Intro to HRM Sup Note

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Introduction to HRM (Supplementary Note)

National Institute of Business Management

Compiled by

Gajaba Perera-Gunawardena

1. IntroductionHuman resources are undoubtedly the key resources in an organization, the

easiest and the most difficult to manage! The objectives of the HRM span right

from the manpower needs assessment to management and retention of the

same. To this effect Human resource management is responsible for effective

designing and implementation of various policies, procedures and programs. It is

all about developing and managing knowledge, skills, creativity, aptitude and

talent and using them optimally.

Human Resource Management is not just limited to manage and optimally exploit

human intellect. It also focuses on managing physical and emotional capital of

employees. Considering the intricacies involved, the scope of HRM is widening

with every passing day. It covers but is not limited to HR planning, hiring

(recruitment and selection), training and development, payroll management,

rewards and recognitions, Industrial relations, grievance handling, legal

procedures etc. In other words, we can say that its about developing and

managing harmonious relationships at workplace and striking a balancebetween organizational goals and individual goals.

In the competitive environment of open economy human resource management

with the increased modern trends becoming a significant factor for the efficient

running of organization Human resource management emerged from personnel

management and personnel management emerged from manpower planning.

2. Evolution of the Concept of HRM

The various stages or phases in the transition or evolution of Personnel

Management in Human Resource Management are shown below:


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(a) The Commodity Concept: Labor was regarded as a commodity or a tool to be

bought or sold.

(b) The Factor of Production Concept: Labor is like any other factor of production,

likeMoney, materials, land, etc.

(c) The Goodwill Concept Welfare measures like safety, first aid, lunch room, rest

room will have a positive impact on workers productivity

(d) The Paternalistic Concept: Management must assume a father or protective

attitude towards employee It means satisfying the various needs of employees as

parents meet the requirements of their child

(e) The Humanitarian Concept: To improve productivity, physical, social andpsychological needs of workers must be fulfilled and met.

(f) The Human Resource Concept: Employees are the most valuable assets in the

organization

(g) The Emerging Concept : Employees should be accepted as partners of the

organization They should belong to the organization as they are running their own

organization.

BOX 1

Personnel management can be defined as obtaining, using and maintaining a

satisfied workforce. It is a significant part of management concerned with employees

at work and with their relationship within the organization.

According to Flippo, Personnel management is the planning, organizing,

compensation, integration and maintenance of people for the purpose of

contributing to organizational, individual and societal goals.

According to Brech, Personnel Management is that part which is primarily

concerned with human resource organization.


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BOX 2

Nature of Personnel Management

1. Personnel management includes the function of employment, development

and compensation- These functions are performed primarily by the personnel

management in consultation with other departments.

2. Personnel management is an extension of general management. It is concerned

with promoting and stimulating competent workforce to make their fullest

contribution to the concern.

3. Personnel management exists to advise and assist the line managers in

personnel matters. Therefore, personnel department is a staff department of an

organization.

4. Personnel management lays emphasize on action rather than making lengthy

schedules, plans, and work methods. The problems and grievances of people at

work can be solved more effectively through rationale personnel policies.

5. It is based on human orientation. It tries to help the workers develop their

potential fully to the concern.

6. It also motivates the employees through it is effective incentive plans so that

the employees provide fullest co-operation.

BOX 3

Role of Personnel Management

Personnel manager is the head of the personnel department. He performs both

management and operational functions of management. His role can be

summarized as :

1. Personnel manager provides assistance to top management- The top

management is the people who decide and frame the primary policies of the

concern. All kinds of policies related to personnel or workforce can be framed out


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effectively by the personnel manager.

2. He advises the line manager as a staff specialist- Personnel manager acts like a

staff advisor and assists the line managers in dealing with various personnel

matters.

3. As a counselor, - As a counselor, personnel manager attends problems and

grievances of employees and guides them. He tries to solve them in his best of

capacity.

4. Personnel manager acts as a mediator- He is a linking pin between

management and workers.

5. He acts as a spokesman- Since he is in direct contact with the employees, he isrequired to act as representative of an organization in committees appointed by

the government. He represents the company in training programs.

