HUMAN RESOURCE MANAGEMENT

1. Material
2. Machines
3. Method
4. Money
5. Men
Five M's of Management
Factor of productions :Entrepreneur, Land. Labour, Capital
• it is concerned with the people dimension in management of an organisation.
• Human Resource, refers to the knowledge,education, skills, training and ability of the skills,
training and members of the organisation.
• Human Resource Management is a process, which consists of four main activities, namely,
acquisition, development, motivation, as well as maintenance of human resources.

Human resource management is organising, coordinating, and managing employees within an

organisation to accomplish its mission, vision, and goals. This includes recruiting, hiring,
training, compensating, retaining, and motivating employees.

HRM staff also develops and enforces policies and procedures to help ensure employee
safety. The HRM team manages adherence to federal and state laws that may work to protect
employees’ private information and ensure their physical safety and mental and emotional
well-being. Organisations of varying sizes and industries rely on HRM to keep business running
smoothly and efficiently.

Human Resource Management (HRM) can be defined as the strategic and coherent
approach to managing an organization's most valuable assets – its people – in a manner that
maximizes their potential contribution towards the achievement of organizational goals and
objectives. It encompasses a wide range of activities aimed at effectively managing the
workforce, including recruitment, selection, training and development, performance
management, compensation and benefits, employee relations, and personnel policies and
procedures.

Key elements of human resource management include:

Recruitment and Selection: Attracting and hiring qualified candidates who possess the skills,
knowledge, and competencies required for various roles within the organization.
Training and Development: Providing employees with the necessary training, education, and
development opportunities to enhance their skills, capabilities, and performance in their
current roles and to prepare them for future responsibilities.
Performance Management: Establishing performance standards, evaluating employee
performance against these standards, providing feedback, and implementing measures to
improve performance and productivity.
Compensation and Benefits: Designing and administering compensation and benefits
packages that are competitive, fair, and aligned with organizational objectives, while also
ensuring compliance with legal requirements.
Employee Relations: Managing and fostering positive relationships between employees and
the organization, addressing workplace conflicts and grievances, and promoting a culture of
fairness, respect, and inclusivity.
Personnel Policies and Procedures: Developing and implementing policies, procedures, and
guidelines that govern various aspects of employment, including recruitment, promotions,
discipline, and termination, while ensuring compliance with relevant laws and regulations.
Workforce Planning and Talent Management: Anticipating future workforce needs,
identifying key talent within the organization, and implementing strategies to attract, retain,
and develop top performers.
Employee Engagement and Satisfaction: Creating an environment that motivates and
engages employees, fosters their job satisfaction, and promotes their overall well-being and
commitment to the organization.
Overall, effective human resource management is essential for maximizing organizational
performance, fostering employee satisfaction and engagement, and ultimately achieving
sustainable competitive advantage in today's dynamic and competitive business
environment.
According to Edwin B. Flippo, -
• Human resource management is the planning, organising, directing and controlling of the
procurement, development, Compensation, integration, maintenance and separation of
human resources to the end that individual, organisational and societal objectives are
accomplished.
• This definition reveals that HR management is that aspect of management, which deals
with the planning, organising, directing and controlling the personnel functions of the
enterprise
Some of the most basic roles of HRM are - recruitment strategies, recruitment, training,
motivation, leave policies, other workplace policies, employee-related legal compliances,
organisational culture, monitoring, salary structure etc to name a few .
human resource or manpower management effectively describes the process of planning
and directing the application, development and utilisation of human resources in
employment-Dale Yoder
human resource management is the part of management processes which is primarily
concerned with the human consequence of an organisation-ELF Berch

NATURE OF HRM

• Managerial Proces
• Human resource management is a vital part of management that includes planning,
organising, staffing, directing, and controlling human resources to achieve
organisational success. It is a managerial process that effectively utilises human
resources to attain organisational goals and objectives.
• Both Art and Science
• Human resource management is a mixture of both art and science. It is an art as it
deals with qualitative attributes like creativity, knowledge, skills, and talent of the
personnel. In simple words, HRM is the art of getting things done by others
effectively. HRM is a science as it requires different scientific techniques for activities
like recruitment, selection, training, and appraisal of employees.
• Pervasive Force

Human resource management, being an inherent part of an organisation, is

pervasive in nature. It means that HRM is present in different functional areas of
management, like finance, marketing, and production, in all commercial and non-
commercial enterprises. Everyone in the organisation, from the top to the lowest
level, must perform HRM functions regularly.

