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Human Resource Management Introduction to Human Resource


Human Resource Management

Definition-1 - Edwin Flippo defines HRM as “planning, organizing, directing, controlling of

procurement, development, compensation, integration , maintenance and separation of
human resources to the end that individual, organizational and social objectives are

Definition-2 -HRM is a management function that helps organization to recruit, select, train,
develop and manage its members. Simply stated, HRM is all about management of people in
the organization from Recruitment to Retirement. HRM refers to set of programs, functions,
and activities designed and carried out in order to maximize both employee as well as
organizational effectiveness.

Definition 2 -HRM is concerned with the people dimensions in management. Since every
organization is made up of people, acquiring their services, developing their skills,
motivating them to higher levels of performance and ensuring that they continue to maintain
their commitment to the organization are essential to achieving organizational objectives.
This is true, regardless of the type of the organization – government, business, education,
health, recreational, or social action.

Features of HRM or characteristics or nature

1. HRM involves management functions like planning, organizing, directing and

2. It involves procurement, development, maintenance of human resource
3. It helps to achieve individual, organizational and social objectives
4. HRM is a mighty disciplinary subject. It includes the study of management
psychology communication, economics and sociology.
5. It involves team spirit and team work.
6. It is a continuous process.

Scope of HRM/functions of HRM

The scope of HRM refers to all the activities that come under the banner of HRM. These
activities are as follows

1. Human resources planning :-

Human resource planning or HRP refers to a process by which the company to
identify the number of jobs vacant, whether the company has excess staff or shortage
of staff and to deal with this excess or shortage.

2. Job analysis design :-

Another important area of HRM is job analysis. Job analysis gives a detailed
explanation about each and every job in the company. Based on this job analysis the
company prepares advertisements.

Human Resource Management Introduction to Human Resource


3. Recruitment and selection :-

Based on information collected from job analysis the company prepares
advertisements and publishes them in the news papers. This is recruitment. A number
of applications are received after the advertisement is published, interviews are
conducted and the right employee is selected thus recruitment and selection are yet
another important area of HRM.

4. Orientation and induction :-

Once the employees have been selected an induction or orientation program is
conducted. This is another important area of HRM. The employees are informed
about the background of the company, explain about the organizational culture and
values and work ethics and introduce to the other employees.

5. Training and development :-

Every employee goes under training program which helps him to put up a
better performance on the job. Training program is also conducted for existing staff
that have a lot of experience. This is called refresher training. Training and
development is one area were the company spends a huge amount.

6. Performance appraisal :-
Once the employee has put in around 1 year of service, performance appraisal
is conducted that is the HR department checks the performance of the employee.
Based on these appraisal future promotions, incentives, increments in salary are

7. Compensation planning and remuneration :-

There are various rules regarding compensation and other benefits. It is the
job of the HR department to look into remuneration and compensation planning.

8. Motivation, welfare, health and safety :-

Motivation becomes important to sustain the number of employees in the
company. It is the job of the HR department to look into the different methods of
motivation. Apart from this certain health and safety regulations have to be followed
for the benefits of the employees. This is also handled by the HR department.

9. Industrial relations :-
Another important area of HRM is maintaining co-ordinal relations with the
union members. This will help the organization to prevent strikes lockouts and ensure
smooth working in the company.

Objectives of HRM

The objectives of HRM may therefore be something as below:

1. Create and utilise capable and motivated workforce, to achieve the basic
organisational goals.

Human Resource Management Introduction to Human Resource


2. To establish and maintain proper and sound organisational structure and

healthy working relationships among all its employees.
3. To ensure the integration of individual group's goals with those of the
4. To create facilities for individuals and groups to develop so as to be in tune
with the growth of the organisation.
5. Proper and optimum utilisation of human resources.
6. Ensuring adequate and equitable wages, incentives and other benefits so that
satisfied individuals and groups are motivated to take on challenges.
7. Maintain high employee morale.
8. Continuously upgrading the skill and knowledge levels of employees, by
training and development programmes.
9. Ensure opportunity for participation in management to the extent possible.
10. Provide acceptable and effective leadership.

Significance/importance/need of HRM

HRM becomes significant for business organization due to the following reasons.

1. Objective :-
HRM helps a company to achieve its objective from time to time by creating a
positive attitude among workers. Reducing wastage and making maximum use of
resources etc.

2. Facilitates professional growth :-

Due to proper HR policies employees are trained well and this makes 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 in the future.

3. Better relations between union and management :-

Healthy HRM practices can help the organization 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 therefore chances of going on
strike are greatly reduced.

4. Helps an individual to work in a team/group :-

Effective HR practices teach individuals team work and adjustment. The
individuals are now very comfortable while working in team thus team work

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

Human Resource Management Introduction to Human Resource


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 the will be satisfied with their job leading to
decrease in labour turnover.

7. Improves the economy :-

Effective HR practices lead to higher profits and better performance by
companies due to this the company achieves a chance to enter into new business and
start new ventured thus industrial development increases and the economy improves.


