UNIT 1

Human Resource Management (HRM) focuses on managing workplace relationships,

recognizing humans as social beings. Since the mid-1980s, HRM has grown in importance in
both academics and business, blending ideas from management, psychology, sociology, and
economics. There’s no one-size-fits-all way to manage people due to their complexity and varied
needs—effective HRM depends on an organization’s people, goals, and structure. Today, a
company’s competitive edge relies more on the quality of its workforce than on capital or
technology. To succeed, organizations must recruit, train, and manage employees well, placing
them in the right roles and ensuring commitment to company goals. HRM aims to boost
productivity while meeting individual needs (like job satisfaction and recognition) and fulfilling
societal duties (such as legal and ethical standards).

Dessler: HRM is the process of acquiring, training, appraising and compensating employees and
of attending to their labor relations, health and safety and fairness concerns (2011).

Raymond A Noe et al: HRM refers to the policies, practices and systems that influence
employees' behaviour, attitudes and performance (2010).

De Cenzo and Robbins: HRM is the people component of management. HR helps line
managers with staffing (getting people) training and development (preparing people) motivation
(stimulating them to put forth their greatest efforts); and maintenance (keeping good employees)
(2010).

In short Human Resource Management (HRM) can be defined as the art of procuring,
developing and maintaining a competent workforce to achieve the goals of an organization
in an effective and efficient manner.

NATURE OF HRM:
Human Resource Management (HRM) is the process of connecting people with organizations to
help both achieve their goals. It focuses on getting the best out of employees by earning their full
cooperation. HRM is about finding, developing, and keeping a skilled workforce to meet the
organization's objectives efficiently. Below are its key features explained under the original
headings:

Pervasive Force
HRM is present in every organization and affects all levels of management. All managers are
essentially HR managers because they need to focus on their team's growth and satisfaction. For
example, at companies like Infosys, every manager is responsible for their team’s development.

Action Oriented
HRM is about taking action, not just keeping records or following strict rules. It solves employee
problems through flexible, employee-friendly policies to reduce stress, resolve conflicts, and
encourage cooperation.

Individually Oriented
HRM helps employees reach their full potential and encourages them to do their best. Employees
are treated as valuable team members, not as less important, and efforts are made to make them
feel valued.

People Oriented
HRM is all about managing people, both individually and in groups. It assigns people to the right
jobs to achieve great results, and the benefits are used to reward and motivate employees for
even better performance. The goal is for employees to feel as satisfied as the organization.

Future Oriented
HRM prepares employees for current and future challenges, especially in fast-changing
environments. It believes that employees, not buildings or machines, give a company its
competitive edge.

Development Oriented
HRM focuses on helping employees grow. Rewards are designed to meet employees' needs,
training is provided to improve skills, and employees are rotated across different roles to gain
experience. The aim is to use their talents fully to support the organization’s goals.

Integrating Mechanism
HRM works to create and maintain good relationships between people in the organization,
ensuring everyone works well together.

Comprehensive Function
HRM is involved in any decision that affects employees at all levels, from workers to top
managers. It manages people across the organization, with the main goal of using human
resources effectively to achieve organizational success. It helps employees feel satisfied and
perform their best.

Auxiliary Service
HR departments are there to help and advise managers in handling employee-related tasks more
effectively. The HR manager acts as a specialist advisor, supporting other managers in their
roles.

Interdisciplinary Function
HRM draws on ideas from psychology, sociology, anthropology, economics, and other fields to
understand human behavior better. Managers need these insights to handle the complexities of
managing people.

Continuous Function
HRM is not a one-time task. It requires constant attention to human relationships and their
importance in daily operations, as it’s not something you can do just once a day or week.

OBJECTIVES OF HRM:

Human resource managers need to get the right people into the right place at the right time and
then help Hchem them maximize their performance and future potential. The principal objectives
of HRM may be listed thus:

1.​ To help the organisation reach its goals: HR department, like other departments in an
organisation, exists to achieve the goals of the organisation first and if it does not meet
this purpose, HR department (or for that matter any other unit) will wither and die.

2.​ To employ the skills and abilities of the workforce efficiently: The primary purpose of
HRM is to make people's strengths productive and to benefit customers, stockholders and
employees. Keep your employees happy and encourage them to do everything possible to
keep customers happy. The results would be truly outstanding-like take the case of
Southwest Airlines-delivering outstanding results for över three decades - based on its
"employees first and customers next" policy.
 3.​ To provide the organisation with well-trained and well-motivated employees: HRM
requires that employees be motivated to exert their maximum efforts, that their
performance be evaluated properly for results and that they be remunerated on the basis
of their contributions to the organisation.