• Improve Employee Relations

• “In order to build a rewarding employee experience, you need to understand what
matters most to your people.” – Julie Bevacqua.

Human resource management is concerned with building healthy relationships

between employees at various organisational levels. Every individual has different
needs, goals, and expectations. HRM deals with these individual factors and
 motivates employees to reach their maximum potential. Moreover, it creates an
organisational culture that fosters learning and growth.

• People-Centred
• The nature of human resource management is people-centred and relevant in all
types of organisations. It is concerned with every employee from the top to the
bottom level. HRM value people both as individuals and as a group. Furthermore, it
encourages people to develop their full potential and fulfil individual and
organisational goals.
• Development-Oriented
• The development of the workforce in an organisation is crucial to the nature of
human resource management. HR managers use various tools to help employees
understand their strengths and unleash their potential. Regular training programs
can benefit employees by improving their skills. Also, monetary and non-monetary
reinforcement can help people stay motivated to perform better.
• Action Oriented
• While human resource management does follow the rules and policies, its main
focus is on action and results rather than rules. A human resource manager stresses
the importance of providing effective solutions for employee problems, tensions, or
controversies.
• Forward-Looking
• Sustaining in the competitive business environment requires organisations to plan
long-term strategies. HRM is a future-oriented approach that evaluates the human
resource requirements and ensures the availability of required personnel in the right
place at the right time. With the forward-looking nature of human resource
management, managers prepare employees by motivation, training, and
development to face current and future challenges in the changing business
environment.
• Continuous Process
• Human resource management is not a ‘one-time’ function. Rather, it is a never-
ending process that must be performed continuously to achieve organisational
objectives effectively. It involves a series of tasks, beginning with identifying the
human resource requirement and continuing with recruitment, training,
performance evaluation, and appraisal.
• Basis of Other Functional Areas
• HRM is the basis of all other functional areas of management, such as finance,
production, and marketing. The effectiveness of each of these departments depends
on the effectiveness of their human resource management.
• Interdisciplinary Function
• Human resource management is multidisciplinary in nature. HR managers utilise
knowledge and inputs from various disciplines to manage the workforce effectively.
The five major disciplines in HRM include management, communication, psychology,
sociology, and economics. In order to effectively manage human resources, one
must understand the contribution of all these disciplines to HRM.
• Legal and Ethical Considerations: HRM operates within the framework of legal and
ethical principles, ensuring compliance with relevant laws, regulations, and industry
 standards. It involves safeguarding employee rights, ensuring non-discrimination and
equal opportunity, and maintaining confidentiality and privacy.
• Systematic and Planned Approach: HRM involves the systematic planning,
implementation, and evaluation of HR policies, programs, and practices to ensure
they are aligned with organizational objectives and contribute to the achievement of
desired outcomes.
• Comprehensive Scope: HRM covers a wide range of activities and functions, including
recruitment and selection, training and development, performance management,
compensation and benefits, employee relations, and legal compliance. It
encompasses all aspects of the employment lifecycle, from hiring to retirement or
separation.
• Overall, the nature of HRM underscores its strategic significance, holistic approach,
and commitment to promoting the well-being of employees while driving
organizational success. It is a dynamic and evolving field that continues to evolve in
response to changing business environments, workforce demographics, and
technological advancements.

SCOPE OF HRM
The scope of Human Resource Management refers to all the activities that come under the
banner of Human Resource Management. These activities are as follows.
Human resources planning :-
Human resource planning or Human Resource Planning refers to a process by which the
company to identify the number of jobs vacant, whether the company has excess staff or
shortage of staff and to deal with this excess or shortage.
Job analysis design :-
Another important area of Human Resource Management is job analysis. Job analysis gives a
detailed explanation about each and every job in the company.
Recruitment and selection :-
Based on information collected from job analysis the company prepares advertisements and
publishes them in the newspapers. This is recruitment. A number of applications are
received after the advertisement is published, interviews are conducted and the right
employee is selected thus recruitment and selection are yet another important area of
Human Resource Management.
Orientation and induction :-
Once the employees have been selected an induction or orientation program is conducted.
This is another important area of Human Resource Management. The employees are
informed about the background of the company, explain about the organizational culture
and values and work ethics and introduce to the other employees.
Training and development :-
Every employee goes under training program which helps him to put up a better
performance on the job. Training program is also conducted for existing staff that have a lot
of experience. This is called refresher training. Training and development is one area where
the company spends a huge amount.
Performance appraisal :-
Once the employee has put in around 1 year of service, performance appraisal is conducted
that is the Human Resource department checks the performance of the employee. Based on
these appraisal future promotions, incentives, increments in salary are decided.
Compensation planning and remuneration :-
There are various rules regarding compensation and other benefits. It is the job of the
Human Resource department to look into remuneration and compensation planning.
Motivation, welfare, health and safety :-
Motivation becomes important to sustain the number of employees in the company. It is
the job of the Human Resource department to look into the different methods of
motivation. Apart from this certain health and safety regulations have to be followed for the
benefits of the employees. This is also handled by the HR department.
Industrial relations :-
Another important area of Human Resource Management is maintaining co-ordinal
relations with the union members. This will help the organization to prevent strikes lockouts
and ensure smooth working in the company

