importance of devising impatience with 'rule'
Guide to Management Clear rules/mutuality 'Business-need'
action procedures.
Behaviour referrent Norms/customs and practise Values/Mission
Managerial task Monitoring Nurturing
vis-a-vis labour
Nature of relations Pluralist Unitarist
Conflict Institutionalized De-emphasised
Strategic Aspects
Key relations Labour management Customer
Initiatives Piecemeal Integrated
Corporate plan Marginal to Central to
Speed of decision Slow Fast
Line Management
Management role Transactional Transformational leadership
Key managers PersonneVIR Specialists GeneraI/business/line managers
Communication Indirect Direct
Standardization High(Eg.Parity an issue) Low(Eg. 'parity' not seen as relevant)
Prized management skills Negotiation Facilitation
Key Levers
Selection Separate, marginal test Integrated, key task
Pay Job evaluation (fixed grades) Performance-related
Conditions Separately negotiated Harmonization
Labour management Collective bargaining Towards individual contracts
contracts
Thrust of relations Regulated through Marginalized (with exception
with stewards facilities and training of some bargaining for
change models)
Job categories Many Few
and grades
Communicatibn Restricted flow Increased flow
Job design Division of labour Teamwork
Conflict handling Reach temporary truces Manage climate and culture
Training and development Controlled access to courses Learning companies
Foci of attention Personnel Wide ranging cultural
for interventions procedures structural and personnel strategies
(Source: John Storey, "Managing Human Resources", Beacon Books, New Delhi, 1997, p.3S.)
Human Resources Management: Fuctlons and Role 7

Human Resources System is a Central Sub-system

Human resources system in an organisation is not only a unique sub-system but a principal and central
sub-system and it operates upon and controls all other sub-systems (See Fig. 1.4) "Personnel management
is a major pervasive sub-system of all organisations."
The importance of human resources management is discussed by Yodder, Heneman and others from
three standpoints, viz., "social, professional and individual enterprise."
Social Significance: Proper management of personnel enhances their dignity by satisfying their
social needs. This is done by: (i) maintaining a balance between the jobs available and the jobseekers
according to the qualifications and needs; (ii) providing suitable and most productive employment,
which might bring them psychological satisfaction; (iii) making maximum utilization of the resources in
an effective manner and paying the employee a reasonable compensation in proportion to the
contribution made by him; (iu) eliminating waste or improper use of human resources, through
conservation of their normal energy and health and (u) by helping people make their own decisions that
are in their interests.
Professional Significance: By providing a healthy working environment, it promotes team
work in the employees. This is done by (i) maintaining the dignity of the employee as a 'human-being';
(ii) providing maximum opportunities for personal development; (iii) providing healthy relationship
between different work groups so that work is effectively performed; (iu) improving the employees'
working skill and capacity; (u) correcting the errors of wrong postings and proper reallocation work.
Significance for Individual Enterprise: It can help the organisation in accomplishing its goals
by: (i) creating right attitude among the employees through effective motivation; (See Box 1.4)
(ii) utilising effectively the available human resources and (iii) securing willing co-operation of the
employees for achieving goals of the enterprise and fulfilling their own social and other psychological
needs of recognition, love, affection, belongingness, esteem and self-actualisation.

OBJECTIVES OF HUMAN RESOURCES MANAGEMENT

Objectives are pre-determined goals to which individual or group activity in an organisation is directed.
Objectives of personnel management are influenced by social objectives, organisational objectives,
functional objectives and individual objectives (See Fig. 1.1). Institutions are instituted to attain certain
specific objectives. The objectives of the economic institutions are mostly to earn profits, and that of
educational institutions are mostly to impart education and/or conduct research so on and so forth .
However, the fundamental objective of any organisation is survival. Organisations are not just satisfied
with this goal. Further, the goal of most of the organisations is growth and/or profits.
The objectives of HRM may be as follows:
(i) to create and utilise an able and motivated workforce, to accomplish the basic organisational
goals.
(ii) to establish and maintain sound organisational structure and desirable working relationships
among all the members of the organisation.
(iii) to secure the integration of individual and groups within the organisation by co-ordination of
the individual and group goals with those of the organisation.
(ju) to create facilities and opportunities for individual or group development so as to match it with
the growth of the organisation.
(u) to attain an effective utilisation of human resources in the achievement of organisational
goals.
 8 Human Resources Management

Social Objectives
Objectives of HRM -.L-
Organisational Objectives
-.L-
Functional Orjectives
-.L-
Individual Objectives

(vi) to identify and satisfy individual and group needs by providing adequate and equitable
wages, incentives, employee benefits and social security and measures for challenging work,
prestige, recognition, security, status etc.

HRM objec~ives at Wipro

• To respect the individual, as people are the greatest asset.
• To govern individual and company relationships with the highest standard of conduct and
integrity.
• To be close to the customer through employees.
• To achieve and maintain leadership in people management..
HRM Policies, Procedures and Programmes
After the establishment of objectives of HRM, human resources policies are to be formulated (See
Fig.1.2). Policies are general statements that guide thinking and action in decision-making.

HRM Objectives
HRM -.L-
Programming HRM Policie~
-.L-
HRM Procedures
-.L-
HRM Programmes

Definition of HRM Policy

A policy is a plan of action. Brewster and Richbell defined HRM policies as, "a set of proposals
and actions that act as a reference point for managers in their dealings with employees". "Personnel
policies constitute guides to action. They furnish the general standards or bases on which decisions are
reached. Their genesis lies in an organisation's values, philosophy, concepts and principles". Personnel
policies guide the course of action intended to accomplish personnel objectives. Box 1.5 provides an
example of HRM policy.

One of the personnel objectives of Personnel policy of Indian Railways relat-

Indian Railways is to provide equal employ- ing to the above objectives is to /ill 15 per cent
ment opportunities to the people of minority and 7.5 per cent of the vacancies from those
sections. candidates belonging to Scheduled Castes and
Scheduled Tribes respectively.
Human Resources Management: Fuctlons and Role 9

What is HRM Procedure?

Policies are general instructions whereas procedures are specific applications. A procedure is a
well thought out course of action. It prescribes the specific manner in which a piece of work is to be done.
Procedures are called 'action guidelines.' They are generally derived from policies. Where policies define a
broad field, procedures show a sequence of activities within that area. The emphasis is on chronological,
step-by-step sequence of required actions. For instance, a student is required to complete several itemized
steps in order to register himself to complete several itemized steps for courses in a university. The basic
purpose of a procedure is to spell out clearly the way one is to go about doing something.
For instance the policy, referred to earlier, might be translated into action through the following
procedure. Box 1.6 provides an example of HRM procedures. .

