UNIT 1.

NATURE AND SCOPE OF HRM Meaning and definition of HRM Human Resource Management (HRM) is a management function that helps managers recruits, select, train and develop members for an organization. Obviously, HRM is concerned with the peoples dimension in organization. Obviously, HRM is concerned with peoples dimension in organizations. We quote three definitions on HRM. But before quoting the definition, it is useful to point out the essentials which must find their place in any definition. The core points are:

Organizations are not mere bricks, mortar, machineries or inventories. They are people. It is the people who staff and manage organizations. HRM involves the application of management functions and principles. The functions and principle are applied to acquisitioning, developing, maintaining, and remunerating employees in organization. Decisions relating to employees must be integrated. Decisions on different aspects of employees must be consistent with other human resource (HR) decisions. Decisions made must influence the effectiveness of an organization. Effectiveness of an organization must result in betterment of services to customers in the form of high-quality products supplied at reasonable costs. HRM functions are not confined to business establishments only. They are applicable to nonbusiness organizations, too, such as education, health care, recreation, and the like.

Human Resource Management- Functions and Objectives HRM and its importance started to be considered as an integral function of the organization and as a specialized field of study with the realization of the fact that employees, independently or jointly, play a pivotal role in the achievement of the overall organizational goals and objectives. HRM aligns the employees skills with the present and future needs of the organization and utilizes it towards the achievement of the desired goal. It analyses the workforce profile, skills, abilities, qualifications, potential, capabilities etc. and assign them various responsibilities as per the requirement of the job and the workers profile. Moreover it also facilitates acquiring, training and retaining the talent. HRM does not only takes care of the present organizational objectives but it also examines and determines the future organizational needs for developing strategies as per the future requirements. Moreover, after identifying the fact that employee turnover is directly proportional to the employee dissatisfaction, taking care of the needs of the employees also became one of the major considerations of HRM. Unsurprisingly, now days, HRM is looked up as a prominent department and shares its existence with the top management functions and figures of the organization. Today, HR is an exclusive department in almost all organizations and has a number of important functions to perform. These are as follows: 1. Employee Career Goals: To understand that the employees are also individual and have their own set of needs. They also have certain goals and they also want reach the pinnacle of the career ladder. The HR has to identify those needs and work upon them to make the employees feel important and motivated by providing them time to time training related to their field of interest. It is to be kept into consideration that

if the employee will not find any career advancement in the kind role he is assigned in the organization, his inclination towards performing will be really low due to lack of motivation. 2. Organizational Goals: To understand and define the overall objectives and goals of the organization, its mission as well as vision. It also calls for aligning the skills of the workforce with the companys mission/vision statement and encouraging them to work towards achieving those organizational objectives. It does not only include the present organization requirements but also forecasting the future needs and making strategies for fulfilling them. 3. Training and Development: To ensure proper availability of latest tools and methods for training the employees as required for their respective competencies. Identifying the imperfect areas which requires training and also working towards filling the need gap with the best available training tools. HR should realize that training is not an unnecessary expenditure which can be discarded; instead they should understand that if the employees are properly trained and developed, it can prove to be the best investment made by the company which will definitely furnish quality returns in future. HRs job does not just ends with the training. They should also scrutinize the post training transformation in the performance the employees and should provide adequate feedback if further improvement is required. 4. Recruitment: Selecting the best workforce from the labor market by using the recruitment options like internal job portals, job websites, advertisements, employment agencies etc. Personal interviews, GDs, Aptitude test should be unbiased and very seriously performed, for getting the cream employee. The candidates should be informed well in advance about the profile of the job, required skills, attitude and the workload a candidate can experience so that they may come with a defined mindset and give their best to the job offered to them. Before moving ahead with recruiting, the HR manager should ensure the adequacy of the funds to be invested on the recruitment procedure. 5. Staffing: To assign the right job to the right employee if the proper utilization of the talent is needed. The HR should understand that the employee will not be able to give his 100% if his talent is not utilized in the right direction. They also require making them understand the overall objective, mission and vision statements and also providing them proper resources which will help him attain those objectives. 6. Ensuring employee health and safety by abiding to the employee safety and health regulations. 7. Managing grievances 8. Ensuring provisions for adequate and promised compensation with fixed and variable benefits to keep them motivated. 9. Making strategies for reducing the employee turnover rate. 10. To ensure a positive work environment in the organization. 11. To continuously stimulate a sense of belonging, responsibility and accountability in employees. 12. Ensuring effective communication between employees and minimizing conflicts. 13. To ensure latest appraisal methods, fair and unbiased salary hikes for keeping the employees motivated.