Objective of Human Resource Management

• To act as a link between the top management and the employees.
• To arrange and maintain adequate manpower inventory, which in turn, ensures the
smooth working of the organisation.
• To offer training as a way of developing skills, enhancing productivity and most
importantly, increasing individual and organisational performance to achieve the desired
results.
• To devise employee benefit schemes for improving employee motivation and group
morale, and enhancing employer-employee cooperation.
• To ensure and enhance the quality of work life, which refers to the employees' perception
of their physical and psychological well -being at work.
• Attracting and Retaining Talent: HRM aims to attract skilled and qualified
individuals to fill positions within the organization and retain them by offering
competitive compensation, benefits, and career development opportunities.

• Employee Development and Training: HRM focuses on enhancing the skills,

knowledge, and competencies of employees through training and
 development programs. This helps employees perform their current roles
effectively and prepares them for future responsibilities.

• Performance Management: HRM establishes performance standards,

evaluates employee performance, and provides feedback to improve
performance. By effectively managing performance, HRM contributes to the
achievement of organizational goals and objectives.

• Employee Engagement and Satisfaction: HRM aims to create a positive work

environment that fosters employee engagement, satisfaction, and
commitment. This involves promoting open communication, recognizing
employee contributions, and addressing issues that impact morale and
motivation.

• Workforce Planning and Succession Management: HRM engages in workforce

planning activities to ensure that the organization has the right talent in place
to meet current and future needs. This includes succession planning to
identify and develop future leaders within the organization.

• Managing Diversity and Inclusion: HRM promotes diversity and inclusion

within the workplace by creating policies and practices that embrace
differences and foster a culture of respect and acceptance. This helps attract a
diverse workforce and enhances innovation and creativity.

• Legal Compliance and Risk Management: HRM ensures compliance with

relevant employment laws, regulations, and industry standards to mitigate
legal and reputational risks. This includes implementing policies and
procedures to prevent discrimination, harassment, and other forms of
misconduct.

• Enhancing Organizational Effectiveness: HRM plays a strategic role in

enhancing organizational effectiveness by aligning human capital with
organizational goals and objectives. This involves developing HR strategies
that support the overall strategic direction of the organization and contribute
to its long-term success.

• Managing Change and Adaptation: HRM helps organizations navigate change

and adapt to evolving business environments by facilitating organizational
change initiatives, managing restructuring efforts, and supporting employees
through transitions.

• Cost Management: HRM aims to manage HR costs effectively while

maximizing the value of human capital. This includes controlling labor costs,
 optimizing workforce utilization, and implementing cost-effective HR practices
and technologies.

• Overall, the objectives of HRM are geared towards maximizing the potential
of employees, creating a positive work environment, and contributing to the
achievement of organizational goals and objectives. By focusing on these
objectives, HRM plays a critical role in driving organizational success and
sustainability.

Importance/Significance of HRM
• Match demand and supply of HR (Fulfill HR Requirement)
• Hire the right person for the job
• Provides training and development
• Minimise Attrition Rate
• Ensure people do their best (Utilisation of HR)
• Redress Grievance and conflict
• Employee benefits, remuneration, motivation, health and safety
1. Quality of work-life

Quality of work refers to the overall quality or productivity of employees at their workplace.
It tells about the employee’s impression of the physical and psychological productivity of
employees at the workplace.

The HR manager makes conscious efforts to maintain the quality of work at the workplace
as it is directly related to employee productivity. This can be done by reducing the work-life
stress and workload, providing rewards and recognition as well as any other financial
benefits if possible.

2. Meeting demand and supply gap for human resources

Besides maintaining the physical resources in an organization, an HR manager ensures that

appropriate human resources in an organization. They are responsible for finding the right
fit for the organization to ensure high performance and productivity. This can be done
through campus placements and other recruitment drives whenever needed. Also,
unproductive employees can be laid off from the organization.