BOX 4

Functions of Personnel Management

Following are the four functions of Personnel Management:

1. Manpower Planning

2. Recruitment3. Selection

4. Training and Development

Box 5

Main Differences Between Personnel Management and Human Resource

Management

Differentiate personnel management and Human Resource Management

The sole purpose of personnel management was to attain competitive advantage

and best results for the organization The individual interests, desires and

aspirations were submerged into the organizational objectives and goals

In contrast HRM aims at the development of the individual in accordance with


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his interests, desires & aspirations. So that the individuals would be motivated to

make their best contribution towards the accomplishment of goals.

While the personnel function was designed to respond to the organizational

objectives like profit maximization, HRM visualized human elements of enterpriseas important resources.

The term human resources at the macro level spell the total sum of all the

components (like skill & creative ability) possessed by all the people, whereas

the term personnel even at the macro level is limited to only employees of all

organizations.

One must not be under the impression that HRM has replaced traditional

personnel management rather we can say that HRM has absorbed the personnelfunction in its refined form.

BOX 6

HRD is an integral part of Human Resource Management.

Due to the amalgamation of Personnel function in its refined way with HRM, it

became necessary for every organization to develop skills, talents, potentialities,

capabilities & attitude of company work to meet the emerging challenges. Hence

HRD policies have been adopted. HRD strategies are supposed to bring forthnecessary changes in skills capabilities & attitude of people who are required to

cope with the emerging changes. Thus HRD has become an integral part of

Human Resource Management. HRD is an integral part of Human Resource

Management. The main difference is that the PM was reactive, focused on the

immediate and short-term needs of the labor force of an organization while HRM

expanded into a proactive strategy of aligning the needs of the workforce to the

strategic objectives of the organization .

The PM was focused on traditional models of industrial relations e.g. union- basedcollective bargaining, HRM has moved towards a more devolved and participative

model. HRM is more involved (often in an advisory capacity) in pay policy and job-

design than PM ever was. HRM has more scope in influencing the nature of the

work contract than PM ever had


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BOX 7

Objectives of HRM

1. Societal Objectives:

To be ethically and socially responsible to the needs and challenges of the society

while minimizing the negative impact of such demands upon the organization.

2. Organizational Objectives:

To recognize the role of HRM in bringing about organizational effectiveness. HRM

is only meant to achieve to assist the organization with its primary objectives.

3. Functional Objectives:To maintain departments contribution and level of services at a level appropriate

to the organizations needs.

4. Personal Objectives:

To assist employees in achieving their personal goals, at least in so far as these

goals enhance the individuals contribution to the organization. This is necessary

to maintain employee performance and satisfaction for the purpose of

maintaining, retaining and motivating the employees in the organization.


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BOX 6

The following are the nine new Roles of HR Practitioner as suggested by Pat

McLegan:

1. To bring the issues and trends concerning an organizations external andinternal people to the attention of strategic decision-makers, and to recommend

long-term strategies to support organizational excellence and endurance.

2. To design and prepare HR systems and actions for implementation so that they

can produce maximum impact on organizational performance and development.

3. To facilitate the development and implementation of strategies for

transforming ones own organization by pursuing values and visions.

4. To create the smoothest flow of products and services to customers; to ensure

the best and most flexible use of resources and competencies; and to create

commitment among the people who help us to meet customers needs whetherthose people work directly for the organization or not.

5. To identify learning needs and then design and develop structured learning

programs and materials to help accelerate learning for individuals and groups.

6. To help individuals and groups work in new situations and to expand and

change their views so that people in power move from authoritarian to

participative modes of leadership.

7. To help people assess their competencies, values, and goals so that they can

identify, plan, and implement development actions.

8. To assist individuals to add value in the workplace and to focus on theinterventions and interpersonal skills for helping people change and sustain

change.

9. To assess HRD practices and programs and their impact and to communicate

results so that the organization and its people accelerate their change and

development.


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Box 7

Functions of Human Resource Management

Function 1: Human Resource Planning

The penalties for not being correctly staffed are costly.

Understaffing loses the business economies of scale and specialization, orders,

customers and profits.

Overstaffing is wasteful and expensive, if sustained, and it is costly to eliminate

because of modern legislation in respect of redundancy payments, consultation,

minimum periods of notice, etc. Very importantly, overstaffing reduces the

competitive efficiency of the business.

