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UNIT-3

FUNCTIONAL MANAGEMENT
1. HUMAN RESOURCE MANAGEMENT(HRM)
Concept/Understanding of HRM
Human Resource Management (HRM) is concerned with the human beings in an
organization. It reflects a new philosophy, a new outlook, approach and strategy, which
views an organization's manpower as its resources and assets.
Meaning an definition of HRM
HRM THE art of procuring, developing and maintaining competent work force to
achieve the goals of an organization is an effective and efficient, manner.
According to Flippo, human Resource management,” the planning, organizing,
directing and controlling of the various aspects of human resources to the end that individual,
organizational and social objectives are accomplished”.
According to Milkovich and Boudrean,” Human resource management is a series of
decisions that affect the relationship between employees and employers; it affects many
constituencies and is intended to influence the effectiveness of employees and employers”.
Objectives /Aim Of HRM
The basic aim OF human resource management are :
1. Maintain high Morale: To achieve and maintain high morale among employees in the
organization by securing better human relation.
2. Development of Human resource : To generate maximum development of human
resources within the organization by offering opportunities for advancement to employees
through and education or by effecting transfers.
3. Utilization of Human resource: To ensure effective utilization of Human resources. All
other organizational resources will be efficiently utilized by the human resources
4. Provide Services and Welfare Facilities : To ensure respect for Human beings by
providing various service and welfare facilities to the personnel.
5. Identifies and Satifies : To identify and Satisfy the needs of individuals by offering
various monetary and non-monetary rewards. .
Functions/Role of HR manager or HRM: The HR manager operate the various
operations of HR management.
The functions of HR Management are as follows:
1. Planning of job and People: The one of the important function of HR manager is to
plan and forecast according to the needs and development of the firm such requirement
of job, employees as people tec.
2. Acquiring Resource : The other function is filling the job position in an organization
filing will be in the form of selection of employess,transferring,and promotion.
3. Training the employees: The HR management activity is to build the organization.
This will take place through the training to the employees to increase their working
qualities which directly increase the organization abilities.
4. Rewarding Employees: HRM has to kindly look at the employees performance and
provide different benefits in the form of reward i.e. ,incentives, compensation etc.
5. International Human Activities : due to the challenging scenario in the globalization
period, HRM has to increase their operations according to the international manner.
This can be
i. Selecting overseas employees.
ii. Developing and implementing HR policies and practices.
iii. To make ready and willing to work effectively in abroad
Significance /Importance/Advantages of HRM
The following are the main implications of HRM
1. Achieve Objective : HRN helps a company to achieve its objective from time to time
by creating a positive attitude among workers. Reducing wasatage and making
maximum use f resources etc.
2. Facilities professional Growth : due to proper HR policies employees are trained
well and make them ready for future promotions. Their talent can be utilized not only
in the company in which they are currently working, but, also in other companies
which the employees may join thee future.
3. Better Relations Between Union and management : Healthy HRM practices can
help the organizations to maintain co-ordinal relationship with the unions. Union
members start realizing that the company is also interested in the workers and will not
go against them therefre ,chances of going on strike are greatly reduced.
4. Helps an individual to Work in a Team/Group : Effective HR practices teach
individual team work and adjustment. The individuals are now very comfortable
while working in team thus, team work improves.
5. Identifies Person for the Future : Since, employees are constantly trained, they are
Ready to meet the job requirements. The company is also able to identify Potential’
Employees who can be promoted in the future for the top level jobs. Thus, one of
the advantages of HRM is preparing people for the future.
6. Allocating the Jobs to the Right Person : If proper recruitment and selection
methods are followed, the company will be able to select the right people for the right
job. When this happens the number of people leaving the job will reduce as they will
be satisfied with their job leading to decrease in labour turnover.
2. HUMAN RESOURCE DEVELOPMENT (HRD)
Meaning and Definition of HRD
Human Resource Development (HRD) is the’ framework for helping employees develop
their personal and organizational skills, knowledge, and abilities.
. According to Gilley and Eggland, “HRD is organized learning activities arranged. Within
an organization in order to improve performance and/or personal growth for the purpose of
improving the job, the individual, and/or the organization”.
Objectives of HRD .
HRD is a people-oriented process. It aims at developing their competencies. The main
objectives of HRD can be summarized as :
1. Employees Competencies: To continuously identify and evaluate the employee
competencies in performing the activities and to bridge the gaps through development, so
that they can meet the organizational requirements.
2. Future Requirement: It aims at preparing the employees to meet the future
requirements.
3. Develop Employees Level : To develop the employee motivational level to the
maximum possible extent so that they can be the dynamic contributors, to the
organizational goals.
4. Developing information about Employees : To generate systematic information about
the employees so as to assist the programs like manpower planning, recruitment,
placement. etc.
5. Increase Capabilities : To increase organizational capabilities to recruit, retain and
motivate the skilled employees.
6. Maintain Climate : To develop a climate Consisting of healthy superior-subordinate
Relationship, high team spirit high inter-team collaborations and goal-oriented Personnel.
Advantages/Šignificance of HRD
Human resource development may facilitates the following implications:
1. Develop Employees Abilities : HRD develops the abilities of the employees by making
them to understand the skills required to perform the job and the performance standards.
2. Improve Communication System : HRD improves the communication system of the
