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HRM: Theoretical Framework


Khan Sarfaraz Ali

Human resource is an increasingly broadening term that refers to managing human capital, the
people of an organization. The field has moved from a traditionally administrative function to a
strategic one that recognizes the link between talented and engaged people and organizational
success. The field draws upon concepts developed in industrial/organizational psychology and
system theory. Human resource has at least two related interpretations depending on context. The
original usage derives from political economy and economics, where it was traditionally called
labor, one of four factors of production although this perspective is changing as a function of
new and ongoing research into more strategic approaches at national levels. This first usage is
used more in terms of human resources development, and can go beyond just organizations to the
level of nations.i The more traditional usage within corporations and businesses refers to the
individuals within a firm or agency, and to the portion of the organization that deals with hiring,
firing, training, and other personnel issues, typically referred to as human resources management.
Human resource management (HRM)1 is a business practice to managing the workforce.
It is one of several important functions in modern organizations. HRM helps to structure
employee and candidate information by skills, profiles and career preferences. It is helping talent
supply and demand by enabling communication, self-selection, and evaluation of human
resources needs. Usually, human resource management use computer systems to support these
functions including payroll, HR and skills database. A human resource management system also
includes the activities of human resources planning, selection, recruitment, orientation, training,
performance appraisal and compensation.
Though human resources have been part of business and organizations since the first days
of agriculture, the modern concept of human resources began in reaction to the efficiency focus
of Taylorism in the early 1900s. By 1920, psychologists and employment experts in the United
States started the human relations movement, which viewed workers in terms of their psychology
and fit with organizations, rather than as interchangeable parts. This movement grew throughout
the middle of the 20th century, placing emphasis on how leadership, cohesion, and loyalty
played important roles in organizational success. Although this view was increasingly challenged
by more quantitatively rigorous and less “soft” management techniques in the 1960s and beyond,
human resources development had gained a permanent role within organizations, agencies and
nations, increasingly as not only an academic discipline, but as a central theme in development
policy.
HRM is allied with people at work in an organization. It manages working employees
and workers in industry, offices and in all private or public fields or employment. It is defined as,
that phase of management, which deals with effective control, and use of manpower as
distinguished from other sources of power. In brief, HRM has to deal with people at work. It
relates to employees both as individuals as well as a group in order to obtain better results with
their working in association with others and their effective participation in organization’s works.

1
HRM is a series of activities that largely involve hiring of employees, training and development, compensation, maintenance
and motivation to achieve the organizational goal.