All zonal railways will fill 15 per cent and uled castes and scheduled tribes will be given
7.5 per cent of their vacancies in Group C and preference if they are equally qualified and
Group D categories from the candidates be- meritorious than those of other communities.
longing to Scheduled Castes and Scheduled Another example of policy and procedure is as
Tribes respectively. If suitable candidates are follows:
not available from these communities, the va- Further, personnel rules and
cancies such as loco driver, signalling staff, programmes help in translating procedures
station master will be filled by candidates be- into concrete action. Personnel rule spells
longing to other communities. In case of vacan- out specific required action or non-action
cies in other jobs, they should be filled only by allowing no discretion . For example:
the candidates belonging to scheduled castes
and scheduled tribes in future. However, North- Paying bonus of 8.33 per cent of the
East Frontier Railway can fill even these vacan- salary (consisting of pay plus dearness allow-
cies by the candidates belonging to other com- ance) on March 31, 1998 to all the confirmed
munities, if the candidates from scheduled com- employees who had completed minimum
munities are not available. In case of jobs in one year of continuous service as on March
Groups A and B, candidates belonging to sched- 31 , 1998.

Personnel programmes are complex sets of goals, policies, procedures, rules, steps to be taken,
resources to be employed and other elements necessary to carry out a given course of action. It can
be said that rules and programmes are aids to policy.
Sources of Content for Formulating HRM Policies
Policies are formulated on the basis of material collected from different sources like:
• past experience of the organisation;
• existing practices and experiences in other organisations of the same nature or in the same
geographical area or in the entire nation;
• attitudes, philosophies of the management at various levels, employees, trade unions, etc.;
• the knowledge and experience gained by all line managers and personnel managers in
handling personnel issues;
• organisational policies etc.
Personnel policies to be effective should be evaluated and controlled continuously.
 10 Human Resources Management

FUNCTIONS OF HRM
The functions of HRM can be broadly classified into two categories, viz., (i) Managerial functions and
(ii) Operative functions .

I. Managerial Functions
Managerial functions of personnel management involve planning, organising, directing and
controlling. All these functions influence the operative functions (Fig. 1.3) .

Figure . . . Functions of HRM

Functions of I
HRM
Managerial Functions Operative Functions
I I
I- Planning - Employment
I- Organising - Human Resources
I - Directing Development
-- Controlling - Compensation
- Human Relations
-Industrial Relations
- Recent Trends in HRM

(i) Planning: It is a pre-determined course of action. Planning pertains to formulating strategies of

personnel programmes and changes in advance that will contribute to the organisational goals. In other
words, it involves planning of human resources, requirements, recruitment, selection, training etc. It also
involves forecasting of personnel needs, changing values, attitudes and behaviour of employees and their
impact on the organisation.
(ii) Organising: An organisation is a means to an end. It is essential to carry out the determined
course of action. In the words of J.e. Massie, an organisation is a "structure and a process by which a
co-operative group of human beings allocates its task among its members, identifies relationships and
integrates its activities towards a common objective." Complex relationships exist between the
specialised departments and the general departments as many top managers are seeking the advice of
the personnel man?ger. Thus, an organisation establishes relationships among the employees so that
they can collectively contribute to the attainment of company goals.
(iii) Directing: The next logical function after completing planning and organising is the
execution of the plan. The basic function of personnel management at any level is motivating,
commanding, leading and activating people. The willing and effective co-operation of employees for
the attainment of organisational goals is possible through proper direction. Tapping the maximum
potentialities of the people is possible through motivation and command. Co-ordination deals with the
task of blending efforts in order to ensure successful attainment of an objective. The personnel manager
has to co-ordinate various managers at different levels as far as personnel functions are concerned.
(iv) Controlling: After planning, organising and directing various activities of personnel
management, the performance is to be verified in order to know that the personnel functions are
performed in conformity with the plans and directions of an organisation. Controlling also involves
checking, verifying and comparing of the actuals with the plans, identification of deviations if any and
correcting of identified deviations. Thus, action and operation are adjusted to pre-determined plans and
Human Resources Management: Fuctlons and Role 11

standards through control. Auditing training programmes, analysing labour turnover records, directing
morale surveys, conducting separate interviews are some of the means for controlling the personnel
management function and making it effective.

II. Operative Functions

The operative functions of human resources management are related to specific activities of
personnel management viz., employment, development, compensation and relations. All these
functions are interacted with managerial functions. Further, these functions are to be performed in
conjunction with management functions as shown in Figure 1.4.
I Figure .,.
HRM as a Central
Sub-System

1. Employment: It is the first operative function of Human Resources Management (HRM).

Employment is concerned with securing and employing the people possessing the required kind and level
of human resources necessary to achieve the organisational objectives. It covers functions such as job
analysis, human resources planning, recruitment, selection, placement, induction and internal mobility.
(i) Job Analysis: It is the process of study and collection of information relating to the operations and
responsibilities of a specific job. It includes:
• Collection of data, information, facts and ideas relating to various aspects of jobs including men,
machines and materials.
• Preparation of job description, job specifications, job requirements and employee specifications
which will help in identifying the nature, levels and quantum of human resources.
• Providing the guides, plans and basis for job design and for all operative functions of HRM.
(ii) Human Resources Planning: It is a process for determination and assuring that the organisation
will have an adequate number of qualified persons, available at proper times, performing jobs which
would meet the needs of the organisation and which would provide satisfaction for j he individuals
involved. It Involves:
• Estimation of present and future requirements and supply of human resources based on
objectives and long range plans of the organisation.
• Calculation of net human resources requirements based on present inventory of human
resources
• Taking sto!ps jr) mould, change and develop the strength of existing employees in the
organisation so as to meet the future human resources requirements.
 12 Human Resources Management

• Preparation of action programmes to get the rest of human resources from outside the
organisation and to develop the human resources in terms of existing employees.
(iii) Recruitment: It is the process of searching for prospective employees and stimulating them to apply
for jobs in an organisation. It deals with:
• Identification of existing sources of applicants and developing them.
• Creation/identification of new sources of applicants.
• Stimulating the candidates to apply for jobs in the organisation.
• Striking a balance between internal and external sources.
(iv) Selection: It is the process of ascertaining the qualifications, experiences, skills, knowledge etc.,
of an applicant with a view to appraising his/her suitability to a job. This function includes:
• Framing and developing application blanks.
• Creating and developing valid and reliable testing techniques.
• Formulating interviewing techniques.
• Checking of references.
• Setting up a medical examination policy and procedure.
• Line manager's decision.
• Sending letters of appointment and rejection.
• Employing the selected candidafes who report for duty.
(v) Placement: It is the process of assigning the selected candidate with the most suitable job in terms
of job requirements. It is matching of employee specifications with job requirements. This function includes:
• Counselling the functional managers regarding placement.
• Conducting follow-up study, appraising employee performance in order to determine employee
adjustment with the job.
• Correcting misplacements, if any.
(vi) Induction and Orientation: Induction and orientation are the techniques by which a new employee
is rehabilitated in the changed surrounding and introduced to the practices, policies, purposes and people
etc., of the organisation.
• Acquaint the employee with the company philosophy, objectives, policies, career planning and
development, opportunities, product, market share, social and community standing, company
history, culture etc.
• Introduce the employee to the people with whom he has to work such as peers, supervisors and
subordinates.
• Mould the employee attitude by orienting him to the new working and social environment.
2. Human Resources Development: It is the process of improving, mOUlding and changing the
skills, knowledge, creative ability, aptitude, attitude, values, commitment etc. based on present and future
job and organisational requirements. This function includes:
(i) Performance Appraisal: It is the systematic evaluation of individuals with respect to their
performance on the job and their potential for development. It includes:
• Developing policies, procedures and techniques.
• Helping the functional managers.
• Reviewing of reports and consolidation of reports.
• Evaluating the effectiveness of various programmes.
Human Resources Management: Fuctlons and Role 13