organization. .
3. Useful In Recruiting : It helps the Organization in recruiting light people and placing
them in the right job. .
4. Improve Employees Commitment: It improves employee commitment by providing
him the benefits like rewards, incentives etc.
5. Continuous Growth of Employees : HRD facilitates the continuous and planned growth
òf employees through succession planning and career Planning.
6. Improve Team Work and Collaborations : HRD Improves the team work and team
Collaborations by creating mutual trust and understanding among employees.
3. PERSONNEL MANAGEMENT AND INDUSTRIAL RELATIONS(PMIR)
Personnel Management
Meaning and Definition of Personnel Management
The term personnel management and human resource management (HRM) are
Interchangeable and both perform same functions.
Personnel management is a process of managing people and enabling them to
contribute their best for the attainment, it of organizational goals.
According to E. Dale .Yoder, “Personnel management. is that phase of
management, which deals with the effective control and use of manpower as distinguished
from other sources of power”. ‘
According to E. F. L. Breach, “Personnel management is that part of management’s
is primarily concerned with the human relationship ¡n an organization”
Featureres Characteristics of Personnel Management
Main features of personnel management are as follows:
1. Personnel management deals with managing people at all levels in the organization.
2. It is concerned with employees (as an individual and as a group). .
3. It is essential in every organization where there are personnel employed.
4. It provides a method to help the employees to identify and develop their potential.
5. It is concerned with human philosophy of management. .
Objectives of Personnel Management .
The objectives of personnel management is as follows:
1. Increase Development: To attain maximum individual development (self-development)
of the members of an organization and also to utilize available human resources
fully and effectively.
2. Effective Resource : To mould effectively the human resources.
3. Working Relationship : To establish desirable working relationships between
employer and employees and between groups of employees.
4. .Satisfaction About Work: To ensure satisfaction to the workers, so that they are freely
ready to work.
5. Maintain Relationship : To establish and maintain a and self-respecting
relationship among the members or an organization.
Role /Function of Personnel Manager/ Management
The personnel (Human Resource) management involves two categories of functions:
1. Managerial functions :
The managerial functions include planning, organizing, motivating and Controlling,.
These general functions are performed by all managers including personnel managers.
Therefore, it may be said that general management and personnel management are one
and the same.
i. Planning: the planning function of personnel manager is related to the steps taken
in determining a course of action.
ii. Organization : After designing the plans , the personnel manager will establish an
organization to implement them
iii. Motivation : By proper guidance and supervision the personnel manager motivates
the personnel.
iv. Control : The personnel Manager helps to measure the performance and corrects
the deviations if any,from plans.
2. Operative Functions:
Operative functions are of routine procurement, development, compensation,
integration personnel of the organization. Generally, the following are operative functions
of personnel department: .
i. Procurement of Employees: This ¡s the main function of personnel management. It
deals with the number of personnel required to accomplish organizational goals. It
includes the following sub functions: .
 Deciding the total man power requirements.
 Job analysis and job grading.
 Deciding the nature and sources of recruitment. .
 Selection of employees.
 The placement and induction
ii. Development of Personnel: After the selection of employees the management
provides proper training and develop them to work efficiently.
iii. Remuneration : This is a very important function as it determination of wages and
salaries policy and levels. Considered while fixing the remuneration viz., basic needs,
jobs, legal provisions, financial capacity of the firm, wage performance rating etc.
iv. Co-ordination : It is responsibility of the personnel management to
promote cordial relations between the employees working in different departments
and between the employees and management is a function of personal department..
v. Maintenance of Personnel : The personnel management must make their employees
loyal to their jobs and to the organization.. The personnel manager has to ensure better
working conditions and labour welfare activities such as medical benefits, housing
facilities, canteens, recreational facilities, rest rooms etc.
Industrial Relations(IR)
Meaning and Definition of industrial Relations:
The term: industrial (IR) :also known as a “labour Management Relations”. or labour
relations” .The term ‘industrial Relations” comprises two terms:
1. Industry : It refers to “ any product activity in which an individual (or a group of
individuals) is or engaged.
2. Relations: It mean “the relationships that, exist within the industry between the employer
and his workers”.
The industrial relations explain about the relationship between the employees and
management which stem directly or indirectly from union-employer relationship.
According to international Labour organization (ILO),”industrial relations deal with
either the relationship between the state and employees and work organization or the
relation between the occupational organizations themselves.
According to Dale Yoder” industrial relations is a relationship between management
and employees or among employees and their organizations that characterize and grow
out of employment.Thus, industrial relations refers to the relationship that exists between
the employer and employees in the day-to day working of an organization.
Importance of IR
1. Safeguard the Interest: To safeguard the interest of labour as well as management
by securing the highest level of mutual understanding and goodwill between all sections
in the industry.
2. Avoid Conflicts : To avoid industrial conflicts and develop harmonious relation.
3. Raise Productivity : To raise productivity to à higher level by lessening the tendency
of high labour turnover/absenteeism.
4. Maintain Industrial Democracy : To establish and maintain industrial democracy based
on labour partnership.
5. Providing Better and improved Conditions : To bring down strikes, lockouts by
providing better and reasonable wages and improve living conditions.
6. Government Control : To bring out government control over loss making units.

