8 GOLDEN PRINCIPLES OF HUMAN RESOURCES

Reinvent the principles of HR to stay ahead of your times and technologies. Your most valuable asset is your
precious human resources. Make sure employees go home happily and return to the office with excitement.
Posted: May 10, 2016
Article Author:
Professor M.S. Rao, Ph.D.

“Take away my people, but leave my factories, and soon grass will grow on the factory floors. Take away my
factories, but leave my people, and soon we will have a new and better factory.” —Andrew Carnegie
Human Resources (HR) is the backbone of any organization as it deals with all aspects of employees, from
recruitment to retirement, including wages and welfare. As the war for talent intensifies globally, HR is more
focused than ever before. Currently, there is a drastic shift from manual workers to knowledge workers
worldwide, where people aspire to become consultants rather than contractors. Additionally, employee
aspirations and expectations are rising rapidly.
Man vs. Machine
Previously, it was the machine behind the men that counted. But today, it is the men behind the machine that
counts. Organizations are crying for talent globally. There is a scarcity of right talent, and it is a great opportunity
for the right talent to explore and grow globally.
There is a limit to machines, but there is no limit to human potential. Elbert Hubbard rightly remarked, “One
machine can do the work of 50 ordinary men. No machine can do the work of one extraordinary man.” It is a fact
that machines can be handled easily whereas people cannot as people have different emotions, egos, and
feelings. Handling them is a challenging task as they have different expectations and aspirations. Knowing what
motivates them is another major challenge. At times, they don’t gel well with other members in the team and
leaders find it challenging to lead and retain them. Here, the role of HR comes into play in order to effectively
handle employees from entry to exit. Additionally, HR must reinvent with the latest principles and philosophies by
keeping pace with the expectations and aspirations of all stakeholders to stay ahead of the times and
technologies.
HR Principles
There are many principles of Human Resources. Here are eight of them to understand and apply appropriately to
make HR practices transparent and relevant for the future.
Principle #1: Recruitment to retirement.
HR is all about dealing with employees from recruitment to retirement. It includes manpower planning, selection,
training and development, placement, wage and salary administration, promotion, transfer, separation,
performance appraisal, grievance handling, welfare administration, job evaluation and merit rating, and exit
interview. Precisely, it deals with planning, organizing, staffing, directing, and controlling of people.
Principle #2: People (men) behind the machine count.
Previously, it was the machine behind the man that counted. Today, people are the real power to drive
organizations forward. Machines only assist people. Ultimately, the machine is servant to men, not the other way
around.
Principle #3: Hire for attitude, recruit for skills.
Attitude is the key to employee engagement and success. Hence, HR leaders must emphasize attitude rather
than experience. It is better to hire a new job seeker with high attitude and no experience than one with a rotten
attitude and years of experience. If employees possess a good attitude, they will have the ability absorb the
knowledge, skills, and abilities that are essential to perform their tasks effectively in the workplace.
Principle #4: Appreciate attitude but respect intelligence.
It is true that both attitude and intelligence are essential to improve the organizational bottom line. If HR leaders
find it is tough to get both, they should choose attitude over intelligence as it helps accomplish organizational
goals and objectives.
Principle #5: Hire slow, fire fast.
HR leaders must be slow in hiring the right talent for their organizations. They must look for the right mindset, skill
set, and tool set in job seekers during recruitment. If they find that bad apples entered into their basket, they must
be removed quickly to contain further damage to their organizations.
Principle #6: Shed complexity, wed simplicity.
People today prefer to work in flat organizations rather than tall ones. Tall organizations often have hierarchies
with a bureaucratic mindset that doesn’t work in the present context. Gen Yers are happy to work with partners
rather than with bosses. So shed complexity and wed simplicity to achieve organizational excellence and
effectiveness.

Principle #7: HR leaders are king and queen makers.

Presently, there is an impression globally that HR leaders are king and queen makers. They cannot become
kings and queens. They are perceived as people who become ladders for others to climb to higher positions. It is
due to the roles and responsibilities they undertake. HR leaders are masters of their trades, not jacks of other
trades. They know everything about HR, but they don’t necessarily know much about other aspects in the
organization. CEOs are masters in their own domains and jacks of other domains. They are masters in their
areas and know something about others areas. Thus, HR leaders must acquire knowledge about other areas and
acquire technical and business acumen to become kings and queens—the chief executives.
Principle #8: To serve is to lead and live.
Mahatma Gandhi once remarked, “The best way to find yourself is to lose yourself in the service of others.” HR
leaders must serve people with pleasure without any pressure. They must become torchbearers of human capital
and knowledge. They must learn, unlearn, and relearn to stay relevant.
Your Most Valuable Asset
Renee West once said, “You can have the best strategy and the best building in the world, but if you don’t have
the hearts and minds of the people who work with you, none of it comes to life.” So always emphasize people
more than strategy. Emphasize men, not machines. Reinvent the principles of HR to stay ahead of your times
and technologies. Your most valuable asset is your precious human resources. Make sure employees go home
happily and return to the office with excitement. Remember, your employees are your brand ambassadors. Care
for them, respect them, and retain them to accomplish your organizational goals and objectives, and to grow as a
soft leader.
“I am convinced that nothing we do is more important than hiring and developing people. At the end of the day
you bet on people, not on strategies.” —Lawrence Bossidy, GE

Introduction 14 principles of Management

In the last century, organizations already had to deal with management in practice. In the early 1900s, large
organizations, such as production factories, had to be managed too. At the time there were only few (external)
management tools, models and methods available.

