1_INTRODUCTION TO HRM AND ENVIRONMENT.docx

**1** **INTRODUCTION TO HUMAN RESOURCE MANAGEMENT AND ENVIRONMENT** **OBJECTIVE OF THE UNIT** After the completion of the unit, the student will be able to 1\. Understand the nature of Human Resource Management 2\. Know the differences Between Personnel Management and Human Resource Management...

**1** **INTRODUCTION TO HUMAN RESOURCE MANAGEMENT AND ENVIRONMENT** **OBJECTIVE OF THE UNIT** After the completion of the unit, the student will be able to 1\. Understand the nature of Human Resource Management 2\. Know the differences Between Personnel Management and Human Resource Management 3\. Understand the Objectives of Human Resource Management 4\. Know the Functions of Human Resource Management 5\. Understand the Importance of Human Resource Management 6\. Understand the Legacy of HRM 7\. Highlight the future Challenges before the Managers 8\. Understand the New Role of Human Resource Management **INTRODUCTION** Human Resource Management (HRM) is a relatively new approach to managing people in any organization. People are considered the critical resource in this approach. It is concerned with the people dimension in the management of an organization. Since an organization is a body of people, their acquisition, development of skills, motivation for higher levels of attainments, and maintenance of their level of commitment are all significant activities. These activities fall in the domain of HRM. Human Resource Management consists of four main activities: acquisition, development, motivation, and maintenance of human resources. Scott, Clothier, and Spriegel have defined Human Resource Management as that branch of management responsible on a staff basis for concentrating on those aspects of operations primarily concerned with the relationship of management to employees and employees to employees and with the development of the individual and the group. Human Resource Management is responsible for maintaining good human relations in the organization. It is also concerned with the development of individuals and achieving the integration of the goals of the organization and those of the individuals. Northcott considers human resource management as an extension of general management, that of prompting and 2 stimulating every employee to make their entire contribution to the purpose of a business. Human resource management must be distinct from the essential managerial function. It is a significant component of the broader administrative role. French Wendell defines ―Human resource management as the recruitment, selection, development, utilization, compensation, and motivation of human resources by the organization. According to Edwin B. Flippo, ―Human resource management is planning, organizing, directing, and controlling procurement, development, and resources to accomplish individual and societal objectives. This definition reveals that human resource (HR) management deals with the planning, organizing, directing, and controlling of the personnel functions of the enterprise. **NATURE OF HUMAN RESOURCE MANAGEMENT** The emergence of human resource management can be attributed to the writings of human relationists who attached great significance to the human factor. Lawrence Appley remarked, ―Management is personnel administration. This view is partially true as management is concerned with the efficient and effective use of human and non-human resources. Thus, human resource management is only a part of the management process. At the same time, it must be recognized that human resource management is inherent in the management process. All the managers perform this function. To get the best of his people, a manager must select people working under him and help develop, motivate, and guide them. However, he can take the help of the specialized services of the personnel department in discharging this responsibility. The nature of human resource management has been highlighted in its features: **1. Inherent Part of Management:** Human resource management is inherent in the management process. This function is performed by all the organization\'s managers rather than the personnel department. To get the best of his people, a manager must primarily select people who will work under him. **2. Pervasive Function:** Human Resource Management is a pervasive management function. It is performed by all managers at various levels in the organization. It is not a responsibility that a manager can leave entirely to someone else. However, he may secure advice and help manage people from experts with special competence in personnel management and industrial relations. **3. Basic to all Functional Areas:** Human Resource Management permeates all the functional areas of management, such as production management, financial management, and marketing management. Every manager working in any department, from top to bottom, has to perform the personnel functions. **4. People-Centered:** Human Resource Management is people-centered and relevant in all organizations. It is concerned with all categories of personnel from the top to the bottom of the organization. The broad classification of personnel in an industrial enterprise may be as follows: (i) Blue-collar workers (i.e., those working on machines and engaged in loading, unloading, etc.) and white-collar workers (i.e., clerical employees), (ii) Managerial and non-managerial personnel, (iii) Professionals (such as Chartered Accountant, Company Secretary, Lawyer, etc.) and non-professional personnel. **5. Personnel Activities or Functions:** Human Resource Management involves several functions concerned with managing people at work. It includes workforce planning, employment, placement, training, appraisal, and compensation of employees. For the performance of these activities efficiently, a separate department known as the Personnel Department is created in most organizations. **6. Continuous Process:** Human Resource Management is not a ‗one shot function. It must be performed continuously if the organizational objectives are to be achieved smoothly. **7. Based on Human Relations:** Human Resource Management is concerned with the motivation of human resources in the organization. Human beings can't be