HRM 18MBA21

Module 1
Human Resource Management

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 the personnel function which is concerned with procurement, development, compensation,
integration and maintenance of the personnel of an organization for the purpose of contributing towards the
accomplishments of the organization’s objectives. Therefore, personnel management is the planning,
organizing, directing, and controlling of the performance of those operative functions (Edwin B. Flippo).
According to Dessler (2008) the policies and practices involved in carrying out the ―people‖ or
human resource aspects of a management position, including recruiting, screening, training, rewarding, and
appraising comprises of HRM.

2 Nature of HRM
HRM is a management function that helps managers to recruit, select, train and develop members for
an organization. HRM is concerned with peoples’ dimension in organizations.
1. HRM Involves the Application of Management Functions and Principles. The functions and principles
are applied to acquiring, developing, maintaining and providing remuneration to employees in organization.
2. Decision Relating to Employees must be Integrated. Decisions on different aspects of employees must
be consistent with other human resource (HR) decisions.
3. Decisions Made Influence the Effectiveness of an Organization. Effectiveness of an organization will
result in betterment of services to customers in the form of high-quality products supplied at reasonable costs.
4. HRM Functions are not Confined to Business Establishments Only but applicable to non-business
organizations such as education, health care, recreation and like. HRM refers to a set of programmes,
functions and activities designed and carried out in order to maximize both employee as well as organizational
effectiveness.

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3 Features of HRM or characteristics or nature:

1. HRM involves management functions like planning, organizing, directing and controlling
2. It involves procurement, development, maintenance of human resource
3. It helps to achieve individual, organizational and social objectives
4. HRM is a mighty disciplinary subject. It includes the study of management psychology
communication, economics and sociology
5. It involves team spirit and team work.

4 Significance/importance/need of HRM
HRM becomes significant for business organization due to the following reasons.
1. Objective: HRM helps a company to achieve its objective from time to time by creating a positive attitude
among workers. Reducing wastage and making maximum use of resources etc.
2. Facilitates professional growth: Due to proper HR policies employees are trained well and this takes them
ready for future promotions. Their talent can be utilized not only in the company in which they are
currently working but also in other companies which the employees may join in the future
3. Better relations between union and management: Healthy HRM practices can help the organization to
maintain co-ordinal relationship with the unions. Union members start realizing that the company is also
interested in the workers and will not go against them therefore chances of going on strike are greatly
reduced
4. Helps an individual to work in a team/group: Effective HR practices teach individuals team work and
adjustment. The individuals are now very comfortable while working in team thus team work improves
5. Identifies person for the future: Since employees are constantly trained, they are ready to meet the job
requirements. The company is also able to identify potential employees who can be promoted in the
future for the top-level jobs. Thus, one of the advantages of HRM is paring people for the future.
6. Allocating the jobs to the right person: If proper recruitment and selection methods are followed, the
company will be able to select the right people for the right job. When this happens the number of people
leaving the job will reduce as the will be satisfied with their job leading to decrease in labour turnover
7. Improves the economy: Effective HR practices lead to higher profits and better performance by
companies due to this the company achieves a chance to enter into new business and start new ventured
thus industrial development increases and the economy improves.
Scope of HRM

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The major HRM activities include HR planning, job analysis, job design, employee hiring, employee
and executive remuneration, employee motivation, employee maintenance, industrial relations and prospects
of HRM.
The scope of Human Resources Management extends to:
Ø
All the decisions, strategies, factors, principles, operations, practices, functions, activities and methods
related to the management of people as employees in any type of organization.
Ø
All the dimensions related to people in their employment relationships and all the dynamics that flow
from it.

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 Organizational Development Compensation and Benefits Employee
Assistance Union/Labour Relations

Personnel Research and Information System

a) Human Resource Planning: The objective of HR Planning is to ensure that the organization has the
right types of persons at the right time at the right place. It prepares human resources inventory with a
view to assess present and future needs, availability and possible shortages in human resource.
Thereupon, HR Planning forecast demand and supplies and identify sources of selection. HR Planning
develops strategies both long-term and short-term, to meet the man-power requirement.

b) Design of Organization and Job:

This is the task of laying down organization structure, authority, relationship and

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responsibilities. This will also mean definition of work contents for each position in the organization. This
is done by ―job description‖. Another important step is ―Job specification.