4.​ To increase to the fullest the employee's job satisfaction and self-actualization: It
tries to prompt and stimulate every employee to realise his potential. To this end suitable
programmes have to be designed aimed at improving the quality of work life (QWL).

5.​ To develop and maintain a quality of work life: It makes employment in the
organisation a desirable, personal and social, situation. Without improvement in the
quality of work life, it is difficult to improve organisational performance.

6.​ To communicate HR policies to all employees: It is the responsibility of HRM to

communicate in the fullest possible sense, wrapping ideas, opinions and feelings of
customers, non-customers, regulators and other external public as well as understanding
the views of internal human resources.

7.​ To be ethically and socially responsive to the needs of society: HRM must ensure that
organisations manage human resources in an ethical and socially responsible manner
through ensuring compliance with legal and ethical standards.

SCOPE OF HRM

●​ HRM has a broad scope, as humans are integral to all organizational activities. Even
automated processes and equipment involve human design and implementation.
●​ Skilled and motivated individuals significantly influence an organization’s success across
all its functions.
●​ Recent developments—such as behavioral science research, trends in managing
knowledge workers, and advancements in training—have further broadened HRM’s role.

Key Areas of HRM (As Defined by the Indian Institute of Personnel Management)

1.​ Personnel Aspect

○​ Focuses on managing human resources through:
■​ Manpower planning, recruitment, selection, and placement.
■​ Employee transfers, promotions, training, and development.
■​ Handling layoffs, retrenchment, remuneration, incentives, and productivity
improvement.
 2.​ Welfare Aspect
○​ Addresses employee well-being by providing:
■​ Improved working conditions and facilities like canteens, crèches,
restrooms, and lunch areas.
■​ Support services such as housing, transportation, medical care, education,
health, safety, and recreational opportunities.
3.​ Industrial Relations Aspect
○​ Manages relationships between employees and management, including:
■​ Union-management interactions, joint consultations, and collective
bargaining.
■​ Handling grievances, disciplinary actions, and dispute resolution.

Functions of HRM
HRM is a management function i.e. it is based on what managers do and the functions performed
by managers are common to all organizations. For the convenience of study, the function
performed by the resource management can broadly be classified into two categories, ie
Managerial functions and Operative functions.

1. Managerial Functions: It includes Planning, Organising, Staffing, Directing and

controlling (POSDC)
a. Planning: Planning is to plan for the future or predetermine the course of actions to be taken
in future. It is a process of identifying the organisational goals and formulation of policies and
programmes for achieving those goals.
b. Organising: Organising is a process by which the structure and allocation of jobs are
determined. Thus organising involves giving each employee a specific task establishing
departments, delegating authority to subordinates, establishing channels of authority and
communication, coordinating the work of subordinates, and so on.
c. Staffing: This is a process by which managers select, train, promote and remove their
employees. This involves deciding what type of people should be hired, recruiting, selecting
employees, setting the performance standard, compensation of employees, evaluation of
performance of employees, counseling employees, training and developing employees.
d. Directing/Leading: Directing is the process of initiating or activating group efforts to achieve
the desired organizational goals, which includes activities like getting subordinates to get the job
done, maintaining their morale, motivating subordinates etc, for achieving the organizational
goals.
e. Controlling: It is the process of setting the standards for performance, measuring the actual
performance of the employees and then comparing the actual performance with the standards and
there by taking corrective actions
as needed.
2. Operative Functions: The Management functions as suggested were common to all the
managers whereas the Operative, also called as service functions are relevant to specific
departments only. These functions differ from department to department depending upon the
nature of the department. Viewed from this standpoint, the operative functions of HRM relate to
ensuring the right people for the right jobs at right times. These functions include procurement,
development, compensation, and maintenance functions of HRM. A brief description of these
follows:
a. Procurement: It involves procuring the right kind of people in the right or rather appropriate
number to be placed in the organisation. It consists of activities such as manpower planning,
recruitment, selection placement and induction or orientation of new employees.
b. Development: It includes activities meant to improve the knowledge, skills, aptitudes and
values of employees so as to enable them to perform their jobs in a better manner in future. It
consists of training to employees, executive training to develop managers, organisation
development to strike a better fit between organisational climate/culture and employees.
c. Compensation: Compensation function involves determination of wages and salaries which
should match with the contribution made by employees towards achieving organisational goals.
In other words, this function ensures equitable and fair remuneration for employees in the
organisation. It consists of activities such as job evaluation, wage and salary administration,
bonus, incentives, etc.
d. Maintenance: It is concerned with retaining or protecting and promoting employees while at
work. For this purpose several benefits such as housing, medical, educational, transport facilities,
etc. are provided to the employees. Several other social security measures such as provident
fund, pension, gratuity, group insurance, etc. are also being given to the employees.

