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Contents
Introduction………………………………………………………………………………………………………… 1

Functions of Human Resource Management and Other Managerial Functions…….. 3

Nature, Scope and Importance of Human Resource Management in Industry……… 7

Role & position of Personnel function……………………………………………………………….. 10

1. Introduction

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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. 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 words,
HRM means employing people, developing their capacities, utilizing, maintaining and compensating
their services in tune with the job and organizational requirement.

Its features include:

 Organizational management
 Personnel administration
 Manpower management
 Industrial management

But these traditional expressions are becoming less common for the theoretical discipline. Sometimes
even employee and industrial relations are confusingly listed as synonyms, although these normally
refer to the relationship between management and workers and the behaviour of workers in
companies.

The theoretical discipline is based primarily on the assumption that employees are individuals with
varying goals and needs, and as such should not be thought of as basic business resources, such as
trucks and filing cabinets. The field takes a positive view of workers, assuming that virtually all wish to
contribute to the enterprise productively, and that the main obstacles to their endeavours are lack of
knowledge, insufficient training, and failures of process.

HRM is a strategic approach to the acquisition, motivation and development and the management of
human resources. It is a specialized field that attempt to developing organizational corporate culture,
implements the programs which reflect values of the organization and ensure its success.

HRM is proactive rather than reactive i.e., looking forward what to what needs to be done and then
doing it, rather than waiting to be told what to do about recruiting, paying and training people, or
dealing with employee relations problems as they arise. The techniques for the application of HRM
will include many familiar functions of personnel managers, such as man-power planning, selection,
performance appraisal, salary administration, training and management development and to improve
communication systems, involvement, commitment and productivity. Broadly, there are three meaning
attached to the concept of HRM. In the first place, persons working in an organization are regarded as
a valuable source, implying that there is a need to invest time and effort in their development.
Secondly, human resources have their special characteristics cannot be treated like other resources.
And thirdly, human resources do not really focus on employees as individual, but also on other social
realities, units and processes in the organizations. In its essence, HRM is the qualitative improvement
of human beings who considered as valuable assets of an organization—the source, resources and
the end user of all products and services. HRM is clearly an outgrowth of older process and approach

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but it is much more than the parent disciplines i.e. personnel management and behavioural sciences.
It is also deep rooted than training and development and approach is multi-disciplinary. It is the
scientific process of continuously enabling the employees to improve their competencies. The
competencies of human resources play a major role in shaping the present and future expected roles
so that the goals of the organization are achieved and the same time the needs of the employees are
also met. Some basic assumptions about human resources are also different from the traditional
approach:

 The members of an organization are reservoirs of untapped resources.

 There is scope for unlimited development of these resources.
 It is more in the nature of self-development that development thrust from outside.
 The organization also undergoes development with overall benefits along with the
development of its members.
 The organization further develops as a culture in which utmost emphasis is placed on
harmonious relationships between superior-subordinate, team-work, collaboration of
individuals, open communication, integration of overall goals of the organization.
 Top management takes the initiative for HRM, in the forms of plans, strategies and creates
the overall climate and support mechanism for its implementation.

Synonyms such as personnel management are often used in a more restricted sense to describe
activities that are necessary in the recruiting of a workforce, providing its members with payroll and
benefits, and administrating their work-life needs. So if we move to actual definitions, Torrington and
Hall (1987) define personnel management as being:

“a series of activities which: first enable working people and their employing organisations to agree
about the objectives and nature of their working relationship and, secondly, ensures that the
agreement is fulfilled".

While Miller (1987) suggests that HRM relates to:

"Those decisions and actions which concern the management of employees at all levels in the
business and which are related to the implementation of strategies directed towards creating and
sustaining competitive advantage".

2. Functions of Human Resource Management and Other Managerial Functions

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Human Resources management has an important role to play in equipping organizations to meet the
challenges of an expanding and increasingly competitive sector. Increase in staff numbers,
contractual diversification and changes in demographic profile which compel the HR managers to
reconfigure the role and significance of human resources management. The functions are responsive
to current staffing needs, but can be proactive in reshaping organizational objectives.