The job of HRM department in India has never been so challenging. Last decade has
witnessed tectonic shift in Job market. From being an employer’s market, it has suddenly
turned into employee’s market, especially in the most crucial segment, ie middle
management. Globalisation and India’s growing stature in the world has seen demand for
Indian managers soaring. From the state of plenty, there is a stage of scarcity of the right
talent. The biggest challenge is to retain the talent one has so assiduously hunted and trained.
The attrition rate has reached alarming proportions. It has reached such proportions that
certain segments of Industry are maintaining bench strengths to fill in the sudden gaps due to
resignations. In addition, there are following new issues:

1. Globalization: Growing internationalization of business and workforce has its

impact on HRM in terms of problems of unfamiliar laws, languages, practices,
attitudes, management styles, work ethics and more. HR managers have a challenge
to deal with more and more heterogeneous functions and more involvement in
employee’s personal life.

2. Corporate Re-organizations: Liberalisation has led to largescale reorganization of

businesses in terms of expansions, mergers and acquisitions, joint ventures, take
overs, and internal restructuring of organizations. In circumstances as dynamic and as
uncertain as these, it is a challenge to manage employees’ anxiety, uncertainties,
insecurities and fears.

3. New Organizational Forms: Exposure to international business and practices have

led to change in the organisational structure and HR policies of the local companies.
Take for instance, the hierarchical structure of Indian companies. Suddenly, Indian
companies have begun to adopt flat hierarchical management structure. But to
implement and grout such fundamental changes in management philosophy of any
company is never easy. The challenge for HRM is to cope with the implications of
these new relations in place of well established hierarchical relationships that existed
within the organizations for ages in the past.

Human Resource Management Introduction to Human Resource


4. Changing Demographics of Workforce: Changes in workforce are largely reflected

by dual career couples, large chunk of young blood with contrasting ethos of work
among old superannuating employees, growing number of women in workforce,
working mothers, more educated and aware workers etc. Thus, changing demography
of workforce has its own implications for HR managers and a true challenge to

5. Changed Employee Expectations: With the changes in workforce demographics,

employee expectations and attitudes have also transformed. Traditional allurements
like job security, house, and remunerations are not much attractive today. Rather,
employees are demanding empowerment and equality with management. Hence, it is
a challenge for HRM to redesign the profile of workers, and discover new methods of
hiring, training, remunerating and motivating employees.

6. New Industrial Relations Approach: In the changed industrial climate, even trade
unions have realised that strikes and militancy have lost their relevance and not many
workers are willing to join them and disrupt work. However, the problems faced by
workforce now have different dimension for the management. They manifest in the
form of increased attrition rate. Unsatisfied employees instead of approaching the
management for resolution, often take up the new job. The challenge before the HRM
is find ways and means to feel the pulse of employees and address the issues on
proactive basis.

7. Renewed People Focus: Man behind the machine is most important than the
machine”. This is an old doctrine of the Armed Forces. However, this doctrine has
begun to gain acceptance in the corporate world and thus all out efforts to grab the
best talent at whatever cost.

8. Managing the Managers: Managing the managers is most difficult. Armed with
inside information, they cannot be lured with rosy promises. They are in great
demand too with growth in economy. These are the people who are most mobile,
attrition rate being highest for the junior and middle management level. The challenge
of HRM is how to manage this tribe?

9. Weaker Section’s Interests: Another challenge for HRM is to protect the interest of
weaker sections of society. The dramatic increase of women workers, minorities and
other backward communities in the workforce, coupled with weakening of trade
unions, has resulted in the need for organizations to re-examine their policies,
practices and values. In the name of global competition, productivity and quality, the
interests of the society around should not be sacrificed. It is a challenge of today’s HR

Human Resource Management Introduction to Human Resource


managers to see that these weaker sections are neither denied their rightful jobs nor
are discriminated while in service.
10. Contribution to the Success of Organizations:
The biggest challenge to an HR manager is to make all employees contribute to the success
of the organization in an ethical and socially responsible way. Because society’s well being
to a large extent depends on its organizations.

Environmental and Organizational Challenges for HR Managers

Environmental Challenges
 Rapid change in technology and market competition.
 Workforce diversity – increased minority make-up of workforce.
 Globalization – organizations competing and building facilities abroad.
 Rise of Internet – increase marketing through Internet and information search.
 Legislation – continued local, state, and federal legislation in HR domain.
 Evolving work and family roles – dual career households requiring accommodation.
 Skill shortages – low birth rates leading to shortages of
Organizational Challenges
 Attempts to minimize costs, improve quality, and provide product innovations.
 Decentralization – distributing responsibility/authority to lower levels in company.
 Downsizing – redefining competitive advantage, eliminating some operations.
 Organizational restructuring – eliminating some operations, combining functions,
 Self-managed teams – used to increase quality and increase employee
 Small businesses – maintain equitable HR policies to prevent loss of employees.
 Organizational culture – managing culture to support diversity and empowerment.
 Technology – implement new technology to increase production and quality.
 Outsourcing – moving work outside the company to reduce costs and overcome
labor shortages.

Human Resource Management Introduction to Human Resource