Unit 1 Notes HRM
Concept of HRM
According to Flippo
“Human resource management is the planning, organizing, directing and controlling of the procurement,
development, compensation, integration, maintenance of human resources to the end that individual
,organizational and societal objectives are accomplished.
Human Resource Management is the organizational function that deals with issues related to people such as
compensation, hiring, performance management, organization development, safety, wellness, benefits, and
employee motivation, communication, administration, and training.
Nature of HRM:–
Human resource management is concerned with most effective use of people to achieve organizational &
individual goals. It has the following features:–
Pervasive force: – HRM is pervasive in nature as it is present in every enterprises & at all level of management
in an Organization.
Action oriented: – HRM focuses attention on action rather then record keeping, written procedures or any rules.
Individually oriented: – It helps employees develop their potential fully & encourages them to give output their
best to the organization & motivates them through systematic process.
People oriented:–HRM in all about people at work both as group & individuals. It tries to put people an assigned job
in order to produce good result.
Development oriented:–HRM intends to develop full potential of employees. The reward structure is turned if
turned to need of employees, Training to sharpen & improve their skills, rotation on various job to gain experience
Integrating mechanism:–HRM tries to build & maintain relations between people working at various levels in the
organization & integrate human assets in best possible manner.
Comprehensive function: – HRM is to some extent concerned with any organizational decision which has an impact
on the workforce of organization at all levels.
Inter disciplinary function: – HRM is a multi disciplinary activity utilizing knowledge & inputs drawn from
psychology, sociology anthropology, economics etc
Continuous function: – HRM is not one shot deal. It cannot be practiced one hour a day or one day a week. It requires
constant alertness & awareness of Human Relations & their importance in all operations.
Dr. Ankit Goel
HRM Notes
Scope of HRM: – The scope of HRM is very wide.
Personal aspect:–This is concerned with manpower planning recruitment, selection,
placement, transfer, promotion training & development, retrenchment, incentive &
productivity etc.
Welfare Aspect –It deals with working conditions such as canteens, lunch room, restroom, crèches,
housing, transport, medical assistance, and education, safety about health & recreation facilities.
Industrial relation aspect:–This covers union management relation joint consultation, collective
bargaining, grievance and disciplinary procedures settlement of disputes etc.
Objectives of HRM
Four basic objectives of HRM
1. Societal objectives: To manage human resources in ethical and socially responsible
manner. To be ethically & socially responsible to the needs &challenges of the society
while minimizing the negative impact of such demands upon the organization.
2. Organizational objectives: HR department should focus on achieving the goals of
the organization first and it should recognize its role in bringing about organizational
effectiveness.
3. Functional objectives: HRM should employ the skills and abilities of workforce
efficiently
4. Personnel objectives: Personal objectives of employees must be met if workers are to
be maintained, retained and motivated.
Dr. Ankit Goel
HRM Notes
HRM functions
The function of HRM may broadly be classified into two categories
1. Managerial functions
Like other managers, a human resource manager performs the function of:
Planning: A plan is predetermined course of action. It involves deciding personnel goals,
formulating personnel policies and programmers.
Organizing: It is the process of allocating tasks among the members of group. It is the
framework through which management directs controls and coordinates the efforts of people.
Directing: It is the process of motivating, activating, leading and supervising people. It helps
in building sound individual and human relations in the organization.
Controlling: It implies checking, verifying, and regulating to ensure that everything occurs
in conformity with the plans controlling the management of human resources involves auditing
training programmes, analyzing labor turnover records, interviews , morale surveys and such
other means.
2. Operative functions
1. Procurement
❖ Job Analysis
❖ Human Resource Planning
❖ Recruitment and Selection
❖ Placement
❖ Induction
❖ Transfer
❖ Promotion
❖ Separation
2. Development
❖ Performance Appraisal
❖ Training
❖ Planning and Development
3. Compensation
❖ Job Evaluation
❖ Wage and Salary
❖ Bonus and Incentives
❖ Payroll
4. Integration
❖ Motivation
❖ Job Satisfaction
❖ Grievance Redressal
❖ Collective Bargaining
❖ Discipline
Dr. Ankit Goel
HRM Notes
Importance of HRM
• Human resources management is considered one of the important
administrative departments in various bodies and business organizations,
and its importance is summarized according to the following points:
• HRM provides human resources with various and appropriate
qualifications by relying on the best management that contributes to the
development of production in quality and quantity.
• HRM provides all the tools and means for individual employees by
preparing a set of training programs, and providing wages and incentives
that support the best performance and increase the productivity rate.
• HRM enhances coordination among the various administrative units and
the tasks of individual employees by activating the role of discussion with
the executive management, as it is concerned with activities related to all
individuals.
• HRM helps to discover problems and difficulties related to individuals,
which negatively affect the effectiveness of the organization, and it also
helps managers to manage employee issues and solve them through advice
and guidance.
