HRM definition:

Resource, in its organizational context, is defined as

anything that could be thought of as a strength or
weakness of a given firm’ including tangible and
intangible assets (Wernerfelt, 1984). There are three
main organizational resources:
1. Human Resources
2. Financial Resources and
3. Technological Resources.

The purpose of HRM is to ensure that the employees

of an organization are used in such a way that the
employer obtains the greatest possible benefit from
their abilities and the employees obtain both material
and psychological rewards from their work
(Graham, 1978).
HRM is a distinctive approach to employment
management which seeks to achieve competitive
advantage through the strategic deployment of a
highly committed and capable workforce, using an
array of cultural, structural and personnel
techniques. (Storey,1995).
HRM is a managerial perspective which argues the
need to establish an integrated series of personnel
policies to support organizational strategy. Buchanan
and Huczynski, 2004)

HRM
Supporting Functions
Objectives

Societal Legal compliance, Benefits, Union-

Objectives management relations

Human resource planning,

Organizational employee relations, Selection,
objectives Training and development,
Appraisal, Placement, Assessment

Appraisal, Placement, Assessment

Functional
Objectives

Training and development,

Personal
Appraisal, Placement,
Objectives
Compensation, Assessment
Human Resource Management: Objectives

• to help the organization reach its goals.

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

1. Defining Organizational Structure and Driving

Productivity
2. Building Coordination between Organizational
Departments
3. Offering Employee Satisfaction
4. Keeping Up With the Societal and Ethical
Models

FUNCTIONS OF HRM
Mgmt of HRM consists of several interrelated
functions. These functions are common to
all organization .these functions may be broadly
classified into two categories
1. MANAGERIAL FUNCTIONS
2. OPERATIVE FUNCTIONS

MANAGERIAL FUNCTIONS
1. PLANNING
2. ORGANISING
3. DIRECTING
4. CONTROLLING

PLANNING:
IT IS DECIDING IN ADVANCE THE FUTURE
COURSE OF ACTION. IT
INVOLVESFORECASTING AND RESEARCH .IT
FORECASTS NEED FOR HUMANRESOUCES
.PREDICTING LABOUR, WAGES ETC.

ORGANISING:
IT IS THE PROCESS OF ALLOCATING TASKS
AMONG THE MEMBERS OF GROUP,
ESTABLISHING AUTHORITY –
RESPONSIBILITY RELATIONSHIPS
ANDINTEGRATING ACTIVITIES AMONG
THEM. AN
EFFECTIVE ORGANISATIONALSTRUCTURE
IS FORMULATED THROUGH PERSONNEL
RELATIONSHIPS.

DIRECTING:
IT IS THE PROCESS OF MOTIVATING
ACTIVATING, LEADING AND SUPERVISING
PEOPLE, IT INCLUDES SUPERVISION OF
SUBORDINATES.DIRECTING IS THE HEART
OF THE MANAGEMENT PROCESS BECAUSE
IT IS CONCERNED WITH INITIATING
ACTION, SECRUING
WILLING COOPERATIONOF EMPLOYEES
AND TAPPING THEIR MAXIMUM.

CONTROLLING
IT REFERS TO COMPARING OF THE ACTUAL
PERFORMANCE WITH PREDECIDED
STANDARDS.IT IMPLIES CHECKING
,VERIFYING AND REGULATING TO ENSURE
THAT EVERY THING OCCURS IN
CONFIRMITY WITH THE
PLANS ADOPTED AND THE INSTRUCTIONS
ISSUED.CONTROLLING THE MANAGEMNT
OF HR INVOLVES AUDITING TRAINING
PROGRAMS, ANALYSING LABOUR
TURNOVER RECORDS, DIRECTING
MORALE,SURVEYS etc

OPERATIVE FUNCTIONS
1. Procurement function: It is concerned with
securing and employing the right kind and proper
number of people required accomplishing the
organization objective.

a. Job analysis: It is the process of studying in

detail the operation and responsibilities involved
in a job so as to identify the nature and level of
HR required. Job description is prepared with
the help of information provided by Job
Analysis.

b. HR planning: It is the process of estimating

present and future manpower requirements of
organization and formulating action programs to
bridge the gap of manpower.

c. Recruitment: It is the process of searching for

required personnel and stimulating them to
apply for job in the organization. A proper
 balance should be maintained between internal
and external sources of recruitment.

d. Selection: It refers to employers judging the

suitability of different candidates for job in the
organization and choosing the most appropriate
persons

e. Placement: It means assigning suitable jobs to

selected candidates so as to match employees
qualification with job requirement

f. Induction: It involves familiarizing the new

employees with company. The work
environment and existing employees so that the
new people feel at homeland can start work
confidently.

2. DEVELOPMENT
HR development is a process of improving
knowledge skills aptitudes and values of employees
so that they can perform the present and future jobs
more effectively.
a)Performance appraisal;
It refers to employers’ systematic
evaluation of employees with respect to their
performance on the job and their potential
for development

b) Training; it is the process by which employees

learn knowledge skills and attitudes to further
organizational and personal goals.

c) Executive development It is the process of

developing managerial talent through programs.

d) Career planning and development it involves

planning and implementing career plans so as to
fulfill the career aspirations of people. it involves
mobility of personal of personnel through promotion
and transfers.

