 Human resources is a term used to describe the

individuals who make up the workforce of an organization

 Human Resources refers to a function within an

organization charged with the overall responsibility for

implementing strategies and policies relating to the

management of individuals i.e., the HR management of the

organization.
 SKILLS

HR KNOWLEDGE

TALENT

APTITUDE
 In simple words, HRM can be defined as:

 Organization’s methods and procedures for managing

people to enhance skills and motivation.

 Activities to enhance the organization’s ability to attract,

select, retain and motivate people.

 HRM encompasses those activities designed to provide

for & coordinate the HR of an organization– BYARS &

RUE

 HRM is a function performed in an organization that

facilitates the most effective use of people to achieve

organizational as well as individual goals- IVANCEVICH &

GLUECK
 DOES HR MANAGEMENT MATTER?

 HOW DOES IT MATTER?

 The HR managers have now started speaking the language

of business. The seek to justify the economic value of

their actions.

THERE ARE TWO COMMON THINGS TO ALL BEST

EMPLOYERS;

1. They build an inventory of people practices that are both

unique & tailored for their firms.

2. They take trouble to painstakingly create a work

environment that gets best out of their employees.
ACQUIRE

DEVELOP

MOTIVATE

RETAIN
1. Output will be greater than the input.

2.Each individual is different from culture, education,

environment, background etc.

3.We can’t purchase the loyalty, .dedication, devotion towards

the organization.

4.As time passes, human factor can bring experience to

organization to accept the challenges.

5.Recent developments like legislation, trade unions enhanced

their importance.
 Line manager

 A manager who is authorized to direct the work of

subordinates and is responsible for accomplishing the

organization’s tasks.

 Staff manager

 A manager who assists and advises line managers.

 Pervasive Function: HRM is practiced at all levels of
management and applies to all kinds of organizations, even
to non-profit organizations.
 Result Oriented: It aims at achieving organizational
objectives through the optimum utilization of human
resources.
 Tactful Approach: HRM deals with the people who are
distinct from one another; thus the manager needs to
apply diverse strategies and tactics at different point of
time and in different situations.
 People-Centric: Human resource management is concerned

majorly with the employees working in an organization.

 Integrative Action: It focuses on maintaining cordial

relations among the employees at different levels and also

addresses employee grievances.

 Continuous Process: HRM is an ongoing process of

procurement, development and redirection of personnel
towards the organizational goals. It cannot be completed
in a day, a week or a month.
CONTROL ACQUISITION
• HR audit
• HR accounting • HRP
• HRIS • Recruitment
• Selection
HRM • Placement
MAINTENANCE
• Remuneration
• Safety & health
DEVELOPMENT
• Motivation
•Training
• Social security
• Career
• IR
Development
• Performance
• OD
Appraisal
 The National Institute Of Personnel Management,
Calcutta, has specified the scope of HRM as:
1. THE LABOR OR PERSONNEL ASPECT: Planning,
recruitment, selection, placement, transfer, promotion,
T&D, layoff, retrenchment, remuneration, etc.
2. WELFARE ASPECT: Canteen, crèches, rest & lunch
rooms, housing, transport, medical assistance, education,
health & safety, etc.
3. IR ASPECT: Union-management relations, settlement of
disputes, grievance management.
The basic objective of HRM is to ensure that there are

right people at the right time & at the right place. This

basic objective is sub-divided into following sub-objectives:

 To help organizations achieve/attain its goals effectively

& efficiently by providing competent & motivated

employees;

 To utilize available HR effectively;

 To increase to the fullest employee’s job satisfaction;

 To ensure maximum individual development;

 To help maintain ethical policies & behavior inside &

outside the organization;

 To develop & maintain quality of work life which makes

employment in the organizations a desirable personal &

social situation;
 To establish & maintain cordial relations between
employees & management;

 To reconcile individual/group goals with organizational

goals;

 To ensure respect for human personality & the well being

of each individual.
 They are broadly classified as:

