CHAPTER - 1

OVERVIEW OF HUMAN RESOURCE

MANAGEMENT &

HUMAN RESOURCE DEVELOPMENT

A. HUMAN RESOURCE MANAGEMENT

1.A.1 Introduction

1■ A.2 Meaning & Definition

1. A.3 Evolution of HRM

1. A.4 Nature of HRM

1. A.5 Functions of HRM

1. A.6 Objectives of HRM

1. A.7 HR Activities

1. A.8 The Challenge to HRM

A. HUMAN RESOURCE MANAGEMENT

1. A.1 INTRODUCTION

Resource means, a source, which can be used when needed. Each and every resource

has a last point of finish. But, while about human resources i.e. human skills,

techniques, ideas, aptitudes, etc., it may not have a last point of finish. Compared to

other resources it depreciates, while human resources appreciate with the passage of

time. Amongst all resources required for an organization Human Resource is the most

important resource. From the ages of kings and politicians have ruled, but only those

who have succeeded are the persons, who have tactfully, used their available human

resources. Appropriate human resources assure an organization that the right number

and kind of people are available at the right time and place so that organizational

needs can be met. Therefore, success of any organization depends on the management

of human resources. In generic terms, Human Resource means, “The total knowledge,

skills, creative abilities, talents, aptitudes, values, attitudes, approaches” in a

personnel. Generally, some resources are developed, while some are obtained through

heredity. When these resources are used in a way such that maximum benefits can be

taken out of it, then it is called “Human Resource Management”.

Human resource management is the organization function that deals with issues

related to people such as compensation, hiring, performance management,

organization development, safety, wellness benefits, employee motivation,

communication, administration and training. The purpose of human resource

management in an organization is to achieve maximum individual development,

favourable working atmosphere and constructive relationship between employers and

employees; in other words effective utilization of Human Resources. Human resource

management is a strategic approach to the motivation and development of people, and

to gaining their commitment so that they can make their best contribution to

organization success, while also meeting their own needs and aspirations.

It is also pervasive force, action-oriented, individually- oriented, development-

oriented, future-focused, and integrative in nature and is a comprehensive function.

Effective HRM enables employees to contribute effectively and productively to the

overall company direction and the accomplishment of the organization’s goals and

objectives.

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In short, HRM aims at achieving organizational goals meet the expectations of

employees; develop the knowledge, skills and abilities of employees, improve the

quality of working life and manage human resources in an ethical and socially

responsible manner. The effective use of people is the critical factor in the successful

accomplishment of corporate goals. To this end HR managers have to understand the

needs, aspirations of employees proactively, face the challenges head on resolve

issues amicably in the years ahead.

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1. A.2 MEANING & DEFINITIONS

Human resource management can be defined as that part of management process

which develops and manages the human elements of enterprise considering the

resourcefulness of the organization’s own people in terms of total knowledge, skills,

creative abilities, talents, aptitudes and potentialities. It refers to the qualitative and

quantitative aspects of employees working in an organization. It is a process of

making the efficient and effective use of human resources so that the set goals are

achieved.

In simple sense, “Human Resource Management means employing people,

developing their resources, utilizing, maintaining and compensating their services in

tune with the job and organizational requirements with a view to contribute to the

goals of the organization, individual and society”.

According to Leon C. Megginson, the term human resources can be thought of as “the

total knowledge, skills, creative abilities, talents and aptitudes of an organization’s workforce, as well as the values, attitudes and beliefs of the individuals’ involved”1.

According to Dale Yoder, “The management of human resource is viewed as a system in which participants seeks to attain both individual and group goals”2.

Michael J. Jucius defines human resources as “A whole consisting of interrelated,

interpedently and interacting physiological, psychological, sociological and ethical components”3.

According to Flippo, “Human Resource Management is 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”4.

1 Megginson L.C., Human Resources, Cases & Concepts, Harcout Brace, New York, 1967.2 Dale Yoder, Personnel Management & Industrial Relations, Prentice Hall, New Delhi, 1982.3 Michael J. Jucius, Personnel Management, Richard D. Irwin Inc. Homewood, Illinois, 1979.4 Edwin B. Flippo, Principles of Personnel Management, Mcgraw Hill Publications, 1976.

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French defined, “Personnel Management is the recruitment, selection, development,

utilization of accommodation to human resource of an organization consists of all

individuals regardless of their role, who are engaged in any of the organization activities”5.

According to National Institute of Personnel Management of India, “Human Resource

Management is that part of management which is concerned with people at work and

with their relationships within the organization. It seeks to bring men and women who

make up an enterprise, enabling each to make their own best contribution to its

success both as an individual and as a member of a working group”.

Human Resource Management is the term increasingly used to refer the philosophy,

policies, procedures and practices relating to the management of people within

organizations. It is the qualitative improvement of human beings who are considered

the most valuable asset of an organization- the sources, resources, and end-users of all

products and services.

Dun & Stephens defined, “Personnel Management is the process of attracting, holding and motivating people, innovating all managers-line & staff’6.

Paul Pigors & Charles Myres defined, “It is a method of developing potentialities of

employees so that they get maximum satisfaction out of their work and give their best efforts to the organization”7.

Prof. Thomas G. Spates defined, “Personnel administration is a code of the ways of

organizing and treating individuals at work so that they each will get the greatest

possible realization of their intrinsic abilities, thus attaining maximum efficiency for

themselves and their group, and thereby giving to the enterprise of which they are a part its determining competitive advantage and its optimum results”8.

5 French Wendell, the Personnel Management Process: Human Resource Administration, Houghton Mifflin Company, New York, 1943.

