Chap-1 Concept of Hrm

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CHAPTER-1

CONCEPT OF HUMAN RESOURCE

MANAGEMENT

BBS 2NDYEAR

PREPARED BY: BIBEK KHADGI


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CONCEPT OF HRM

Human resource management is an essential and vitalmanagement function which is focused on people dimensionof an organization

Humans are also crucial resources like land, capital and

technology in absence of which all other resources may beuseless

Human resources are vital for achieving organizationalobjectives and better managed human resources achievebetter results.

So, human resource management is the function of managingthe human energy and competencies i.e. their Knowledge,Skills, Attitudes and Potential.


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Concept Contd

According to DeCenzo and Robbins Human resource

management is comprised of the acquisition, development,

motivation and maintenance functions.

Thus, HRM (Human Resource Management) can be defined as

the set of policies and practices concerned with managing the

human energies and competencies for achieving the

organizational objectives through proper acquisition,

development, utilization and maintenance of peoples of an

organization.


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CHARACTRISTICS OR NATURE OF HRM

Human Focus

It regards peoples as the vital resources and is focusedtowards several aspects of peoples.

It emphasize on human energies and competencies and

develop them

Management Function

Human resource is need of all organization

So, all organization needs to manage its human resourcesor employees

It is the staffing function of the management


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Characteristics Contd..

Pervasive Function Human resource management should be emphasized by all

managers but not only the HR managers

In addition, HRM is needed for all employees i.e. from

higher level to lower level employees The HRM responsibilities cannot be delegated to single

person

Continuous Commitment It is not one time and one shot activity

HRM needs to be carried out till the organization exists

It is concerned with present as well as future


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Characteristics Contd Dynamic

HRM should change with time and business environment It should adapt to political, legal, socio-cultural, economic,

technological and global environment changes

System

HRM follows the acquisition, development, utilization andmaintenance

Such functions needs to be carried out systematically and

sequentially

Mutually Oriented HRM promotes the mutual interest of employers and

employees

Such interests may be objectives, influence, respect,

rewards and responsibilities etc.


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OBJECTIVES OF HRM Goal Achievement

Personal Goals: HRM helps employees to achieve their

personal goals like financial soundness, compensation,

development, career advancement etc. It ensures

integration of personal with organizational goals

HRM Goals: HRM ensures proper, timely and effective

acquisition, development, utilization and maintenance ofcapable employees

Organizational goals: HRM ensures better employees in

organization which helps achieve the organizational goals

such as profit, survival, growth, quality, industrial peaceetc.

Societal Goals: In way of achieving organizational

objectives, HRM focuses in welfare of the employees,

creates employment opportunities which is socialresponsibilities.


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Goal Harmony: Effective HRM ensures the clear

understanding of the mutual goals of an organization and

individual employee. Mutual understanding makes it easy to

work out on those goals which are readily achieved. So, HRM

creates goal harmony.

Structure Maintenance: While organization manages its

human resource, it defines the organization structure and

positions of the employees in various tasks and jobs.

Productivity Improvement: HRM focuses on developing the

employee competencies, motivating them and rewarding

them based on their performance. In addition, HRM oversees

the welfare, safety and quality of life of the employees. It

makes the employee competent, satisfied and committed that

helps in improving the productivity.


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Efficiency Promotion: Since HRM develops the competencies

and makes proper utilization of HR, it cuts the cost for the

organization. Cost cuts promotes efficiency in jobs. Reducethe wastes.

Change Management: Generally, employees have tendency to

resist the changes. To prepare them adopt the changes, HRMplays vital role. HRM provisions for training and employee

development which brings readiness to change in employees.

Quality of Work Life: HRM considers the employees as thevaluable resources. HRM emphasize on the welfare and

development of the employees. Employees become satisfied

and motivated. Their goals are achieved and quality of work

life is improved.


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Functions of HRM (Components)

HRM is not one time activity. It lasts till the organization existsright from the entry of the employees to exit. HRM intends toacquire competent employees, develop them, use themproperly in obtaining organizational goals and retaining themin organization.

The major functions or components of the HRM are asfollows:

Acquisition

Development

Utilization

Maintenance


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Acquisition: It is concerned with staffing the organization thatensures right number of right kind of employees at right timein right job. Followings are the important steps of acquisition

function: Human resource planning: Predetermines the future need

of human resource

Job Analysis: It is formal and in depth study of jobs, its

requirements and determines qualification and skills forvarious jobs.

Recruitment: Preparing the pool of qualified candidatesfrom which the final employees are to be selected.

Selection: It is the process of choosing the qualified and

right candidates among the recruits.

Socialization: Preparing the employees to understand thejob environment and the organizational culture.


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Development: HRM focuses on developing the competencies

of individual employees so that they can perform the

designated tasks better. Followings are the steps in

development function of human resource management:

Analyzing Developmental Needs: Identifying the future

needs of human resource and their growth potential.

Employees needs to be developed in order to delegate

higher responsibilities.