Associate Management Counselor, Bangladesh Institute of Management (BIM),


sarfarazbim@gmail.com / 01817528067
HRM: Concept and Meaning
Human resource management (HRM) is the strategic and coherent approach to the management
of an organization’s most valued assets - the people working there who individually and
collectively contribute to the achievement of the objectives of the business.ii The terms ‘human
resource management’ and ‘human resources’ (HR) have largely replaced the term ‘personnel
management’ as a description of the processes involved in managing people in organizations. In
simple sense, HRM means employing people, developing their resources, utilizing, maintaining
and compensating their services in tune with the job and organizational requirement.
Human resource management is the process of acquiring, training, appraising, and
compensating employees, and attending to their labor relations, health and safety, and fairness
concerns.iii HRM is concerned with giving assistance to the employees to increase their
potentialities and capacities to the utmost reasonable extent, so that they may obtain greater
satisfaction from their performance of work. Since recruitment, selection, progress and effective
use to people are necessary part of any orderly endeavor, HRM is essential part in all
organizations. It is uniformly advantageous and adequate to industry, Government departments,
military departments and non-profitable institutions. HRM is of a never ceasing nature. It cannot
be performed casually or occasionally. It requires a continuous vigilance and knowing about
human relations and their importance in everyday process of working having knowledge of their
activities.
Human resource management refers to the policies, practices and systems that influence
employees’ behavior, attitudes, and performance. Human resource practices play a key role in
attracting, motivating, rewarding, and retaining employees. Other human resource management
practice include recruiting, employees, selecting employees, designing work, compensating
employees, and developing good labor and employee relations. iv It is a process consisting of four
functions-acquisition, development, motivation, and maintenance of human resources. In less
academic term, these functions are getting people, preparing them, activating them and keeping
them.v
The sphere of HRM covers managerial and organizational development, manpower
growth, planning of manpower. These are now gaining considerable considerations, although in
the past decades the management never paid any attention to these factors, and also ignored in
importance of these aspects. Training and research of employees, administrative and managerial
HR are considered very important in recent years.vi In brief, the HRM a) should assure justice to
all employee b) wages and salaries are sufficient, just and reasonable c) every employee has
opportunity for advancement according to his capacities d) quite good and reasonable treatment
is done in maintaining discipline and e) principles are pursued without distinction against any
rank of employees. HRM techniques, when properly practiced, are expressive of the goals and
operating practices of the enterprise overall. HRM is also seen by many to have a key role in risk
reduction within organizations.vii
Principles of HRM
Management of workforce is a hard work. The way of thinking or behaving and manner of
human being do not agree to any established model. Each individual worker has his own outlook,
convictions and sensitive personality. Still HRM is established on definite satisfactorily
explained principles, which have been developed after an enormous act of research and
Associate Management Counselor, Bangladesh Institute of Management (BIM),
sarfarazbim@gmail.com / 01817528067
experimentation. The prime principle of HRM is that the employees’ performance of work
should contribute organizational objectives at the maximum desired level. But the objectives
should also ensure the satisfactory interest and needs of the workers and the employers. These
are:
i) Utilization of human resources effectively for greater volume of production and more
satisfactory productivity;
ii) To provide congenial condition of work for the employees who may be stimulated for
adequate contribution for successful operation of the organization;
iii) To promote mutual respect and confidence between management and workers,
through sound relation;
iv) The workers should be given adequate training, counseling and guidance to enhance
their efficiency in order to promote production and productivity;
v) To satisfy the needs of the workers by giving them reasonable remuneration, social or
monetary security and protection against accidents, illness, old age, disability, unemployment
and death.
The Management must adjust and settle the needs, goals, objectives and values of both
the employers and employees while making or designing HR policies. These policies are rules of
conduct. They are established on the following principles:
i) Place the right man in the right place by a proper and due selection. Selection and
thereof placement should ensure that he physically, mentally and temperamentally suitable for
the job; and the said new employee may be reasonably supposed to develop his potentialities
and the latest qualities for the better service and results of the organization;
ii) Train all employees from the bottom to the top level to develop their working
efficiency and be able to qualify for better job and also can discharge their present work with a
skilled performance;
iii) Transform the organization into a team for work through a proper functioning in
harmony and managing organization’s affair of different departments in order to have a least
amount of disagreement and unproductive work. This requires for proper planning, organizing,
controlling and directing the whole organization without damaging the initiative of the
individual employee;
iv) Right tools are to be supplied and the right arrangement of work with suitable working
environment should be provided for maintaining and increasing of output. If the better tools,
facilities and improved conditions of work are available to the employees, the output produced
would be larger with better quality with the same human effort at reduced cost which will
enable the employer to pay higher wages and to provide more good jobs;
v) Give security, opportunity for advancement, incentive, and recognition. Each
employee should receive better incentives for work, recognition for achievements of results,
satisfactory security and opportunity for promotion or advancement in the organization, so that
he may retain in the job;
vi) Consider the future plan for more and better things. In order to meet the demands of
the consumers, better or high quality products should be produced and distributed. Research and
policy of continuing product planning and development should be considered necessary to
conduct in order to achieve the desired object.
Organizations exist for a variety of purposes. Some produce goods for local or overseas
consumption while others provide necessary services for profit or community benefit. In pursuit

Associate Management Counselor, Bangladesh Institute of Management (BIM),


sarfarazbim@gmail.com / 01817528067
of their objectives all organizations rely on availability and effectiveness of several kinds of
resources, which can be divided into finances, technology and people.
Management Theories and Influences on HRM
Classical Management Theory (Scientific Management): This theory of management asserts that:
a. jobs can be scientifically analyzed
b. employees can be scientifically selected
c. training ensures job and employee ‘fit’
d. Management - employee relationships should be friendly, cooperative and productive.
Classical Organization Theorists: The work of Henry Fayol (1841-1925) and Max Weber
(1864-1920) exemplifies these theories. Fayol identified the major management functions as
those of planning, organizing, commanding, coordinating and controlling. Later theorists reduced
these to planning, organizing, leading and controlling (POLC). Weber classified organizations by
authority structures as charismatic, traditional or rational-legal.
Transitional Theorists: ‘Mary Parker Follett (1868-1933), Chester I. Barnard (1886-1961)
and Lyndall F Urwick (1891-1983) represent transitional human relations theorists, situated
between classical management and behavioral approaches to the employment relationship. All
these writers placed emphasis on the importance of social factors at work, including work terms,
leadership styles and ‘informal’ systems in organizations.
Behavioral School (Industrial Psychology): This approach attempts to apply psychological
research to the employer-employee relationship. Hugo Munsterberg (1863-1916) applied
‘personality’ research to employee selection, work design and training programs. Walter Dill
Scott and James McKeen Cattell developed personality tests for the recruitment of sales and
managerial staff.
Management Science (The Quantitative School): This approach focuses on measuring the
outcomes of jobs and work systems. Applications include production schedules, productivity
strategies and consequent management planning and control mechanisms.