dealt with like physical factors of production. Every person has different needs, perceptions, and expectations. The managers should give due attention to these factors. They require human relations skills to deal with the people at work. Human relations skills are also needed in training performance appraisal, transfer, and promotion of subordinates. **Personnel Management VS Human Resource Management:** Contemporary Human Resource Management, as part and parcel of management function, underscores a strategic approach to management in the acquisition, motivation, and management of people at work. Human Resource Management originates from the practices of earlier personnel management, which assisted in the direction of people in an organization setup. Human Resource Management leverages setting up the systems and procedures for ensuring efficiency, control, and equal opportunities for all working for the organization. Human Resource Management (HRM) differs from Personnel Management (PM) in scope and orientation. HRM views people as an essential source or asset to be used for the benefit of organizations, employees, and society. It is emerging as a distinct philosophy of management aiming at policies promoting mutuality-mutual goals, mutual respect, mutual rewards, and responsibilities. The belief is that policies of mutuality will elicit commitment, yielding better economic performance and more excellent Human Resource Development (HRD). Though a distinct philosophy, HRM cannot be treated in isolation. It is being integrated into the overall strategic management of businesses. Further, HRM represents the latest term in the evolution of the subject. There are several similarities between Human Resource Management (HRM) and Personnel Management (PM) (a). Both models emphasize integrating personnel/HRM practices with organizational goals. (b) Both models vest Personnel/HRM firmly in line management. (c) Human Resource Management (HRM) and Personnel Management (PM) both models emphasize the importance of individuals fully developing their abilities for their satisfaction to make their best contribution to organizational success. (d) Both models identify placing the right people into the right jobs as an essential means of integrating personnel/HRM practice with organizational goals. **OBJECTIVES OF HUMAN RESOURCE MANAGEMENT** According to Scott, Clothier, and Spriegal, "The objectives of Human Resource Management in an organization are to obtain maximum individual development, desirable working relationships between employers and employees and employers and employees, and to affect the molding of human resources as contrasted with physical resources." The primary objective of human resource management is to contribute to realizing organizational goals. However, the specific objectives of human resource management are as follows: - To ensure the effective utilization of human resources, all other organizational resources will be efficiently utilized by the human resources**.** - To establish and maintain an adequate organizational structure of relationships among all the organization\'s members by dividing organization tasks into functions, positions, and jobs and by defining clearly the responsibility, accountability, and authority for each job and its relation with other jobs. - To generate maximum development of human resources within the organization by offering opportunities for advancement to employees through training and education. - To ensure respect for human beings by providing various services and welfare facilities to the personnel. - To ensure reconciliation of individual/group goals with those of the organization so that the personnel feels a sense of commitment and loyalty. - To identify and satisfy the needs of individuals by offering various monetary and non-monetary rewards. To achieve the above objectives, human resource management undertakes the following activities. - Human Resource Planning, i.e., determining the number and kinds of personnel required to fill various positions in the organization. - Recruitment, selection, and personnel placement, i.e., employment function. - Training and development of employees for their efficient performance and growth. - Appraisal of the performance of employees and taking corrective steps such as transfer from one job to another. - Motivation of the workforce by providing financial incentives and avenues of promotion. - Remuneration of employees. The employees must be given sufficient wages and fringe benefits to achieve a higher standard of living and to motivate them to show higher productivity. - Social security and welfare of employees. - **FUNCTIONS OF HUMAN RESOURCE MANAGEMENT.** The main functions of human resource management are classified into two categories: (a) Managerial Functions and (b) Operative Functions. a. **Managerial Functions** Following are the managerial functions of Human Resources Management. \(a) preparation of task force; \(b) allocation of work to individuals; \(c) integration of the efforts of the task force; \(d) coordination of the work of an individual with that of the department. b. **Operative Functions:** The following are the Operative Functions of Human Resource Management 1. **Procurement of Personnel:** It is concerned with obtaining the proper kind and number of personnel necessary to accomplish organizational goals. It determines workforce requirements, recruitment, selection, placement, orientation, etc. 2. **Development of Personnel:** Development involves the increase through training. This skill is necessary for proper job performance. In this process, various training techniques are used to develop the employees. Framing a sound promotion policy, determining the basis of promotion, and making performance appraisals are the elements of the personnel development function. 3. **Compensation to Personnel:** Compensation means a determination of adequate and equitable personnel remuneration for their contribution to organization objectives. Determining the monetary compensation for various jobs is one of the most challenging and vital personnel management functions. Several decisions are taken into the function: job evaluation, remuneration, policy, inventive and premium plans, bonus policy, co-partnership, etc. It also assists the organization in adopting suitable wages and salaries, policies, and payment of wages and salaries at the right time. 4. 