Thanks to scientists like Henri Fayol (1841-1925) the first foundations were laid for modern scientific
management. These first concepts, also called principles of management are the underlying factors for
successful management. Henri Fayol explored this comprehensively and, as a result, he synthesized the 14
principles of management. Henri Fayol ‘s principles of management and research were published in the book
‘General and Industrial Management’ (1916).

14 Principles of Management of Henri Fayol

14 principles of Management are statements that are based on a fundamental truth. These principles of
management serve as a guideline for decision-making and management actions. They are drawn up by means of
observations and analyses of events that managers encounter in practice. Henri Fayol was able to synthesize 14
principles of management after years of study.

1. Division of Work

In practice, employees are specialized in different areas and they have different skills. Different levels of
expertise can be distinguished within the knowledge areas (from generalist to specialist). Personal and
professional developments support this. According to Henri Fayol specialization promotes efficiency of the
workforce and increases productivity. In addition, the specialization of the workforce increases their accuracy and
speed. This management principle of the 14 principles of management is applicable to both technical and
managerial activities.

2. Authority and Responsibility

In order to get things done in an organization, management has the authority to give orders to the employees. Of
course, with this authority comes responsibility. According to Henri Fayol, the accompanying power or authority
gives the management the right to give orders to the subordinates. The responsibility can be traced back from
performance and it is therefore necessary to make agreements about this. In other words, authority and
responsibility go together and they are two sides of the same coin.

3. Discipline

This third principle of the 14 principles of management is about obedience. It is often a part of the core values of
a mission and vision in the form of good conduct and respectful interactions. This management principle is
essential and is seen as the oil to make the engine of an organization run smoothly.
4. Unity of Command

The management principle ‘Unity of command’ means that an individual employee should receive orders from
one manager and that the employee is answerable to that manager. If tasks and related responsibilities are given
to the employee by more than one manager, this may lead to confusion which may lead to possible conflicts for
employees. By using this principle, the responsibility for mistakes can be established more easily.

5. Unity of Direction

This management principle of the 14 principles of management is all about focus and unity. All employees deliver
the same activities that can be linked to the same objectives. All activities must be carried out by one group that
forms a team. These activities must be described in a plan of action. The manager is ultimately responsible for
this plan and he monitors the progress of the defined and planned activities. Focus areas are the efforts made by
the employees and coordination.

6. Subordination of Individual Interest

There are always all kinds of interests in an organization. In order to have an organization function well, Henri
Fayol indicated that personal interests are subordinate to the interests of the organization (ethics). The primary
focus is on the organizational objectives and not on those of the individual. This applies to all levels of the entire
organization, including the managers.

7. Remuneration

Motivation and productivity are close to one another as far as the smooth running of an organization is
concerned. This management principle of the 14 principles of management argues that the remuneration should
be sufficient to keep employees motivated and productive. There are two types of remuneration namely non-
monetary (a compliment, more responsibilities, credits) and monetary (compensation, bonus or other financial
compensation). Ultimately, it is about rewarding the efforts that have been made.

8. The Degree of Centralization

Management and authority for decision-making process must be properly balanced in an organization. This
depends on the volume and size of an organization including its hierarchy.

Centralization implies the concentration of decision-making authority at the top management (executive board).
Sharing of authorities for the decision-making process with lower levels (middle and lower management), is
referred to as decentralization by Henri Fayol. Henri Fayol indicated that an organization should strive for a good
balance in this.

9. Scalar Chain

Hierarchy presents itself in any given organization. This varies from senior management (executive board) to the
lowest levels in the organization. Henri Fayol ’s “hierarchy” management principle states that there should be a
clear line in the area of authority (from top to bottom and all managers at all levels). This can be seen as a type of
management structure. Each employee can contact a manager or a superior in an emergency situation without
challenging the hierarchy. Especially, when it concerns reports about calamities to the immediate
managers/superiors.

10. Order

According to this principle of the 14 principles of management, employees in an organization must have the right
resources at their disposal so that they can function properly in an organization. In addition to social order
(responsibility of the managers) the work environment must be safe, clean and tidy.
11. Equity

The management principle of equity often occurs in the core values of an organization. According to Henri Fayol,
employees must be treated kindly and equally. Employees must be in the right place in the organization to do
things right. Managers should supervise and monitor this process and they should treat employees fairly and
impartially.

12. Stability of Tenure of Personnel

This management principle of the 14 principles of management represents deployment and managing of
personnel and this should be in balance with the service that is provided from the organization. Management
strives to minimize employee turnover and to have the right staff in the right place. Focus areas such as frequent
change of position and sufficient development must be managed well.

13. Initiative

Henri Fayol argued that with this management principle employees should be allowed to express new ideas. This
encourages interest and involvement and creates added value for the company. Employee initiatives are a
source of strength for the organization according to Henri Fayol. This encourages the employees to be involved
and interested.

14. Esprit de Corps

The management principle ‘esprit de corps’ of the 14 principles of management stands for striving for the
involvement and unity of the employees. Managers are responsible for the development of morale in the
workplace; individually and in the area of communication. Esprit de corps contributes to the development of the
culture and creates an atmosphere of mutual trust and understanding.

In conclusion on the 14 Principles of management

The 14 principles of management can be used to manage organizations and are useful tools for forecasting,
planning, process management, organization management, decision-making, coordination and control.

Although they are obvious, many of these matters are still used based on common sense in current management
practices in organizations. It remains a practical list with focus areas that are based on Henri Fayol ’s research
which still applies today due to a number of logical principles.