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 An orgn is made up of 4 resources

◦Money Non Living

◦It is the human that make use of non human

 L. F. Urwick had remarked that

“Business houses are made or broken in

the long run not by markets or capital,
patents or equipments, but by men.”
 As Peter F. Drucker also says

“Men, of all the resources available to

man, can grow and develop.”
 is the effective management of people at
◦ The goal: make workers more satisfied and
◦ When an organization is concerned about people,
its total philosophy, culture, and orientation reflect
 Every manager must be concerned with
people, whether or not there is a human
resources department
It is important to
remember that
the people who do
the work and
create the ideas
allow the
organization to
 Changes experienced by organizations:
◦ Growing global competition
◦ Rapidly expanding technologies
◦ Increased demand for individual, team, and
organizational competencies
◦ Faster cycle times
◦ Increasing legal and compliance scrutiny
◦ Higher customer expectations
 The mechanized, routine-oriented
workforce is giving way to a knowledge-
based workforce
 HRM is process of making the efficient
and effective use of human resources so
that the set goals are achieved.
 Acc to Flippo
“ Personnel mgmt or say HRM is the
planning, organizing, directing or
controlling of the procurement,
development, compensation,
integration, maintenance & separation of
HR to the end that individual, orgnl &
social objectives are achieved.”
 Acc. To Decenzo & Robbins
“ HRM is concerned with the PEOPLE DIMENSION in
management. Since every orgn 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 organisation are
essential to achieve organizational objectives. This
is true regardless to the size of the organization,
government, business, education, health,
recreation, or social action.”
 Acc to Leon C. Megginson
“ From the national point of view, Human
resources are Knowledge, skills ,
creative abilities, talents and attitude
obtained in the population.”
“From the view point of Individual
enterprise, they represent the total of
the inherent abilities, acquired
knowledge and skills as exemplified in
the talents and aptitude of its
 Now human resources are considered
as HUMAN CAPITAL, which can be
classified into 3 categories
 Intellectual Capital
 Social Capital
 Emotional Capital
 Intellectual Capital consists of
specialized knowledge, tacit knowledge
and skills , cognitive complexity , and
learning capacity.
 Social capital is made up of network of
relationships, sociability and
 Emotional capital consists of self
confidence, ambition & courage, risk
bearing ability & resilience.
 In that way, Human Resources refer to
aspects of employees working in an
 Fairness and firmness

 Tact and resourcefulness

 Sympathy and consideration

 Knowledge of labor and other terms

 Broad social outlook

 Others and Academic qualifications

Importance of HRM

 attract and retain talent

 train people for challenging roles
 develop skills and competencies
Good HR Practices help
 promote team spirit
 develop loyalty and commitment
 increase productivity and profits
 improve job satisfaction
 enhance standard of living
Functions of HRM

Managerial Operative Functions

Procurement Development: Motivation and Maintenance: Emerging
– Planning Integration:
Compensation: Issues:
Job Analysis Training Grievances
Job design Health Personnel
HR planning Executive records
Work scheduling Discipline
– Organizing Recruitment development
Safety Personnel
Motivation Teams and
Selection Career teamwork audit
planning Job evaluation Personnel
Placement Welfare Collective
Succession Performance and research
– Directing bargaining
Induction potential HR
appraisal Social security Participation accounting
Internal planning
mobility Compensation Empowerment HRIS
– Controlling Human administration
resources Trade unions Job stress
development Incentives
benefits and Employers’ Mentoring
services associations International
Industrial HRM
HRM as a central subsystem in an

HR Subsystem
Finance Training Marketing
Subsystem Compensation Subsystem

Objectives of HRM
Objectives of the HRM Function

 Increasing employees’ job satisfaction and self-

 Employees must feel that the job is right for their
abilities and that they are being treated equitably
 Satisfied employees are automatically more productive

 However, unsatisfied employees tend to be absent

and quit more often and produce lower-quality work
 Both satisfied and dissatisfied employees can perform
equally in quantitative terms
Objectives of the HRM Function
 Quality of work life (QWL) is a general concept that
refers to several aspects of the job, including:
 Management and supervisory style

 Freedom and autonomy to make decisions on the job

 Satisfactory physical surroundings

 Job safety

 Satisfactory working hours

 Meaningful tasks

 The job and work environment should be structured to

meet as many workers’ needs as possible
Objectives of the HRM Function

 Communicating HRM policies to

all employees:
 HRM policies, programs, and procedures must be
communicated fully and effectively
 They must be represented to outsiders

 Top-level managers must understand what HRM can

Objectives of the HRM Function

 Maintaining ethical policies and socially responsible

 HRM managers must show by example that HRM
activities are fair, truthful, and honorable
 People must not be discriminated against