Why HRM is unique?

HRM is multidisciplinary. It applies the disciplines of Economics (wages, markets, and


resources), Psychology (motivation, satisfaction), Sociology (organization structure, culture) and
Law (Maternity Benefit Act, Minimum Wage Act, Factories Act, IRO etc.). HR is embedded
within the work of all managers, and most individual contributors due to the need of managing
people (subordinates, peers and superiors) as well as teams to get things done.

‘Hard’ and ‘Soft’ HRM

Depending on the assumptions about the nature of the employment relationship, different HRM
models and practices have been developed to accommodate the diverse industry and workplace
contexts in which they operate. Both ‘hard’ and ‘soft’ HRM approaches reflect their underlying
management theories as well as different national or industry environments.

Associate Management Counselor, Bangladesh Institute of Management (BIM),


sarfarazbim@gmail.com / 01817528067
.. emphasizes the full utilization .. emphasizes the need to
of employees in a formal, develop the potential and
calculating and dispassionate resourcefulness of employees in
manner, to be treated in a order to encourage commitment
manner similar to any other and high performance in pursuit
resources available to the of shared organizational goals.
organization.

Hard Version Soft Version

Objectives of HRM

1. Personal Objectives:
a. It is concerned with the optimum utilization of the human resources within an
organization;
b. It is concerned with the creation of conditions in which each employee is encouraged to
make his best possible contribution to the effective working of the undertaking;
c. It endeavors to increase the productive efficiency to the workers through training,
guidance and counseling and;
2. Organizational Objectives:
a. To recognize the role of HRM in bringing about organizational effectiveness.
b. HRM is not an end itself. It is only a means to assist the organization with its primary
objectives.
c. Simply stated, the department exists to serve the rest of the organization.
Societal Objectives:
a. To be ethically and socially responsible to the needs and challenges of the society while
minimizing the negative impact of such demands upon the organization.
b. The failure of organizations to use their resources for the society’s benefit in ethical way
may lead to restrictions.

Associate Management Counselor, Bangladesh Institute of Management (BIM),


sarfarazbim@gmail.com / 01817528067
c. For example, the society may limit HR decisions through laws that enforce reservation in
hiring and laws that address discrimination, safety or other such areas of social concern.
HRM: Towards the Future
In today’s intensely competitive business environment, with the recognition of the value (and
cost) of human resources, HR practitioners and their associated HR community can maximize
the effectiveness of the human resource and focus on these macro issues by utilizing one (or
several) of the following HR strategies:
a) Devaluation of bottom level HR functions (e.g. recruitment, performance appraisal, training)
to line managers;
b) Automation of some HR administrative tasks (e.g. payroll, leave processing);
c) Outsourcing non - key HR activities (e.g. award interpretation, bottom level recruitment).
If these activities are effectively designed and implemented, strategic HR practitioners can
then concentrate on the major organizational issues.

Associate Management Counselor, Bangladesh Institute of Management (BIM),


sarfarazbim@gmail.com / 01817528067
i
McLean G. N (2006). National Human Resource Development: A Focused Study in Transitioning Societies in the Developing World,
in Advances in Developing Human Resources.
ii
Armstrong, Michael (2006). A Handbook of Human Resource Management Practice (10th ed.). London: Kogan Page. ISBN 0-7494-
4631-5. OCLC 62282248.
iii
Gary Dessler, Human Resource Management (Pearson Prentice Hall, 2009), p. 4
iv
Raymond A. Noe, Employee Training and Development (McGraw-Hill, 2005), p. 3
v
DeCenzo, David A. and Robbins, Stephen P. (2006). Fundamentals of Human Resource Management, Ninth Edition. New York: John
Wiley and Sons, Inc. (ISBN 978-0-470-00794-5)
vi
The Columbia Encyclopedia, Human resource management. Encyclopedia article, sixth edition. 2004
vii
Towers, David. Human Resource Management essays.
http://www.towers.fr/essays/hrm.html. Retrieved 2007-10-17.