• HRM provides support to executive directors in order to achieve the goals
of the organization.
• HRM contributes to the study of all organizational and effectiveness
competencies and indicators used in measuring the efficiency of
performance, the rates of accidents that affect the work, and other
indicators and averages.
• HRM provides an appropriate organizational climate for work, by
motivating employees, which will positively affect their job satisfaction,
and thus increase productivity.
• HRM pays attention to achieving the organization’s strategic objectives,
by making use of the competencies present in it.
• HRM helps in training employees and achieving their job stability, as well
as wages and salaries, to ensure increased productivity.
• HRM helps save high costs on the organization, which employees may
incur if they are suspended from work, or if they are not granted
promotions or bonuses.
• HRM helps achieve belonging to the human element, by setting up a fair
system of wages, incentives, and taking care of human relations in the
organization.
Dr. Ankit Goel
HRM Notes
• HRM helps achieve the highest possible productivity through qualitative
and quantitative planning of the human resources needed by the
organization.
• HRM helps maintain work ethics, paying attention to behavioral policies,
and opening the field for communication between management and
workers.
Evolution and principles of HRM
HR Policies
According to a definition “HR Policies are formal rules and procedures that
dictate how certain matters should be addressed in the workplace including
employee rights and duties. HR Policies are tied to employment law. To
avoid non compliance and penalties from the government, employer must
adhere to HR policies.
Dr. Ankit Goel
HRM Notes
Why do we need HR Policies?
HR Policies are basically a course of action embraced by a business Purpose solved
by HR policies (Reason a business need them)
1. They are one of the means of communication between the employer and
employee.
2. Conveys various guidelines which are to be followed within the company.
3. Create benchmark to treat all employees equally and fairly.
4. Help senior management towards better decision making.
5. Make work process more transparent.
6. Prevent misunderstanding which can arise between the employer and employee.
7. Business with policies in place succeeds in the long run than the ones who do not
have any policy in place.
8. HR Policies when placed well result in risk reduction.
9. HR Policies gives a strategic direction to the company.
10. It makes employees more productive.
HR Policies: Examples
we discuss the 10 top HR policies in India that every company should
consider.
1. Employment contract
In India, it is crucial to file proper documentation of the employees that work in the company.
The employee contract acts as the umbrella covering a list of HR policies and agreements.
As per India’s employment laws, it is essential to file proper documentation of the employees
to ensure appropriate navigation through the complex and diverse employment framework.
Therefore, having accurate and updated documents that prove the employee’s compliance to
the company will help in the long term and save them from any legal hassles later. Therefore,
you need to follow the labour and wage laws while processing documentation.
2. Employee wages
Employee payroll is one of the significant aspects of employee management. The job of the
HR department of the company is to manage the employee payroll effectively. This includes
offering competitive salaries to employees and staying in compliance with the government
policies.
Various acts passed by the government cover the employee wages. The most prominent among
being The Minimum Wage Act, 1948. This act sets a particular wage as the minimum wage for
Dr. Ankit Goel
HRM Notes
skilled as well as unskilled workers. The act mandates that the employees earn the ‘Basic’
salary to meet their living expenses.
Further, The Payment of Wages Act, 1936 states that an employee should receive their rightful
monthly salary payment on the agreed-upon date without any unwanted deductions. Therefore,
companies need to follow the laws to remain compliant while being competitive. This is one
of the most critical points in the list of HR policies in India.
3. Code of Conduct
The Code of Conduct is the company’s policies, consisting of its vision, mission, and ethics.
This is created to inform employees about the policies of the behaviour and maintain discipline
while at the workplace.
The code of conduct is among the types of HR policies containing the company’s rules that
employees need to adhere to. The policy includes dress code, equal rights to all, electronic
usage policy, conflict of interest, media policy, proper work environment etc. It also contains
the rules and penalties if an employee breaches or violates the code of conduct.
4. Leave policy
As per requirement, every company should have a good leave policy to provide a clear picture
of the leaves they would be entitled to take in a year. The policy should include a proper
bifurcation of the leaves into paid leaves, sick leaves or casual leaves etc. It must also mention
public holidays.
HR policies in India 2022 should also provide provision for unpaid leaves along with detailed
rules on the salary cut on late arrivals and half days. According to The Factories Act, 1948,
employees are entitled to get paid holidays every week as well as get paid for any extra work
they did beyond their work hours.
5. Employee provident fund
Every employer is liable to set up an employees provident fund account for each of its
employees. The Employees Provident Fund Act, 1947 provides income security to the
employees after their retirement. This is more like a security fund offering various benefits for
employees, such as housing care, medical insurance and retirement pension.
It is important to note that companies exceeding 10 employees must provide provident fund
benefits to their employees. Therefore, if you have more than 10 employees, then you are liable
to have a provident fund scheme for your employees.
Dr. Ankit Goel
HRM Notes
6. Gratuity Policy
The gratuity policy is a way for companies to appreciate the services provided by their
employees towards the company. The gratuity policy applies to all employees who have
provided more than 5 years of continuous service to the organisation.