HRM & HRD

Human Resource Development (HRD) is a positive approach in human resource management
that views investing in people as essential for long-term organizational benefits. It focuses on
unlocking human potential, treating employees as valuable assets rather than liabilities, and
fostering their overall growth for the well-being of individuals, the organization, and society.

According to Prof. T.V. Rao, HRD is a process by which the employees of an organisation are
helped in a continuous and planned way to: (1) acquire or sharpen capabilities required to
perform various functions associated with their present or expected future roles; (2) develop their
general capabilities as individuals and discover and exploit their own inner potential for their
own and/or organisational development purposes; (3) develop an organisational culture in which
superior-subordinate relationships, teamwork and collaboration among subunits are strong and
contribute to the professional well being, motivation and pride of employees.

Aspect HRD (Human Resource HRM (Human Resource Management)

Development)

Aim Develops employees' Utilizes people effectively to achieve

competencies to realize their full organizational and individual goals.
potential.

Emphasis Focuses on creating a healthy Ensures that people work together to

work climate that encourages meet both individual and organizational
employees to give their best. goals.

Scope Limited to developing Broader scope covering personnel,

competencies at individual and welfare, and industrial relations aspects.
group levels.

Orientation Aims at developing a healthy Focuses on turning human talent into a

work climate and improving competitive advantage and achieving
work-life quality. extraordinary results through
cooperation.

Responsibility Lies primarily with HR Shared responsibility between HR staff

managers. and line managers.

Principles of HRD
1. Developing Organizational Capabilities
HRD focuses on enhancing and building an organization’s capabilities. For example, through
performance appraisals, HRD evaluates employees to identify strengths and weaknesses. For
overachievers, it determines the areas of strength that give them an edge, helping HRD define its
scope of work, which ultimately boosts the organization’s overall capability. For underachievers,
it highlights the gap between current and desired performance, pinpointing specific capabilities
that need development.

2. Potential Maximization
This principle involves recognizing employees’ potential by emphasizing their strengths and
addressing their weaknesses. By doing so, HRD enables individuals to contribute their best
efforts toward achieving organizational goals.

3. Autonomy Maximization
HRD aims to increase individual autonomy, fostering greater ownership of results both as
individuals and within teams. This ties into motivation concepts, where greater autonomy can
enhance intrinsic motivation, encouraging employees to take initiative and feel more accountable
for their contributions.

4. Empowerment
Empowerment is rooted in the principles of decentralization and delegation. It involves sharing
responsibility and authority across the organization, promoting collective leadership rather than
relying solely on individual-centered leadership.

5. Participative Decision-Making
In this principle, organizational objectives become a shared responsibility among executives,
managers, and employees. HRD encourages collaborative decision-making to ensure everyone
contributes to the organization’s success.

6. Change Management
HRD plays a key role in balancing an organization’s current culture with evolving environmental
factors. For instance, in traditional settings, employees might work and dine together, fostering
collaboration. However, in virtual organizations, these interactions are limited, leading to
generational differences and divides. HRD must adapt to these changes and address their impact
effectively.

7. Periodic Review
Since nothing remains static, HRD emphasizes the periodic renewal of organizational systems to
ensure they remain self-sustaining. This involves reviewing and co-creating human systems to
keep them aligned with organizational needs and external changes.
Features of Human Resource Development (HRD):

1. HRD is a connected system:

HRD is like a machine with many connected parts, such as hiring, evaluating, and training
employees. If one part changes (e.g., a new promotion rule based on merit instead of seniority), it
affects other parts. These changes need to be carefully thought out, considering how they impact
employees, unions, and policies.

2. HRD is a planned and ongoing process:

HRD is a step-by-step and organized way of helping employees grow. It’s not a one-time
thing—it’s continuous, like learning throughout life.

3. HRD focuses on building skills at different levels:

- At the personal level, employees learn to align their roles with the organization’s goals and
expectations. Jobs are made more interesting and meaningful.
- At the team level, HRD encourages trust, confidence, and helpfulness among employees.
- At the group level, teams like task forces or cross-functional groups are formed to improve
teamwork.
- At the organization level, HRD creates a supportive environment where employees’
potential is fully utilized to achieve company goals.

