UNIT—1

Personnel Management and the new approach of Human

Resource Management

Although the field of personnel management as a discipline

of study is relatively new, the ideas upon which its current
concepts are based had their origins deep in history. For
example, the minimum wages rate and Babylonian code of
Hammurabi around 1800 BC.

In India, Kautilya has observed that there existed a sound base for
systematic management of human resources as early as the fourth century
BC. The government then took active interest in the operation of
public and private sector for regulating employer-employee
relationship.

Evolution of personnel mgmt.

After the 2 world war when industrialization came into

existence, there was a rapid growth of industries and
basically then came into being of two divisions labour and
management. People at those times understood only two
terms
1.labour
2. Management.
But slowly this concept changed. People started realizing
that organizations in which they work are not just offices but
their second homes. Because most of there time or rather
majority of their time they spend at the workplace. So if this
workplace is turned into happy place where people enjoy
their work, enjoy working with their superiors and
subordinates then there would be no problems and no
hassles at all.
With this concept or idea personnel management was born.
Here we believe that men when they come to work come
first as human beings then they come with their respective
designations. We are first humans i.e., we have our own
emotions, feelings, perceptions, attitudes, values,
judgements, backgrounds, educations etc.,
Therefore to cater to all these attributes and motivate
employees to work in a proper channel personnel mgmt was
evolved.
We all know an organization is a place where two or more
persons come together and work to achieve a common goal.
There can be any sort of organizations like manufacturing
units, service sectors, government organizations, public
limited companies etc.
Whatever may be the organization primarily it is the human
beings who are working there. So in short organizations are
made of human beings. And taking care of these human
wealth is utmost important to the company/organization.
All these organizations which exist today, exist for some
reason i.e., they try to serve some purpose in the society
e.g. if hospital exist it tries to provide health services to the
people. If a police station exist it tries to provide security
services to the people thereon we have many institutions
like this. But the basic purpose is they have an objective
/goal for there existence. Therefore any organizations will
have objective or multiple objectives to serve members of
different category of people. In order to achieve the goals a
well-run organization works out a set of rules sometimes
called policies, programmes, rules, regulations, procedures
or guidelines and sanctions. These are designed not to
restrict creativity but to assist its members in
accomplishment of the organizational goals. Therefore now
we understood human resources are most important part of
any organization.
There are other things, which are also important in any
organization to achieve its objectives they are material,
money, machinery. in short there are 4M’S i.e., including the
MEN. But human beings are the only living resources
available to the management in an organization, so these
resources
have to be coordinated with other resources like money,
machinery and material so as to achieve organizational
objectives.
In brief we can say human beings efficiency, effectiveness
and productivity will determine to what degree we can
achieve organizations goal.

PEOPLE AT WORK

Now that we know the most important factor of any

organization is human resource so, this factor has to be
taken care of. We can say human resource is nothing but
people at work. Therefore we can define human resource as
nothing but pool of knowledge, skills, creative, abilities,
talents, and aptitudes. It is this human resource, which is of
paramount importance in the success of any organization,
because most of the problems in organizational settings are
human and social rather than physical, technical or rather
economical.
“PEOPLE AT WORK” comprises a large number of individuals
of different sex, age, socio-religious group and different
educational backgrounds. Now this is where the problem
arises. Since we know, no two individuals are same. There
behaviour is also not same. Thus we can say that these
individuals in the work place exhibit not only similar
behaviour patterns but they exhibit dissimilarities also.
Now as we get on to the topic we will move a little deeper.
So far we were talking at a macro level “human resources”
or “people at work” etc., but when we break up into smaller
portions or segments we call them individuals. Or rather at
micro level we call them employees of the organization.
Therefore management must, be aware not only of the
organizational goals but also employee and if needs have to
be taken care of. None of them can be ignored.
In today’s world every organization has an internal
management system and external system to which it
encounters everyday. In brief internals are “ people at work”
or “people who manage them” these are called managers.
The external environment, which these managers face day in
and day out, are “ customers, shareholders, the
entrepreneurs, government, suppliers etc.,
Therefore to coordinate internally and externally a manager
develops 4 dimensional relationships, they are

1.those between management and workers

2.those among the workers themselves
3.those among the managerial personnel
4. Those among different members of the
organizations
Therefore now we are in a position to understand that
management of men is a challenging job. Reason as we all
know men are dynamic in nature. Hence we can say
manpower management is a most crucial job because
managing people is the heart and essence of being a
manager. Since now we are clear about personnel and there
management we can now define it
These are some of the standard definitions.

