DEFINITIONS

Human

resource management is the

process of acquiring, training, appraising
and compensating employees and
attending to their labour relations, health,
safety and fairness concerns.---- Dessler

HRM

is a series of integerated decisions

that form the employment relationship; their
quality contributing to the ability of the
organisations and employees to achieve
their objectives.--Milkovich & Boudreau

NATURE
Inherent

part of management : HRM is a part

of Mgt., draws heavily from Mgt. concepts,
principle & techniques. This function is
performed by all the managers throughout the
organization rather than by the personnel
department only.
Pervasive Function : All managers at various
levels in the organization are required to perform
the personnel functions on a continuous basis. It
is not a responsibility that a manager can leave
completely to someone else.

 Basic

to all Functional areas : All the

departments has to perform personnel
functions.
People centred : HRM is concerned with
people in the organization both present and
potential. It is concerned with Top mgt.,
Middle mgt., Supervisory mgt. & Operatives.
Personnel activities : Manpower planning,
Employment, Placement, Training, Appraisal
& Compensation. Performed by HR
department.

 Continuous

Process : It is not a one

shot function. It requires a constant
alertness and awareness to achieve the
objectives.
Based on Human Relations : human
relations in the organization will be cordial.
Motivation of human resource is very
important.

SCOPE
Human

resource / Manpower planning

determining the number and kinds of
personnel required to fill various position
in the orgnisation.
Recruitment, selection and placement of
personnel Employment function.
Training and development of employees
for their efficient performance and growth.
Appraisal of performance employees.

 Motivation

of work force.
Remuneration of employees. ---sufficient
wage and fringe benefits.
Social security and welfare of employees.
Canteens, crches, housing, recreation &
health.
Review and audit of personnel policies,
procedures and practices of the
organisation.
Industrial relation aspects is concerned with
union negotiation and collective bargaining.

Functions

1.

Managerial : HRM is a part of

organizational management.
Planning :is the conscious determination
of future course of action to achieve the
desired results. Determination of
personnel programs that will contribute to
the goals of enterprise. It includes a
supply and demand forecast for each
category, net shortage and excess of
personnel .

2.

3.

Organizing : is the process of dividing work

(personnel activity) in to convenient tasks or
duties, grouping of such duties in the form of
positions, grouping of various positions in to
departments and sections, assigning duties in to
individual positions and delegating authority to
each position so that work is carried out as
planned.
Directing :when people are available in the
organization, they must know what they are
expected to do in the organization. It include
communicating, motivating and leading. To guide
and motivate people to accomplish personnel
programmes.

4.

A.

Controlling : Involves comparing actuals with

standards and corrective action. It involves
performance appraisal, critical examination of
personnel records and statistics and personnel
audit.
Operative :Duties/ tasks which are specifically
entrusted to the human resource department.
Employment : proper kind and number of
persons are necessary to achieve the objective
of the organisation. It includes manpower
planning , recruitment, selection, Induction
,Placement.

B.

C.

Development : To train each employee

properly to develop technical skills & develop
him for the higher jobs. There is On-the-job
and Off- the job methods are available.
Compensation : Determination of adequate
and equitable remuneration. The personnel
can be compensated both in terms of monetry
as well as non-monetary terms. While fixing
the wage, the following factors should be
considered. Basic needs of the personnel,
legal provisions regarding minimum wage,
capacioty of the organization to pay, wage
level afforded by competitors. Job evaluation
and performance appraisal can be followed.

D.

E.

F.

Maintenance ( Working Conditions and

Welfare) : Measures taken for health ,
safety, cafeteria, rest rooms, counseling,
group insurance recreations etc
Motivation : HR manager helps the various
departmental mangers to design a system
financial and non-financial reward to
motivate employees.
Personnel records :Records of their
training, achievements, transfer, promotion,
absenteeism and labour turnover, policies

G.
H.

A.
B.

Industrial Relations : settlement of disputes,

collective bargaining ..
Separation : HR manager has to ensure the
release of retirement benefits..
Advisory : Gives advise relating human
resource of the organization.
Top Management : evaluation of personnel
Programme, policies & procedures.
Department heads : performance appraisal ,
job analysis, manpower planning training ,
recruitment

Importance of HRM / Role of HR

Manager
Policy

Formulation : HR policies are indented

to communicate to the employees the basic
ground rules under which the organization
functions and to avoid discrimination,
inconsistency and confusion. HR manager
helps top management in the formulation of
policies on wage and salary, administration,
transfer, appraisal, welfare activities, personnel
records and work environment.