4. HRD combines ideas from many fields:

HRD uses concepts and methods from subjects like sociology, psychology, economics, and
anthropology to help employees grow and develop.

5. HRD improves employees’ quality of life:

HRD helps employees discover their strengths and use them for the organization’s benefit. When
managers support them with rewards and challenging tasks, employees find their work more
meaningful, which improves their overall life at work.

6. HRD creates a motivating work environment:

HRD builds a workplace culture where:
- Employees are encouraged to do their best with energy and passion.
- Employees love their company and are willing to take risks, try new ideas, and deliver great
results.
- Employees feel trusted, show enthusiasm, and are committed to their work.
- Employees enjoy their jobs, work well together, openly discuss problems, care for each other,
and solve issues as a team.
Objectives of HRD
1. Employee Growth as Individuals
HRD helps employees improve their personal skills and knowledge, like communication or
leadership, for overall development.

2. Skills for Current Role

HRD ensures employees are skilled for their present job, e.g., sales training for a salesperson to
excel.
3. Preparation for Future Roles
HRD prepares employees for future promotions or roles, like leadership training for a junior
manager.

4. Strong Employee-Employer Bond

HRD builds trust and communication between employees and the organization, e.g., through
regular feedback sessions.

5. Team Spirit in Units

HRD promotes teamwork within departments, using activities like team-building workshops.

6. Collaboration Across Units

HRD ensures different teams work together smoothly, e.g., through joint projects to align goals.

7. Organizational Health and Adaptability

HRD makes the organization strong and adaptable, fostering innovation and growth to benefit
individuals, teams, and the whole organization.

Benefits of HRD

1. Enhanced Employee Capabilities

HRD improves employees' skills, making them innovative and willing to take risks. Feedback
and guidance from superiors help them grow continuously and perform better, contributing to
their all-round development.

2. Improved Teamwork
HRD fosters openness and trust among employees, strengthening teamwork. This also improves
the overall workplace environment and culture.

3. Greater Organizational Effectiveness

HRD helps organizations achieve goals more efficiently through employee-focused policies,
leading to better overall performance.
4. Motivated Employees and Organizational Health
Performance-based rewards encourage employees to use their skills fully for organizational
goals. This also boosts the organization's ability to adapt and grow.

Example: Attracting Top Talent Companies like BMW, TCS, and Infosys, with strong HRD
practices, attract thousands of job applications. Their excellent HR policies allow them to select
the best talent, giving them a competitive edge in the market.

Strategic and Traditional HRM

Traditional HR focuses on managing employee relations and day-to-day tasks like payroll and
compliance. Strategic HR (SHRM) sees people as the heart of a company’s success or failure
since they make all decisions—about marketing, operations, or tech. SHRM prioritizes managing
people by linking HR policies to the company’s big-picture goals. It pushes everyone to think
strategically, not just operationally, and believes there’s no one-size-fits-all way to manage
people. HR should fit the company’s unique strategy and support both daily work and long-term
plans (Becker and Gerhart). Even in the same industry, HR approaches can differ widely.

SHRM creates consistent practices and policies to help achieve company goals. Unlike
traditional HR’s focus on employees alone, SHRM builds partnerships inside and outside the
company. It considers the many factors affecting employees and the business, aiming to keep
everyone satisfied. Strategic HR is proactive and adaptable, helping people and the company
adjust quickly to change—like building strong teams or rolling out new tech efficiently (Ulrich,
1998). It avoids strict rules, letting employees work flexibly while adjusting controls as needed.

Jobs in SHRM are fluid—less rigid specialization, more cross-training and teamwork, giving
people independence. Above all, it views employees as the company’s biggest asset and key to
staying ahead of competitors by attracting and keeping talented people (Pfeffer, 1994). Anyone
managing people, regardless of their role, is an HR manager in this view.

SHRM delivers three big wins: better performance, happier customers and employees, and more
value for shareholders. It does this by smart hiring, keeping good people, picking employees who
fit the company’s vibe and goals, investing in talent, aligning HR with strategy, adapting to
change, and focusing on customers and quality (Mello, 2003).

Point of Traditional HR Strategic HR

Distinction
Responsibility Handled by staff specialists, Managed by line managers,
for HR focusing on specific HR tasks and integrating HR responsibilities into
expertise. their roles.

