Human Resource Management (BEBA55A) UNIT-1

REF NO: BEBA55A-U1-02

HUMAN RESOURCE MANAGEMENT (BEBA55A)

UNIT – I continued...

Difference between Human Resource Management and Personnel Management

INTRODUCTION

The main difference between Personnel Management and Human Resource Management lies
in their scope and orientation. While the scope of personnel management is limited and has an
inverted approach, wherein workers are viewed as tool. Here the behaviour of the worker can
be manipulated as per the core competencies of the organization and are replaced when they
are worn-out.

On the other hand, human resource management has a wider scope and considers employees
as the asset to the organization. It promotes mutuality in terms of goals, responsibility, reward
etc. that will help in enhancing the economic performance and high level of human resource
development.

In early centuries, when Human Resource Management (HRM) was not prevalent, then the
staffing and payroll of the employees were taken care of, by the Personnel Management (PM).
It is popularly known as Traditional Personnel Management. Human Resource Management
have emerged as an extension over the Traditional Personnel Management. So, in this article,
we are going to throw light on the meaning and differences between Personnel Management
and Human Resource Management.

COMPARISON CHART

Dimensions Personnel Management HRM

Meaning The aspect of management The branch of management
that is concerned with the that focuses on the most
work force and their effective use of the
relationship with the entity is manpower of an entity, to
known as Personnel achieve the organizational
Management goals is known as Human
Resource Management.
Approach Traditional Modern

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Treatment of manpower Machines or Tools Asset

Type of function Routine function Strategic function

Beliefs and assumptions

1. Contract Careful delineation of written Aim to go beyond contract
contracts
2. Rules Importance of devising clear 'Can-do' outlook; Impatience
rules/mutually with 'rule'
3. Guide to management Procedures Business-need'
action
4. Behaviour referent Norms/custom and practice Values/mission
6. Nature of relations Pluralist Unitarist
Strategic
8. Key relations Labor management Customer
9. Initiatives Piecemeal Integrated
11. Speed of decision Slow Fast
Line management
12. Management role Transactional Transformational leadership
13. Key managers Personnel/ IR specialists General/business/line
managers
14. Communication Indirect Direct
16. Management skills Negotiation Facilitation
Key levers
17. Selection Separate, marginal task Integrated, key task
18. Pay Job evaluation (fixed grades) Performance-related
19. Conditions Separately negotiated Harmonization
21. Thrust of relations with Regularized through facilities Marginalized (with
stewards and training exception of some
bargaining for change
models)
22. Job categories and grades Many Few
23. Communication Restricted flow Increased flow
24. Job design Division of labor Teamwork

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 Human Resource Management (BEBA55A) UNIT-1

Function of Human Resource Management

Human Resource Management is a management function concerned with hiring, motivating,

and maintaining workforce in an organization. Human resource management deals with issues
related to employees such as hiring, training, development, compensation, motivation,
communication, and administration. Human resource management ensures satisfaction of
employees and maximum contribution of employees to the achievement of organizational
objectives.

According to Armstrong (1997), Human Resource Management can be defined as “a strategic

approach to acquiring, developing, managing, motivating and gaining the commitment of the
organisation’s key resource – the people who work in and for it.”

Human Resource Management functions can be classified in following three categories.

 Managerial Functions,
 Operative Functions, and
 Advisory Functions

1. Planning:
Defined in its simplest terms, planning is the determination of anything in advance of the
action. It involves scanning of the external and internal environment, setting up of goals and
objectives, preparing an action plan to achieve these objectives/goals, laying down policies and
procedures, formulating standards of evaluation and allocating resources.

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It requires anticipation, forecasting, predictions and so on. Thus, planning is a deliberate and
conscious effort to utilise the resources to achieve the given ends. Planning is a link between
the present and the future and is a continuous and never-ending process.
The goals set up under planning may be – (a) short term and (b) long term. Besides, these
objectives may be – (a) financial, (b) non-financial and (c) mixed. Above all, planning should
be flexible so that necessary adjustments could be made as and when needed.

Thus, planning provides the basis for effective and most economical action in the future. It
leads to integrated action and reduces considerably the probability of unanticipated crisis. It
also leads to the use of effective and efficient methods and helps in accomplishing the desired
goals of the enterprise through better control and coordination.

So far as an HR manager is concerned, he/she is required to determine in advance an HR

programme that will contribute towards the achievement of goals specified for the
organisa-tion. Thus, it involves planning of manpower requirements and related issues.
Obviously, it is necessary that the HR manager should be an expert in the field of HRP.

2. Organising:
After plans have been developed and the course of
action determined, organising is next in order. The
process of organising is essential for accomplishing
the objectives of the enterprise. Organising
involves the establishment of an organisation
structure through determination and grouping the
activities, the assignment of activities to the
specified individuals and departments, defining
their role, establishing relationships, the delegation
of authority to carry out the responsibilities and
provision of coordination of men and work.
So far as an HR manager is concerned, in order to execute the HR plans and programmes, he/
she also has to form an organisation. He/she is required to design the structure of the
relationships among – (a) various jobs, (b) various personnel, (c) jobs and men (d) men and
machinery, (e) a specialised unit and the rest of organisation (f) and other physical factors.

In case the relationships among these are well defined, it will leave practically no scope for any
sort of confusion and thus lead to smooth sailing of the organisation towards the specified
goals.

