Shree D.N. Institute of Business Administration

Shree D.N. Institute of Business AdministrationHRM

Class: SYBBA (Gen) Sem. -IIIUnit 1: Human Resource ManagementPrepared by: Ritesh H. PatelConcept of Human Resource Management:

Human Resource Management (HRM) is a relatively new approach to managing people in any organization. People are considered the key resource in this approach. it is concerned with the people dimension in management of an organization. Since an organization is a body of people, their acquisition, development of skills, motivation for higher levels of attainments, as well as ensuring maintenance of their level of commitment are all significant activities. These activities fall in the domain of HRM.What is HRM?Human resources management (HRM) refers to the management of people in organizations. It comprises 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 organizations 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).Let us understand it by dividing the term in the term into its sub parts;Human PeopleResource Assets/costs for organizationManagement To Manage, to forecast, to plan, to organize, to command, to co-ordinate and to controlAccording to Edwin Flippo, "Personnel Management is the planning, organizing, directing and controlling of the procurement, development, compensation, integration and maintenance of people for the purpose of contributing to organizational, individual and social goals".This definition reveals that human resource (HR) management is that aspect of management, which deals with the planning, organizing, directing and controlling the personnel functions of the enterprise.French Wendell defines Human resource management as the recruitment, selection, development, utilization, compensation and motivation of human resources by the organization.Evolution of Human Resource ManagementEvolution and development of HRM consist of 7 stages beginning prior to the industrial revolutions in UK and continuing up to the present.Stage 1: Pre-Industrial Era (1400 AD-1700 AD)Pre-industrial period is characterized by the absence of any formal HRM with in organizations. But there were some dramatic changes which ignited the modern HRM. They are Cessation of feudalism, release of labour from land and the beginning of the free employment relationship. Shift from subsistence agriculture to a commercial mixed economy, a diffusion of economic control and distribution of wealth and income.Stage 2: Industrial Revolution and the Factory System Industrialization replaced the human effort and skill by machines. Factory system which was developed due to the industrial revolution gave birth to rationalization of work and division of work. Necessity of supervising was also introduced.Stage 3: Emergence of the Modern Corporation and Managerial Capitalism The period of 1860 to 1900s witnessed a growth in corporate form of organization, the separation of the operation from the ownership of firms and the employment of salaried managers. The modern enterprise along with managerial capitalism emerged.Stage 4: World War I and the emergence of HRM as a profession (1911-1914)World War 1 provided the apt conditions that resulted in the growth of business around the world, and the emergence of HRM as a profession.Stage 5: The golden age of industrial relations and the personnel management maintenance function (1935-1970)HRM function which evolved during the world war had a set back during the great depression. After depression there was an increased need of human relations management as a result of growth in formations of unions. The provision of several labour acts led to the formation of unions which resulted in the evolution of human relation functions.Stage 6: The Emergence of Contemporary HRM Function.Since the 1970s, the PM side of the HRM function has experienced an evolution from being a maintenance function, secondary to the IR function, to representing one of critical importance to the effectiveness of the organisation.Stage 7: The HRM Functions TodayTodays HRM functions are different from that of the past in many ways. Firstly todays HRM is characterised by the emphasis on the integration of traditional PM activities as well as HRMs involvement in overall organisational planning and change. Secondly HRM today is characterized as a partner in organisational change, creator of organisational culture and facilitator of organisational commitment. Third, HRM is characterised by the decentralisation of many of the traditional HRM activities from personnel specialists to senior line management. Fourth current HRM is characterized by a focus on individual employees rather than on collective management-trade union relations. Furthermore HRM has become a partner with other management functions and has become increasingly responsible to cultivate the requisite culture that is conducive of required behaviours.

Functions of HRMThe main functions of human resource management are classified into two categories: (a) Managerial Functions and (b) Operative Functions.

(A) MANAGERIAL FUNCTIONS:1. Planning:It involves the process of pre-determining the personnel programs that are necessary to attain the organizational goals. Accurate forecasting is vital to the success of any plan. The steps involved in the planning are: Establishing goals and objectives to be achieved Developing rules and procedures Determining plans and forecasting techniques

2. Organizing:Its a process through which the firm establishes its structure and determines the authority, responsibility and accountability of each member in relation to the job. Organising involves: Giving each member a specific task Establishing departments and divisions Delegating authority to the members Establishing channel of authority and communication Creating a system to coordinate the works of the members

3. Staffing:This deals with the creation and maintenance of human resources through employment, compensation, benefits, training and development and industrial relations measures. The steps are: Determining the type of people to be hired Recruiting prospective employees and selecting the best ones from them Compensating the employees Training and developing the employees Setting performance standards and evaluating the employees performance Counseling the employees

