The practice of human resource management (HRM) is concerned with all aspects of how people are employed and managed in organizations. It covers activities such as strategic HRM, human capital management, corporate social responsibility, knowledge management, organization development, resourcing (human resource planning, recruitment and selection, and talent management), performance management, learning and development, reward management, employee relations, employee well-being and health and safety and the provision of employee services. HRM practice has a strong conceptual basis drawn from the behavioral sciences and from strategic management, human capital and industrial relations theories. This foundation has been built with the help of a multitude of research projects. The aim of this chapter is to provide a general introduction to the practice and underpinning concepts of HRM. It covers the definition of human resource management, importance of HRM, growth and evolution of HRM, human resource environment and strategic management approach to human resource management. Personnel, according to some writers, at least in a primitive from, have existed since the dawn of group effort. Certain personnel functions, even though informal in nature, were performed whenever people came together for a common purpose. During the course of this century, however, the processes of managing people have become more formalized and specialized, and a growing body of knowledge has been accumulated by practitioners and scholars. Human resource management (HRM) as it is currently perceived, therefore, represents the extension rather than the rejection of the traditional requirements for managing personnel effectively. Definition of Human Resource Management Human resource management (HRM) is a strategic, integrated and coherent approach to the employment, development and well-being of the people working in organizations. Human Resource Management (HRM) is a relatively new approach to managing people in any organization. People are considered the key resource in this approach. It is concerned with the people dimension in management of an organization. Since an organization is a body of people, their acquisition, development of skills, motivation for higher levels of attainments, as well as
1 ensuring maintenance of their level of commitment are all significant activities. These activities fall in the domain of HRM. Human Resource Management is a process, which consists of four main activities, namely, acquisition, development, motivation, as well as maintenance of human resources. Other definitions of HRM: Human resource management involves all management decisions and action that affect the nature of the relationship between the organization and its employees – its human resources. (Beer et al, 1984)
HRM comprises a set of policies designed to maximize organizational integration,
employee commitment, flexibility and quality of work. (Guest, 1987)
Scott, Clothier and Spiegel have defined Human Resource Management as that branch of management which is responsible on a staff basis for concentrating on those aspects of operations which are primarily concerned with the relationship of management to employees and employees to employees and with the development of the individual and the group.
Northcott considers human resource management as an extension of general
management, that of prompting and stimulating every employee to make his fullest contribution to the purpose of a business. Human resource management is not something that could be separated from the basic managerial function. It is a major component of the broader managerial function.
French Wendell defines ―Human resource management as the recruitment, selection,
development, utilization, compensation and motivation of human resources by the organization.
According to Edwin B. Flippo, Human resource management is the planning, organizing,
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, organizing, directing and controlling the personnel functions of the enterprise. HRM consists of the following propositions: That human resource policies should be integrated with strategic business planning and used to reinforce an appropriate (or change an
2 inappropriate)organizational culture, that human resources are valuable and a source of competitive advantage, that they may be tapped most effectively by mutually consistent policies that promote commitment and which, as a consequence, foster a willingness in employees to act flexibly in the interests of the ‗adaptive organization‘s pursuit of excellence. (Legge, 1989) Human resource management is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural and personnel techniques. (Storey, 1995) HRM is: ‗The management of work and people towards desired ends. (Boxall et al, 2007) HRM is concerned with how organizations manage their workforce (Grimshaw and Rubery, 2007) Importance of HRM Human Resource Management has a place of great importance. According to Peter F. Drucker, The proper or improper use of the different factors of production depends on the wishes of the human resources. Hence, besides other resources human resources need more development. Human resources can increase cooperation but it needs proper and efficient management to guide it. Importance of personnel management is in reality the importance of labor functions of personnel department which are indispensable to the management activity itself. Because of the following reasons human resource management holds a place of importance. 1. It helps management in the preparation adoption and continuing evolution of personnel programs and policies. 2. It supplies skilled workers through scientific selection process. 3. It ensures maximum benefit out of the expenditure on training and development and appreciates the human assets. 4. It prepares workers according to the changing needs of industry and environment. 5. It motivates workers and upgrades them so as to enable them to accomplish the organization goals. 6. Through innovation and experimentation in the fields of personnel, it helps in reducing cost and helps in increasing productivity. 7. It contributes a lot in restoring the industrial harmony and healthy employer-employee relations.
