Human Resource management UNIT I

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UNIT I

Introduction to Human Resource Management

Introduction

It is necessary to understand the term `management` before starting our discussion on

`human resources management ` .

Management is basically concerned with the performance of planning, organizing , directing

,co-ordinating and controlling, which ,in fact, are it main function. Management is also regarded as

the art of getting things done through others. It is not possible for any individual to do all the work

himself. The work is always shared with others. In a household, for example, the head of the house

the father earns for family maintenance. The lady of the house manages the kitchen and so on.

Similarly, in a bank there are different individuals to look after cash, savings bank account, fixed

deposit, current account, recurring deposit account and soon. The overall control lies with bank

manager .Thus it becomes clear that the work is assigned to many in any work place and

responsibilities are fixed on them. The person assigning the work, i.e., subordinate. A manager who is

unable to make his subordinates work cannot be a successful manager.

Definitions of the term `Management’

A few definitions of the term `management’ offered by experts, have been given below:

To manage is to forecast and plan, to organize, to command, to co-ordinate, and to control –Henry

Fayol.

Management is what a manager does –Louis Allen.

Management is an art of knowing exactly what you want your men to do and then seeing that

they do it in the best and the cheapest way –F.W. Taylor.



Application of management concepts

Management concepts have universal application . In a business organization, these concepts

are applied in the following functional areas:

(i) Production (ii) Marketing

(iii) Finance; and (iv) Personnel

The relevance of management concepts in managing the `personnel’ or the `human

resource’ of an organization is what we are concerned with in this book.

Human Resource and Its Peculiar Characteristics

For the successful functioning of any business organization, finance, machines, materials, and

manpower resources are essential. Of this various resources, the manpower or the human resources

occupies a very important place in view of its distinctive characteristic. The term `human resources’

With reference to an organization refer to it employees. The peculiar characteristics of human

resources are given below:

1. 1. While all resources merely exist, human resource alone lives. Machines, materials and

money are inanimate. 2. It is only the human resource that has created the other resources and not vice versa.

3. Commitment, devotion , enthusiasm ,energy ,interest ,intelligence , etc., of a person determine

.His performance . A manager can only hire the labor of an employee but not this qualities.

3. Human resources alone can be creative. Every individual is blessed with certain creative skills

that help him to bring out something unique.

4. Human resource alone can think and act. Man is capable of analyzing the situation before

arriving at a conclusion.5. human resource alone can be emotional. A person by his action and reaction, is able to express

his happiness or unhappiness.

6. Human resource can be motivated to work better. An employee, for example, may be offered a

reward, for reaching a certain target, which induces or instigates him to more efforts.

7. The behaviour of human resource is also highly unpredictable. Their exist no method by whic

a person can read the mind of another.



8. While all other resources depreciate in value with the passage of time, the value of human resource alon

appreciates. A person with greater work experience has more value to an organization. The very fact tha

most establishments prefer experienced hands proves this point.

In view of these unique characteristics, management of human resource is always a challenging

task.

Human Resource Management and Personnel Management

The name’ human resource management’ and ‘personnel management’ are being us

interchangeably by many. When used in a broader sense, the term human resource manageme

refers to the task of handling people who belong to the different strata of the society, i.e., stude

employees, employers, the self-employed, sportsmen, housewives etc. The term human resou

management has greater relevance for a government that has to work for the betterment of all

citizens. On the other hand, the term personnel management, even when used in a broader sen

refers to the task of managing the employees of a concern. Thus, it becomes clear that the te

human resource management has greater scope than the term personnel management.

Distinction Between Human Resource Management and Personnel Managemen

The following points of distinction may be made between human resource management and

personnel management:

Human Resource Management Personnel Management

1. Contemporary management experts 1. This is a conventional name.

Use this name.

2. The term, when used in a broader sense, 2. The term, however used, refers to

refers to the task of managing people the task of managing the employee

belonging to the different sections of of the concern.

the society



3. It has relevance not only for a business 3. It is relevant mainly for a bus-

Organization but for a government as iness establishment.

Well.

4. The employee is seen as a resource of 4. Employees is seen as a commodity

the enterprise like any other resource. that can be purchased for a

price.

5. Measures are taken for the overall 5. Measures are taken to satisfy the

Progress of the employee i.e., his economic needs of the employee

Economic, social and psychological mainly.

Needs are fulfilled.

6. The amount spent on the employee 6. The amount spent on the employee

Is viewed as an investment. Is only seen as expenditure

Incurred.

7. The term has wider scope. 7. The term has limited scope.

Definition Of Human Resource Management(HRM)

Given below are some of the important definitions of’ Human Resource Management’ made

by eminent management thinkers:

1. “Human resource or manpower effectively describes the process of planning and directing

the application, development and utilization of human resources in employment”-Dale Yoder.

2. “HRM is the part of management process which is primarily concerned with the human

constituents of an organization “-E.F.L. Brech.

3. ”The personnel function is concerned with the procurement, development, compensation,

integration and maintenance of the personnel of an organization for the purpose of

contributing towards the accomplishment of that organization ‘s major goals or objectives”-

Flippo.