4. Directing:Its the sum of several activities like communication, leadership and motivation. Directing as a function, aims at securing willing cooperation from the individuals and groups to achieve the predetermined goals. It includes the following activities: Getting works done through subordinates Motivating subordinates to strive for better performance Maintaining the group morale

5. Controlling :Controlling is the process of checking the efficiency of the individuals and the groups in fulfilling the plans and goals through follow-up measures? The processes involved are: Establishment of standard performance Measurement of actual performance Comparison of actual performance with the standard one to find the deviation Initiation of corrective action(B) OPERATIVE FUNCTIONThe operative functions of personnel management are related to specific activities of personnel management viz., employment, development, compensation and relations. All these functions are interacted by managerial functions. Further these functions are to be performed in conjunction with management functions.1. Employment or RecruitmentIt is the first operative function of HRM. Employment is concerned with securing and employing the people possessing required kind and level of human resources necessary to achieve the organizational objectives. It covers the functions such as job analysis, human resources planning, recruitment, selection, placement, induction and internal mobility.2. Job Analysis:It is the process of study and collection of information relating to the operations and responsibilities of a specific job. It includes: Collection of data, information, facts and ideas relating to various aspects of jobs including men, machines and materials. Preparation of job description, job specification, job requirements and employee specification which help in identifying the nature, levels and quantum of human resources. Providing the guides, plans and basis for job design and for all operative functions of HRM.

3. Human Resources Planning:It is a process for determination and assuring that the organization will have an adequate number of qualified persons, available at proper times, performing jobs which would meet the needs of the organization and which would provide satisfaction for the individuals involved. It involves Estimation of present and future requirement and supply of human resources Calculation of net human resources requirement based on present inventory of human resources. Taking steps to mould, change, and develop the strength of existing employees in the organization so as to meet the future human resources requirements. Preparation of action programs to get the rest of human resources from outside the organization and to develop the human resources of existing employees.

4. Recruitment:It is the process of searching for prospective employees and stimulating them to apply for jobs in an organization. It deals with: Identification of existing sources of applicants and developing them. Creation / Identification of new sources of applicants. Stimulating the candidates to apply for jobs in the organization. Striking a balance between internal and external sources.

5. Selection:It is the process of ascertaining the qualifications, experience, skill, knowledge etc., of an applicant with a view to appraising his / her suitability to a job appraising.This function includes: Framing and developing application blanks. Creating and developing valid and reliable testing techniques. Formulating interviewing techniques. Checking of references. Setting up medical examination policy and procedure. Line managers decision. Sending letters of appointment and rejection. Employing the selected candidates who report for duty.

6. Placement:It is the process of assigning the selected candidate with the most suitable job in terms of job requirements. It is matching of employees specifications with job requirements. This function includes: Counseling Conducting follow-up study, appraising employee performance in order to determine employees adjustment with the job. Correcting misplacements, if any..

7. Induction and Orientation:Induction and orientation are the techniques by which a new employee is rehabilitated in the changed surroundings and introduced to the practices, policies, purposes and people etc., of the organization. Acquaint the employee with the company philosophy, objectives, policies, career planning and development, opportunities, product, market share, social and community standing, company history, culture etc. Introduce the employee to the people with whom he has to work such as peers, supervisors and subordinates. Mould the employee attitude by orienting him to the new working and social environment.

Role of Human Resource ManagerThe human resource or personnel manager control and manage his department. He has also to perform certain operative functions of recruitment, selection, training, placement etc, which the other line managers may entrust to him. He is basically a manager whatever may be the nature of his operative functions. Just as finance assesses cost, marketing emphasizes customers, personnel is people-centred. Some of the important roles of human resources manager in an organization are:-performs managerial as well as operative functions. Since he is a manager, he performs the basic functions of management like planning, organizing, directing and controlling.1. Policy Formulation:-Policy formulation is one of the important tasks of the human resource manager. It is with a view to overcome problems of recurring nature, or to prevent anticipated problems in the area of human resource management that policies are framed. The human resource manager helps the top management in the formulation of policies on wage and salary administration, transfer, appraisal, welfare activities, personnel records and statistics, working environment etc.2. Advisory Role:-The advisory role of the human resource manager is of crucial importance. Line managers are generally confronted with a variety of problems in their day to day operations. These problems may include grievance over distribution of overtime work, annual increase in pay, transfer, promotion, disciplinary action and so on. In all such matters, the personnel manager can offer useful advice because he is familiar with personnel policies and practices, labor agreements, labor laws, etc.3. Linking Pin Role:-The human resource manager attempts to achieve and maintain good industrial relations in the organization. He is responsible for setting up various committees on discipline, labor welfare, safety, grievance etc. He helps in laying down the grievance procedure to redress the grievances of employees. He also conveys the views of the trade union leaders to the higher management. Thus he acts as a linking pin between the management and the workers.4. Representative Role:-The human resource manager generally acts as a spokesman of the top management or representative of the company and communicates management policies and decisions that affect people in the organization. It is because he has better understanding and overall picture of the companys operation. Sometimes, he also acts as workers representative to put forward their problems to management, particularly in non-unionized organizations. 5. Decision-making Role:-The human resource manager also plays an effective role in decision-making on issues related to human resources. He formulates and designs objectives, policies and programs of human resource management.6. Mediator Role:-The human resource manager often acts as a mediator in the event of conflict between employees, or groups of employees, superior and sub-ordinate, and even between management and employees. Thus he attempts to maintain industrial peace and harmony in the organization.7. Leadership Role:-The human resource manager provides leadership and guidance to the workers and their groups. He ensures effective communication in the organization and influences the workers for extending their co-operation in extending the organizational objectives. 8. Welfare Role:-The human resource manager acts as a welfare officer in the organization. As welfare officer, he is concerned with provision of canteen, crches, transport, hospital and other welfare services for the benefit of workers and their family members.