Key Investments Focused on cost control, aiming to Invests in people, viewing them as
minimize expenses in HR valuable assets for organizational
operations. growth.

Job Design Designed with a narrow scope, Designed with a broad scope,
emphasizing specialization and promoting flexibility and
division of labor. cross-training.

Control Operates with tight control, relying Operates with loose control,
Horizons on strict policies and procedures. encouraging adaptability and
innovation.

Core Initiatives Focuses on short-term goals, often Focuses on long-term goals, being
reactive and fragmented in proactive and integrated in
approach. approach.

Role of HR Acts as a bureaucratic follower, Acts as an organizational leader,

sticking to traditional roles and driving strategic change and
processes. transformation.

Focus Emphasizes slow, transactional Emphasizes fast, transformational

change, focusing on routine HR change, aligning HR with strategic
tasks. goals.

Employee Maintains a customer-follower Adopts a customer-initiator

Relations approach, reacting to employee approach, proactively addressing
needs as they arise. employee needs.

Partnerships Limited partnerships, primarily Builds internal and external

internal and focused on operational partnerships to align HR with
needs. broader strategies.

Challenges of HRM
A.​Globalization:
1. Access and Competition in Global Labor Markets -Globalization allows companies to hire
from international talent pools, but it also increases competition for skilled workers. HRM must
attract, develop, and retain top talent in a highly competitive global environment.

2. Fostering Inclusivity in Culturally Diverse Workforces- Global workplaces consist of

employees from diverse cultural, linguistic, and ethnic backgrounds. HRM needs to create an
inclusive culture and implement diversity management practices to use these differences for
innovation and business advantage.

3. Managing High Employee Mobility and Turnover - Globalization leads to frequent job and
location changes as employees seek better opportunities. HRM must address this by offering
career growth programs, flexible work conditions, and a supportive organizational culture to
reduce turnover.

4. Leveraging Technology for Global HRM -Technology helps automate HR processes like
recruitment and training, track employee performance globally, and analyze HR strategies. HRM
must use these tools effectively, especially in companies with international operations.

5. Ensuring Coherence in Outsourced and Offshored HR Functions - Many companies

outsource or offshore HR tasks to cut costs and focus on strategy. HRM must ensure that these
decentralized processes remain aligned and effective across global operations.

6. Continuous Employee Skill Development - In a fast-changing global environment, HRM

must provide ongoing training to help employees adapt to new market and technological
demands, fostering loyalty and preparedness for future challenges.

7. Promoting Ethics and Sustainability in HRM : Global HRM must align HR practices with
corporate ethics, social responsibility, and sustainability to enhance the company’s reputation and
credibility in international markets.

Indian Example: Tata Consultancy Services (TCS): TCS faced challenges managing a
culturally diverse workforce across its global offices. To address this, TCS implemented the
"TCS Global Learning Program," which provides cross-cultural training and leadership
development to improve collaboration and inclusivity among its international teams.

B.​Invasion of Privacy:
1. Balancing Monitoring and Employee Trust -Companies use tools like email tracking and
video surveillance to ensure productivity and security, but excessive monitoring can invade
privacy and erode trust.Finding a balance between monitoring for legitimate purposes and
respecting employees' privacy rights.

2. Secure and Transparent Data Collection -HR gathers sensitive employee data (e.g., personal
details, health records), but misuse, unauthorized access, or unclear policies can raise privacy
concerns. Ensuring secure data storage, transparent usage policies, and protection against
breaches.

3. Social Media Monitoring and Personal Boundaries -Employers often review social media
profiles for hiring or disciplinary decisions, which employees may see as an invasion of their
personal lives. Defining clear boundaries between professional evaluations and respecting
personal privacy.

4. Managing Privacy in BYOD Policies - Allowing personal devices for work blurs the line
between personal and professional data, risking privacy breaches for both employees and the
company. Creating clear BYOD policies to protect company data while safeguarding employees'
personal information.

5. Compliance with Data Privacy Regulations- Organizations must follow laws like GDPR or
India's Personal Data Protection Bill to avoid penalties for privacy violations. Staying updated on
legal requirements and ensuring all HR practices comply with regulations.

6. Privacy in Health and Wellness Programs- Health assessments or wellness initiatives

require employees to share sensitive health data, raising concerns about confidentiality. Building
trust and ensuring the privacy of employees' health information.

7. Surveillance in Remote Work Settings -Remote work has increased the use of surveillance
tools to track productivity, but this can feel intrusive to employees. Respecting employees'
privacy while ensuring accountability in remote work environments.