(ij) Training: It is the process of imparting to the employees technical and operating skills and
knowledge. It includes:
• Identification of training needs of the individuals and the company.
• Developing suitable training programmes.
• Helping and advising line management in the conduct of training programmes.
• Imparting of requisite job skills and knowledge to employees.
• Evaluating the effectiveness of training programmes.
(iii) Management Development: It is the process of designing and conducting suitable executive
development programmes so as to develop the managerial and human relations skill of employees. It
includes:
• Identification of the areas in which management development is needed.
• Conducting development programmes.
• Motivating the executives.
• Designing special development programmes for promotions.
• Using the services of specialists, and/or utilising of the institutional executive development
programmes.
• Evaluating the effectiveness of executive development programmes.
(iv) Career Planning and Development: It is the planning of one's career and implementation of
career plans by means of education, training, job search and acquisition of work experiences. It includes
internal and external mobility.
(v) Internal Mobility: It includes vertical and horizontal movement of an employee within an
organisation. It consists of transfer, promotion and demotion.
(vi) Transfer: It is the process of placing employees in the same level jobs where they can be utilised
more effectively in consistence with their potentialities and needs of the employees and the organisation.
It also deals with:
• Developing transfer poliCies and procedures.
• Guiding employees and line management on transfers.
• Evaluating the execution of transfer policies and procedures.
(vii) Promotion: It deals with upward reassignment given to an employee in the organisation to
occupy higher position which commands better status and/or pay keeping in view the human resources
of the employees and the job requirements.
• This function covers the formulating of equitable, fair and consistent promotion policies and
procedures.
• Advising line management and empl9yees on matters relating to promotions.
• Evaluating the execution of promotion policies and procedures.
(viii) Demotion: It deals with downward reassignment toan employee in the organisation.
• Develop equitable, fair and consistent demotion policies and procedures.
• Advising line managers on matters relating to demotions.
• Oversee the implementations of demotion policies and procedures.
(ix) Retention Management Employers prefer to retain more talented employees while they retrench
less talented employees. Employers modify existing human resource strategies and craft new strategies in
order to pay more salaries, provide more benefits and create high quality of work life to retain the best
employees.
 14 Human Resources Management

(x) Change and Organisation Development: Change implies the creation ofimbalances in the existent
pattern or situation. Organisation development is a planned process designed to improve organisational
effectiveness and health through modifications in individual and group behaviour, culture and systems of
the organisation using knowledge and technology of applied behavioural sciences.
3. Compensation: It is the process of providing adequate, equitable and fair remuneration to the
employees. It includes job evaluation, wage and salary administration, incentives, bonus, fringe benefits,
social security measures etc.
(i) Job Evaluation: It is the process of determining relative worth of jobs.
• Select suitable job evaluation techniques.
• Classify jobs into various categories.
• Determining relative value of jobs in various categories.
(ii) Wage and Salary Administration: This is the process of developing and operating a suitable wage
and salary programme. It covers:
• Conducting wage and salary survey.
• Determining wage and salary rates based on various factors.
• Administering wage and salary programmes.
• Evaluating its effectiveness.
(iii) Incentives: It is the process offormulating, administering and reviewing the schemes of financial
incentives in addition to regular payment of wages and salary. It includes:
• Formulating incentive payment schemes.
• Helping functional managers on the operation.
• Review them periodically to evaluate effectiveness.
(iv) Bonus: It includes payment of statutory bonus according to the Payment ofBonus Act, 1965 and
its latest amendments:
(v) Fringe Benefits: These are the various benefits at the fringe of the wage. Management provides
these benefits to motivate the employees and to meet their life's contingencies. These benefits include:
• Disablement benefit.
• Housing facilities.
• Educational facilities to employees and children.
• Canteen facilities.
• Recreational facilities.
• Conveyance facilities.
• Credit facilities.
• Legal clinics.
• Medical, maternity and welfare facilities.
• Company stores.
(vi) Social Security Measures: Managements provide social security to their employees in addition
to the fringe benefits. These measures include:
• Workmen's compensation to those workers (or their dependents) who involve in accidents.
• Maternity benefits to women employees.
Human Resources Management: Fuctlons and Role 15

• Sickness benefits and medical benefits.

• Disablement benefits/allowance.
• Dependentbenefits.
• Retirement benefits like provident fund, pension, gratuity etc.
4. Human Relations: Practicing various human resources policies and programmes like employ-
ment, development and compensation and interaction among employees create a sense of relationship
between the individual wor~er and management, among workers and trade unions and the management.
It is the process of interaction among human beings. Human relations is an area of management in
integrating people into work situations in a way that motivates them to work together productively, co-
operatively and with economic, psychological and social satisfaction. It includes:
• Understanding and applying the models of perception, personality, learning, intra and inter
personal relations, intra and inter group relations.
• Motivating the employees.
• Boosting employee morale.
• Developing the communication skills.
• Developing the leadership skills.
• RedreSSing employee grievances properly and in ti~e by means of a well formulated
grievance procedure.
• Handling disciplinary cases by means of an established disciplinary procedure.
• Counselling the employees in solving their personal, family and work problems and releasing
their stress, strain and tensions.
• Providing a comfortable work environment by reducing fatigue, monotony, boredom and
industrial accidents.
• Improving quality of work life of employees through participation and other means.
5. Industrial Relations: Industrial relations refers to the study of relations among employees,
employer, government and trade unions. Industrial relations include:
• Indian labour market
• Trade unionism
• Collective bargaining
• Industrial conflicts
• Workers' participation in management and
• Quality circles.
6. Recent Trends in HRM: Human Resources Management has been advancing at a fast rate.
The recent trends in HRM include:
• Quality of worklife
• Total quality in human resources
• HR accounting, audit and research and
• Recent techniques of HRM.
 16 Human Resources Management

NATURE OF HUMAN RESOURCES

People in any organisation manifest themselves, not only through individual sections but also throuqh
group interactions. When individuals come to their workplace, they come with not only technical s!,ills,
knowledge etc., but also with their personal feelings, perception, desires, motives, attitude, values etc.
Therefore, employee managemeht in an organisation does mean management of not only technical
skills but also other factors of the human resources. (See Box 1.7) .

