Appu HRM Intro

7/27/2019 Appu HRM Intro

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Human Resource Management

Appasaba.L.V


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Why Study HRM ?

Most of us can expect to spend many years of our lives

working in organisationsof various kinds, being managedor managing others.

Employers have different approaches to managing their

employees, but all organisations require people to make thegoods or provide the services they are set up to make or

provide, and therefore an understanding of how to effectively

manage people in the workplace is of great importance and

value.

To work with people effectively, we have to understand

human behavior.


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At the same time, we have to be aware of economic,

technological, social, and legal issues that either facil i tate

or constrain our efforts to achieve organizational goals.

There is no magic in the success or companies in general.

The secret or their success is ' simply the way they treat their

employees. As Thomas J. Watson, the founder of IBM, said,"You can get capital and erect buildings, but it takes

people to build a business."


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What is Human Resource?

According to leon C. Megginson, the term human resources

can be thought of as, the knowledge, skills, creative abilities,

talents and aptitudes of an organizations workforce, as well as

value, attitudes and beliefs of the individuals involved.

What is Management?

Management has been defined by Mary Parker Follett as, " the

art of getting things done through people."


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Meaning of Human Resource Management HRM

HRM means to Select, Develop, Motivate and Maintainhuman resources, in the organization. I t f irst selects the r ight

human resources or staff(i.e. managers and employees). I t

trains and develops them.I t motivates them by giving them

recogni tion and rewards. It also provides them with the bestworking conditions. HRM is directly concerned with the

"people" of the organization.

French Wendell, definesHuman resource management as

the recruitment, selection, development, utilization,

compensation and motivation of human resources by the

organization.


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Nature of HRM

Inherent Part of Management: Human resource management is

inherent in the process of management. This function is performed

by all the managers throughout the organization rather that by the

personnel department only. I f a manager is to get the best of his

people, he must undertake the basic responsibil i ty of selecting

people who wil l work under him.

Basic to all Functional Areas : Human Resource Management

permeates all the functional area of management such as

production management, f inancial management, and marketing

management. That is every manager from top to bottom, working

in any department has to perform the personnel functions.


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People Centered : Human Resource Management is people

centered and is relevant in all types of organizations. It is

concerned with all categor ies of personnel from top to the bottom

of the organization. The broad classification of personnel in anindustrial enterprise may be as follows :

(i) Blue-collar workers (i.e. those working on machines and

engaged in loading, unloading etc.) and white-collar workers(i.e. clerical employees),

(ii) Managerial and non-managerial personnel.

(iii) Professionals (such as Chartered Accountant, Company

Secretary, Lawyer, etc.) and non-professional personnel.


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Personnel Activities or Functions : Human Resource

Management involves several functions concerned with the

management of people at work. It includes manpower planning,

employment, placement, train ing, appraisal and compensation of

employees. For the performance of these activities efficiently, a

separate department known as Personnel Department is created in

most of the organizations.

Continuous Process : Human Resource Management is not a one

shot function. It must be performed continuously if the

organizational objectives are to be achieved smoothly.


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. Based on Human Relations : Human Resource Management is

concerned with the motivation of human resources in the

organization. The human beings cant be dealt with like physical

factors of production. Every person has different needs, perceptionsand expectations. The managers should give due attention to these

factors. They require human relations skills to deal with the people

at work. Human relations skills are also required in training

performance appraisal, transfer and promotion of subordinates.


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Scope of Human Resource

Management HRMHuman Resource Planning (HRP):HRP estimates the

manpower demand and manpower supply of the organization. It

compares the manpower demand and manpower supply.

Acquisition Function: Acquisition function includes Human

Resource Planning, Recruitment, Selection, Placement and

I nduction of employees. HRM uses the scientific selection

procedure for selecting the right man for the right post. The "right

man" is given proper placement and induction.


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Placement Function: HRM also performs the placement

function. Placement i s done after selection of employees. I t

means to put the right man in the right place of work. Properplacement gives job satisfaction to the employees, and it

increases their efficiency.

Performance Appraisal: HRM also conducts a performanceappraisal. Performance appraisal is a systematic evaluation of

the employees' performance at work. It informs the employees

about their strengths and weakness. It also advises them about

how to increase their strengths and remove their weaknesses.


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Career Development: HRM also helps the employees in planning

and developing their careers. It informs them about future

promotions and how to get these promotions. It helps them to

grow and develop in the organization.