Job specification identifies the attributes of persons who will be most suitable for each job which is defined
by job description.

c) Selection and Staffing:

This is the process of recruitment and selection of staff. This involves matching people and their
expectations with which the job specifications and career path available within the organization.

d) Training and Development: This involves an organized attempt to find out training needs of the
individuals to meet the knowledge and skill which is needed not only to perform current job but also to
fulfil the future needs of the organization.

e) Organizational Development: This is an important aspect whereby ―Synergetic effect‖ is generated

in an organization i.e. healthy interpersonal and inter-group relationship within the organization.

f) Compensation and Benefits: This is the area of wages and salaries administration where wages and
compensations are fixed scientifically to meet fairness and equity criteria. In addition labour welfare
measures are involved which include benefits and services.

g) Employee Assistance: Each employee is unique in character, personality, expectation

and temperament. By and large each one of them faces problems everyday. Some are personal some are
official. In their case he or she remains worried. Such worries must be removed to make him or her more
productive and happy.

h) Union-Labour Relations: Healthy Industrial and Labour relations are very important for enhancing
peace and productivity in an organization. This is one of the areas of HRM.

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i) Personnel Research and Information System: Knowledge on behavioral science and industrial
psychology throws better insight into the workers expectations, aspirations and behaviour.Advancement
of technology of product and production methods have created working environment which are much
different from the past. Globalization of economy has increased competition many fold. Science of
ergonomics gives better ideas of doing a work more conveniently by an employee. Thus, continuous
research in HR areas is an unavoidable requirement. It must also take special care for improving
exchange of information through effective communication systems on a continuous basis especially on
moral and motivation.

Objectives of HRM

The primary objective of HRM is to ensure the availability of competent and willing workforce to an
organization. The specific objectives include the following:

1) Human capital: assisting the organization in obtaining the right number and types of employees to
fulfill its strategic and operational goals.

2) Developing organizational climate: helping to create a climate in which employees are encouraged to
develop and utilize their skills to the fullest and to employ the skills and abilities of the workforce
efficiently.

3) Helping to maintain performance standards and increase productivity through effective job design:
providing adequate orientation, training and development; providing performance-related feedback; and
ensuring effective two-way communication.

4) Helping to establish and maintain a harmonious employer/employee relationship 5) Helping to create

and maintain a safe and healthy work environment

6) Developing programs to meet the economic, psychological, and social needs of the employees and
helping the organization to retain the productive employees

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7) Ensuring that the organization is in compliance with provincial/territorial and federal laws affecting
the workplace (such as human rights, employment equity, occupational health and safety, employment
standards, and labour relations legislation). To help the organization to reach its goals

8) To provide organization with well-trained and well-motivated employees 9) To increase the

employees satisfaction and self-actualization

10) To develop and maintain the quality of work life

11) To communicate HR policies to all employees.
12)To help maintain ethical polices and behavior.

5 Objectives of HRM
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
departments 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.

Functions of HRM
Human Resources management has an important role to play in equipping organizations to meet the
challenges of an expanding and increasingly competitive sector. Increase in staff numbers, contractual
diversification and changes in demographic profile which compel the HR managers to reconfigure the

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role and significance of human resources management. The functions are responsive to current staffing
needs, but can be proactive in reshaping organizational objectives. All the functions of HRM are correlated
with the core objectives of HRM (Table 1.1). For example personal objectives is sought to be realized
through functions like remuneration, assessment etc.
6 Functions of HRM