6 Dun, J.D. & Stephens, Ec., Management of People, McGraw Hill Book Company, New York, 1972.7 Pigors, Paul & Myres, Charles A., Personnel Administration; A point of View & Method, McGraw Hills

Books Company, Kagakusha Ltd., Tokyo, Second Edition, 1961.8 Spates, Thomas G., An objective Scrutiny of Personnel Administration, American Management

Association, New York, 1944.

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According to Decenzo and Robbins, “Human Resource Management is concerned

with the people dimension management. Since every organization is made 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, essential for achieving organizational objectives. This is true, regardless

of the type of organization- government, business, education, health, recreation or social action”9 .

Prof. Cynthia D. Fisher, Lyle F. Schoenfeldt and James B. Shaw stated that, “Human

Resource Management involves all management decisions and practices that directly

affect or influence the people or human resources who work for the organization. In

recent years, increasing attention has been devoted to how the organizations manage

human resources. It is important to examine as to how organization’s employees enable as organization to achieve its goals”10.

Guest defined, “Human Resource Management comprises a set of policies designed to

maximize organizational integration, employee commitment, flexibility and quality of work”* 11.

It is clear from the above definitions that human resources refer to the qualitative and

quantitative aspects of employee working in an organization. Human Resource

Management as a process of making the efficient and effective use of human

resources so that the set goals are achieved.

In short, HRM can be defined as a process of procuring, developing and maintaining

competent human resources in the organization so that the goals of an organization

are achieved in an effective and efficient manner. It also an art of managing people at

work in such a manner that they give their best to the organization.

9 David A. Decenzo & Steppen P. Robbins, Human Resource Management, John Wiley & Soans Inc. New York, 1994.10 Prof. Cynthia D. Fisher, Lyle F. Schoenfeldt & James B. Shaw, Human Resource Management, Houghton Muffic company, Boston, 1977.11 Guest D.E., Human Resource Management & Industrial Relations, Journal of Management Studies, 1987.

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A3 EVOLUTION OFHRM

The early part of the century saw a concern for improved efficiency through careful

design of work. During the middle part of the century emphasis shifted to the

availability of managerial personnel and employee productivity. Recent decades have

focused on the demand for technical personnel, responses to new legislation and

governmental regulations, increased concern for the quality of working life, total

quality management and a renewed emphasis on productivity. The evolution and

development of HRM has interrelationship with that of management.

The development of HRM is classified as follows:

1) Industrial Revolution Era:

The Industrial Revolution consisted essentially of the development of machinery. This

brought about mass production of goods. Workers were treated like ‘glorified

machine tools’. Industrialization completely changed the way people earned their

living. It was made possible by the replacement of human effort and skill by the work

of machines. One of the contributions of the industrial Revolution was the

development of the “factory” system. The factory system gave birth to a

rationalization of work and a division of work. With the advent of the factory system

personnel practices became autocratic, based upon a commodity concept of labour.

Consequently, there was a total neglect of the human factor-the focus was upon

materials, markets and production. In the late 1800’s when unions were battling for

recognition and violent strikes become a significant concern, these developments in

management practices accelerated. By the early 1900’s, many of the components of

modem human resource management were falling into place.

2) Scientific Management Era:

The scientific management movement owes its origin to Fredrick WinslowTraylor

who is known as the father of scientific management. He showed scientific

management as an alternative to the prevailing system of management by initiative

and incentive. Scientific management is nothing but a systematic analysis and

breakdown of work into its smallest mechanical elements and rearranging them into

their most efficient combination. Taylor was concerned with worker inefficiency and

the need for managers to gain the co-operative effort of the employees.

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According to Taylor, “Planning should be the result of co-operation between the

management and workers and that a provision should exist for compensating the

personnel with financial incentives”.

Scientific Management represented a new attitude towards management and Taylor’s

work contributed greatly to the formalization and specialization of management.

3) Trade Unionism:

The view point underlying trade unionism was to safeguard the worker’s interest and

to sort out of their problems such as use of child labour, long working hours and poor

working conditions. Unions tried to improve the lot of workers through collective

bargaining, resolving the grievances of workers relating to working conditions, pay

and benefits, disciplinary actions, etc. For the acceptance of their problems, this union

used strikes, slowdowns, walkouts, picketing, boycotts and sabotage as weapons.

4) Paternalistic Era:

Management must assume a fatherly and protective attitude towards employees.

Paternalism does not mean merely providing benefits but it means satisfying various

needs of the employees as parents meet the requirement of the children.

Robert Owen, British Industrialist, reformer and humanitarian, is considered to be the

first to adopt humanistic and paternalistic approach towards workers. He, who is

considered to be the father of personnel management, worked for the welfare of the

workers and tried to develop a spirit of co-operation between the workers and the

management. He viewed that the returns from investment in human resources would

be much higher than the investment in machinery and equipment. He regarded the

workers as children who must be cautiously guided, trained and protected. He advised

other manufacturers to devote more attention to workers in order to increase

productivity because the workers according to Owen are the vital machines. In order

to improve the productivity, it is necessary to improve conditions of employees by

removing them from an adverse environment or by changing the environment with the

provisions of more satisfactory living and working conditions.

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5) Industrial Psychology Era:

Hugo Munsterberg is regarded as the father of industrial psychology. His

contributions to industrial management were particularly notable in the field of

emotional requirements of workers. In industrial psychology era, greater emphasis

was given to individual and group relationships in the workplace. Its main objective

was to increase human efficiency by focusing on the maximum well-being of the

worker and decreasing the physiological and psychological costs of work.

6) Human Relations Era:

The organization is a social system that has both economic and social dimensions.

The objective of human relations approach was to make employees productive and it

was realized that employees’ satisfaction is the best means of making the employee

productive. The human relations’ movement has been a major influence on modem

human resource management.

