BA9224 HUMAN RESOURCE MANAGEMENT
UNIT 1
PERCEPTIVE IN HUMAN RESOURCE MANAGEMENT
Human Resource
Meaning:
Human resources refer to the qualitative and quantitative aspects of employees working in an
organization.
Definition:
“Human resources are considered as Human Capital. Human capital is classified under 3
categories- Intellectual capital, Social capital and Emotional capital. Intellectual capital consists of
specialized knowledge, tacit knowledge and skills, cognitive complexity and learning capacity. Social
capital is made up of network of relationships, sociability and trustworthiness. Emotional capital consists
of self confidence, ambition and courage, risk bearing ability and resilience.” – Sumantra Ghosal.
Human Resource Management (HRM)
Meaning:
HRM is a process of making the efficient and effective use of Human Resources so that the set
goals are achieved.
Definition:
“Personnel management or say 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.” –Flippo.
Differences b/w Personnel Management and Human Resource Management
Dimensions
Nature of relations
Perception of conflict
Contract
Role of procedures
Planning perspective
Acceptability of Unions
Level of trust
Key relation
Management’s Role
Basis of job design
Key People
PM
Pluralist
Conflict is institutionalized
Emphasis on compliance
Rules dominated
Ad hoc, reactive
Acceptable
Low
Labor Management
Transactional
Division of Labor
PM/IR(Industrial Relations) Specialist
HRM
Unitarist or Neo-Unitarist
Conflict is Pathological
Beyond contract-commitment
Culture and values dominated
Integrated, pro active
Not desirable
High
Customer
Transformational
Teams
Line
People
and
general
managers
Skill Acquisition
Reward Management
Training and development
Standardized Job evaluation
Learning organization
Performance related
Scope of HRM
The scope of HRM includes all activities starting from man power planning till employee leaves
the organization. Accordingly the scope of HRM consists of acquisition, development,
maintenance/retention and control of human resources in the organization.
Control
Acquisition
Human Resource Audit
Human Resource Planning,
Recruitment, selection and
placement.
Human Resource Accounting
Human Resource Information System
Human
Resource
Management
Maintenance
Remuneration, Motivation, Health and
Safety, Social Security, Industrial
relations, Performance appraisal.
Development
Training, Career development,
Organization development,
Internal Mobility.
The National Institute of Personnel Management (NIPM) has specified the scope of HRM as follows:
The Labour or Personnel Aspect
Concerned with manpower planning, recruitment, selection, placement, transfer, promotion,
training and development, lay-off and retrenchment, remuneration, incentives, productivity,etc.
Welfare Aspect
Deals with working conditions and amenities such as canteen, crèches, rest and lunch rooms,
housing, transport, medical assistance, education, health and safety, recreation facilities, etc.
Industrial Relations Aspect
Includes union-management relations, joint consultation, collective bargaining, grievance and
disciplinary actions, settlement of disputes, etc.
Significance of HRM
1. Social significance: Proper management of personnel’s, enhances their dignity by satisfying their
social needs. This is done by
a. Maintaining a balance between the jobs available and the job-seekers, according to the
qualification and needs
b. Providing suitable and most productive employment
c. Making maximum utilization of the resource
d. Eliminating waste or improper use of human resources
e. By helping people make their own decisions
2. Professional Significance: By providing healthy working environment, it promotes team work in
the employees. This is done by
a. Maintaining the dignity of the employees as a ‘human-being’.
b. Providing maximum opportunities
c. Providing healthy relationship between different work groups
d. Improving the employee’s working skill and capacity
e. Correcting the errors
3. Significance for Individual Enterprise: It can help the organization in accomplishing its goals
by:
a. Creating right attitude among the employees through effective motivation
b. Utilizing effectively the available human resources
c. Securing co-operation of the employees for achieving goals of the enterprise and fulfilling
their own social and other psychological needs of recognition, love, affection, belongingness,
esteem and self-actualisation.
Objectives of HRM
The primary objective of HRM is to ensure the availability of right people for right jobs so as the goals
are achieved effectively.
Sub-objectives:
1. To help the organization to attain its goals effectively and efficiently by providing competent and
motivated employees.
2. To utilize the available human resources effectively.
3. To increase to the fullest the employee’s job satisfaction and self-actualization.
4. To develop and maintain the Quality of Work Life(QWL)
5. To help maintain ethical policies and behavior inside and outside the organization.
6. To establish and maintain cordial relations between employees and management
7. To reconcile individual/group goals with organizational goals.
Societal objectives
Organizational
objectives
Functional
objectives
Personal
objectives
Societal objectives: 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.
Organizational objectives: To recognize the role of HRM in bringing about organizational
effectiveness.
Functional objectives: To maintain the department’s contribution at a level appropriate to the
organization’s needs.
Personal objectives: To assist employees in achieving their personal goals.
HRM Objectives
1. Societal Objectives
2. Organizational Objectives
3. Functional Objectives
4. Personal Objectives
1.
2.
3.
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
1.
2.
3.
4.
5.
Supporting Functions
Legal Compliance
Benefits
Union-management relations
Human Resource Planning
Employee Relations
Selection
Training and Development
Appraisal
Placement
Assessment
Appraisal
