1

HUMAN RESOURCE
MANAGEMENT
(HRM)
 Introduction
2
Organization is a group of people established either
formally or informally for the attainment of certain
objectives.
So, people are the foundation of any organization.
In societal context, organization need people and people
need organization.
It is people who staff, lead and control organizations.
Persons involved in an organization are referred as
human resource.
Simply, the overall management of such personnel in an
organization is called human resource management
(HRM).
 Who are Human Resource?
3

In organizational context, the personnel involved in

different activities of an organization are the human
resources of that organization.
Such type of personnel (referred as human resources) have
one thing common i.e. fulfillment of their assigned duties &
responsibilities in order to achieve the organizational goal
and objectives.
People become human resource when they involved in any
organization with physical strength, energy and
competencies. Competencies consists of knowledge, skill,
attitudes and potential for growth.
Human resources are effectively mobilized by the
organization for the achievement of desired results.
 Human Resource Management
4

An essential function of management; and also an

important part of every managers job.
HRM is concerned with managing people in
organizations.
It is concerned with philosophy, principles, policies
and practices related to human aspect of
management.
It aims at achieving organizational objectives
through the efficient and effective mobilization of
human resources.
Contd
5

According to Donnelly and Gibson,

HRM is the process of accomplishing organizational
objectives by acquiring, retaining, terminating,
developing and properly using the human resources
in an organization.

According to Gary Dessler,

HRM refers to 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.
 6

Human Resource Management (HRM) is a process

concerned with the management of personnel
along with their energies and competencies for the
achievement of organization objectives by the
process of acquiring, developing and utilizing such
personnel.
 Evolution of HRM
7

A number of academics and practitioners in the past

have contributed a great deal to the development of
HRM.
The history of its development goes back to the early
management pioneers, Robert Owen (1771 1858) and
Charles Babbage (1792 1871).
Similarly, other developments such as the industrial
revolution, the principles of scientific management,
the classical organization theory and more recently, the
behavioral science movement and the organization
development movement have influenced the
development of personnel management and HRM.
 Contd
8

The trend of the development of HRM in the past

can be explained through following periods.

Early Scientific Management
Scientific Management
Human Relations Movement
The New HRM Era
 Early Scientific Management
9

The history can be traced back to the Origin of

Personnel Management. In the beginning of 18th
century, many masons, carpenters, leather workers
and people of other crafts organized themselves into
guilds.
In the later part of 18 th century, the Welfare
Concept was developed by some prominent family
business houses in the UK.
Industrial Revolution started from the late 18th
century. Labor was treated as commodity to be bought
or sold. There was strict system of punctuality and
rigorous working rules.
 Scientific Management
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F.W. Taylor invented principles of scientific

management in the 19th century.
He suggested to plan work and gave methods to
maximize productivity and minimize inefficiencies.
In his studies, he explained less about humanization
of workplaces and focused more on output from the
workers.
 Human Relations Movement
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Elton Mayo and Fritz Roethlisberger investigated the

causes of low productivity different from Taylors
perspective.
The Hawthorne studies (1927 1932) laid the
foundation for the human relations movement and
explain why human elements are important to rise
productivity.
 The HRM Era
12
It was by 1920s, personnel management began to
taught at university level in US.
At the period of 1920s, a number of large companies
established personnel departments.
During 1930 1950, many instances of exploitation of
labor appeared.
Subsequently, a labor relations movement in the form
of Labour Unions and collective bargaining
emerged and remained successful during 1935 1960.
Personnel department started to work in collaboration
with union representatives.
 Contd
13

The HRM era, began in 1950s, comprises

the work of pioneers,

human capital concept,
concept of corporate culture and
the new HRM.
 14

The Work of Pioneers

Peter F. Drucker is the main inventor of HRM
concept. He had suggested how an effective
management contributes to direct all managers
towards a common goal.
Douglas McGregor emphasized the strategic
importance of personal policies and their integration
with business objectives.
 15

Human Capital Concept

T. Schulz invented human capital theory and cited

example of how qualified and committed human

resources contributed in the post war economy of
Germanny and Japan.
 16

Concept of Corporate Culture

The book The art of Japanese Management by R.
Pascale and A. Athos in 1981 stated that shared
values of management and workers are the secret of
Japanese Management.
The book In search of excellence written by T.J.
Peters and R. Waterman in 1982 named 43
successful companies in the U.S. that were driven by
the managers values and achieved productivity by
paying close attention to the needs of their people.
 17