Planning staff levels requires that an assessment of present and future needs of theorganization be compared with present resources and future predicted resources.

Appropriate steps then be planned to bring demand and supply into balance.

Function 2: Recruitment and selection of employees

Recruitment of staff should be preceded by:

An analysis of the job to be done (i.e. an analytical study of the tasks to be performed

to determine their essential factors) written into a job description so that the selectorsknow what physical and mental characteristic applicants must possess, what qualities

and attitudes are desirable and what characteristics are a decided disadvantage;

Achieving organizational objectives requires having the proper number of employees

with the appropriate skills. Staffing accomplishes this objective through four tasks. The

first task is job analysis, which examines specific job functions in determining the skills,

duties and knowledge required for each position. The second task is ensuring that the

required numbers of employees, with the appropriate skills, are available when

needed organizations engage in Human Resource Planning (HRP). The third task isrecruitment, which is the process of attracting enough skilled people to apply for jobs

in the organization. Fourth, the last step in the staffing process, is selection. This

involves choosing the best suited individuals to fill the open positions in the firm.


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Function 3: Employee motivation

To retain good staff and to encourage them to give of their best while at work requires

attention to the financial and psychological and even physiological rewards offered bythe organization as a continuous exercise.

Basic financial rewards and conditions of service (e.g. Working hours per week) are

determined externally (by national bargaining or government minimum wage

legislation) in many occupations but as much as 50 per cent of the gross pay of manual

workers is often the result of local negotiations and details (e.g. Which particular hours

shall be worked) of conditions of service are often more important than the basics.

Hence there is scope for financial and other motivations to be used at local levels.

As staffing needs will vary with the productivity of the workforce (and the industrial

peace achieved) so good personnel policies are desirable. The latter can depend upon

other factors (like environment, welfare, employee benefits, etc.) but unless the wage

packet is accepted as 'fair and just' there will be no motivation.

Hence while the technicalities of payment and other systems may be the concern of

others, the outcome of them is a matter of great concern to human resource

management.

Function 4: Employee education, training and development

Human Resource Development (HRD)

HRD has six sub-functions or activities, including training, development, career

planning, career development, organization development and performance appraisal,

make up Human Resource Development (HRD).

Training: is a process designed to provide employees with the knowledge and skills

needed for their present job. Focusing on long-term learning needs is developed. Theongoing process of career planning sets career goals for employees and identifies the

means to achieve them. Career development is a formal approach used by firms to

ensure that people with the proper qualifications and experiences are available when

needed. A planned process for improving the firm by developing its structures, systems

and processes to improve effectiveness and achieving desired goals is Organizational


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Development (OD). And finally, performance appraisal is a formal system of review

and evaluation of individual or team task performance.

Function 5: Employee evaluation

An organization needs constantly to take stock of its workforce and to assess its

performance in existing jobs for three reasons:

To improve organizational performance via improving the performance of individual

contributors (should be an automatic process in the case of good managers, but (about

annually) two key questions should be posed:

Whatt has been done to improve the performance of a person last year?

And what can be done to improve his or her performance in the year to come?).

To identify potential, i.e. to recognize existing talent and to use that to fill vacancieshigher in the organization or to transfer individuals into jobs where better use can be

made of their abilities or developing skills.

Function 6: Industrial relations

Good industrial relations, while a recognizable and legitimate objective of an

organization, are difficult to define since a good system of industrial relations involves

complex relationships between:

(a) Workers (and their informal and formal groups, i. e. Trade union, organizations and

their representatives);

(b) Employers (and their managers and formal organizations like trade and professional

associations);

(c) The government and legislation and government agencies and 'independent'

agencies like the Advisory Conciliation and Arbitration Service.


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Function 7: Compensation Management:

Compensation includes all rewards that individuals receive as a result of their

employment. The pay is the money that a person receives for performing a job.

Additional financial rewards other than base pay include paid vacations, sick leave,holidays and medical insurance, and they are called benefits. Nonfinancial rewards are

non-monetary rewards, such as the enjoyment of the work performed or a pleasant

working environment.

Documents

Intro to HRM Sup Note