Strategic HR Management:
As a part of maintaining organizational competitiveness, strategic planning for HR effectiveness can
be increased through the use of HR metrics and HR technology. Human resource planning (HRP) function
determine the number and type of employees needed to accomplish organizational goals. HRP includes
creating venture teams with a balanced skill-mix, recruiting the right people, and voluntary team assignment.
This function analyzes and determines personnel needs in order to create effective innovation teams. The
basic HRP strategy is staffing and employee development.
Equal Employment Opportunity: Compliance with equal employment opportunity (EEO) laws and
regulations affects all other HR activities.
Staffing: The aim of staffing is to provide a sufficient supply of qualified individuals to fill jobs in an
organization. Job analysis, recruitment and selection are the main functions under staffing. Workers job
design and job analysis laid the foundation for staffing by identifying what diverse people do in their jobs and
how they are affected by them.
Job analysis is the process of describing the nature of a job and specifying the human requirements
such as knowledge, skills, and experience needed to perform the job. The end result of job analysis is job
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description. Job description spells out work duties and activities of employees. Through HR planning,
managers anticipate the future supply of and demand for employees and the nature of workforce issues,
including the retention of employees. So HRP precedes the actual selection of people for organization.
These factors are used when recruiting applicants for job openings. The selection process is concerned
with choosing qualified individuals to fill those jobs.In the selection function, the most qualified applicants
are selected for hiring from among the applicants based on the extent to which their abilities and skills are
matching with the job.
Talent Management and Development: Beginning with the orientation of new employees,
talent management and development includes different types of training. Orientation is the first step towards
helping a new employee to adjust himself to the new job and the employer. It is a method to acquaint new
employees with particular aspects of their new job, including pay and benefit programmes, working hours
and company rules and expectations. Training and Development programs provide useful means of assuring
that the employees are capable of performing their jobs at acceptable levels and also more than that. All the
organizations provide training for new and in experienced employee. In addition, organization often provide
both on the job and off the job training programmes for those employees whose jobs are undergoing change.
Likewise, HR development and succession planning of employees and managers is necessary to
prepare for future challenges. Career planning has developed as result of the desire of many employees to
grow in their jobs and to advance in their career. Career planning activities include assessing an individual
employee‘s potential for growth and advancement in the organization. Performance appraisal includes
encouraging risk taking, demanding innovation, generating or adopting new tasks, peer evaluation, frequent
evaluations, and auditing innovation processes.
This function monitors employee performance to ensure that it is at acceptable levels. This strategy
appraises individual and team performance so that there is a link between individual innovativeness and
company profitability. Which tasks should be appraised and who should assess employees’ performance are
also taken into account.
Total Rewards: Compensation in the form of pay, incentives and benefits are the rewards given to the
employees for performing organizational work. Compensation management is the method for determining
how much employees should be paid for performing certain jobs.
Compensation affects staffing in that people are generally attracted to organizations offering a higher
level of pay in exchange for the work performed. To be competitive, employers develop and refine their basic
compensation systems and may use variable pay programs such as incentive rewards, promotion from within
the team, recognition rewards, balancing team and individual rewards etc.
This function uses rewards to motivate personnel to achieve an organization’s goals of productivity,
innovation and profitability. Compensation is also related to employee development in that it provides an
important incentive in motivating employees to higher levels of job performance to higher paying jobs in the
organization.
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Benefits are another form of compensation to employees other than direct pay for the work performed.
Benefits include both legally required items and those offered at employer’s discretion. Benefits are primarily
related to the area of employee maintenance as they provide for many basic employee needs.
Risk Management and Worker Protection: HRM addresses various workplace risks to ensure protection
of workers by meeting legal requirements and being more responsive to concerns for workplace health and
safety along with disaster and recovery planning.
Employee and Labor Relations: The relationship between managers and their employees must be handled
legally and effectively. Employer and employee rights must be addressed. It is important to develop,
communicate, and update HR policies and procedures so that managers and employees alike know what is
expected. In some organizations, union/management relations must be addressed as well.
The term labour relation refers to the interaction with employees who are represented by a trade union.
Unions are organization of employees who join together to obtain more voice in decisions affecting wages,
benefits, working conditions and other aspects of employment. With regard to labour relations the major
function of HR personnel includes negotiating with the unions regarding wages, service conditions and
resolving disputes and grievances.

Job analysis
Defn: According to Edwin B. Flippo – “Job analysis is the process of studying and collecting information
relating to the operations and responsibilities of a specific job. The immediate products of this analysis are
job descriptions and job specifications.”

