CHAPTER I

HUMAN RESOURCE MANAGEMENT – BASIC CONCEPT

CONCEPT OF HRM
HRM is concerned with the human beings in an organization. “The management of man” is a
very important and challenging job because of the dynamic nature of the people. No two
people are similar in mental abilities, tacticians, sentiments, and behaviors; they differ widely
also as a group and are subject to many varied influences. People are responsive, they feel,
think and act therefore they cannot be operated like a machine or shifted and altered like
template in a room layout. They therefore need a tactful handing by management personnel.”
HRM is the process of managing people of an organization with a human approach. Human
resources approach to manpower enables the manager to view the people as an important
resource. It is the approach through which organization can utilize the manpower not only for
the benefits of the organization but for the growth, development and self satisfaction of the
concerned people. Thus, HRM is a system that focuses on human resources development on
one hand and effective management of people on the other hand so that people will enjoy
human dignity in their employment.
HRM is involved in providing human dignity to the employees taking into account their
capacity, potentially, talents, achievement, motivation, skill, commitment, great abilities, and
so on. So, that their personalities are recognized as valuable human beings. If an organization
can trust, depend and draw from their bank account on the strength of their capital assets,
they can trust, depend and draw more on their committed, talented, dedicated and capable
people. This is what the HRM is involved in every business, managerial activity or
introduction.
The principal component of an organization is its human resource or ‘people at work’.
According to Leon C. Megginson from the national point of view Human Resources as, “the
knowledge, skills, creative abilities, talents and aptitudes obtained in the population; whereas
from the view point of the individual enterprise, they represent the total of inherent abilities,
acquired knowledge and skills as exemplified in the talents and aptitudes of its employees.”
Human resource has a paramount importance in the success of any organization because most
of the problems in organizational setting are human and social rather than physical, technical
or economical failure. In the words of Oliver Shelden, “No industry can be rendered efficient
so long as the basic fact remains unrecognized that it is principally human.”
Human Resources Management is concerned with the “people” dimension in management.
Since every organization is made up of people acquiring their services, developing their
skills, motivating them to high level of performance and ensuring that they continue to
maintain their commitment to the organization are essential to achieve organizational
objectives. This is true regardless of the type of organization, government, business,
education, health, recreation or social action. Getting and keeping good people is critical to
the success of every organization, whether profit or non-profit, public or private.
DEFINITIONS
“Human resource management is the planning, organizing, directing and controlling of the
procurement, development, compensation, integration, maintenance and separation of human
resources to the end that individual, organizational and social objectives are accomplished”. –
Edwin B. Filippo
“It is a method of developing potentialities of employees so that they get maximum
satisfaction out of their work and give their best efforts to the organization”. – Pigers and
Myers
“Human resource management is that part of management which is concerned with the
people at work and with their relationship within the enterprise”. - British Institute of
Personnel Management
The Indian Institute of Personnel Management defines HRM as, “Human resource
management is a responsibility of all those who manage people as well as being a description
of the work of those who are employed as specialists. It is that part of management which is
concerned with people at work and with their relationships within an enterprise. It applies not
only to industry and commerce but to all fields of employment.”
According to Tead and Metcaff, “Human resource management is the planning, supervision,
direction and co-ordination of those activities of an organization which contribute to realising
the definite purpose of that organization, with an animating spirit of co-operation and with a
proper regard for the well-being of all the members of the organization.”
NATURE OF HRM
HRM is a management function that helps managers to recruit, select, train and develop
members for an organization. HRM is concerned with people’s dimension in organizations.
The following aspects constitute the core of HRM
1. HRM Involves the Application of Management Functions and Principles. The
functions and principles are applied for acquiring, developing, maintaining and
providing remuneration to employees in organization.
2. Decision Relating to Employees must be integrated. Decisions on different aspects of
employees must be consistent with other human resource (HR) decisions.
3. Decisions Made Influence the Effectiveness of an Organization. Effectiveness of an
organization will result in betterment of services to customers in the form of high
quality products supplied at reasonable costs. 4. HRM Functions are not confined to
Business Establishments Only but applicable to non-business organizations such as
education, health care, recreation and like.
HRM refers to a set of programmes, functions and activities designed and carried out in order
to maximize both employee as well as organizational effectiveness.
