Module-1

Introduction – meaning – importance -

Scope– objectives – Evolution, functions of
HRM approaches for organizing human
resources; trends in human resource
management; difference between Personnel
Management; HRM and HRD.
 The Paradigm shifts in People Management

Era 1850-1900 1900-1940 1940-1960 1960-1980 1980-1995 1995 onwards

Industrial Industriali- Corporate Rise of Technology Information

Revolution Sation Growth MNCs Revolution Age & Global
Business Linkage
change Changing Important
Bonded Collective Mix of
Professional Stakeholder Intellectual
Labour Unionisation workforce workforce In Business Asset

Changes Strategic
Human
In Labour Industrial Personnel People Human
Resource
HR Relations Relations Management Management Resource
Development
function Development

Birth Mass Product Customer Customer

End Value
Of Produc- & Market Satisfaction Delight
Results Product tion Orientation & Quality & Productivity Addition
 Emergence of HRM as a distinct model of People Management

 Scientific Management Approach

Advocated by F.W.Taylor in the early 1900s’

 Human Relation Approach

The famous Hawthorne study conducted by Elton Mayo and his Harvard associates
in 1930-40s’

 Human Resource Approach

People as resources from 1970 onwards…
• The process of planning, organizing, directing (motivating), and controlling the
procurement, development, compensation, integration, maintenance, and
separation of organizational human resources to the end that organizational,
individual, and societal needs are satisfied.
Human Resource Management includes all activities used to attract & retain
employees and to ensure they perform at a high level in meeting organizational
goals.
These activities are made up of
1. Recruitment & selection.
2. Training and development.
3. Performance appraisal and feedback.
4. Pay and benefits.
5. Labor relations.
 HRM is

 An academic theory and a business practice.

 Effective and efficient use of organizations human

resources.

 A complex and challenging field of management

which deals with the people dimension in
management.

 A management function concerned with hiring,

developing and managing people in the organization.
 Features of Human Resource
Management
• A part of management discipline .
• As a continuous process .
• Concerned with people.
• Directed towards achievement of
objectives.
• Universal existence.
 HRM: Objectives
• To create and utilize an able and motivated workforce to accomplish the
basic organizational goals.
• To establish and maintain a sound organizational structure and desirable
working relationships among all the members of the organization .
• To secure the integration of individual or groups within the organization by
co-ordination of the individual and group goals with those of the
organization.
• To enhance the employees’ job satisfaction and self actualisation need and
there by providing quality of work life.
• To be etically and socially responsible to the needs and challenges of the
society ,minimising the negative impact of such demands upon the society.
• To strengthen and appreciate the human assets continuously by providing
training and development programs.
• To enhance both individual and organizational performance in the world of
competition.
 Scope of HRM
Personnel Aspects
• Manpower Planning
• Recruitment
• Selection
• Placement
• Performance Appraisal
• Training and Development
• Lay off & Retrenchment
• Remuneration & Incentives
Welfare Aspects
 Working Conditions
 Amenities such as canteens, crèches, rest and lunch room, housing,
transport ,medical assistance, education, health, safety, recreation etc.
Industrial Aspects
 Union Management Relations
 Joint Consultation
 Collective Bargaining
 Grievances & Disciplinary Procedures
 Settlement of Industrial Disputes.
 Scope of HRM

Nature
Of
HRM
Prospects Employee
Of Hiring
HRM

Human
Resource
Industrial Management Remuneration
Relations

Employee
Employee
Maintenance
Motivation
 HR Function – A Value Addition

Inputs
VALUE ADDITION O
U
MEN T
P
Customer
MACHINE Satisfaction Profit U
T
HR FIN. MKTG. PRODN. OTHER
MATERIAL FUN.
 Functions of HRM
Managerial Functions
 Planning
 Organizing
 Directing
 Controlling

Operative Functions

 Procurement
 Development
 Compensation
 Integration
 Maintenance
 Function of HRM

