Human Resource Management(Unit I)
TYBMS( Sem – V)
Introduction HRM & PM
PERSONNEL MANAGEMENT
Definition:
According to Edwin Flippo : “Personnel 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 societal objectives are accomplished.
According to George R. Terry : “Personnel Management is the concerned with the obtaining and
maintaining of a satisfactory and satisfied work force”
Human Resource Management
1. HRM refers to the activities and functions designed and implemented to maximize
organizational as well as employees effectiveness.
2. HRM is that part of management is that part of management concerned with the
organization. It seeks to bring together men and women who make up an enterprise,
enabling each to make his own best contribution to its success both as an individual and
as a member of a working group.
3. HRM is that branch of management which is responsible on a staff basis for
concentrating on those aspects of relationship of management to employees and
employees to employees and with the development, desirable working relationship
between employers and employees and employees, and effective moulding of human
resource as contrasted with physical resources.”
Definition:
According to Scott and others, Human resource management is that branch of which is responsible on a
staff basis for concentrating on those aspects of relationship of management to employees and
employees to employees and with the development of the individual and the group.
According to National Institute of Personnel Management of India, Human resource management is
that part concerned with people at work and with their relationships within the organisation.
It seeks to bring to together men and women who make up an enterprise, enabling each to make his
own best contribution to its success both as an individual and as a member of a working group.
Prof.Tahereem Bardi
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Human Resource Management(Unit I)
TYBMS( Sem – V)
Objectives/Purposes of HRM:
(1) To attain maximum individual development of the members of an organisation and also
to utilize available human resources fully and effectively.
(2) To mould effectively the human resources
(3) To establish desirable working relationships between employer and the employees and
between the groups of employees.
(4) To ensure satisfaction to the workers so that they are freely ready to work.
(5) To establish and maintain a productive and self respecting relationship among all the
members of an organisation.
(6) To ensure the availability of a competent and willing workforce to the organisation for
its progress and prosperity.
(7) To help the organisation to achieve its goals by providing well trained, effciented and
properly motivated employees.
(8) To maintain high morale and good human realtions within the ordanisation for the
benefit of employer and employees.
Scope of HRM:Diagram:-
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Human Resource Management(Unit I)
TYBMS( Sem – V)
 Planning, job design, job analysis, procurement, recruitment, selection, induction,
placement, training and development.
 Compensation, rewards, benefits, retrial benefits, medical and health care.
 Motivation: Motivation aids, bonuses, incentives, profit sharing. Non-monetary benefits
are esteem satisfaction, career development, growth decision making, delegation of
authority and power, promotion etc.
 Employee relation: Grievances handling, participation, collective handling & other
aspects of cordial relations conducive to mutual understanding and trust.
 Employee evaluation and performance improvement, human resource audit and human
resource accounts.
Importance of Human Resource Management
The importance of human resource management can be discussed, after Yodder, Heneman and
others, from three standpoints, viz., social, professional and individual enterprise.
a) Social Significance: Proper management of personnel enhances their dignity by satisfying
their social needs. This it does 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 resource 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 interest.
b) Professional Significance: by providing a healthy working environment it promotes team
work in the employees. This it does by: (i) maintaining the dignity of employees as a
‘human-being’; (ii) providing maximum opportunities 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 work.
c) 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 human resource; and (iii) and fulfilling their own social and
other psychological needs of recognition, love, affection, belongingness, esteem and selfactualization.
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Human Resource Management(Unit I)
TYBMS( Sem – V)
Functions of HRM
1. Organizational Planning, Development and Task Specialization;
2. Staffing and Development;
3. Training and Development;
4. Compensation, Wage and Salary Administration;
5. Motivation and Incentives;
6. Employee Services and Benefits;
7. Employee Records;
8. Labour or Industrial Relations; and
9. Personnel Research and Personnel Audit.
Classification of functions
(A) The General and Specific Functions:
1. To conduct personnel research,
2. To assist in the programmes of personnel administration,
3. To develop appraisal plans,
4. To launch education and training programmes,
5. To develop a competent work force, and
6. To establish and administer varied personnel services delegated to personnel
department.