The CEO of MICO says: Employees of when it is sought. When I ask them, "Why
our company are highly skilled, talented and don't you speak freely, as you speak with
knowledgeable. But the ualue system of most your family members?", they reply that
of them is such that they do not speak until we suggestion offered in the company without
repeatedly request them to offer their ideas. sought is just like paying the money without
Their motiue is only to offer a suggestion buying.

Complex Dynamism
A close observation of employees reveals that they are complex beings, Le. (i) economic,
(ii) physiological, (iii) psychological, (iu) sociological and (u) ethical beings. The proportions or intensities
of these dimensions of the human factor in employment may differ from one situation to another but the
fact remains that these are the basic things of the human factor in organisations. Undoubtedly, the physical
and mental attributes of human resources are highly pertinent to organisational performance and
productivity .

A Social System
Human resources management is relatively new and developed as a part of management (concerned
with the management of human resources). In its simple terms, personnel management is the task of dealing
with human relationships, moulding and developing the human behaviour and attitude towards the job and
organisational requirements. The personnel manager involves himself in administering a social system. In
this process, the manager has to see that the economic satisfaction for a reasonable livelihood, the social
satisfaction of working together as members of a group and individual job satisfaction of a worker are
attained.

A Challenging Task
The personnel manager plays a Crucial role in understanding the changing needs of the organisation
and society. Further, he faces some challenging tasks in attaining the employee, organisational and societal
objectives with the available resources. In addition to it, the technological developments increasing
educational standards etc. further complicate the role of the personnel manager. Hence, the modem
personnel manager should equip himself with good knowledge of disciplines, viz. Economics, Commerce,
Management, Sociology, Psychology, Engineering, Technology and Law.

ROLE OF. HUMAN RESOURCES MANAGEMENT

Human ResourceS Management plays the moSicrucial role in the management of an organisation. Human
resources play crUcial role in the conversion process of inputs into outputs. PrOduct design, quality
maintenance, rendering services etc. depend upon the efficiency of human resources. Similarly, human
Human Resources Management: Fuctlons and Role 17

resources plays critical role in marketing the products and services. Human resource also plays significant
role in managing finances and managing information systems. Role of HR at TCS is presented in Fig. 1.5.

PROCESS OF HRM
I Figure •••
Performance discussions Allocations to
Role of and performance manage- projects (Domestic!
HR at Tes ment for all at a centre Overseas)

Recruitment
-----------r-- The Centre Training
(TechnicaV
Manager
Behavioural)

\ Career
development!
monitoring

(Source: Geeta Gwalani, "Journey to Excellence", Human Capital,

Vol. 4, No.4, September 2000, p.2S)

Human Resource Management is viewed as a process of sequence of operations and activities. HRM
process starts with the objectives of an organisation. HRM objectives are drawn from the organisational
objectives. Similarly HRM strategies are drawn from the organisational strategies. HRM objectives and
strategies, thus, form the basis for HRM process in an organisation.
The first operative function or activity in the HRM process is the employment. Employment process
consists various sub-processes like job design and analysis, human resource planning, recruitment, selection,
placement and induction. Employment process is linked to the next process i.e., human resource
development. Human resource development aspect consists of various sub processes like performance
appraisal, training and development, career planning and development, promotion, transfer and demotion,
absenteeism and labour turnover, organisational change and development. This aspect ofHRM process is
followed by compensation which consists of job evaluation, wage and salary administration and social
security and welfare benefits. Thus these three aspects of HRM process enable the employee to acquire
necessary skills and contribute his human resources to achieve organisational objectives for which his/her
contributions are compensated.
This process, further requir~s creation and maintenance of human relation in order to enlarge and
enrich employee contribution towards organisation goals. Human relations are created and maintained
by motivating, enriching job satisfaction, improving morale, communicating effectively, leading the
employees and by creating and maintaining healthy work environment, reducing industrial accidents
and enhancing safety and health.
Implementation of these aspects of HRM process results in creation of industrial relations.
Industrial relation refer to the relations among employees, employer, government and trade unions. The
sub processes of industrial relations include labour market, concept of industrial relations, trade unions,
collective bargaining, workers' participation in management and quality circles. These sub processes
 18 Human Resources Management

enable the employees al.y employer to modify HRM policies and strategies for their mutual benefit and to
enhance their contribution to the organisational goals. Figure 1.6 presents the process of HRM.

IObjectives and Organisation of HRM I

Process of HRM .....v
IStrategic HRM I
~
IEmployment I
• Job Design and Analysis
• Human Resources Planning
• Recruitment, Selection, Placement and Induction
IHuman Resourc~s Development
• Performance Appraisal
• Training and Development
• Career Planning and Development
• Promotion, Transfer and Demotion
• Absenteeism and Labour Turnover
• Management of Change, Development and Culture
ICompensation Management I
• Job Evaluation
• Wage and Salary Administration
• Social Security and Welfare
IHuman Relationst
• Motivation and Job Satisfaction
• Morale
• Communication
• Leadership
• Work Environment, Industrial Accidents, Safety and Health
Iindustrial Relations I
• Indian Labour Market
• Industrial Relations
• Trade Unionism
• Collective Bargaining
• Industrial Conflicts
• Workers' Participation in Management and
Quality Circles
IRecent Trends in HRM I
• Quality of Worklife and Empowerment
• Total Quality HRM
• HR Accounting, Audit and Research
• Recent Techniques in HRM
Human Resources Management: Fuctfons and Role 19

SYSTEMS AND TECHNIQUES

A system is a set of comprehensive, interrelated and unified objectives and elements that interact with
each other. These elements receive inputs from the external environment, process these inputs and produces
the output for the external environment (See Fig. 1. 7).

