You've reached the end of your free preview.
Want to read all 293 pages?
Unformatted text preview: CHAPTER I: HUMAN RESOURCE MANAGEMENT
"Human Resource Management is a process consisting of acquisition, development,
motivation and maintenance of Human Resource."
—David A. Decenzo and Steven P. Robbins
After reading this chapter you should understand:
■ Conceptual clarity of human resource management ■ Definitions of human resource management ■ Role of human factor in management ■ Importance of human resources in industrial enterprise ■ Major activities under human resource management ■ Structure of human resource department 1.1 Introduction:
Human Resource Management or HRM is the management of purposeful source, i.e.
Human beings. The speedy changes in technology and economy are undergoing. The
recent scenario of economic liberalization and process of liberalization increased the
importance of human resource management by unifold. The approach is to humanize
management. The world over in general of Ethiopia in particular the human resource
development and human resource management gained an importance and is viewed as a
fundamental aspect of management. The more stress is now given on human resource
development. The effective human resource utilization and human resource development
become very essential. It is the primary task of any management in the organizations.
Human resource development is now viewed as the key to economic development.
People are vital elements of any organization. No one can ignore them rather one has to
develop them. A visit to such organization, a college, an office, a school, a departmental
store, a factory, military cantonment, a hospital, political party's office, or even religious
places, a mosque, a church, a temple would realize the importance of people there and the
role they play. So it is certain that human resources are all the more important. They are
an asset to be drawn upon. The human resource development has become a buzzword for
any organization now.
1 What do the human resources mean? Leon C. Megginson has described human
resources as, "the total knowledge, skills, creative abilities, talents and attitudes of an
organization's workforce, as well as the value, attitudes and beliefs of the individual
involved." Human resources are therefore source of strength, ability, competence, skill,
creativity, knowledge, attitude, aptitude, values, beliefs, talent, efficiency, decisionmaking prowess, valor, zeal, enthusiasm, etc. If these qualities among human resources
are tapped and developed, they can be effectively utilized for accomplishment of
organizational, individual, societal and national objectives.
Human resources are the assets or wealth of the country whom it can rely upon at any
time. The need of the hour is to develop these resources. Human resources development
is, therefore, a continuous process of sharpening the skills, knowledge of the people
adopted by almost all organizations. Human resources are crucial and most vital elements
in any organization. It is, therefore, presumed that the expenses incurred on human
resource development and training is investment, the investment, which yields an income.
The effective human resources management and their development are very essential for
the very growth and development of the organization.
1.2 Meaning of Human Resource Management
1.2.1 Definitions of Terms
Following definitions of important terms are given below:
The term management is defined by:
"Management is the creation and control of technological and human environment of an
organization in which human skill and capabilities of individual and groups find full
scope for their effective use in order to accomplish the objective for which an enterprise
has been set up. It is involved in the relationship of individuals, groups, organizations and
—Prof. A. Das Gupta
"Management is the development of people and not direction of things... management, is
—Lawrence A. Appley 2 "Management is simply the process of decision-making and control over the action of
human beings for the express purpose of attaining predetermined goals."
"Management is a distinct process consisting of planning, organizing, actuating and
controlling performed to determine and accomplish the objectives by the use of people
—George R. Terry
"Management is the method of effectively utilizing available resources for the purpose of
delivering goods and services to the maximum satisfaction of maximum number of
In all the above definitions we find a common factor. This is the focus on people. Thus
we find management as a science or art cannot exist without people and their
participation. Once again, without an exception, all authors have highlighted importance
of human resources and their development as the bedrock of all management practices.
With this background we shall now discuss some popular definitions.
(b) Human Resources Management
Simply put, Human Resource Management (HRM) is a management function that helps
managers recruit, select, train and develop members for an organization. Obviously,
HRM is concerned with the people's dimension in organizations.
The core points of HRM are:
1. Organizations are not mere bricks, mortar, machineries or inventories. They are
people. It is the people who staff and manage organizations.
2. HRM involves the application of management functions and principles. The
functions and principles are applied to acquisitioning, developing, maintaining,
and remunerating employees in organizations.
3. Decisions relating to employees must be integrated. Decisions on different aspects
of employees must be consistent with other human resource (HR) decisions. 3 4. Decisions made must influence the effectiveness of an organization. Effectiveness
of an organization must result in betterment of services to customers in the form
of high-quality products supplied at reasonable costs.
5. HRM functions are not confined to business establishments only. They are
applicable to non-business organizations, too, such as education, health care,
recreation, and the like.