Under specific functions, the personnel management may involve itself in areas of employment,
safety, wage and salary, benefit schemes, community relations and advice and counseling.
(B) Personnel Administration and Industrial Relations Functions:
Prof.Tahereem Bardi
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Human Resource Management(Unit I)
TYBMS( Sem – V)
Personnel administration functions relate to the function of managing people from lower to
upper level of the organization and embraces policy determination as well as of policies by the
personnel at the lower levels. Accordingly, “personnel administration” refers to “creating,
developing and utilizing a ‘work group’ and involves all types of inter-personnel relationships
between superiors and subordinate.”
The ‘Industrial Relations’ functions, on the other, are “not directly related to the function of
‘managing people’, but refer to interactions between the management and the representatives
of the unions.” Such functions involve all activities of employer-employee relationship, such as
organization of the union member, negotiation of contracts, collective bargaining ,grievance
handling, disciplinary actions,arbitaration etc – the purpose of all this being to prevent the
conflict between two participants.
The above two functions are interrelated and inter dependent and, hence ,the most common
terms used is “Personnel Management/Administration and Industrial relations.”
(C) Functions classified on the basis of capacities:
This classification has been adopted by Saltonstall. According to him “although personnel
managements’ function is the ‘staff function’, it also performs three roles. “ viz :
(i) He performs a line function not only because he directs the work in his own department but
also in some service functions as recruitment, administration of benefits, the plant canteen and
allied activities
(ii) He functions as a coordinator of personnel activities in so far as he controls the functions of
other departments. This he does trough regular reporting on labor turnover, absenteeism,
accidents and grievances to different levels of management. He also assists/advices the top
management in accomplishing personnel objectives, policies and procedures.
(iii) He performs a typical staff function in the form of assisting and advising the line personnel
to solve their problems
(D) Functions according to degree of authority:
Dale Henning and French made an interesting observation that “The personnel man is
described in the text book and journal is like ‘abominable snow man’ much talked about but
seldom seen.” They have classified his function into three categories thus:
a. Area of maximum authority, e.g.: direction of payroll calculation, orientation procedures,
transfer rules etc
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Human Resource Management(Unit I)
TYBMS( Sem – V)
b. Area of combined use of authority and persuasion, e.g. : establishment of disciplinary
procedures, inter departmental data gathering, determining the numbers of participants in a
training programmes etc.
Area of maximum persuasion, e.g.: salary changes under the rules of plant, employment of
individuals recommended by the personnel department, in other departments, initiating
disciplinary action, etc
Functions explained by the author:
Scott, Clothier and Spriegel divide the functions of the personnel management into thse specific
categories, namely:
1. Employment;
2. Promotion, transfer, termination, denominations, and separations;
3. Formulation and direction of training programmes;
4. Job analysis and evaluation;
5. Remuneration and Incentives;
6. Health and Sanitation;
7. Safety and Institutional Protection;
8. Financial aids to employees;
9. Employee service activities;
10. Research, record keeping, reports and follow-up;
11.Employee-employer and community cooperation.
12 Labour union contracts and cooperation.
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Human Resource Management(Unit I)
TYBMS( Sem – V)
EVOLUTION OF HRM IN INDIA
PERIOD
DEVELOPMENT
STATUS
OUTLOOK
EMPHASIS
STATUS
BEGINNING
PRAGMATISM OF
CAPITALISTS
STATUTORY,WELFARE,
PATERNALISM
CLERICAL
STUGGLING FOR
RECOGNITION
TECHNICAL,
LEGALISTIC
INTRODUCTION OF TECHNIQUES
ACHIEVING
SOPHISTICATION
PROFESSIONAL,
LEGALISTIC,
IMPERSONAL
PROMISING
PHILOSOPHICAL
REGULATORY,CONFORMING
,IMPOSITION OF STANDARDS
OF OTHER FUNCTIONS
HUMAN VALUES,
PRODUCTIVITY
THROUGH PEOPLE
1920s-1930s
1940s-1960s
1970s-1980s
1990s
ADMINISTRATIVE
MANAGERIAL
EXECUTIVE
Explanation :
HRM, a relatively new term, emerged during the 1970s.Many people continue to refer to the
discipline by its older, more traditional titles, such as personnel management or personnel
administration. The term now days used in industry circles is HRM.
 In 1800 BC itself, ‘minimum wage rate plan’ were included in the Babylonian Code of
Hammurabi.
 Since the 1920s experts of HRM in our country have tried to chronicle the growth of the
growth of the subject during this period intervention to protect the interests of workers
was felt necessary because of the difficult conditions which followed the First World War,
and he emergence of trade unions.
 In 1931 The Royal Commission recommended the appointment of labour - welfare officers
to deal with selection of workers and to settle their grievances.
 In course of time, two professional bodies, the Indian Institute of Personnel Management
(IIPM) and the National Institute of Labour Management (NLIM), were set up in pre –