3. Training and overall development

Training and development are the continued efforts of any organization to boost employee
productivity and performance. Spending money on training and development is an
investment for an organization that will generate good future returns. This investment not
only benefits employees but is also a major benefit for organizations in improving
productivity scale.
Training can be provided to new employees in the organization as well as to old employees
to boost their productivity. These training sessions teach decision-making skills, leadership
skills, building thought processes etc.

4. Employee motivation and retention

The major task of Human resource management is to build a sense of belongingness in

employees. It is essential to motivate each employee so that they can work to their full
potential. This can be done with the help of employee recognition programs.

An employee getting recognition gets a purpose for their job, therefore motivating them to
do better next time. Another method is to provide them with regular monetary benefits
such as meal coupons and gift cards.

5. Building a healthy work culture

Healthy work culture plays an important part in any organization. The workplace should be
safe, comfortable and valued for employees. It is needed to bring the best out of
employees.

HR makes sure that the work culture is democratic and transparent. Employees should be
provided with the power to present their ideas and point in the organization. This culture is
found to be best for employees as well as organizations. The more happy the employees
are, the more will be their productivity.

6. Employee wages and salaries

Appropriate compensation is necessary for employees so that they can feel the job’s worth.
Compensation may be in the form of wages, additional benefits and perks or travel packages
etc.

7. Maximizing profit and productivity

Human resource management helps to ensure how much personnel are required in which
department. It also ensures that enough opportunities should be provided to existing
employees of the organization for their growth and career opportunities.

Such employees who work to achieve their personal growth are directly related to the
growth of the organization. Thereby minimizing the cost and maximizing productivity.

8. Strategy Management

Human resource is an important aspect of any organization. HR managers work on and

manage all the strategies laid out by top management and industry experts. It also takes
part in the corporate decision and strategy making for all the employees in achieving their
goals or targets.
9. Establishing corporate image
Every organization must have a good brand image in the industry. HRM plays
an important role in building the brand image of an organization in front of
external and internal stakeholders. Moreover, employees would be more
 willing to work for an organization which possesses a good image in the
market.

EVOLUTION OF HRM
The evolution of Human Resource Management (HRM) can be traced through various
stages, reflecting changes in organizational needs, societal norms, and the understanding of
the role of employees within the workplace. Here's a brief overview of the evolution of
HRM:

Personnel Administration (Late 19th to Early 20th Century):

The earliest phase of HRM was primarily focused on administrative tasks related to
managing employees, such as record-keeping, payroll, and compliance with labor laws.
The main objective was to ensure that organizations complied with legal requirements and
maintained basic employee records.
Human Relations Movement (1920s to 1930s):
With the rise of industrialization and scientific management principles, attention shifted
towards understanding the psychological and social factors influencing employee behavior
and productivity.
The emphasis was on improving employee morale, motivation, and job satisfaction to
enhance productivity and reduce turnover.
Behavioral Science Approach (1940s to 1950s):

This phase built upon the human relations movement and incorporated insights from
psychology and sociology to better understand employee behavior.
Research studies such as the Hawthorne Studies highlighted the importance of social and
psychological factors in influencing employee performance.
Systems Approach (1960s to 1970s):
The systems approach to HRM emphasized viewing organizations as complex systems
composed of interrelated parts.
HRM focused on aligning human resources with organizational goals and creating systems
and processes to support organizational effectiveness.
Human Resource Management (1980s to Present):
The emergence of the term "Human Resource Management" marked a shift towards a
strategic approach to managing people within organizations.
HRM became more integrated with overall organizational strategy, with a focus on
maximizing the potential of human capital to achieve organizational goals.
Key areas of focus include strategic HR planning, talent management, performance
management, employee engagement, and organizational development.
Contemporary Trends (21st Century):
In the 21st century, HRM has continued to evolve in response to changing workforce
demographics, globalization, technological advancements, and shifting employee
expectations.
Contemporary HRM practices emphasize flexibility, agility, and innovation in responding to
dynamic business environments.
Emerging trends include the use of data analytics for HR decision-making, the adoption of
flexible work arrangements, a focus on diversity and inclusion, and the integration of HR
technology (e.g., HRIS, AI) to streamline HR processes.
Throughout its evolution, HRM has transitioned from a primarily administrative function to a
strategic partner in organizational success, reflecting broader changes in the nature of work
and the role of employees within organizations.