Training and Development: HRM also provides training and

development to the employees. Training means to increase the

knowledge and skills of the employee for doing a particular job.

Training given to managers is called development. So, training is

given to employees while development is given to managers.


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Employees' Welfare: HRM provides employee's welfare. Welfare

measures include paid holidays, medical insurance, canteen

faci l i ties, recreation faci l i ties, rest room, transport facil i ties, etc.Proper and timely welfare facil i ties motivate the employees to

work hard in the organization.

Compensation Function: Employees must be rewarded andrecognized for their performance. HRM makes proper

compensation packages for the employees. These packages

motivate the employees and increase their morale. Rewards are

given to individuals, and teams. The rewards may be in the form ofhigher pay, bonus, other monetary incentives, and non-monetary

incentives such as a certi f icate of appreciation, etc.


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Labour Relations: HRM is also includes industrial relations. It

includes union management relations, joint consultations,

negotiating, collective bargaining, grievance handling, disciplinary

actions, settlement of industrial disputes, etc.


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Objectives of HRM

To achieve an effective uti l ization of human resources.

To establish and maintain an 'adequate organizational structure and

a desirable working, relationship among all the members of an

organization,

To secure the integration of the individuals and groups within the

organization.


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To satisfy and recognize individual needs and group goalsby

offering an adequate and equitable remuneration, economicand social security.

To maintain a high morale and better human relations inside

the organization


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Pre-Requisites for the Achievements

of the Objectives

Capable people should be picked up on the basis of the

qualification.

I ndividual and group efforts must be uti l ized by providingsui table work opportuni ties, tools and raw materials , by showing

an appreciation of work well done, and by offering better chance

for future advancement and training.

Willing Co-operation of the people to achieve the objective must

be available by creating such feelings as people work with us

ratherthan saving that people work forus.


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The task of an organization should be properly divided in

accordance with a sound plan into functions, each indicating clear

cut authority responsibility and duties, as also the relationship of

one position with other. A wide- scale enqui res and consultation should be undertaken

before the formulation of objectives and effort should

subsequently be made to develop a common understanding of the

objectives among managers at various levels. The objectives should be clear defined, fail ing which a great deal

of confusion may raise. Without clear-cut objectives, the

management of organizational records cannot be kept in balance,

and the management of one section may interfere with that ofanother.

A properly prepared grievance handling procedure and disciplinary

plan should be available.


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Difference Between PM&HRM

The term human resources at the macro level spells the total sum

of all the components(l ike ski l ls, and creative abil i ty) possessed

by all the people(employed, self employed employer, owners etc.)

HRM differs from PM.

HRM views people as an impor tant source or asset to be used for

the benefits of organizations, employees and society.Further,human resources includes human values, etc,


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Whereas the term personnel even at macro level is l imited to

only the employees of the organizations. PM has a limited

scope and a inverted organization. It viewed workers as a

workers, the behavior of which could be manipulatefor thebenefit of the organization.


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Personnel Management Human Resources Management

PM is the management of people employed HRM is the management of employees

skills, knowledge, abilities, talents, aptitudes

creative abilities etc.

Employees of PM are mostly treated as an

economic man as his services are exchanged

for wage/ salary.

Employees in HRM are treated not only as

economic man but also as social and

psychological man. Thus, the complete man

is viewed under this approach

Employees is viewed as a commodity or tool,

which can be purchase and used

Employees is treated as a resources

Employees are treated as cost center and

therefore management controls the cost of

labour.

Employees are treated as a profit center and

therefore, management invest capital for

human resources development and futureutility.

Employees are used mostly for organizational

benefits.

Employees are used for the multiple mutual

benefits of the organization employees and

their family members.


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Personnel system and procedures should

be designed to achieve maximum

efficiency.

Human resources systems and procedures

should be designed on the basis of process

to reduce wastage.

In personnel management communicationsystem is a indirect to nature and speed of

decision is slow.

In HRM direct communication is maintainedtimely decision making-making is possible.

Job design is on the basis of division of

labour, and managerial task is monitoring in

nature, and management role is transactional.

Teamwork is the main criteria for the job

design, and managerial task nurturing in

nature, and management play a role of

transformational leadership.


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Evolution & Development of

HRM

Intro..

HRM has evolved due to enlightened employers trying hard, over

the years, to improve the lot of their workers.

Kautilya has observed that there existed a sound base for

systematic management of human resources in the fourth century

B.C. Moses originated the principle of division of labour in 400 B.C.

The Babylonians had a code for incentive wage plans in 1800 B.C.