4. ”It is the field of management which has to do with planning, organizing, directing and

controlling the various operative functions of procuring, developing, maintaining and

utilizing a labour force for the attainment company’s objectives”-Prof. Jucius

5. “It is that part of the management function which is concerned with people at work and with

Their relationship within an enterprise. Its aim is to bring together and develop into an effective

Organization the men and women who make up an enterprise and having regard to the well-

being of an individual and of working groups, to enable to make their best contribution to its

success”-The British Institute Of Personnel Management.

The above definitions make it clear that human resource management is basically

concerned with the task of procuring, developing, maintaining and utilizing the manpowerresource effectively so that the objectives of the enterprise can be fruitfully realize



Functions of Human Resource Management

The functions of human resource management may be classified under:

(a) Managerial functions; and (b) Operative functions.

Managerial Functions

The managerial functions of human resource management are as follows:

(a) Planning (b) Organizing

(c) Directing; and (d) Controlling

These have been explained briefly below:

Planning

Planning is deciding in advance what should be done. It helps to work in a

systematic manner and eliminates the need for working at random . Planning

involves the determination of objectives, policies, procedures, rules, strategies,

program and budgets. In the context of human resource management planning is

necessary to determine the manpower needs of the enterprise. This ensures that at

any given point of time the right number and type of persons are employed in the

different department of the enterprise and there is no problem of either surplus or

shortage of labour. Human resource planning is also vital for formulating suitable

personnel policies and programs.

Organising

Organising involves the performance of the following tasks:

(a) Division of work among employees (assignment of duties)



(b) Delegation of authority (transfer of official rights by a superior to his

subordinate) and

Creation of accountability (the subordinate, to whom work has been assigned

and authority has been delegated, is made answerable for progress of work).

Directing

Directing the human resource does not mean the process of issuing mere

orders and instructions to the subordinate staff. It is, in fact, the process of

supervising, guiding and motivating the employees in orders to get the best out of

them. By performing the directing function, the human resource manager will also be

able to get the whole-hearted support and co-operation of all his subordinate staff.

This helps in the effective attainment of the enterprise objective.

Controlling

If planning is looking ahead, controlling is looking back. The object of the

control function is to ensure that what has been planned has been successfully

achieved. Planning without control is useless and control without planning is

meaningless.

The process of control involves the following stages:

(i) Establishing standards

(ii) Measuring actual performance

(iii) Comparing the actual performance with the standards laid down already

(iv) Measuring deviations and

(v) Taking corrective actions.

Controlling, in the context of human resource management, is performed by

means of direct observation, supervision, reports, records, and audit.



FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

Managerial Function Operative function

planning organizing Directing Controlling

Procurement Development Compensation integration Maintenance

Operative functions

The operative function of human resources management consist of the following:

(a) Procurement (b) Development

(c) Compensation (e) Integration; and

(e) Maintenance.

The scope of each of these operative functions is given briefly below.

Procurement

Procurement of human resource is concerned with the following:

(i) Job analysis (ii) human resource planning

(iii) Recruitment (iv) selection



(v) Placement (vi) transfer; and

(vii) Promotion.

Development

Development of human resources is concerned with the following:

(i) Performance appraisal (ii) Training

(iii) Executive development (iv) Career planning and development

(vi) Organizational Development (OD).

Compensation

It deals with the following:

(i) Job evaluation (ii) wage and salary administration and

(iii) Incentives (iv) Bonus

(v) Fringe benefits; and (vi) social security schemes.

Integration

It is concerned with the performance of all those active the aim of which is to bring

about reconciliation between individual interest and that of the organization. These

include.

(i) motivating employing to work better

(ii) Boosting the morale of the staff

(iii) Ensuring effective communication

(iv) Enhancing leadership qualities

(v) Providing scope for collective bargaining

(vi) Redressing grievance



(vii) Managing conflicts

(viii) Handling disciplinary cases

(ix) Providing counseling to get rid of stress

(x) Improving quality of work life of employees.Maintenance

This function deals with the following:

(a) promoting job satisfaction among employees

(b) tacking the problem of labor turnover

(c) Human resource accounting, audit and research.

Nature of Human resource Management

analysis of the nature of human resource management will bring out its following

characteristics:

1. It is universally relevant: Human resource management is relevant not only just for a

business organization alone. It has universal relevance. Effective management of human

resource is a task to be performed right from the house hold level to a government. The very fact that the government of India has created a separate Ministry called the ‘ Ministry

of human Resource Development’ proves this point.

2. It is goal oriented: the goal of human resource management is to make the best use of

the available man power resource of the organization. Only then it will be possible

to achieve the ultimate goal of the organization, i.e., the targeted level of profit in

the case of organization.

3. It adopt a systematic approach in handling the manpower resource: Human

resource management lays emphasis on a systematic approach to the task of

managing the human resource of an organization. This is done by the performance



of two sets of function, i.e., managerial functions and operative functions, discussed

already.

4. It is pervasive in nature: Management of human resource is a task performed at

different levels. As stated earlier, every family and every Government considers the

effective management of its human resource important. In a business concern, the need

for effective management of the manpower resource is felt in all its functional areas, i.e.,

production, marketing, finance, research, etc.