 Advisory

Role : advice to line managers ,

Department Heads, Top management. Matters like
grievance over distribution of overtime work,
disciplinary action, labour laws, preparation of
reports.
Linking Pin Role : Linking Pin between
management and the workers.
Representative Role : generally act as a
spokesman of the top management,
representative of company. Sometimes workers
representative, particulary in non-unionised
organisations.

 Decision

making Role : Plays effective role

in decision making on issues related to
human resource.
Mediator Role : Mediator in the event of
conflict between employees, group of
employees, superior & subordinate and
even between management and
employees.
Leadership Role : provides leadership,
guidance and counseling to employees.

 Welfare

Role : Act as welfare officer. He is

concerned with provision of canteen,
crches, hospital and other welfares.
Research Role : on the basis of records
he undertake various research in various
personnel areas absenteeism, labour
turnover etc..

Human Resource Planning

Human

resource planning is the process by which

an organisation ensures that it has the right number
and kind of people, at the right place, at the right
time, capable of effectively and efficiently
completing those tasks that will help the
organisation to achieve its overall objectives. ---Decenzo & Robbins

Manpower

planning is the process of determining

manpower requirements and the means for meeting
those requirements in order to carry out the
integrated plan of the organization. -----Coleman

scope
Listing

of current manpower with the

organisation.
Assessing the extent to which the current
manpower is utilised to the advantage of the
organisation.
Phasing out the surplus manpower/if any.
Analysing the requirements of manpower in
future in the light of expansion plan, retirement
of personnel.
Making manpower procurement plan.
Designing training programmmes for different
categories of manpower.

Objectives
To ensure

optimum use of human resource

currently employed.
To determine future recruitment level.
To provide control measures to ensure that
necessary resources are available as and when
required.
To anticipate redudancies and avoide
unnecessary dismissals.
To forecast future skill requirements to serve as
a basis for training and development
programmes.

 To assess

future housing needs of

employees.
To cost the manpower component in new
projects.
To decide whether any of enterprise
activities be off-loaded or subcontracted.
(maintenance)
To control cost aspect of human resource.
To formulate transfer and promotion
policies.

Process
1.

2.

Objectives of manpower planning : HRP

must be integrated with the overall
organizational plan. The ultimate purpose
of HRP should be decided.
Analysis of current manpower inventory :
analysis of current manpower supply may
be undertaken by department, by
function, by occupation, or by level of skill
or qualification.

3.

Demand forecasting : A proper forecast of

manpower required in the future ( say after one
year, two years, three years and so on) must be
attempted .
Employment Trends : The manpower planning
committee at the corporate level should make an
examination of number of employees on the
payroll during the past five years to know the trend.
Replacement Needs : Need of replacement arises
due to death , retirement, resignation and
termination of employees.( supervisory. Skilled,
managerial, clerical)

i.

ii.

iii.

Productivity : Gains in productivity add to the

growth potential of the organisation.Planning
for productivity gains has several aspects.
The first and important one relates to affecting
gains by improvement in existing manapower
utilisation.
The second aspect relates to installation of
more productive tools , equipments or
process. (Automation).
The last aspect relates to the matching of
skills with the requirements of the jobs.(Job
Analysis)

4.

Growth and Expansion : Expansion of

various plants and divisions.
Absenteeism : it mean a situation when
a person fails to come for work when he
is scheduled to work. Planning expert
should consider the rate of absenteeism.
Work study : workload analysis.
Supply forecasting : there is two sources
of supply internal and external.

i.

ii.

5.

Human Resource audit : It gives idea

about the potential and capabilities of
people working in an organisation.
(management inventories, skill inventories)
Replacement Charts : These are meant for
listing each key position and indicating
time when it it is likely to be vacated.
Estimating the Net Human Resource
Requirements: compare the demand
forecast with the projected internal supply
of human resource.

6.

7.

8.

Action Plan for Redeployment /redundancy :

In the case of surplus staff position,
employees caan be redeployed to other
jobs / departments. If it is cannot be
redeployed , offer golden handshake under
VRS scheme.
Determining Job Requirements of position to
be filled : accurate job description help in
finding suitable candidates.
Employment plan : Preparing the
programmes of recruitment , selection,
transfer, promotion.