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The HR manager is expected to procure the resources necessary to carry out the HR
programme, design an appropriate system to carry out such a programme and also establish
lines of authority and communication between the various people working with or receiving
benefits from the HR programmes. However, the development of sound organisation requires
certain principles.
3. Staffing:
Staffing is a process of manning the organisation and keeping it manned. Needless to mention
that the future of any enterprise is governed by the quality of the hired personnel. In case the
enterprise has failed to get right man for the right job, the accomplishment of the objectives of
the enterprise will be quite difficult.

So far as an HR manager is concerned, he/ she is required to recruit, select, train, place,
compensate, promote and retire the personnel of the organisation at the appropriate time in a
manner most conducive for accomplishing the objectives of the enterprise. The HR department
itself is all about staffing.

4. Directing:
Having a plan and an organisation to execute it, the next step is getting the job done. As the
process of management is concerned with getting work done through and with people, they
require proper motivation. The management is required to lead, guide, motivate, supervise,
communicate and inspire them towards improved performance.

An HR manager is also expected to do all these things in getting people to go to work will-ingly
and effectively. Although all managers must unavoidably direct their subordinates, the HR
manager should possess exceptional expertise in this regard.

5. Controlling:

Controlling is a very important function of management. In an undertaking, control consists in

verifying whether everything occurs in conformity with the plan adopted, the instructions
issued and the principles laid down. In this way, controlling is a measuring and corrective
device.
Through control, we evaluate the performance against the goals and the plan. Two important
things in the process of control are – (a) a comparison of actual performance as against
standards and (b) taking corrective actions.
So far as the HR manager is concerned, he/she has to evaluate the results of the personnel
activities in comparison with the desired objectives. Through control, he/she measures the
progress of the HR programme along the lines laid out in the programme and determines how
effectively the desired HR objectives were attained.
Thus, we can say that through direct observation, supervision report, records, audits and so on,
the HR manager ensures that the enterprise is carrying out the HR programme on the desired
lines and, if necessary, takes cor-rective steps.

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The Operative functions are as follows:

1. Procurement of Human Resource / Employment:
The first important function of HRM is securing and employing the right type of personnel
according to the needs or requirements of the organization. For effective performance of
procurement function, HRM has to perform a number of functions such as manpower planning
which gives the estimate of manpower requirements.
Job analysis includes job description and job specification which gives the idea of title and
nature of job, duties and authorities on that job, specification of personnel required to perform
on that job such as qualification, qualities, experience, skill, talent, training, abilities etc.
Then he has to perform the function of recruitment which involves the identification of sources
of recruitments, selecting the right type of source for recruiting the personnel. Then he has to
perform selection function. Selection procedure has to be chalk out and selecting the right man
for the right job.
Then placing the personnel which involve allocation of job to the most suitable candidates.
After placement arrange the induction programme for the new entrant and give the information
about the company in detail and create a good image and opinion about the organization.
2. Employee Compensation:
After procurement of employees the next operative function of HRM is compensation function.
It means providing adequate, equitable, regular and fair remuneration to the employees.
According to the services rendered by the employees, remuneration should be given.
For equitable and fair compensation, it should be based on job evaluation, merit rating
Techniques. HRM has to look after the wage and salary administration. He has to formulate
the incentives, bonus, fringe benefits, and social security measures in the interest of the
employees.
3. Development of Human Resource:
Development of Human Resources is done through the training and development programme.
Development process includes improving the skills and knowledge, creativity, ability,
intellectual ability, capacities of employees.
Development process also moulds and changes the attitude and behaviour of the employees,
improves their aptitude, commitment etc. Performance appraisal helps in employee
development programme.
A systematic training programme has to be arranged by the HRM for employee and
management development. He has to prepare career planning and development programme.
HRM has to frame the policies and plans of promotion, demotion and transfer of employees.
4. Developing Healthy Human Relations:
One of the most important operative functions of HRM is developing, maintaining and
preserving the healthy, friendly, harmonious relationship between the management and
employees or employer and employee.

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He is also responsible for developing healthy relations between the employee and employer,
between workers and trade unions and management. Due to healthy relations there are no
disputes, clashes and misunderstanding. But it improves morale, team spirit, team work,
cooperation, togetherness, and oneness among the employees.
5. Integration of Conflicting Interest:
HRM has to perform one more important function that is integration of individual employee
interest and business organization interest. Employees are interested in higher wages and
salaries, more facilities, bonus, social security, less working hours, overtime wages, best
working conditions and so on.
On the other hand company is interested in more profit, higher production and efficiency, long
working hours, minimum working condition, etc. HR managers have to integrate these
conflicting interests in a way that both the parties should be satisfied.
6. Safety and Health of Employees:
HR manager has to take the care of safety and health of the employees. In case of employees
whose work is risky, and hazardous, HR manager has to provide the safety measures to the
employees. Regular medical checkup of the employees has to be done. Free medicines,
treatment should be provided to the employees who fall sick.

7. Stability and Optimum Utilization of Employees:

HR manager has to maintain the employees in the organization and has to utilize them at the
optimum level, He must ensure the best utilization of employees. For this he has to motivate
the employees and to give them job satisfaction, job security, participate them in management.
Their grievances should be promptly resolved. Opportunities for career development should be
given so that employees may prefer to stay in the same organization and company can enjoy
the benefits of stable workforce.
8. Personnel Research, Audit and Records:
HR manager has to conduct research in various areas of human resource for example, research
in motivational techniques, behavioural sciences, attitude, turnover, absenteeism, development,
performance, morale and so on. Audit involves the periodical assessment and appraisal of
employee performance.
Moreover he has to maintain the updated records of the employees since joining till their
retirement by maintaining service books or records. These records would help at the time of
promotion, demotion and transfer of employees.

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