This movement is characterized by its focus on group behaviour and workers’ feelings

as they relate to productivity and morale. Therefore, management must be mainly

concerned with the informal, spontaneous behaviour of work groups and the

sentiments and attitudes of employees.

7) Behavioural Science Era:

The behavioural science era assumes human behaviour as a means to achieve

efficiency in performance and it is an outgrowth of the human relations studies. The

major contributions made by behavioural scientists are in the areas of motivation,

leadership, communication, organizational culture and individual and group

dynamics.

8) Personnel Specialist Era & Welfare Era:

Employees are the most valuable assets of an organization. There should be a

conscious effort to realize organizational goals by satisfying needs and aspirations of

employees. Employees are considered to be the part in the progress of a company and

also having a feeling their own organization. To this end, managers must offer better

quality of working life and offer opportunities to people to exploit their potential

folly.

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Evolution Development of HRM in India

Period DevelopmentStatus

Outlook Emphasis Status

1920s-1930s

Beginning Pragmatism of Capitalists

Statutory, welfare Paternalism

Clerical

1940s-1960s

Struggling for recognition

Technical,Legalistic

Introductiontechniques

Administrative

1970s-1980s

Impressing with sophistication

Professional,Legalistic,Impersonal

Regulatory, conformance, imposition of standards another function

Managerial

1990s Promising Philosophical Human Values, Productivity Through people

Executive

Chart No: 1. C. S. Venkataraman and B.K. Srivastava, Personnel Management and Human Resources 1991, Tata McGraw Hill, New Delhi, Pg.5

1. A.4. NATURE OFHRM

In every phase of life, man learns new things and makes use of those in his daily

routines. This nature builds a person to develop and change from time to time. When

this change is well utilized by a person to coincide the organizational and individual

goal, it becomes an effective human resources management.

It has following features:

1) Pervasive Force:

HRM is pervasive in nature. It is present in all enterprises. HRM is the central sub­

function of an organization and it permeates all types of functional management viz.,

production management, marketing management and financial management. Each and

every manager is involved with human resource function.

2) Action Oriented:

HRM focuses attention on action, rather than on record keeping, written procedures or

rules. The problems of employees at work are solved through rational policies.

3) Individually Oriented:

It tries to help employees develop their potential fully. It encourages them to give

their best to the organization. Under HRM, every employee is considered as an

individual so as to provide services and programmes to facilitate employees’

satisfaction and growth. In other words, it is concerned with the development of

human resources, i.e., knowledge, capability, skill, potentialities and attaining and

achieving employee goals.

4) People Oriented:

HRM is all about people at work, both as individual and groups. It tries to put people

on assigned jobs in order to produce good results. The resultant gains are used to

reward people and motivate them toward further improvements in productivity. It is

the process of bringing people and organization together so that the goals of each are

met.

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5) Future Oriented:

Effective HRM helps an organization meet its goals in the future by providing for

competent and well-motivated employees.

6) Development Oriented:

HRM intends to develop the full potential of employees. The reward structure is tuned

to the needs of employees. Training is offered to sharpen and improve their skills.

Employees are rotated on various jobs so that they gain experience and exposure.

Every attempt is made to use their talents fully in the service of organizational goals.

Individual employee-goals consist of job satisfaction, job security, high salary,

attractive fringe benefits, challenging work, pride, status, recognition, opportunity for

development etc. HRM is concerned with developing the potential of employees, so

that they derive maximum satisfaction from their work and give their best efforts to

the organization.

7) Integrating Mechanism:

HRM tries to build and maintain cordial relations between people working at various

levels in the organization. In short, it tries to integrate human assets in the best

possible manner in the service of an organization.

8) Comprehensive Function:

HRM is, to some extent, concerned with any organizational decision which has an

impact on the workforce or the potential workforce. The term ‘workforce’ signifies

people working at various levels, including workers, supervisors, middle and top

managers. It is concerned with managing people at work.

9) Auxiliary Service:

HR departments exist to assist and advise the line or operating managers to do their

personnel work more effectively. HR manager is a specialist advisor. HR managers do

not manufacture or sell goods but they do contribute to the success and growth of an

organization by advising the operating departments on personnel matters.

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10) Inter-disciplinary Functions:

HRM is a multi-disciplinary activity, utilizing knowledge and inputs drawn from

psychology, sociology, anthropology, economics, etc. to unravel the mystery

surrounding the human brain, managers, need to understand and appreciate the

contributions of all such ‘soft’ disciplines.

11) Continuous Functions:

HRM is a continuous and never ending process.

According to George R.Terry, “it cannot be turned on and off like water from a

faucet; it cannot be practiced only one horn each day or one day each week. Personnel

management requires a constant alertness and awareness of human relations and their

importance in everyday operations.

12) Challenging Functions:

Managing of human resources are challenging job due to the dynamic nature of

people. HRM aims at securing unreserved co-operation from all employees in order to

attain pre-determined goals.

Therefore, HRM is the management of human resources in the organization and is

concerned with the creation of harmonious working relationships among its

participants and bringing about their utmost individual development. It is about

developing people and enabling them to make the best use of their abilities in their

own interests, as well as those of the organization. It furthermore matches human

resources to the strategies and operational needs of the organization, and ensuring the

full utilization of those resources.

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A. 5 FUNCTION OF HRM

HRM has been described as a process of development of human resource through

guidance, integration, motivation of personnel to achieve the organizational goals

along with individual goals. This is a social process involving responsibility for

economic planning and supervising activities of an enterprise keeping the ‘human

factor’ in forefront of all activities. Whilst it is not easy to ensure that all the functions

of HRM are interdependent, interrelated and depend upon the specific situation. Most

functions are carried out as one single activity of management.