9.

10.

Training and development programe :

the talents of the employees are not fully
productive without a systematic T & D.
Evaluation of effectiveness of HRP

Objectives of Inventory of
HRP
HR Skills

Appraisal of
HRP

T&D
Programme

Demand &
Supply
forecasting

Determine Net
Manpower
Requirements

Employment
Program

Redeployment
&
Redundancy
Plan

Benefits of HRP
1)
2)
3)
4)
5)
6)
7)

HRP results in reduced labour costs

It is a better basis for planning employee
development.
It enables identification of the gaps of the existing
manpower.
It leads to improvement in the overall business
planning process.
It helps in formulating managerial sucession plan.
It leads to greater awareness of the importance
of sound management.
It serve as a tool to evaluate the effect of
alternative manpower action and policies.

Quantitative aspects of HRP

1.

Demand forecasting : Estimating the

requirements of different kinds of personnel in
future. HRP forecast should be the annual
budget and long-term corporate plan translated
in to activity levels of each functions and
department. There are three basic techniques.
Managerial judgment :Used in smaller
companies. This simply requires manager to
sit down, think about their future workloads
and decide how many people they need. It
might be done on a

bottom-up basis line managers

submitting proposals
Top-down approach : Forecasts are
prepared by the top management. These
are reviewed and agreed with the
departmental managers.
The best way to adopt both the bottom-up
and top-down approach.

2.

Work study technique : It can be used when it

is possible to apply work measurement to know
how long operations should take and the
amount of labour required.
planed output
Work-load analysis : in this , the manpower
planning expert needs to find out sales
forecast, work schedules and thus determine
the manpower required per unit of product.
Work-force analysis : it is necessary to keep
sufficient margin for absenteeism, labour
turnover and idle time on the basis of past
experience.

3.
i.

ii.

Statistical techniques :For long range &

more accurate personnel forecasting.
Ratio and Trend analysis : Calculation on the
basis of established ratios. It is worked out for
number of years based on the past records of
the organisation and future trends are
projected on these ratios. (supervisory &
managerial)
Econometric model : it helps in understanding
the nature of relationships among different
variables at the different levels. Suitable for
large organisations. It refers to the science of
economic measurement.

iii.

iv.

Regression analysis : In this human

resource needs is the dependent
variable and independent variables are
business activity, HR productivity
Bureck-smith model : Forecasting based
on the selected key variables that affect
an organisations HR needs.
En = (Lagg + G) /x
Y

En = estimated level of HR needed in n

plan period.
Lagg =total business activity of n period in
terms of value
G = total growth in business activity in n
period based on the current prices.
X = average productivity improvement in n
period over the current period.
Y = business activitypersonnel ratio of the
current year.

4.

Delphi Technique : A small group

designs questionnaire about the problem
under study which is sent to various
experts related to the field. Filled up
questionnaires are analyzed. If any
divergence in opinion, a revised
questionnaire sent to large experts. It will
continue until some consensus reached.
( Fashion trends for next year). Here It
can be used to know the trends in
changing job profile & personnel profile
across the country and international level.
It helps to get experts view in different
functional area.

1.

Supply forecasting : Manpower suply

forecasting measures the number of
people likely to be available from within
and outside an organisation, after
making allowance for absenteeism,
internal movements and promotions,
wastage and change in work hours and
other working condition of work.
Markov Analysis : Historical flows of
personnel (transitions) through the
organisation are represented by
probabilities. (Ref.p174 HRM, L.M Prasad)

2.

3.

4.

Simulation techniques : It considers

alternative flows which are examined for effect
on future manpower supplies. Alternative flows
reflect the anticipated result of policy or
programme changes concerning voluntary
turnover retirement , promotion etc
Renewal analysis : this technique future flows
and supplies of manpower by calculating (i)
vacancies created by the organisation (ii) the
results of decision rules governing the filling of
vacancies.
Goal programming : The goal to optimize the
desired stafing pattern subject to a set of
constraints (salary budget, new recruitment
permitted.)

5.

Human resource inventory : It is the

cataloguing the present and future potentials.
It includes
Skill inventory (non-managerial) : Personal
data, skills-education, job experience, training,
special achievements, salary, job history,
potential of employees.
Management inventory :Personal data, work
history, strength and weakness, career plan,
promotion potentials, number and type of
employee managed, total budget managed,
special achievements.