14. To keep a record of the employee profiles and database so that it can be readily available at the time of recruitment and staffing and also ensuring its confidentiality. 15. To keep a bird eye view on each employees performance and regularly providing feedbacks on the same. There are also some objectives for which HRM performs its aforesaid functions in an organization. Some of the objectives are as follows: 1. To achieve the organizational goals and objectives. 2. To ensure employee satisfaction at every level. 3. To instill team spirit in employees. 4. To explore employees capabilities for performing a given job. 5. To ensure maintaining the quality of work life. 6. To respect the employees as individuals and also respect their individual career goals. 7. To equip the employees with proper resources. 8. To keep the employees motivated. 9. To encourage the feeling of organizational loyalty in employees. 10. To ensure a positive environment of mutual trust and understanding in the organization. Personnel policies in Human Resource Management PERSONNEL POLICIES

1). What is meant by personnel policies? Ans. A policy is a plan of action. A policy is a predetermined course of action that establishes a guide to work towards accepted objectives. Personnel policies are statements of personnel of an organization and provide a broad framework within which decisions on personnel matters can be made without reference to higher authorities. It lays criteria for decision making in the field of personnel management. 2). What are the characteristics of personnel policies? Ans. The characteristics of personnel policies are:It is derived from the personnel objectives of the organization. * Personnel policies are general statements of broad understanding. * It reflects the recognized intentions of top management with regard to the human resources of the organization. * Personnel policies are the standing plans.

3). What are the need of personnel policies? Ans. The need of personnel policies arises basically from overall objectives of the organization; a corporate thinking is required which will guide decision making at all operating level. The spontaneous cooperation of employees can be achieved through a just and fair treatment to all. Personnel policies provide the basis for uniformity and consistency.

4). What are the importance of personnel policies? Ans. The importance of personnel policies are:* Gives clear thinking Helps the manager to guide the delegation of authority * Guides for orientation and training of new employees * Provide sense of security * Provides uniformity and consistency of administration * Provide continuity and stability

5). What are the principles of personnel policies? Ans. The principles of personnel policies are as follows:* Put the right man in the right place. * Train everyone for the assigned job. * Make the organization a coordinated team. * Supply right tools and right conditions of work. * Give security with opportunity, incentive and recognition.

* Look ahead and plan ahead for more and better things.

6). How personnel policies are formulated? Ans. The process of policy formulation involves the following steps:1. Identifying the need: - All the areas requiring personnel policies are identified. 2. Gathering information: - The next step is to collect necessary facts for its formulation. 3. Examining policy alternatives: - On the basis of data collected, alternatives are appraised in terms of their contributions to the organizational objectives. 4. Getting approval: - Top management has the final authority to decide whether a policy adequately represents the organizations objectives. 5. Evaluating policy: - From time to time policies should be evaluated to ensure best use. The following questions may be asked to evaluate a policy:

Strategic Management Process - Meaning, Steps and Components The strategic management process means defining the organizations strategy. It is also defined as the process by which managers make a choice of a set of strategies for the organization that will enable it to achieve better performance. Strategic management is a continuous process that appraises the business and industries in which the organization is involved; appraises its competitors; and fixes goals to meet all the present and future competitors and then reassesses each strategy. Strategic management process has following four steps: 1. Environmental Scanning- Environmental scanning refers to a process of collecting, scrutinizing and providing information for strategic purposes. It helps in analyzing the internal and external

factors influencing an organization. After executing the environmental analysis process, management should evaluate it on a continuous basis and strive to improve it. 2. Strategy Formulation- Strategy formulation is the process of deciding best course of action for accomplishing organizational objectives and hence achieving organizational purpose. After conducting environment scanning, managers formulate corporate, business and functional strategies.

4. Strategy Evaluation- Strategy evaluation is the final step of strategy management process. The key strategy evaluation activities are: appraising internal and external factors that are the root of present strategies, measuring performance, and taking remedial / corrective actions. Evaluation makes sure that the organizational strategy as well as its implementation meets the organizational objectives.