Functions of HRM can mainly be divided into two:

A. Managerial Functions

B. Operative Functions

A. Managerial Functions:

Managerial functions involve planning, organizing, staffing, directing, coordinating,

controlling, reporting and budgeting, the work of those who are entrusted with the

performing of operative functions. All these functions influence the operative

functions and also they are interdependent. In other word, managers procure process

and peddle, find and employ resources, develop services and find markets for their

output.

1) Planning:

Planning is a hard job, for it involves the ability to think, to predict, to analyze and to

come to decisions, to control the actions of its personnel and to cope with a complex,

dynamic fluid environment. It is a pre-determined course of action.

According to Allen, “It is a trap laid to capture the future”. In fact, “Planning today

avoids crises tomorrow”.

Thus, planning is future oriented concerned with clearly charting out the desired

direction of business activities in future.

2) Organizing:

Organizing involves giving each subordinates a specific task, establishing

departments, delegating authority to subordinates, establishing channels of authority

and communication, coordinating the work of subordinates, and so on.

In the words of Drucker, “The right organizational structure is the necessary

foundation, without it the best performance in all other areas of management will be

inefficient and frustrated”.

So an organization is the combination of authority and responsibility because, in its

essentials, it consists of the assignment of specific functions to designate to have them

carried out, and their accountability to management for the results obtained.

3) Directing:

Directing includes guiding, overseeing, inspiring and influencing the subordinates to

work in a way that is beneficial to the enterprise as well as the community. The

effective directing is an appreciation of human nature and it is involved with getting

persons together and asking them to work willingly and effectively for the

achievement of designated goals. So direction is an important managerial function to

build sound industrial and human relations besides securing employee contributions.

It is the process of activating group efforts to achieve the desired goals.

4) Controlling:

Controlling is the process of setting standards for performance, checking to see how

actual performance compares with these set standards, and taking corrective actions as

needed. It is through control that action and operation are adjusted to pre-determined

standards, and its basis is information in the hands of the managers. By check,

analysis and review the personnel department assists in realizing the personnel

objectives.

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B. Operative Functions:

The operative functions of personnel management are concerned with the activities

specially dealing with procuring, developing, compensating, integrating and

maintaining an efficient workforce. These functions are also known as service

functions. It varies from department to department depending on the nature of the

department. The operative functions of HRM relate to ensuring right people for right

jobs at right times.

1) Procurement:

The first operative function of personnel management is procurement. The

procurement function is concerned with the obtaining of a proper kind and number of

personnel necessary to accomplish organizations goals. It deals specifically with such

subjects as the determination of manpower requirements, selection and placement,

induction, follow-up, transfers, lay-offs, discharge and separation etc.

2) Development:

The development function deals with the personal development of employees by

increasing their skills, through training so that job performance is properly achieved.

It is the process of improving, moulding, changing and developing the skills,

knowledge, creative ability, aptitudes, attitude, values and commitment based on

present and future requirements both at the individual’s and organization’s level.

3) Compensation:

Compensation function involves determination of wages and salaries matching with

contribution made by employees to organizational goals. To frame a suitable

compensation policy, management has to take into consideration various factors, viz.,

job evaluation, existing remuneration policy, incentive plans, bonus policy etc. It also

helps in building a suitable salary and wage structure.

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4) Maintenance:

The maintenance function deals with sustaining and improving the conditions that

have been established. It aims at protecting and preserving the physical and

psychological health of employees through various welfare measures. So maintenance

function ensures that employees’ needs are well taken care of by the management by

providing benefits and services.

5) Integration:

HRM tries to integrate the management and the workers to have mutual respect for

each other and bring in a new sense of industrial relations in the enterprise for

economic progress and industrial harmony. It is mainly focus on employees to

understand that they are part and partial of the enterprise and inculcate a feeling of

belonging to the enterprise.

In short, the key role of HRM function is to play a part in the creation of an

environment which enables people to make the best use of their capabilities and to

realize their potential to the benefits of both the organization and themselves. It is also

essentially a business-oriented philosophy concerning the management of people in

order to obtain added value from them and thus achieve competitive advantage.

Today HRM function is not only more integrated but is holistic as well. HR

practitioners of today are not narrowly specialist in his/her personnel area. It is

important to note that the managerial and operative functions of HRM are performed

in conjunction with each other in an organization, be large or small organizations.

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Functions of HRM

Chart No: 2. Functions of HRM

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L A.6. OBJECTIVE OFHRM

Human resources are managed to divert and utilize their resources towards and for the

accomplishment of organizational objectives. The most important objective of any

organization would be to find out the right person for the right job, so that the

organizational goals are achieved. The objectives of HRM changes from time to time

and from organization to organization.

They are as follow:

1) 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.

2) Organizational Objectives'.

To recognize the HRM exists to contribute to organizational effectiveness. HRM is

not an end in itself; it is only a means to assist the organization with its primary

objectives.

3) Functional Objectives:

To maintain the department’s contribution at a level appropriate to the organization’s

needs. A department’s level of service must be appropriate for the organization it

serves.

4) Personal Objectives:

To assist employees in achieving their personal goals, at-least in so far 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.

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Hence objectives in order to improve business performance and develop

organizational culture that foster innovation and flexibility. Management has to create

conducive environment and provide necessary pre-requisites for the attainment of the

objectives of HRM. Objectives should be based on 3H’s i.e. Heart, Head & Hand. We

should feel by Heart, think by Head & implemented by Hand.

