Unit 1 Perceptive in Human Resource Management

Introduction
Human Resource Management
Human Resource Management is the process of efficiently achieving the objectives
of the organization with and through people.
It involves all management decisions and practices that directly affect or influence the
HR who works for the organizations.
It is concerned with the people s dimension in management.
It can be defined as a process of procuring, developing, motivating and maintaining
competent HR in an organization so that goals can be achieved in an efficient and
effective manner.
Organization is made up of 4 resources.
Men, Material, money & machinery. Only one out of them is living & others are non
living.
It is the people who make use of non human resources. Hence people are the most
significant resources in an organization.
For any organization, proper management of human resources is very important for
its growth, survival, profitability, competitiveness, and flexibility in adapting to
changing conditions.
Business houses are made or broken in the long run not by markets or capital,
patents or equipments, but by men. - L.F. Urwick
Organizations are made and staffed by people. Without people organizations can not
exist. Organization is nothing without human resources.
On an average 25% of production cost and 40% of selling cost constitute the HR cost
in a manufacturing organization. Thus the business success depends on how best
they bring right kind of people, develop them and maintain them.
Human resources are heterogeneous in the sense that they differ in personality,
emotions, values, attitudes motives etc. Their behaviour is unpredictable.
While other resources depreciate HR appreciate with time. Better educated, more
skilled, better aware of their interest and rights are also some distinguishing features
of HR.
HRM practices can bring an important practical difference in terms of three key
organizational outcomes productivity, quality of work life, and profit.
These features make it difficult for managers to use them in efficient and effective
manner.
Highly complex and competitive business environment makes attracting and retaining
qualified and competent employees very difficult and challenging for the managers.
The need of the new perspective is to have right people for right jobs.
This Mantra offers the organization a competitive edge or core competency to
survive and thrive in the competitive world.
HRM is an art of managing people at work in such a manner that they give their best
to the organization.

The Importance of HRM

Prior to the mid-60 s personnel department in organizations were perceived as the
health and happiness crew . There primary focus was either paper compliance or
company picnics.
The rapid change in the legal landscape, the workforce, and a emphasis on
productivity changed the HR function
Today HRM must balance two primary responsibilities: being a strategic partner with
business, and a representative of employees.
Four basic function of HRM
Staffing (getting people)
Training and development (preparing them)
Motivation (stimulating them)
Maintenance (keeping them)

HRM
HRM can be viewed in one of two ways. First, HRM is a staff, or support function for
the organization. Second, HRM is a function of every Managers job.

The Dynamic Environment of HRM

Many events have shaped the HRM field.
Globalization
Work-force Diversity
Changing Skills Requirements
Corporate Rightsizing
Continuous Improvement
Reengineering
Decentralized work sites
Employee Involvement

HRM Areas
Employment: The main thrust of the employment function is to promote the activities
of the staffing function. It is important to note that the employment specialist s roles
is not to make the hiring decision, but to coordinate the effort with line management.

The Training and Development section of an organization is often responsible for

helping employees to maximize their potential. More importantly the training and
development members are often better know as the organizations internal change
agents.

Compensation and Benefits focus on both the staffing side and the maintenance
portion of HRM. Offering a competitive wage and benefit package is a moving target.
Determining what different position on are worth to the organization is as much a
science as an art. Yet often described as the most objective area in a subjective field.

Employee Relations deals with maintenance function. Primary function of ensuring

open communications permeates the organization. Employee Relations Specialist
ensures helps employees understand policies and procedures.

Labor Relations function is different than Employee relations in that it is concerned

with the negotiation, interpretation, and compliance with the labor contract. The
latest trend in Labor relations is interest based bargaining and labor management
groups.

As we move into the different areas of Human Resource Management we need to

understand that it is based on four primary functions; staffing, training and
development, motivation, and maintenance. All areas under HRM can be aligned
with one of these functions.