External
The System r - - - - - - - - -Syste7n- - - - - - - - - ~

~
r-----'
Inputs I
I
I Transform I ---''---.~ Output
L _____ ..
I
I
Environment
~--~--------------~---~
L _______ J - - - '- - Feedback' - - - J __ - - __ - - J

Thus, systems consist of external environmental factors like social factors, technical factors,
economic factors, political factors and natural factors, inputs, transformation, output and feedback.
Business organisations are regarded as open and adaptive systems which are influenced by environ-
mental factors and also influence and shape the environment. The factors underlying business
organisation as a system include:
• Business organisation as a single entity composed of an interrelated subunits like production,
marketing, human resources and finance.
• Organisation is closely related to its environment. In other words, environment influences the
organisation and the organisation also influences the environment.
• System is 'input-process-output' mechanism. Organisation receives raw material from the
environment, convert the raw material into products and supplies these products to the
environment.
... , Information flows freely in the organisation. In addition, information flows from the external
environment to the organisation system and from the organisation system to the external
environment.
• System integrates all its internal and external stakeholders like supplyings of inputs,
employees, shareholders, customers, government, creditors, bankers, market intermediaries
like wholesalers, retailers, and franchisees.
• Each system consists of several subsystems. Infact each of the stakeholders form a subsystem.
Thus, organisational system consists of several subsystems (See Fig. 1.8), which are closely
interlinked and interrelated.
These substems interact with each other closely. In fact, each subsystem is a system by itself. For
example, human resource itself is a system.
 20 Human Resources Management

HUMAN RESOURCE MANAGEMENT (HRM) SYSTEM

Human Resource Management (HRM) as a system receives inputs from the organisation's vision,
mission and strategies, employee skills and talents. HRM system processes the organisation's strategies and
goals into innovative ideas, performances etc. and produces the output in the form of organisation's
performance in terms of production, profit, customer service, market share, expansion, diversification and
growth (See Fig. 1.9).

Figure . . .
Business
Organisation

External Envir~nment/Market
HRM System I

I'" - - - - - - - - - - - - - - Organisation' - - - - - - - - ,
I I

~
I

• Transformation ~ Output .!i\

• Vision • Creative Ideas • Performance

• Strategies • Knowledge • Market share
• Goals • HR Policies • Customer service
• Skills • HR Practices • Profit
• Talents • Motivation • Expansion
• Knowledge • Leadership • Diversification
• Technology • Communication • Value addition
• Policies • Strategy Implementation
+L _ _ _ _ _ _ _ _ _ _ _ Feedback ____________ J
I
Human Resif)urces Management: Fuctlons and Role 21

HR:OPEN AND DYNAMIC SYSTEM

Human resource system is also a open and dynamic system as it interacts not only with organisational
policies, but also with the external environmental factors like cultural factors, educational facilities in the
country, economic conditions and living standards of the people, government policies with regard to
reservations, wage and salaries, welfare measures, political influence through trade unions and international
trade policies affecting business process outsourcing and thereby employment. In fact, unlike other systems,
HR interacts very closely with all other subsystems. HR is a more vibrant system as it deals with more
knowledgeable living beings.
HR Subsystems
Each system is composed of several closely interrelated components, which are called subsystems.
Similarly to other systems human resource system is also composed of various subsystems. These
subsystems include employment, development, compensation, human relations and industrial relations
(See Fig. 1.10).

Figure .,e,.
HR Subsystem

Each HR subsystem is again viewed as a system, which in tum consists of subsystems. Employment
system consists of subsystems like job design, job analysis, HR planning, recruitment, selection, placement
and induction. Development system consists of subsystems like performance appraisal, training, develop-
ment, career planning, promotion, transfer, demotion, change and organisation development. The
subsystems of compensation include job evaluation, wages and salaries, fringe benefits and welfare
measures. Human Relations System consists of motivation, morale, communication, leadership and work
environment. Industrial relations system consists of labour market, trade unions, collective bargaining,
industrial conflicts, participative management and quality circles.
 22 Human Resources Management

TECHNIQUES OF HRM
A number of techniques are used in the process of HRM in order to achieve HRM strategies. These
techniques are presented as hereunder and are discussed in detail in respective chapters.
HRM Function Techniques
Job Design • Engineering Approach
• Human Approach
• Job Characteristics Approach
• Job Rotation, Job Enlargement, Job Enrichment
Recruitment • Promotions, transfers, present employees, scouting,
Advertising, Walk-ins, Consult-in, Head-hunting, Body
shopping, Business alliances, Tele-recruitment
Selection • Application blank, tests, interviews
Human Resource Development • Performance appraisal, training, management develop-
ment, career development
Performance Appraisal • Graphic rating scales, ranking, paired comparison, forced-
distribution, check-list, assessment centres
Training and Development • Vestibule training, role-play, lecture, programmed instruc-
tion, job rotation, coaching, job instruction
Compensation • Job evaluation, salaries in comparable organisations, abil-
ity to pay, productivity, cost of living.
Line and Staff Relationships and HRM
The relationship between two managers due to delegation of authority and responsibility or issuing
or receiving instructions / orders is called 'line relationship'.
The relationship between two managers due to offering suggestions, advice, providing informa-
tion is called 'Staff relationship'.
(i) Human Resources Management is a Line Responsibility: It is widely felt that "human
resources management is a line manager's responsibility but a staff function." The responsibility of line
managers is to attain effective goals of their respective departments by the proper management of
materials, machine, money and men. Thus, management of four Ms which includes management of
personnel in their respective departments is the responsibility of the line management. Since
management is getting things done through and by the people, responsibility of the management of
these people rests with line managers. Attaining overall organisational goals is the responsibility of the
general manager through proper management of personnel and with the help of different heads of the
departments. In turn, management of personnel in different departments is the responsibility of heads
concerned. In the same way, first level superiors are also responsible for managing the men of their
respective sections in achieving their goals. Thus, personnel management is a responsibility of all line
managers. It is in this sense that every manager is a personnel manager (See Box 1.8).
(Ii) Line Needs Assistance in Managing Men: In most of the organisations, Board of Directors
delegate operative/technical responsibilities to managing directors and through them to the general
managers. Different functional managers are delegated with the technical responsibility by the general
manager. Since all these line managers have to concentrate on discharging technical/operative
responsibility, they may not find time to discharge their responsibilities managing human resources. For
Human Resources Management: Fuctlons and Role 23

The CEO of Infosys says that their of his company are human resources.
machines are human beings. Computers In addition, he says that all employees
and software are tools in their hands, manage their human resources and others'
their finances are their employees and human resources. Thus, all the managers are
their employees are their human human resources managers as managing their
resources. In essence, all the resources team members is their responsibility.

example, the production manager has to concentrate on production activities and thus he may not find time
to perform the various functions of personnel management relating to employees of his own department.
In such a situation, the line managers require help or advice relating to personnel management of their
respective departments.
(iii) Human Resources Management is a Staff Function: Since the top management believes
that organisational ability depends on the sound management of human resources, it provides specialised
assistance to line managers through personnel managers,. Thus, personnel managers are created for the
purpose of providing assistance, advice, information etc. to line managers in order to relieve them from the
burden of management of personnel and to allow them to concentrate on their technical operations.
Personnel managers perform the various functions of personnel management viz. employment, training,
development, wage and salary administration, motivation, grievance redressal, workers' participation in
management, collective bargaining etc. Thus, personnel managers perform certain staff functions relating
to management of personnel like advising, assisting, guiding, suggesting, counselling and providing
information to line managers. So personnel management is a staff function.
However, responsibility for the management of personnel still rests with line managers. Thus,
personnel management is a line management responsibility but a staff function (See Box 1.9).