1. Xavier Institute of Management, Bhubaneswar (XIM B)

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Module 2
Job Analysis & Human resource Planning
Meaning

Job analysis is a process in which jobs are studied to determine what tasks and responsibilities they
include, their relationship to other jobs, conditions under which work is performed and the personal
characteristics required for satisfactory performance. Job analysis consists of two parts, a statement
of work to be performed and the skill and knowledge which must be possessed by any one filling
the job.

Process of Job analysis

Organisation Analysis
Selection of job to be analyzed
Data collection
Job description
Job specification

Steps involved
1) Strategies:
a) Extent of employees involvement in job analysis
b) The level of detail of job analysis
c) Timing and frequency of job analysis
d) Past oriented Vs. Future Oriented job analysis

2) Collection of background information: Organisation charts, class specification & existing

job description

3) Selection of representative position to be analysed: In order to analyse – selecting a

representative position.

4) Collection a job description: On features of the job, required employee behavior & human
requirement

5) Developing a job description: Contents of jobs in term of function & operations as given
in job description

6) Developing a job specification: Converting job description into job specification

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Describes – Personal qualities, traits, skills, knowledge & background for getting job done.

7) Developing employee specification: Conversion of job specification into employee

specification, which includes, physical qualification, educational qualification, experience.

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Methods of collecting job analysis data

 Observation
 Interview with job holder
 Interacting with experts in the field
 Gathering information with past performers
 Seeking consultants
 Observation
 Performing the job.
 Critical incidents
 Interview- individual & group
 Panel of experts
 Diary method
 Questionnaire
 Structured & Unstructured
Types of Job analysis Information
 Work Activities:
 Machines, Tools, Equipment’s and Work Aids used
 Personal requirements
 Job context
Outcomes of Job Analysis
The information obtained from job analysis is classified into three categories.
– Job description
– Job specification
– Job evaluation
Job Description
• A job description is a written statement of the duties, responsibilities, required
qualifications and reporting relationships of a particular job.
• The job description is based on objective information obtained through job analysis.
• Job description acts as an important resource for
– Describing the job to potential candidates

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– Guiding new hired employees in what they are specifically expected to do

– Providing a point of comparison in appraising whether the actual duties align with the stated duties.
It includes the following details
: Job title
Occupational code
Reports to

Job on
Supervise
Grade level
As on date
Functions

Duties and responsibility

Job characteristics

Job specification
• Job specifications specify the minimum acceptable qualifications required by the
individual to perform the task efficiently. Based on the information obtained from the job
analysis procedures, job specification identifies the qualifications, appropriate skills,
knowledge, and abilities and experienced required to perform the job.
• Job specification is an important tool in the selection process as it keeps the attention of the
selector on the necessary qualifications required for that job.
It includes the following details
Job title
Gender
Experience
Qualification
Location of the job
Physical health
Education
Appearance

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Mental abilities
Special abilities

Special knowledge and skills

Other details

Role Analysis

At middle and higher Management levels, a clear definition of expected and unexpected job related
behavior is not possible. A role is a set of expectations people have about the behavior of a person
in a position. A position holder may perform 3 types of roles 1.Expected Role, 2.Perceived Role
and 3.Enacted Role. The incumbent’s role is observed and feedback is provided for further
improvement.
It includes the following
Analysis the essential roles, tasks and responsibilities in that particular job
Collecting the list of roles to be performed

Sequencing the tasks and process

Analysis the skills and competencies for the task performance
Matching the skills required and the job demand.

Swot analysis of the employee

Human Resource Planning

The process of analyzing and identifying the need for and availability of human resources so that
the organization can meet its objectives. Top HR executive and subordinates gather information
from other managers to use in the development of HR projections for top management to use in
strategic planning and setting organizational goals such as Small Business and HR Planning Issue
Attracting and retaining qualified outsiders, Management succession between generations of
owners, Evolution of HR activities as business grows, Family relationships and HR policies
Objectives

Human resource planning involves the hiring, development and retention of employees in the
achievement of organizational goals. This includes analysis of the current workforce and how it

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aligns with future employment needs. By planning for the future, human resources creates action
plans aimed to satisfy organizational goals. Consider Future Workforce