4. WAGES
Meaning and Definition of Wages:
The word wage and salary are use interchangeable. Wage is the payment for labour
(or) services to workers especially remuneration on an hourly, daily or weekly basis or by the
piece.
According to Benham, “Wages Means the amount paid to the Labour for his services
to the employer”.
According to payment of wages Act 1936, “Any award of settlement and production
bonus, if paid, constitute wage.
Thus wages are the remunerations paid for the service given by the labour.
Objectives / Aims of Wages:
The objectives of wages and salary administration are:-
1) Maintain Wage Structure:- The basic purpose of wage administration is to establish
and maintain an equitable wage and salary structure.
2) Equitable Labour Cost Structure:- It is concerned with the establishment and
maintenance of equitable labour cost structure i.e., an optimal balancing of conflicting
personnel interest. So that the satisfaction of the employees and employers is
maximised and conflicts are minimised.
3) Financial Aspects:- The wage administration is concerned with the financial aspects
of needs, motivation and rewards.
4) Payment In Accordance To Requirement:- Employees should paid according to the
requirements of their jobs i.e., highly skilled jobs are paid more compensation than
low skilled jobs.
5) Primacies Favouritism:- To minimise the chances of favouritism.
Systems of Wagement:-
There are two principal wage systems.
1) Time Wage System:- Payment on the basis of time spent in the factory irrespective
of the amount of work done. This method is known as time Wage System.
Wages = Hours worked x Rate per hour.
2) Piece Rate System:- Payment on the basis of the work done irrespective of the time
taken by the worker. The method is called piece rate system.
Wages (or) Earnings = No. of units x Rate per unit.
Bonus Systems Based On Time Rate Only:-
i) Halsey System:- In this method a standard time on the basis of past experience. When
the work is completed in less than the standard time, he is paid at hourly rate for the
actual time spend on the job plus bonus for the time saved. The bonus is calculated at
50% of time saved wages.

50
Earnings = H.W x R.H + ( x T.S x R.H)
100
ii) Rowan System: In this method a standard time is allowed for a job and a bonus is paid
for time saved.
T .S
Earnings = H.W x R.H + ( x H.W x R.H)
S .T (T . A)
Note: H.W = Hours worked, R.H = Rate per Hour.
T.S = Time saved; S.T = Standard time, T.A = Time allowed.
iii) Halsey Weir Plan:- The bonus is calculated at 30% of time save wages.
30
Earnings = H.W x R.H + ( x T.S x R.H)
100
iv) Barth Premium Plan:- This is adopted for beginners and apprentices, until they
become skilled workers. Time rate

Earnings = R.H x S tan dardHoursx H .W

II. Piece Wages:-


a) Straight Piece Rate System:-
Wages (Or) Earnings: No. of units x Rate per piece (or) unit.
b) Taylor’s Differential Piece Rates: This scheme was introduced in the U.S.A. by
Dr.F.W. Taylor who is the Father of Scientific Management. Standard time for a job is
fixed by time and Motion study. The essential features of this scheme are it provides two
differentials piece rates.
Formula :
i) Low Piece Rate: - 80% of Normal piece rate when below standard.
ii) High Piece Rate: - 120% of Normal piece rate when at (or) above standard.
iii) Merrictes Multiple Piece Rates: He has used three differentials instead of two in
case of Taylor.
Formula:-
Efficiency Piece rate applicable.
Up to 83 1/3 % Normal piece rate
Above 83 1/3% to 100% 110% of Normal piece rate
Above 100% 120% of normal piece rate