5. **4. Maintaining Good Industrial Relations:** Human Resource Management covers a wide field. It is intended to reduce strikes, promote industrial peace, provide workers a fair deal, and establish industrial democracy. If the personnel manager cannot make harmonious relations between management and labor, industrial unrest will occur, and millions of person-days will be lost. If labor-management ties are not good, the morale and physical condition of the employees will suffer, and it will be a loss to an organization vis-a-vis the nation. Hence, the personnel manager must create harmonious relations with the help of a sufficient communication system and co-partnership. **IMPORTANCE OF HUMAN RESOURCE MANAGEMENT** Human Resource Management is a place of great importance. According to **Peter F. Drucker,** "The proper or improper use of the different factors of production depends on the wishes of the human resources. Hence, besides other resources, human resources need more development. Human resources can increase cooperation but require proper and efficient management to guide it." The importance of personnel management is, in reality, the labor functions of the personnel department, which are indispensable to the management activity itself. Because of the following reasons, human resource management holds a place of importance. 1. 2. 3. 4. 5. 6. 7. 8. Thus, the role of human resource management is vital in an organization, and it should be supported, especially in large-scale enterprises. It is the key to the whole organization and related to all other management activities, i.e., marketing, production, finance, etc. Human Resource Management is concerned with managing people as an organizational resource rather than as factors of production. It involves a system to be followed in business firms to recruit, select, hire, train, and develop human assets. It is concerned with the people dimension of an organization. To a great extent, attaining organizational objectives depends on how management recruits, designs, and utilizes people. Therefore, properly coordinating human efforts and effectively using human and other resources is necessary. **Legacy of HRM :** The legacy of HRM needs to be analyzed from two different perspectives to get a better insight into its nature. These are (a) the Western context and (b) the Indian context. a. **Western Context:** The origin of HRM, as it is known today, dates back to ancient times. One finds a reference to HR policy as early as 400 B.C. when the Chaldeans had a sound incentive wage plan. All that has changed over the years is the employees\' status, roles, and relationships, personal and inter-group. The quality of labor before the Industrial Revolution was deficient, and the relationships were characterized by slavery, seldom, and a guild system. The enslaved people performed manual agricultural, military, and clerical tasks. The efficiency levels were low due to over-dependence on negative incentives and negligence of positive incentives. administration, employee benefit schemes and services, training and development, and other allied services. The top management started encouraging middle-level line managers to consult personnel departments in these respects. Later, this department acquired recognition as staff to the working line. This led to multiple personnel jobs instead of a single, stereotyped task. The personnel or human resource manager became a part of top management. **FUTURE CHALLENGES BEFORE THE MANAGERS** Because of continuously changing socioeconomic, technological, and political conditions, the human resource managers of the future shall have to face more problems in labor management. If they correct themselves, today\'s human resource managers may need to be updated due to environmental changes. Some of the critical challenges that might be faced by the managers in the management of people in business and industry are discussed below: **1. Increasing Size of Workforce:** The size of organizations is increasing. A large number of multinational organizations have grown over the years. The number of people working in the organization has also increased. Managing an increased workforce might create new problems and challenges as the workers become more conscious of their rights. **2. Increase in Education Level:** The governments of various countries are taking steps to eradicate illiteracy and increase the education level of their citizens. Educated consumers and workers will create very tough tasks for future managers. **3. Technological Advances:** With the changes coming in the wake of advanced technology, new jobs are created, and many old jobs become redundant. There is a general apprehension of immediate unemployment. In today\'s competitive world, the industry can only hope to survive for a while with old technology. The problem of unemployment resulting from modernization will be solved by adequately assessing workforce needs and training redundant employees in alternate skills. **4. Changes in Political Environment:** There may be more significant Government interference in business to safeguard the interests of workers, consumers, and the public. The government 's participation in trade, commerce, and industry will pose many challenges before management. The Government may restrict the scope of the private sector in certain areas in the public interest. It does not mean chances of cooperation between the Government and private industry are ruled out. There will be more and more joint-sector enterprises. **5. Increasing Aspirations of Employees:** Considerable changes have been noted in the workers of today in comparison to their counterparts of the 1950s. The workers are becoming more aware of their higher-level needs, which would intensify further in future workers. **6. Changing Psychosocial System:** In the future, organizations must use advanced technology to accomplish their goals while satisfying human needs. In the traditional bureaucratic model, the organizations were designed to achieve technical functions with little