Managerial Operative
Functions Functions

Planning
Organizing Procurement Development Compensation Integration
Directing
Controlling Job Evaluation Motivation
Job Analysis Performance Job Satisfaction
HRP Wage & Salary
Appraisal Grievance Redressal
Recruitment Administration
Training & Collective Bargaining
Selection Bonus & Conflict Management
Development
Placement Incentives Employee Participation
Career Planning
Induction Payroll Discipline
Transfer
Promotion Maintenance
Separation
Employee Welfare
Personnel Records
Personnel Research
Personnel Audit
 Comparison of Conventional Model and HRM Model
Old Model of HRM
 Individual position or job was taken as the
basic unit in organization.
 Relations with the environment was more
handled by the specialists.
 Information in the organization flows only
vertically.
 Many layers of management
 Emphasis was laid on structure only.
 Rules and standard procedures are
emphasized.
 Working hours used to be long and fixed.
 Career path used to be linear and upward.
 Evaluation and reward system used to be
standardized.
 Single strong culture with strong
expectation of behaviour.
 Individual focused.
 External environment was defined in terms
of country or location.
New Model of HRM
 Team is taken as the basic unit in any
organization.
 New organizations are networked with the
internal and external environment.
 All forms of information are available.
 Flat organizations with few layers of
management.
 Emphasis is on organizational process.
 New models emphasizes on results and
outcome.
 Flexible, part-time.
 Flexible and lateral.
 Evaluation and reward system is
customized.
 Modern organization are characterized by
diversity of new points and behaviour.
 Organization specialized.
 Environment is global now a days.
 HRM Model
 It provides a macro perspective of HRM practice in
overall organizational set up .
 The unity and diversity of these models serves as
vital inputs in drafting tailor made HRM model for
organizations.
 These models offer answers to quite a few dilemmas
that practitioners encounter in their mission to
pursue an organisationally dovetailed and business
aligned human resource function.
 HRM Model
1.
Nature of HRM
Environment of HRM
7.
Ethical Issues Strategic HRM 2
HRP
HR Audit
Job Analysis & Design
Challenges of HRM
Employee Hiring
International HRM
Orientation
Placement

6.
IR
Trade Union
HRM
Disputes & Resolution 3
Training & Development
Appraisal
Remuneration
Incentives & Benefits
Executive Remuneration
5.
Employee Welfare 4.
Safety & Health Motivation
Promotion & Transfer Applied Motivation
Participative Management
Employee Communication
 Harvard Model of HRM

 This model is otherwise known as soft model of HRM /Harvard Map of HRM /
Multiple Stake holders Model profunded by Michael Beer, Richard Walton, Quinn
Mills, P. Lawrence and Bert Spector .

 The Harvard interpretation sees employees as resources. However, they are viewed as
being fundamentally different from other resources - they cannot be managed in the
same way. The stress is on people as human resources.

 This model says that the type of HRM policies and practices an organization prefers
should be dependent upon its organizational vision, mission, strategy, goals and
objectives and must be tuned with external environment of organizations .

 This model argues that human resource policies are to be influenced by two
significant considerations : 1. Situational Factors 2. Stakeholder’s Interest .
 The Harvard Map or model outlines four HR policy areas:

– Human resource flows - recruitment, selection, placement, promotion,

appraisal and assessment, promotion, termination, etc.
– Reward systems - pay systems, motivation, etc.
– Employee influence - delegated levels of authority, responsibility, power
– Work systems - definition/design of work and alignment of people.

 Which in turn lead to the 'four C's' or HR policies that have to be achieved:
– Commitment - Employee Commitment for performance, loyalty ,self respect
and worth.
– Congruence - must be there among the policies as well as practices in
operation.
– Competence - people should be attracted ,developed and retained with
valuable skills and knowledge.
– Cost effectiveness - HRM policies should be evaluated in terms of wage
,benefits , turnover, absenteeism etc.
 MICHIGAN MODEL OF HRM
 The Michigan model has a harder, less humanistic edge called as Utilitarian Instrumentalism, holding that
employees are resources in the same way as any other business resource. They must be:
– obtained as cheaply as possible
– used sparingly
– developed and exploited as much as possible

 The Michigan theorists highlighted the following as being the most important HR issues to achieve such a
match:
– Selection of the most suitable people to meet business needs
– Performance in the pursuit of business objectives
– Appraisal, monitoring performance and providing feedback to the organization and its employees
– Rewards for appropriate performance
– Development of the skills and knowledge required to meet business objectives .

 The essential features of this model are –

 Is focused on individual and organizational performance.
 Based on strategic control ,organizational structure ,systems for managing people.
 Concentrates on managing human assets to achieving strategic goal.
 Contributes to human resource performance.
 Has components such as organizational structure, mission, and strategy, human resource selection,
performance appraisal, rewards and developments.
 Requires that personal policies ,practices, and systems are not only consistent with the business objectives of
the firm but should also have coherence among various subsystems of HRM.
 Competitive Advantage Model of HRM
 Professor Jay Barney of Ohio State University and Professor Patrick Wright of Cornell
University developed a comprehensive model in 1997 to establish HR as a competitive
advantage of the firm.

