MEANING OF HRM
HRM is a management
function that helps organisation to recruit, select, train, develop and manage
its members. Simply stated, HRM is all about management of people in the
organisation from Recruitment to Retirement. HRM refers to set of programs,
functions, and activities designed and carried out in order to maximise both
employee as well as organisational effectiveness.
Definition
1
“HRM is planning,
organizing, directing and controlling of the procurement, development,
compensation, integration, maintenance and separation of human resources to the
end that individual, organizational and social objectives are accomplished.”
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.”
OBJECTIVES OF HRM
1.
Organizational Objectives: To assist the organization to achieve its
primary objectives, whether it is profit making or charity or social agenda.
2.
Societal Objectives: To be
responsive to the needs and challenges of the society while minimizing the
negative impact, if any, of such demands upon the organization.
3.
Functional Objectives: To maintain department’s contribution and
level of services at a level appropriate to the organization’s needs.
4.
Personal Objectives: To assist employees in achieving their
personal goals, at least in so far as these goals enhance the individual’s
contribution to the organization. This is necessary to maintain employee
performance and satisfaction for the purpose of maintaining, retaining and
motivating the employees in the organization.
SCOPE OF HRM
From Entry to Exit
or Recruitment to Retirement
of an employee in the organization
Following are the areas of operation of HRM:
1.
Human Resource Planning
2.
Job Analysis
3.
Job Design
4.
Recruitment & Selection
5.
Orientation & Placement
6.
Training & Development
7.
Performance Appraisals
8.
Job Evaluation
9.
Employee and Executive Remuneration
10.
Motivation
11.
Communication
12.
Welfare
13.
Safety & Health
14.
Industrial Relations
Based on
the above activities, we can summarize the scope of HRM into following seven
different categories:
1.
Introduction to HRM
2.
Employee Hiring
3.
Employee and Executive Remuneration
4.
Employee Motivation
5.
Employee Maintenance
6.
Industrial Relations
7.
Prospects of HRM
ROLE OF HRM
1.
Advisory
Role: HRM advises management on the solutions to any
problems affecting people, personnel policies and procedures.
(a)
Personnel Policies: Organization
Structure, Social Responsibility, Employment Terms & Conditions,
Compensation, Career & Promotion, Training & Development and Industrial
Relations.
(b)
Personnel Procedures: Relating
to manpower planning procedures, recruitment and selection procedures, and
employment procedures, training procedures, management development procedures,
performance appraisal procedures, compensation procedures, industrial relations
procedures and health and safety procedures.
2.
Functional
Role: The personnel
function formulates personnel policies in accordance with the company’s
doctrine and management guidelines. It provides guidance to managers to help
them ensure that agreed policies are implemented.
3.
Service
Role: Personnel function provides personnel services.
These services constitute the main activities carried out by personnel
department, like payroll, disciplinary actions, etc, and involve the
implementation of the policies and procedures described above.
ROLE OF HR MANAGERS
1.
Humanitarian
Role: Reminding
moral and ethical obligations to employees.
2.
Counsellor: Consultations to employees about marital,
health, mental, physical and career problems.
3.
Mediator: Playing the role of a peacemaker during
disputes, conflicts between individuals and groups or management.
4.
Spokesman: To represent the company in Media and other
forums because he has better overall picture of his company’s operations.
5.
Problem
Solver: Solving
problems of overall human resource management and long-term organizational
planning.
6.
Change
Agent: Introducing
and implementing institutional changes and installing organizational
development programs
7.
Management
of Manpower Resources:
Broadly concerned with leadership both in the group and individual
relationships and labour-management relations.
OBJECTIVES V/s FUNCTIONS OF HRM
HRM
Objectives
|
Supporting
HRM Functions
|
Social Objectives
(3)
|
(a)
Legal Compliance
(b)
Benefits
(c)
Union Management Relations
|
Organizational
Objectives (7)
|
(a)
Human Resource Planning
(b)
Employee Relations
(c)
Recruitment & Selection
(d)
Training & Development
(e)
Performance Appraisals
(f)
Placement & Orientation
(g)
Employee Assessment
|
Functional
Objectives (3)
|
(a)
Performance Appraisals
(b)
Placement & Orientation
(c)
Employee Assessment
|
Personal Objectives
(5)
|
(a)
Training & Development
(b)
Performance Appraisals
(c)
Placement & Orientation
(d)
Compensation
(e)
Employee Assessment
|
MANAGERIAL FUNCTIONS OF HRM
1.
Planning: Research and plan about wage trends,
labour market conditions, union demands and other personnel benefits.
Forecasting manpower needs etc.
2.
Organizing: Organizing manpower
for the achievement of organizational goals and objectives.
3.
