Human Resource Management

Unit I Perspectives in Human Resource Management

Define HRM
Definition of HRM According to Flippo, ‘Personnel Management,
or say, human resources management is the planning, organizing,
directing and controlling of the procurement, development
According to Flippo, ‘Personnel Management, or say, human
resources management is the planning, organizing, directing and
controlling of the procurement, development, compensation,
integration, maintenance, and separation of human resources to the
end that individual, organizational and social objectives are
accomplished”.
The National Institute of Personal Management (NIPM) of India has
defined human resources – personal management as “that part of
management which is concerned with people at work and with 4their
relationship within an enterprise. Its aim is to bring together and
develop into an effective organization of the men and women who
make up enterprise and have regard for the well-being of the
individuals and of working groups, to enable them to make their best
contribution to its success”.
Significance of HRM
Human resources are the most precious asset of an organization.
They are the activators of non-human resources, means for
developing competitive advantages and sources of creativity. Ghoshal
outlines the role of HRM in managing an organization in the
following lines. “Indian Companies have spruced up their strategic
thinking; they have even moved a generation ahead with their
organisations. But they still have managers who have been shaped by
old models. They are essentially a group of first generation managers
whose definitions of roles and tasks, personal skills and competencies,
ideas and beliefs about management have been shaped by an earlier
model. You cannot manage third generation strategies with second
generation organizations and first generation managers to meet the
needs of second generation organisations and third generation’s
strategic thinking. The above view indicates the role of HRM in
Indian industry.
Significance of HRM can be viewed in three contexts;
organizational, social and professional.
Organizational significance
i. Effective utilization of human resources to motivate them and
to change their attitudes to work and the organization.
ii. To develop personnel to meet the demands of the work
effectively; and
iii. To ensure proper recruitment and to retain the personnel in the
organization so that right people are available.
Social significance This aspect aims in achieving the need
satisfaction of personnel in the organization. It is often said that a
happy worker is not only happy in his work place but also at home
and in society also.
Hence HRM seeks to achieve the following
1. Maintaining balance between jobs and job-seekers, taking into
consideration job requirements, job seekers’ abilities and aptitudes
2. Providing most productive employment from which
sociopsychological satisfaction can be derived.
3. Utilizing human capabilities effectively and matching with
government rewards.
4. Eliminating wasteful organizational and individual practices
Evolution of human resource management

The evolution of Human Resource Management (HRM) approaches can be

traced through various stages, reflecting changes in how organizations perceive
and interact with their employees. Let's explore this evolution with real-life
examples and highlight some tricks or strategies adopted at each stage:
1. Transactional Approach (1900s - 1950s):
· Example: During the early 20th century, HRM primarily focused on
transactional tasks such as payroll processing and benefits administration.
· Tricks/Strategies: Efficiency and accuracy in administrative tasks were crucial.
Organizations employed basic record-keeping systems and clerical staff to
manage routine HR functions.
2. Personnel Management Approach (1950s - 1970s):
· Example: Post-World War II, organizations recognized the need for more
structured employee management. Personnel departments emerged, focusing on
hiring, training, and compliance.
· Tricks/Strategies: Organizations started emphasizing compliance with labor
laws and regulations. HR departments focused on creating standardized policies
and procedures to manage employees effectively.
3. Human Resource Management (1980s - 1990s):
· Example: The shift from Personnel Management to Human Resource
Management marked a change in mindset. HRM started viewing employees as
valuable assets to be developed and nurtured.
· Tricks/Strategies: Training and development programs became more common.
Companies invested in employee engagement initiatives, recognizing that
satisfied and motivated employees contribute to organizational success.
4. Strategic Human Resource Management (2000s - Present):
· Example: In the 21st century, HRM evolved into a strategic partner, aligning
HR practices with overall organizational goals. Talent management and
employee engagement took center stage.
· Tricks/Strategies: Organizations began adopting strategic HR planning, linking
HR practices with business objectives. Talent acquisition strategies became
more sophisticated, focusing on acquiring and retaining top talent. Employee
performance management shifted towards continuous feedback and
development.
5. People-Centric Approach (Present and Future):
· Example: Today, HRM is evolving towards a more people-centric approach.
Organizations recognize the importance of employee well-being, diversity, and
inclusion.
· Tricks/Strategies: Companies are investing in employee experience initiatives,
offering flexible work arrangements, and promoting a positive workplace
culture. HR is actively involved in fostering diversity, equity, and inclusion,
reflecting a commitment to creating a workplace that values and respects
individual differences.
Tricks/Strategies for Modern HR:
· Data-Driven Decision Making: Utilize HR analytics to make informed
decisions about talent acquisition, retention, and development.
· Technology Integration: Leverage HR technology, such as HRIS and AI tools,
to streamline processes and enhance efficiency.
· Continuous Learning: Encourage a culture of continuous learning and
development to keep employees engaged and adaptable in a rapidly changing
work environment.
· Employee Well-being Programs: Implement well-being initiatives, including
mental health support, to ensure employees feel supported and valued.
· Strategic Partnerships: Collaborate with other departments to align HR
strategies with overall business goals, fostering a more integrated approach to
organizational success.
In summary, the evolution of HRM reflects a shift from transactional tasks to a
strategic, people-centric approach. Successful organizations today understand
that their employees are critical assets, and effective HR practices contribute
directly to overall business success.
Define human capital
Human capital refers to the collective knowledge, skills, abilities, and
experience of employees, viewed as assets that contribute to an organization's
value and productivity.
The importance of human capital
Human capital is important because it helps people and organizations
be more productive and successful. It can also improve social well-
being and economic growth.
Why human capital is important
 Economic growth: Human capital helps economies grow by
increasing innovation, productivity, and participation rates.
 Social well-being: Human capital can improve social well-being
and equality.
 Individual success: Human capital can help people earn higher
incomes and improve their quality of life.
 Organizational success: Human capital can help organizations
be more productive and competitive.
How to improve human capital
 Invest in education: Build up the education system to improve
the workforce.
 Invest in health: Improve the health of the population.
  Invest in training: Provide on-the-job training and other
development opportunities.
 Invest in compensation: Provide fair compensation to
employees.