Objectives of HRM

HRM Objectives Supporting Functions

Social/Societal Objectives 1) Legal Compliance2) Benefits3) Union Management Relations4) Personal Objectives

Organizational Objectives 1) Human resource planning2) Employee relations3) Selection4) Training & Development5) Appraisal6) Placement7) Assessment

Functional Objectives 1) Appraisal2) Placement3) Assessment

.. ... ... .... ..... .. ...Personal Objectives 1) Training and Development2) Appraisal3) Placement4) Compensation5) Assessment

Chart No: 3. Objectives of HRM

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Objectives of HRM

Chart No: 4. Objectives of HRM

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L A. 7.HR ACTIVITIES

One aspect of getting the greatest contribution from human capital in an organization

requires that a fit be made with how people are treated and the long-term effect on the

company’s bottom-line. The way that happens is through HR activities that are based

on research, best practices, and continuing enhancement of HR efforts. HRM can be

thought of as seven interlinked activities taking place within organizations.

Additionally, external forces- legal, economic, technological, global, environment,

cultural/geographic, political and social- significantly affect HR activities and how

they are designed, managed and changed.

The HR activities are:

1) Strategic HRM:

As part of maintaining organizational competitiveness, HR effectiveness can be

increased through the use of HR measurement and HR technology. Through HR

planning, managers anticipate the future supply of and demand for employees. An

additional strategic HR concern is the retention of employees.

2) Equal Employment Opportunity:

Compliance with equal employment opportunity (EEO) laws and regulations affects

all other HR activities. The diversity of a workforce creates additional challenges. For

instance, a company must have sufficient diversity to meet affirmative action

requirements.

3) Staffing:

The aim of staffing is to provide a sufficient supply of qualified individuals to fill jobs

in an organization. Job analysis lays the foundation for staffing by identifying what

people do in their jobs. These analyses are used when recruiting applicants for job

openings. The selection process is concerned with choosing qualified individuals to

fill those jobs in the organization.

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4) Talent Management & Development:

Beginning with the orientation of new employees, talent management and

development includes different types of training. Also, HR development of employees

and managers is necessary to prepare for future challenges. Career planning identifies

paths and activities for individual employees as they move within the organization.

Assessing how well employees perform their jobs is the focus of performance

management.

5) Total Rewards:

Compensation in the form of pay incentives, benefits, rewards people for performing

organizational work. To be competitive, employers develop and refine their basic

compensation systems and may use variable pay programs such as gain sharing and

productivity rewards. The rapid increase in the cost of benefits will continue to be a

major issue for most employers.

6) Risk Management & Workers Protection:

Employers need to address an increasing number of workplace risks to ensure workers

protection. For decades employers have had to meet legal requirements and be more

responsive to concerns for workplace health and safety. Also, workplace security has

grown in importance along with disaster and recovery planning.

7) Employee & Labour Relations:

The relationship between managers and their employees must be handled effectively.

Employee rights and privacy issues 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.

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HR Activities

C EXTERNAL ENVIRONMENT

Chart No: 5. HR Activities

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SOC

IAL

1. A.8. THE CHALLENGE TO HRM

As Ulrich (1998) points out, environmental and contextual changes present a number

of competitive challenges to organizations, which mean that HR has to be involved in

helping to build new capabilities. Globalization requires organizations to move

people, ideas, products and information around the world to meet local needs.

Some of the important challenges are as follow:

1) Vision Penetration:

Vision not only provides the fuel and directions to business strategy, but also helps

managers evaluate management practices and make decisions. Penetration of vision

shall therefore, become an important integral part of man management in future.

2) Internal Environment:

Creating an environment, which is responsive to external changes, providing

satisfaction to the members of the organization, and sustaining it through culture,

useful traditions, practices, and even systems, will become another important

dimension of managing managerial personnel.

3) Change in Industrial Relations:

The practice of industrial relations has undergone sea change. Development of

workers may need simpler and appropriate inputs, but both the workers and managers

must be managed and developed by the same set of assumptions and HRM

philosophy of the company.

4) Building Organizational Capabilities:

The paradigm of managing managers would include not only assisting them to acquire

new skills and knowledge and to evaluate environmental changes, to evolve business

strategies, but also to live in a psychological state of readiness to continuous change.

5) Job Design & Organizational Structure:

In designing organizations, soon give up uncritical acceptance of foreign concepts and

fads like quality circles, TQM, etc. Instead of these, organizational structure and

design will primarily base on task approach and people approach.

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6) Increasing size of workforce:

The management of an increased workforce poses serious problems and challenges

especially since the workers are becoming more conscious of their rights.

7) Changing Psycho-social system:

In the traditional bureaucratic mode, the organizations were designed to perform

technical functions with strict compartmentalization of work functions. But in future,

human participation will be required not only in technical functions but also in

establishing the democratic humanistic system.

8) Satisfaction of higher level needs:

The workers are becoming much aware of their higher level needs. This awareness is

likely to intensify further in the future workforce. Therefore, managers would be

required to evolve appropriate techniques of motivating the workers and getting work

for them.

9) Equalitarian Social System:

Contemporary organizations are putting lesser emphasis on the hierarchical structures

and thus moving towards a more equalitarian social system. This is going to be more

common in days to come.

10) Technological Advance:

In the wake of technological advances new jobs will be created and may old jobs will

become redundant. Unemployment resulting from modernization could be liquidated

by properly assessing manpower needs and training of redundant employees in

alternate skills.

11) Computerized Information Systems:

It will pay a revolutionary role in managerial decision-making. It will also have an

increasing impact in co-ordination and at strategic levels.

12) Changes in legal Environment:

To meet with the increasing changes in the legal environment, necessary adjustments

will have to be made so that greater utilization of human resources can be achieved.

13) Management of Human Relations:

The new generation workforce comprising educated and conscious workers will ask

for higher degree of participation and avenues for self-fulfilment. It is rather difficult

to motivate many of the new generation workers than their predecessors. This is partly

due to change in their value system and higher levels of professional competency.

Therefore, today personnel managers may find themselves obsolete because of the

rapidly changing business environment, and they should also constantly update their

knowledge and skills by looking at the organization’s needs and objectives.