1. Managerial functions: It includes the following:

 Planning

 Organizing

 Staffing

 Directing

 Controlling
2. Operative functions

 EMPLOYMENT
 Job analysis

 HRP

 Recruitment

 Selection

 Induction

 Placement

 Transfer

 Promotion
 HUMAN RESOURCE DEVELOPMENT

 Executive Development

 Performance appraisal

 Training

 Career Planning & Development

 Organization change & development

 COMPENSATION MANAGEMENT

 Job evaluation

 Wage & salary administration

 Fringe benefits
 EMPLOYEE RELATION

 Motivation

 Morale

 Job satisfaction

 Communication

 Grievance & disciplinary procedure (Conflict

management, collective bargaining, participation of
employees, discipline)
 MAINTENANCE

 Health

 Safety

 Social security

 Welfare schemes

 Personnel records
1-9

P/HRM

Managerial Operative Functions

functions:
Procurement Development: Motivation and Maintenance: Emerging
– Planning Integration:
Compensation: Issues:
Job Analysis Training Grievances
Job design Health Personnel
HR planning Executive records
Work scheduling Discipline
Recruitment development
– Safety Personnel
Motivation Teams and
Selection Career teamwork audit
Organizing planning Job evaluation
Placement Personnel
Welfare Collective
Succession Performance research
bargaining
Induction planning and potential HR
appraisal Social Participation accounting
– Directing Internal Human security
mobility Compensation Empowerment
resources HRIS
development administration
Trade unions Job stress
strategies Incentives
Mentoring
– benefits and Employers’
services associations International
Controlling
Industrial HRM
relations

The Strategic Role Of Human Resources Management

Environment may be understood by all those factors which

have their bearing on the functioning of various activities

including HR activities.

Analysis of environment is useful for the HR manager &

his/her team in order to become proactive & not remain

reactive to the environment.

Environment is an important element in the HRM model and

therefore, it is necessary know what the environment is and

how it influences HR functions in an organization.

Environment consists of all those factors which have their

bearing on the functioning of the HR department.

These forces are divided into external factors and internal
factors. External factor include political and legal,
technological, economic and cultural whereas internal
factors include unions, organizational culture and conflicts
and professional bodies. Analysis of the environment is
essential for the HR manager and his/her team in order to
be proactive to the environment and not reactive to the
environment.
1. External Forces 2. Internal Forces
 Political-Legal  Union
 Economical  Organization culture
 Globalization & conflict
 Technological  Professional bodies
 Cultural  Strategy, task &
leadership
1. External Forces

Political-Legal- The environment includes the impact of the political institutions

on the HRM department.

In a democratic set up like India which together constitute the total political
environment:

(a) Legislature – It is also called Parliament at the central level and advisory at
the state level. It is basically a law making body. The various labor laws are
enacted by this institution.

(b) Executive – It is also known as the government and it is a law implementing

body. It acts according to the decisions of the legislature.

(c) Judiciary – It plays the role of watchdog and ensures that both legislature
and executive work in the interest of public.
Political environment affect the labor through the labor
laws. There are many labor laws which are related to terms
and conditions of employment, work conditions, payment of
wages, industrial disputes, health, safety and welfare of the
labor.
The following activities are mainly affected by the constitutional
provisions:

(a) HR Planning

(b) Recruitment

(c) Selection

(d) Placement

(e) Training and development

(f) Employee Relations

(g) Separations
In May 2009, workers at Mahindra’s Satpur, Nashik plant protested
over the suspension of union leader Madhavrao Dhatrak on disciplinary
grounds. The strike was called off after 48 hours; however, it led to
production loss of around 6,000 units amounting to Rs 325 crore.

Hyundai Motor India – 2010

The Indian unit of Hyundai Motor Company incurred a loss of Rs 65

crore due to a production halt at its Chennai plant following a protest by
150 workers demanding the reinstatement of employees sacked in
December 2009. It led to a production loss of 2,200 cars.
Economic environment refers to all the economic factors
which directly or indirectly affect the HRM.