consideration for the psychosocial system. However, future management would be required to ensure the effective participation of lower levels in managing the organization system. **7. Computerized Information System:** In the past, the automation of manufacturing processes had a significant effect on the systems of production, storage, handling, packaging, etc. More recently, there has been, and in the future, there will be, the impact of revolutionary computerized information systems on management. This revolutionary development would cover two primary areas of personnel management, which are as follows : (a) The use of electronic computers for the collection and processing of data **8. Mobility of Professional Personnel:** Organizations will expand the use of "boundary agents‖ whose primary function will be achieving coordination with the environment. One interesting fact will be increased managerial and professional personnel mobility between organizations. As individuals develop more excellent technical and professional expertise, their services will be in greater demand by other environmental organizations. **9. Changes in Legal Environment:** Many changes are taking place in the legal framework within which the industrial relations systems in the country are now functioning. It is the duty of the human resource or personnel executive to be aware of these changes and to bring about necessary adjustments within the organizations so that greater utilization of human resources can be achieved. This is and will remain a significant challenge for the personnel executive. 10. **Management of Human Relations:** On the ‗industrial relations front, things are not showing much improvement even after so many efforts by the government in this direction. Though many factors are responsible for industrial unrest, a significant cause is the growth of multifunction in industrial complexes with different political affiliations. Under the present conditions, inter-union rivalries would grow more in the coming years and might create more problems in the industry. **The New Role of Human Resource Management** in the new Millenium' has undergone a significant revolution by questioning the accepted practices and re-inventing the organizations and structures. Many traditional methods have been thrown out. For example, it can be seen that hierarchies are vanishing, and there is a greater emphasis on flat organizations. It means a great deal of specialization and skills. It also means upgrading the norms and standards of work and performance. The new role of human resource management is much more strategic than before. Some of the new directions of the role of HRM can be summed up as follows: **1. A Facilitator of Change:** To carry people through upheaval requires appropriately managing human resources. **2. An Integrated Approach to Management:** Human resources is a core activity that shapes a company's values rather than being an isolated function. In particular, this can have an impact on customer service. **3. A Mediator:** Establishing and balancing the new and emerging aspirations and requirements of the company and the individual. These changes, which are taking place, involve more organizational commitment to the development of people by improving performance and cutting costs. As a result of this, the duration of tenure, which was traditionally long-standing, is now limited, the future is becoming less specific, management opportunities are self-determined, and motivational factors are more concerned with enhancing future employability rather than loyalty to the company, and, at the same time, the rewards are going up in terms of higher salaries. Future creative careers will require a more involved approach to career development, including: 1. Share employees with strategic partner organizations (customers of suppliers) instead of internal moves. 2. Encourage independence: Employees may go elsewhere for career development possibly to return in a few years. 3. Fund groups of employees to set up as suppliers outside the organization. 4. Encourage employees to think of themselves as a business and of the organization's various departments as customers. 5. Encourage employees to develop customers outside the organization. 6. Help employees develop self-marketing, networking, and consultancy skills to discover, recognize, or create new opportunities for themselves and the organization. 7. Identify skilled individuals in other organizations who can contribute on a temporary project basis or part-time. 8. Regularly expose employees to new people and ideas to stimulate innovation. 9. Balance external recruitment at all levels against internal promotion to encourage open competition ―competitive tendering‖ for jobs to discourage seeing positions as someone's territory, which causes self-protective conformity. 10. Forster more cross-functional teamwork for self-development. 11. Eliminate the culture of valuing positions as career goals in favor of portraying a career as a succession of more significant projects, achievements, and new skills learned. The concept of ―position is part of the outside static concept of the organization. Positions are out. Processes and projects are in. 12. Abandon top-down performance appraisal in favor of self-appraisal based on internal customer satisfaction surveys and assessing people as you would suppliers. (xiii) Replace top-down assessment processes with self-assessment techniques and measure performance in terms of results. **Functions of a Human Resource Manager** A human resource manager, charged with fulfilling the objectives of an organization, should be a leader with high intellectual powers, a visionary, and a philosopher who provides the initiative to shape the future in terms of leading human beings in an organization toward more prosperous and progressive policies. **1. Human Resource Man as an Intellectual:** The fundamental skill in the human resource field, as compared to technologists or financial experts, is the skill to communicate, articulate, understand, and above all, to be an expert when it comes to putting policies and agreements in black and white. The personnel man's skill lies in his command over the language. A personnel man must deal