Objectives
Objectives are bench marks against which actions are evaluated.
The primary objective of HRM is to ensure the availability of right people for right jobs
so as the organizational objectives are achieved.
 Sub Objectives
To help the organisation to attain its goals effectively and efficiently by providing
competent and motivated employees.

Davis has classified the objectives of HRM into 4 categories as Societal, Organizational,
Personal, labour union objectives.

1. Societal: To be ethically and socially responsible to the needs and challenges of the
society while minimizing the negative impact of such demands upon the organization.
It includes:
To provide more employment opportunities
To provide maximum productivity
To provide maximum material and mental satisfaction to workforce.
To control the wastage of effort
To help maintain ethical policies and behaviour inside and outside organization.
To establish and maintain cordial relations between employees and management.
To reconcile individual and group goals with organizational goals.

2. Organizational objectives: To recognize the role of HRM in bringing about

organizational effectiveness.
It includes:
To help the organization to reach its goals.
To efficiently utilize the skills and abilities of the workforce
To communicate HRM policies to every one in the organization
To develop and maintain quality of work life.
To provide well trained and well motivated employees to the organization.
Functional objectives:
To maintain the department s contribution at a level appropriate to the organization s
needs.

3. Personal Objectives:
To assist the employees in achieving their personal goals, so that they enhance the
individual s contribution to the organization.
It includes:
To provide adequate compensation to employees
To provide job security
To provide facilities for training and development
To increase employees job satisfaction
To provide conducive working environment

4. Labor Union Objectives:

It Includes:
To recognize the labor unions
To establish the personnel policies in consultation with the union
To create congenial environment with unions so as to maintain the spirit of self
discipline and cooperation with the management
To utilize the available HR effectively
To increase the employee s job satisfaction and self- actualization
To develop and maintain (QWL) which makes employment in the organization a
desirable personal and social situation

Scope
The scope of HRM is very vast. It includes all activities starting from man power planning till
employees leave the organization. The scope consists of Acquisition, development,
maintenance & control of human resources in an organization. National institute of personnel
management, Calcutta has specified the scope as:

The labour or personnel aspect: Manpower planning, recruitment, selection, training, layoff &
retrenchment, remuneration, incentives etc.

Welfare aspect: It deals with working conditions, and amenities like canteen, cretch, housing
transport, education health & safety etc.

Industrial relations aspect: union management Relations, collective bargaining, grievances,

etc.

Functions
HRM performs a number of functions and activities for the achievement of the objectives of
HRM. They fall in to the following categories:
Organizational planning and development
Strategic HR planning
Job Analysis
Training & Development
Compensation and benefits
Staffing
Performance appraisal
Health and safety
HRIS
Union Relations
Employee relations

Functions of HRM according to Edwin Flippo

Managerial: Planning, staffing, organizing, directing, controlling
Operative: Procurement, Development, Compensation, Integration, Maintenance
Procurement: Job analysis, HR planning, recruitment, selection, placement,
induction, transfer, promotion, separation
Development: Training, executive development. Career planning, performance
management.
Compensation: job evaluation, wage & salary administration, Bonus & incentives
payroll
Integration: Motivation, job satisfaction, grievances handling, collective bargaining,
discipline, conflict management
Maintenance: safety, social security, welfare schemes, personnel records, personnel
research, personnel audit.
 Managers Role
Manager
It is a role from which some work has to be delegated to the subordinate roles. The
occupant of this role is accountable for his subordinates work & must at least have
authority to veto the appointment of persons to the sub-ordinates role to insist that
they be removed from these roles if they are unsatisfactory & to determine which
portions of his own work shall be carried out by each subordinate.

This definition reminds us of the changing nature of management the extent of the
manager s individual authority over subordinate staff.