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Thus human resource management in some form or the other has

been practiced in various parts of the world since the dawn of

civilization.

With the onset of the Industrial Revolution, the position underwent

a radical change.

Industrial Revolution is a word used to describe a number of

changes which took place in England between 1760 and 1850. It

brought about far reaching changes in the economic life of people.

It is against this background that we trace the origin of modem.

human resource management.


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The Report of tile Royal Commission on Labour in India:

Human resource management in India dates back to the Report of

the Royal Commission on labour in I ndia (1929-31) whichrecommended the appointment of labour officers to deal with

recruitment in order to check corrupt practices in industr ies in

I ndia, particularly in areas of selection of workers.

Appointment of Labour Officers: Labour officers were entrusted

with the responsibility of promoting welfare activities.They

functioned as industrial relations officers to handle grievances. TheBombay M il l Owners Association in Bengal appointed labour

off icers to settle grievances and disputes.


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Tile Second World War: During the second world war, the need

for enl isting labour support for the war effort was considered

imperative. These officers were generally entrusted with the

handling of welfare and labour administration. They were to dealwith working conditions, canteens, ration shops, recreation

facilities, medical facilities, workers' housing etc. The second

world war resulted in welfare officers being appointed by

government as well as industry. The function of the welfareofficers included welfare activities, personnel activities and

industr ial relations.


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Enactment of Industrial Disputes Act: The enactment of the

I ndustr ial Disputes Act 1947 made adjudication compulsory. This

made the welfare off icer handle disputes and adjudicate relatingto conditions of service, wages, benefits etc. The welfare officer

thus became industrial relations officers. As a result employers

employed welfare officers with a legal background.

Enactment of Factories Act: Section 49 of the Factor ies Act

1948 made it obligatory for factories employing 500 or more

workers to appoint welfare off icers. A welfare officer had a list of

duties laid down for him. Thus, they had to perform activitiesconcerned with welfare, personnel administration and industrial

relations.


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Reasons for Slow Growth of

HRM in India1. Late arrival of the Factory System

2. Low Status of the Industrial Worker

3. Highly Authoritarian Culture

4. Social Responsibilities of Business(a) Fair Wages

(b) Adequate Benefits

(c) Good Working Conditions

(d) Opportunity for Growth

(e) Recognition of Worker's Rights

(f) Co-operation

4. Technological Backwardness


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5.Instability in Employment:

6. Unhealthy Growth o/Trade Unions:

7. Migratory characteristic of Indian Labour: As a result of migration,

the industrial worker finds himself in an unfamiliar environment.

Due to lack of houses, workers are forced to leave their famil ies

in villages. Separation from families leads to promiscuity,

prostitution,venereal diseases and even AIDS. To compound the

problem, the healtlt of the worker is subjected to severe strain dueto many reasons like change in climate, working and living

conditions etc.


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FUNCTIONS OF HRM

The functions of HRM can be broadly classified

into two categories, viz.,

(I) Managerial functions and

(II)Operative functions.


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I. Managerial Functions :Managerial functions ofpersonnel management involve planning, organizing, directing,

and controlling. All these functions influence the operative

functions.

(i) Planning: It is a .pre-determined course of action. Planning is

determination of personnel programmes and changes in advance

that will contribute to the organizational goals.

(ii) Organizing: An organization is a means to an end. It is essential

to carry out the determined course of action. In the words of J.c.

Massie, an organization is a "structure and a process by which co-

operative group of human beings allocates its task among its

members, identifies relationships and integrates its activities

towards common objective.


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(iii) Directing: The basic function of personnel management at any

level is motivating, commanding, leading and activating people.

Tapping the maximum potentiali ties of the people is possiblethrough motivation and command. Thus, direction is an

important managerial function in building sound industrial and

human relations besides securing employee contributions.

(iv) Controlling: After planning, organizing and directing the

various activities of the personnel management, the performance

is to be ver if ied in order to know that the personnel functions

are performed in conformity with the plans and directions.

Controlling also involves checking, verifying and comparing of

the actual with the plans, identi f ication of deviations, if any, and

correcting of identi f ied deviations. Thus, action and operation are

adjusted to pre-determined plans and standard through control.


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II. Operative Functions :The operative functions of humanresource management are related to specific activities of personnel

management viz., employment, development, compensation and

relations.

1. Employment: It covers the functions such as job analysis, human

resource planning, recruitment, selection, placement, induction

and internal mobility.