Challenges of HR Managers

Chart No: 6. Challenges of HR Managers

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B. HUMAN RESOURCE DEVELOPMENT

1. B.1 Introduction

1. B.2 Meaning & Definitions

1. B.3 Evolution of HRD

1. B.4 Nature of HRD

1. B.5 Functions of HRD

1. B.6 Aims of HRD

1. B.7 HRD Matrix

Bo HUMAN RESOURCE DEVELOPMENT

1. B.l INTRODUCTION

Human resource development is concerned with the development of human resource

in an organization. Development means improving the existing capabilities to the

human resources in the organization and helping them to acquire new capabilities

required for the achievement of the corporate as well as individual goals. It believes

that individuals in an organization have unlimited potential for growth and

development and their potential can be developed and multiplied through appropriate

and by providing the right type of climate in the organization, individuals can be

helped to give foil expression of their potential, contributing to the achievement of

goals of the organization and thereby ensuring optimization of human resources.

Investment in human beings is another underlying concept of the human resources

system. The organization accepts that development of human resources involves

investment of time and concern for growth. Everyone in the organization will have to

take self-responsibility for growth and optimization of performance. It is the process

of enhancing potential of people to perform better in all spears of life. People’s

potential can be developed through training and capacity building access to

opportunity and environment, which supports their developments.

The term “HRD” implies development qualities, capabilities, positive work aptitudes

of all the people working at all levels in an organization, so that their performance in

the present jobs is increased and they become prepared to take on increased

responsibilities in the foture. HRD is a process, which consists of a series of activities

conducted in order to design behavioural efforts should be made in such a way that

the employees should contribute willingly and wholeheartedly towards the

accomplishment of the goals or objectives of their organization. It is expected that

HRD should help and motivate the employees of an organization to acquire and

develop necessary technical, managerial and behavioural knowledge, skills and

abilities to mould the values, beliefs, attitudes required to perform present as well as

foture roles by realizing human potentials with a view to contribute positively to the

organizational, group, individual and social goals. HRD helps the employees to

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acquire expertise required to perform all their activities, jobs efficiently and

effectively for their own well being as well as of their organization.

HRD aims at overall development of human resources in order to contribute to the

well being of the employees, organization and the society at large. It activities should

begin, when an employee joins an organization and continues throughout his/her

career, regardless of whether that employee is an executive or a worker on an

assembly line. HRD programs must respond to job changes and integrate the long­

term plans and strategies of the organization to ensure the efficient and effective use

of resources.

HRD, on the other hand is a proactive function, as it prepares people to face, future

challenges with confidence. In a broad sense, HRD is the process of increasing

knowledge and capabilities of all the people in a given society. In the national context,

HRD is a process by which the people in various groups are helped to acquire new

competence continuously so as to make them more and more self-reliant and

simultaneously develop a sense of pride in our country. In the corporate vision, the

HRD framework views employees as an asset to the enterprise, whose value is

enhanced by development. As far as industrial organization is concerned, human the

‘Human’ aspect where people are seen as having skills, having potential and the

ability to grow, change and develop; the ‘Resource’ aspect where individuals are

considered resources rather than problems and the ‘development’ aspect, where is an

emphasis on the discovery and nurturing of their potentials.

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conc

ept

HRD a Humanistic Concept

0 • H

-------> People can do better, they can do wonders

Involve them, trust them, and empower them: treat them as resources, as assetsy

*vFocus on the strengths of people and help them

y overcome their weaknesses.

--------->Integrate the needs and aspirations of individuals into the strategic goals and the mission of an organization for better result.

Encourage individual initiative and response by providing a fostering culture (openness, trust,----------7

collaboration, mutuality etc.).

Chart No: 7. HRD Concept

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1. B.2 MEANING & DEFINITION

Human Resource Development can be defined as a set of inter-related activities, by

which human potentialities’ are assessed, selectively upgraded and appropriately

deployed for achievement of envisioned goals, which foster human dignity.

From the organization context, “HRD is a process which helps employees of an

organization to improve their functional capabilities for their present and future roles,

to develop their general capabilities, to harness their inner potentialities both for their

self and organization development and to develop organizational culture to sustain

harmonious superior-subordinates relationships, team work, motivation, quality and a

sense of belongingness.

According to Peter F. Drucker, “The prosperity if not the survival of any business19

depends on the performance of its managers of tomorrow.”i

According to Leonard Nadler, “HRD is organized learning experiences in a definite time period to increase the possibility of improving job performance and growth”.13

According to Kelly D., HRD can be defined simply as developing the most important

section of any business its human resource by, “Attaining or upgrading the skills and

attitudes of employees at all levels in order to maximize the effectiveness of the enterprise. The people within an organization are its human resource.14

M. M. Khan defined as “HRD is the process of increasing knowledge, skills,

capabilities and positive work attitude and values of all people working at all levels in a business undertaking”.15

12www.oppapers.com, business & economy research papers.13 Leonard Nalder & Garland Wiggs, Managing HRD, San Franciso: Jossey-Bass Inc., 1986, Wiley Online Library.14Kel!y D., Dual Perceptions of HRD, http://ro.uow.edu.artpaper/26, 2001.15 Ashok Khurana, Parveen khurana & Hiralal Sharma, V.K. (India) enterprises, New Delhi, 2009-10.

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A successful Human Resources Development program will prepare the individual to

undertake a higher level of work, “Organized learning over a given period of time, to provide the possibility of performance change”.16

K.C. Gupta in his research paper HRD is organization concept & Mechanism states,

“HRD means safeguarding, maintaining, and improving existing skills of human

beings (i.e. human resources) so as to increase their productivity for ultimate well­being of organizations as well as their own.”17

According to John E. Jones, “HRD is an approach to the systematic expansion of

people’s work-related abilities, focused on the attainment of both organizational andf o

personal goals” .