Staffing: Recruitment & Selection
4.
Directing: Issuance of orders and instructions,
providing guidance and motivation to managers and employees.
5.
Controlling: Regulating
personnel activities and policies according to plans. Observations and
comparisons of deviations
OPERATIONAL FUNCTIONS OF HRM
1.
Procurement: Planning, Recruitment and Selection,
Induction and Placement
2.
Development: Training, Development, Career planning and
counselling.
3.
Compensation: Wage and Salary determination and
administration
4.
Integration: Integration of human resources with
organization.
5.
Maintenance: Sustaining
and improving working conditions, retentions, employee communication
6.
Separations: Managing
separations caused by resignations, terminations, lay offs, death, medical
sickness etc.
CHALLENGES OF HRM IN INDIAN ECONOMY
The job of HRM
department in India India
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.
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 handle.
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 what ever cost.
8.
Managing the Managers: Managing the managers is most difficult. Armed
with inside information, they can not 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 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.
STRATEGIC HUMAN RESOURCE MANAGEMENT
Strategy:
“Strategy is a way of
doing something. It includes the formulation of goals and setting of action
plans for accomplishment of that goal.”
Strategic Management:
“A Process of
formulating, implementing and evaluating business strategies to achieve
organizational objectives is called Strategic Management”
Definition of Strategic Management
“Strategic Management
is that set of managerial decisions and actions that determine the long-term
performance of a corporation. It includes environmental scanning, strategy
formulation, strategy implementation, evaluation and control.”
The study of
strategic management therefore emphasizes monitoring and evaluating
environmental opportunities and threats in the light of a corporation’s
strengths and weaknesses.
STEPS IN STRATEGIC MANAGEMENT
1.
Environmental Scanning: Analyze the Opportunities and Threats in
External Environment
2.
Strategy Formulation: Formulate Strategies to match Strengths and
Weaknesses. It can be done at Corporate level, Business Unit Level and
Functional Level.
3.
Strategy Implementation: Implement the
Strategies
4.
Evaluation & Control: Ensure the
organizational objectives are met.
IMPORTANCE & BENEFITS OF STRATEGIC MANAGEMENT
1.
Allows identification, prioritization and exploration
of opportunities.
2.
Provides an objective view of management problems.
3.
Represents framework for improved co-ordination and
control
4.
Minimizes the effects of adverse conditions and
changes
5.
Allows major decisions to better support established
objectives
6.
Allows more effective allocation of time and resources
7.
Avoids ad hoc
decisions
8.
Helps to integrate the individual behaviours
9.
Encourages forward thinking
10.
Encourages favourable attitude towards change.
ROLE OF HRM IN STRATEGIC MANAGEMENT
Role in Strategy Formulation: HRM is in a unique position to supply
competitive intelligence that may be useful in strategy formulation. Details
regarding advanced incentive plans used by competitors, opinion survey data
from employees, elicit information about customer complaints, information about
pending legislation etc. can be provided by HRM. Unique HR capabilities serve
as a driving force in strategy formulation.
Role in Strategy Implementation: HR Manager helps
strategy implementation by supplying competent people. Additionally, HRM
facilitates strategy implementation by encouraging proactive thinking,
communicating goals and improving productivity and quality.
HUMAN RESOURCE DEVELOPMENT
Human Resource
Development is a process to help people to acquire competencies and to increase
their knowledge, skills and capabilities for better performance and higher
productivity.
Definition 1:
HRD is a process of
enhancing the physical, mental and emotional capacities of individuals for
productive work.
Definition 2:
HRD means to bring
about the possibility of performance improvement and individual growth.
PROACTIVE HRD STRATEGIES FOR LONG TERM PLANNING AND GROWTH
Like quoted earlier,
employee retention has become bigger challenge than employee hiring today. With
trade unions breathing their last, and easy job availability, employees have
developed propensity to switch jobs for minor reasons without voicing their
protest. Thus, HRD has to take a proactive approach, that is, to seek
preventive care in human relations. By using HRD strategies, maximization of
efficiency and productivity could be achieved through qualitative growth of
people.
Long-term growth can
also be planned by creating highly inspired groups of employees with high
aspirations to diversify around core competencies and to build new
organizational responses for coping with change.
A proactive HRD
strategy can implement plans directed at improving personal competence and
productive potentials of human resources.
Following strategic
choices can be considered which would help today’s organizations to survive and
grow.
Change Management: Manage
change properly and become an effective change agent rather than being a victim
of change itself.
Values: Adopt proactive HRD measures, which encourage
values of trust, autonomy, proactive approach and experimentation.
Maximize Productivity and Efficiency: Maximize
productivity and efficiency of the organization by helping qualitative growth
of people.
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