CONCEPT OF HRM
HRM is a strategic approach to the acquisition, motivation, development and management of the organisation’s human resources. It is a specialised field that attempts to devd .ng an appropriate corporate culture, and introducing programmes which reflect and support the core values of the enterprise and ensure its success. HRM is proactive rather than reactive, i.e., always looking forward to what needs to be done and then doing it, rather than waiting to be told what to do about recruiting, paying or 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 manpower planning, selection, performance appraisal, salary administration, training and management development. These will be overlaid by special programmes designed to improve communication systems, involvement, commitment, and productivity.
Broadly, there are three meanings 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, they are human resources which means that they have their own special characteristics and, therefore, cannot be treated like material resources. The approach focuses on the need to humanise organisational life and introduce human values in the organisation. And thirdly, human resources do not merely focus on employees as individuals, but also on other social realities, units and processes in the organisation. These include the role or the job a person has in the organisation, the dydadic unit, (consisting of the person and his superior), the various teams in which people work, inter-team processes, and the entity of the total organisation.
In its essence, HRM is the qualitative improvement of human beings who are considered the most valuable assets of an organization-the sources, resources, and end-users of all products and services. HRM is, no doubt, an outgrowth of the older process and approach. But it is much more than its parent disciplines, viz., personnel management, and behavioural science. HRM is also more comprehensive and deeprooted than training and development. Its approach is multi-disciplinary from the beginning to the end. It is a scientific process of continuously enabling the employees to improve their competency and capability to play their present as well as future expected roles so that the goals of the organization are achieved more fully and at the same time the needs of the employees are also met to an adequate extent.
HRM is a production model approach to personnel management. The HRM model is characterised as being employee-oriented with an emphasis on the maximisation of individual skills and motivation through consultation with the workforce so as to produce high levels of commitment to company strategic goals. It is a resource to be used to its fullest capacity. It is an asset to be invested in. HRM is concerned with both the structure of work in a firm and with all the related employment practices that are needed to carry out the work. HRM is not simply about HR or ‘people practices’, it is about the management of work and people in the firm. Managing people includes both individual and collective dimensions. The traditional personnel management is non-strategic, separate from the business, reactive, short-term, and constrained by a limited definition of its role as dealing with mostly unionised and low level employees. The major attention of traditional personnel function is on personnel administration or management while the major attention of HRM is on developing people and their competencies. If personnel management is curative, HRM is preventive. The key distinguishing feature of HRM is its evolving strategic role.
HRM essentially emphasises and incorporates those expectations which are not being fulfilled through the traditional personnel management. It integrates in a meaningful way the various sub-systems like performance appraisal, potentiality appraisal and development, career planning, training and development, organisation development, research and systems development, rewards, employee welfare and quality of work life, industrial relations, and human resource information. Under the HRM approach, some basic assumptions about human resources are also different from the traditional approach. The important assumptions of HRM are as follows:
1) The members of an organisation are reservoirs of untapped resources.
2) There is scope for unlimited development of these resources.
3) It is more in the nature of self-development than development thrust from outside.
4) The organisation also undergoes development with the overall benefits along with the development of its members.
5) The organisation further develops a culture in which utmost emphasis is placed on harmonious superior-subordinate relations, teamwork, collaboration among different groups of individuals, open communication, and above all, integration of the goals of the organisation with the needs of the employees.
6) Top management takes the initiative for HRM, formulates necessary plans and strategies, and creates an overall climate and support for its implementation.
FUNCTIONS OF HRM
HRM plays the centre stage role in an organisation to meet the challenges of a dynamic and competitive environment. Due to the changes in the business environment, the work, workplaces and demographics HR managers need to reconfigure their roles. However, in general the HRM functions are broadly of two categories: Managerial and Operational.
I. Managerial Functions
Managerial functions of human resource management involve planning, organising, directing and controlling.All these functions influence the operative functions.
A) Planning: It is a predetermined course of action. Planning pertains to formulating strategies of programmes and changes in advance that will contribute to the organisational goals. In other words, it involves planning of human resources, requirements, recruitment, selection, training etc. It also involves forecasting of HR needs, changing values, attitudes and behaviour of employees and their impact on the organisation.
B) Organising: Organising is essential to carry out the determined course of action. In the words of J.C. Massie, an organisation is a “structure and a process by which a co-operative group of human beings allocates its task among its members, identifies relationships and integrates its activities towards a common objective.” Thus, an organisation establishes relationships among the employees so that they can collectively contribute to the attainment of company goals.
C) Directing: The next logical function after completing planning and organising is the execution of the plan. The willing and effective cooperation of employees for the attainment of organisational goals is possible through proper direction. Tapping the maximum potentialities of the people is possible through motivation and command. Co-ordination deals with the task of blending efforts in order to ensure successful attainment of an objective.