9. Research Role:-The human resource manager maintains the records of the employees working in the enterprise. On the basis of records, he undertakes research in various personnel areas such as absenteeism, labor turnover, alcoholism etc and suggests suitable measures for improvement to the top management. Human Resource Planning:Human Resource Planning is concerned with the planning the future manpower requirements for the organization. HR manager ensures that the company has the right type of people in the right number at the right time and place, who trained and motivated to do the right kind of work at the right time.Human Resource planning is the process by which a management determines how an organization should move from its current manpower position to its desired manpower position.Definitions of Human Resource Planning: 1. Coleman has defined Human Resource Planning as the process of determining manpower requirements and the means for meeting those requirements in order to carry out the integrated plan of the organization.2. According to WERTHER AND DAVIS HRP systematically forecasts an organizations future supply of and demand for, employees.

Process of Human Resource Planning:Human resource planning refers to a process by which companies ensure that they have the right number and kinds of people at the right place, at the right time; capable of performing different jobs efficiently. Planning the use of human resources is an important function in every organization.

1. Analysis of Organizational Plans and Objectives: Human resource planning is a part of overall plan of organization. Plans concerning technology, production, marketing, finance, expansion and diversification give an idea about the volume of future work activity.The HR Manager first studies the objectives of the organization. Then he prepares a list of all the activities (jobs) that are required to achieve the objectives. He also does Job's analysis.2. Estimation of Manpower RequirementsThe HRD manager then estimates the manpower requirement of the organization. That is, he finds out how many people (manager and employers) will be required to do all the jobs in the organization. Estimation of manpower requirements must be made in terms of quantity and quality.3. Estimation of Manpower Supply:The HRD manager then estimates the manpower supply. That is, he finds out how many managers, and employers are available in the organization.4. Comparison of Manpower Supply and DemandThe HR manager then compares the manpower requirements and manpower supply.(a) In case of no difference If there is no difference between the manpower requirements and the manpower supply, then the HR manager does not take any action. This is because manpower requirements are equal to the manpower supply.(b) In case of differenceIf there is a difference between the manpower requirements and the manpower supply the HRD manager takes the following actions.A. Manpower Surplus:If the manpower requirements are less than the manpower supply then there is a surplus. During manpower surplus, the HRD manager takes the following actions :-1. Termination i.e. removal of staff.2. Lay-off.3. Voluntary retirement.B. Manpower Shortage: If the manpower requirements are greater than the manpower supply then there is manpower shortage.During manpower shortage, the HR manager takes the following actions:-1. Promotions2. Overtime3. Training to improve quality.4. Hire staff from outside, etc.

Job Analysis:Job analysis is a process of determining which characteristics are necessary for satisfactory job performance and analyzing the environmental conditions in which the job is performed. It analyzes the work content of job & job content of work. The process of job analysis leads to development of two documents viz., job description and job specification. Job description indicates the tasks and responsibilities, job title, duties, machines, tools and equipment, working conditions and occupational hazards that form part of the job whereas job specification comprises of the capabilities required to perform job, education, experience, training, judgmental skills, communication skills and personal skills required to perform the job effectively.What is contained in a job analysis?A job analysis would typically contain:Job purposeWhat is the job meant to do - and how does this related to other parts of the business?

Job contentDuties and responsibilities

AccountabilitiesWhat results / outputs is the job holder responsible for?

Performance criteriaHow will the job holder's performance be measured?

Resource requirementsE.g. equipment, location

Significance of Job AnalysisJob analysis is a vital tool in taking a variety of human resource decisions. It is used to design and execute a number of human resource management activities and programs. They are described here:1. Manpower Planning: Job analysis helps in forecasting manpower requirements based on the knowledge and skills and quality of manpower needed in organization.