• Organizations use strategic planning to achieve goals. This relates to the organization's vision,
mission and strategic objectives. An organization must analyze its future employment needs. If an
organization decides it must increase productivity by 25 percent, it may need to grow its workforce
by 2 percent. If an organization wants to increase market share by moving offices into new
locations, it must consider the human resource requirements. Analyze Current Workforce

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• With future workforce needs considered, human resource planning must analyze the competency
of the present workforce. Comparing future needs with current workforce strengths and abilities
will identify gaps or surpluses. Future Preparation
• Considering workforce surpluses and deficits, human resources must prepare action plans for the
workforce. This includes identifying the type and number of employees needed, employee
competency, budget considerations, recruiting and retaining measures, and the development and
training of employees. Evaluation Process
• Ensuring objectives are being met by the future workforce requires an evaluation process. This
will determine if the workforce is adequate to satisfy strategic goals. Planning for this process now
will more easily and quickly identify future workforce gaps or surplus.
Importance and Process of Human Resource Planning
Importance of HRP

Human Resources Planning (HRP) anticipates not only the required kind and number of employees
but also determine the action plan for all the functions of personnel management .The major
benefits of Human resource planning are:

 It checks the corporate plan of the organization.

 It offsets uncertainly and change .But the HRP offsets uncertainties and changes to the
maximum extent possible and enables the organization to have right men at right time and
in right place.
 It provides scope for advancement and development of employees through
training,development etc.
 It helps to anticipate the cost of salary enhancement, better benefits etc.
 It helps to anticipate the cost of salary, benefits and all the cost of human resources
facilitating the formulation of budgets in an organization.
 To foresee the need for redundancy and plan to check it or to provide alternative
employment in consultation with trade unions, other organizations and government
through remodeling organizational, industrial and economic plans.
 To foresee the changes in values, aptitude and attitude of human resources and to change
the techniques of interpersonal, management etc.

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 To plan for physical facilities, working conditions and the volume of fringe benefits like

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canteen, schools, hospitals, conveyance, child care centers. Quarters, company
stores etc.
 It gives an idea of type of tests to be used and interview techniques in
selection based on the level of skills, qualifications, intelligence, values
etc., of future human resources.
 It causes the development of various sources of human resources to meet the
organizational needs.
 It helps to take steps to improve human resource contributions in the form
of increased productivity, sales turnover etc.
 It facilities the control of all the functions, operations, contribution and
cost of human resources.
Process of Human Resource Planning
HR Strategies
– The means used to anticipate and manage the supply of and
demand for human resources.
• Provide overall direction for the way in which HR
activities will be developed and managed.
Scanning the External Environment
• Environmental Scanning
– The process of studying the environment of the
organization to pinpoint opportunities and threats.
• Environment Changes Impacting HR
– Governmental regulations
– Economic conditions
– Geographic and competitive concerns
– Workforce composition
Internal Assessment of the Organizational Workforce
• Auditing Jobs and Skills
– What jobs exist now?
– How many individuals are performing each job?
– How essential is each job?
– What jobs will be needed to implement future organizational strategies?
– What are the characteristics of

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anticipated jobs?

– Organizational Capabilities
Inventory
HRIS databases—sources of information about employees’
knowledge, skills, and abilities (KSAs)

– Components of an organizational capabilities inventory

• Workforce and individual demographics
• Individual employee career progression
• Individual job
performance data
Forecasting HR
Supply and Demand
• Forecasting
– The use of information from the past and present to identify
expected future conditions.
• Forecasting Methods
– Judgmental
• Estimates—asking managers’ opinions, top-down or bottom-up
• Rules of thumb—using general guidelines
• Delphi technique—asking a group of experts
• Nominal groups—reaching a group consensus in open discussion
– Mathematical
• Statistical regression analysis—
• Simulation models
• Productivity ratios—units produced per employee
• Staffing ratios—estimates of indirect labor needs
• Forecasting Periods
– Short-term—less than one year
– Intermediate—up to five years
– Long-range—more than five years
Effective of HRP
Diagnostic Measures of HR Effectiveness
– HR expense per employee

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– Compensation as a percent of expenses
– HR department expense as a percent of total expenses
– Cost of hires
– Turnover rates
– Absenteeism rates
– Worker’s compensation per employee

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