Unit - 1 : Introduction to Human Resource Management
Structure of Unit:
1.0 Objectives
1.1 Introduction
1.2 Opening Case
1.3 What is Human Resource Management?
1.4 Nature of HRM
1.5 Scope of HRM
1.6 Objectives of HRM
1.7 Functions of HRM
1.8 Role of HRM
1.9 HRM in the New Millennium
1.10 Summary
1.11 Self Assessment Questions
1.12 Reference Books
1.0 Objectives
After studying this unit, you will be able to:
Understand the basic concepts of human resource management (HRM).
Explain what human resource management is and how it relates to the management process.
Provide an overview of functions of HRM.
Describe how the major roles of HR management are being transformed.
Explain the role of HRM in the present millennium.
1.1 Introduction
Human beings are social beings and hardly ever live and work in isolation. We always plan, develop and
manage our relations both consciously and unconsciously. The relations are the outcome of our actions
and depend to a great extent upon our ability to manage our actions. From childhood each and every
individual acquire knowledge and experience on understanding others and how to behave in each and
every situations in life. Later we carry forward this learning and understanding in carrying and managing
relations at our workplace. The whole context of Human Resource Management revolves around this
core matter of managing relations at work place.
Since mid 1980’s Human Resource Management (HRM) has gained acceptance in both academic and
commercial circle. HRM is a multidisciplinary organizational function that draws theories and ideas from
various fields such as management, psychology, sociology and economics.
There is no best way to manage people and no manager has formulated how people can be managed
effectively, because people are complex beings with complex needs. Effective HRM depends very much
on the causes and conditions that an organizational setting would provide. Any Organization has three
basic components, People, Purpose, and Structure.
In 1994, a noted leader in the human resources (HR) field made the following observation: Yesterday, the
company with the access most to the capital or the latest technology had the best competitive advantage;
1
,Today, companies that offer products with the highest quality are the ones with a leg up on the competition;
But the only thing that will uphold a company’s advantage tomorrow is the caliber of people in the
organization.
That predicted future is today’s reality. Most managers in public- and private sector firms of all sizes
would agree that people truly are the organization’s most important asset. Having competent staff on the
payroll does not guarantee that a firm’s human resources will be a source of competitive advantage.
However in order to remain competitive, to grow, and diversify an organization must ensure that its
employees are qualified, placed in appropriate positions, properly trained, managed effectively, and
committed to the firm’s success. The goal of HRM is to maximize employees’ contributions in order to
achieve optimal productivity and effectiveness, while simultaneously attaining individual objectives (such
as having a challenging job and obtaining recognition), and societal objectives (such as legal compliance
and demonstrating social responsibility).
1.2 Opening Case
On October 3, 2003, Anant Dalvi and Akhtar Khan, who worked as contract workers in Tata Electric
Company until they were laid off in 1996, doused themselves with kerosene and set themselves ablaze
even as their co-workers protested before the company’s offices. While Dalvi died on the spot, Khan
died a few days later.
The Tata Electric Company said they were no longer on their payroll and were not permanent workers.
Employees union had taken up their case and filled petition in the Labour Court before their contracts
were terminated. The court directed the company not to terminate their services without following the due
process of law. Despite this their services were terminated on June 30, 1996.
The company union promised the workers that they would renegotiate. Yet on the night before they killed
themselves when Khan and Dalvi spoke to the union leader Shinde, they were told that nothing more
could be done for them. It is this that led them to take their lives. Dalvi has been in service as a peon for17
years and Khan had been employed for 19 years. But their services were not regularized. Such workers
draw salary much less than the permanent employees.
This is an example of the problem that comes under the purview of Human Resource Management- the
main concept elaborated in this chapter.
1.3 What is Human Resource Management?
HRM is the study of activities regarding people working in an organization. It is a managerial function that
tries to match an organization’s needs to the skills and abilities of its employees.
1.3.1 Definitions of HRM
Human resources management (HRM) is a management function concerned with hiring, motivating
and maintaining people in an organization. It focuses on people in organizations. Human resource
management is designing management systems to ensure that human talent is used effectively and efficiently
to accomplish organizational goals.