Tasks and contributions of a manager

Sets Objectives
Organizes
Motivates & communicates
Measures
Develops people
Managing means leading, making things happen through people

Attributes & qualities of a manager

Technical competence
Social & human skill
Conceptual ability
Qualities
Basic knowledge & information is needed by the manager in making decisions
and taking actions. It is the foundation level.
Command of basic facts
Relevant professional understanding
Specific skills & attributes directly affect behavior and performance
Continuing sensitivity to events
Analytical, problem solving, decision & judgment making skills
Social skills & abilities
Emotional resilience
Pro activity
Problem solving skills
Competence in HR functional areas
Creativity
Mental agility
Balanced learning habits
Self knowledge

Key Roles for HR Manager

Business person
Shaper of change in accordance with business
Consultant to organization
Strategy/ business planner
Talent manager
HR asset manager/cost controller
Who is responsible for managing HRM
In most organizations two groups perform HR activities.
HR Managers/Specialists
Operating Managers
HR Generalists: A person who is responsible for performing a variety of HR
activities. He must maintain an adequate knowledge of all HR activities.
HR Specialists: Individuals who have in depth knowledge and expertise in a
limited area

Managerial Roles
Interpersonal
Figurehead, leader, Liaison
Informational role
Monitor, disseminator, spokesperson
Decisional roles
Entrepreneurial
Disturbance handler
Resource allocator
Negotiator

Tasks
Providing purposeful direction to the firm
Managing survival & growth
Maintaining firm s efficiency
Meeting the challenges of competition
Managing for innovation
Building human organization
Retaining talent & inculcating loyalty.
Sustaining leadership effectiveness
Maintaining balance between creativity & conformity
Postponing managerial obsolescence
Meeting the challenge of change
Coping with tech. Sophistication
Coping with public criticism
Coping with high aspiration
Maintaining relations with society segments

Why organization need managers?

To ensure that org. serve its basic purpose.
To design & maintain the stability of operations
To take charge of strategy making
To ensure the organization serves the ends of people who control it
To serve as a key information link between org. & environment
As formal authority to operate the organization s status system.

Significant activities of successful managers

Network building 19 %
Communication 29 %
Traditional management 32% time
HRM 20%

Manager s of future -- Key strategies

Developing Leadership
 Driving radical change
Reshaping culture
Dividing to rule
Exploiting the organization
Keeping the competitive edge
Achieving constant renewal
Managing the motivators
Making team working work
Achieving total quality management

Evolution of HRM
Evolution of HRM (Berridge, 1992)

1. Welfare (c1915-1920s)
Providing employees with facilities such as canteens and looking after their
personal interests
Welfare officers first appeared in the munitions factories of World War I.

2. Personnel administration (1930s)

In addition to welfare, providing support to management in the form of
recruitment, basic training and record keeping.

3. Personnel management, the developing phase (1940s and 50s)

Whole range of personnel services provided including, in addition to
recruitment and record keeping, craft and supervisory training
Welfare officers become staff or labour officers. Labour officers increasingly
involved in industrial relations.

4. Personnel management, the mature phase (1960s and 70s)

Services provided extended into organisation and management development,
systematic training and manpower planning
More sophisticated selection, training, salary administration and appraisal
(MBO) techniques
Under the influence of the behavioural scientists some businesses undertook
organisation development programmes and job enrichment
Emphasis on industrial relations - saw formal productivity bargaining come
and go
Directors appearing more frequently on boards - although involvement in
strategy limited
Increase in employment legislation meant personnel professionals had to
become employment law experts
Personnel managers adopted more professional role.

5. Human resource management, phase one (1980s)

Concept of HRM emerged from the writing of America academics and during
the entrepreneurial 1980s was adopted by personnel specialists who were
facing the enterprise culture and the market economy
Major concerns included how personnel management could make an impact
on the bottom line - HRM approaches integrated HR and business strategy
Personnel management became more business and management orientated
- decade saw the rise of performance-related pay
Development of performance management systems
 Industrial relations became less significant as trade union power declined

Personnel director expected to act as a business partner taking an even-

handed stance on the needs of the organisation and its employees.