with employees and possess the skills to conduct fruitful, systematic discussions and communicate effectively. He should also be able to formulate principles and foresee the organization\'s problems. This means he would require the mental ability to deal with his people intelligently and understand what they are trying to say. **2. Human Resource Man as an Educator:** More than a human resource man has command over the language, which, however, remains his primary tool. He should be deeply interested in learning and also in achieving growth. Human beings like to grow and realize their full potential. To harmonize the development of individuals with that of the organization, a personnel administrator must provide opportunities for his employees to learn, get the required training, assimilate new ideas, and be a teacher. A personnel man who pushes files and attends labor courts for conciliation purposes and other rituals of legal procedure for settling industrial disputes is not a personnel administrator of the future. **3. Human Resource Man as a Discriminator:** A human resource administrator must be able to discriminate between right and wrong, just and unjust, and merit and non-merit. In other words, he should be a good judge when he sits on a selection board, a fair person when he advises on disciplinary matters, and a reasonable observer of proper conduct in an organization. **4. Human Resource Man as an Executive:** The human resource man must execute the decisions of the management and its policies with speed, accuracy, and objectivity. He has to streamline the office, tone up the administration, and set performance standards. He has to coordinate the control functions of the various other divisions, and in doing so, he should be in a position to bring unity of purpose and direction in the activities of the personnel department. He must ask relevant questions rather than merely be involved in the office routine whereby the status quo is maintained. He should be inquisitive to determine the causes of delay, tardy work, and wasteful practices. He should be keen to eliminate those activities from the personnel functions which have either outlived their utility or need to be consistent with the objectives and purposes of the organization. **5. Human Resource Man as a Leader:** Being concerned with people or groups of people and placed in the group dynamics of various political and social functions of an organization, a Human resource man must respect the leadership role in an organization. By setting his example and working towards the objectives of sound personnel management practices, he must inspire his people and motivate them towards better performance. He should resolve different groups\' conflicts and build teamwork in the organization. **6. Human Resource Man as a Humanist:** Deep faith in human values and empathy with human problems, especially in less developed countries, are the sine qua non for a Human resource man. He has to deal with people who toil at various levels and share their joys and sorrows. He must perform his functions with sensitivity and feeling. **7. Human Resource Man as a Visionary:** While every leading function of an organization must evolve its vision of the future, the primary responsibility for developing the social organization towards purposive and progressive action falls on the personnel man. He should be a thinker who sets the pace for policy-making in an organization in human relations and should gradually work out new patterns of human relations management consistent with the organization\'s and society\'s needs. He must ponder on the social obligations of the enterprise, especially in the public sector, where one has to work within the framework of social accountability. He should be in close touch with socio-economic changes in the country. He should be able to forecast future events reasonably and should constantly strive to meet the coming challenges. **Role and Challenges of Human Resource Manager** **A** Human Resource (HR) Department is established in every organization under the charge of an executive, a Human Resource Manager. This department plays a vital role in the efficient management of human resources. The human resource department assists and provides service to all other departments on personnel matters. Though the personnel or human resource manager is a staff officer in other enterprise departments, he has a line authority to get orders executed within his department. The human resource manager performs managerial functions like planning, organizing, directing, and controlling to manage his department. He must also perform specific operative tasks like recruitment, selection, training, placement, etc., which the other line managers may entrust him. He is a manager, whatever the nature of his operative functions. The status of the Human Resource Manager in an organization depends upon the type of organizational structure. **Role of Human Resource Manager in an Organization** In most prominent enterprises, the human resource department is set up under a personnel manager with specialized knowledge and skills. The human resource manager performs managerial as well as operative functions. Since he is a manager, he conducts essential management functions like planning, organizing, directing, and controlling to manage his department. He also has to achieve specific operative tasks of recruitment, selection, training, placement, etc., which, the management problems, the human resource managers attach the highest priority to the settlement of industrial disputes than anything else. The role of human resource management in industry is underlined by the complex and dynamic environment under which modern large-scale industries function. The impact of technology on organization structure, the politicization of workers\' unions, and the growing consciousness of industrial employees about their rights and privileges have made personnel management increasingly more important in industrial undertakings. The task has also been facilitated by the greater recognition of the value of human resources in the industry and the application of human resource development (HRD) techniques by enlightened managers in modern organizations.