5. It is an on-going activity: Human resource management is not something that is

required only at a particular point of time. It is a continuous affair. As long as

manpower resource is needed in any place, the importance of its management will

be felt.

6. It is dynamic field of activity: Management of human resource is perhaps the most

challenging task of every manager. This is because human resource has certain

peculiar characteristics. People have feelings and therefore they cannot be handled

in the way inanimate things like machines are handled.

7. It focuses on the development of manpower resource: Human resource

development is part of human resource management. Development of the

manpower resource through training program is as important as its procurement.

Needless to say, in an organization, it is only the human resource that can be trained

to acquire greater skills.

8. It is a science as well as an art: The subject human resource management is both a

science and an art. As a social science, it relies on experiments and observations for

the sake of making inferences. As an art, it calls for certain special skills on the part

of the manager for the effective handling of the manpower resource.



9. It is interdisciplinary: human resource management does make use of the concepts of

subject such as sociology, psychology, economics, etc. As a subject, it is, therefore,

interdisciplinary in nature.

10. It is relatively new: When compared with subjects like psychology, sociology,

economics, marketing, financial management, etc., human resource management is

relatively a new subject. It was once popularly known by the name personnel

management. After it became human resource management, its scope widened.

Importance of Human Resource Management (HRM)

The importance of HRM to any particular organization may be explained as follows:

1. It helps the organization to identify correctly its manpower needs:

The manpower needs of an organization will have to be correctly determined.

As amount spent on human resource is deemed an investment, it is necessary

to determine the number of men required for doing the various jobs in the

enterprise accurately so that investment in human resource will be at theoptimum level.

2. It ensures that the organization does not suffer from either surplus

or shortage of manpower: It is further important that the number of

persons employed in the organization at any given point of time should

neither be more nor less than what is actually required. HRM helps to do away

with the problem of both surplus and shortage of labor.

3. It facilitates the selection if the right man for the right job: HRM

ensures the selection of the right man for the right job. It recognizes the fact

that if a candidate is overqualified for the job, he will not have a positive

attitude towards work and on the other hand, if he is under qualified, he

cannot carry out the task assigned.



4. It focus attention on the development of the skill of every individual in

order to make him up-to-date: Every person in the workplace has to update

his knowledge and skill in tune with the development in work methods. HRM

takes note of the fact that a person who does not update himself will become

outdated.

5. It recognizes the need for the appraisal of the employees’

performance: Performance appraisal is an integral part of human resource

management. Unless the performance of the employees is periodically

reviewed, it will not be possible for the employer to know their level of

efficiency.

6. It considers the need to provide incentives to the employees

performing well: Employees who are very good in their work, need

inducement in the form of incentives. These incentives may be financial as well

as non-financial. HRM does recognize the fact that if good workers are not

suitably rewarded, they may lose interest in their work.

7. It gives utmost importance to securing a favorable employee attitude:

The attitude of the employees towards work is a crucial factor determiningperformance. HRM makes an earnest attempt to secure a favorable employee

attitude. This is done by providing the employees with proper working

environment. Counseling is provided to those employees who undergo stress.

8. It emphasizes the need for good human relations in every workplace:

HRM places emphasis on cordial human relations. Conflicts are unavoidable in

a workplace. But such conflicts shall not be allowed to damage inter-personnel

relationships. 9. It provides scope for collective bargaining: The employer shall encourage

the employees to form a union in the workplace. This will give the employees

the benefit of collective bargaining. In the absence of such a union, if any



individual has certain grievances, he may find it difficult to represent the same

to the management in his personal capacity.

The Role Of a Human resource Manager

A part from performing the various managerial and operative functions

mentioned earlier, a human resource manager is expected to perform the following

roles:

1. To provide counseling: In the workplace, the employees may undergo stress. The

stress may be related to both official and personal problems. In such a situation, theemployees may approach the HR manager for help and remedy and the latter is expected to

provide the necessary counseling to enable the employees to get rid of their stress.

2. To act a link between the different individuals in the organization: The inter-

personal relationships in the workplace must always be conductive for work. Difference of

opinion is bound to arise an several organizational matters. The HR manager has to make

efforts to settle any dispute that may arise between the individuals.

3. To ensure that the employees get what is due to them: The HR manager has

the duty to ensure that the employees are not deprived of any benefit, monetary or non-

monetary, that they are entitled to get from the management.

4. To act as a spokesman of the organization: Of the various executives in

the organization, it is the HR manager who has better knowledge of the activities of the

enterprise and is therefore the right person to answer queries.

5. To introduce any change without facing resistance from any side: Changes

are inevitable for an organization to progress. Changes may be effected in the work

methods, working hours, working conditions and so on. The employees may resist certain

changes preferred by the management while the management may not accept certain



changes desired by the employees. In either case, it is the HR manager who is the right

person to convince everyone and introduce any change without the problem of resistance.

6. To advice the line managers: The HR manager, who is a staff manager, advises

the line manager, e.g., the production manager and the marketing manager, on certain

matters pertaining to recruitment, selection, training, appraisal of performance and so on.