In short, HRD means to develop available manpower through suitable methods such

as training, promotions, transfers and opportunities for career development. It is

organized learning activities arranged within an organization in order to improve

performance and personal growth for the purpose of improving the job, the individual,

and the organization.

16 Nalder L. Ed., The Handbook of HRD, John Wiley & Sons, New York, 1984.17 K.C Gupta Research paper of HRD, organization concept and Mechanism states, WWW.hrmnotes.com18 Gupta Santosh & Gupta Sachin, Human Resource Development, Deep & Deep Publications Pvt. Ltd., New Delhi, 2005.

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L B.3 EVOLUTION OF HKD

The early part of the century saw a concern for improved efficiency through careful

design of work. Improving employee productivity and efficiency was the next big

thing to hit the business world. Recent years have witnessed an increasing towards the

quality of working life, product, and quality, speedy and efficient delivery of work.

During this middle part of the century emphasis shifted to the availability of

managerial personnel and employee productivity.

The term HRD has become very popular in the recent past. Many organizations have

either started new HRD department or have appointed HRD managers or at least have

strengthened their personal departments to look after the HRD functions. The format

introduction of the concept of Human Resource Development (HRD) was done by

Prof. Len Nadler in 1969 in American Society for Training and Development

Conference.

In India, Larsen and Toubro Ltd, was the first company to introduce this concepts in

1975 among the private sector companies with an objectives of facilitating growth of

employees, especially people at the lower levels. Among the public sector

Government companies it was BHEL, which introduced this concept in 1980. Even

while introducing HRD, many organizations were under the impression that it was

nothing but Training and Development concept. Certain companies started renaming

their Training and Development Departments and some have created new

departments.

Later some other personnel management functions like performance appraisal,

potential appraisal, career planning and development, feedback and counselling,

organizational development and data storage systems were included as sub-systems of

Human Resources Development.

A survey by Industrial Team Service in 1969 indicated that the personnel function is

no longer viable, if it doesn’t include or allow scope for employment, training,

welfare measures, employee education, employee benefits, industrial relations and

industrial insurance. Thus, the concept was subject to serious criticism and this has

ultimately paved the way for the emergence of Human Resources Development.

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Evolution of IIRD

Concept What’s it all about

The Commodity concept Labour was regarded as a commodity to be bought and sold. Wages were based on demand and supply. Government did very little to protect workers

The factor of production concept

Labour is like any other factor of production, viz, money, materials, land etc. Workers are like machine tools

The Goodwill concept Welfare measures look safety, first aid, lunch room, and restroom will have a positive in productivity.

The paternalistic concept / paternalism

Management must assume a fatherly and protective attitude towards employers. Paternalism does not mean merely providing benefits, but it means satisfying various needs of the employers just as parents meet the requirement of the children.

Humanitarian concepts The improve productivity; physical social and psychological needs of waters must be met. As Mayo and others stated, money is less a factors in determining output, than group standards, group incentives and security. The organization is a social system that has both economic and social dimensions

The Human Resource concept

\Employees are the most valuable assets of an organization. There should be a conscious effort to realise organizational goals by satisfying needs and aspirations of employees.

The Emerging Concept :HRD

Employees should be accepted as partners in the progress of a company. They should have a feeling that the organization is their own. To this end, managers must offer better quality of working life and provide opportunities to people to exploit their potential fully. There should be opportunities for self-fulfilment in one’s work. The focus should be on Human Resource Development

Chart No: 8. Evolution of HRD

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1. B.4 NATURE OF HRD

HRD is a process, by which the employees of an organization are helped to help

themselves and develop the organization. Following are some of the important

features of HRD, which makes the concepts of HRD clearer. They are as follows:

1) HRD is the employee-oriented concept:

HRD is mainly concerned with developing the knowledge, skills and capabilities,

competencies of the employees and hence, it is said that HRD is the employee

oriented concept. It can be applied for the development of the total human resources

at the national level as well as for the development of employees employed in an

organization.

2) HRD is a system:

HRD is a system having several interdependent parts or subsystems such as

procurement appraisal, development, etc. change in any one subsystem leads to

changes in other parts. This system made up of various mutually dependent parts.

Hence, the design of the HRD system cannot be considered in isolation. It has to take

into consideration its linkages with other parts, areas of the organization.

3) HRD is a planned process:

HRD is a planned and systematic way of developing people. Further, it is undertaken

on a continuous basis. Proper planning is necessary for proper development of human

resources. Planning is done in various areas such as recruitment and selection, training

and development, etc.

4) HRD is a proactive approach:

Now-a-days, it is found that business environment is changing very fast and becoming

challenging, competition is keen. HRD is not merely to cope with the needs of an

organization, but it has to anticipate them in advance in a continuous and planned

manner. The proactive HRD practices can positively contribute to set the journey in

the right direction. The proactive HRD practices can successfully integrate

productivity with quality of work life and help the effectiveness. Hence, the approach

of HRD should be proactive and not reactive. d.d-3

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5) HMD is an interdisciplinary concept:

HRD is an amalgamation of various ideas, concepts, principles and practices drawn

from a number of soft sciences such as sociology, psychology, anthropology,

economics, etc.

6) HRD is a comprehensive programme:

HRD aims at developing the capabilities of human resources and emphasis of building

the right work culture by motivating the people properly.

7) Approach of HRD is dynamic:

Considering the needs, necessary actions are taken. HRD programmes for developing

human resources are adopted.

8) HRD improves quality of life:

HRD enables the employee to discover and utilize their capabilities in service of

organizational goals. It finds a new meaning in work, when managers support such

initiatives through incentive plans and challenging work assignments. The whole

effort of HRD thus, is focused on improving the quality of life of employees working

at various levels in an organization.