Human Resources Manager, Sat yam • Employee Retention

Computers, proudly says, he performs more Though all the software managers man-
critical functions of: age their team members, the HR Managers
• Resources Match perform .more critical and specialist functions
• Resources Allocation ofHRM.
• Employee Development

ROLE OF HUMAN RESOURCES MANAGER •

Human Resources Manager plays a vital role in the modem organisation. He plays various strategic
roles at different levels in the organisation. The roles of the HR Manager include roles of conscience,
of a counsellor, a mediator, a company spokesman, a problem solver and a change agent.
(i)The Conscience Role: The conscience role is that of a humanitarian who reminds the
management of its morals and obligations to its employees.
 24 Human Resources Management

(ii) The Counsellor: Employees who are dissatisfied with the present job approach the personnel
manager for counselling. In addition, employees facing various problems like marital, health, children
education/marriage, mental, physical and career also approach the personnel managers. The Personnel
Manager counsels and consults the etnployees and offers suggestions to solve lovercome the problems of
the employees.
(iii) The Mediator: As a mediator, the personnel manager plays the role of a peace-maker. He settles
the disputes between employees and the management. He acts as a liaison and communication link
between both of them.
(iv) The Spokesman: He is a frequent spokesman for or representative of the company.
(v) The Problem-solver: He acts as a problem solver with respect to the issues that involve human
resources management and overall long range organisational planning.
(vi) The Change Agent: He acts as a change agent and introduces changes in various existing
programmes.
He also performs various other roles like welfare role, clerical role and fire-fighting role as indicated
in Fig 1.11.

IK'Figur'ei '• • •- The Role of the Personnel Manager

The Role of the
Personnel Manager Personnel Welfare
~ Clerical Fire-Fighting
Role Role Role legal Role
+
(a) Advisory- (a) Research in
~ ~
(a) Time keeping +
(a) Grievance handling
advising personnel and
Management on organisational
effective use of problems.
human resources.

(b) Manpower (b) Managing services (b) Salary and wage (b) Settlement of
planning- canteens, grain Administration, disputes.
Reauitrnent, shops, transport Incentives
Selection etc. co-operatives
cereals etc.

(c) Training and (c) Group dynamics- (c) Maintenance (c) Handling disciplin-
development of Group counselling, of records. ary actions.
linemen. Motivation,
leadership,
communication
etc.

(d) Measurement of (d) Human Engineer- (d) Collective bargain-

assessment and ing- Man Machine ing.
individual and relationship.
group behaviour. (e) Joint consultations.

As a Specialist
The personnel department has staff relationship with other departments/managers in the total
organisation. The personnel department is responsible for advising management from the Managing
Director to the lowest line supervisor in all areas relating to personnel management and industrial relations.
Human Resources Management: Fuctfons and Role 25

Personnel department also performs various functions of employment, training and development. It
represents the management in many of the relationships that affect the organisation as a whole. It is also
responsible for representing various workers' problems to the management.
Personnel department generally acts in an advisory capacity; it provides information, offers
suggestions and is not responsible for the end results. The personnel manager must exercise control very
tactfully in order to win the confidence and co-operation of all line managers. He has to persuade line
managers to work with staff specialists and not against them. The authority of the personnel manager
should derive from concrete personnel policies and programmes and from the advantages and result
of accepted specialised knowledge.
(I) As a Source of Help: In certain situations (when line managers lack skill or knowledge in
dealing with employee problems), experienced personnel managers assume line responsibility for
personnel matters. But it may be resented by the very managers who ought to seek staff assistance in
meeting their personnel responsibilities. They should earn the reputation and confidence of line
managers of being a source of help rather than a source of threat to line managers. Staff assistance is
likely to be effective when it is wanted rather than imposed.
(Ii) As a Change Agent: Personnel Manager should work as an enabler and change agent
regarding personnel areas and he should be familiar with different disciplines like management,
technology, sociology, psychology and organisational behaviour as organisational adaptability,
viability and development are dependent on human resources development. So, the personnel
manager should work as a consultant of an organisational development by providing necessary
information and infrastructure to the line managers. Thus, the role of personnel managers is more
concerned with providing information and offering advice to the decision-makers rather than making
decisions.
(iii) As a Controller: Nevertheless, it is still true that effective personnel executives advise on
policies, help managers in implementing their programmes and provide services, exercise monitoring
and control functions sparingly.

QUALIFICATIONS AND QUALITIES OF HUMAN RESOURCE MANAGER

The functions of personnel management vary from organisation to organisation both in nature and
degree. So, the qualifications required of a personnel manager differ from organisation to organisation
depending on its nature, size, location etc. However, the qualifications and qualities which will be
applicable in general can be summarised as follows:
1. Personal Attributes: The personnel manager, as in case of any other manager, must have
initiative, resourcefulness, depth of perception, maturity in judgement and analytical ability. Freedom
from bias would enable the personnel manager to take an objective view both, of the management and
workers. He must thus have intellectual integrity. Moreover, the personnel manager should be thorough
with labour laws. An understanding of human behaviour is essential to the personnel manager. He must
be familiar with human needs, wants, hopes and desires, values, aspirations etc. without which
adequate motivation is impossible.
The Personnel Manager should also possess other personal attributes like:
(i) Intelligence: This includes skills to communicate, articulate, moderate, understand etc.,
command over language, mental ability and tact in dealing with people intelligently, including the ability
to draft agreements, policies etc.
 26 Human Resources Management

(ii) Educational Skills: Personnel Managershould possess learning and teaching skills as he has to learn
and teach employees about organisational growth, need for and mode of development ofindividuals etc.
(iii) Discriminating Skills: He should have the ability to discriminate between right and wrong, between
just and unjust, merit and demerit.
(iv) Executing Skills: He is expected to execute the management's decisions regarding personnel issues
with speed, accuracy and objectivity. He should also be able to streamline the office, set standards of
performance, co-ordinate, control etc.
Further, the personnel manager is expected to have leadership qualities: deep faith in human values,
empathy with human problems, foreseeing future needs of employees, organisation, government, trade
unions, society etc.
(v) Experience and Training: Previous experience is undoubtedly an advantage provided the
experience was in an appropriate environment and in the same area. Training in psychological aspects,
labour legislations and more specifically in personnel management and general management is an
additional benefit. Experience in an enterprise in some other executive capacity can also help towards
an appreciation of the general management problems and a practical approach in meeting personnel
problems.
(vi) Professional Attitudes: Finally, professional attitude is more necessary particularly in the
Indian context. The personnel managers' job, as in the case of other managers, is getting professionalised.
He should have patience and understanding, ability to listen before offering advice. As mentioned
earlier, he should have the knowledge of various disciplines like technology, engineering management,
sociology, psychology, philosophy, human physiology, economics, commerce and law. He must be
able to couple his social justice with a warm personal interest in people which must be secured by an
uncommon degree of common sense.
(vii) Qualifications: Qualifications prescribed for the post of Personnel Manager vary from industry
to industry and from State to State. These qualifications have been undergoing several changes from
time to time. However, the qualifications prescribed by various organisations include MBA with Human
Resources Management Specialisation, M.H.R.M, M.A.(IR&PM), M.P.M and P.G.D.P.M.