The relationship between the line manager and the HR manager

Qualities of a Human Resource Manager

To be successful in his job, the human resource manager shall hold an MBA (with

specialization in Human Resource Management or Personnel Management)

obtained from one of the Indian Institutes of Management (IIM s) or its equivalent.

Knowledge of organization theory, behavioral science and labor laws is absolutely

necessary for such a person.

A part from the academic qualifications me4ntioned above, the human resource

manager is expected to have certain other qualities to be successful in his work. A

person who has done his MBA from the IIM would certainly possess these qualities.

These are:

1. He should possess good communication skills. He should be fluent in

English, Hindi and a couple of Indian languages. Only then, he will be able to convey his ideas emphatically.

2. He should be a creative person and only then he will be able to conceive

novel ideas to solve complex HR management problems.



3. He should be a analyse any problem objectively. Only then he will be4

able to arrive at a practical solution.

4. He should be able to inspire, induce and motivate the employees to put in

their best efforts. For this, the HR manager must be a motivated person himself.

5. He should have leadership qualities without which he will not be able to

lead a team of subordinate staff and guide them properly.

6. He should not be an irritable person. He should be friendly and

approachable.

7. He should be fair and honest in his dealings. Only then the subordinate

staff will repose faith in him.

8. He should have the ability to make decisions independently.

9. He should be curious always. Only then he will be able to be a dynamic

person.

10. He should have good memory to be able to recollect anything. He should

not give scope for others to prompt him to act.

Objectives of Human Resource Management

The main objectives of HRM are as follows:

1. To make an optimum utilization of the human resource of the

organization: By this we mean that every individual in the enterprise shall

work to his potentials. Only then the amount spent on human resource will be

justified.



2. To ensure that the organization has the required number staff:

The objective here is to do away with the problem of both surplus and shortage of

labor. Surplus labor would mean higher labor cost and inefficiency shortage of

labor would mean that the organization is ill-equipped to cope with the volume of work.

3. To establish and maintain a sound organization structure: HRM

aims at dividing the organizational tasks in to different functions, jobs and

positions. The authority and responsibility associated with each such position is

clearly defined.

4. To reconcile personal and organizational goals: There is often a clash

between individual goal and organizational goals. HRM aims at integrating

personal and organizational goal by guiding the employees to work with a sense of

involvement, commitment and loyalty towards the enterprise.

5. To provide scope for the development of personnel: HRM provides

scope for the employees to enrich their job knowledge and skill by undergoing

relevant training program. Employees need to update themselves in tune with

the requirements.

6. To ensure that the employees have higher job satisfaction: HRM

ensures a higher level of job satisfaction among employees by providing them the

kind of work environment that is really conducive. The employees are assured of

equitable remuneration and social security benefits like provident fund, gratuity,

insurance etc.

7. To provide scope for participation in decision-making: Under HRM,

employees are involved in the process of decision-making. The decisions binding

on employees are made with their participation. In other words, the management

does not take unilateral decisions. As employees are involved in decision –

making, they extend their support to the implementation of any decision and do

not show resistance.



Human Resource management as a Profession

Human Resource Management has come to be recognized as a profession in

the way medical, law and engineering are recognized. A professional need work for

salary under an different from an occupation. A professional need work for salary

under an employer. He can have his own clients and get his remuneration from

them directly. On the other hand, a person who is employed as a clerk or as an

officer or in some other capacity in a bank or in some other organization has to work

for a monthly salary under an employer. Same is true with regard to a professor who

employed in a college or university. He gets his salary at the end of the month and

is an employee of the institution where he is employed. A professional can be an

employ nursing staff, lab technicians and others.

HRM as a profession fulfils the following criteria of a profession:

1. An organized body of know ledge: HRM like medicine law and

engineering has well developed concept principles, theories and practices. A HR

manager professional cannot perform his tasks if he is not familiar with these

concept principle etc.

2 . Educational qualification: A person who wants to become a medical

or engineering professional has to posses the minimum qualification and trading

prescribed for it. In the same manner , a person aspiring to be a HR management

professional has to fulfils the educational qualification norms. In India, a person

holding an MBA (with specialization in Human Resource Management or Personnel

Management)obtained from one of the Indian Institutes of Management(IIM s) or

equivalent is considered a HR management professional.

3. Regulatory Authority: The Medical Council and the Bar Council act as the

regulatory authority for medical and law professionals. As far as HRM is concerned,

the government of India has created a separate Ministry called the ministry of



human Resource Development that is empowered to regulate the activities of any

HRM institution. The National Institute of Personnel Management prescribes

certain obligations for the HR management professionals.

4. Code of Conduct: Every member of a profession has to observe certain ethical

standards laid down for that profession. The code of conduct lays down ethical norms,

which the members shall observe while dealing with clients. Such a code of conduct

exists for HR management professionals too in the manner it exits for medical, law

and other professionals. Any member found to be violating the code of conduct might

be disqualified from functioning as a professional.

5. Serving the Community: A professional’s main obligation is to serve the

society. He must not think in terms of personal gain always although his profession

gives ample scope to earn.