Challenges Faced by Human Resource Management Includes:

1. Recruitment and Selection

One of the major challenges faced by human resource managers is recruitment and
selection. As technology advances, new HR management tools and techniques are
developed. As a result, HR professionals find it challenging to find a suitable candidate who
fits job requirements and adapt to technological changes. They will have to make some
changes in their recruitment methods, including offering new training services to ensure
quality results.

2. Leadership Development
Leadership development is another one of the biggest challenges for HR in 2022. You see, it
is crucial that you nurture employees with leadership skills and help them advance their
careers. This is a strategic initiative that should be handled carefully to retain the best
employees. In addition, HR professionals must ensure they provide essential tools and
structures to select and develop future leaders of their organizations.

3. Managing a Diverse Workforce

Hiring a diverse workforce means that you bring onboard employees with a broader range
of skills and different experiences that can maximize productivity. However, managing such
workers is one of the HR challenges in many organizations. For instance, handling frequent
disagreements and encouraging effective communication between a diverse workforce with
different backgrounds can leave other employees feeling neglected. In this regard, HR
professionals must develop an organizational culture through various team-building
activities.

4. Compliance With Employment Laws

Employment laws keep changing, and it is upto the HR professionals to stay abreast with the
latest laws to avoid audits and lawsuits that could affect your business
performance. Employment laws are regulations that assist in effective hiring, employee
management, and workplace safety.

5. Engaging Employees
Besides talent acquisition challenges, HR departments struggle to keep their workforce
engaged and maximize productivity. You see, as your business grows, you will also alter its
structure, work plan, and even internal processes. Getting your workers to adapt to this
change require effective communication. Let them know the benefits of the changes and
why their input is crucial in taking the business to a higher level. Consider having frequent
meetings and let them know about recent developments. Regular feedback is also essential
to identify areas that need extra attention.

6. Compensation and Benefits

Structuring employee compensation and benefits is another emerging challenges of HRM.
Businesses have to keep up with their competitors to retain the best talent. This can cause a
strain on small businesses that are yet to generate the same revenue large organizations do.
In this regard, HR managers with small payroll budgets should consider employee rewards
programs for the best-performing individuals. Incentive programs can also be a solution to
low salaries and employee benefits.

7. Trade Union Demands

Some trade unions have unrealistic demands that contribute to human resource
management challenges. Therefore, you need to be skillful in handling trade unions that
oppose your company’s policies and procedures. This is so that you can easily reach an
agreement that benefits both parties.

8. Retaining the Best Talent

This is one of the most common challenges of HRM faced by organizations. With employers
competing for the best employees, retaining them requires a structured onboarding plan.
Remember that employee turnover can be costly and have an adverse effect on your
business growth. To maintain the best talent, you should also create a conducive work
environment, provide room for career development, and motivate them to perform better.

9. Maintaining Workers’ Health and Safety at Workplace

HR professionals must ensure that the workplace is conducive enough to accommodate
employees without affecting their health. For instance, if there are types of machinery that
require skills to operate, let the employees know the dangers of using them. Their health
should also be a priority since healthy and safe workers will keep your business running and
growing. Workload and stress levels are also other human resource management issues and
challenges that can be handled by allocating tasks equally and planning for activities that
help manage stress.

10. Organizational Data and Integrity Management

Businesses are becoming more digitized, using electronic devices to manage various tasks.
However, while they enjoy the benefits of the advancing technology, their data are at risk of
leaking into the wrong hands. These challenges for HR people make HR professionals
struggle to secure their companies’ data and maintain their integrity. Therefore, you need to
ensure the data security department is on its toes to secure data. Also, consider
communicating with your employees about data security best practices such as the use of
passwords, phishing emails, desktop rules, etc.

11. Adapting to Technological Disruption:

Embracing digital transformation and leveraging HR technology (e.g., HRIS, AI, analytics) presents
challenges related to data security, privacy, and the ethical use of technology. HRM must navigate the
integration of technology into HR processes while addressing concerns about job displacement and
the human impact of automation.