Managing human resources to achieve better knowledge related outcomes means, “Retaining
personnel, building their expertise into the organizational routines through learning processes, and
establishing mechanisms for the distribution of benefits arising from the utilization of this expertise”.
To identify which HRM practices could be employed to help organizations to achieve knowledge
related outcomes, a brief review of representative case-based and existing empirical studies
undertaken by scholars from different research fields (international HRM, innovation, strategy,
international business, etc.) on the link between HRM practices and various knowledge related
outcomes is necessary. The purpose is to determine what HRM practices organizations could employ
to enhance knowledge related outcomes, otherwise known as knowledge-driven HRM practices.

1. Human resource planning, which includes creating venture teams with a balanced skill-mix,
recruiting the right people, and voluntary team assignment. This strategy analyses and determines
personnel needs in order to create effective innovation teams.

2. Performance appraisal, which includes encouraging risk taking, demanding innovation, generating
or adopting new tasks, peer evaluation, frequent evaluations, and auditing innovation processes. This
strategy appraises individual and team performance so, that there is a link between individual
innovativeness and company profitability. Which tasks should be appraised and who should assess
employees’ performance are also taken into account.

3. Reward systems, which includes freedom to do research, freedom to fail, freedom to form teams,
freedom to run businesses, balancing pay and pride, noticeable pay raises, dual career tracks,
promoting from within, recognition rewards, and balancing team and individual rewards. This strategy
uses rewards to motivate personnel to achieve an organization’s goals of productivity, innovation and
profitability.

4. Career management, which includes empowering people, leading by example, and continued
education. This strategy matches employees’ long-term career goals with organizational goals
through continuing education and training. Recently, international business researchers have
identified the role of HRM practices in the organizational learning as one subject of inquiry to
investigate the link between new HRM practices and innovation performance, arguing that HRM
practices are “most conducive to innovation performance when adopted, not in isolation, but as a
system of mutually reinforcing practices”. Applying principal component analysis, they identify two
HRM systems that influence innovation performance. The first consists of HRM practices, which is
knowledge transfer, affect employees’ ability to innovate. They are interdisciplinary work groups,
quality circles, systems for the collection of employee proposals, planned job rotation, delegation of

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responsibility, integration of functions, and performance related pay. The second system is dominated
by internal and external training. The overall conclusion is that “while the adoption of individual HRM
practices may be expected to influence innovation performance positively, the adoption of a package
of complementary HRM practices could be expected to affect innovation performance much more
strongly”. From the reviewed articles we learned that there are certain knowledge-driven HRM
practices, the extensive use of which enhances knowledge related outcomes. We also learned that
the existing empirical work on the relations between HRM practices and knowledge related outcomes
has exclusively focused on the individual HRM practices and their isolated effect. That could become
a serious limitation since HRM is defined as “a set of distinct but interrelated activities, functions, and
processes that are directed at attracting, developing and maintaining (or disposing of) a firm’s human
resources”.

5. Training and Development: The managerial training is a challenge for organization to equip the
managerial personnel to meet the ever advancing Technology and other Socio-economic and Political
factors. It enriches and experiences of the managerial personnel to get maximum productivity in an
organization. Managers should explore the policies, procedures, and structures used to guide the
work of non-profit organizations. They learn how to effectively develop transparent organizational
structures and policies, identify and describe appropriate roles for staff and board members, methods
of effective communication, and how to monitor and respond to change. Training and Development
programs provide useful means of assuring that the employees are capable of performing their jobs at
acceptable level and also more than that.

The role of HRM is to plan, develop and administer policies and programs designed to make
expedious use of an organizations human resources. It is that part of management which is
concerned with the people at work and with their relationship within enterprises. Its objectives are: (a)
effective utilization of human resources, (b) desirable working relationships among all members of the
organizations, and (c) maximum individual development.