OBJECTIVES OF HRM
The primary objective of HRM is to ensure the availability of a competent and willing
workforce to an organization. Apart from this, there are other objectives too.
Specifically, HRM objectives are four fold: societal, organisational, functional, and personal.
1. Societal Objectives
The societal objectives are socially and ethically responsible for the needs and
challenges of society. While doing so, they have to minimize the negative impact of
such demands upon the organisation. The failure of organisations to use their
resources for society’s benefit in ethical ways may lead to restrictions. For example,
the society may limit human resource decisions to laws that enforce reservation in
hiring and laws that address discrimination, safety or other such areas of societal
concern.
2. Organisational Objectives
The organisational objectives recognise the role of human resource management in
bringing about organisational effectiveness. Human resource management is not an in
 itself; it is only a means to assist the organisation with its primary objectives. Simply
stated the human resource department exists to serve the rest of the organisation.
3. Functional Objectives
Functional objectives try to maintain the department’s contribution at a level
appropriate to the organisation’s needs. Human resources are to be adjusted to suit the
organisation’s demands. The department’s level of service must be tailored to fit the
organisation it serves.
4. Personal Objectives
Personal objectives assist employees in achieving their personal goals, at least in so
far as these goals enhance the individual’s contribution to the organisation. Personal
objectives of employees must be met if they are to be maintained, retained and
motivated. Otherwise, employee performance and satisfaction may decline giving rise
to employee turnover.
SCOPE OF HRM
The scope of HRM is indeed vast. All major activities in the working life of a worker - from
the time of his or her entry into an organization until he or she leaves the organization comes
under the preview of HRM.
The major HRM activities include HR planning, job analysis, job design, employee hiring,
employee and executive remuneration, employee motivation, employee maintenance,
industrial relations and prospects of HRM.
The scope of Human Resources Management extends to
 All the decisions, strategies, factors, principles, operations, practices, functions,
activities and methods related to the management of people as employees in any type
of organization.
 All the dimensions related to people in their employment relationships and all the
dynamics that flow from it.
American Society for Training and Development (ASTD) conducted fairly an exhaustive
study in this field and identified nine broad areas of activities of HRM.
These are given below:
a) Human Resource Planning: The objective of HR Planning is to ensure that the
organization has the right types of persons at the right time at the right place. It
prepares human resources inventory with a view to assess present and future needs,
availability and possible shortages in human resource. Moreover, HR Planning
forecast demand and supplies and identify sources of selection. HR Planning develops
strategies both longterm and short-term, to meet the man-power requirement.
b) Design of Organization and Job: This is the task of laying down organization
structure, authority, relationship and responsibilities. This will also mean definition of
work contents for each position in the organization. This is done by :‘job description”.
Another important step is “Job specification”. Job specification identifies the
attributes of persons who will be most suitable for each job which is defined by job
description.
c) Selection and Staffing: This is the process of recruitment and selection of staff. This
involves matching people and their expectations with which the job specifications and
career path available within the organization.
d) Training and Development: This involves an organized attempt to find out training
needs of individuals to meet the knowledge and skill which is needed not only to
perform current job but also to fulfil the future needs o fthe organization.
 e) Organizational Development: This is an important aspect whereby “Synergetic
effect” is generated in an organization i.e. healthy interpersonal and inter-group
relationship within the organization.
f) Compensation and Benefits: This is the area of wages and salaries administration
where wages and compensations are fixed scientifically to meet fairness and equity
criteria. In addition labour welfare measures are involved which include benefits and
services.
g) Employee Assistance: Each employee is unique in character, personality, expectation
and temperament. By and large each one of them faces problems every day. Some are
personal some are official. In their case he or she remains worried. Such worries must
be removed to make him or her more productive and happy.
h) Union-Labour Relations: Healthy Industrial and Labour relations are very important
for enhancing peace and productivity in an organization. This is one of the areas of
HRM.
i) Personnel Research and Information System: Knowledge on behavioral science
and industrial psychology throws better insight into the workers expectations,
aspirations and behavior.
IMPORTANCE OF HUMAN RESOURCE MANAGEMENT
The importance of human resource management can be discussed by Yodder, Heneman and
others, from three standpoints, viz., social, professional and individual enterprise.
