Thursday, August 17, 2017

Nature and Scope of Human Resource Management

Unit-I Nature and Scope of HRM
Meaning and Definition of Human Resource Management (HRM)
Human Resource Management (HRM) can be defined as the set of programs, functions, and activities designed and performed in order to maximize both employee as well as organizational effectiveness. It is a management function that helps organization in recruiting, selecting, training, developing and managing its members. HRM is concern with the management of people in the organization from Recruitment to Retirement.

According to Flippo, “human resource management is the   planning , organizing , directing and controlling of the procurement, development, compensation, integration, maintenance, and separation of human resource to the end that individual, organizational and social objectives are accomplished.”
According to the Invancevich and Glueck, “HRM is concerned with the most effective use of people to achieve organizational and individual goals. It is the way of managing people at work, so that they give their best to the organization”.

According to Dessler (2008) the policies and practices involved in carrying out the “people” or human resource aspects of a management position, including recruiting, screening, training, rewarding, and appraising comprises of HRM.

Generally HRM refers to the management of people in organizations. It comprises of the activities, policies, and practices involved in obtaining, developing, utilizing, evaluating, maintaining, and retaining the appropriate number and skill mix of employees to accomplish the organization’s objectives. The goal of HRM is to maximize employees’ contributions in order to achieve optimal productivity and effectiveness, while simultaneously attaining individual objectives (such as having a challenging job and obtaining recognition), and societal objectives (such as legal compliance and demonstrating social responsibility). In short Human Resource Management (HRM) can be defined as the art of procuring, developing and maintaining competent workforce to achieve the goals of an organization in an effective and efficient manner.
Nature/Characteristics of HRM
Human Resource Management is a process of bringing people and organizations together so that the goals of each are met. The various features of HRM include:
a)      It is pervasive in nature as it is present in all enterprises.
b)      Its focus is on results rather than on rules.
c)       It tries to help employees develop their potential fully.
d)      It encourages employees to give their best to the organization.
e)      It is all about people at work, both as individuals and groups.
f)       It tries to put people on assigned jobs in order to produce good results.
g)      It helps an organization meet its goals in the future by providing for competent and well-motivated employees.
h)      It tries to build and maintain cordial relations between people working at various levels in the organization.
i)        It is a multi-disciplinary activity, utilizing knowledge and inputs drawn from psychology, economics, etc.
Objectives of HRM
The primary objective of HRM is to ensure the availability of competent and willing workforce to an organization. The specific objectives include the following:
1) Societal Objectives: seek to ensure that the organization becomes socially responsible to the needs and challenges of the society while minimizing the negative impact of such demands upon the organization. The failure of the organizations to use their resources for the society’s benefit in ethical ways may lead to restriction.
2) Organizational Objectives: it recognizes the role of HRM in bringing about organizational effectiveness. It makes sure that HRM is not a standalone department, but rather a means to assist the organization with its primary objectives. The HR department exists to serve the rest of the organization.
3) Functional Objectives: is to maintain the department’s contribution at a level appropriate to the organization’s needs. Human resources are to be adjusted to suit the organization’s demands. The department’s value should not become too expensive at the cost of the organization it serves.
4) Personnel Objectives: it is to assist employees in achieving their personal goals, at least as far as these goals enhance the individual’s contribution to the organization. Personal objectives of employees must be met if they are to be maintained, retained and motivated. Otherwise employee performance and satisfaction may decline giving rise to employee turnover.
Scope 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.
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 decided.
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.
Functions of HRM:
The function performed by the resource management can broadly be classified into two categories, viz.
(1) Managerial functions, and
(2) Operative functions
(1) Managerial Functions:
Planning: Planning is a predetermined course of actions. It is a process of determining the organisational goals and formulation of policies and programmes for achieving them. Thus planning is future oriented concerned with clearly charting out the desired direction of business activities in future. Forecasting is one of the important elements in the planning process. Other functions of managers depend on planning function.
Organising: Organising is a process by which the structure and allocation of jobs are determined. Thus organising involves giving each subordinate a specific task establishing departments, delegating authority to subordinates, establishing channels of authority and communication, coordinating the work of subordinates, and so on.
Staffing: It is a process by which managers select, train, promote and retire their subordinates This involves deciding what type of people should be hired, recruiting prospective employees, selecting employees, setting performance standard, compensating employees, evaluating performance, counseling employees, training and developing employees.
Directing/Leading: Directing is the process of activating group efforts to achieve the desired goals. It includes activities like getting subordinates to get the job done, maintaining morale motivating subordinates etc. for achieving the goals of the organisation.
Controlling: It is the process of setting standards for performance, checking to see how actual performance compares with these set standards, and taking corrective actions as needed.
(2) Operative Functions: The operative, also called, service functions are those which are relevant to specific department. These functions vary from department to department depending on the nature of the department Viewed from this standpoint, the operative functions of HRM relate to ensuring right people for right jobs at right times. These functions include procurement, development, compensation, and maintenance functions of HRM.