“ The Management Of Human Resources Is Viewed As

A System In Which Participants Seeks To Attain Both
Individual And Group Goals.”

“ It is that phase of management which deals with

the effective control and use of manpower as
distinguished from other resources of power”

Edward FLIPPO states “personnel management is the

planning, organizing, directing and controlling of the
procurement, development, compensation,
integration, maintenance and separation of human
resources to the end that individual, organizational
and societal objectives are accomplished.”
The Indian institute of personnel management,
London, formulated an official definition of personnel
management after the Second World War.
“Personnel management is that part of the
management function which is primarily concerned
with the human relationships within an organization.
Its objective is the maintenance of those
relationships on a basis which, by consideration of
the well-being of the individual, enables all those
engaged in the undertaking to make their maximum
personal contribution to the effective working of that
undertaking.”

Growth of personnel management in India

In India there were various reasons why personnel

management evolved the main important reason being
labour officers in Indian industry which was realized as early
as 1929.when royal commission on labour was set up in
1931 the commission recommended the appointment of
labour officer in order to protect the workers from evils of
robbery and indebtedness. And to safe guard their interests.
During the Second World War, these labour officers or
relations officers were entrusted to handle grievances. Their
functions were subsequently enlarged and were influenced
by social reform movement in the country, public concern for
improving labour administration and the growth of the
modern management movement. Their core functions
included activities relating to welfare, personnel and
industrial relations.
Although we know this field is recent origin lets us see in
detail its chronological growth

Era of industrial revolution:

In industrial revolution or we can call it evolution there were
several phases.
We can now understand human resource management term
came into being .HRM of an organization consist of all people
who perform its activities. In
other words all the decisions that effect workforce is HRM
function. Regardless of the size or existence of a formal
function.

HRM activities are divided into 5 major domains

1.Organizational Design
Human resource planning
Job analysis/work analysis
Job design
Information systems
2.Staffing
Recruiting/interviewing/hiring
Affirmative action
Promotion /transfer/separation
Outplacement services
Employee selection methods
Induction/orientation
3.Performance management and appraisal
Management appraisal/management by objectives
Productivity/enhancement programs
Customer-focused performance appraisal
Multilateral systems
4.Employee training and organizational developments
Management/supervisory development
Career planning
Employee assistance/counselling
Attitude surveys
Training delivery options
Diversity programs
5. Reward systems, benefits and compliance
Safety programs
Health/medical services
Complaint/ disciplinary procedures
Compensation administration
Wage/salary administration
Insurance benefits administration
Unemployment compensation
Pension/profit sharing plans
Labour relations/collective bargaining

The welfare tradition:

After independence , the factory act ,1948 provided for the

statutory appointment of a welfare officer in factories.
Section 49 of the factories act lays down that:
1. if more than 500 worker are working in an orz, a
welfare officer should be appointed
2. the state government may prescribe the duties ,
qualifications & conditions of services of welfare officer
employed.

According to the Plantation act 1951, Wherein 300 or

more workers are ordinarily employed the employer shall
employ such no welfare officer as many be prescribed.

The Mines act,1952 also provides that every mine

wherein 500 or more persons are ordinarily employed ,the
owner, agent or manager has to appoint a suitably qualified
person as welfare officer.

The Control of Labour Tradition :

Personnel management at this stage was mainly concerned

with “Hiring and firing of people”
They were also responsible for wages & salary
administration and transfer, layoff, retrenchment and
termination of workers in case of surplus labour in the
factory.