Ethical issues in Human Resource Management

Ethical issues in Human Resource Management (HRM) arise from the complex nature of
managing people within organizations and the ethical responsibilities that HR professionals
have towards employees, the organization, and other stakeholders. Here are some common
ethical issues in HRM:
1. Equal Employment Opportunity (EEO) and Diversity: Ensuring fairness and equality in
recruitment, selection, promotion, and compensation processes, and preventing
discrimination based on factors such as race, gender, age, religion, disability, or
sexual orientation.
2. Privacy and Confidentiality: Protecting employee privacy rights and maintaining the
confidentiality of sensitive personal information, such as medical records,
performance evaluations, and disciplinary actions.
3. Conflict of Interest: Avoiding situations where personal interests conflict with
professional duties, such as nepotism in hiring or promotion decisions, or accepting
gifts or favors from vendors or clients that may compromise objectivity.
4. Fair Treatment and Respect: Treating employees with dignity, respect, and fairness,
and ensuring that HR policies and practices are applied consistently and
transparently across all employees.
5. Compensation and Benefits: Ensuring that compensation and benefits packages are
fair, equitable, and aligned with industry standards and organizational performance,
and avoiding unethical practices such as wage theft or unfair wage differentials.
6. Health and Safety: Providing a safe and healthy work environment for employees,
addressing workplace hazards and safety concerns promptly, and complying with
occupational health and safety regulations.
7. Whistleblowing and Reporting Misconduct: Encouraging employees to report
unethical behavior or violations of company policies without fear of retaliation, and
ensuring that whistleblowers are protected from adverse consequences.
8. Employee Rights and Representation: Respecting employees' rights to freedom of
association, collective bargaining, and representation by labor unions, and refraining
from interfering with these rights.
9. Layoffs and Downsizing: Handling layoffs and downsizing in a humane and
compassionate manner, providing support and assistance to affected employees, and
minimizing the negative impact on morale and livelihoods.
10. Globalization and Supply Chain Ethics: Ensuring that HR practices adhere to ethical
standards throughout the global supply chain, including in sourcing, manufacturing,
and distribution processes, and avoiding exploitation of labor in low-wage countries.
11. Use of Technology and Data Privacy: Ethical use of technology and data in HR
processes, including data privacy, protection of personal information, and ensuring
that algorithms and AI systems used in HR decision-making are fair and unbiased.
12. Labor Costs:HR must cope with conflicting needs to keep labor costs as low as
possible and to invite fair wages. Ethics come into action when HR must select
between outsourcing labor to countries with lower wages and harsh living conditions
and paying competitive wages.
13. While there is nothing illegal about outsourcing labor, this issue has the potential to
build a public relations problem if consumers object to using underpaid workers to
save money.
14. Opportunity for New Skills:If the HR department selects who gets training, it can run
into ethical issues. As training is a chance for development and broadened
opportunities, employees who are left out of training may debate that they are not
being given equal opportunities in the workplace.
15. Performance Appraisal:Ethics should be the basis of performance evaluation. Highly
ethical performance appraisal demands that there should be an honest assessment
of the performance and steps should be taken to improve the effectiveness of
employees. However, HR managers, sometimes, face the dilemma of assigning higher
rates to employees who are not deserving them; based on some unrelated factors
eg. closeness to the top management. Some employees are, however, given low
 rates, despite their excellent performance on the basis of factor like caste, religion or
not being loyal to the appraiser.
Addressing these ethical issues requires a proactive approach by HR professionals, including
the development and implementation of clear ethical guidelines, training programs for
employees and managers, regular ethical audits and assessments, and fostering a culture of
integrity and accountability within the organization.

Personnel Management Vs Human Resource

Management
BASIS FOR
PERSONNEL MANAGEMENT HUMAN RESOURCE MANAGEMENT
COMPARISON

Meaning The aspect of management that is The branch of management that focuses on the
concerned with the work force and most effective use of the manpower of an
their relationship with the entity is entity, to achieve the organizational goals is
known as Personnel Management. known as Human Resource Management.

Approach Traditional Modern

Treatment of Machines or Tools Asset

manpower

Type of function Routine function Strategic function

Basis of Pay Job Evaluation Performance Evaluation

Management Transactional Transformational

Role

Communication Indirect Direct

Labor Collective Bargaining Contracts Individual Contracts

Management

Initiatives Piecemeal Integrated

Management Procedure Business needs

Actions

Decision Making Slow Fast

Job Design Division of Labor Groups/Teams

Focus Primarily on mundane activities like Treat manpower of the organization as valued
employee hiring, remunerating, assets, to be valued, used and preserved.
training, and harmony.