3 8. It establishes mechanism for the administration of personnel services that are delegated to the personnel department. Thus, the role of human resource management is very important in an organization and it should not be undermined especially in large scale enterprises. It is the key to the whole organization and related to all other activities of the management i.e., marketing, production, finance etc. Human Resource Management is concerned with the managing people as organizational resources rather than as factors of production. It involves a system to be followed in business firm to recruit, select, hire, train and develop human assets. It is concerned with the people dimension of an organization. The attainment of organizational objectives depends, to a great extent, on the way in which people are recruited, developed and utilized by the management. Therefore, proper co-ordination of human efforts and effective utilization of human and others material resources is necessary. Growth and Evolution of HRM The terms ‗human resource management (HRM) and ‗human resources (HR) have virtually replaced the term ‗personnel management as a description of the processes involved in man- aging people in organizations, although what is now described as HRM is in practice often synonymous with what used to be described as personnel management. In the early days of HRM it was suggested by Armstrong (1987) that: HRM is regarded by some personnel managers as just a set of initials or old wine in new bottles. It could indeed be no more and no less than another name for personnel management, but as usually perceived, at least it has the virtue of emphasizing the virtue of treating people as a key resource, the management of which is the direct concern of top management as part of the strategic planning processes of the enterprise. Although there is nothing new in the idea, insufficient attention has been paid to it in many organizations. However, commentators such as Guest (1987) and Storey (1995) regard HRM as a substantially different model built on unitarism (employees share the same interests as employers), individualism, high commitment and strategic alignment (integrating HR strategy with the business strategy). It is claimed that HRM is more holistic than traditional personnel management. HRM has also emphasized the notion that people should be regarded as assets rather than variable costs.
4 Human Resource Environment Environment of HRM refers to the aggregate of conditions, events and influences that surround and affect it. Following are the external and internal environment in which the HRM has to function.- 1. External Environment: - Economic, political, technological and demographic factors 2. Internal Environment: - Internal environment comprises of the factors which affect an organization‘s human resources from inside the organization‘s boundaries. Mission, HR policies, organization culture, HR system etc. are the variable of HR internal environment. Major Human Resource Management Functions Human resource management functions are the set of activities performed in utilizing human resources for better achievement of organizational objectives. Following are the major elements of Human Resource Management (HRM) functions. 1. Human Resource planning Human resource planning (HRP) is the process of systematically reviewing human resource requirements to ensure that the required numbers of employees, with the required skills, are available when they are needed. HRP is the process of matching the internal and external supply of people with job openings anticipated in the organization over a specified period of time. 2. Recruitment Recruitment is the process of attracting in individuals in sufficient numbers and encouraging them to apply for jobs with the organization. It is the process of identifying and attracting a pool of candidates, from which some will later be selected to receive employment offers. 3. Selection Selection is the process of choosing from a group of applicants the individuals that best suited for a particular position. Selection process is to identify and employ the best qualified individuals for specific positions. 4. Orientation Orientation is the formal process of familiarizing new employees with the organization, their job, and their work unit. Through orientation (also called socialization or induction) new employees will acquire the knowledge, skills, and attitudes that make them successful members of the organization.
5 5. Training and Development Training and development aim to increase employee‘s ability to contribute to organizational effectiveness. Training is a process designed to maintain or improve performance (skills) in the present job. Development is a program designed to develop skills necessary for future work activities. It is designed to prepare employees for promotion. 6. Compensation Administration Compensation administration refers to the administration of every type of reward that individuals receive in return for their services. In its broader sense, compensation represents all sorts of rewards that individuals receive as a result of their employment. 7. Performance Evaluation Performance evaluation is a formal system of periodic review and evaluation of an individual‘s job performance. 8. Safety and health Safety involves protecting employees from injuries caused by work related accidents. Health refers to the employee‘s freedom from illness and their general physical and mental well – being. This is important because employees who work in a safe environment and enjoy good health are more likely to be productive and yield long – term benefits to the organization 9. Promotion, transfers, demotion and separations Promotions, transfers, demotions, and separations reflects an employee‘s value to the organization. High performers may be promoted or transferred to help them develop their skills, while low performers may be demoted, or transferred to lees important positions, or even separated. 10. Human Resource research Human resource research is a systematic gathering, recording, analyzing and interpretation of data for guiding human resource management decisions. Every human resource management function needs effective research. 11. Other areas such as employee and labor relation, collective bargaining, employee rights & discipline; and retirement are also concerns of human resource management.
