UNIT -1

 INTRODUCTION TO HRM
 NATURE AND IMPORTANCE OF HRM
 OBJECTIVES OF HRM
 FUNCTIONS OF HRM
 GENESIS AND GROWTH OF HRM IN INDIA
 JOBS AND CAREERS IN HRM
WHAT IS HRM?
 Organization:
 Consists of people with formally assigned roles who
work together to achieve the organization’s goals.
 A Manager:
 Is responsible for accomplishing the organization’s
goals, who does so by managing the efforts of the
organization’s people.
 A manager performs five main functions:
 Planning, Organizing, Staffing, Leading and
Controlling
 HRM focuses on one of these functions: Staffing
Defining HRM
“Human Resource is the sum total of the
knowledge, abilities and attitudes of all the
employees of an organization.
-Leon C. Megginson
“HRM is the process consisting of four
functions- acquisition, development,
motivation, and maintenance of human
resources.”
-David A. Decenzo and Stephen P. Robbins
Human Resource Management
HRM is the process of acquiring,
training, appraising, and
compensating employees, and of
attending to their labor relations,
health and safety, and fairness
concerns.
NATURE OF HRM
 HRM consists of people-related functions
 hiring, training and development, performance appraisal,
compensation, safety and health, welfare, industrial
relations and the like.
 Building of human capital.
 Human capital refers to the stock of employee skills,
knowledge and capabilities that may not show up in a
balance sheet but have significant impact on a firm’s
performance.
 HRM necessitates alignment of HR policies and
practices with the organization’s strategies.
 HRM involves the application of management
principles and functions to people management.
NATURE OF HRM (Cond.)
 HRM assumes that it is the people who make the
difference. They alone are capable of generating value
and adding to the competitive advantage to
organizations.
 HR activities are not the sole responsibility of the HR
specialists. Line managers are equally responsible
for carrying out the activities.
 HR functions are not confined to business
establishments only. They are applicable to non-
business organizations too, such as education,
health care, recreation, and the like.
IMPORTANCE OF HRM
 Strategy
 HR improves the company's bottom line with its
knowledge of how human capital affects
organizational success.
 Leaders with expertise in HR strategic management
participate in corporate decision-making that
underlies current staffing assessments and
projections for future workforce needs based on
business demand.
IMPORTANCE OF HRM (COND.)
 Compensation
 HR compensation specialists develop realistic
compensation structures that set company wages
competitive with other businesses in the area, in the
same industry or companies competing for employees
with similar skills.
 They conduct extensive wage and salary surveys to
maintain compensation costs in line with the
organization's current financial status and projected
revenue.
IMPORTANCE OF HRM (COND.)
 Employee Benefits
 Benefits specialists are important to the organization
because they have the skills and expertise necessary to
negotiate group benefit packages for employees,
within the organization's budget and consistent with
economic conditions.
 They also are familiar with employee benefits most
likely to attract and retain workers.
 This can reduce the company’s costs associated with
turnover, attrition and hiring replacement workers.
IMPORTANCE OF HRM (COND.)
 Safety
 Employers have an obligation to provide safe working
conditions.
 Workplace safety and risk management
specialists from the HR area manage compliance with
U.S. Occupational Safety and Health Administration
regulations through maintaining accurate work logs
and records, and developing programs that reduce the
number of workplace injuries and fatalities.
 Workplace safety specialists also engage employees in
promoting awareness and safe handling of dangerous
equipment and hazardous chemicals.
IMPORTANCE OF HRM (COND.)
 Liability
 HR employee relations specialists minimize the
organization's exposure and liability related to
allegations of unfair employment practices.
 They identify, investigate and resolve workplace issues
that, left unattended, could spiral out of control and
embroil the organization in legal matters pertaining to
national and state anti-discrimination and harassment
laws.
IMPORTANCE OF HRM (COND.)
 Training and Development
 HR training and development specialists coordinate
new employee orientation, an essential step in forging
a strong employer-employee relationship.
 The training and development area of HR also
provides training that supports the company's fair
employment practices and employee development to
prepare aspiring leaders for supervisory and
management roles.
IMPORTANCE OF HRM (COND.)
 Employee Satisfaction
 Employee relations specialists in HR help the
organization achieve high performance, morale
and satisfaction levels throughout the workforce, by
creating ways to strengthen the employer-employee
relationship.
 They administer employee opinion surveys, conduct
focus groups and seek employee input regarding job
satisfaction and ways the employer can sustain good
working relationships.
IMPORTANCE OF HRM (COND.)
 Recruitment
 HR recruiters manage the employment process from
screening resumes to scheduling interviews to
processing new employees.
 Typically, they determine the most effective methods
for recruiting applicants, including assessing which
applicant tracking systems are best suited for the
organization's needs.
IMPORTANCE OF HRM (COND.)
 Selection
 HR professionals work closely with hiring managers to
effect good hiring decisions, according to the
organization's workforce needs.
 They provide guidance to managers who aren't familiar
with HR or standard hiring processes to ensure that
the company extends offers to suitable candidates.
IMPORTANCE OF HRM (COND.)
 Compliance
 HR workers ensure that the organization complies
with national and state employment laws.
 They complete paperwork necessary for documenting
that the company's employees are eligible to work as
per the country’s laws.
HRM OBJECTIVES

