Commerce for IAS – HRM Basics
Human beings are social beings and hardly ever live and work in isolation. We always plan, develop and manage our relations both consciously and unconsciously. The relations are the outcome of our actions and depend to a great extent upon our ability to manage our actions. From childhood each and every individual acquire knowledge and experience on understanding others and how to behave in each and every situations in life. Later we carry forward this learning and understanding in carrying and managing relations at our workplace. The whole context of Human Resource Management revolves around this core matter of managing relations at work place. Since mid 1980’s Human Resource Management (HRM) has gained acceptance in both academic and commercial circle. HRM is a multidisciplinary organizational function that draws theories and ideas from various fields such as management, psychology, sociology and economics.
In 1994, a noted leader in the human resources (HR) field made the following observation: Yesterday, the company with the access most to the capital or the latest technology had the best competitive advantage; Today, companies that offer products with the highest quality are the ones with a leg up on the competition; But the only thing that will uphold a company’s advantage tomorrow is the caliber of people in the organization.
Definitions of HRM
Human resources management (HRM) is a management function concerned with hiring, motivating and maintaining people in an organization. It focuses on people in organizations. Human resource management is designing management systems to ensure that human talent is used effectively and efficiently to accomplish organizational goals.
HRM is a management function that helps manager’s to recruit, select, train and develop members for an organization.
According to Edwin B. Flippo, ―Human resource management is the planning, organising, directing and controlling of the procurement, development, resources to the end that individual and societal objectives are accomplished‖. This definition reveals that human resource (HR) management is that aspect of management, which deals with the planning, organising, directing and controlling the personnel functions of the enterprise.
French Wendell, defines ―Human resource management as the recruitment, selection, development, utilisation, compensation and motivation of human resources by the organisation‖
Nature of HRM
The nature of the human resource management has been highlighted in its following features :
1. Inherent Part of Management : Human resource management is inherent in the process of management. This function is performed by all the managers throughout the organisation rather that by the personnel department only. If a manager is to get the best of his people, he must undertake the basic responsibility of selecting people who will work under him.
2. Pervasive Function : Human Resource Management is a pervasive function of management. It is performed by all managers at various levels in the organisation. It is not a responsibility that a manager can leave completely to someone else. However, he may secure advice and help in managing people from experts who have special competence in personnel management and industrial relations.
3. Basic to all Functional Areas : Human Resource Management permeates all the functional area of management such as production management, financial management, and marketing management. That is every manager from top to bottom, working in any department has to perform the personnel functions.
4. People Centered : Human Resource Management is people centered and is relevant in all types of organisations. It is concerned with all categories of personnel from top to the bottom of the organisation. The broad classification of personnel in an industrial enterprise may be as follows : (i) Blue-collar workers (i.e. those working on machines and engaged in loading, unloading etc.) and white-collar workers (i.e. clerical employees), (ii) Managerial and non-managerial personnel, (iii) Professionals (such as Chartered Accountant, Company Secretary, Lawyer, etc.) and nonprofessional personnel.
5. Personnel Activities or Functions : Human Resource Management involves several functions concerned with the management of people at work. It includes manpower planning, employment, placement, training, appraisal and compensation of employees. For the performance of these activities efficiently, a separate department known as Personnel Department is created in most of the organisations.
6. Continuous Process : Human Resource Management is not a ‗one shot‘ function. It must be performed continuously if the organisational objectives are to be achieved smoothly.
7. Based on Human Relations : Human Resource Management is concerned with the motivation of human resources in the organisation. The human beings can‘t be dealt with like physical factors of production. Every person has different needs, perceptions and expectations. The managers should give due attention to these factors. They require human relations skills to deal with the people at work. Human relations skills are also required in training performance appraisal, transfer and promotion of subordinates.
Scope of HRM
The scope of HRM is really vast. All major activities n the working life of a worker – from the time of his or her entry into an organization until he or she leaves it comes under the purview of HRM. 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
Compensation and Benefits
Personnel Research and Information System.
Objectives of HRM
The objectives of HRM can be summarized under four specific objectives: societal, organizational, and functional and personnel.