Definition of Personnel Management

Personnel Management is a part of management that deals with the recruitment, hiring,
staffing, development, and compensation of the workforce and their relation with the
organization to achieve the organizational objectives. The primary functions of the
personnel management are divided into two categories:

 Operative Functions: The activities that are concerned with procurement,

development, compensation, job evaluation, employee welfare,
utilization, maintenance and collective bargaining.
 Managerial Function: Planning, Organizing, Directing, Motivation, Control, and
Coordination are the basic managerial activities performed by Personnel
Management.

From the last two decades, as the development of technology has taken place and the
humans are replaced by machines. Similarly, this branch of management has also been
superseded by Human Resource Management.

Key Differences Between Personnel Management and Human

Resource Management

The following are the major differences between Personnel Management and Human
Resource Management:

1. The part of management that deals with the workforce within the enterprise is
known as Personnel Management. The branch of management, which focuses on the
best possible use of the enterprise’s manpower is known as Human Resource
Management.
2. Personnel Management treats workers as tools or machines whereas Human
Resource Management treats it as an important asset of the organization.
3. Human Resource Management is the advanced version of Personnel Management.
4. Decision Making is slow in Personnel Management, but the same is comparatively
fast in Human Resource Management.
5. In Personnel Management there is a piecemeal distribution of initiatives. However,
integrated distribution of initiatives is there in Human Resource Management.
6. In Personnel Management, the basis of job design is the division of work while, in the
case of Human Resource Management, employees are divided into groups or teams
for performing any task.
7. In PM, the negotiations are based on collective bargaining with the union leader.
Conversely, in HRM, there is no need for collective bargaining as individual contracts
exist with each employee.
8. In PM, the pay is based on job evaluation. Unlike HRM, where the basis of pay is
performance evaluation.
9. Personnel management primarily focuses on ordinary activities, such as employee
hiring, remunerating, training, and harmony. On the contrary, human resource
management focuses on treating employees as valued assets, which are to be
valued, used and preserved.
TRADITIONAL HRM VS STATEGIC HRM
What is traditional human resource management?

Traditional human resource management is primarily reactive. This means the HR

department’s activities aren’t fully aligned with the business’s leadership goals. Instead,
HR is more of a task-oriented, administrative department that fulfills employees’ needs
only as they occur.

For example, in a traditional human resource management approach, HR will recruit and
hire employees once a department manager informs them of an open position. Similarly,
if employees have questions about a specific policy, then HR will provide the answers.
However, HR probably won’t go so far as to create an employee handbook or host
seminars on new policies that employees need to be aware of.

One of the issues with this approach is that, because it’s largely reactive, the HR team
may sometimes rush processes, which can make them feel disjointed. There’s often little
strategic planning involved in traditional human resource management, so the team isn’t
always aware of what they could be doing before the company or an employee needs
assistance.

What is strategic human resource management?

Unlike the reactive approach of traditional human resource management, strategic

human resource management is highly proactive. With this approach, HR aligns with the
business’s larger goals from an executive level.

The organization develops a cohesive HR strategy in conjunction with the objectives it

wants to achieve. All human resource initiatives — from recruiting and hiring to
onboarding and training — are designed to bring the organization closer to its targets.

For example, instead of waiting for a department manager to notify the HR team of an
open position, HR will proactively recruit and hire employees based on the overall
business strategy and in lockstep with department managers. The HR team can do this
because it’s already aware of the company’s future needs and can set plans in motion to
meet those needs.

Similarly, using the strategic approach, HR will preemptively assess employees’ needs for
onboarding, training, performance evaluations, and compensation, and they’ll develop
and implement programs to provide employees with the necessary information and
resources.

Traditional HRM (Human Resource Management) and Strategic HRM represent different
approaches to managing human resources within an organization. Here's a comparison
highlighting the key differences between the two:
Focus:

Traditional HRM: Traditional HRM focuses on administrative tasks and transactional

activities such as payroll, benefits administration, and compliance with employment laws and
regulations.

Strategic HRM: Strategic HRM focuses on aligning human capital with organizational goals
and objectives. It involves a more proactive and strategic approach to managing people, with
an emphasis on driving organizational performance and competitive advantage.

Role of HR:

Traditional HRM: In traditional HRM, HR is seen as a support function responsible for

carrying out routine administrative tasks and providing services to employees and managers.

Strategic HRM: In strategic HRM, HR plays a strategic role in shaping organizational

strategy and direction. HR professionals are involved in strategic planning, talent
management, and organizational development activities.

Time Horizon:

Traditional HRM: Traditional HRM has a short-term focus, primarily concerned with
meeting immediate operational needs and ensuring compliance with legal requirements.