 This model was built on the framework of VRIO ( Value, Rareness, Imitability and
Organization ) .-it is the value ,rareness, non- imitability and scientific organization of
HR that provides sustainable competitive advantage to the firm .

 The model presents three elements of HRM that provide the competitive advantage
as –

– Sustainable competitive advantages stems from firm-specific more than general skills.
– Sustainable competitive advantage comes from teams more than from individuals.
– Sustainable competitive advantage stems from HRM systems more than single HRM
practices.
 Personnel Management and HRM
Human resource management is the new version of personnel management.
There is no any watertight difference between human resource management and
personnel management. However, there are some differences in the following
matters.
Personnel management is a traditional approach of managing people in the
organization. Human resource management is a modern approach of managing
people and their strengths in the organization.

Personnel management focuses on personnel administration, employee welfare

and labor relation. Human resource management focuses on acquisition,
development, motivation and maintenance of human resources in the
organization.

Personnel management assumes people as a input for achieving desired output.

Human resource management assumes people as an important and valuable
resource for achieving desired output.

Under personnel management, personnel function is undertaken for employee's

satisfaction. Under human resource management, administrative function is
undertaken for goal achievement.
• Under personnel management, job design is done on the basis of division of labor.
Under human resource management, job design function is done on the basis of
group work/team work.
• Under personnel management, employees are provided with less training and
development opportunities. Under human resource management, employees are
provided with more training and development opportunities.

In personnel management, decisions are made by the top management as per

the rules and regulation of the organization. In human resource management,
decisions are made collectively after considering employee's participation,
authority, decentralization, competitive environment etc.
•
Personnel management focuses on increased production and satisfied employees.
Human resource management focuses on effectiveness, culture, productivity and
employee's participation.

Personnel management is concerned with personnel manager. Human resource

management is concerned with all level of managers from top to bottom.

• Personnel management is a routine function. Human resource management is a

strategic function.
 Difference between Personnel Management and HRM
Personnel Management
• Personnel management is an administrative
function of an organization that exists to provide
the personnel needed for organizational
activities and to manage the general employee-
employer relationship.
• The aspect of management that is concerned
with the work force and their relationship with
the entity is known as Personnel Management.
Human Resource Management
•
Human resource management also involves the
management of people in an organization. The
job of human resource management is to
ensure that the organization has the human
capital it needs to accomplish its goals. 'Human
capital' is a fancy way of describing employees
with a certain set of knowledge, skills and
abilities that can be used by an organization in a
productive way.
• The branch of management that focuses on the
most effective use of the manpower of an entity,
to achieve the organizational goals is known as
Human Resource Management.
BASIS FOR COMPARISON PERSONNEL HUMAN RESOURCE
MANAGEMENT MANAGEMENT
Approach Traditional Modern

Treatment of manpower Machines or Tools Assets/Resources

Type of function Routine function Strategic function
Basis of Pay Job Evaluation Performance Evaluation
Management Role Transactional Transformational
Communication Indirect Direct
Labor Management Collective Bargaining Individual Contracts
Contracts
Management Actions Procedure Business needs
Decision Making Slow Fast
Job Design Division of Labor Groups/Teams
Focus Primarily on mundane Treat manpower of the
activities like employee organization as valued
hiring, remunerating, assets, to be valued, used
training, and harmony. and preserved.
 HRM VS HRD
• HRD or Human Resource Development is a sort of framework that
allows and aids employees of an organization to develop their
organizational and personal skills as well as their knowledge and abilities.
There are a myriad of practices and opportunities involved in this field.
Some of them can be named as performance development and
management, training, career development, mentoring, coaching
succession planning, tuition assistance, key employee identification, etc.

The main goal of Human Resource Development is to create the most

superior workforce possible so that the organization has the means to
fulfil their services towards their clientele better. Human Resource
Development can be formal or informal: formal being tutored in a
classroom or an organized effort while informal may be on the job training
by a manager.
 HRM VS HRD

HRD is a sub section of HRM, i.e. HRD is a section with the

department of HRM.

HRM deals with all aspects of the human resources function

while HRD only deals with the development part.

HRM is concerned with recruitment, rewards among others

while HRD is concerned with employee skills development.

HRM functions are mostly formal while HRD functions can be

informal like mentorships.