The Industrial Relation Tradition:

The industrial or labour relations aspect is concerned with

the company’s relations with the employees as a group and
include union –mgmt relations, joint consultation, negotiating
& collecting bargaining , Discipliner action ,grievance
handling &settlement, interpretation of implementation of
industrial laws, contracting lawyers regarding court cases,
filling suits in labour courts, industrial tribunals.

Professional Tradition:

Personnel Mgmt is that form of mgmt where the decision

making process rest with the professional mgrs where there
is a divarce b/w capital &control and where the owner of
business r functionless owner.
Criteria of Profession;
1. It require advanced specialized formal education and
training.
2. require a consistent exercise of direction &independent
judgment.
3. Based on deep recognized body of knowledge.
4. Effort are made to expend knowledge & develop a
sense of ethics & public responsibility.

Difference Between HRM & Personnel Management

Dimension Personnel Mgmt HRM

1. Employment Careful Aim to go beyond

contract delineation of contract
written contracts

2. Rules Importance of ‘Can do, outlook,

devising clear rules impatience with
rule
3.Guide to mgmt Procedures Business need
action
4.Behaviour Norms/customs & Values/mission
referent practices
 monitoring
5.Managerial tasks Monitoring Nurturing
6.key relations Labour mgmt Customer
7. Initiative Piecemeal Integrated
8. Speed of Slow Fast
decision
9.Management Transactional Transformational
role Leadership
10.Communication Indirect Direct
11.Prized Mgmt Negotiation Facilitation
skills
Selection Separate, marginal Integrated, key
task task
12.pay Job evaluation Performance
related
13.Condition Separately Harmonization
Negotiated
14.Labour mgmt Collective Individual
Bargaining contracts
contracts
15.Job Categories Many Few
16.Job Design Division Of Labour Teamwork
17.Conflict Reach temporary Manage climate
handling truce &culture

Function of Personnel Management

Managerial Function

1. -Planning
2. Organizing
3. Directing
4. Motivating
5. Controlling
Operative function
1. Procurement of Personnel
2. Development of Personnel
3. Compensation of Personnel
4. Integration
5. Maintenance of employee

HRM Model
Nature of HRM

Job analysis

Recruitment

Selection
placement

promotion
 Safety & health

Competent and
Industrial Relation, Dispute & their willing workforce
settlement

Communication
Organizational
goals
Welfare

Participative Mgmt

Remuneration

Motivation

Training and Development

Objective of HRM:

To increase welfare of Human resources:

Basic objective of HR is to increase welfare of worker & employee engaged

in an enterprise, best working condition should be provided &many welfare
prog. Must be launched so that employer may get facility of health &
recreation.

Establish Harmonious relationship b/w labour & capital:

The philosophy of modern management is that contribution of labour is nt

less important than that of the capital. Manager realize that they cant make
use of capital without cooperation of labour.

To arrange effective communication with employees:

Efffective HR
Policies order & direction effective Problems
Grievance
Effective Industrial Communication
Policy Of supervisors &employer
(EMPLOYER) (EMPLOYEE)

To Develop Employee:

Development of Employee Run short run & Long run Training

Programme
Employee Exchange Programme

Other objects:

1. To arrange for sufficient no of efficient ,capable & expressed

employees in all dept & at all level of mgmt
2. To motivate employees so that productivity of enterprise may be
increased
3. to increase morale of employees
4. to provide best working condition to the employee so that may
complete their work in most efficient manner.
 Importance of HRM:

The human relation and human behaviour school of mgmt has

emphasized the role of ppl in work organizations. Personnel psychology,
sociology & other related behavioral sciences have emphasized the
importance of treating ppl in organization so as to get desired results
effectively.
HRM involves the effective & efficient utilization of HR of an
organization. It guides the personnel into the dynamic organizations that
attains its objectives with a high degree of morale 7& to the satisfaction
of those concerned.

Importance for Individual Enterprise: includes:

• Securing willing cooperation of the employees for
achieving goals of the enterprise & fulfilling their own social & other
psychological needs of recognition, self actualization & esteem
• Creating right attitude among the employees through
effective motivation.
• Utilizing effectively the available HR

Professional Importance- These includes:

• Providing maximum opportunity for personnel development

• Providing healthy relationship b/w different work gps so that work is
effectively performed.
• Correcting the errors of wrong posting & proper reallocation work
• Maintaining the dignity of the employee as a human being.