These components are steps that are carried, in chronological order, when creating a new strategic management plan. Present businesses that have already created a strategic management plan will revert to these steps as per the situations requirement, so as to make essential changes.

he human resource management that aims to improve the productive contribution of individuals while simultaneously attempting to attain other societal and individual employee objectives has undergone drastic change with the passing of years. We all know that HRM is concerned with the "people" & keeping the fact in mind that HRM helps in acquiring, developing, stimulating & retaining the outstanding employees as it gives both effectiveness & efficiency to the working of the organization, it has been started being used strategically & is now termed as Strategic human resource management. The changing role of HRM: The role of human resource management is changing & is changing very fast, to help companies achieve their goals. HRM has gone through many phases from hiring & firing to relationship building, from there to legislation role, & now its role is shifting from protector & screener to strategic partner & as a change agent. Defining SHRM:

o Organizational use of employees to gain or keep a competitive advantage against competitors. o Involves aligning initiatives involving how people are managed with organizational mission and objectives. In today's flattened, downsized & high-performing organizations, highly trained & committed employees not machines are often the firm's competitive key. Perhaps the most drastic change in HR's role today is its growing involvement in developing & implementing the company's strategy. In order to understand the modern aspect of HR i.e. SHRM, lets discuss the terms which would help us in understanding the concept: o Core Competency can be defined as - A unique capability in the organization that creates high value and that differentiates the organization from its competition. o Mission Statement explains purpose and reason for existence; it is usually very broad, but not more than a couple of sentences & it serves as foundation for everything organization does. o Strategy: the company's plan of how it will balance its internal strengths & weaknesses with external opportunities & threats in order to maintain a competitive advantage, earlier this role was performed by the line managers, but now it is carried by the HR manager. Strategies increasingly depend on strengthening organizational competitiveness & on building committed work teams, & these put HR in a central role. In the fast changing, globally competitive & quality oriented industrial environment, it's often the firm's employees its human resources who provide the competitive key. And so now it is a demand of the time to involve HR in the earlier stages of development & implementing the firm's strategic plan, rather than to let HR react to it. That means now the role of HR is not just to implement the things out but also to plan out in such a manner that the employees can be strategically used to get edge over the competitors, keeping in mind the fact that this is the only resource (HUMANS), which cannot be duplicated by the competitors. The Strategic Management Process includes: Determining what needs to be done to achieve corporate objectives, often over 3 - 5 years Examining organization and competitive environment Establishing optimal fit between organization and its environment Reviewing and revising strategic plan The Stage in the Process of Strategic Management:

Mission statement- Business definition and future plan for success. Environmental analysis- OT analysis and preparing to meet environmental pressures. Organizational self-assessment- SW analysis and chalking road map for attaining goals. Establishing goals and objectives- Laying concrete figures that will help in benchmarking the performance. These benchmarks will lead to the development of strategy that will decide how the company intends to meets its environmental challenges with given environmental and resource constraints in the time to come.

Benefits of a Strategic Approach to HR: * Facilitates development of high-quality workforce through focus on types of people and skills needed * Facilitates cost-effective utilization of labor, particularly in service industries where labor is generally greatest cost * Facilitates planning and assessment of environmental uncertainty, and adaptation of organization to external forces * Successful SHRM efforts begin with identification of strategic needs * Employee participation is critical to linking strategy and HR practices * Strategic HR depends on systematic and analytical mindset * Corporate HR departments can have impact on organization's efforts to launch strategic initiatives Human Resources Life Cycle:

The above diagram is divided into four different colours each indicating a separate stage of HR life cycle. Each stage has specific actions or steps that form respective stage for e.g. in third stage there are six different steps involved such as step 3 to step 8. These four stages cover all actions or functions pertaining to HR manager's job and they are related with strategic plan of the organisation. The cycle starts with laying down a strategic plan, linking HR functions in it, and it provides the basis for Manpower planning and internal mobility. The Manpower planning will lead to the function of acquiring right people for the right job and in accordance recruitment as well as selection exercise will be designed and tools selected. For e.g. if a automobile company decides to launch a new four-wheel model in the time to come their focus will be on Research and Development and then on Market Testing and last but foremost production and after sales. This new plan will act as the guideline for the company and will help in determining how many people do we need and what qualifications they should posses and how many of them can be kept on full-time rolls and as permanent employees. The next Stage is for sustaining and retaining those who are hired and making sure that they work efficiently and help the company move in the selected direction. They should also facilitate the smooth movement of the company in the desired direction and should result in achievement of corporate goals and objectives effectively and efficiently. Employee's performance should be rated and compared with the benchmarks, recorded deviations are to be corrected, and precautionary measures for the future are implemented. In last stage the separation or farewell to those who are non-performing or may be to those who have completed their job or task i.e. project teams, is bided. Factor Linkages of HR Plans and Strategies:

Given diagram presents various factors that have an impact on HR plans and Strategy and how are they interlinked with each other. Their interactions and impact on each element and the resulting change in HR Plan and policy is also indicated clearly.

The table given above takes into consideration two of the generic strategies and the strategic focus required to generate each of these competitive advantages along with HR strategy and activities needed to be done by HR Department to help the organization in generating these strategic advantages and to move successfully towards desired goals and objectives. To understand these linkages we can look at them as tasks and steps needed to be taken in order to complete the tasks. The selected strategic focus should be very clear and well integrated into organizational policy and clearly communicated to HR Department to help in drafting suitable HR strategy and last in carrying out all activities. Definition of 'Human Resource Planning - HRP' The ongoing process of systematic planning to achieve optimum use of an organization's most valuable asset - its human resources. The objective of human resource (HR) planning is to ensure the best fit between employees and jobs, while avoiding manpower shortages or surpluses. The three key elements of the HR planning process are forecasting labor demand, analyzing present labor supply, and balancing projected labor demand and supply.

InTroduction Planning is very important to our everyday activities. Several definitions have been given by different writers what planning is all about and its importance to achieving our objectives. It is amazing that this important part of HR is mostly ignored in HR in most organizations because those at the top do not know the value of HR planning. Organizations that do not plan for the future have less opportunities to survive the competition ahead. This article will discuss the importance of HR planning; the six steps of HR planning that is : Forecasting; inventory, audit, HR Resource Plan; Actioning of Plan; Monitoring and Control. Definition of HR Planning Quoting Mondy et (1996) they define it as a systematic analysis of HR needs in order to ensure that correct number of employees with the necessary skills are available when they are required. When we prepare our planning programme, Practitioners should bear in mind that their staff members have their objective they need to achieve. This is the reason why employees seek employment. Neglecting these needs would result in poor motivation that may lead to unnecessary poor performance and even Industrial actions.

Importance of Planning Planning is not as easy as one might think because it requires a concerted effort to come out with a programme that would easy your work. Commencing is complicated, but once you start and finish it you have a smile because everything moves smoothly. Planning is a process that have to be commenced form somewhere and completed for a purpose. It involves gathering information that would enable managers and supervisors make sound decisions. The information obtained is also utilized to make better actions for achieving the objectives of the Organization. There are many factors that you have to look into when deciding for an HR Planning programme. HR Planning involves gathering of information, making objectives, and making decisions to enable the organization achieve its objectives. Surprisingly, this aspect of HR is one of the most neglected in the HR field. When HR Planning is applied properly in the field of HR Management, it would assist to address the following questions: 1. 2. 3. 4. How many staff does the Organization have? What type of employees as far as skills and abilities does the Company have? How should the Organization best utilize the available resources? How can the Company keep its employees?

HR planning makes the organization move and succeed in the 21st Century that we are in. Human Resources Practitioners who prepare the HR Planning programme would assist the

Organization to manage its staff strategically. The programme assist to direct the actions of HR department. The programme does not assist the Organization only, but it will also facilitate the career planning of the employees and assist them to achieve the objectives as well. This augment motivation and the Organization would become a good place to work. HR Planning forms an important part of Management information system. HR have an enormous task keeping pace with the all the changes and ensuring that the right people are available to the Organization at the right time. It is changes to the composition of the workforce that force managers to pay attention to HR planning. The changes in composition of workforce not only influence the appointment of staff, but also the methods of selection, training, compensation and motivation. It becomes very critical when Organizations merge, plants are relocated, and activities are scaled down due to financial problems.