The following are the components of economic environment:

 Suppliers

 Competitors

 Customer

 Industrial Labor
(a) Suppliers: Under HRM, the suppliers are the agencies or parties
who make available the human resources to the organization.
These agencies are as follows:
(i) Employment Exchanges
(ii) Universities
(iii) Colleges
(iv) Training Institutes
(v) Casual Labor Contractors
(vi) Consulting firms
The type of employees received by the organization depends on the
suppliers to a large extent.
(b) Competitors: Some of the HR functions or activities are
influenced by the competitors. This is because the number of
organizations is competing for the human resources, which
increases the importance of staffing function and its appraisal
and compensation activities.

Now the individual is offered job by many organizations and the

organization which provides him best terms and conditions wins
the competition. Therefore, when the employees from outside
become difficult to obtain, the organizations have to groom its
own employees with help of HR activities.
(c) Customers: The Company’s personnel function is also
influenced by the customers. It is well known that
customers want high quality products at the reasonable
prices and therefore, everybody in the organization should
strive to offer such products which provide desired
satisfaction to the customer.

(d) Industrial Labor: Many changes have been taken place

in the industrial labor especially in the organized sector.
India’s economy is gradually getting integrated with the global economy.

Globalization has considerable influence on the HR function which can

explained as follows:

(a) Employee hiring, training, motivation, compensation, and retaining are

guided by the global perspective.

(b) The department can become the source of competitive advantage for the

company by discharging the HR functions effectively and by helping the

best qualified people execute the company’s strategy on the global scale.
(c ) A workforce that is knowledgeable and skilled at doing
complex things keeps the company competitive and
attracts foreign investment.

(d) The benefits between globalization and workers are

mutual.

(e) Every advanced nation is increasingly becoming

globalized, skills and cumulative learning of its work
force becomes its competitive assets.
(a) With the advancement in technology jobs tend to become more
intellectual or upgraded. Now the jobs require the skills of
educated and knowledgeable workers.
(b) The introduction of new technology dislocates workers unless they
become well equipped to work on new machines which makes
obligatory on the part of HRM to train workers and to
rehabilitate those who are displaced or cannot be trained.
(c) Those employees who pick up and acquaint themselves with new
technology, the job will be challenging and rewarding.
(d) Technology also has its impact on human relations as technology
lays down the requirements for much of the human interactions in
the organizations.
Culture includes knowledge, belief, art, morals, laws,
customs, and other capabilities and habits acquired by an
individual as a member of a society.
(a) The attitude of the worker towards his work depends upon his

cultural background. Our workers are known to have a deep seated

apathy towards work. Tasks are performed without any interest,

dedication, or pride. Further, there is indiscipline at all levels and

poor superior subordinate relationships.

(b) Culture trains people along particular lines, tending to put

personality stamp on them. When people with different cultural

backgrounds promote, own and manage organizations, they

themselves tend to acquire distinct culture.

(c) Time dimension which affects the HRM has its basis in culture.

Time orientation refers to the people’s orientation – past, present,

and future. HRM focuses on present and care more for employees

on the rolls. Employees are hired and maintained as long as they

are useful to the organization and dispensed as they cease to be

so.
Unions:

The firm’s personnel activities are influenced by its own

union as well as the unions of the other firms. A trade

union is an association of workers or management formed

to protect their own individual interests. The role of a

union is too well known. All HR activities – recruitment,

selection, training, compensation, IR and separations are

carried out in consultation with the trade unions.

Organizational Culture and Conflict:

Every organization has its own culture. Organizational culture is

the result of all the organization’s features – its people,

successes, and its failures. Organizational culture shapes the

future by reflecting the past. Therefore, it becomes necessary

for the HR specialists to adjust proactively to the culture of the

organization. The organizational culture is shaped by its core

values and beliefs.

For example the following cultures were adopted by different

organizations:

TATA – Get Best People and Set them Free

L&T – Professional Approach

Reliance Industries – Competitive Spirit

There is often conflict between organizational culture and

employees’ attitude.