The New HRM

Traditional American personnel management and industrial
relation systems were challenged by the process of
globalization, rapid technological advances, shorter product
lifecycles and changing customers and investors demands.
Many US industries were facing the under-utilization and
unemployment of human resources.
The reasons for such problems were: adverse union-
management relations, low employee motivation & trust in
management, hierarchical management, restrictive work
practices and, finally, resistance of the employees towards
change to cope with the competitive environment.
 18
Promoted by this challenges, American business has begun
to place greater emphasis on the management of human
resources to improve productivity and quality and thus to
be competitive internally and externally.
In academic literature, at least, the terms personnel
management and personnel administration have been
virtually replaced by the term HRM.
In UK, the concept of HRM arrived around 1985 86,
when the British industry was suffering from restructuring
effects due to recession & loss of competitiveness.
Anti-union legislation of the Thatcher government
encouraged firms to introduce new labor practices and re-
order their collective bargaining arrangements.
 Nature of HRM
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Human Focus
People concern, develops & utilize human potential,
regard people as an important asset of organization
Management Function
Applies mgmt principles & functions, perform by all level
of managers
Dynamic
Affected by changes in envn (political-legal, economic,
socio-cultural & technological)
Mutually oriented
Mutuality between employer and employees.
Continuous-ongoing activity
 Components of HRM
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Human Resource Planning

Recruitment & Selection

Performance Management

Training and Development

Employee Management Relation

Management Information System

 HRM Process
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The process of HRM involves attracting, developing

and maintaining a talented and energetic workforce.
The basic goal of HRM is to build organizational
performance capacity by raising human capital, to
ensure that highly capable and enthusiastic people are
always available.
The 3 major responsibilities of HRM are
A.Attracting a quality workforce
B.Developing a quality workforce
C.Maintaining a quality workforce
Contd
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Attracting a quality workforce

Involves human resource planning, employee
recruitment and selection.
Developing a quality workforce
Involves employee orientation, training &
development and performance appraisal
Maintaining a quality workforce
Involves career development, work life balance,
compensation and benefits, retention and turnover,
and labor-management relations.
 Attracting a quality workforce
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Human Resource Planning

Recruitment

Selection.

24
 Developing a quality workforce
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Induction/orientation

Training and Development

Performance Appraisal

 Maintaining a quality workforce
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Career Development

Work-life Balance

Compensation and Benefits

Retention and turnover

Labor-management Relations

Elements & Model of HRM
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 Functions of HRM
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Human Resource Planning

Acquisition of Human Resources
Utilization of Human Resources
Development of Human Resources
Maintenance of Human Resources
Control of Human Resources
Harmonious Employer-Employee Relationship
Attainment of organizational objectives
 System Model of HRM
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Input Process Output

Human energy Organizational

Acquisition
& competencies Goals achievement
Organizational Development
Quality of work life
Utilization
Plan Productivity
HR Plan Maintenance
Readiness for change
HR Inventory Personal
Job Analysis Commitment
Competence
Congruence

Feedback
 Challenges to HRM
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Globalization
Technological Advances
Nature of work
Size & composition of the workforce.
Rising employees' expectations
Life-style changes
Less attached/temporary employees
New HRM concerns
Learning organizations
Impact of new economic policy.
Political ideology of the Government.
 Trends and Issues of HRM
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Issues of HRM in Nepal

Corporate Planning and Objectives

Human Resource Planning

Recruitment, Selection and Placement

Employee training and development

Performance Evaluation

Salary and other benefits

Job Design

Employee Relations
 Barriers to Development of HRM in
Nepal
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HRM in Nepal is mainly concerned with utilizing

human energies.
It is least concerned with developing human
competencies and potential for growth of employees.
Its focus is on achieving organizational goals without
much regard to personal goals of employees.
HRM has not assumed a strategic role in Nepalese
management.
People are not considered as a source of competitive
advantage and important assets.
Contd
33

HRM is not given a strategic role. It lacks clear cut

vision, mission and goals.
The attitudes of top management are not favorable
towards HRM. Human resources are viewed as a cost
rather than assets by management.
HRM is considered as a firefighting job to deal with
labor grievance and indiscipline.
Line managers do not feel ownership for HRM.
Lack of mutual trust between labor and management.
Multiplicity of unions, union challenges, politicialization
of unions and negative attitude of management towards
labor unions.
Contd
34

HR aspects are not considered in policy and plan

formulation.
Human resource development has remained an area
of low priority. This has retarded professionalism in
HRM. Performance based HRM practices are
lacking.
Legal framework has remained weak and largely
welfare oriented.
HRM is short range oriented. It is least concerned
with future potential development of employees.