Inadequacy of HR Planning Poor HR Planning and lack of it in the Organization may result in huge costs and financial looses. It may result in staff posts taking long to be filled. This augment costs and hampers effective work performance because employees are requested to work unnecessary overtime and may not put more effort due to fatigue. If given more work this may stretch them beyond their limit and may cause unnecessary disruptions to the production of the Organization. Employees are put on a disadvantage because their live programmes are disrupted and they are not given the chance to plan for their career development. The most important reason why HR Planning should be managed and implemented is the costs involved. Because costs forms an important part of the Organizations budget, workforce Planning enable the Organization to provide HR provision costs. When there is staff shortage, the organization should not just appoint discriminately, because of the costs implications of the other options, such as training and transferring of staff, have to be considered. Steps in HR Planning Forecasting HR Planning requires that we gather data on the Organizational goals objectives. One should understand where the Organization wants to go and how it wants to get to that point. The needs of the employees are derived from the corporate objectives of the Organization. They stern from shorter and medium term objectives and their conversion into action budgets (eg) establishing a new branch in New Dehli by January 2006 and staff it with a Branch Manager (6,000 USD, Secretary 1,550 USD, and two clerical staff 800 USD per month. Therefore, the HR Plan should have a mechanism to express planned Company strategies into planned results and budgets so that these can be converted in terms of numbers and skills required.

Inventory After knowing what human resources are required in the Organization, the next step is to take stock of the current employees in the Organization. The HR inventory should not only relate to data concerning numbers, ages, and locations, but also an analysis of individuals and skills. Skills inventory provides valid information on professional and technical skills and other qualifications provided in the firm. It reveals what skills are immediately available when compared to the forecasted HR requirements.

Audit We do not live in a static World and our HR resources can transform dramatically. HR inventory calls for collection of data, the HR audit requires systematic examination and analysis of this data. The Audit looks at what had occured in the past and at present in terms of labor turn over, age and sex groupings, training costs and absence. Based on this information, one can then be able to predict what will happen to HR in the future in the Organization. HR Resource Plan Here we look at career Planning and HR plans. People are the greatest asserts in any Organization. The Organization is at liberty to develop its staff at full pace in the way ideally suited to their individual capacities. The main reason is that the Organizations objectives should be aligned as near as possible, or matched, in order to give optimum scope for the developing potential of its employees. Therefore, career planning may also be referred to as HR Planning or succession planning.

The questions that should concern us are: a) b) Are we making use of the available talent we have in the Organization, and have we an enough provision for the future? Are employees satisfied with our care of their growth in terms of advancing their career?

Assignment of individuals to planned future posts enable the administration to ensure that these individuals may be suitably prepared in advance.

Actioning of Plan There are three fundamentals necessary for this first step. 1) Know where you are going. 2) There must be acceptance and backing from top management for the planning.

3) There must be knowledge of the available resources (i.e) financial, physical and human (Management and technical). Once in action, the HR Plans become Corporate plans. Having been made and concurred with top management, the plans become a part of the companys long-range plan. Failure to achieve the HR Plans due to cost, or lack of knowledge, may be a serious constraints on the long-range plan. Below is an illustration of how HR Plan is linked to corporate Plan. The link between HR Plan and Strategic Management STRATEGIC MANAGEMENT Organizational goals Organizational goals Strong and weak parts &weak points Opportunities and threats Opportunities & threats Sources of Competitive advantage Competitive advantage Identify People related matters Hr Processes Practices HUMAN Bohlander et as (2001) RESOURCES PLANNING -> HR PLANNING STRATEGIC PLAN Values Mission Strong Goals and Priorities Resource Allocations Source of

Define HR strategies, Goals & plans

Implement Policy &

Monitoring and Control. This is the last stage of HR planning in the Organization. Once the programme has been accepted and implementation launched, it has to be controlled. HR department has to make a follow up to see what is happening in terms of the available resources. The idea is to make sure that we make use of all the available talents that are at our disposal failure of which we continue to struggle to get to the top.

RECOMMENDED BOOKS Gary Dessler: Personnel / Human Resource Management (PHI: Latest edition) VSP Rao, Human Resource Management, Excel Bppks Wayne F Cascio, Managing Human Resources, TMH Fisher, Schoenfeldt and James Shaw, Human Resource Management, Biztantra Raymo1d, John, Barry and Patrick, Human Resources Management, TMH