HRM is the personnel function which is concerned with procurement, development, compensation, integration
and maintenance of the personnel of an organization for the purpose of contributing towards the
accomplishments of the organization’s objectives. Therefore, personnel management is the planning,
organizing, directing, and controlling of the performance of those operative functions (Edward B. Philippo).
2
,According to the Invancevich and Glueck, “HRM is concerned with the most effective use of people
to achieve organizational and individual goals. It is the way of managing people at work, so that they give
their best to the organization”.
According to Dessler (2008) the policies and practices involved in carrying out the “people” or human
resource aspects of a management position, including recruiting, screening, training, rewarding, and
appraising comprises of HRM.
Generally HRM refers to the management of people in organizations. It comprises of the activities, policies,
and practices involved in obtaining, developing, utilizing, evaluating, maintaining, and retaining the appropriate
number and skill mix of employees to accomplish the organization’s objectives. The goal of HRM is to
maximize employees’ contributions in order to achieve optimal productivity and effectiveness, while
simultaneously attaining individual objectives (such as having a challenging job and obtaining recognition),
and societal objectives (such as legal compliance and demonstrating social responsibility).
In short Human Resource Management (HRM) can be defined as the art of procuring, developing and
maintaining competent workforce to achieve the goals of an organization in an effective and efficient
manner.
1.4 Nature of HRM
HRM is a management function that helps manager’s to recruit, select, train and develop members for an
organization. HRM is concerned with people’s dimension in organizations.
The following constitute the core of HRM
1. HRM Involves the Application of Management Functions and Principles. The functions
and principles are applied to acquiring, developing, maintaining and providing remuneration to
employees in organization.
2. Decision Relating to Employees must be Integrated. Decisions on different aspects of
employees must be consistent with other human resource (HR) decisions.
3. Decisions Made Influence the Effectiveness of an Organization. Effectiveness of an
organization will result in betterment of services to customers in the form of high quality products
supplied at reasonable costs.
4. HRM Functions are not Confined to Business Establishments Only but applicable to non-
business organizations such as education, health care, recreation and like.
HRM refers to a set of programmes, functions and activities designed and carried out in order to maximize
both employee as well as organizational effectiveness.
1.5 Scope of HRM
The scope of HRM is indeed vast. All major activities in the working life of a worker – from the time of his
or her entry into an organization until he or she leaves the organizations comes under the purview of HRM.
The major HRM activities include HR planning, job analysis, job design, employee hiring, employee and
executive remuneration, employee motivation, employee maintenance, industrial relations and prospects
of HRM.
The scope of Human Resources Management extends to:
All the decisions, strategies, factors, principles, operations, practices, functions, activities and
methods related to the management of people as employees in any type of organization.
All the dimensions related to people in their employment relationships, and all the dynamics that
flow from it.
3
, Union/Labour
Relations
Personnel Compensation
Research and and Benefits
Information
System
Human
resource Employee
Assistance
planning Human
resource
management
Design of the
Organization Organizational
and Job Development
Selection and
Staffing Training and
Development
Figure 1.1: Scope of HRM
The scope of HRM is really vast. All major activities n the working life of a worker – from the time of his
or her entry into an organization until he or she leaves it comes under the purview of HRM. American
Society for Training and Development (ASTD) conducted fairly an exhaustive study in this field and
identified nine broad areas of activities of HRM.
These are given below:
Human Resource Planning
Design of the Organization and Job
Selection and Staffing
Training and Development
Organizational Development
Compensation and Benefits
Employee Assistance
Union/Labour Relations
Personnel Research and Information System
a) Human Resource Planning: The objective of HR Planning is to ensure that the organization has
the right types of persons at the right time at the right place. It prepares human resources inventory
with a view to assess present and future needs, availability and possible shortages in human resource.
Thereupon, HR Planning forecast demand and supplies and identify sources of selection. HR
Planning develops strategies both long-term and short-term, to meet the man-power requirement.
b) Design of Organization and Job: This is the task of laying down organization structure, authority,
relationship and responsibilities. This will also mean definition of work contents for each position
in the organization. This is done by “job description”. Another important step is “Job specification”.
Job specification identifies the attributes of persons who will be most suitable for each job which
is defined by job description.