Employee Training: Training should focus on developing

the job oriented skills required to perform present tasks. It

can be on the job and off the job.

Management Development: It targets to enhance the

managerial capacities in higher level employees. Useful for

succession planning.

Career Development: Understanding the career goal of

employees and making a path to reach that career goal.


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Utilization: Like any other resources, the human resources

should also be utilized productively for better performance

and increased productivity. Human resources can be utilizedefficiently through:

Motivation: Motivated employees put their best efforts

while doing their jobs.

Performance Appraisal: Employee performance can beevaluated whether or not it meets the standard

performance. Performance appraisal helps in finding out

the actual performance which can be used to utilized the

employees in better way.

Compensation Management: Effective utilization involves

the lowest cost and fair compensation structure for

employees. Compensation packages includes money,

promotion, benefits and services.


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Human Resource Management System

Human resource management has system characteristics thatconsists of input-processing-output and feedback

components.

HRM operates within internal and external environment

HRM system provides framework for integrating the variouscomponents within the HRM system.

HRM system entails that Human Resource Management

should not be a haphazard and unstandardized procedure

rather it should follow the certain standard steps making a

integrated system.


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Human Resource Management System

Inputs of HRM System

Organizational plan, HR plan, competencies, human energy

and abilities, human resource inventory and information,

job analysis, labor market etc. works as the input for HRM

system. All of these inputs for HRM system makes the

organization able to execute various HRM functions

effectively.

Processing of HRM System

The inputs of HRM system are processed by the

organization in carrying out various functions of HRM.

Such functions are acquisition, development, utilization

and maintenance of the employees.


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Outputs of HRM System

The outputs of the HRM system are categorized into two

major forms. Goals achievement, Quality of work life,Productivity, Profits, Readiness for change etc. are

organization related outputs. In other hand, Commitment,

Competence, Congruence, Cost effectiveness are

employee related output.

Feedback of HRM System

Feedback system of HRM provides in formation whether

the outcome from the HRM system is actually meeting thestandard and desired goals are achieved. If not, it assess

the problems that exist in the inputs and processing of the

HRM system. It resembles the control system of HRM.


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HRM Outcomes

Quality of Work Life

Quality of work life is the relationship between theemployees and total job environment. It is employees

perception of physical and psychological well being at

work.

Quality of work life can be ensured through autonomy injobs, recognition, rewards, belongingness of the

organization etc. These factors encourages freedom,

decision making power, higher responsibilities and

reputation etc. so that quality of work life improves.

Quality of work life is represented by equity in

compensation, safe and healthy working environment,

development of human capacities, social relevance and

responsibilities and total life space.


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Productivity

It is the efficiency relationship between the input and

output or ratio of input to output.

Productivity increases due to various components like

technology, innovation, learning, motivation and

performance - reward linkage.

Technology makes the production efficient while

innovation develops new products. Likewise, motivation

keeps the employees willing to work better.


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Readiness to Change

Generally, employees have tendency to resists the change.

They resist change due to fear of unknown, job security,

habitual resistance, misunderstanding, poor

communication, lack of involvement in decision making,

vested interest and other social factors.

However, HRM ensures proper awareness, education and

communication of change, itsneed, its process and other

various aspects. In addition. Employees are involved indecision making.

Key roles are given to employees and negotiation are

carried out through labor unions and whole organization.


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Challenges of HRM or Contemporary HRM

Issues

HRM operates in dynamic i.e. ever changing environment.

The environmental factors like Political-legal, Economic, Socio-cultural, and Technological (PEST) affects the HRM and poses

various challenges.

So, organization need to review and restructure its HRMpractices based on such changes in environment failing which

may degrade the productivity of an organization.

Some of the contemporary issues or challenges of the HumanResource Management are as follows:


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Globalization: Business organization are crossing the border

of one country. Organization are present in different countries

in search of new market, cheaper raw materials, labors etc.

So, as the business are growing global, the HRM practices

needs to be innovative to face such challenges.

Complexity: Modern organizations are complex. They operate

in various product and service ranges. Such a complex

operation of business requires proper management ofcompetent and committed human resource which is challenge

for human resource managers.

Technological Change: Technology is changing rapidly due to

which employees are required to have skills on using the newtechnology. This poses HRM a challenge to avoid the skill

deficiencies.


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Workforce Diversity: The composition of workforce is

becoming very vague and diverse in terms of age, gender,

skills, culture and ethnicity and others. Managing such

numerous aspects of the human resources or employees ischallenging tasks.

Less Attached Employees: Employees tends to be freelancer

and work independently. So, they are less attached to their

jobs i.e. less loyal and committed to the organization. Itcreates higher turnover rates that increases the costs for the

organization.

New HRM Concerns: HR outsourcing has been increasing,

social responsibility and total quality management hasincrease. New concerns like reservations, equal employment

opportunity etc. brings difficulties in managing the Human

resources.


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Chap-1 Concept of Hrm

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