Procurement: It involves procuring the right kind of people in appropriate number to be placed in the organisation. It consists of activities such as manpower planning, recruitment, selection placement and induction or orientation of new employees.
Development: This function involves activities meant to improve the knowledge, skills aptitudes and values of employees so as to enable them to perform their jobs in a better manner in future. These functions may comprise training to employees, executive training to develop managers, organisation development to strike a better fit between organisational climate/culture and employees.
Compensation: Compensation function involves determination of wages and salaries matching with contribution made by employees to organisational goals. In other words, this function ensures equitable and fair remuneration for employees in the organisation. It consists of activities such as job evaluation, wage and salary administration, bonus, incentives, etc.
Maintenance: It is concerned with protecting and promoting employees while at work. For this purpose virus benefits such as housing, medical, educational, transport facilities, etc. are provided to the employees. Several social security measures such as provident fund, pension, gratuity, group insurance, etc. are also arranged.
Significance/importance/need /Role 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 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 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.
Personnel management and Its nature
Personnel management can be defined as obtaining, using and maintaining a satisfied workforce. It is a significant part of management concerned with employees at work and with their relationship within the organization.
According to Flippo, “Personnel management is the planning, organizing, compensation, integration and maintenance of people for the purpose of contributing to organizational, individual and societal goals.”
According to Brech, “Personnel Management is that part which is primarily concerned with human resource of organization.”
Nature of Personnel Management
1. Personnel management includes the function of employment, development and compensation- These functions are performed primarily by the personnel management in consultation with other departments.
2. Personnel management is an extension to general management. It is concerned with promoting and stimulating competent work force to make their fullest contribution to the concern.
3. Personnel management exists to advice and assists the line managers in personnel matters. Therefore, personnel department is a staff department of an organization.
4. Personnel management lays emphasize on action rather than making lengthy schedules, plans, work methods. The problems and grievances of people at work can be solved more effectively through rationale personnel policies.
5. It is based on human orientation. It tries to help the workers to develop their potential fully to the concern.
6. It also motivates the employees through its effective incentive plans so that the employees provide fullest co-operation.
7. Personnel management deals with human resources of a concern. In context to human resources, it manages both individual as well as blue- collar workers
Difference Between Personnel Management And Human Resource Management
Human resource management is the new version of personnel management. There is no any watertight difference between human resource management and personnel management. However, there are some differences in the following matters.
1. Personnel management is a traditional approach of managing people in the organization. Human resource management is a modern approach of managing people and their strengths in the organization.
2. Personnel management focuses on personnel administration, employee welfare and labor relation. Human resource management focuses on acquisition, development, motivation and maintenance of human resources in the organization.
3. Personnel management assumes people as a input for achieving desired output. Human resource management assumes people as an important and valuable resource for achieving desired output.
4. Under personnel management, personnel function is undertaken for employee's satisfaction. Under human resource management, administrative function is undertaken for goal achievement.
5. Under personnel management, job design is done on the basis of division of labor. Under human resource management, job design function is done on the basis of group work/team work.
6. Under personnel management, employees are provided with less training and development opportunities. Under human resource management, employees are provided with more training and development opportunities.
7. In personnel management, decisions are made by the top management as per the rules and regulation of the organization. In human resource management, decisions are made collectively after considering employee's participation, authority, decentralization, competitive environment etc. 
8. Personnel management focuses on increased production and satisfied employees. Human resource management focuses on effectiveness, culture, productivity and employee's participation.
9. Personnel management is concerned with personnel manager. Human resource management is concerned with all level of managers from top to bottom.
10. Personnel management is a routine function. Human resource management is a strategic function.
Differences between Human Resource Management (HRM) and Human Resource Development (HRD)
1. HRM is a subset of the entire management processes of an organization. HRD is a subset of HRM.
2. Scope of HRM is wider. Scope of HRD as compared to HRM is narrower.
3. HRM manages and develops the human elements of an organization in its entirety on longer term basis. HRD focuses on those learning experiences which are organized for a specific period to bring about the desired behavioral changes.
4. HRM emphasizes that employees, their abilities and their attitudes constitute an important organizational resource that should be used effectively and efficiently to achieve organizational as well as employees' goals. HRD emphasizes mainly on training and development of employees.
5. HRM takes decisions on HRD plans. HRD thus depends on the decisions of HRM.
6. HRM at its center has HRD. HRD's cooperation is important for overall success of HRM. HRD has to work within the realm of HRM and therefore, its objectives should be in tandem with the broader objectives of HRM. Thus, HRM and HRD are interdependent.