(i) Job Analysis: It is the process of study and collection of

information relating to the operations and responsibil i ties of a

specif ic job. It includes:


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(a) Collection of data, information, facts and ideas relating to various

aspects of jobs including men, machines and mater ials.

(b) Preparation of job description, job specif ication, job

requirementsand employee specification which will help in

identifying the nature, levels and quantum of human resources.

(c) Providing the guides, plans and basis forjob designand for all

operative functions of HRM.


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(ii)Human Resources Planning:a process by which an

organization should move from its current manpower position to

its desired manpower. Through planning, management strives tohave the right kind of people at the right place at the right time,

doing things which result in both the organization and the

individual receiving's maximum long-run benefits. It involves

(0) Estimation of present and future requirements and supply of

human resources based on objectives and long range plans of the

organization.

(b) Calculation of net human resources requirementsbased on

present inventory of human resources.


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(c) Taking steps to mould, change, and develop the strength of

existing employees in the organizationso as to meet the future

human resource requirements.

(d) Preparation of action programmes to get the rest of human

resources from outside the organization and to develop the human

resources of existing employees.


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(iii) Recruitment: It is the process of searching for prospective

employees and stimulating them to apply for jobs in an

organization. It deals with:

(a)Identification of existing sources of applicants and developing

them.

(b) Creation/identification of new sources of applicants.

(c) Stimulating the candidates to apply for jobs in the organization.

(d) Striking a balance between internal and external sources.


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(iv) Selection: Choosing the most appropriate candidates and

offering then jobs. This function includes:

(a) Framing and developing application blanks (Application Form).

(b) Creating and developing valid and reliable testing techniques.

(c) Formulating interviewing techniques.

(d) Checking of references.

(e) Setting up medical examination policy and procedure.

(f) Line (Process) manager's decision.

(g) Sending letters of appointment and rejection.

(h) Employing the selected candidates who report for duty


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(v) Placement: It is the process of assigning the selected candidate

with the most suitable job in terms of job requirements. It is

matching of employee specif ications with job requirements. This

function includes:

(a) Counseling the functional managers regarding placement.

(b) Conducting follow-up study, appraising employee performance in

order to determine employee adjustment with the job.

(c) Correcting misplacements, if any.


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(vi) Indication and Orientation: Induction and orientation are the

techniques by which a new employee is rehabilitated in the

changed surrounding and introduced to the practices, policies,

purposes and people, etc., of the organization.

(a) Acquaint the employee with the company philosophy, objectives,

policies, career planning and development, opportunities,

product, market shore, social and community standing, companyhistory, culture, ete.

(b) Introduce the employee to the people with whom he or she has to

work such as peers, supervisors and subordinates.

(c) Mould the employee attitude by orienting him to the new working

and social environment.


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2. Human Resources Development: It is the process of improving,

molding and changing the skills, knowledge, creative ability,

aptitude, attitude, values, commitment, etc., based on present andfuture job and organizational requirements. This function

includes:

(i) Performance Appraisal: It is the systematic evaluation ofindividuals with respect to their performance on the job and their

potential for development. It includes:

(a) Developing policies, procedures and techniques.

(b) Reviewing of reports and consolidation of reports.

(c) Evaluating the effectiveness of various programmes.


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(ii) Training: It is the process of imparting the employees the

technical and operating skills and knowledge. It includes:

(a)Identification of training needs of the individuals and the

company.

(b) Developing suitable training programmes.

(c)Helping and advising line management in the conduct of training

programmes.

(d)Imparting of requisite job skills and knowledge to employees.

(e) Evaluating the effectiveness of training programmes.


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(iii) Management Development: It is the process of designing and

conducting suitable executive development programmes so as to

develop the managerial and human relations skill of employees. It

includes:

(a) Identification of the areas in which management development is

needed.

(b) Conducting development programmes.

(c) Motivating the executives.

(d) Designing special development programme for promotions.

(e)Using the services of specialists, and/or utilizing of the institutional

executive development programmes.

(f)Evaluating the effectiveness of executive development

programmes.


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(iv) Career Planning and Development: It is the planning of one's

career and implementation of career plans by means of education,

training, job search and acquisition of work experiences. It

includes internal and external mobility. Internal Mobility: It includes vertical and horizontal movement

of an employee within an organization. I t consists of transfer,

promotion and demotion.

(v) Organization Development: It is a planned process designed to

improve organizational effectiveness and health through

modif ications in individual and group behavior, culture and

systems of the organization using knowledge and technology ofapplied behavioral science.