Societal Objectives

Organizational
Objectives

Functional
Objectives

Personal
Objectives

Source: Aswathappa, 2008, p.8

HRM OBJECTIVES (Cond.)
 Societal Objectives
 To be ethically and SOCIALLY RESPONSIBLE to the
needs and challenges of the society while
minimising the negative impact of such demands
upon the organisation. The failure of organisation to
use their resources for the society’s benefit in ethical
ways may lead to restrictions. For example, the society
may limit HR decisions through laws that enforce
reservation in hiring and laws that address
discrimination, safety or other such areas of societal
concern.
HRM OBJECTIVES (Cond.)
 Societal Objectives:
 Legal Compliance
 Benefits
 Union-management Relations
HRM OBJECTIVES (Cond.)
 Organisational Objectives
 To recognise the role of HRM in bringing about
organisational effectiveness.
 HRM is not an end in itself. It is only a means to assist
the organisation with its primary objectives.
 HR department exists to serve rest of the organisation.
HRM OBJECTIVES (Cond.)
 Organisational Objectives:
 Human Resource Planning
 Employee Relations
 Selection
 Training and Development
 Appraisal
 Placement
 Assessment
HRM OBJECTIVES (Cond.)
 Functional Objectives
 To maintain the department’s contribution at a level
appropriate to the organisation’s needs.
 The department’s level of service must be tailored to
fit the organisation’s functional needs.
HRM OBJECTIVES (Cond.)
 Functional Objectives:
 Appraisal
 Placement
 Assessment
HRM OBJECTIVES (Cond.)
 Personal Objectives
 To assist employees in achieving their personal goals,
at least insofar as these goals enhance the individual’s
contribution to the organisation.
 Personal objectives of employees must be met if
workers are to be maintained, retained and motivated.
 Otherwise, employee performance and satisfaction
may decline and employees may leave the
organisation.
HRM OBJECTIVES (Cond.)
 Personal Objectives:
 Training and Development
 Appraisal
 Placement
 Compensation
 Assessment
FUNCTIONS OF HRM
SCOPE OF HRM
 HRP
 Job Analysis and Design
 Recruitment and Selection
 Orientation and Placement
 Training and Development
 Performance Appraisal
 Job Evaluation
 Compensation Management
 Motivation and Communication
 Welfare
 Safety and Health
 Industrial Relations
EVOLUTION OF HRM
 The history of the HR function dates back to the
Taylor’s theory of scientific management and
Fayol’s administrative theory.
 However, it was only during the 1930s and 1940s that
the function grew in significance, largely due to the
war-time imperatives. At this time, the HR function
matured and focused largely on labor relations and
staffing.
 In India, the Tata and Steel Company (TISCO) was
one of the first organizations to set up a personnel
department in the year 1947.
EVOLUTION OF HRM (Cond.)

Personnel HRM (early 1970s) SHRM (early

Management • Part of Organic 1980s)
Organization • Convergence between
• Cross-hierarchical HRM and Business
• Part of Mechanistic and Cross-functional Strategy
Organization Teams • Proactive HRM
• Bureaucratic • Decentralization • Concerned with
• High Centralization • Low Formalization Organizational
• High Formalization • Flexible Effectiveness and
• Low Flexibility Performance
From PM to HRM
 The early 1970s witnessed the emergence of the term
HRM as a replacement of HRM. The change in
terminology also brought changes in the objectives
and boundaries of the function.
 The main objective of HRM is to ensure the
achievement of organizational goals through people.
From PM to HRM (Cond.)
 PM differ from HRM on several counts-
 PM is part of the more mechanistic form of
organization, while HRM is aligned with the organic
design of the organization.
 PM is more bureaucratic with high levels of
centralization and formalization and lower levels of
flexibility, while HRM is decentralized, flexible (with
low levels of formalization), and has cross-functional
and cross-hierarchical teams.
Difference between PM and HRM
 Personnel Management
 1. Reactive, servicing role
 2. Emphasis on implementation
of procedures
 3. Specialist department
 4. Focus on employees’ need in
their own right
 5. Employees seen as a cost to be
controlled
 6. Presumption of union
manager conflicts
 7. Preference for collective
bargaining of pay and working
conditions
 Human Resource
Management
 1. Proactive, innovative role
 2. Emphasis on strategy
 3. General management activity
 4. Focus on employees’
requirements in the light of
business needs
 5. Employees seen as an
investment to be nurtured as
well as a cost to be controlled.
 6. Conflicts dealt with by team
members within their teams.
 7. Management-led planning of
people resources and
employment conditions
From HRM to SHRM
 During the early 1980s, HR function emerged to a
more strategic role.
 The late 1980s and early 1990s witnessed a visible
convergence between HRM and business strategy.
 In the 21st century, this convergence can be seen with
the use of terms such as ‘knowledge’, ‘networked’,
‘knowledge-based firm’, and ‘virtual organization’.
 SHRM puts an emphasis on the ways in which HRM
contributes to the organizational effectiveness.
Difference between HRM and SHRM
 Traditional HRM
 1. Responsibility for HR
programmes: staff personnel
in the HR department.
 2. Focus of activities:
employee relations (ensuring
employee motivation and
productivity, compliance with
laws)
 3. Role of HR: Transactional
 4. Initiative for change: Slow,
piecemeal, and fragmented,
not integrated with larger
issues
 5. Time horizon: Short-term
 6. Control:
 Strategic HRM
 1. Responsibility of HR
programmes: line managers.
 2. Focus of activities:
Partnership with internal
(employees) and external
(customers, stakeholders,
public interest groups)
groups.
 3. Role of HR:
Transformational, change
leader
 4. Initiative for change: Fast,
flexible, and systematic,
change initiatives are
implemented in context with
other HR systems