The following three definitions collectively cover all the five core points:
1. …….a series of integrated decisions that form the employment relationship; their
quality contributes to the ability of the organizations and the employees to achieve
2. …….is concerned with the people dimension in management. Since every
organization is made up of people, acquiring their services, developing their
skills, motivating them to higher levels of performance and ensuring that they
continue to maintain their commitment to the organization are essential to
achieving organizational objectives. This is true, regardless of the type of
organization-government, business, education, health, recreation, or social action.
3. …….management is the planning, organizing, directing and controlling of the
procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organizational, and
Social objectives are accomplished.
Thus, 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.
Perusal of these definitions highlights the following elements in human resources
Scope is confined to managing people at work in an organization. Well-being of individuals and groups are attempted. Development of individuals and their satisfaction. 4 Organizational development and contribution to the organizational objectives.
Attempting management functions such as planning, organizing, directing, coordinating and control as applicable to staff
Attending to staffing functions such as recruitment, selection, placement, etc.
Look after industrial relations, union-management interactions and collective bargaining. Emancipation leading to empowerment of employees. Human resource management means managing people. It is people, if not properly
managed it creates problem. Top managements of the organizations are now paying more
attention towards the human resource management because they have now realized that
human resources need to be closely integrated with planning and decision-making.
Human resource management, therefore, involves all managerial decisions, policies and
practices that influence human resource directly. According to Wendell L. French, the
human resource management, "refer to the philosophy, policies, procedures, and
practices related to the management of people within an organization." To David A.
Decenzo and Steven P. Robbins, Human Resource Management is, "a process consisting
of the acquisition, development, motivation, and maintenance of human resources."
Human resource management includes human resource planning, job design acquisition,
training and development, compensation, benefit and rewards, safety and health,
motivation, employee participation in management, organization development, performance appraisal, job evaluation, human relations, employee counselling, personnel
research and human resource information system (HRIS), etc.
Human resources are the valuable assets of any organization. They are their strength. To
face the new challenges on the fronts of knowledge, technology and changing trends in
global economy needs effective human resource management.
1.3 Scope of Human Resource Management
The scope of HRM is indeed vast. All major activities in the working life of a workerfrom the time of his or her entry into an organization until he or she leaves come under
5 the purview of HRM. Specifically, the activities included are - HR planning, job analysis
and design, recruitment and selection, orientation and placement, Training and
development, performance appraisal and job evaluation, employee and executive
enumeration, motivation and communication, welfare, safety and health, industrial
relations (IR) and like. For the sake of convenience, we can categorize all these functions
into seven sections.
(i) Introduction - HRM, (ii) Employee hiring, (iii) Employee and executive remuneration, (iv) Employee motivation, (v) Employee maintenance, (vi) Industrial relations (IR), and (vii) Prospects of HRM (see Fig. 1.1).
o Fig 1.1 Scope of HRM As the subsequent pages in this module unfold, all these functions are explained in a
1.4 Major Activities under HRM
A potentially large number of activities are involved in human resources management.
This number varies according to the size and needs of the organization. These HRM
activities affect the organization internally as they are meant for organization's
development and prosperity. These activities are directly related with the human
6 resources of the organization job structures and job performance of the employees, job
results, health and safety, salary structure, productivity, quality, competitiveness,
objectives of the organization, policies, procedures, strategy of the organization, i.e., overall
planning, etc. The human resource management activities are affected by the external
environment, business environment, competition, population, etc. The major Human Resource
management activities are as under: 1.5 Structure of Human Resources Department
In every organization big or small there is a human resource development now, and personnel
department then headed by a manager. In large organizations more specialists are employed while
in small organizations one person has to perform many specialized jobs. The word manager is equivalent here to the chairman or director. Many organizations use to nomenclature as
‘chairman human resources’, ‘director human resources’ or ‘president human resources’.
Nomenclatures differ from organization to organization, in its size and sophistications.
We use a common term ‘manager.’ The following diagram illustrates the structure of
human resource department.
of HR Organizatio
Resource Training &
nt Safety &
on & Other
& Review Fig 1.2: Major Activities in HRM 1.6 1.6 HRM Model
We follow the model (shown in Fig. 1.5) for discussing the subject HRM in this module.
As seen from the figure, the model contains all HR activities. When these activities are
discharged effectively, they will result in a competent and willing workforce who will
help realize organizational goals.
7 Nature of HRM
Training & Develop
T Motivation Participative
Safety & Health Organizational
Disputes & Settle
Future of HRM
International HRM Fig:1.3 HRM Model There is another variable in the model—environment. It may be stated that the HR
function does not operate in vacuum. It is influenced by several external and internal
forces like economic, technological, political, legal, organizational and professional
8 Activity1.1: Based on above HRM Model draw similar diagram indicating
the components of HRM in relation to your TVET 1.7 The Semantics
As in any other discipline, there is the problem of semantics in HRM, too. First, we have
two terms, namely, personnel management (PM) and HRM. Between these two terms
there is a basic difference, and it is useful to understand as to what it is.