Other Managerial HR Functions:

 From Professional to Strategic Partner

Recent decades have witnessed dramatic shifts in the role of HR. Traditionally, managers saw the
human resources function as primarily administrative and professional. HR staff focused on
administering benefits and other payroll and operational functions and didn’t think of themselves as
playing a part in the firm’s overall strategy.

Efforts to measure HR’s influence on the firm’s performance reflected this mindset. Specifically,
theorists examined methodologies and practices that are focused at the level of the individual
employee, the individual job, and the individual practice (such as employee selection, incentive
compensation, and so forth). The idea was that improvements in individual employee performance

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would automatically enhance the organization’s performance. Although such research attempted to
extend the range of HR’s influence, it did little to advance HR as a new source of competitive
advantage. It provided scant insight into the complexities of a strategic HR architecture. And simply
put, it didn’t encourage HR managers to think differently about their role.

Amongst other issues, the four stages of growth and evolution process of the Human Resource
Management (HRM) function as follows:

 The Reactive HRM Function

Where the main purpose is seen as maintenance of industrial harmony, and avoiding disruption
through strikes etc. and exists generally where organizations are operating in near monopoly
situations with assured growth—the interactions between HR and operating managers being minimal
under normal situations at this stage.

 The Independent HRM Function

In this stage, while HR is involved in setting up industrial systems and procedures for operating
managers, but is not fully responsible for the monitoring or correcting the problems in the system—
only being marginally involved in various processes and other functions or results. Other functions
would mostly seek HR’s help in administrative or on few specific issues, and line managers do not see
HR as a repository of expertise.

 The Supportive HRM Function

It has its own direction with a distinct status within the organization, and actively contributes to the
efforts of other functions in producing results. Organizations requiring product or technology changes
rapidly in a competitive scenario generally need such HR involvement with high demands for qualified
and competent manpower, often in a high turnover or mobility situation. Emphasis on people
development and motivation generation comes from such HR, but their understanding or involvement
in total business perspective remains limited or inadequate, even with higher functional participation.

 The Integrative HRM Function

It is the stage when the competitive success of the organisation involves HRM significantly in an
integrated manner, and demands such capabilities from the HR specialists. Their roles shift from a
facilitator to a functional peer with competencies in other functions, and are recognised as an equal
partner by the others. The typical HRM in this case is geared to contribute to organisational objectives
of profitability and customer satisfaction, and is seen as a vehicle for implementation of quality
processes. The department has a responsibility for monitoring employee satisfaction, since it is seen
as surrogate to customer satisfaction.

According to Dave Ulrich, there are four roles which HR plays. The first, strategic partner role turning
strategy into results by building organizations that create value; second, a change agent role making
change happen, and in particular, help it happen fast; the third, an employee champion role—

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managing the talent or the intellectual capital within a firm; and the fourth, an administrative role—
trying to get things to happen better, faster and cheaper.

HRM has received a tremendous attention in recent years. Its role in organizations has also
undergone a substantial change and many organizations have gradually oriented themselves from the
traditional personnel management to a human resources management approach, although many see
it as the “old wine in new bottle”. The basic approach of HRM is to perceive the organizations in its
totality. Its emphasis is not on production and productivity but also on the quality of life. It seeks to
achieve the fullest development of human resource and the fullest possible socio-economic
development.

3. Nature, Scope and Importance of Human Resource Management in Industry

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Nature:
Human Resource Management is a process of bringing people and organizations together
so that the goals of each are met. The various features of HRM includes:
 It is pervasive in nature as it is present in all enterprises.
 Its focus is on results rather than on rules.
 It tries to help employees develop their potential fully.
 It encourages employees to give their best to the organization.
 It is all about people at work, both as individuals and groups.
 It tries to put people on assigned jobs in order to produce good results.
 It helps an organization meet its goals in the future by providing for competent and
well-motivated employees.
 It tries to build and maintain cordial relations between people working at various
levels in the organization.
 It is a multidisciplinary activity, utilizing knowledge and inputs drawn from psychology,
economics, etc.