6. Human resource management, phase two (1990s)

1990s began with a reaction against the enterprise culture with its emphasis
on greed and individualism
Virtues of teamwork, empowerment and continuous development in the
learning organisation were extolled
The role of HR in total quality initiatives became more important
Development of more sophisticated approaches to processes such as culture
management, performance and reward management, performance-related
pay and management development
Recession meant leaner, more flexible and delayered organisations and the
concept of a job for life was no longer the norm
Personnel directors often involved in redundancy or downsizing exercises or
managing the results of a business process re-engineering study
Importance of being strategic
Personnel specialists took on role of internal consultant - concerned with
benchmarking in order to identify and emulate best practice
More personnel work was outsourced.

Personnel or Human Resource management?

Personnel management is workforce centred, directed mainly at the organisation s
employees -
Finding and training staff
Arranging for payment
Explaining management s expectations
Justifying management s actions
Satisfying employees work-related needs
Dealing with employees problems
Seeking to modify management action that could produce unwelcome
employee response.
Premise is that the people who work in the organisation are an inflexible
resource compared to cash and materials
Personnel, although a management function, is never totally identified with
management interests - always some degree of being in-between
management and employees.

Human Resource management is

Resource-centred, directed mainly at management
Needs for human resources (not necessarily Employees) to be provided and
deployed
Demand rather than supply is emphasised
Greater emphasis on planning, monitoring and control, rather than mediation
Problem-solving on HR issues is with other members of management rather
than with employees or their representatives
Totally identified with management interests - top management driven and
management-orientated activity
Relatively distant from the workforce as a whole as employee interests can
only be enhanced through effective overall management
Performance and delivery of HRM is a line management responsibility
Need for strategic fit - integration of HR and business activities
 Importance on gaining commitment to organisation s mission and values
Provision of mutually supporting employment policies and practices
Importance attached to strong cultures and values
Performance-orientated - need for higher levels of achievement to meet new
challenges
Individual rather than collective approach to employee relations
Flexible roles and emphasis on teamwork
Strong emphasis on quality and customer satisfaction
Rewards are differentiated according to performance, competence or skill
Distinction between hard and soft versions of HRM:
- Soft HRM emphasises communication, motivation and leadership (Human
Relations School)
- Hard HRM emphasises the quantitative, calculative and business-
strategic aspects of managing the head count resource.

Ideas understanding Personnel management and Human Resource

management (Torrington and Hall, 1991)
Personnel management:
People have a right to proper treatment as dignified human beings while at
work and employees are only effective when their job-related needs are met
This will not happen without personnel management intervention in the
everyday manager/subordinate relationships
Personnel managers often involve directly in the relationship between other
managers and their subordinates because line managers do not see the
personnel aspects of management as central to their role.

Human Resource management

Management of human resources is the same as any other aspect of
management and cannot be separated out for specialists to deal with
People have a right to proper treatment as dignified human beings while at
work and they will be effective when their personal career and competence
needs are met within a context of efficient management and a mutually
respectful working relationship
Personnel specialist role is concerned with manpower planning, providing
specialist support to other managers and contributing to major strategic
change.
Old wine in new bottles?
Just a set of initials?

Similarities:
Personnel management strategies and HRM strategies flow from the
business strategy
Both recognize that line managers are responsible for managing people -
personnel function provides the necessary advice and support services
Identical with regard to respect for the individual, balancing organisational and
individual needs and developing people both for personal and organisational
objectives
Both recognise their essential function of matching people to ever-changing
business requirements
Same range of techniques are used e.g. selection, training, management
development, reward management
Personnel management and soft version of HRM attach importance to the
process of involvement, participation and communication.