4. Compensation It refers to fair and equitable

remuneration to employees for their contribution
to the attainment of organizational objectives. It
consists of:
A) Job evaluation: It is the process of determining
real worth of the job. The effectiveness of job is
compared with its relative worth in terms of time
and money.

b) Wages and salary administration; It implies

developing and operating suitable wages and salary
programmed conducted to determine wages and
salary structure for various jobs in the organization.

c) Bonus: It involves payment of bonus paid under

the Payment of Bonus Act, 1965 as well as non –
statutory and other incentives.

d) Payroll; Maintenance of proper and systematic

records of existing employees along with essential
details.

5. INTEGRATION FUNCTION;
It is the process of reconciling organizational goals
with those of its members. Integration involves
motivating employees through various
financial and non
financial incentives providing satisfaction, handling
employee’s grievances through formal grievance,
collective bargaining, workers participation in
management, conflict resolution developing cordial
human relationship employee consulting improving
quality of work life. It includes:

Motivation: it is the force which instigates an

employee to work in a proper direction Job

Satisfaction: it is the amount of satisfaction and

contentment derived from ones job, its pay and
environment.

Grievance redressed; various problems and

conflict which are amongst the employees should be
properly and cordially handled

Collective bargaining: It means negotiating with

the managers on various terms and conditions.
 Conflict Management: It refers to effective and
efficient management of conflict arising in the
organization.

•Participation of employees; Employees should be

given a chance to participate in the working of
the firm. Their suggestion

• Discipline; It is one of the most essential

requirements of organization for its smooth and
efficient working.

Maintenance; It is concerned with promoting

physical and mental health of employees by
providing various benefits and facilities

•Health; it provides health facilities, medical aid etc.

•Safety it provides security measures like PF,

pension, gratuity, injury/disablement benefits
allowances, group insurances etc.

•Welfare schemes; health, safety and welfare

measures are designed to preserve the HR of the
organizations
•Personnel record: they are maintained to keep
entire records of the employees and update them.
• Personnel research. Research is conducted to
check whether HR is sufficient as per the current
status.
•Personnel audit: controlling and evaluating current
HR status and requirements

Personnel management Personnel are those who

are employed in the workplace. Personnel
management is an administrative function which
exists in an organization to ensure right personnel at
right organizational activity. It is a traditional
approach of managing employees which focuses on
adherence to policies and rules of organization.
Human Resource Management Human resource
management is a modern approach of managing
people at workplace which focuses on acquisition,
development, utilization and maintenance of human
resource. It combines physical energies and their
strengths with human competencies. In simple
words, human resource management can be referred
as the policy which ensures right quality and
quantity of human resource in the organization.

Explanation
By contrast, HRM makes a determined effort to be a
more integrative mechanism in bringing people issue
into line with business issues, with a pronounced
problem – seeking and problem solving orientation,
and a determination to build collaborative
organizational systems. The role of top management
in setting the agenda for change and development is
very much in evidence in HRM.
Some personnel managers will no doubt see the
growing influence of HR managers as a threat
fearing that they may just become custodians of
personnel systems. Beer (1997) identified major
obstacles in transforming the traditional
administrative personnel function and moving to a
fully fledged HRM system. He function is that most
HR professionals do not possess the requisite
analytical and interpersonal skills.
In HRM there is a greater emphasis on strategic
issues and on the way which the human resource
contributes to the achievement of corporate
objectives. HRM underlines the importance of
flexibility and the ability to react and adapt quickly
to changes in the organizational environment.
Difference in Approach
The personnel management approach tends to attach
much importance to norms, customs and established
practices, whereas the human resource approach
gives importance to values and mission.
The personnel management approach also concerns
itself with establishing rules, policies, procedures,
and contracts, and strives to monitor and enforce
compliance to such regulations, with careful
delineation of written contract. The human resource
management approach remains impatient with rules
and regulations. HR managers tend to relax rules
based on business needs and exigencies, and aim to
go by the spirit of the contract rather than the letter
of the contract.
Difference in Nature
Another dimension of the difference is the proactive
nature of human resource management compared to
the reactive nature of personnel management.
Personnel management remains aloof from core
organizational activities, functions independently,
and takes a reactive approach to changes in
corporate goals or strategy. Human resource
management remains integrated with corporate
strategy and takes a proactive approach to align the
workforce toward achievement of corporate goals.
Difference in Application
Personnel management is an independent staff
function of an organization, with little involvement
from line managers, and no linkage to the
organization’s core process. Human resource
management, on the other hand, remains integrated
with the organization’s core strategy and functions.
Although a distinct human resource department
carries out much of the human resource management
tasks, human resource initiatives involve the line
management and operations staff heavily.
Personnel management also strives to reconcile the
aspirations and views of the workforce with
management interest by institutional means such as
collective bargaining, trade union-based negotiations
and similar processes. This leads to fixation of work
conditions applicable for all, and not necessarily
aligned to overall corporate goals.