III. Time and Piece Rates: This system of wage payment is based on the time rate and piece
rate.
i)GANTT Task Bonus System:- This system was introduced by Henry L. Gantt. It is a
combination of time rate, High piece rate and bonus. Day wages are guaranteed. This
scheme may be introduce in Heavy Engineering Industry.
Formula:-
S.No. Out Put Payment
1 Out put below standard Time rate i.e., guaranteed day wages
120% of time rate i.e., time rate + 20% of time rate as
2 Out put at standard
bonus
3 Out put above standard 120% of piece rate i.e., high piece rate.

ii)Emerson’s Efficiency Bonus System: This method is introduced by H. Emerson. This


scheme is designed to encourage slow workmen to improve their performance. It
provides for guaranteed time wages and a bonus to be paid if the output exceeds 66
2/3% of efficiency (i.e., 100% efficiency = standard).
Efficiency percentage is calculated as follows:-

Standard Time Allowed


On Time Basis : Efficiency % = X100
Time Taken
Actual out put
On Out put Basis : Efficiency % = X100
Standard out put

Earnings = Wages + Bonus.

Formula:
Emerson Bonus percentage x HW X RH
Earnings : HW x RH =
100

Scheme of Bonus:
2
Below 66 % efficiency: No bonus. But time rate is guaranteed.
3
2
66 % + 100% efficiency: Bonus of 20% above basics wages on 100% efficiency.
3
Beyond 100% efficiency: A bonus of 20% above basic wages + 1% for each1%
Increase in efficiency.
(iii) Bedaux (or) points premium system:- Under this plan standard time is divided into
standard minutes. Each minute of standard time is called BEDAUX point of B’s.
B’s are indicated on each job ticket.
Bonus at 75% wages of Bedaux x Points saved.
75
Earnings = H.W x R.H + ( x Bedaux (or) Pints saved x Rate per minute)
100

5. JOB EVALUATION:
Meaning and Definition of Job Evaluatio:
Job evaluation is the relative rating of jobs in an organization. In other words, it is a
formal and systematic comparison of jobs in order to determine the relative worth of jobs, so
that salary or wage constraints can be determined.
According to Internal Labour Officer, “Job evaluation is an attempt to determine and
compare the demand which the normal performance of a particular job makes on normal
workers, without taking into account the individual abilities or performance of the workers
concerned”. According to British Institute of Management, “Job evaluation is the process of
analysis and assessment of jobs to ascertain reliably their negative worth using the
assessment as the basis for a balanced wage structure”.
Thus, job evaluation measures the relative worth of a job within an organization.
Aims / Objectives off Job Evaluation:
The following are some more objectives of job evaluation:
1) Standardized Procedures: Developing standardised procedures for determining the
relative worth of each job.
2) Equitable Wage: Determining equitable wage differentials between different jobs in
an organization.
3) Removing Inequalities : Removing the wage / salary inequalities
4) Basis for Incentives and Bonus: Developing a basis for fixing incentives and bonus.
5) Solving grievances: Providing necessary information for solving the grievances
regarding wage rates.
6. MARKETING MANAGEMENT
Introduction and meaning :
Marketing is an essential function of a modern organisation wheteher it deals in
products or services. In order words marketing constitutes an essential function of
modern business organisation. There is also a danger of getting bad or poor quality
products marketed by strong networking. However , the customer is the king decide
what is good quality or otherwise.
Definitions:
Marketing is the performance of business activity that direct the flow of goods
and services from production centre to conception centre.
-American marketing association.
According to Philip kotler, “Marketing management is the process of
planning and executing the conception, rising and promotion and distribution of
goods, services and Idea with the target groups that satisfy customer and
organisational objectives’.
Thus marketing management is the process of management or marketing
programmers for accomplishing organisational goals and objectives
Functions of marketing
All business organisation to basic operative functions that they produce product or a
service MJ market it production and marketing law important factors in the economic
life .
Marketing Functions

Functions of Exchange Function of Physical Facilitating Functions


Exchange

Buying Selling Transportation Storage

Market information Standardisation


Financing Risk-taking
I. Functions Of Exchange:
Buying and Selling:
i) Buying:
Buying is one of the important functions of Exchange. It required planning of purchases,
search for the sellers, selection of goods to be bought, assembling of goods in right quantity,
quality at the right place and time at the right price.
ii) Selling:
Selling is an important function from the point of view of the seller as well as the consumer.
Selling creates demand for a product. Selling function involves product planning and
development, finding out (or) locating the buyers, negotiation of terms of sale such as price,
quantity, quality, date of delivery etc and sale contract leading to transfer of title and
possession of goods.
II. Functions Of Physical Supply:-
Transportation And Storage:-
i) Transportation:
Transportation is the physical means where by goods are moved from point of production to
the place where they are required for consumption. Different modes of transportation like
bullock cart, trucks, bus, train, aeroplane, ships etc.
ii) Storage:
Storage function provides time utility by holding and preserving products and
delivery them according to the requirements of market. If the product is seasonal and
demand is stable, storage becomes essential.