1. 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;
(iv) eliminating waste or improper use of human resource, through conservation of
their normal energy and health; and (v) by helping people make their own decisions,
that are in their interests.
2. Professional Significance-
By providing 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 opportunity for personal development; (iii) providing healthy
relationship between different work groups so that work is effectively performed; (iv)
improving the employees’ working skill and capacity; (v) correcting the errors of
wrong postings and proper reallocation ofwork.
3. Significance for Individual Enterprise:
It can help the organization in accomplishing its goals by: (i) creating right attitude
among the employees through effective motivation; (ii) utilizing effectively the
available goals of the enterprise and fulfilling their own social and other
psychological needs of recognition, love, affection, belongingness, esteem and self-
actualization.
Dynamic and growth - oriented organization do require effective management of people in a
fast - changing environment. Organizations flourish only through the efforts and
competencies of their human resources. Employee capabilities must continuously be
acquired, sharpened, and used.
Any organization will have proper human resource management (i) to improve the
capabilities of an individual; (ii) to develop team spirit of an individual and the department;
and (iii) to obtain necessarily co - operation from the employees to promote organizational
effectiveness.
PRINCIPLES OF HUMAN RESOURCE MANAGEMENT
Human Resource Management or HRM is one of the most crucial aspects of undertaking a
business. It enables the HR teams to manage their employees effectively, helping them keep
their staff engaged with their organization. Hence, it is essential to understand the basic
principles of HRM.
1. Principle of Individual Growth
Employees stay for longer in an organization when they realize their company values
them as individuals and are ready to provide them with opportunities to grow as an
individual and professionally.
It will lead to a satisfied workforce who are committed towards their workplace and
hence, remain loyal for longer. Hence, the principle of individual growth is one of the
most essential principles of HR Management.
2. Principle of Fair Selection
Since recruitment and selection helps the company find the right individuals to
undertake the company tasks, the HR teams need to ensure that they find the right
candidates who are the ideal fit for their job role.
Similarly, they should ensure that they are shortlisting the candidates based on solely
their merits, by providing them with a fair selection process, making the principle of
fair recruitment and selection critical for company success. It can be easily
accomplished with a dedicated recruitment management system.
3. Principle of the Free Flow of Communication
To open & encourage upward, downward, formal, and informal communication
4. Principle of Fair remuneration
Since compensation and benefits prove to be the primary motivators for employees to
work for an organization, HR teams should enforce the principle of fair pay.
By having fair pay, HR teams can ensure that they find the right individual to
undertake the task while providing them with the correct remuneration.
5. Principle of Equal Participation
The principle of equal participation ensures that every employee feels valued to be an
active member of the team.
HRs ensures that each employee gets an equal opportunity to share their voice within
the company and they are heard irrespective of their designation. It helps boost
employee morale and job satisfaction in the organization.
6. Principle of Incentives
Since rewards and bonuses act as incentives to undertake their tasks better, the
principle of incentives dictates that HR reward employees for undertaking their jobs
well. It motivates the performers to undertake their tasks in the best manner possible
while motivating others to perform better for the rewards.
7. Principle of Dignity of Labour
The principle of dignity of labour ensures that all employees of the organization feel
valued and appreciated irrespective of their job role and designation.
By treating employees with dignity and respect, HR teams can ensure increased
loyalty from their workforce, improving the overall employee experience within the
organization.
8. Principle of Team Spirit
 HR teams are also responsible for inculcating the spirit of teamwork among its staff
members.
The principle of team spirit dictates that the HR teams create an environment of team-
building, promoting mutual trust among the team members. Having such bonding and
mutual understanding helps the teams to undertake their tasks efficiently.
9. Principle of Communication
Since businesses run on departmentalized teamwork, it is essential to provide
excellent means of communication to ensure that work is undertaken with utmost
efficiency.
Utilizing the principle of communication, HR teams ensure that the communication is
transparent from the upper management to the employees, leading to better overall
management within the organization.
10. Principle of National Prosperity
The principle of national prosperity enables the HR teams to utilize the sense of
patriotism among their staff to ensure better productivity.
If all employees start being more productive in their respective organizations, it will
lead to the prosperity of the company, and eventually, help usher the country into a
better future.