HRM differs from PM both in scope and orientation. HRM views people as an important
source or asset to be used for the benefit of organizations, employees and the society. It is
emerging as a distinct philosophy of management aiming at policies that promote
mutuality—mutual goals, mutual respect, mutual rewards and mutual responsibilities.
The belief is that policies of mutuality will elicit commitment which, in turn, will yield
both better economic performance and greater human resource development (HRD). The
year 1990 was a turning point in the evolution of HRM. The American Society for
Personnel Administration (ASPA) the largest professional association in this field of
management changed its name to the Society for Human Resource Management
(SHRM). Since then, the expression is gradually replacing the worn-out term - personnel
PM views labour as a tool, the behaviour of which could be manipulated for the benefit
of the organization and replaced when it was worn - out. The personnel department itself
was not treated with respect. It was filled with not-very-productive employees whose
services could be spared with minimal damage to the organization's ongoing operations.
Personnel function was treated as a routine activity meant to hire new employees and to
maintain personnel records. It was never considered a part of the strategic management of
businesses. Historically, PM preceded HRM.
Another term widely used these days is HRD. For many people, HRD and HRM convey
the same meaning. This may not be true. Essentially, HRD is a function more concerned
with training and development, career planning and development, performance and
potential appraisal, counselling, succession planning, and welfare. HRD, therefore, is a
part of HRM (see fig 1.3). 9 Table 1.1 Differences between HRM and PM SNo Dimension Personnel Management Human
Management 1 Employment contract Aim to go beyond contract 2 Rules Careful delineation of written
Importance of devising clear rules 3
5 Guide to management action
Managerial task vis-à-vis
Speed of decision
Prized management skills
Job categories and grades Procedures
Norms/customs and practices
Monitoring Can do outlook, impatience with
Nurturing Labour management
Separate, marginal task
Job evaluation (fixed grades)
Integrated, key task
Few Division of labour
Reach temporary truce
Controlled access to courses
Personnel procedures 21 Job design
Training and development
Focus of attention for
Respect for employees 22 Shared interests 23 Evolution Interests of the organization are
Precedes HRM Team work
Manage climate and culture
Wide-ranging cultural, structural
and personnel strategies
People are treated as assets to be
used for the benefit of an
organization, its employees and the
society as a whole
Mutuality of interests 6
20 Labour is treated as a tool which is
expendable and replaceable Resource Latest in the evolution of the
subject Industrial Relations Management (IRM) is yet another term which adds to the problem of
semantics. Industrial relations, as the term implies, is merely concerned with employee
grievances and their settlement unionization, and the like. Obviously, IRM is one wing of
HRM (see Fig. 1.3).
1.8. Objectives of HRM:
The primary objective of HRM is to ensure the availability of a competent and willing
workforce to an organization. Beyond this, there are other objectives, too. Specifically,
10 HRM objectives are four fold - societal, organizational, functional and personal (see Fig.
a. Societal Objectives: To be ethically and socially responsible to the needs and
challenges of the society while minimizing the negative impact of such demands upon
the organization. The failure of organizations to use their resources for the society's
benefit in ethical ways may lead to restrictions. For example, the society may limit
HR decisions through laws that
s enforce reservation in hiring and
laws that address discrimination,
safety or other such areas of
societal concern. Functional Objectives b. Functional
the contribution Organizational Objectives appropriate To department's
the organizational needs. Resources Societal Objectives are wasted when HRM is either
more or less sophisticated to suit
Fig 1.4 Objectives of the HRM organization's demands. The department's level of service
must be tailored to fit the
organization it serves.
c. Organizational Objectives: To
recognize the role of HRM in
beginning about organizational
effectiveness. HRM is not an end Organizational Objectives in itself. It is only a means to 11 assist the organization with its primary objectives. Simply stated, the department
exists to serve the rest of the organization.
d. Personal Objectives: To assist employees in achieving their personal goals, at least
insofar as these goals enhance the individual's contribution to the organization.
Personal objectives of employees must be met if workers are to be maintained,
retained and motivated. Otherwise, employee performance and satisfaction may
decline and employees may leave the organization. 1.9. HRM: Functions and Objectives
In order to realize the objectives stated above, HRM must perform certain functions.
These functions have been stated while outlining the scope of HRM. Generally, it may be
stated that there is a correlation between the objectives and the functions. In other words,
some functions help realize specific objectives. For example, the organizational objective
is sought to be met by discharging such functions as HR planning, recruitment and
selection, training and development, and performance appraisal. Similarly, the personal
objective is sought to be realized through such functions as remuneration, assessment,
and the like. Table 1.2...
View Full Document
- Winter '18
- Mr. DOc
- Human Resource Management