independent India.
 The aftermath of the Second World War and the country’s political independence witnessed
increased awareness and expectations of workers.
 During the 1960s, the personnel function began to expand beyond the welfare aspect, with
labour welfare, IR and personnel administration integrating into the emerging profession
called Personnel Management (PM).
 Simultaneously, the massive thrust given to the heavy industry in the context of planned
economic development, particularly since the Second Five – Year Plan and the accelerated
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Human Resource Management(Unit I)
TYBMS( Sem – V)
growth of the public sector in the economy resulted in a shift in focus towards
professionalization of management.
 By the 1970s professional values shifted from a concern for welfare to a focus on efficiency.
 In the 1980s, professionals began to talk about new technologies. HRM challenges and
HRD. The two bodies, IIPM and NILM, merged in 1980 to form the National Institute of
Personnel Management (NIPM).
 In the 1990s, the emphasis shifted to human values and productivity through people.
Reflecting this trend, the American Society for Personnel Administration (ASPA) was
renamed as the Society for Human Resources Management (SHRM).
DIFFERENCE BETWEEN HRM AND PM
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
HRM
It places emphasis on a continuous
development of people at work.
It has favoured all round
development of employees.
It has attached more importance to
the abilities of employees.
It works on the basis of piecemeal
initiative.
The speed of decision making is fast.
It supports performance related
remuneration.
It practices division of work along
with the team work.
It uses latest techniques of training &
development with audio-visual
facilities.
It decides behavior norms based on
individual values & mission of
business.
HRM is a proactive function.
HRM deals with managing workforce
one of the primary resources that
contribute to the success of the
organization.
HRM is the integral part of overall
company function.
Prof.Tahereem Bardi
1)
2)
3)
4)
PM
It is a routine, maintenance - oriented
administrative function.
It has favoured contractual employment
based on written agreement.
It has attached highest importance to
rules.
5)
6)
It works on the basis of integrated
initiative.
The speed of decision making is slow.
It supports fixed remuneration.
7)
It practices division of work.
8)
It uses outdated methods of training &
development.
9)
It decides behavior norms based on
customs & practices.
10)
11)
PM is a reactive function.
PM deals with payroll, employment law
and handling related tasks.
12)
PM is considered to a independent
function.
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Human Resource Management(Unit I)
TYBMS( Sem – V)
Some more differences between HRM and PM:1) PM is more administrative in nature dealing with pay- roll, complying with employment law and
related task.HRM on the other hand is responsible for managing a work force as one of the primary
resources that contributes the success of an organization.
2) HRM is described as much as much broader in scope than PM.HRM is to set to incorporate and
develop PM task. Primary goal of HRM is to enable employees to work to a maximum level of
efficiency.
3) PM is often considered as in independent function of am organisation.HRM on other hand
tends to be an integral part of overall company function.
4) PM is typically the sole responsibility of an organization’s personnel dept whereas HRM
involves organization’s managers and achieve goal by managers of various departments and
develop the skills to handle personal related tasks.
5) According to P.C.TRIPARTY (HRM.HRD) :a) PM is traditional, routine, maintenance oriented, administrative functions whereas HRM is
continuous ongoing development function that aim at improving human resources.
6) Pm is dependent function with independence of functions whereas HRM follows systems
thinking approach.
7) PM is responding to demand as and when they arise HRM is proactive, planning and advancing
continuously.
8) PM is an exclusive responsibility of the Personnel dept.HRM is a concern for all managers in the
organization and aims at developing capabilities of all managers to carry out the personnel
functions.
9) The scope of PM is relatively narrow with a flow on administrating people. The scope of HRM
views the organization as a whole and lays emphasis building a dynamic culture.
10) In PM improve satisfaction is considered to be the cause of improved performance. In HRM.
Performance is the cause and satisfaction is the result.
Prof.Tahereem Bardi
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Human Resource Management(Unit I)
TYBMS( Sem – V)
NEW TRENDS IN HRM
 Human resource management is a process of bringing people and organizations together so
that the goals of each other are met.
 The role of HR manager is shifting from that of a protector and screener to the role of a
planner and change agent.
 Over the years, highly skilled and knowledge based jobs are increasing while low skilled jobs
are decreasing. This calls for future skill mapping through proper HRM initiatives.
 Indian organizations are also witnessing a change in systems, management cultures and
philosophy due to the global alignment of Indian organizations.
Some of the recent trends that are being observed are as follows:




The recent quality management standards ISO 9001 and ISO 9004 of 2000 focus more
on people centric organizations. Organizations now need to prepare themselves in order
to address people centered issues with commitment from the top management, with
renewed thrust on HR issues, more particularly on training.
Organizations have introduced six- sigma practices. Six- sigma uses rigorous analytical
tools with leadership from the top and develops a method for sustainable improvement.
These practices improve organizational values and helps in creating defect free product
or services at minimum cost.
Human resource outsourcing is a new accession that makes a traditional HR department
redundant in an organization.
With the increase of global job mobility, recruiting competent people is also increasingly
becoming difficult, especially in India. Therefore by creating an enabling culture,
organizations are also required to work out a retention strategy for the existing skilled
manpower.
NEW TRENDS IN INTERNATIONAL HRM
International HRM places greater emphasis on a number of responsibilities and functions such
as relocation, orientation and translation services to help employees adapt to a new and
different environment outside their own country.


Selection of employees requires careful evaluation of the personal characteristics of the
candidate and his/her spouse.
Training and development extends beyond information and orientation training to
include sensitivity training and field experiences that will enable the manager to
understand cultural differences better. Managers need to be protected from career
development risks, re-entry problems and culture shock.
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Human Resource Management(Unit I)



TYBMS( Sem – V)
To balance the pros and cons of home country and host country evaluations,
performance evaluations should combine the two sources of appraisal information.
Compensation systems should support the overall strategic intent of the organization
but should be customized for local conditions.
In many European countries - Germany, law establishes representation. Organizations
typically negotiate the agreement with the unions at a national level. In Europe it is
more likely for salaried employees and managers to be unionized.
Role of the HR Manager
o HR Manager plays a variety of roles.
o Earlier, the main role of the manager was to procure & maintain a commited workforce.
o But with the passage of time, increasingly critical nature of problems and challenges in the
effective utilization of human beings has elevated the status of HR Manager.
Different roles played by the HR Manager are:
1) Counsellor’s Role:
HR Manager acts a counselor for the employees facing problems related with health,
work, colleagues, family, supervisors, financial, mental, physical, children education,
marriage, etc.

Employees discuss their problems with the HR Manager and he offers suitable solutions to solve
their problems.
2) Advisory Role: HR Manager advises the management regarding Human Resources Planning,
recruitment, selection, training and development, appraisal, compensation,
integration, separation, etc.
 HR Manager advises management in case of industrial disputes, etc.
 On the other hand, he also provides assistance to the workers by conveying their
problems to the management.
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Human Resource Management(Unit I)
TYBMS( Sem – V)
3) Mediator Role:-In case of some conflicts and disputes, HR Manager plays the role of a peacemaker
between the management and the employees.
4) Conscience Role:-This role is that of a humanitarian who advises management of its ethical
obligations to its employees.
5) Liaison Role:-Generally, HR Manager acts as a spokesperson for or representative of the
organization.
6) Change Agent:-He acts as a catalyst in introducing new changes in the organization.
7) Problem Solver:-Problems related with HR in any part of the organization are tackled by the
HR Managers.
8) Welfare Role:-As per The Factories Act, 1948, where 500 or more workers are employed,
one welfare officer should be appointed. Otherwise, HR Manager acts as a welfare officer.
He is concerned about facilities like crèche, canteen, shelter, lunch and restrooms, etc.
9) Legal Role:-HR Manager plays a vital fire-fighting role during: grievance handling procedure,
settlement of industrial disputes, collective bargaining, handling disciplinary action, joint
consultation, etc.
Challenges Faced by HR Managers:-
1. Technological Developments:
As a result of technological advances made in almost all fields, jobs have become
more intellectual.
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Human Resource Management(Unit I)
TYBMS( Sem – V)

Modernization ends with problems like retrenchment, lay-offs, unemployment,
dislocation of workers, etc.

Thus, HR Manager has to make proper assessment of manpower needs,
retraining, skills upgradation, etc.
2. Changes in the political & legal environment:-In order to meet the changes in political &
legal environment, awareness of legislation at state and central level becomes necessary for
proper utilization of human resources.
3. Globalization:
As the industrial world is becoming globalised and informationalised, HR
Managers are expected to play more competitive roles.

They should be aware about employees’ and company’s needs in foreign
markets, designing suitable compensation packages, planning about spouse’s job
and children’s education in other country, if needed making arrangements of
training in foreign country’s local language, etc.
4. Socio – cultural factors:
Organizations do not operate in isolation.Thus, organizations have to be alert
always before taking any decision.

