Chapter 1

Understanding the
Nature and Scope
of
Human Resource Management

Human Resource Management, 5E 1

Learning Objectives

• Understand the Nature, Scope and Objectives

of Human Resource Management.
• Design an Organisation Chart for Human
Resource Management Function in a Typical
Industrial Establishment.
• Understand the Personnel Principles and
Policies.
• Trace the Evolution of Human Resource
Management.
• Understand Human Capital Management
• Identify Jobs and Careers in HRM.

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Meaning and Definition
• People’s dimension
• Organisational effectiveness

Scope of HRM
• Enters
• Works
• Exits

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Scope of HRM

Nature of
HRM

Prospects Employee
of HRM Hiring

HRM
Employee &
Industrial
Executive
Relations Remuneration

Employee Employee
Maintenance Motivation

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Difference between PM and HRM
Personnel Management HRM
• Careful delineation of written • Aim to go beyond contract
contracts • Can do outlook, impatience with
• Importance of devising clear rules rule
• Procedures • Business need
• Norms/customs and practices • Values/mission
• Monitoring
• Labour management • Nurturing
• Piecemeal • Customer
• Slow • Integrated
• Transactional • Fast
• Indirect • Transformational leadership
• Negotiation • direct
• Separate, marginal task • facilitation
• Job evaluation • Integrated key tasks
• Performance related

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Difference between PM and HRM
Personnel Management
• Separately negotiated
• Collective bargaining contracts
• Many
• Division of labour
• Reach temporary truce
• Controlled access to courses
personnel procedures
• Labour is treated as a tool which
is expendable and replaceable
• Interests of the organisation are
uppermost
• Precedes HRM
• •
external
HRM
• harmonisation
• Individual contract
• Few
• Team work
• Manage climate and culture
• Learning companies
wide ranging culture, structural
and personnel strategies.
• People are treated as assets to
be used for the benefit of an
organisation, its employees and
the society as a whole.
Mutuality of interests
• Latest in the evaluation of the
subject
• internal

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Semantics – HRM vs. PM
• Mutuality
• Labour management
• Legal compliance

HRD and IRM – What are they?

• Segments of HRM

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 Composition of a HR / Personnel
Department
Owner/Manager

Manager-
Manager-Personnel Manager-HRD Manager-IR
Administration

Appraisal Training & Development

PR Canteen Medical Welfare Transport Legal

HRP Hiring Grievances Handling Compensation

Human Resource Management, 5E 8

Objectives of HRM

Personal
Objectives

Functional
Objectives

Organisational
Objectives

Societal
Objectives

Human Resource Management, 5E 9

 HRM Small-scale Unit
Owner/Manager

Production Manager Sales Manager Office-Manager Accountant

Personnel Assistant

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 HRM Large-scale Unit
Chairman and
Managing Director

Director Director Director Director Director

Production Finance Personnel/HRM Marketing R&D

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Paradoxes in HRM

• Only hype but low on content

• Has grown from IR to PM to HRM. But
HRM is brilliant ambiguity.
• HR Manager is change agent and
transformationalist.
• Finance overtakes personnel function.

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Personnel Policies at ABB India

• Role clarity
• Empowerment
• Take responsibility
• Competence development
• Clearly defined objectives for individual
and the work team

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Personnel Policies at ABB India

• The local unions as natural co-operation

partners

• Planning discussions held at least once a year

• Internal mobility and employee development

• Ethics, equal opportunities and an open and

honest exchange of thoughts and ideas

• A strategic issue

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Evolution of HRM in India

1920s – 30s
Pragmatism of capitalists

1940s – 50s
Technical, legalistic

1970s – 80s
Professional, legalistic, impersonal

1990s
Philosophical

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Jobs & Careers in HRM

• HR Specialist
• HR Manager
• HR Executive

• Why Study HRM?

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Reality Check

• It is good to read that people

management has matured from IR to PM
to HRM to HCM. But has the change
been only cosmic or real? Have a debate.

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 Reality Check

• Should this happen? Would this happen?

Could this happen? How could all HR
activities be outsourced? Can a firm
function with a HR department organised
on perfunctionary basis? Answer these
questions.

Human Resource Management, 5E 18

Reality Check

• Looking at the four models described in

this section, what similarities and
dissimilarities do you notice among them?
What assumptions to they make? What
lessons do they carry to practising HR
managers and students of HRM?

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