D) Controlling: Controlling involves checking, verifying and comparing of the actuals with the plans, identification of deviations if any and correcting of identified deviations. Thus, action and operation are adjusted to pre-determined plans and standards through control. Auditing training programmes, analysing labour turnover records, directing morale surveys, conducting separate interviews are some of the means for controlling the HRM function and making it effective.
II. Operative Functions
The operative functions of human resources management are related to specific activities of managing employees, viz., employment, development, compensation and relations. All these functions are interacted with managerial functions. There are five major operative functions that HR managers carry out.
A. HR Sourcing
B. Performance and development
C. Compensation management
D. Integration
E. Employee relations
With the changing business scenario these are emerging functions which HR managers carry out.
1. HR Resourcing: It is the first operative function of Human Resources Management (HRM). It is concerned with employing the people possessing the required kind and level of human resources necessary to achieve the organisational objectives. It covers functions such as job analysis, human resources planning, recruitment, selection, placement, induction and orientation.
i) Job Analysis: It is the process of study and collection of information relating to the operations and responsibilities of a specific job. It includes:
- Collection of data, information, facts and ideas relating to various aspects of jobs including men, machines and materials.
- Preparation of job description, job specifications, job requirements and employee specifications which will help in identifying the nature, levels and quantum of human resources.
- Providing the guides, plans and basis for job design and for all operative functions of HRM.
ii) Human Resources Planning: It is a process for determination and assuring that the organisation will have an adequate number of qualified persons, available at proper times, performing jobs which would meet the needs of the organisation and which would provide satisfaction for the individuals involved. It involves:
- Estimation of present and future requirements and supply of human resources based on objectives and long range plans of the organisation.
- Calculation of net human resources requirements based on present inventory of human resources.
- Taking steps to mould, change and develop the strength of existing employees in the organisation so as to meet the future human resources requirements.
- Preparation of action programmes to get the rest of human resources from outside the organisation and to develop the human resources in terms of existing employees.
iii) Recruitment: It is the process of searching for prospective employees and stimulating them to apply for jobs in an organisation. It deals with:
- Identification of existing sources of applicants and developing them.
- Creation/identification of new sources of applicants.
- Stimulating the candidates to apply for jobs in the organisation.
- Striking a balance between internal and external sources.
iv) Selection: It is the process of ascertaining the qualifications, experiences, skills, knowledge etc., of an applicant with a view to appraising his/her suitability to a job. This function includes: Framing and developing application blanks.
- Creating and developing valid and reliable testing techniques.
- Formulating interviewing techniques.
- Checking of references.
- Setting up a medical examination policy and procedure.
- Line manager‟s decision.
- Sending letters of appointment and rejection.
- Employing the selected candidates who report for duty.
v) Placement: It is the process of assigning the selected candidate with the most suitable job in terms of job requirements. It is matching of employee specifications with job requirements. This function includes:
- Counselling the functional managers regarding placement.
- Conducting follow-up study, appraising employee performance in order to determine employee adjustment with the job.
- Correcting misplacements, if any.
vi) Induction and Orientation: Induction and orientation are the techniques by which a new employee is rehabilitated in the changed surrounding and introduced to the practices, policies, purposes and people etc., of the organisation.
- Acquaint the employee with the company philosophy, objectives, policies, career planning and development, opportunities, product, market share, social and community standing, company history, culture etc.
- Introduce the employee to the people with whom he has to work such as peers, supervisors and subordinates.
- Mould the employes attitude by orienting him to the new working and social environment.
2. Performance and Development: It is the process of improving, moulding and changing the skills, knowledge, creative ability, aptitude, attitude, values, commitment etc., based on present and future job and organisational requirements.
i) Performance Appraisal: It is the systematic evaluation of individuals with respect to their performance on the job and their potential for development. It includes:
- Developing policies, procedures and techniques.
- Helping the functional managers.
- Reviewing of reports and consolidation of reports.
- Evaluating the effectiveness of various programmes.
ii) Training: It is the process of imparting to the employees technical and operating skills and knowledge.
It includes:
- Identification of training needs of the individuals and the company.
- Developing suitable training programmes.
- Helping and advising line management in the conduct of training programmes.
- Imparting of requisite job skills and knowledge to employees.
- Evaluating the effectiveness of training programmes.
iii) Management Development: It is the process of designing and conducting suitable executive development programmes so as to develop the managerial and human relations skill of employees.
It includes:
- Identification of the areas in which management development is needed.
- Conducting development programmes.
- Motivating the executives.
- Designing special development programmes for promotions.
- Using the services of specialists, and/or utilising of the institutional executive development programmes.