2. Recruitment: A carefully designed job analysis provides information as to what sources of recruitment are to be used to hire employees. For example, job analysis in a retail stores about merchandise sorters tells that village level schools are potential source of recruitment.3. Selection: Selection of the right candidate to the right job can only be done with the help of job analysis. In the case of retail stores, a billing assistant can be selected with the knowledge of accounting, cash, and computer operations. This is possible with the help of job analysis.4. Training and Career Development: Job analysis provides valuable information to develop training programs. It provides information about what skills are to be trained. It also provides information about various techniques to be used in career development of employees.5. Placement and socialization: After people are selected and trained, they must be placed in suitable jobs. Job analysis provides information about the suitability of jobs. A clear job analysis guides the process to socialize the employees to develop sound relationships with all those persons.6. Compensation: Job analysis provides information as to how much compensation and other financial and non-financial benefits to be associated with each job.7. Employee Safety and Welfare: Job analysis details information on working conditions. Thus, management tries to provide safety and welfare measures that are outlined in job analysis.8. Performance Appraisal: Performance of employees is appraised based on standard criteria provided in the job analysis.9. Counseling: A good job analysis provides information to the superiors about the jobs. They use this information to guide and counsel employees about their career options, performance, training requirements and skill up-gradation.10. Strategic Planning: Job analysis enables human resource manager to develop a long-range strategic plan in all concerned areas of human resources.Components of Job Analysis1. Job Description: It is an important document. It is descriptive in nature. It is useful to identify a job for consideration by job analyst. Important questions to be answered through job description are:What should be done? Why it should be done? - Where it should be done?There is no universal format of writing job description.According to Ghorpade the following information is common in most of the job descriptions.1. Job title: title of the job and other identifying information such as wages, salaries, other benefits2. Summary: summary is written in one or two lines that describes what outputs are expected from job incumbents.3. Equipment: a clear statement of tools, equipment and other information required to perform job effectively.4. Environment: a clear description of the working conditions of the job, the location and other characteristics of work environment such as hazards, noise, temperature, cleanliness etc.5. Activities: a description about the job duties, responsibilities, and expected behavior on the job. A description of social interactions associated with the job such as the size of work group, interpersonal interaction on the job is made.6. Job duties give us a comprehensive listing or the duties together with some indication of the frequency of occurrence or percentage of time devoted to each major duty. It is regarded as the heart of a job.Job analyst writes job description in consultations with the workers and supervisors. After writing draft job description, comments and criticism are invited to improve its content. Final draft is then prepared. Job description is written either by making personal observation or using questionnaire to collect relevant information from supervisors and workers. Job description should be reviewed from time to time.2. Job Specifications: It also known as man or employee specifications is prepared on the basis of job specification. It specifies the qualities required in a job incumbent for the effective performance of the job.Basic contents of a job specification are as follows:1. Personal characteristics such as education, job experience, age, sex, and extra co-curricular activities.2. Physical characteristics such as height, weight, chest, vision, hearing, health, voice poise, and hand and foot coordination, (for specific positions only).3. Mental characteristics such as general intelligence, memory, judgment, foresight, ability to concentrate, etc.4. Social and psychological characteristics such as emotional ability, flexibility, manners, drive, conversational ability, interpersonal ability, attitude, values, creativity etc.Various contents of a job specification can be prescribed in three terms:1. Essential qualities which a person must possess;2. Desirable qualities which a person may possess; and3. contra-indicators which are likely to become a handicap to successful job performanceMethods of Job AnalysisJob analysis methods can be categorized into three basic types: (1) ObservationMethods; (2) Interview; and (3) Questionnaire.1. Observation Method: Observation of work activities and worker behaviors is a method of job analysis which can be used independently or in combination with other methods of job analysis. Three methods of job analysis based on observation are: (i) Direct Observation;(ii) Work Methods Analysis; and (iii) Critical Incidents Technique.2. Interview: In this method, the Analyst interviews the employee, his supervisor and other concerned persons and record answers to relevant questions. The interviewer asks job related questions and a standard format is used to record the data. The limitation of this method is that it does not provide accurate information because the employee may not provide accurate information to protect his own interest. Success of this method depends upon the rapport between the analyst and the employee.3. Questionnaire: In this method properly drafted questionnaires are sent to jobholders. Structured questionnaires on different aspects of a job are developed. Each task is described in terms of characteristics such as frequency, significance, difficulty and relationship to overall performance. The jobholders give their rating of these dimensions. The ratings obtained are analyzed and a profile of actual job is developed. This method provides comprehensive information about a job. The limitation of this method is that it is time consuming and costly.

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