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The resources of men, money, materials and machinery cannot accomplish the organizational
objectives in isolation. They need to be united into a team. It is only through the combined &
coordinated efforts of people that the material & monetary resources can be effectively utilized
for the attainment of objectives.
Hence, people are the most significant resource of any organization & are called as “Human
Resources”.
“Human Resources” are defined as the knowledge, skills, creative abilities, talents and aptitudes
obtained in the population
Human Resources are the sum-total of the internet abilities, acquired knowledge and skill as
exemplified in the talents & aptitudes of its employees.
1. Human Resources of an organization are the product of their biological inheritance &
interactions with the environment. The attitude & behaviour of human beings is always
shaped by the family relationship, religious influences, educational background &
organization climate.
2. Human resources are heterogeneous i.e. everyone has a different personality, different
needs, attitudes & values. Inorder to make effective use of its human resources, an
organization must recognize and acknowledge the differences between individuals so that
each person can maximize his/her potential.
3. The effective utilization of all the other resources of an organization depends upon the
quality of human resources.
4. Human resources are dynamic & behave differently. They react different to different
situations. Hence, it is difficult to predict human behaviour.
5. If provided with the right climate human resources have a good potential to develop &
grow. An organization can survive & grow if it has the right people at the right time
working at right jobs.
10. Future-oriented - HRM is concerned with helping an organization achieve its objectives
in the future by providing for competent and well motivated employees.
11. Based on Human Relations - Personnel management is concerned with the motivation
of human resources in the organization. Every person has different needs, perceptions and
expectation. Managers must have the human relations skills to deal with the people at
work. Human relations skills are also required in training, performance appraisal, transfer
& promation of subordinates.
12. Challenging Fucnction - Managing of human resources is a challenging job due to the
dynamic nature of people. People have to be dealt with tactfully as they have sentiments
& emotions.
13. Interdisciplinary - HRM involves application of knowledge drawn from disciplines like
sociology, anthropology, psychology etc. HRM is a highly specialized job.
14. Science as well as Art - HRM is a sciences as it contains an orgnised body of knowledge
consisting of principles & techniques. It is also an art because it involves application of
theoretical knowledge to the problems of human resources.
15. Staff Function - The function of HRM is advisory in nature. HR managers contribute to
the growth & success of the organization by advising the operating department on
personnel matters.
Objectives of HRM
The basic objective of personnel / human resource management is to contribute to the realsation
of the organizational goals. Inorder to achieve organizational objective, integration of employer’s
and employees interest is important.
1. To ensure effective utilization of human resources. All other organizational resources will be
efficiently utilized by the human resources.
2. To help the organization attain its goals by providing well-trained and well-notivated
employees.
3. To establish and maintain an adequate organizational structure of relationships among all the
members of an organization by dividing of organization tasks into functions, positions and jobs
and by defining clearly the responsibility, accountability, authority for each job and its relation
with other jobs in the organization.
7. To achieve and maintain high morale among employees in the organization by securing
better human relations.
8. To identify and satisfy the needs of individuals by offering various monetory and non-
monetory rewards.
9. To develop and maintain a quality of work life (QWL) which makes employment in the
organization a desirable personnel & social situation.
10. To help maintain ethical policies and behaviour inside and outside the organization.
11. To manage change to the mutual advantage of individuals, groups, organization and the
society.
12. To ensure respect for human beings by providing various services and welfare facilities
to the personnel.
To sum up, HRM seeks to accomplish individual, organizational and societal goals.
1) Human Resource or Manpower Planning i.e. determining the number and kinds of
personnel required to fill various positions in the organization.
2) Recruitment, Selection and Placement of personnel i.e. employment function.
3) Training and Development of employees for their efficient performance and
growth.
4) Appraisal of performance of employees and taking corrective steps like transfer
from one job to another.
5) Motivation of workforce by providing financial incentives and avenues of
promotion.
6) The employees should be given good remuneration (wages & fringe benefits) to
achieve higher standard of living and so that they are motivated to give higher
productivity.
7) Social security and welfare of employees.
8) Review and audit of personnel policies, procedures and practices of the
organization.
According to the Indian Institute of Personnel Management, the scope of personnel management
is –
A) The welfare aspect – concerned with working conditions and amenities like canteens,
crèches, housing, personal problems of workers, schools and recreation.
B) The Labour or personnel aspect – includes recruitment, placement of employees,
remuneration, promotions, incentives, productivity etc.
C) The Industrial relations aspect – includes trade union negotiations, settlement of
industrial disputes, joint consultation and collective bargaining.
FUNCTIONS OF HRM
Managerial Functions
Operative Functions
Advisory Functions
B) Development Function – HRD is the process of improving the knowledge, skills aptitudes
and values of employees so that they can perform the present and future jobs more effectively. It
consists of the following activities.
D) Maintenance Function – (Working conditions & welfare) It is concerned with providing the
employees with good working conditions so that they like their work and workplace & maintain
their efficiency. This is important to increase the motivation & morale of employees several
fringe benefits like housing, medical aid, educational facilities etc are also given to the
employees, social security measures like provident fund, gratuity, maternity benefits, injury /
disablement allowance, group insurance etc are also given.
Health, safety and welfare services are designed to preserve the human resources of the
organization.
E) Motivation – The personnel manager helps the various departmental managers to design a
system of financial and non-financial rewards which is a source of motivation to the employees.
F) Personnel Records – Personnel department keeps an updated record of the employees with
respect to the training, achievements, transfer, promotions etc. Records of absenteeism, labour
turnover and the personnel programmes & policies of the organization are also kept.