4
Structure of Unit:
1.0 Objectives
1.1 Introduction
1.2 Opening Case
1.3 What is Human Resource Management?
1.4 Nature of HRM
1.5 Scope of HRM
1.6 Objectives of HRM
1.7 Functions of HRM
1.8 Role of HRM
1.9 HRM in the New Millennium
1.10 Summary
1.11 Self Assessment Questions
1.12 Reference Books
1.0 Objectives
After studying this unit, you will be able to:
Understand the basic concepts of human resource management (HRM).
Explain what human resource management is and how it relates to the management process.
Provide an overview of functions of HRM.
Describe how the major roles of HR management are being transformed.
Explain the role of HRM in the present millennium.
1.1 Introduction
Human beings are social beings and hardly ever live and work in isolation. We always plan, develop and
manage our relations both consciously and unconsciously. The relations are the outcome of our actions
and depend to a great extent upon our ability to manage our actions. From childhood each and every
individual acquire knowledge and experience on understanding others and how to behave in each and
every situations in life. Later we carry forward this learning and understanding in carrying and managing
relations at our workplace. The whole context of Human Resource Management revolves around this
core matter of managing relations at work place.
Since mid 1980’s Human Resource Management (HRM) has gained acceptance in both academic and
commercial circle. HRM is a multidisciplinary organizational function that draws theories and ideas from
various fields such as management, psychology, sociology and economics.
There is no best way to manage people and no manager has formulated how people can be managed
effectively, because people are complex beings with complex needs. Effective HRM depends very much
on the causes and conditions that an organizational setting would provide. Any Organization has three
basic components, People, Purpose, and Structure.
In 1994, a noted leader in the human resources (HR) field made the following observation: Yesterday, the
company with the access most to the capital or the latest technology had the best competitive advantage;
1
,Today, companies that offer products with the highest quality are the ones with a leg up on the competition;
But the only thing that will uphold a company’s advantage tomorrow is the caliber of people in the
organization.
That predicted future is today’s reality. Most managers in public- and private sector firms of all sizes
would agree that people truly are the organization’s most important asset. Having competent staff on the
payroll does not guarantee that a firm’s human resources will be a source of competitive advantage.
However in order to remain competitive, to grow, and diversify an organization must ensure that its
employees are qualified, placed in appropriate positions, properly trained, managed effectively, and
committed to the firm’s success. The goal of HRM is to maximize employees’ contributions in order to
achieve optimal productivity and effectiveness, while simultaneously attaining individual objectives (such
as having a challenging job and obtaining recognition), and societal objectives (such as legal compliance
and demonstrating social responsibility).
1.2 Opening Case
On October 3, 2003, Anant Dalvi and Akhtar Khan, who worked as contract workers in Tata Electric
Company until they were laid off in 1996, doused themselves with kerosene and set themselves ablaze
even as their co-workers protested before the company’s offices. While Dalvi died on the spot, Khan
died a few days later.
The Tata Electric Company said they were no longer on their payroll and were not permanent workers.
Employees union had taken up their case and filled petition in the Labour Court before their contracts
were terminated. The court directed the company not to terminate their services without following the due
process of law. Despite this their services were terminated on June 30, 1996.
The company union promised the workers that they would renegotiate. Yet on the night before they killed
themselves when Khan and Dalvi spoke to the union leader Shinde, they were told that nothing more
could be done for them. It is this that led them to take their lives. Dalvi has been in service as a peon for17
years and Khan had been employed for 19 years. But their services were not regularized. Such workers
draw salary much less than the permanent employees.
This is an example of the problem that comes under the purview of Human Resource Management- the
main concept elaborated in this chapter.
1.3 What is Human Resource Management?
HRM is the study of activities regarding people working in an organization. It is a managerial function that
tries to match an organization’s needs to the skills and abilities of its employees.
1.3.1 Definitions of HRM
Human resources management (HRM) is a management function concerned with hiring, motivating
and maintaining people in an organization. It focuses on people in organizations. Human resource
management is designing management systems to ensure that human talent is used effectively and efficiently
to accomplish organizational goals.