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3. Compensation: It is the process of providing adequate, equitable

and fair remuneration to the employees. It includes job evaluation,

wage and salary administration, incentives, bonus, fringe benefits,

social security measures,etc.

(i) Job Evaluation: It is the process of determining relative worth

of jobs:

(a) Select suitable job evaluation techniques.

(b) Classify jobs into various categories.

(ii) W d S l Ad i i i Thi i h f


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(ii) Wage and Salary Administration: This is the process of

developing and operating a suitable wage and salary programme. It

covers:

(a) Conducting wage and salary survey.

(b) Determining wage and salary rates based on various factors.

(c) Administering wage and salary programmes.

(d) Evaluating its effectiveness.

(iii) Incentives: It is the process of formulating, administering and

reviewing the schemes of financial incentives in addition to

regular payment of wages and salary.


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(iv) Bonus: It includes payment of statutory bonus according to the

Payment of Bonus Act, 1965, and its latest amendments:

(v) Fringe Benefits: These are the various benefits at the fringe of

the wage. Management provides these benefits to motivate the

employees and to meet their life's contingencies. These benefits

include:

Disablement benefit.

Housing facilities.

Educational facilities to employees and children.

Canteen facilities.

Recreational facilities.

C f iliti


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Conveyance facilities.

Credit facilities.

Legal clinic.

Medical, maternity and welfare facilities. Company stores.

(vi) Social Security Measures: Managements provide social security

to their employees in addition to the fringe benefits. These

measures include:

Workmen's compensation to those workers (or their dependents)

who involve in accidents.

Maternity benefits to women employees.

Sickness benefits and medical benefits.

Disablement benefits/allowance.

Dependant benefits.

Retirement benefits like provident fund, pension, gratuity, ete.


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4. Human Relations: Human Relations is the process of interaction

among human beings. Human relations is an area of management

in integrating people into work situation in a way that motivates

them to work together productively, co-operatively and witheconomic, psychological and social satisfaction. It includes:

Understanding and applying the models of perception, personality,learning, intra and inter personal relations, intra and inter group

relations.

Motivating the employees.

Boosting employee morale.

Developing communication skills.


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Developing leadership skills.

Redressing employee grievances properly and in time by means ofa well formulated grievance procedure. :

Handling disciplinary cases by means of an established

disciplinary procedure.

Counseling the employees in solving their personal, family and

work problems and releasing their stress, strain and tensions.

Improving quality of work life of employees through participation

and other means.


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5. Effectiveness of Human Resources Management: Effectiveness

of various personnel programmes and practices can be measured or

evaluated by means of organisational health and human resources

accounting, etc.

(a) Organizational Health: Organizational health may be studied

through the result ofemployees' contr ibution to the organization

and the employee job satisfaction. The result of the employee

satisfaction can be understood by labour turnover, absenteeism,

commitmentand the like. Low rate of absenteeism and specif ic

and high rate of employee commitmentmost probably indicate

employee-satisfaction about the job and the organisation.


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(b) Human Resource Accounting, Audit and Research:

Effectiveness of human resources management can also be found

out through human resource accounting, audit and research.


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Personnel PolicyPersonnel Policy can be defined as a setof rules that define the

manner in which an organization deals with a human resourcesor personnel-related matter.A personnel policy should reflect

good practice, be written down, be communicated across the

organization, and should adapt to changing circumstances.

The major steps involved in Personnel Policy framing is asfollows Identify the need for a policy

Information collection

Policy Drafting and Review

Management Support

Implement the Policy

Communicate the policy


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Record-keeping

The oldest and most basic personnel function is employee

recordkeeping. This function involves recording, maintaining,

and retrieve employee related information for a variety of

purposes. Records which must be maintained include application

forms, health and medical records, employment history (jobs

held, promotions, transfers, and lay-offs), seniority lists, earnings

and hours of work, absences, turnover, and other employee data.Complete and up-to-date employee records are essential for most

personnel functions. More than ever employees today have a great

interest in their personnel records. They want to know what is in

them, why certain statements have been made, and why records

may or may not have been updated.

P l d id h f ll i


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Personnel records provide the following:

1. A store of up-to-date and accurate information about the companys

employees.

2. A guide to the action to be taken regarding an employee,

particularly by comparing him with other employees.

3. A guide when recruiting a new employee, e.g. by showing the rates

of pay received by comparable employees.

4. A historical record of previous action taken regarding employees.

Appu HRM Intro

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