Doctors and lawyers have their own clients and get their remuneration

directly from them. As a result they enjoy the status of professionals. Those qualified in

management, in particular HR management, often work for reputed organizations for a

monthly remuneration in the form of salary and perquisites. It is probably because of

this difference that the society is yet to recognize these people as professionals. In

contrast to medical and legal professionals, who are known even to the illiterate mass,

management professionals are recognized mostly by intellectuals.

Human resource management –Both a science and Art

Science establishes cause effect relationship between different variables. Scientists

have developed certain basic principles and theories by means of observation andexperiment. Scientific principles have universal relevance . HR Management is a social

science like sociology, psychology, economics and so on . HR Management experts have

developed many theories and formulated several principals that guide manager in



performing their function. There are theories on motivation, principal governing delegation

of authority and so on . motivation delegation etc . are essentially management concepts.

But unlike physical science where cause effect relationship is certain and

definite, in the case of social sciences no such definite relationship exist. For example, it

cannot be said with definiteness that financial rewards will motivate all the employees.

The out came of every experiment in HR management may also vary from place to place

and from country to country. What is true in the case of workers in other countries may

not be true in the case of Indian workers . for example , workers in the western countries

work even belong the working hours to show their protest when ever they have

grievances . But the workers in India only strike to shows their protest . social science

focus on the behavior of individuals which is a complex affair. On the other hand ,

physical sciences focus on inanimate objects the behavior of which can be accurately

predicted.

Art involves the use of personal skill of every individual. In fact , performance in art

will vary from individual to individual in view of difference in skill. For example, if two

persons are asked to draw the same picture, the performance of both will not look

identical. Same in true with respect to music or dance or all other art forms. Performance

in art is mainly influenced by such factor as skill, technical knowledge, creativity and so

on . to be a successful HR manager, an individuals has to apply his knowledge, skill and

creative ability. Knowledge of the theory alone cannot help a manager in performing his

duties. A HR manager who has the skill to understand the psychology of his workers will

be able to get things done better. It is clear now that HR management is both a Science

and Art..

HUMAN RESOURCE PLANING



The most important of all the resources of a business enterprise is its human resource. the very fate of

an organization is determined by the number and type of person working in it. In fact an institution is

recognized more by the quality of its staff rather than by its physical structure. It is there fore, Important

that an organization has the right number and type of person at any given point of time to be successful an

this is what is achieved through manpower planning or human resources planning.

Meaning of human resources planning

Human resources planning , in simple term, is the process of determining the man power needs of an

enterprise so that is possible to fill up any vacancy as and when it arises. Such a plan eliminates the risk of

surplus or shortage of staff at any time.

Definition of human resource planning

Given below are some of the important definition of the term human resource planning .

1. “human resources planning is the process by which a management determines how the

organization should move from its current manpower position to it desired man power position

through planning the management strives to have the right number and the right kind of peopl

at the right places, at the right time , doing things which result in both the organization and the

individual receiving maximum long range benefit”-E.W.Vetter

2. “ human resource or manpower planning is the process of determining the manpower

requirements and the means for meeting those requirements in order to carry out the

integrated plan of the organization”-Coleman.

3. “manpower planning is the strategy for the acquisition, utilization, improvement and

preservation of an enterprise human resources. It relates to establishing job specification or the

quantitative requirements of jobs determining the number of personal required and developin

source of manpower”.- Stainer.



4. human resources planning is an integrated approach to performing the planning aspects of the

personal function in order to have a sufficient supply of adequately developed and motivated

people to perform the duties and task required to meet organization objective and satisfy the

individual needs and goals of organizational members” –Leon C. megginson.

5. “human resources planning is a process of qualified person, available at the proper times,

performing jobs which meet the needs of the enterprise and which provide satisfaction for the

individual involved” –Dale S.Beach

It is clear from the above definition that human resources planning is concerned with the task of

projecting the man power needs of an organization and taking steps to fulfill the same.

Importance of human resources planning

Human resource planning is necessary in view of the following reasons:

1. It helps the organization to procure the required manpower: To perform the various jobs in the

organization, people with varying skills, qualification and experience are required. Human resour

planning helps to fulfill such a requirement.

2. It further helps to replace employees: Every year, a number of employees retire in workplaces.

These employees, therefore, have to replaced. Vacancies arising due to retirement can be

anticipated and suitable arrangement for replacement can be made. A vacancy may also arise

when an employees dies or becomes incapacitated or dismissed on disciplinary grounds. Proper

planning will enable the management to fill up vacancies as and when they arise.

3. It helps in expansion program: No organization is going to remain static. To undertake expansio

activities additional hands are necessary. Such additional hands can be secured through effective

planning.

4. It ensures optimum investment in human resource: under HR management, the amount spent o

human resource is viewed as an investment. But it is necessary that such an investment is made a

the optimum level in order to derive maximum benefits. HR planning ensures optimum

investment in human resource.



5. It is indispensable to give effect to reservation policy: As per the reservation policy of the

government, certain number of posts will have to be reserved for people belonging to certain

communities in case of recruitment to govt. departments. To give effect to such a policy,

manpower planning is indispensable.