Following dualities are the reasons for conflicts:

(a) Personal Goal vs. Organizational Goals

(b) Personal Ethics vs. Organizational Ethics

(c) Rights vs. Duties

(d) Discipline vs. Autonomy

There is often conflict between organizational culture and

employees’ attitude.

Following dualities are the reasons for conflicts:

(a) Personal Goal vs. Organizational Goals

(b) Personal Ethics vs. Organizational Ethics

(c) Rights vs. Duties

(d) Discipline vs. Autonomy

(e) Feedback vs. Abuse

The impact of the apex body, National Institute of Personnel

Management (NIPM), on HR experts is minimal.

The code of ethics formulated by NIPM reminds HR people

about their ethical obligations towards the employees,

organization, government, profession, and society.

 Trade Union Movement Era

 Social Responsibility Era

 Scientific Management Era

 Human Relation Era

 Behavioral Science Era

 Systems Approach Era

 Contingency Approach

 Human Resource Approach

JOB EVALUATION

GRADE 1---- CEO PRESIDENT--- 70K-1l

GRADE 2---- VP, BOG, Unit Heads--- 50-70
GRADE 3---- HEAD OF VARIOUS DEPTS
GRADE 4---- Employees
1. The Fombrun

2. The Harvard

3. The Guest

4. The Warwick
 HRD

ORGANIZATION
Selection APPRAISAL EFFECTIVENESS

REWARDS
 One of the first explicit statements of the HRM concept was made

by the Michigan School (Fombrun et al, 1984).

 They held that HR systems & organization structure should be

managed in way that is congruent with organization strategy (Hence

the name “Matching Model”).

 They further explained that HR cycle consists of four generic

processes or functions that are performed in all organizations.

 Being the first model (dates back to 1984), this emphasizes just

four functions and their interrelatedness. The four functions are:

selection, appraisal, development and rewards. These four

constituent components of human resource management and are

expected to contribute to organizational effectiveness.

 The Fombrun model is incomplete as it focuses on only four

functions of HRM and ignores all environmental and contingency

factors that impact HR functions. But, this model is simple and

can serve as a heuristic framework for explaining the nature

and significance of HR activities.

This model was developed by Beer et al . (1984) (Michale Beer, Richard

Walton & Bert Spector)

This model suggested that HRM has two characteristic features:

 Line manager accept more responsibility for ensuring the alignment of

competitive strategy & personnel policies.

 Personnel has the mission of setting policies that govern how personnel

activities are developed & implemented in ways that make them more

mutually reinforcing.
 (1984) which use as an as a strategic map to concentrates on the soft aspect of HRM.
It describes employee commitment. It also shows that employees needed to be
competent and cost effective. This model has six basic components. Such as;

 Stakeholders interest - shareholder, management, employee groups, government,

unions

 Situational factors- workforce characteristics, business strategy and conduct,

management philosophy, Labour markets, unions, task technology, social and law values,

 Human resources management policy choices – employee influence, hr. flow, rewards,
work system

 Human Resources outcomes- commitment, competence, congruence, cost effective

 Long term consequences- individual well being, organizational effectiveness, societal

well being

 Feedback loop
 Customers
 Competitors
 Employee
 Creditors
 BODs
 Shareholder
 Media
 General Public
 Vendor
 Government
 Commitment REWARD

• Authority • Pay System

• Responsibility • Incentive

• Power • Motivation

HR Flow Work System

• Recruitment, Selection
• Design of work
• Placement, Promotion
• Alignment of people
• Assessment, Appraisal