C.​Technological Changes:

1. Managing Remote Work Dynamics -The rise of remote work requires HR to ensure effective
communication, collaboration, and engagement across dispersed teams while maintaining
productivity, work-life balance, and a cohesive company culture in virtual settings. Fostering
team unity and performance in a geographically distributed workforce.

2. Ensuring Data Privacy and Security

 HR relies on digital tools like cloud platforms, increasing the need to protect sensitive employee
data from breaches and comply with data protection laws (e.g., GDPR). Implementing strong
security measures and adhering to legal standards to safeguard confidential information.

3. Integrating AI and Automation Ethically - AI and automation are used in HR for

recruitment, performance evaluation, and monitoring, but they raise concerns about bias, job
displacement, and integration with existing systems. Ensuring ethical use of AI, avoiding
algorithmic bias, and managing workforce transitions due to automation.

4. Upskilling and Reskilling for Technological Adaptation - Rapid technological changes

require employees to learn new skills to stay relevant, pushing HR to develop continuous
learning programs and tools for workforce adaptation. Equipping employees with skills for
evolving job roles in an increasingly automated environment.

5. Adapting HRM Practices to Technological Trends HR must continuously update strategies

to align with the latest technological innovations impacting recruitment, training, and employee
management.
Keeping HRM practices current with dynamic technological advancements.

6. Managing Change During Technology Adoption -Introducing new technologies often faces
resistance, requiring HR to implement change management strategies for smooth transitions.
Overcoming employee resistance and ensuring effective adoption of new tools.

7. Addressing Legal and Ethical Issues in Technology Use- Using technology in HRM raises
concerns about compliance with data protection laws and ensuring fairness in automated
decisions. Navigating legal and ethical complexities while maintaining transparency and equity.

Indian Example: Tata Consultancy Services (TCS) (2024): TCS encountered challenges while
adopting AI-powered tools for talent acquisition and employee performance tracking. To address
this, TCS launched a "Digital Skills Program" to train its workforce on AI and automation tools
and implemented robust cybersecurity measures to protect employee data. However, concerns
about potential bias in AI-driven hiring processes led TCS to audit and refine its algorithms to
ensure fairness and transparency (Source: Economic Times, 2024).

D.​Labor Supply and Shortages:

1. Understanding Labor Supply -Labor supply is the number of workers ready to work at a
specific wage in an economy or industry. It is influenced by economic cycles and demographic
shifts.Predicting labor availability due to unpredictable economic trends (e.g., tight labor markets
in the late 1990s vs. layoffs during 2001 and 2008 recessions) and predictable demographic
changes (e.g., aging populations and declining birthrates).

2. Impact of Demographic Trends

Predictable demographic changes, like declining birthrates and aging workforces, lead to labor
shortages in developed countries. Addressing workforce gaps caused by retiring workers, such as
the retirement of baby boomers in the U.S., which led to an estimated 2.4 million job shortages
by 2014 in sectors like healthcare, engineering, and IT.

3. Festival-Related Labor Shortages in India

During major Indian festivals like Diwali, Holi, and Chhat Puja, many workers migrate to their
hometowns, reducing workforce availability in industrial areas. Managing reduced productivity,
supply chain disruptions, strained customer relations, increased costs, and quality concerns due
to labor shortages during festive periods.

Suggested Measures:
●​ Advance Planning: Track festival schedules to prepare for labor shortages.
●​ Festive Incentives:Offer bonuses or benefits to encourage workers to stay during
festivals.
●​ Cross-Training:Train employees to handle multiple roles during absences.
●​ Local Hiring: Employ local workers for critical tasks to maintain operations.
●​ Labor Rotation: Rotate workers across departments to ensure workforce stability.

Indian Example:
Maruti Suzuki (2023): During Diwali 2023, Maruti Suzuki faced production delays due to
worker migration. The company implemented a festive incentive program and cross-trained
employees to handle critical roles, reducing downtime. However, hiring local workers
temporarily increased costs (Source: The Hindu BusinessLine, 2024).

E.​Mergers and HRM:

1. Understanding Mergers and Acquisitions (M&As) -M&As are strategies for businesses to
enter new markets, acquire technology, and achieve cost efficiencies. However, they introduce
uncertainties like job losses and cultural conflicts. HR must address the human aspects of
integration to prevent merger failures, as financial and strategic gains often overshadow
employee-related concerns.
2.Cultural Integration Issues - Merging organizations often have different workplace cultures,
leading to employee dissatisfaction and resistance. HR must manage cultural differences to
ensure smooth integration and maintain employee engagement.