DUTIES AND RESPONSIBILITIES OF HUMAN RESOURCE MANAGER

Human Resource Manager is responsible for efficient management and utilisation of human
resources in the process of achieving organisational objectives, group goals and goals of individual
employees. In this process human resource manager offers suggestions and advise to all other managers
in the organisation, in addition to providing all necessary arrangements. Duties and responsibilities of
human resource manager include:
• Preparing, modifying and up-dating job analysis including job description and job specifica-
tions as desired by various line managers.
• AdviSing the line managers regarding the latest developments in job analysis like role analysis,
broad jobs, dejobbing and the like.
• Helping the line managers in planning for human resources and finalising the human resource
plans submitted by various line managers.
Human Resources Management: Fuctlons and Role 27

• Advising the line managers regarding the impact of multiskilling, down-sizing and de-layering on
human resource planning.
• Searching for the prospective employees at various sources and motivating them to apply for jobs
in the company.
• Identifying employment agencies and entrusting recruitment function to them, if it is economical
and desirable.
• Conducting various selection tests and interviews and helping the line managers in selecting
the right candidates for various jobs.
• Conducting the induction programmes to the new employees and placing the employees in
right jobs.
• Helping the line managers in identifying the training needs of employees from time to time.
• Organising the training and management development programmes in collaboration with line
managers and external organisatinns.
• Fixing and administering the salaries and employee benefits in consultation with line
managers.
• IntrodUcing various techniques to motivate the employees and also guiding the line managers
in this aspect.
• Preparing the employees in quality improvement programmes.
• Maintaining close and sound relations with individual employees, employee groups, trade
unions, Government and the like.
• Conducting collective and individual bargaining meetings to solve employee problems and
prevent industrial disputes.
• Administering employee benefit programmes.
• Encouraging the employees to form into teams and develop team culture.
• Assisting the line managers in organising for promotions, transfers and demotions.
• Conducting surreys and research studies regarding job satisfaction, morale, salary and
benefits levels, productivity, employee contributions, employee regularity and advising the
management based on with research findings.
• Advising, assisting and contributing in formulation and implementation of corporate level and
other level strategies.
• Maintaining and enhancing sound human relations.

TYPICAL ORGANISATION SET UP OF HUMAN RESOURCE DEPARTMENT

Human resource department maintains staff relations with other departments and it has line line
relations within itself. Human resource departments in various organisations have different units as
shown in Figure 1.12. These departments include employment unit, human resource development unit,
salaries and welfare unit, and industrial relations units. The human resource department is normally
headed by Chief Human Resource Manager who is assisted by Employment Manager, Human
Resource Development Manager, Salaries and Welfare Manager and Industrial Relations Manager.
 28 Human Resources Management

Figure • • t.
Managing
Organisation Director
Structure of .I
Human Resource l
Department Chief Manager
Chief Manager Chief Manager Chief Manager
Human
Marketing Production Finance
Resources

I
Manager Human Manager Manager
Manager
Resources Salaries & Industrial
Employment
Development Walfare Relations
"

I
Assistant Assistant Assistant Assistant
Manager Manager Manager Manager Career
Performance Training Management Planning &
Appraisal Development Development

Employment Manager is assisted by Assistant Managers incharge ofjob design and analysis, human
resource planning, recruitment and selection. Human Resource Development Manager is assisted by
Assistant Managers incharge of Performance Appraisal, Training, Management Development, Career
Planning and Development. Salaries and Welfare Manager is assisted by Assistant Managers in charge of
Managerial Compensation, employee salaries, canteen, hoUSing, conveyance and the like. Manager
Industrial Relations is assisted by Assistant Managers incharge of Union Relations, collective bargaining,
grievance handling and workers' education. All these managers work as a team and help in managing
human resou(ces of an organisation, most efficiently.

EVOLUTION AND DEVELOPMENT OF HRM

The history of development of personnel management in India is comparatively of recent origin. But
Kautilya had dealt with some of the important aspects of human resources management in his
"Arthasastra," written in 400 B.C. Government in those days adopted the techniques of H.R.M. as
suggested by Kautilya. In its modern sense, it has developed only since independence. Though the
importance of labour officers was recognised as early as 1929, the appointment of officers to solve
labour and welfare problems gained momentum only after the enactment of the Factories Act of 1948.
Section 49 of the Act required the appointment of Welfare Officers in companies employing more than
500 workers. At the beginning, Government was concerned only with limited aspects of labour welfare.
The earliest labour legislation in India dealt with certain aspects of Indian labourers (Regulation of
Recruitment, Forwarding and Employment) sent to various British colonies in 1830. Important phases
of evolution of HRM are presented in Exhibit 1.2.
Human Resources Management: Fuctfons and Role 29

Exhfbftl.2
EVOLUTION OF HRM IN INDIA

Period Development Outlook Emphasis Status

Status

1920s- Beginning Pragmatism of Statutory, welfare Clerical

1930s capitalists paternalism

1940s - Struggling for Technical, Introduction of Administrative

1960s recognition legalistic Techniques

1970s - Achieving Professional, Regulatory, conforming, Managerial

imposition of

1980s Sophistication Legalistic, Standards on other

Promising impersonal functions

1990s Philosophical Human values, Executive

productivity
through people
(Sources: C.S. Venkataratnam and B.K. Srivastava, Personnel Management and Human Resources,
Tata Mc-Graw Hill, New Delhi, 1991, p. 5.)

The important aspects of development of human resources management in India are shown in the
Exhibit 1.3.