 Their basic rights must be protected

 These principles should apply to all activities in the

HRM area
Objectives of the HRM Function

 Managing increased urgency and faster cycle times:

 Firms are placing a growing emphasis on:

 Increasing customer service

 Developing new products and services

 Training and educating technicians, managers,

and decision makers
 Shorter cycle times mean less time to:
 Train, educate, and assign managers

 Recruit and select talented people

 Improve the firm’s image

 Learning provides a framework for decreasing

cycle time
HRM’s Place in Management

 The HR department must be a proactive, integral part

of management and strategic planning
 Ascertain specific organizational needs for the
use of its competence
 Evaluate the use and satisfaction among other
 Educate management and employees about the
availability and use of HRM services
 HRM strategic plans must build on the firm's strengths
HR Audit Recruitment,
HR Accounting Selection
HRIS Placement

Remuneration DEVELOPMENT
Motivation Training
Health & safety Career development
Social Security Organisational Dev
IR Internal Mobility
A Brief History of HRM
 HRM can be traced to England, where craftspeople
organized guilds
 They used unity to improve working conditions

 The Industrial Revolution in the 18th century laid the

basis for a new, complex industrial society
 Changing work conditions, social patterns, and labor
created a gap between workers and owners
 During the world wars era, scientific management,
welfare work, and industrial psychology merged
A Brief History of HRM
 Frederick W. Taylor, the father of scientific
management, summarized scientific management as:
 Science

 Harmony

 Cooperation

 Maximum output

 Industrial psychology, initiated in 1913, focused on:

 The worker

 Individual differences

 The maximum well being of the worker

A Brief History of HRM
 Personnel departments were created to deal with:
 Drastic changes in technology

 Organizational growth

 The rise of unions

 Government intervention
concerning working people
 Around the 1920s, more organizations
noticed and acted on employee-management conflict
A Brief History of HRM
 The Hawthorne studies (1924 to 1933):
 Were to determine the effects of
illumination on workers and their output
 Rather, it pointed out the importance of
social interaction on output and satisfaction
 Until the 1960s, the personnel function was concerned
only with blue-collar employees
 File clerk, house-keeper, social worker, firefighter, and
union trouble defuser
Evolution of the Personnel Function
Concept What is it all about?

The Commodity Labour was regarded as a commodity to be bought and sold.

concept Wages were based on demand and supply. Government did
very little to protect workers.

The Factor of Labour is like any other factor of production, viz, money,
Production concept materials, land, etc. Workers are like machine tools.

The Goodwill concept Welfare measures like safety, first aid, lunch room, rest room will
have a positive impact on workers’ productivity

The Paternalistic Management must assume a fatherly and protective attitude

concept/ Paternalism towards employees. Paternalism does not mean merely
providing benefits but it means satisfying various needs of the
employees as parents meet the requirements of the children.

Evolution of the Personnel Function
The Humanitarian To improve productivity, physical, social and psychological
concept needs of workers must be met. As Mayo and others stated,
money is less a factor in determining output, than group
standards, group incentives and security. The organization is a
social system that has both economic and social dimensions.

The Human Resource Employees are the most valuable assets of an organization.
concept There should be a conscious effort to realize organizational goals
by satisfying needs and aspirations of employees.

The Emerging concept Employees should be accepted as partners in the progress of a

company. They should have a feeling that the organization is
their own. To this end, managers must offer better quality of
working life and offer opportunities to people to exploit their
potential fully. The focus should be on Human Resource
Personnel Function in India;
Changing Scenario
Period Emphasis Status Roles
1920 – 30 Welfare management Clerical Welfare
Paternalistic practices administrator

1940 – 60 Expanding the role to cover Administrative Appraiser

Labour, Welfare, Industrial Advisor
Relations and Personnel Mediator
Administration Legal advisor
Fire fighting

1970 – 80 Efficiency, effectiveness Developmental Change agent

dimensions added Integrator
Emphasis on human Trainer
values, aspirations, Educator

1990s – Incremental productivity Proactive, Developer

onwards gains through human growth-oriented Counsellor
assets Coach
Problem solver
Dimensions Personnel HRM
a. Nature of Pluralist Unitary
b. Perception Conflict is Conflict is
of Conflict institutionalized Pathological
c. Contract Emphasis on Beyond
compliance Contract
d. Role of Rules Culture &
procedures dominated values
e. Planning Ad hoc, Integrated,
perspective reactive proactive
f. Level of trust Low High
g. Key relation Labour- Customer
h. Transactional Transformatio
Management’s nal
i. Acceptability Acceptable Not desirable
of Unions
j. Basis of job Division of Teams
design labour
k. Key People PM/IR Line people &
Specialists General
l. Skill Training & Learning
acquisition development organization

m. Reward Standardized Performance

Management job evaluation related