- Evaluating the effectiveness of executive development programmes.
iv) Career Planning and Development: It is the planning of one‟s career and implementation of career plans by means of education, training, job search and acquisition of work experiences. It includes internal and external mobility.
v) Internal Mobility: It includes vertical and horizontal movement of an employee within an organisation. It consists of transfer, promotion and demotion.
vi) Transfer: It is the process of placing employees in the same level jobs where they can be utilised more effectively in consistence with their potentialities and needs of the employees and the organisation. It also deals with:
- Developing transfer policies and procedures.
- Guiding employees and line management on transfers.
- Evaluating the execution of transfer policies and procedures.
vii) Promotion: It deals with upward reassignment given to an employee in the organisation to occupy higher position which commands better status and/or pay keeping in view the human resources of the employees and the job requirements. This function covers.
- Formulating of equitable, fair and consistent promotion policies and procedures.
- Advising line management and employees on matters relating to promotions.
- Evaluating the execution of promotion policies and procedures.
viii) Demotion: It deals with downward reassignment to an employee in the organisation.
- Develop equitable, fair and consistent demotion policies and procedures.
- Advising line managers on matters relating to demotions.
- Oversee the implementations of demotion policies and procedures.
ix) Retention and Retrenchment Management: Employers prefer to retain more talented employees while they retrench less talented employees. Employers modify existing human resource strategies and craft new strategies in order to pay more salaries, provide more benefits and create high quality of work life to retain the best employees. And managements pay less to the less talented employees and plan to retrench the misfits as well as unwanted employees depending upon the negetive business trends
x) Change and Organisation Development: Change implies the creation of imbalances in the existing pattern or situation. Organisation development is a planned process designed to improve organisational effectiveness and health through modifications in individual and group behaviour, culture and systems of the organisation using knowledge and technology of applied behavioural sciences
C. Compensation Management: It is the process of providing adequate, equitable and fair remuneration to the employees. It includes job evaluation, wage and salary administration, incentives, bonus, fringe benefits, social security measures etc.
i) Job Evaluation: It is the process of determining relative worth of jobs.
- Select suitable job evaluation techniques.
- Classify jobs into various categories.
- Determining relative value of jobs in various categories.
ii) Wage and Salary Administration: This is the process of developing and operating a suitable wage and salary programme. It covers:
- Conducting wage and salary survey.
- Determining wage and salary rates based on various factors.
- Administering wage and salary programmes.
- Evaluating its effectiveness.
iii) Incentives: It is the process of formulating, administering and reviewing the schemes of financial incentives in addition to regular payment of wages and salary. It includes:
- Formulating incentive payment schemes.
- Helping functional managers on the operation.
- Review them periodically to evaluate effectiveness.
iv) Bonus: It includes payment of statutory bonus according to the Payment of Bonus Act, 1965 and its latest amendments.
v) Fringe Benefits: These are the various benefits at the fringe of the wage. Management provides these benefits to motivate the employees and to meet their life‟s contingencies. These benefits include: Disablement benefit.
- Housing facilities.
- Educational facilities to employees and children.
- Canteen facilities.
- Recreational facilities.
- Conveyance facilities.
- Credit facilities.
- Legal clinics.
- Medical, maternity and welfare facilities.
- Company stores.
vi) Social Security Measures: Managements provide social security to their employees in addition to the fringe benefits. These measures include:
- Workmen‟s compensation to those workers (or their dependents) who involve in accidents.
- Maternity benefits to women employees.
- Sickness benefits and medical benefits.
- Disablement benefits/allowance.
- Dependent benefits.
- Retirement benefits like provident fund, pension, gratuity etc.
D. Integration: Practicing various human resources policies and programmes like employment, development, compensation and interaction among employees create a sense of relationship between the individual worker and management, among workers and trade unions and the management.
It is the process of interaction among human beings. Human relations is an area of management in integrating people into work situations in a way that motivates them to work together productively, co-operatively and with economic, psychological and social satisfaction. It includes:
- Employee engagement
- Understanding and applying the models of perception, personality, learning, intra- and inter-personal relations, intra- and inter-group relations.
- Motivating the employees.
- Boosting employee morale.
- Developing the communication skills.
- Developing the leadership skills.
- Grievance redressal
- Handling disciplinary cases by means of an established disciplinary procedure.
- Counseling the employees in solving their personal, family and work problems and releasing their stress, strain and tensions.
- Providing a comfortable work environment by reducing fatigue, monotony, boredom and industrial accidents.
- Improving quality of work life of employees through participation and other means.
E. Employee Relations: The term „industrial relations‟ refers to the study of relations among employees, employers, government and trade unions. Industrial relations include:
- Trade unionism
- Collective bargaining
- Industrial conflicts
- Workers‟ participation in management
Emerging Functions in HRM: Apart from the above mentioned functions of HRM, these are some emerging functions. Human Resources Management has been advancing at a fast rate. The recent trends in HRM include:
- Strategic HRM
- Ethics and HRM
- HR accounting, audit and research and
- International HRM
- HR outsourcing
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