The company is liable to pay a one-time payment as gratuity payout to employees who are
either being laid off or resigning, but have provided 5 years or more of continuous service. This
is vital to keeping employees happy and engaged. Moreover, companies are legally bound, as
per The Payment of Gratuity Act, 1972, to pay gratuity to their employees.
7. Paternity and maternity leave policy
Every company with more than 10 employees is required by law to provide maternity leave
benefits to women employees as per The Maternity Benefits (Amendment) Act, 2017. Any
woman who has worked with the company for 80 days is entitled to receive the benefits.
According to the act, a pregnant working woman is eligible to get a minimum of 26 weeks of
paid leave for the first 2 children and a subsequent 12 weeks of unpaid leave.
As of now, there is no law on paternity bills for private company employees. The central
government employees are entitled to get paternity leave of 15 days to take care of their wife
and surviving child. There is a proposed paternity benefits bill, 2017, which is still pending
government authorisation.
8. Sexual harassment workplace policy
A company is required to take or implement decisive rules, human resource policies and
regulations to create a safe work ecosystem for women at the workplace. This is not just
required by law, but it should be a moral necessity for the company.
According to The Sexual Harassment Act, 2013, the company must implement proper steps to
protect women employees and interns as well as any woman who visits the company.
Moreover, every company should have a sound sexual harassment policy to address harassment
complaints by women employees actively.
This includes setting up an Internal Complaints Committee in every company crossing the 10-
employee mark to look into the sexual harassment complaints by women at the workplace.
9. Adaptive work culture policy
The past year has seen a paradigm shift in various companies’ work culture. The pandemic has
forced many of them to ask their employees to work from home. This has given rise to the need
for an adaptive work culture policy to provide greater flexibility to employees to choose their
work location or workplace.
Dr. Ankit Goel
HRM Notes
The adaptive work culture policy should contain proper rules and structures to manage
employees working remotely or working from home. This will create a framework or
guidelines for employees to follow when working from different locations.
10. Employment Termination policy
Every employer has to face it. Some of your employees may plan to move ahead at some point
in their careers. You may also feel that an employee no more fits into your larger scheme of
things. These moments are emotional for the employee as well as the employer.
Therefore, the employer needs to ensure that they implement a proper leave policy that lays
down the steps for an employee who wishes to leave the company.
This will help the HR team follow the correct procedures as per the labour laws to terminate
an employee or process the employee’s resignation request.
HR policies are an essential framework that every company needs to ensure smooth
functioning. These policies are the guiding factor that tells the company and the employees
how to work and conduct themselves to ensure a safe and secure working environment for all.
Challenges of HRM
1. Recruitment of Skilled Candidates
2. Development of Leadership
3. Diversity in the Workplace
4. Retainment of Talented Employees
5. Performance Management
6. Compensation Systems
7. Adapting to Changing Technology
8. Compliance with Ever-changing Laws and Regulations
9. Changes in Management
10. Training and Development
Dr. Ankit Goel
HRM Notes
Traditional HRM vs Strategic HRM
What is traditional human resource management?
Traditional human resource management is primarily reactive. This means the HR
department’s activities aren’t fully aligned with the business’s leadership goals. Instead, HR
is more of a task-oriented, administrative department that fulfills employees’ needs only as
they occur.
For example, in a traditional human resource management approach, HR will recruit and hire
employees once a department manager informs them of an open position. Similarly, if
employees have questions about a specific policy, then HR will provide the answers.
However, HR probably won’t go so far as to create an employee handbook or host seminars
on new policies that employees need to be aware of.
One of the issues with this approach is that, because it’s largely reactive, the HR team may
sometimes rush processes, which can make them feel disjointed. There’s often little strategic
planning involved in traditional human resource management, so the team isn’t always aware
of what they could be doing before the company or an employee needs assistance.
What is strategic human resource management?
Unlike the reactive approach of traditional human resource management, strategic human
resource management is highly proactive. With this approach, HR aligns with the business’s
larger goals from an executive level.
Dr. Ankit Goel
HRM Notes
The organization develops a cohesive HR strategy in conjunction with the objectives it wants
to achieve. All human resource initiatives — from recruiting and hiring to onboarding and
training — are designed to bring the organization closer to its targets.
For example, instead of waiting for a department manager to notify the HR team of an open
position, HR will proactively recruit and hire employees based on the overall business
strategy and in lockstep with department managers. The HR team can do this because it’s
already aware of the company’s future needs and can set plans in motion to meet those needs.
Similarly, using the strategic approach, HR will preemptively assess employees’ needs for
onboarding, training, performance evaluations, and compensation, and they’ll develop and
implement programs to provide employees with the necessary information and resources.
New Trends in HRM
Dr. Ankit Goel
HRM Notes
Dr. Ankit Goel
HRM Notes