The HR Manager should evaluate beforehand the impact of any business action
upon the society so that the people’s beliefs, morals, customs, ethics, values, etc.
are not hurt.
5. Changing mix of the workforce:
Another challenge to HR Manager is increasing workforce diversity.

This includes : more young and highly educated people, more female employees,
increasing levels of married female workers, etc.
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Human Resource Management(Unit I)

TYBMS( Sem – V)
Prohibition of discrimination and the need of positive actions for redressing
imbalances in workforce have made job for HR Managers more challenging.
6. Trade Unions

Trade Unions refer to any combination of workers for a common cause.

Trade Unions act as a challenging force for HR Manager in decisions like signing
of agreements, recruitment, selection, training and development programs,
retrenchment, etc.
7. Management of Human Resources

The new workforce is educated, talented, well-qualified and conscious than their
predecessors.

So, HR Manager has to be conscious and tough while leading and motivating, winning
employees’ commitment, etc.
Personal manual (policies & principal)
Prof.Tahereem Bardi
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Human Resource Management(Unit I)
TYBMS( Sem – V)
According to flippo ‘policy’ is a man made rule of Pre-determined course of action that is
established to guide the performance of work toward the organization objectives. It is a type of
standing plan that serve to guide subordinates in the execution of their tasks.
According to Yoder obserbes, a policy is a pre-determined, selected course established as a
guide towards accepted goals and objectives. In general, policies constitute guides to action.
They offer a road map for managers in the organization.
In general HR polices should respect human dignity and personal integrity , ensure fair
treatment for all, irrespective of caste, creed, or color, and offer reasonable social and
economic security to employees.
Policies do not include detailed statements describing specifically how the policy is to be
implemented.
Policies are implemented by procedures the basic objectives of policy is to ensure that work
and accomplishment are properly recognized, that safe and healthy conditions of work are
established, that common interests of personnel are considered and employee participation is
encouraged, employees motivation and their development are properly look after, and that the
role of trade unions are recognized and their functions and responsibilities are respected.
The policy is rules of conduct; therefore it is based on the following principles:
1.
2.
3.
4.
5.
6.
7.
8.
Place right person in the right place at the right time.
Train every employee for current and future jobs.
Establish organization as whole a co-ordination team.
Ensure proper and adequate supply of tools and equipments.
Create better working conditions
Give security with opportunity, incentive, and recognition.
Look forward, plan ahead for more and better things.
Ensure the principle of equity and natural justice.
Characteristics of a sound personnel policy :
During the course of formulation of personnel policy, the management should consider the
following points :
1. It should be in written form as well as computerized form.
2. It should be clear, positive and early understood by each and every employee of the
organization
3. It should be in the line of corporation objectives.
Prof.Tahereem Bardi
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Human Resource Management(Unit I)
TYBMS( Sem – V)
4.
5.
6.
7.
8.
It should be generally known to all interested parties
It should be reasonably stable but not rigid.
It should be fair and equitable to internal as well as external groups.
It should be consistent with public policy.
It should support management as well as establish cooperation of employees at the shop
floor level and in the office.
9. It should be progressive and enlightened.
10. It should be applicable uniformly through out the organization.
11. trade unions should be consulted before formulating a policy
12. It should be periodically evaluated and revised in tune with changing times.
Method of policy Formulation:
Policy generation is a very complex process. It is time consuming and also a costly affair
because is not job for any ivory-lower specialist. The expert person who is involve in preparing
a draft of it must be thoroughly familiar with the subject from personal experience and involvement. The following steps are involved in this process:
1.
2.
3.
4.
5.
6.
Identification of area.
Collection of appropriate data.
Formulation of draft or policy.
Communication to all those employees who may be expected to operate under it.
Periodic review, evaluation and revision of the policies.
Reformulating the policies.
Advantages of personnel policies :
There various advantages of having personnel policies :
1. It promote consistency and fairness, and avoid confusion and misunderstanding among
employees in the organization.
2. It helps the managers in delegating the power and authority of lower staff.
3. It ensure uniformity in application.
4. It helps in achieving co-ordination between management and workers.
5. It acts as better control over the line managers and their employees.
6. It can spend speed up decision making process.
7. It increases the confidence and reduces chance of misinterpretation, misrepresentation
and friction.
8. It avoid repeat analysis of the same type and of problems.
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