However, there are some differences in the

following matters.
1. Personnel management is a traditional approach
of managing people in the organization. Human
resource management is a modern approach of
managing people and their strengths in the
organization.
2. Personnel management focuses on personnel
administration, employee welfare and labor
relation. Human resource management focuses
on acquisition, development, motivation and
maintenance of human resources in the
organization.
 3. Personnel management assumes people as a
input for achieving desired output. Human
resource management assumes people as an
important and valuable resource for achieving
desired output.
4. Under personnel management, personnel
function is undertaken for employee’s
satisfaction. Under human resource
management, administrative function is
undertaken for goal achievement.
5. Under personnel management, job design is
done on the basis of division of labor. Under
human resource management, job design
function is done on the basis of group work/team
work.
PM can be described as a series of activities related
to various aspects of an employee’s relationship with
the organization. HRM is also concerned with these
issues, but in addition stresses the primacy of
business needs. Other points of departure are that
HRM embraces individual flexibility and
congruency between individual and organizational
goals, whereas PM is concerned with systems
applied to individuals and collectivism.
 HR Planning:
The process that links the human resource needs of
an organization to its strategic plan to ensure that
staffing is sufficient, qualified, and competent
enough to achieve the organization's objectives. HR
planning is becoming a vital organizational element
for maintaining a competitive advantage and
reducing employee turnover.
 “Human Resource Planning is a strategy for the
acquisition, utilization, improvement and
preservation of an organization’s human
resource.” – Y.C. Moushell
Human Resource Planning (HRP) is the process of
forecasting the future human resource requirements
of the organization and determining as to how the
existing human resource capacity of the organization
can be utilized to fulfill these requirements.
HR Planning process simply involves the
following four broad steps:
 Current HR Supply: Assessment of the current
human resource availability in the organization
 is the foremost step in HR Planning. It includes
a comprehensive study of the human resource
strength of the organization in terms of numbers,
skills, talents, competencies, qualifications,
experience, age, tenures, performance ratings,
designations, grades, compensations, benefits,
etc. At this stage, the consultants may conduct
extensive interviews with the managers to
understand the critical HR issues they face and
workforce capabilities they consider basic or
crucial for various business processes.
 Future HR Demand: Analysis of the future
workforce requirements of the business is the
second step in HR Planning. All the known HR
variables like attrition, lay-offs, foreseeable
vacancies, retirements, promotions, pre-set
transfers, etc. are taken into consideration while
determining future HR demand. Further, certain
unknown workforce variables like competitive
factors, resignations, abrupt transfers or
dismissals are also included in the scope of
analysis.
 Demand Forecast: Next step is to match the
current supply with the future demand of HR,
and create a demand forecast. Here, it is also
 essential to understand the business strategy and
objectives in the long run so that the workforce
demand forecast is such that it is aligned to the
organizational goals.


 HR Sourcing Strategy and

Implementation: After reviewing the gaps in
the HR supply and demand, the HR Consulting
Firm develops plans to meet these gaps as per
the demand forecast created by them. This may
include conducting communication programs
with employees, relocation, talent acquisition,
recruitment and outsourcing, talent management,
training and coaching, and revision of policies.
The plans are, then, implemented taking into
confidence the mangers so as to make the
process of execution smooth and efficient. Here,
it is important to note that all the regulatory and
legal compliances are being followed by the
consultants to prevent any untoward situation
coming from the employees.
Objectives of Human Resource Planning
The objective of human resource planning is to
ensure the best fit between employees and jobs,
while avoiding manpower shortages or surpluses.
Human resource planning is a sub-system of the
total organizational planning. It constitutes an
integral part of corporate plan and serves the very
purpose of organization in many ways. The primary
purpose of human resource planning is to prepare for
the future by reducing organizational uncertainty in
relation to the acquisition, placement, and
development of employees. Human resources
planning is done to achieve the optimum use of
human resources and to have the right types and
correct number of employees to meet organizational
goals.
The main objectives of Human Resource Planning
are:
1. Achieve Goal: Human Resource Planning helps in
achieving individual, Organizational & National
goals. Since Human resource planning is linked
with career planning, it can able to achieve
individual goal while achieving organizational and
national goal.
2. Estimates future organizational structure and
Manpower Requirements: Human Resource
Planning is related with number of Personnel
 required for the future, job-family, age distribution
of employees, qualification & desired experience,
salary range etc and thereby determines
future organization structure.
3. Human Resource Audit: Human resource planning
process is comprised of estimating the future needs
and determining the present supply of Manpower
Resources. Manpower supply analysis is done
through skills inventory. This helps in preventing
over staffing as well as under-staffing.
4. Job Analysis: The process of studying and
collecting information relating to operations and
responsibilities of a specific job is called Job
analysis. Job analysis is comprised of job
description and job specification. Job description
describes the duties and responsibilities of a
particular job in an organized factual way. Job
specification specifies minimum acceptable human
qualities necessary to perform a particular job
properly.