6. It is essential in view of the problem of labor turnover: Every organization faces the problem of

labor turnover, i.e., employees leaving their jobs due to various reasons. Proper manpower

planning help to tackle the problem.

7. It helps to tackle the problem of surplus or shortage of manpower: In the absence of proper

planning of manpower needs, the organization is sure to face the problem of either surplus or

shortage of manpower. Surplus employees do not contribute to output. On the other hands, if

there is shortage of manpower, the organization cannot cope with the volume of work. To tack

both the problem effectively, proper planning is essential.

8. It becomes necessary to meet the need of changing technology: Repaid technological changes

would render the existing workforce inadequate in terms of skills. To tackle such a problem, the

organization must require the existing employees to update themselves or recruit a new set of

workforce. Here again, human resource planning can help.

Characteristics of Human Resource Planning

The characteristics of human resource planning may be stated as follows:

1. It is goal-oriented: The main objectives of HR planning is to ensure that the amount invested

human resource is justified, i.e., the organization should derive maximum benefits. If further

ensures that the organization has the right number and type of persons working at any given

point of time.

2. It focuses attention on the present and future manpower needs of an organization: After the

present and future manpower needs of an organization have been anticipated, steps may be

taken to fulfill the same through proper planning . Human resource planning, thus, has relevanc

for the present and the future.



3. It follows a systematic approach to the task of fulfilling the manpower needs: In the absence o

HR planning, the organization will recruit staff at random. This leads to certain problems, e.g.,

surplus or shortage of manpower and the organization appointing unsuitable persons. HR

planning follows a systematic approach to the entire process of recruiting staff in order to

overcome these problems.

4. It promotes efficiency: HR planning is required as it leads to greater efficiency. This it does by

keeping the cost of recruitment and selection low and by ensuring right man for the right job.

5. It is a continues process: It is not correct to think that HR planning is required only in the early

years of inception of an organization. It is something that is required continuously. In other

words, as long as an organization requires manpower, the need of HR planning will be felt.

6. It can be made flexible: There is always a feeling among many that any type of plan makes

things rigid. It may be said here that the HR plan can be made flexible needs of the organization

Objectives of Human Resource Planning

The objectives of human resource planning may be briefly stated as follows:

1. To ensure that the HR plan help to attain overall objective of the enterprise.

2. To keep the cost of recruitment and selection of employees low.

3. To ensure the selection of the right man for the right job.

4. To ensure that the amount invested in human resource is at its optimum level.

5. To ensure that the organization does not face the problem of either surplus or shortage of

manpower.

6. To make available the required manpower when expansion and diversification activities are

undertaken.

7. To give effect to the recruitment policy of the organization. Government organizations adhere t

the reservation policy of the Government in the matter of recruitment of staff.

8. To eliminate or minimize the adverse effects of labor turnover.



9. To find a suitable replacement for those employees, who retire, die, become incapacitated or

are dismissed from service on disciplinary grounds.

10. To guard the enterprise against manpower obsolescence.

Factors influencing Human Resource Plan

The various factors influencing human resource plan may be grouped under:

(1) Internal Factor

(2) External Factors

Factors Influencing Human Resource Plan

Internal factor External factor

Recruitment Availability Job Scale Trade

Policy of funds Requirement of operations Union

Influence

Reservation Availability Willingness Trend in Level of Technology

Policy of of Manpower of job the Industry

Govt. seekers



Internal factors

The internal factor include, among other, the following:

1. Recruitment policy of the organization: The policy of the organization regarding the source of

recruitment and the method of selection is an important factors influencing the human resource

plan.

2. Availability of funds: If finance is not a constraint, the organization will be in a position to offer a

attractive salary package and there by induce deserving persons to apply for the various job.

3. Job requirement: Different jobs call for different qualifications and skill from prospective

applicants. The requirement of every job, therefore, will have to borne in mind while preparing the

human resource plan.

4. Scale of operation: The manpower needs of an organization, the scale of operation of which is

greater, will naturally be more than the one with a lesser scale of operation.

5. Trade union influence: The demands of trade union regarding the hours of work, source of

recruitment etc., may also influence human resource plan.

External Factors

The external factor include, among other, the following:

1. The reservation policy of the government: The reservation policy of the government provides

for reservation of jobs for certain communities. The human resource plan of every government

organization and government aided organization has to give effect to such a policy.



2. Availability of the desired manpower: Before preparing the human resource plan, it must be

ensured that the type of human resource needed by the organization is actually available. This is

because, sometimes people with a certain skill or qualification may not be willing to apply.

3. Willingness of the job seekers to accept the terms and conditions : When an organization

wants to recruit staff afresh, it must ensure that its terms and condition of service are acceptable

to the job seekers. If they find the term unreasonable, they may not be willing to apply.

4. Knowledge of the trend in the industry: consideration of the trend in the industry in the

matter of the type of workforce preferred for certain jobs, wage rates, hours of work etc., is

important in preparing the human resource plan.

5. Level of technology: A business enterprise is highly susceptible to technological changes.

Technically qualified persons constantly update themselves to enhance their employment

prospects. The job offer of an enterprise, therefore, must be such that the potentials of the

individuals are fully utilized and they are also rewarded suitably.