III. Standardisation And Grading:


i) Financing: financing is the life blood of commerce. Value of goods is expressed in
money and it is denoted by price to be paid by a buyer to a seller with out finance.
The whole marketing activity may become a stand still.
ii) Risk taking: One of the important functions of marketing management is risk bearing. In
any marketing activity uncertainty is bound to exits. This uncertainty may result n the
form of either loss (or) profit.
iii) Market information: Marketing information is a vital source in the business for taking
marketing decision.
iv) Standardisation:- Standardisation refers to determine the basic limits to different classes
of products i.e., to establish standard for different grades of product.
7. Product Life Cycle (PLC):
A product is a physical good (or) service (or) more often, a combination of both. It is
capable of satisfying the buyer’s needs. It has certain tangible attributes that seller offers to a
potential buyer.
It is very interesting to observe the changes in the sales of the product (or) service
once it is launched.
Meaning and definition of Product Life Cycle.:
Product life cycle is the period of time over when an item is developed, brought to
market and eventually removed from the market.
According Philip kotlar. “The product life cycle is an attempt to recognise district
stages in the sales history of product.”
From its birth to death, a product exists in different stages and in different competitive
environments.
Stages in product Life cycle :
Every product or service has a defined Life cycle with distinct stages .
These stages include Introduction, Development, growth stage, maturity stage, saturation, and
decline.
1) Introduction: At the introduction (or development) stage the firm launches (or) introduced
a new product into the market. At this stage the cost product is very high and sales are very
low, at this stage the company charges high price to the customers.
2) Growth stage: At the growth stage the firm should attempt to maximise his market share.
Sales will grow rapidly, resulting in lessor cost and better profits, company reduces the prices
of the product.
3) Maturity stage: Now the product enters into the fourth stage called maturity, when the
products sales growth slows down, it is called maturity competition becomes acute and
severe. Market is blooded with many competing products. Consumers start switching to
new brands.
4) Saturation: When the sales growth slows down to zero such a stage is called saturation.
The size of the market does not inevage beyond this stage. In other words any new
customer entering the market is replaced by an old customer.
5) Decline stage: In the decline stage, the market is shrinking, reducing the overall profit.
At this stage great care has to be taken to manage the product carefully. Sales many come
down to zero. Either no profit (or) low level of profits.

Sales and profit

Product
Development Introduction Growth Maturity saturation Decline

Time
8. Channels of Distribution:
After product are produced and priced they must be distributed to the market place.
All organizations perform the distribution function. The distribution function is vital to the
economic well-being of society because it provides the goods and services desired by the
consumer.
Distribution also provides employment opportunities in the form of sales people, ware
house managers, truck drivers and operators etc.
Types of Channels Of Distribution:
a) Manufacturer -> Consumer
b) Manufacture -> Whole Sale –> Consumer
c) Manufacture – >Retailer –>Consumer
d) Manufacture –>Whole Sale –>Retailer –> Consumer
a) Manufacturer –> Consumer: This is a direct marketing channel where the
manufacturer contracts the customer directly without involving middle men (or)
intermediaries. This route is mostly followed by the manufacturer of industrial goods
such as aeroplanes, turbo engines, ships etc.
b) Manufacture -> Whole Sale –> Consumer: This channel is primarily used in the
case of industrial goods and high value consumer durable products. The whole sales,
who may also called as distributor in this channel. Large whole sales in Singapore
buy various types of computer hardware in large quantities directly from the
producers.
c) Manufacture –> Retailer –> Consumer: Here the large retail chains like super
markets use this channel to buy products in large quantities from manufacturers at
very competitive price and sell the same to the ultimate consumers.
d) Manufacture –> Whole Sale –> Retailer –> Consumer: This chain widely
followed for fast moving consumer goods, which are likely to have mass markets.
When the consumers are large in members, widely dispersed geographically and
products are of low value, this channel is favoured.
For manufactures of consumer goods such as hosiery food items,
confectionery, cloths and readymade garments, cosmetics and so on, intermediaries
are indispensable in the distribution chain.