G) Industrial Relations – The personnel managers can help in collective bargaining, joint
consultation and settlement of disputes, if they arise, since he is associated with the committees
on discipline, labour welfare, safety, grievance etc, he helps in maintaining industrial peace in
the organization.
H) Separation – At the time of separation of the employees from the organization, the personnel
manager must ensure the release of retirement benefits to the retiring personnel in time.
HR Functions
1) Significance for an Enterprise – HRM helps an enterprise to accomplish its goals efficiently
by means of -
a) Attracting, & retaining the required talent through proper HR Planning, recruitment,
selection, placement, orientation, and compensation & promotion policies.
b) Developing the skills and right attitudes among the employees through training,
development, performance appraisal etc,.
c) Securing willing co-operation of employees through motivation, participation, grievance
handling etc.
d) Utilising the human resources effectively
e) Ensuring a team of competent people in the organization in the future also. –
3) Social Significance – A sound HRM contributes to the society since it enhances the
dignity of labour in the following ways –
Challenges of HRM
1) Increasing size of workforce - The size of organizations is increasing and with the rise
of MNCs, the workforce of an organization has also increased. The management of such
a large workforce is difficult as the workers are more conscious of their rights.
2) Increase in Education Level – The rise in the literacy level will definitely create tough
task for the future managers.
3) Increasing aspirations of employees – The workers are becoming more aware of their
higher level needs & this awareness will intensify more in the future workers. The
managers would have to evolve appropriate techniques to satisfy the higher level needs of
workers & thus motivate them.
8) Motivation – Work-force in the future & in fact, now also is more educated & are self-
conscious, will demand more of participation & avenues for self-fulfillment. With the rise
in the proportion of professional & technical employees & the women getting into
managerial ranks, non-financial incentives are more important for the employees rather
than only the financial incentives.
9) Changes in Legal Environment – Many changes are taking place in the legal
framework within which the industrial relations system in the country is now functioning.
It is the duty of the HR executive to anticipate the changes & prepare the organization to
face them & bring about necessary adjustment for the effective utilization of human
resources.
11) Building Responsive Organizations – Rather than being a traditional boss, the managers
today have to be more so a “team leader”, “internal consultant” & “change facilitator”.
They have to aim at building up of responsive organizations, customer-oriented
organizations which require more of employees’ commitment.
12) Leadership – The HR Managers have to not only look after the personnel functions, but
also be involved in the actuating process (leadership & motivation) of the entire
organization (from bottom to the top level). The HR Manager is required to play the key
role in formulation of personnel policies, programmes, plans etc in consultation with the
other functional managers.
13) Change Agent – The HR Managers will be required to act as change agents through
greater involvement in environmental scanning & strategic planning; they not only have
the responsibility of maintaining the organization but also furthering it. They need to
prepare the personnel to help them deal with the environmental uncertainties.
15) New Work Ethics – HR Managers will have initiate & foster a new work ethic so as to
assist the top management in setting up & enforcing good quality standards. As changing
work ethic requires increasing emphasis on individual, jobs will have to be redesigned to
make them more challenging. Flexitime would be necessary. Focus will (infact has
already started) shifting from extrinsic to intrinsic motivation of employees.
16) Keeping IR from conflict to co-operation – The challenge for Managers is to move IR
from conflict to co-operation. The present industrial relations situation in India is marked
by multiplicity of unions. The union tend to make irrational & false promises & adopt
erratic and violent measures to compete with their rivals. There is more of inter-unions
rivalry too. This problem can be resolved by a system of recognition of trade unions.
Industrial harmony can be accomplished through worker’s participation in the
management. There should be improved interpersonal interaction based on trust &
confidence between workers & the management.
Evolution of the Concept of HRM
1) The Commodity concept – Prior to the Industrial Revolution, the guild system was the
onset of personnel management. “Guild” refers to a closely knit group concerned with
selecting, training rewarding, and maintaining workers. The industrial revolution gave
rise to the Factory System wherein factory owners employed workers on fixed wages.
The workers were treated as a commodity which could be bought & sold. The close
relationships between owners and workers were broken.
However, unlike in the commodity concept, employees gained through higher earnings &
better working conditions in this concept. Personnel Management was believed to be
concerned with keeping records of production, employment, wage payments, training etc.
Employees launched health and welfare schemes like housing facilities, recreation
facilities, medical facilities, worker’s education, pension plans, etc. In several factories,
welfare officers were appointed to provide welfare services to the workers.
Employers & Employees both realized that they cannot survive without each other. All
the benefits were treated as a favour to the employees by their workers.
4) The Humanitarian Concept – In the 1920s and 30s, industrial psychologists and human
relations activists advocated the adoption of humanitarian concept. They opined that
workers should be treated as human beings and the employer’s responsibility is to
provide facilities for the social and psychological satisfaction of the workers.
Human Resource Development (HRD) is the core of a larger system known as Human Resource
System, wherein HRD is mainly concerned with providing learning experiences for the people
associated with an organization through behavioral processes. It means those learning
experiences which are organized for a specific time & is aimed to bring about a behavioral
change. In this, the individual is provided with learning experiences not only in isolation but he
shares other’s learning experiences also.
HRD is a process whereby the employees are continuously helped in a planned way to –
a) Acquire or sharpen capabilities required to perform various tasks & functions associated
with their present and future expected roles.
b) Develop their general enabling capabilities as individuals so that they can be developed
for their own/organizational development purposes.
c) Develop an organizational culture where superior-subordinate relationships, team work &
collaboration among different sub-units are strong & contribute to the professional well-
being, motivation & pride of employees.