Social Importance: These includes:

• Providing suitable and most productive employment which might bring

them psychological satisfaction.
• By helping ppl make their own decisions
• Making maximum utilization of the resources in an effective manner and
paying the employee a reasonable compensation in proportion to the
contribution made by him.
• Maintaining a balance b/w the jobs available and the job seekers,
according to the qualification and needs.
 Role & Function of HRM

COMPANY OBJECTIVES& STRATEGIC PLANS

Mkt forcast Production capital/financialplan ( Phase 1)

Objective /Process

Time Horizon( Short /Long term)

HR Demand HR supply
Forecast
Forecast Estimating HR Requirement based
On objective & Top mgmt approval HR inventory
• Norms
• Number
• Category (Phase 2)
• Skills
Action Plan
Recruitment (Phase 3)
Retraining
Redundancy
Productivity
Retention

Monitoring & control

The Inception Function

1. Development function

2. Motivation Function

3. Maintenance Function

4. Training & Development Function

5. Compensation & Benefits Function

 HRM within Organization Structure

Organization structure is the pattern of organizational hierarchy based on

the authority responsibility relationship.

According to Lounsbury Fish,”Organization structure is more than a

chart .It is a mechanism through which management directs ,co-
ordinates & control the business. It is the foundation of management.

Factor Affecting The organization Structure:

• Structural management:

Structural Mgmt is necessary for efficient orgz structure bcoz it is the

structural arrangement which ensure smoothly functioning of all dept.

• Continuity:
It should be able to fulfill not only the immediate targets of the enterprise
but also the long terms plans of the enterprise.

• Provision for top Mgmt:

• Departmentation of activities:

Departmentation according to regions

Departmentation acc to functions
------------------------acc to market
-----------------------acc to production
-----------------------acc to enterprise.

• Balance:
The principle of balance must be also considered & followed while
determining the orgz structure of an enterprise.

• Convenient unit:
While determining the orgz of structure of an enterprise is that the units of
central must be convenient.
 Human Resource Development Department(Personnel Dept) in a
small business unit-
Small business organization is that organization which les than 100
employees in all. In small business unit HR Manager is appointed to
perform the staff function .The HR mgr act as on advisor to top mgmt
& assist top mgmt is performing various personnel functions.

Owner/Mgr (Small Unit)

Production Sales Mgr Office mgr Account

Personnel Assistant

Human Resource Dept in Large Scale Unit

Board of directors

General Manager

Director production/ finance/Marketing/Personnel /HR

Mgr Personnel Mgr Admin Mgr HRD Mgr IR

Appraisal Training & Development

HRP Hiring Grievance Handling Compensation

 Role Of Personnel Mgr

1. Personnel role
• Advisory: Advising mgmt on effective use of HR

Manpower Planning:
• Recruitment, selection
Training & Development of lineman
• Measurement & assessment of individual & group behaviour

2. Welfare role
• research in personnel &orgzl problems.
• managing services
• Group dynamics ,counseling, Motivation, Leadership,
communication

3. Admin. Role
• Time keeping
• salary & wages administration
• Maintenance records
• Human Engineering- Man –Machine relationship

4. Firefighting legal roles

• Grievance Handling
• Settlement of dispute
• Handling disciplinary action
• Collective Bargaining
• Joint consultation
Difference between HRD &HRM and HRP

Human Resource Development:

It develop human resource its strength, talent, capability of employees

so that they achieve orgzl goal as well as attain better job satisfaction
& adjustment to work culture.
Human Resource Management:
It involves procedure &practices through which HR are managed i.e
organized & directed towards attainment of individual, social
organizational goal.

Human Resource Planning:

It is a process to ensure that manpower supply equal the manpower
demand at any point in future in the organization.

Reference books for unit one:(for detail just go through these

books):

Aswasthappa: Personnel Management

Edward Flippo: Personnel Management