Differences
 Can be seen as a matter of emphasis and approach rather than one of
substance
Legge (1989) suggests:
- Personnel management is aimed primarily at non-managers,
whereas HRM is less clearly focused but more concerned with
managers.
- HRM is more of an integrated line management activity whereas
personnel management seeks to influence line management.
- HRM emphasises the importance of senior management being
involved in the management of culture
Strategic nature of HRM - some writers feel that traditional personnel
management was never really involved in the strategic areas of business.
Inaccurate to suggest that one has taken over from the other or that one is
modern and one is old-fashioned
Both are usually present in one organisation, sometimes in one person - this
can cause tension and ambiguity
Perhaps it is best to regard HRM as simply a notion of how people can best
be managed in the interests of the organisation.
HRM can be seen as an approach to personnel management which is shared
between line managers and personnel specialists and which emphasises:
- The importance of human resources as assets rather than costs
- The strategic nature of personnel management as a process which
enables the organisation to achieve its objectives and provide for
the needs of its stakeholders.

Personnel management Vs Human Resource management

There is a tendency for HRM to increase at the expense of personnel management.
(Torrington and Hall, 1991:16)
Reasons for change:
Devolution of personnel duties to line managers
Workplace no longer so significant as a source of personal self-esteem and
as an arena for achieving personal objectives
HRM provides a repositioning of the personnel management to make it more
influential
Tendency for personnel managers to become deployers of resources and
knowledgeable about sources rather than just deployers of skills and
knowledgeable about people
Reduced assertiveness of trade unions therefore less likelihood of industrial
action
Avoidance of long-term commitments other than to key staff
Emphasis of employment legislation shifted from employee rights towards
trade union containment
Increasing need for personnel activity to be justified in cost terms.
 Human Resource Policies

HR Policies
A policy is a plan of action.
It is a predetermined, selected, course established as a guide towards accepted
goals and objectives.
It is a man-made rule of pre-determined course of action that is established to
guide the performance of work towards the organizational objectives.
Personnel policies are those that individuals have developed to keep them on track
towards their personnel objectives.
Personnel policies refer to principles and rules of conduct which formulate redefine
break into details and decide a no. of actions that govern the relationship of
employees in the attainment of organizational objectives.
They serve as a road map for HR managers and line managers.

Aims and objectives of personnel policies

To enable an organization to carry out the main objectives.
To ensure that employees are informed of these items of policy and to ensure their
cooperation.
To provide an adequate competent and trained personnel for all levels and
motivate them.
To protect the common interests of all the parties and recognize the trade union.
To provide for a consultative participation by the employees in the mgt.
To provide an efficient consultative service.
To establish conditions for mutual confidence and avoid confusion between mgt. &
employees.
To provide security of employment to workers.
To provide an opportunity for growth within the organization to persons who are
willing to learn.
To provide for payment of fair & adequate wages.
To recognize the achievements of employees by offering non monetary incentives.
To create a sense of responsibility on the part of those in authority for the claims of
employees as human beings.

Principles of personnel Policies

Put the right man in the right place.
Train everyone for the job to be done.
Make the organization a coordinated team.
Supply the right tools and right conditions of work.
Give security with opportunity, incentive recognition.
Look ahead, plan ahead for more and better things.

Elements of personnel Policies

History of company s growth
Employment practices and conditions of employment
Grievances redressal procedure
Safety rules
General practices
Communication media
Employee financial aid
Educational opportunities
 Vacation with pay
Public relations

Characteristics of a sound personnel policy

It should be definite, clear, positive and easily understood by everyone.
It should be written in order to preserve it against loss.
It must be reasonably stable but not rigid. It must be periodically revised,
evaluated, assessed and revised.
It must be supplementary to the overall policy of the organization.
It should recognize the desire of workers.
It should be formulated with due regard to the interests of all the concerned parties.
It should be the result of careful analysis of all facts.
It must provide a 2 way communication system between mgt. and employees. It
must be progressive and enlightened.
It should be uniform through out the organization. It should be consistent with the
public policy.

Origin & sources of personnel policies

The past and present practice of the organization.
The prevailing practices among sister organizations.
The attitudes ideals and philosophy of the top mgt.
The knowledge gained from handling previous personnel problems.
Employees suggestions and complaints.
Collective bargaining programmes.
Changes in country s economy.
The goals of the organization.