Scope:
Scope of Human Resources Management was very limited in the beginning. Their activities were
confined to administration, arranging little parties and picnics. This was the ancient time when Adam
Smith saw ‘factors of production’ as land, labour and capital. Things have changed since then. The
scope of the management in general and personnel in particular has changed considerably, covering
more areas and responsibilities. It is the fact that there is no general agreement among the authors as
to the scope of HRM. However, American Society for Training and Development (ASTD), conducted
fairly an exhaustive study in this field and identified nine broad areas of activities of HRM. These are
given below:
 Human Resource Planning
 Design of the Organization and Job
 Selection and Staffing
 Training and Development
 Organizational Development
 Compensation and Benefits
 Employee Assistance
 Union/Labour Relations
 Personnel Research and Information System.

Human Resource Planning: The objectives of HR Planning are to ensure the organization has the
right types of persons at the right time at the right place. It must prepare human resources Inventory
with a view to assess present and future needs, availability and possible shortages. Thereupon, HR

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Planning must forecast demand and supplies and identify sources. Last but not the least, HR Planning
must develop strategies long-term and short-term meet the man-power requirement.

Design of Organization and Job: This is the task of laying down organization structure, authority,
relationship and responsibilities. This will also mean definition of work contents for each position in the
organization. This is done by “job description”. Another important step is “Job specification”. We shall
go into the details of these terms shortly. Job specification identifies attributes of persons most
suitable for each job which is defined by job description.

Selection and Staffing: This is the process of recruitment and selection to staff. This involves
matching people and their expectations with which the job specifications and career path available
within the organization.

Training and Development: This involves an organized attempt to find out training needs of the
individuals to meet the knowledge and skill which is needed not only to perform current job but the
future needs of the organization.

Organizational Development: This is an important aspect whereby developing healthy interpersonal

and inter-group relationship “Synergetic effect” is generated in an organization.

Compensation and Benefits: This is the area of wages and salaries administration where wages
and compensations are fixed scientifically to meet fairness and equity criteria. In addition labour
welfare measures are involved which include benefits and services.

Employee Assistance: Each employee is unique in character, personality, expectation and

temperament. By and large each one of them faces problems everyday. Some are personal some are
official. In their case he or she remains worried. Such worries must be removed to make him or her
more productive and happy.

Union-Labour Relations: Healthy Industrial and Labour relations are very important for enhancing
peace and productivity in an organization. This is one of the areas of HRM.

Personnel Research and Information System: Knowledge on behavioural science and industrial
psychology throws better insight into the workers expectations, aspirations and behaviour.
Advancement of technology of product and production methods have created working environment
which are much different from the past. Globalization of economy has increased competition many
fold. Science of ergonomics gives better ideas of doing a work more conveniently by an employee.

Thus, continuous research in HR areas is an inescapable requirement. It must also take special care
for improving exchange of information through effective communication systems on a continuous
basis especially on moral and motivation.

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4. Role & position of Personnel function

Management basically deals with all the persons working in the concern who are responsible for
managing an organization. Everyone in the organization will have certain responsibilities and duties in
the enterprise. Personnel management includes planning and directing the applications, development

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and utilization of human resource in the enterprise. Employees, unions, public relationship also plays
a key role in personnel management. So there is a need for personnel Management and planning of
the members play a vital role in the Enterprise.

Personnel Management is an important branch in Management of any business enterprise. It holds a

key to all actions and successful management. It is also concerned with human and social
implications of change in internal organization and methods of working and of economic and social
changes in the community. The main aim is to establish a better coordination between all the
members from top level management to down below the subordinates to have better cooperation,
better focus to bring out innovative ideas, their objectives and understanding in the enterprise. Co-
operative relationship is achieved within the enterprise by creating harmonious relations, genuine
consultation and participation and system of effective communication.

Personnel management should designed in such a way it will have the capability to respond to the
changes. Maintain a good relationship within the organization; meet the enterprise social and legal
responsibilities. Human relations have to be nurtured constantly in the enterprise. Only the enterprise,
which is conscious of this need, can achieve their targets by efficiently handling their available
resources for a particular process.