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Shifts in HR Management

I„ I| Traditional HR Functions Emerging HR Practices fI ' f0 ■ & a %

ifI Administrative Focus Strategic Focus

Reactive Proactive

Separate & Isolated from Company Key part of Organizational Missionmission

Production Focus Services Focus

Functional Organization with Vertical Lines of Authority

Process-Based Organization I• Generalists with horizontal §

responsibility j• Corporate team of specialists I

People as Expenses People as Investments

IiKZ/.'4Z.<&.’/.*PAK

Ii 1 I

■ yi

I

Chart No: 9. Source: HR 21: Human Resource for the Next Century

(Washington D C Watson, Wyatt Worldwide)

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1. B. 5 FUNCTIONS OFHRD

HRD plays an important role in any organization. HRD is a function consists of

various activities related to individual’s growth and development.

These functions are as follows:

1) Role A nalysis:

HRD includes designing the wider roles than more jobs based on the organization

present-future needs.

2) Human Resource Planning:

Based on role analysis, plan for human resource, which would meet only the future

organizational requirement, but also capable of being developed comes the previews

ofHRD.

3) Recruitment:

It is a process of searching for prospective employees and stimulating them to apply

for job in an organization.

4) Selection".

It is a process of ascertaining the qualification, experience, skill, knowledge, etc., of

an applicant with a view to appraising his/her suitability to a job.

5) Induction and Orientation:

Induction and orientation are the techniques by which a new employee is rehabilitated

in changed surroundings and introduced to the practices, policies, purpose and people,

etc of the organization.

6) Performance Appraisal:

It is the system evaluation of individuals with response to their performance on the

job and their potential of development.

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7) Training:

Training is a systematic process, by which employees leam, acquire skills,

knowledge, abilities or attitudes to further organizational and personal goals.

8) Management Development:

It is a process of designing and conducting, suitable, executive development

programmes so as to develop the managerial and human relations skill of employees.

9) Career Planning & Development:

HRD deals with his/her planning and development of career of employer, so that

don’t leave the organization, but plan for internal mobility by means like transfer

problem etc.

10) Organization Development:

Organization development is an organization wide planned effort managed from the

top with a goal of increasing organizational performance through planned

interventions.

11) Compensation:

It is a process of providing equitable and fair remuneration wage and salary

administration incentive bonus, fringe benefits, social security measures, etc.

12) Social & Cultural Programme:

HRD should arrange for social and cultural programmes to enable the employees to

leam from each other.

13) Employee Counselling:

HRD function includes employee counselling about his/her job and organizational

related activities to help them acquire additional skill, knowledge and ability from

his/her counsellor.

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14) Teamwork:

HRD functions also include encouraging the team spirit among the employees for

developing the organizational human process efficiently and effectively.

15) Communication Policy:

The free flow of communication both ways are to share new ideas, experience and

work related issues.

16) Monetary and Non-monetary Rewards:

The functions of HRD management include educating the top management on

providing proper monetary and non-monetary rewards and benefits to the employees.

17) Employee Benefits:

It also encourages the employee to learn and acquire additional skills.

18) Grievance Handling Mechanism:

Promote settlement of employee grievance leads to job satisfactions and satisfied

employees are encouraged to enrich their resources with a view to enhance their

contributions to the organization.

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Functions of HRD

Chart No: 10. Functions of HRD

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1. B. 6 AIMS OF HRD

HRD is concerned with providing learning and development opportunities, making

training interventions and planning, conducting and evaluating training programmes.

It is essentially a strategic process, which is concerned with meeting both business

and individual’s needs. HRD system helps to create the expected work culture and

work environment besides improving the capabilities and skills in the human .

resources. HRD is needed by any organization that wants to survive, develop and

succeed the fast changing environments.

The overall aim of HRD is to see that the organization has the quality of people it

needs to attain its goals for improved performance and growth. This aim is achieved

by ensuring as far as possible that everyone in the organization has the knowledge and

skills and reaches the level of competence required to carry out their work effectively,

that the performance of individuals and teams is subject to continuous improvement,

and that people are developed in a way that maximizes their potential for growth and

promotion.

HRD basically aims at developing:

> The capabilities of each employee as an individual.

> The dyadic relationship between each employee and his/her employer;

> To generate systematic information about human resources;

> To create to technological changes;

> To create and maintain competent workforce;

> To adapt technological changes;

> To fill the vacuum at different levels of management;

> To fulfil career aspirations of employees;

> To aid total quality management;

> To import new entrants with basic HRD skills and knowledge;

> To prepare employees for higher level jobs;

> To broaden the minds of senior managers by providing them with

opportunities for an interchange of experiences within & outside of

organization;

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1.B.7HRD MATRIX

The HRD matrix shows the interrelationships between HRD instruments, Processes,

outcomes and organizational effectiveness.

a) HRD Instruments:

These include performance appraisal, counselling, role analysis, potential

development, training, communication policies, job relations, rewards, job enrichment

programmes, etc. These instruments may vary depending on the size of the

organization, the internal environment, the support and commitment of the top

management, the competitive policies, etc.

b) HRD Processes:

The HRD instruments lead to the generation of HRD of processes like role charity,

performance planning, development climate, risk-taking, dynamism in employees.

Such HRD processes should result in more competent, satisfied and committed people

that would make the organization grow by contributing their best to it.

c) HRD Outcomes:

HRD instruments and processes make people more committed and satisfied, where

they tend to give their best to the organization enthusiastically.

d) Organizational Effectiveness Dimensions:

Such HRD outcomes influence the organizational effectiveness, which in turn,

depends on a number of variables like environment, technology, competitors, etc.

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