Limitations of Human Resource Planning

Some of the limitation of human resource planning are mentioned below:

1. Expensive: preparation and implementation of the human resource plan is expensive in terms of

time, efforts and money required.

2. Inaccurate forecasts; The manpower need of an organization are determined based on forecasts.

The human resource plan is prepared in tune with such forecasts. The success of the plan,

therefore, depends on the accuracy with which the forecasts are made. Inaccurate forecasts would

only result in the failure of the plan.



3. uncertainties: Absenteeism, seasonal nature of certain jobs, labor turnover etc., can jeopardize th

human resource plan.

4. Trade union resistance; trade union often criticize the human resource plan of an organization on

the ground that it is detrimental to the interests of the employees. The plan may contain such

measures as increase in workload, voluntary retirement, redeployment of surplus labor etc. It is fo

these reasons the trade unions show resistance.

5. Rigidity; Any plan is basically rigid. The rigidity of the human resource plan may, sometimes, affect

implementation. Such a plan, thus, remains only on paper.

6. Focus on quantity: The manpower plan often focuses attention on the quantity of human resourc

rather than quality. Quantity without quality does more harm than good.

Measures to make the human resource plan effective

The following measures can be taken to make the human resource plan effective.

1. Cost-benefits analysis of the HR plan: One of the limitation of the HR plan is that it is expensiv

in terms of time, effort and money required. The cost of preparing such a plan may be compare

with the benefits accruing to the enterprise. It must be ensured that the benefits are always

greater than the costs incurred.

2. Making accurate forecasts: as the success or failure of the HR plan depends on the accuracy o

the forecasts, steps must be taken to predict the present and future manpower needs of the

organization more accurately. There are several qualitative tools used for the purpose of

forecasts.

3. provision for future uncertainties: Adequate provision should be made in the HR plan for suc

uncertainties as absenteeism, labor turnover etc. This would ensure proper implementation o

the HR plan.



4. Involve employees and their Unions: Employees participation in management is an integral

part of human resource management. While preparing the human resource plan, the

suggestions and views of the employees on the manpower needs of the organization can be

received. Where ever possible, steps can be taken to incorporate such suggestions in the HR

plan. This would, certainly, help to overcome resistance by the employees and their unions.

5. Introducing flexibility: The rigid nature of the HR plan may hamper implementation. To

overcome such a problem, certain amount of flexibility may be introduced into the plan.

6. Consideration of both quantity and quality: The HR plan, to be fruitful, must consider both th

quantitative and qualitative aspects of the human resource.

Steps involved in Human Resource Planning (process of HR planning)

The following are the steps involved in human resource planning:

1. Analysis the organizational plan

2. Forecasting the demand for human resource

3. Forecasting supply

4. Making an estimate of the net human resource requirements and

5. preparing the action plan

Let us now discuss these.

Analysis the organizational plans

Every business enterprise will have plans for the successful performance of the following activitie

(i) Purchase of raw- materials

(ii) Installation of machines and their maintenance

(iii) Finance and Accounting



(iv) Marketing

(v) Research and Development

(vi) Maintenance of employee reveal the manpower needs of the organization.

An analysis of these various plans would reveal the manpower needs of the organization.

Process of Human Resource Planning

Analysis the Forecasting Forecasting Estimating Preparing

Organizational demand supply net HR the action

Plans Requirements plan

Forecasting the demand for human resource

Keeping in mind the expansion and diversification program of the enterprise in the near future

the rate of labor turnover and absenteeism, the technological changes, the trend in the industry an

in the job market and so on, the future manpower requirements of the enterprise need to be

forecasted. The quantity as well as the quality(in term of skill, experience, knowledge etc.) of the

human resource shall be taken into account while making the forecast.



Some of the methods used for forecasting the manpower requirements are:

(a) Managerial judgment

The heads of the various departments will be in a position to estimate the manpower needs o

their respective departments in the near future. While making such estimation, they take into

account the various factors such as the general trend in the industry, the expansion and

diversification program of the enterprise and so on. The aggregate of the departmental

estimates would reveal the manpower needs of the whole enterprise. The experience of the

managers helps them in making judgment.

This method is simple to use and is also less time consuming. But the main drawbacks of th

approach is that it is highly subjective and therefore may not be reliable.

(b) Time study method

The time study makes use of the concept of ‘standard time’ for completing a certain task. By

using such a study, it is possible to determine the manpower needs of an organization. This ma

be explained with a simple illustration.

Standard time per worker per day =6 hours

Man-hours needed to complete the weekly production targets=300 hours

The number of workers required to complete the task, therefore300/6 =50

The time study method uses a very pragmatic approach to determining the manpower

needs of an organization.

(c) Ratio Analysis

Ratio may be calculated for the past data relating to the number of employees in each catego

to the level of activity, i.e.,

Production level Number of workers

Sales level Numbers of sales representatives and so on.