Strategic HRM: Strategic HRM takes a long-term perspective, focusing on developing human
capital capabilities that align with the organization's long-term goals and objectives.

Approach to Planning:

Traditional HRM: In traditional HRM, planning tends to be reactive and based on short-term
operational needs. HR plans are often disconnected from overall organizational strategy.

Strategic HRM: Strategic HRM involves proactive planning that is integrated with
organizational strategy. HR plans are aligned with business objectives, and HR strategies are
developed to support the achievement of these objectives.

Employee Relations:

Traditional HRM: Traditional HRM focuses on managing day-to-day employee relations

issues, such as grievances, disciplinary actions, and employee morale.

Strategic HRM: Strategic HRM takes a more proactive approach to employee relations,
focusing on fostering a positive work environment, promoting employee engagement, and
aligning employee interests with organizational goals.

Measurement and Evaluation:

Traditional HRM: Traditional HRM tends to focus on input measures such as the number of
employees hired, training hours delivered, and compliance metrics.
Strategic HRM: Strategic HRM emphasizes outcome measures that are aligned with
organizational performance indicators, such as employee productivity, turnover rates, and
return on investment in human capital.

Overall, while traditional HRM focuses on day-to-day administrative tasks and compliance,
strategic HRM takes a more proactive and strategic approach, aligning human capital with
organizational goals to drive long-term success and competitive advantage.

NEW TRENDS IN HRM

Several emerging trends are shaping the landscape of Human Resource Management (HRM)
in organizations. These trends reflect changes in workforce demographics, technological
advancements, evolving workplace dynamics, and shifting employee expectations. Some of
the new trends in HRM include:

Remote Work and Flexible Work Arrangements: The COVID-19 pandemic has accelerated
the adoption of remote work and flexible work arrangements. HRM is increasingly focused
on developing policies and practices to support remote employees, ensuring effective
communication, collaboration, and performance management in virtual environments.

Digital HR and HR Technology: The integration of technology in HR processes, such as

Human Resource Information Systems (HRIS), artificial intelligence (AI), machine learning,
and data analytics, is transforming HRM. HR technology enables automation of routine
tasks, streamlines recruitment and onboarding processes, enhances employee engagement,
and provides insights for strategic decision-making.

Employee Well-being and Mental Health: Organizations are placing greater emphasis on
employee well-being and mental health initiatives. HRM is implementing programs and
resources to support employee wellness, promote work-life balance, and address stress,
burnout, and mental health challenges in the workplace.

Diversity, Equity, and Inclusion (DEI): There is growing recognition of the importance of
diversity, equity, and inclusion in the workplace. HRM is implementing strategies to foster a
diverse and inclusive workplace culture, address unconscious bias in recruitment and
promotion processes, and promote equal opportunities for all employees.

Skills Development and Continuous Learning: HRM is focusing on skills development and
continuous learning initiatives to upskill and reskill employees in response to rapid
technological advancements and changing job roles. This includes providing access to online
learning platforms, offering training programs tailored to individual development needs, and
promoting a culture of lifelong learning.

Agile and Adaptive HR Practices: HRM is adopting agile and adaptive practices to respond
quickly to changing business needs and market conditions. This includes flexible workforce
planning, agile performance management processes, and cross-functional teams that can
quickly adapt to new challenges and opportunities.

Remote Recruitment and Onboarding: With the rise of remote work, HRM is leveraging
virtual recruitment and onboarding processes. This includes conducting virtual interviews,
using online assessment tools, and providing remote onboarding experiences to ensure a
smooth transition for new hires.

Gig Economy and Contingent Workforce Management: HRM is managing an increasingly

diverse workforce that includes full-time employees, freelancers, contractors, and gig
workers. This involves developing policies and practices to effectively recruit, onboard, and
manage contingent workers, while ensuring compliance with labor laws and regulations.

Environmental, Social, and Governance (ESG) Initiatives: Organizations are integrating

environmental, social, and governance considerations into their business practices. HRM is
playing a role in supporting ESG initiatives by promoting corporate social responsibility,
sustainability practices, and ethical leadership within the organization.

Remote Performance Management: As remote work becomes more prevalent, HRM is

rethinking traditional performance management processes. This includes adopting remote-
friendly performance metrics, providing regular feedback and coaching to remote
employees, and leveraging technology to track performance and progress towards goals.

Overall, these new trends in HRM reflect the evolving nature of work and the need for HR
professionals to adapt to changing workplace dynamics, leverage technology, and
implement innovative strategies to support organizational success and employee well-being.