7. HRM takes care of all the human needs and tries to satisfy these needs so that the employees are motivated from all the angles to contribute their best to achieve organizational goals. HRD focuses on upgrading the skills and competencies of the employees in order to improve the performance of the employees on the job.
Problems/Challenges before the Human Resource Manager
Personnel management which is know as human resource management has adapted itself to the changing work environment, however these changes are still taking place and will continue in the future therefore the challenges before the HR manager are
1. Retention of the employees: One of the most important challenge the HR manager faces is retention of labour force. Many companies have a very high rate of labour turnover therefore HR manager are required to take some action to reduce the turnover
2. Multicultural work force: With the number of multi cultural companies are increasing operations in different nations. The work force consists of people from different cultures. Dealing with each of the needs which are different the challenge before the HR manager is integration of multicultural labour work force.
3. Women in the work force: The number of women who have joined the work force has drastically increased over a few years. Women employees face totally different problems. They also have responsibility towards the family. The organization needs to consider this aspect also. The challenge before the HR manager lies in creating gender sensitivity and in providing a good working environment to the women employees.
4. Handicapped employees: This section of the population normally faces a lot of problems on the job, very few organization have jobs and facilities specially designed for handicapped workers. Therefore the challenge before the HR manager lies in creating atmosphere suitable for such employees and encouraging them to work better.
5. Retrenchment for employees: In many places companies have reduced the work force due to changing economic situations, labourers or workers who are displaced face sever problems. It also leads to a negative atmosphere and attitude among the employees. There is fear and increasing resentment against the management.
6. Change in demand of government: Most of the time government rules keep changing. While a lot of freedom is given to companies some strict rules and regulations have also been passed. The government has also undertaken the disinvestment in certain companies due to which there is fear among the employees regarding their job. The challenge before the HR manager lies in convincing employees that their interest will not be sacrificed.
7. Initiating the process of change: Changing the method of working, changing the attitude of people and changing the perception and values of organization have become necessary today. Although the company may want to change it is actually very difficult to make the workers accept the change. The challenge before the HR manager is to make people accept change.
Evolution and Growth of Human Resource management
People – The Principal Resource: The principal resource of any organization is people and managing people is the most important and challenging aspect of an organization. What we call human resource management today, dates back to 1800 B.C., which is evident from the inscriptions of Babylonian code of Hammurabi and Kautilya’s Arthasashtra, which explains in detail the importance of selection, incentives, performance evaluation, quality of a manager and wage rates. So, we understand that the concept of managing people has existed even in the previous eras through ancient literature and philosophy. India, China and Greece have been the origin points of human resource management concepts.
Evolution of Human Resource Management
Industrial Revolution:
Till, 1930’s, there was no such department called “personnel management” that was considered necessary to cater to the needs and welfare of the labor society. The factory manager was acting as a link between the workers and the management, and most of the time he had to comply with the rules of the management to satisfy them, even if it were against the welfare of the workers. Also proper attention was not given to areas like, worker safety, security and living conditions. Industrial revolution saw mass exodus of workers to urban areas in search of jobs.
Need for employment Department:
Application of science and technology in production made the rich owners even richer; the poor workers were not paid adequately and their life became miserable. Since the owners lost direct contact with the employees, managers came into the picture to take over control of production and administration. Machines ruled the industry and importance of labor got reduced. This condition existed for sometime until the advent of new and improved management concepts by people like F.W.Taylor who is considered to be the father of scientific management and B.F.Goodrich who was instrumental in forming the “employment department” which can be considered the fore runner of present human resource department.
Introduction of Scientific Management:
Scientific methods were introduced to make the workers perform the job with ease and perfection. It also saved enormous time and reduced the monotony of work. Job-designs, job-specification, training and development and human relations were given due importance and the owners slowly started realizing the importance of labor. Through 1940’s to 1970’s behavioral approach was applied to professional management, the major architects being Abraham Maslow, Herzberg and Douglas McGregor. This approach suggested managers to modify their leadership styles to suit the type of followers and motivate the workers.
Consequences of World War I and II:

World War I and II also had profound influence on Human resource development. The concepts of role playing, improved training methods, supervision and group discussions came into the fray. The advent of labor unions also established a clear pathway for the workers to claim their rights, ably supported by the labor laws enacted by various governments. International labor organization was formed in 1919 which created sensation in the worker community all over the world. All said and done, empowerment of workers has been achieved only in developed nations where “job security” is no more a great concern because job opportunities are more. But in unorganized and small sectors, employers continue to exploit workers because “supply” is more than “demand”. The responsibility to develop and empower the employees solely lies on the shoulders of human resource department. It should try to address the problems of workers to the management and amicably settle issues relating to wages, welfare, safety and security.


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