3. Job Losses and Employee Anxiety- M&As frequently result in layoffs due to overlapping
roles, creating uncertainty and low morale among employees. HR needs to communicate
effectively and provide support to address anxiety and maintain trust.

4. Talent Retention Difficulties- Uncertainty during mergers can lead key employees to seek
stable opportunities elsewhere. HR must focus on retaining critical talent to ensure
organizational stability and continuity.

5. Navigating Legal and Regulatory Complexities - India’s labor laws and regulations add
complexity to the merger process, requiring compliance during integration. HR must ensure legal
adherence while managing workforce transitions.

Indian Examples:
JioHotstar Merger (2024-2025): The merger of JioCinema and Disney+ Hotstar faced cultural
clashes, employee uncertainty, talent retention issues, and regulatory challenges in the media
sector.
GlaxoSmithKline (GSK) and SmithKline Beecham Merger (2000, impacting India): The
merger led to compensation disparities, cultural conflicts, job redundancies, and legal
complexities in India’s pharmaceutical operations.

F.​ Recession

1. Understanding Recession- A recession is a prolonged economic decline, typically marked by

two consecutive quarters of GDP contraction, affecting employment, production, and consumer
spending. HR must navigate reduced business activity and implement cost-cutting measures
while managing workforce impacts.

2. Layoffs and Workforce Reduction - Businesses reduce staff to cut costs during recessions,
leading to job insecurity and talent loss. HR must manage layoffs while minimizing negative
impacts on remaining employees.

3. Morale and Productivity Decline- Surviving employees face increased workloads and
uncertainty, reducing morale and productivity. HR needs to maintain motivation and engagement
amidst economic stress.
4. Talent Retention Issues- Key employees may leave for more stable opportunities during
economic uncertainty. HR must implement retention strategies to retain critical talent.

5. Balancing Cost Management- HR must cut costs while ensuring the workforce remains
effective and motivated. Striking a balance between cost-saving measures and employee support.

Indian Example:
Impact on Indian IT Sector (2020 COVID-19 Recession): The 2020 recession, driven by
COVID-19, reduced global IT demand, leading to layoffs, salary cuts, and increased workloads
in India’s IT sector. HR adapted by enhancing remote work, offering reskilling, and focusing on
talent retention.

UNIT-2

Recruitment
"Recruiting is discovering potential applicants for actual or anticipated organizational vacancies.
It involves seeking viable job candidates."(Robbins, 2010)

Recruitment is the process of finding, attracting, and selecting qualified people to fill job
openings in an organization. It involves promoting the company and its jobs through channels
like job fairs, online platforms, and networking to build a diverse pool of suitable candidates.
The goal is to match candidates with job requirements while minimizing the effort and cost
of dealing with unqualified applicants by providing enough information for them to self-filter.
Recruiting is a vital HR function, often taking up 50-70% of HR time, and is key to hiring the
right talent for business success.

Sources of Recruitment

A.​Internal Recruitment
Large organizations often promote entry-level employees to higher roles by identifying
candidates through internal applications, HR systems, or colleague referrals. This
"promote-from-within" approach, used by companies like UPS and McDonald’s (where 40% of
top executives started in restaurants), boosts morale, reduces costs, and leverages existing
performance data. However, it may overlook external talent, cause internal conflicts, and limit
diversity. HRM systems help identify candidates, and job postings on bulletin boards or
newsletters encourage applications or referrals.

Example:
Tata Consultancy Services (TCS) frequently promotes from within, using its internal talent
pool to fill managerial roles. For instance, many project managers at TCS started as entry-level
software engineers, benefiting from the company’s focus on internal growth and training
programs like iON, which prepare employees for leadership positions.

B.​ Employee Referrals and Recommendations

Employee referrals are a trusted recruitment method where current employees recommend
candidates, typically ensuring quality as their reputation is at stake. These referrals provide
realistic job insights, reducing mismatched expectations and increasing retention rates. They are
especially effective for hard-to-fill roles like IT or engineering, with companies like Principal
Financial Group (40% hires from referrals) and Wegmans (one in five employees related)
offering bonuses, sometimes exceeding $10,000, for successful hires. However, risks include
bias (favoring friends over competence), nepotism, and reduced diversity. Referrals are versatile,
filling both entry-level and managerial roles, though higher-level positions are often
recommended by professional acquaintances.
Example
In 2023, Infosys used employee referrals to tackle talent shortages, offering ₹50,000 incentives
for referring experienced software developers. This cost-effective method quickly filled critical
roles like cloud architects and data engineers, enhanced employee engagement, and aligned with
Infosys' strategy to maintain a skilled workforce in a competitive market.