Such ratios are useful in knowing the future manpower needs of the enterprise. This has

been explained with a simple illustration below:

Level of sales in the previous years=2,500 units

Number of sales representative in the previous years= 10

The ratio of sales level to the number of sales representative =250:1

Sales level to be attained in the current year= 4,000 units

The number of sales representatives required for attaining the target= 16

Additional hands needed, therefore=6

Forecasting supply

Collecting information about the existing human resource inventory is what is the first step in

forecasting the future supply of human resource. Information on the existing human resource

inventory is gathered:

(i) Department-wise (production, marketing, finance etc.)

(ii) Job – category- wise (clerks, cashiers, sales representative etc)

(iii) Age – wise

(iv) Skill-wise

(v) Experience- wise

(vi) Pay-scale-wise

(vii) Sex-wise and so on.

Once information on the existing human resource is obtained, the next step is o estimate the future

loss of human resource. Loss of human resource can arise on account of the following reasons:

(i) Retirement

(ii) Resignation



(iii) Death

(iv) Dismissal

(v) Disablement

(vi) Lay-off

(vii) Retrenchment etc.

Making an estimate of the net human resource requirements

A comparison between the demand and supply forecast of human resource would indicate the net

manpower requirements of the enterprise. It may be either surplus or deficit. Surplus indicates that

some employees are redundant while deficiency implies the need for additional hands.

Preparing the action plan

In case of surplus manpower, the employees, found in excess of the equirement, may be redeployed,

i.e., sent to branch offices or sister concerns where there is shortage of manpower. Redeployement is

prevalent in Government organization. The surplus may also be encouraged to opt for voluntary

retirements. If there is deficiency, the number of person needed may be recruited from outside

sources.

Human resource Planning at various level

HR planning is undertaken at various levels as mentioned below:

1. Global Level: Eminent persons through out the world are considered for appointment in global

organization like the UNICEF, the UNESCO etc. Computer professionals through out the world and in

particular from India are working for the corporate giants of the U.S and the European countries.

2. National Level: A citizen of India, possessing the requisite qualification, is considered for

appointment in central government organizations. In India, organization like the Union Public Service

Commission (UPSC) and the staff selection commission (SSC) are empowered to conduct entrance tes

to select suitable candidates for central government service. An employee of the central government



must be willing to serve in any part of India. A citizen of India, fulfilling the eligibility criteria, may also b

inducted into the Indian army, Navy and Air force. There are also organization that select deserving

sports persons, through out the country, to play for India. The board of control for cricket in India

(BCCI), for example, has a selection committee that selects talented cr4icketers through out India to pla

for India.

3. State Level: Vacancies in state government organizations in India are filled up with the help of the

respective state public service commission. For example, the Tamil Nadu Public Service Commission

(TNPSC) is empowered to hold entrance tests to select candidates for states government service. An

employee in the state government service must be prepared to serve in any part of the state.

4. Industry level: The level of activity of a particular industry like automobile, textile, chemical etc., wi

determine its manpower requirement. Only persons possessing certain specific qualification and

experience can be considered for appointment in these industry. For example, a degree or diploma in

automobile engineering is necessary for someone to associate himself with the auto industry as a

technician.

5. Firm/ Company Level: The scale of operation of a particular firm or company will determine its

manpower needs. The recruitment policy of the particular concern will indicate the mode of selection

(whether from within or from outside) and the type of candidates (male or female, with or without

previous work experience and so on) for the various jobs.

6 Department/Division Level: This is concerning the manpower need of a particular department or

division within a firm or a company. The nature of activities of a particular department, the availability o

financial resource etc., are some of the factors influencing the human resource plan.

Human resource retention plan

An important feature of the human resource is that it is perfectly mobile. If an employee, working for

an organization, finds a better job elsewhere, ther4e is every possibility of his leaving his present



organization, it would prove to be detrimental to the interests of the particular concern. Such a trend

disturbs stability and also increase the recruitment and training costs. It is, therefore, necessary that

every organization takes certain steps to retain its human resource. The human resource retention pla

shall provide for the following:

1. Job security for all the employees: Obviously, an employee who does not have job security w

quite his present job if he finds a secured job elsewhere.

2. Pay benefit on par with those in rival concerns: The salary and other monetary benefit given

the employee shall be on par with those in rival firms. Only then the employees will have a feeling that

the employer does not exploit them.

3. Promotion opportunities: Lack of promotion opportunities result in stagnation. This leads to

monotony and boredom in the workplace. There should always be scope for the employees to move to

higher positions.

4. Facilities for training: Training enables an employees to update his knowledge and skill. It give

him greater confidence to meet future challenges.

5. Conducive working condition: The physical environment as well as the social environment in

the workplace should be conducive for the employees.

6. Encouraging workers participation in management decision: Only then the employee will have

faith in the management, as the latter cannot take unilateral decisions.

7. Challenging works: The work given to any employee must be of a challenging nature. It must

give scope for the employee to exhibit their skills.

8. Motivation of employees: Inducement of employees is necessary to get the best out of them

This mat done by offering them suitable tangible and intangible benefits.

9. Encouraging workers to form a union: When there is a trade union, the employees will be in a

position to represent all their genuine demands collectively.



10. Facilities for counseling: Employees to undergo stress in view of domestic and work-related

problems. Counseling, by the manager or by a specialist, enables them to get rid of their stress and

perform their jobs better.

Documents

Human Resource management UNIT I