• Separation
 Commitment Competence

• Psychological Attachment • Ability to do job properly

Congruence Cost Effectiveness

• Similarity between objects/
• Wage
individuals • Turnover
• Absenteeism
• Benefits
• Strikes
 PERFORM
HR ANCE
PRACTIC BEHAVIOR OUTCOME
ES AL POSITIVE
HR HR OUTCOME •Productivit FUNCTION
Strategie •Hiring OUTCOME AL
•Training •Motivate/ y
s •Commitmen efforts •Innovation OUTCOME
•Appraisal t •Profits
•Compens •Cooperate •Quality
•Quality •Involved NEGATIVE •ROI
ation •Flexibility
•Relations •Organizatio •Low
nal productivity
citizenship •Absenteeis
m
• Employee
Turnover
HR strategy—HR Practices--
Cost reduction– Job design/ re-design
Differentiation– Training/ selection
Focus– Appraisal/ rewards
 (Guest, 1997) works on as integrated Human Resources Management practices

will result to superior individual and organizational performance .The concept

describes HRM strategies such as differentiation, innovation, the focus on

Quality and cost reduction will increase good practices which influence the

quality of the outcome, commitment and flexibility by training, appraisal,

selection, rewards, job designs, involvement, and security. The final outcome

will be positive productivity, with innovation, and decrease Labor turnover,

fewer conflicts and less customer complaints.

 This model claims that the HR manager has specific strategies to begin with, which demand certain

practices and when executed, will result in outcomes. These outcomes include behavioral,

performance related and financial rewards.

 The model emphasizes the logical sequence of six components: HR strategy, HR practices, HR

outcomes, behavioral outcomes, performance results and financial consequences. Looking inversely,

financial results depend on employee performance, which in turn is the result of action oriented

employee behaviors. Behavioral outcomes are the result of employee commitment, quality and

flexibility, which, in turn are impacted by HR practices. HR practices need to be in tune with HR

strategies which are invariably aligned with organizational strategies.

 The claim of the Guest model that it is superior to others is partly justified in the sense that it clearly

maps out the field of HRM and delineates the inputs and outcomes. But the dynamics of people

management are so complex that no model (including the Guest model) can capture them

comprehensively.
HR FLOW-

HR Inflow----- R&S
HR throughflow– PROMOTION & TRANFERS
HR outflow– RESIGNATION/ RETIREMENT/ Dismissal
Warwick model: was developed by Hendry and
Pettigrew (1990). It is on analytical approach to
Human Resources Management. It also recognizes the
impact of the role of the personnel functions on the
human resource strategy content. : Outer context,
inner context, business strategy context, HRM context,
HRM content
This model was developed by two researchers, Hendry and Pettigrew of University of Warwick
(hence the name Warwick model). Like other human resource management models, the
Warwick proposition centers around five elements

 Outer context (macro environmental forces)

 Inner context (firm specific or micro environmental forces)

 Business strategy content

 HRM context

 HRM content

The Warwick model takes cognizance of business strategy and HR practices (as in the Guest
model), the external and internal context (unlike the Guest model) in which these activities
take place, and the process by which such changes take place, including interactions between
changes in both context and content. The strength of the model is that it identifies and
classifies important environmental influences on HRM. It maps the connection between the
external and environmental factors and explores how human resource management adapts to
changes in the context. Obviously, those organizations achieving an alignment between the
external and internal contexts will achieve performance and growth.
1-19

Traditional HR practice Emerging HR practice

 Administrative role  Strategic role

 Reactive  Proactive

 Separate, isolated from  Key part of organizational

company mission mission

 Production focus  Service focus

 Individuals encouraged,  Cross-functional teams,

singled out for praise, teamwork most important

rewards  People as key

investments/assets
 People as expenses

The Strategic Role Of Human Resources Management

3-22

Designing appropriate HR systems

Issue Focus on
 Nature of employment : Job/Career
 Recruitment : Internal/external/both
 Selection : Merit/other considerations
 Training and employee : 6 months/yearly
development actions Regular/irregular/need based
 Degree of participation : Top down/bottom up
 Incentives : Individual merit/group output
 Job security : Lifelong employment/need-based jobs
 Employee welfare : Be a model employer (offer those that
are needed by law.)
 Worker productivity

 Quality improvement

 The changing attitude of workforce

 The impact of government

 Quality of work life

 Technology & training

 ROLE OF HR MANAGER
 STRUCTURE OF HRM
 Difference between HRM & PM