Exhfbftl.3
DEVELOPMENT OF HRM IN INDIA
Year Nature o/Development
1860 Employers' and Workmens' (Disputes) Act was passed. This Act was penal in character,
laying down criminal penalties for breach of contract.
1881 to 1891 Factories Acts of 1881 and 1891 were passed showing concern for workers' welfare.
These Acts were limited to working hours of women and children.
1863 to 1901 The Assam Labour Acts passed between 1863-1901 were concerned with migration
of labour.
1890 First Labour Organisation, Le., Bombay Mill Hands' Association was established.
1901 The Mines Act, concerned with the :.afe working conditions in the Mines was passed
in 1901.
1905 The Printers' Union was established in Kolkata.
1907 The Postal Union was established in MumbaL
1907 Fact Labour Commission submitted its report to the Government of India.
1911 Factories Act, 1911 was passed consequently upon the Report of Factory Labour
Commission, 1907.
30 Human Resources Management

Year Nature ojDeve[opment

1915 Calico Mills in Ahmedabad provided welfare facilities by appointing a doctor and a
nurse.
1918 Massive industrial unrest prevailed following the end of World War I.
1919 The All India Trade Unions Congress (AITUC) was formed.
1920 Mahatma Gandhi inaugurated the Union ofThrostie Department workers. This Union
later became the Ahmedabad Textile Labour Association.
1922 An All India Industrial Welfare Conference was conducted by Social Service League in
Bombay. Representatives of the Government and employers attended the meeting.
Subjects discussed were workers' education, sanitation, child welfare, trade unionism,
housing etc.
1923 Strikes were organised when employers tried to reduce wages as a measure to reduce cost
of living. Workmen's Compensation Act was passed.
1924 Strikes were organised in Cotton Mills in Bombay against the management's decision
to withhold the annual bonus due to trade depression.
1926 Indian Trade Unions Act was passed with a provision of voluntary registration of the
Unions basing on certain requirements and giving certain legal protection to officers
and members of the Unions.
1928 Strikes were organised for nearly 5 months in Jamshedpur as a consequence of
retrenchment of workers.
1929 Labour Officers were appointed at the main oil installations in Bombay and Calcutta
to take complete charge of all matters of labour like recruitment, promotion,
discipline, retirement etc.
1934 The Bombay Trade Disputes Conciliation Act was passed.
1935 Bombay Mill Owners' Association reported to the Government that Government
Labour Officer together with the Association Labour Officer was successful in
improving industrial relations.
1936 The Payment of Wages Act (regulating the deductions from wages) was passed.
1937 Provincial Labour Legislations were passed in Bombay. For example, Bombay
Industrial Disputes Act, Maternity Benefits Act in Bengal etc.
1938 Bombay Mill Owners' Association published a booklet called "Recommendations of
Labour Matters".
1939 Industrial Code under Bombay Industrial Disputes Act was constituted to settle the
dispute under the standing procedure.
1940 Government of India convened Labour Ministers' Conference which continued ever
since with the representatives of employers and employees. Tata School of Social
Work started in 1940 is providing training in social welfare.
1942 Tripartiate Labour Conference representing Government, employees and labour
became a regular feature of labour policy (Indian Labour Conference).
1943 Tripartite Labour Conference recommended the setting up of a machinery to enquire
into wages and earnings, employment, housing and social conditions.
1946 Report was submitted by Indian Labour Conference.
1947 Industrial Disputes Act was passed. Functions of Labour Officer were elaborated
covering the recruitment and selection of unskilled labourers.
Human Resources Management: Fuctlons and Role 31

Year Nature of Development

1948 Factories Act was enacted.
1959 The Employment Exchange (Compulsory Notification of Vacancies) Act was passed.
1961 The Maternity Benefit Act and the Apprentice Act were passed.
1965 An ordinance for regulating payment of bonus was issued in May 1965 and was later
replaced by the Payment of Bonus Act, 1965 in September of that year.
1969 National Commission on Labour submitted its report.
1970 The Contract Labour (Regulation and Abolition) Act was passed.
1972 Payment of Gratuity Act was passed.
1972 to 1976 ILC did not meet during this period.
1980 Bonus was announced under Productivity Unked Bonus Scheme to the employees
working in departmentally run Public Sector Undertakings like Indian Railways, Posts
and Telegraphs.
1985 Ministry of Human Resources Development was set up in the Union Cabinet - Many
organisations have started changing their personnel department as Departments of
HRM and created HRD Departments.
1987 Emphasis has been shifted to various modern techniques of HRM.
1995 Emphasis has been shifted to human resources development (HRD).
1998 Emphasis on HRD, cultural diversity, teamwork and participative management has
been continuing. Further, the emerging areas are total quality in management in
HRM, empowering the employees and developing empowered teams and integrat-
ing HRM with strategic management as the top management realised that HRM is
the core of competencies of the 21st century corporations.
2000 Emphasis is shifted towards empowerment of employees.
2001 Emphasis is on 'smart sizing of the organisations'.
2002 More emphasis is laid on the positive attitude of the candidate rather than skill and
knowledge, shift from intelligence quotient to emotional quotient.

RECENT DEVELOPMENTS IN HRM

Recent developments in the area of human resources management include:
• Treating the employees as economic, social, psychological and spiritual men and women.
• Shift in the concept from Labour Management to Personnel Management and Personnel
Management to Human Resources Management.
• Significance is shifted from skilled employees to knowledgeable employees.
• The most important aspects of human resources is also shifted from skill and expertise to
positive attitude.
• Organisation design is shifted from hierarchical structure to flat and flexible structure.
• Significance of the function of controlling is getting decelerating as the application 'feed
forward' has been increasing as the companies started performing perfectly at the first time
itself.
• Significance of the functional areas of management is now centred around 'Human
Resources' .
 32 Human Resources Management

Questions for Discussion

1. The personnel manager is being paid by the management. Is he therefore a representative of the
management or personnel. Discuss in detail.
2. Describe in brief the nature and scope for personnel function in an organisation. What are the indicators
of its working in an organisation?
3. Differentiate the ~erms personnel from human resources. What is Human Resources Management?
Analyse the more comprehensive definition of Human Resources Management.
4. "Objectives of the personnel management always contradict the objectives of the personnel." Elucidiate
the statement.
5. What is personnel policy? Describe the important personnel policies that affect the job of a personnel
manager.
6. How does personnel function change as the firm grows in size? Briefly describe each stage of development.
7. Identify and discuss the managerial and operative functions of personnel management.
8. "Personnel Manager's position in the company does not determine his voice in policy-making on
personnel matters." Discuss.
9. Describe some of the problems that have often been characteristic of human resources departments in the
past.
10. What changes in society and within organisations have been instrumental in reshaping the personnel role?
11. "Personnel management is a basic management pertaining to all levels and types of management."
Discuss.
12. "The objective of personnel management in an organisation is to attain maximum individual develop-
ment, desirable working relationship between employers and employees and effective inclusion of human
resources as contrasted with physical resources." Elucidate.
13. "Personnel administration is a line responsibility but a staff function." Discuss.
14. What is line and staff. Explain the sources of conflict between line and staff.
15. Explain the qualities and qualifications necessary for a personnel manager.
16. Compare critically the organisation charts of personnel departments of two or three companies with model
charts discussed in ,he book.
17. Explain the process, systems and techniques of HRM.
18. Discuss the duties and responsibilities of human resource manager.