1) Societal Objectives: seek to ensure that the organization becomes socially responsible to the needs and challenges of the society while minimizing the negative impact of such demands upon the organization. The failure of the organizations to use their resources for the society’s benefit in ethical ways may lead to restriction.
2) Organizational Objectives: it recognizes the role of HRM in bringing about organizational effectiveness. It makes sure that HRM is not a standalone department, but rather a means to assist the organization with its primary objectives. The HR department exists to serve the rest of the organization.
3) Functional Objectives: is to maintain the department’s contribution at a level appropriate to the organization’s needs. Human resources are to be adjusted to suit the organization’s demands. The department’s value should not become too expensive at the cost of the organization it serves.
4) Personnel Objectives: it is to assist employees in achieving their personal goals, at least as far as these goals enhance the individual’s contribution to the organization. Personal objectives of employees must be met if they are to be maintained, retained and motivated. Otherwise employee performance and satisfaction may decline giving rise to employee turnover.
HRM Evolution in India
HRM in India is centuries old. The first reference of HRM was provided by Kautilya as early as 4th century B.C. in his book ‗Arthashastra‘. The work environment had logical procedures and principles in respect of labour organisation such as ‗Shreni‘ Wages were paid in terms of quantity and quality of work. Workers were punished for unnecessary delay or spoiling of work. Kautilyas contribution was based on ‗Shamrastra Concepts like job description, qualifications for jobs, selection procedures, executive development, incentive system and performance appraisal were very effectively analysed and explained.
The guild system prevailed in the Indian economy too. It was based on ‗Varnashram‘ or caste system and resulted in division of labour accordingly. In the course of time, professions became hereditary. From 14th century B.C. to the latter half of 10th century B.C., the relationship of employer-employee was marked with justice and equity.
During the British rule, the work environment was appalling and full of inhuman cruelties. This continued till 1881 when the Factory Act was enacted. In 1890, the first labour organisation was formed and was known as Bombay Mill Hands Association. This association started working for improving the work environment and for getting the 11 workers their rightful dues.
After independence, the activities of the personnel department have multiplied. Human resource department is expected to take care of welfare activities, employment, safety, training, wage and salary administration, promotions, transfers, lay-off, improvement in living and working conditions, health services, safety measurers, prevention and settlement of disputes, etc.
Future Challenges for HR Managers
Because of continuous changing socio-economic, technological and political conditions, the human resource managers of the future shall have to face more problems in the management of labour. The human resource managers of today may find themselves obsolete in the future due to changes in environment if they do not update themselves some of the important challenges which might be faced by the managers in the management of people in business and industry are as below :
1. Increasing Size of Workforce
2. Increase in Education Level
3. Technological Advances
4. Changes in Political Environment
5. Increasing Aspirations of Employees
6. Computerised Information System
7. Mobility of Professional Personnel
8. Changes in Legal Environment
New Role of Human Resource Management
Human Resource Management in the ‗New Millenium‘ has undergone a great revolution by questioning the accepted practices and re-inventing the organisations as well as structures. Many traditional practices have been thrown out. As an example, it can be seen that hierarchies are vanishing and there is greater emphasis on flat organisations. It means a great deal of specialisation and skills. It also means upgrading the norms and standards of work as well as performance. The new role of human resource management is much more strategic than before. Some of the new directions of the role of HRM can be summed up as follows :
1. A Facilitator of Change : To carry people through upheaval requires the true management of human resources.
2. An Integrated Approach to Management : Rather than being an isolated function, human resource is regarded as a core activity, one which shapes a company‘s values. In particular, this can have an impact on customer service.
3. A Mediator : Establishing and balancing the new and emerging aspirations and requirements of the company and the individual.
These changes, which are taking place, involve more commitment of the organisation to the development of people by improving performance and cutting costs. As a result of this, the duration of tenure, which was traditionally long standing, is now limited, future is becoming less certain, management opportunities are self-determined and motivational factors are more concerned with enhancing future employability rather than loyalty to the company and, at the same time, the rewards are going up in terms of higher salaries.
The future creative careers, will require more involved approach to career development.