Placement
Assessment
Training and Development
Appraisal
Placement
Compensation
Assessment
EVOLUTION AND DEVELOPMENT OF HRM
HRM reached to India in the beginning of twentieth century. Since then to the present era, the
development of HRM may be classified as follows:
•
Trade Union Management Era
•
Social Responsibility Era
•
Scientific Management Era
•
Human Relations Era
•
Behavioual Science Era
•
Systems Approach Era
•
Contingency Approach Era
Trade Union Management Era:
1. The Royal Commission of Labour in India (1911) recommended for the appointment of
labour officers in industrial enterprises to perform the recruitment function as well as to
settle the worker’s grievances
2. Workers started forming associations known as trade unions. Trade Union Act, 1926 was
passed in India.
3. The basic philosophy underlying trade unionism was to safeguard the worker’s interest
and to sort out the problems such as use of child labour, long hours of work and poor
working conditions.
4. These unions used strikes, walkouts, sabotage as weapons for the acceptance of their
problems.
5. Trade unions gave rise to Collective Bargaining, grievance handling system, employee
benefit programs.
Social Responsibility Era
1. Some factory owners/employers started showing humanistic and paternalistic approach
(First introduced by Robert Owen) towards the workers.
2. In order to improve the productivity, it is necessary to improve conditions of employees
from removing them from an adverse environment.
3. The philosophy underlying paternistic approach was that worker is just like a child and
owner is just like a father. Therefore owner should take care of a worker just like a father
takes care of his child.
4. Owen implemented this philosophy in his cotton mill by introducing facilities like shower
baths and toilets in the factory premises.
Scientific Management Era
1. The concept of scientific management was introduced by Frederick Winslow Taylor as an
alternative to the prevailing system of management by incentive and initiative.
2. Four principles of scientific management
a. Development and use of scientific methods in setting work standards
b. Scientific selection and placement of workers
c. Clear cut division of work and responsibility
d. Harmonious relations and close cooperation with workers
3. Taylor developed several techniques like Time study, Motion Study, Standardization of
tools, Incentive wage plan with differential piece rate system.
4. Taylor viewed that if economic reward is tied up with the efforts put on the job, the
worker will respond with his maximum physical capability.
Human Relations Era
1. By 1920, it was felt that earlier approaches to HRM were incomplete as these didn’t
recognize workers as human beings having their feelings, attitudes and needs.
2. Elton Mayo, in his Hawthorne experiment found that ‘ employee groups based on social
interactions and common interests exercised a strong influence on worker’s performance.
3. The objective of human relations approach was to make employees productive and it was
realized that employees’ satisfaction is the best means of making the employee
productive.
Behavioural Science Era
1. Behavioural Science approach assumed human behavior as a means to achieve efficiency
in performance.
2. Main contributions are in the areas of motivation, leadership, communication,
organizational change and development, organizational culture, individual and group
dynamics.
3. Important elements of the Behavioural approach to HRM includes
a. Individual behavior is linked with the group behavior
b. Informal leadership rather than the formal leadership of manager is more effective
c. Most people enjoy work and motivated by self-control and self development which
can improve operating efficiency.
Systems Approach Era
1. A system may be defined as a set of interdependent parts forming an organized unit or
entity.
2. The parts, also known as sub-systems interact with each other and are subject to change.
3. Any working organization consists of the following three broad sub-systems:
a. Technical sub-system, i.e., formal relationships among the members of an
organization
b. Social sub-system, i.e., social satisfaction to the members through informal group
relations
c. Power sub-system, i.e., exercise of power or influence by individual or group
4. The system approach is characterized by the following features:
a. A system is a group of inter-related elements which are separate entities.
b. All the elements are inter-related in an orderly manner.
c. There is a need for proper and timely communication facilitate interaction between
the elements
d. The interaction between the elements should lead to achieve some common goal.
Period
1920’s-1930’s
1940’s-1960’s
Development
Status
Beginning
Outlook
Emphasis
Status
Pragmatism of
Capitalists
Statutory ,
welfare,
paternalism
Introduction of
techniques
Regulatory
conformance,
imposition of
standards on
other functions
Human values,
productivity
through people
Clerical
1970’s-1980’s
Struggling for
recognition
Impressing with
sophistication
Technical,
legalistic
Professional,
legalistic,
impersonal
1990’s
Promising
Philosophical
Administrative
Managerial
Executive
Contingency Approach Era
1. Contingency approach believes that there is no one way of managing that works best in
all situations.
2. According to this approach, the best way to manage varies with the situation. Hence this
approach is also called situational approach.
3. Contingency approach emphasizes on two points:
a. It focuses attention on situational factors that influence managerial decision
b. It highlights the need for developing skills for managers in situational analysis.
Functions of HRM
The functions performed by the human resource management can broadly be classified into two
categories.
1. Managerial functions
2. Operative function
FUNCTIONS
MANAGERIAL
PLANNING
OPERATIVE
PROCUREMENT
DEVELOPMENT
COMPENSATION
INTEGRATION
MAINTENANCE
ORGANISING
DIRECTING
CONTROLLING
Managerial Functions:
Planning:



Planning is a predetermined course of actions.
It is the process of determining the organizational goals and formulation of policies and
programmes for achieving them.
Forecasting is one of the important elements in the planning process.
Organizing:


Organizing is a process by which the structure and allocation of jobs are determined.
Organizing involves giving each subordinate a specified task, establishing departments,
delegating authority to subordinates, establishing channels of authority and
communication, coordinating the work of subordinates and so on.
Directing:


Directing is the process of activating group efforts to achieve the desired goals.
It includes activities like getting subordinates to get the job done, maintaining morale,
motivating subordinates etc. for achieving the goals of the organization.
Controlling:

It is the process of setting standards for performance, checking to see how actual
performance compares with these set standards, and taking corrective action as needed.
Operative Functions:


The operative, also called service functions are those which are relevant to specific
department.
The operative functions of HRM relate to ensure right people for right jobs at right times.
These functions include
Procurement:


It involves procuring the right kind of people in appropriate number to be placed in the
organization.
It consists of activities such as manpower planning, recruitment, selection, placement and
induction or orientation of new employees.
Development:


This function involves activities meant to improve the knowledge, skills, aptitude and
values of employees so as to enable them to perform their jobs in a better manner in
future.
Comprise of training to employees, executive training to develop managers, organization
development to strike a better fit between organizational climate/culture and employees.
Compensation:


Compensation function involves determination of wages and salaries matching with
contribution made by employees to organizational goals.
It consists of activities such as job evaluation, wage and salary administration, bonus,
incentives, etc.
Maintenance:


It is concerned with protecting and promoting employees while at work. For this purpose,
various benefits such as housing, medical, educational, transport facilities, etc is provided
to the employees.
Several social security measures such as provident fund, pension, gratuity, group
insurance, etc. are also arranged.
The managerial and operative functions of HRM are performed with conjunction with each
other in an organization, be large or small organizations.