C.​External Searches
Companies often look outside their own staff to find new employees. They use methods like ads,
employment agencies, schools, job fairs, professional groups, and random applications.

Advertisements: Companies post job openings in places that match the job type—local papers
or sites like Monster for basic roles, and big newspapers or special websites for top jobs. Things
like the company’s name, job market, and required skills affect how many people reply. Some
ads hide the company’s name for privacy, but this might scare off applicants.

Employment Agencies: These are groups that help match workers with jobs. Public ones (run
by the government) help unemployed people for free. Private ones charge fees for extra help.
“Headhunters” focus on finding bosses or rare experts and cost more.

Educational Institutions: Schools and colleges offer new graduates or people with experience
through job placement offices, internships, or work-study programs. They fill all kinds of jobs,
from starters to managers.

Job Fairs: These are events where companies meet job seekers to collect résumés and show off
their brand. They can be in-person or online. Virtual fairs are popular with young, tech-smart
people since they’re cheaper and easier.

Professional Organizations: Groups like unions or trade clubs help their members find jobs.
They might limit who gets hired by requiring special training or certificates, helping both
workers and companies.

Unsolicited Applicants: People who apply without being asked—by email, phone, or in
person—give companies a backup list of candidates. How good these applicants are depends on
the economy and the company’s reputation.

D.​Online Recruiting
Online recruiting is replacing traditional methods like newspaper ads and employment agencies,
with most companies using their websites to attract talent by adding "careers" sections. These
sites detail job qualifications, experience, benefits, and company values, helping filter out
unqualified applicants. Technology, like keyword searches, efficiently rejects unsuitable résumés,
often without human involvement. Well-designed sites allow direct résumé submissions, as seen
with Cisco Systems. Job boards like Monster, CareerBuilder, and industry-specific sites like
Dice.com list diverse roles, while social media platforms like LinkedIn and Facebook connect
recruiters with candidates. Online recruiting is cost-effective (e.g., free Craigslist listings in
many areas), enhances diversity, and accesses global talent. However, concerns like video
résumés potentially leading to discrimination claims exist. Candidates also create personal
websites with résumés and videos to attract employers.

Example
In 2022, Infosys used Naukri.com to post software engineer openings, leveraging filters to
screen for skills like Python and cloud computing. Integrated with LinkedIn for profile
verification, this approach helped hire over 10,000 employees in a quarter, showcasing
cost-effectiveness and access to diverse talent, especially from tier-2 cities via the mobile app.

Alternative Recruitment Methods

Recruitment is often associated with hiring full-time, permanent employees. However, economic
shifts and organizational trends like rightsizing have led companies to explore alternative hiring
methods, including temporary staffing, employee leasing, and independent contracting. These
approaches help businesses manage workforce fluctuations while reducing long-term
employment costs.

A.​Temporary Staffing

Companies frequently hire temporary workers to address short-term HR needs. Initially popular
in office administration, temporary staffing now spans various industries, including healthcare,
IT, and finance. Older workers, particularly retirees, are also a valuable source of temporary
labor due to their experience, strong work ethic, and ability to mentor younger employees.

Example: Companies like Amazon India hire temporary workers in warehouses and logistics to
manage high demand during sales events like the Great Indian Festival.

B.​ Employee Leasing

Employee leasing involves hiring workers through a leasing company, also known as a
Professional Employer Organization (PEO). These employees remain officially employed by the
leasing firm while working for a client company. Leasing reduces administrative burdens and
provides cost-effective benefits, especially for small businesses.

Example: A small IT firm, for instance, might lease software developers from a staffing agency
rather than hiring them permanently.

C.​Independent Contractors

Organizations also recruit independent contractors (consultants) for specialized work. These
professionals are not formal employees, which allows businesses to save on expenses like
insurance and social security contributions. Independent contractors benefit from flexible work
arrangements, often completing projects remotely.

Example: Many Indian firms hire freelance content writers, graphic designers, and IT
consultants through platforms like Upwork, Freelancer, and Fiverr. For instance, a legal firm
in India might hire an independent legal transcriptionist to work remotely rather than employing
a full-time staff member.