HRM is the personnel function which is concerned with procurement, development, compensation, integration
and maintenance of the personnel of an organization for the purpose of contributing towards the
accomplishments of the organization’s objectives. Therefore, personnel management is the planning,
organizing, directing, and controlling of the performance of those operative functions (Edward B. Philippo).
2
,According to the Invancevich and Glueck, “HRM is concerned with the most effective use of people
to achieve organizational and individual goals. It is the way of managing people at work, so that they give
their best to the organization”.
According to Dessler (2008) the policies and practices involved in carrying out the “people” or human
resource aspects of a management position, including recruiting, screening, training, rewarding, and
appraising comprises of HRM.
Generally HRM refers to the management of people in organizations. It comprises of the activities, policies,
and practices involved in obtaining, developing, utilizing, evaluating, maintaining, and retaining the appropriate
number and skill mix of employees to accomplish the organization’s objectives. The goal of HRM is to
maximize employees’ contributions in order to achieve optimal productivity and effectiveness, while
simultaneously attaining individual objectives (such as having a challenging job and obtaining recognition),
and societal objectives (such as legal compliance and demonstrating social responsibility).
In short Human Resource Management (HRM) can be defined as the art of procuring, developing and
maintaining competent workforce to achieve the goals of an organization in an effective and efficient
manner.
1.4 Nature of HRM
HRM is a management function that helps manager’s to recruit, select, train and develop members for an
organization. HRM is concerned with people’s dimension in organizations.
The following constitute the core of HRM
1. HRM Involves the Application of Management Functions and Principles. The functions
and principles are applied to acquiring, developing, maintaining and providing remuneration to
employees in organization.
2. Decision Relating to Employees must be Integrated. Decisions on different aspects of
employees must be consistent with other human resource (HR) decisions.
3. Decisions Made Influence the Effectiveness of an Organization. Effectiveness of an
organization will result in betterment of services to customers in the form of high quality products
supplied at reasonable costs.
4. HRM Functions are not Confined to Business Establishments Only but applicable to non-
business organizations such as education, health care, recreation and like.
HRM refers to a set of programmes, functions and activities designed and carried out in order to maximize
both employee as well as organizational effectiveness.
1.5 Scope of HRM
The scope of HRM is indeed vast. All major activities in the working life of a worker – from the time of his
or her entry into an organization until he or she leaves the organizations comes under the purview of HRM.
The major HRM activities include HR planning, job analysis, job design, employee hiring, employee and
executive remuneration, employee motivation, employee maintenance, industrial relations and prospects
of HRM.
The scope of Human Resources Management extends to:
All the decisions, strategies, factors, principles, operations, practices, functions, activities and
methods related to the management of people as employees in any type of organization.
All the dimensions related to people in their employment relationships, and all the dynamics that
flow from it.
3
, Union/Labour
Relations
Personnel Compensation
Research and and Benefits
Information
System
Human
resource Employee
Assistance
planning Human
resource
management
Design of the
Organization Organizational
and Job Development
Selection and
Staffing Training and
Development
Figure 1.1: Scope of HRM
The scope of HRM is really vast. All major activities n the working life of a worker – from the time of his
or her entry into an organization until he or she leaves it comes under the purview of HRM. American
Society for Training and Development (ASTD) conducted fairly an exhaustive study in this field and
identified nine broad areas of activities of HRM.
These are given below:
Human Resource Planning
Design of the Organization and Job
Selection and Staffing
Training and Development
Organizational Development
Compensation and Benefits
Employee Assistance
Union/Labour Relations
Personnel Research and Information System
a) Human Resource Planning: The objective of HR Planning is to ensure that the organization has
the right types of persons at the right time at the right place. It prepares human resources inventory
with a view to assess present and future needs, availability and possible shortages in human resource.
Thereupon, HR Planning forecast demand and supplies and identify sources of selection. HR
Planning develops strategies both long-term and short-term, to meet the man-power requirement.
b) Design of Organization and Job: This is the task of laying down organization structure, authority,
relationship and responsibilities. This will also mean definition of work contents for each position
in the organization. This is done by “job description”. Another important step is “Job specification”.
Job specification identifies the attributes of persons who will be most suitable for each job which
is defined by job description.
4