Types of policies
Functional policies: Those policies which are grouped for different categories of
personnel e.g. for the management dealing with personnel planning, organizing
controlling or for management dealing with procurement development and
utilization of manpower.
Centralized policies: Framed for companies with several locations. They are
formulated at the head office and apply through out the organisation.
 Computer Applications in HRM
Computer Applications in HRM
Managing Human resources effectively requires a great deal of information.
The success of HRM depends largely on its ability to collect, store and
evaluate large amount of information about its human resources. Mechanical
techniques of dealing with these large amount of information are inadequate.

Organizations have very sophisticated computerized systems to successfully

cope with these information demands. Computer technology enables
organizations to combine HR information into a single database called as
HRIS.

Human Resource Information System (HRIS)

Human Resource Information System can be defined as the system used to
acquire, store manipulate, analyze retrieve, and distribute pertinent
information regarding an organization s human resource.
It is an integrated system designed to provide information used in HR
decision making.
It is also used for tracking almost every area of HRM.

Why organizations need HRIS?

As organizations grow in size, maintenances and use of employee
information becomes more difficult. HRIS helps in managing information
efficiently.
It helps in reducing the cost of computing.
It helps in maintaining accurate and timely information on employees a
required by the legislation
HRIS assists top management in moving beyond simple administrative HRM
to a thoughtful and planned HRM.

Objectives of HRIS
To acquire, store manipulate, analyze retrieve, and distribute pertinent
information regarding an organization s human resource.
To facilitate HR decision making in following areas: man power planning,
Recruitment & selection, job change, training, compensation, labor relations
etc.
To provide relevant information on employees to government agencies as
part of the legal requirement.

Information Requirements May Include:

Duties and responsibilities of every job in the organization
Skills possessed by every employee
Organization s future human resource needs
Current productivity of human resources
Identification of training needs

HRIS is utilized basically for the following purposes:

Storing information and data for each individual employee for future reference
Providing a basis for planning, organizing, decision making, controlling, and a
host of other human resource functions
Meeting daily transactional requirements such as marking present/absent,
and granting leave
 Supplying data and submitting returns to government and other statutory
agencies

Applications
Personnel administration
Salary administration
Leave /absence recording
Skill inventory
Medical history
Accident monitoring
Performance appraisal
Training and development
Manpower planning
Recruitment
Career planning
Collective bargaining

Components of HRIS
Hardware is the actual equipment used like computers, monitors, printers
LAN
Software: It contains the program instructions that tell the computer how to
process the data. E.g. HR PRO-I, Registrar, AAP, Org Plus
Data Base: The heart of any HRIS is its database. Database is stored data
used by the computer.
The typical data elements in an HRIS are: Personal data, recruitment &
selection data, work experience data, compensation data, performance
appraisal data, attitude data( absence record grievance filed), health data,
benefit data

System Functions
Computerized environment
Networked-PC environment-security groups-super user
User-driven ad hoc enquiries-database
HRIS should be part of MIS

Steps in Implementing an HRIS

Inception of idea
Feasibility study
Selecting a project team
Defining the requirements
Vendor analysis
Contract negotiations
Training
Tailoring the system
Collecting data
Testing the system
Starting up
Running in parallel
Maintenance
Audit

Benefits of HRIS
Higher speed of retrieval and processing of data
Reduction in duplication of efforts leading to reduced cost
Ease in classifying and reclassifying data
 Better analysis leading to more effective decision making
Higher accuracy of information /report generated
Fast response to answer queries
Improved quality of reports
Better work culture
Establishing of streamlined and systematic procedures
More transparency in the system

Limitations of HRIS
It can be expensive in terms of finance and manpower requirements
Lack of quality information
Threatening and inconvenient to those who are not comfortable with
computers
Lack of intelligence (GIGO)
Employee privacy may be at threat
Lack of proper training to users
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