The objectives of personnel management in any working organization are, to bring development of
individuals, maintain safe and effective environmental conditions, utilize the available resources, to
ensure job satisfaction among workers. What all the objective to be focused?

 Social.
 Personnel.
 Enterprise.
 Union.

Social objective is concerned about how the enterprise creates new employment opportunities, how
the productivity of the enterprise can be maximized, bring satisfaction to the work force, avoidance of
wastage of resources and promote a healthy relationship between the human and the social welfare.

Personnel objectives specify the needs of the members by providing job security, maximizing the
development of the members provide proper working environmental conditions to workers. Enterprise
objective is to bring a balance between demand and supply of the personnel and maintain competent
workers in the enterprise. Union objective deals with formulation of personnel policies in consultation
with unions and self-discipline within the enterprise.

Financial and physical resources required for a particular process to be done, and the members of the
organization. Personnel Management is responsible for both the enterprise operating system and the
workers. Other areas in which personnel management is expected to help the workers are include
maintenance of personnel records, determination of wage policy, methods and rates of remuneration.

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Characteristics of good personnel management are:

 Stability, to appoint or replace key personnel executives with minimal loss

 Flexibility, capability to handle problems encountered within the enterprise.
 Simplicity, balancing the perfect line of relationship among the workers.
 Objectivity, feature of having definite objectives for all the levels or units in the enterprise.

Functional responsibilities concerned with the personnel management are

 Managerial functions 
 Operative functions.

Managerial functions includes planning, it involves formulating policies for future development of the
enterprise, program to choose adequate number of persons who can work efficiently and accomplish
the business objectives, provide training to the workers in the enterprise, integration and maintenance
of work force.

Organizing, it has to provide a clear layout about the inter-relationship between persons, jobs and
physical factor and every worker should have proper understanding of their job. Direction involves
motivation, which can be either positive or negative for the enterprise. It is necessary to motivate the
workers about the nature of their job. Instructions should be clear, neatly explained and easy to
understand.

Control, it helps in bringing out performance analysis of all the workers, which would be useful in,
evaluate and to discover their deviations. Operative functions include procurement, which deals with
recruitment of right kind of persons for the available job in the enterprise i.e. right person for right job.
Development, subordinates of the enterprise should be able to know what are the qualities needed to
get into higher levels in the organization. Integration, it provides so-operation among the workers,
efficient channel for communication, satisfactory solution for problems and grievances.

Planning is a process of deciding the business targets and charting out the path of attaining those
targets. It is also described as process of thinking before doing. Every enterprise that recruits people
to carry out its work, whether it is educational institutions, enterprise or business needs a personnel
plan in various phases of personnel.

Planning in personnel management system is concerned about present manpower positions, what
number and kind of employees are required for the enterprise. And this can be done only when the
enterprise knows its objectives and how the plans are accomplished with right kind of resources,
future demand and supply of personnel. Assessment of all the workers should be carried out.

 What each worker does?

 How his performance during his career?

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 About his educational qualification skills and training in the concerned field.
 How his job is related to others. ?
 In what kind of environment his performance can be increased.

These evaluations can be carried out by conducting interviews to selected number of workers in the
enterprise or by having a detailed performance report. By assessing the enterprise we can also
determine the plan for the future. This can be carried out by analysing the objectives and plan of the
enterprise for long term and short term required number of workers, resources needed for the future
purpose, forecasting the number of personnel requirements estimate not only of the number of
personnel required but their qualities and their types also should be specified. So assessment for
future holds a key in the development of the enterprise so it should be carefully analysed.

Sources of personnel may be from: Internal or External. Internal supply deals with new recruitments to
the concern this is determined by the enterprise itself it is not difficult to know what type and number
personnel they need would be to accomplish the objectives of the enterprise, transfers within the
enterprises this is not determined by the enterprise while transferring within a department or
organization it is difficult to fulfil all the workers satisfactions, personnel reporting after a period of
leave

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