Role of human resource manager

The HR manager's role encompasses recruitment, training, employee relations,
compensation, and maintaining a positive work environment, all crucial for a
thriving workforce.
Below are the roles played by human resource manager
 Recruitment and Hiring:
The HR manager is responsible for identifying staffing needs,
attracting qualified candidates, conducting interviews, and making
hiring decisions.
 Training and Development:
They develop and implement training programs to enhance employee
skills and knowledge, ensuring the workforce is equipped to meet the
organization's goals.
 Employee Relations:
The HR manager fosters positive relationships between employees
and management, addressing concerns, resolving conflicts, and
ensuring fair and equitable treatment.
 Compensation and Benefits:
They manage salary structures, benefits packages, and other
compensation-related aspects, ensuring they are competitive and
attract and retain talent.
 Performance Management:
The HR manager plays a role in evaluating employee performance,
providing feedback, and developing improvement plans.
  Workplace Culture:
They contribute to creating a positive and productive work
environment by promoting teamwork, communication, and a sense of
belonging.
 Legal Compliance:
The HR manager ensures that Tagore Publications complies with all
relevant labour laws and regulations.
 HR Administration:
They handle administrative tasks related to HR, such as payroll,
record-keeping, and data management.
 Succession Planning
The HR manager will also be responsible for ensuring that there are
plans in place for future leadership and employee transitions
Challenges for human resource managers
Human resource managers face a variety of challenges in today's
dynamic work environment. Here are some key challenges based on
the notes from Tagore Publications:
1. Talent Acquisition and Retention: Finding and keeping the right
talent is a significant challenge. With the increasing competition
for skilled workers, HR managers need to develop effective
recruitment and retention strategies.
2. Employee Engagement: Keeping employees motivated and
engaged is crucial for productivity. HR managers must create a
positive work environment and implement programs that foster
employee satisfaction and loyalty.
3. Training and Development: Continuous learning and
development are essential for employees to stay relevant in their
 roles. HR managers need to design and implement training
programs that align with the organization's goals and employees'
career aspirations.
4. Performance Management: Evaluating and managing employee
performance can be challenging. HR managers must establish
clear performance metrics and provide regular feedback to help
employees improve and grow.
5. Compliance with Labor Laws: Staying updated with the ever-
changing labor laws and regulations is crucial. HR managers
must ensure that the organization complies with all legal
requirements to avoid penalties and legal issues.
6. Diversity and Inclusion: Promoting diversity and inclusion in
the workplace is essential for fostering innovation and creativity.
HR managers need to implement policies and practices that
support a diverse and inclusive work environment.
7. Technological Advancements: The rapid pace of technological
advancements requires HR managers to stay updated with the
latest tools and technologies. They need to leverage technology
to streamline HR processes and improve efficiency.
8. Change Management: Managing organizational change
effectively is a critical challenge. HR managers must develop
strategies to help employees adapt to changes and minimize
resistance.
These challenges require HR managers to be strategic, adaptable, and
proactive in their approach to managing human resources.
Trends in Human resource policies
Computer applications in human resource management
 Computer applications in human resource management (HRM)
include time and attendance tracking, human resource information
systems (HRIS), and performance management.

Time and attendance tracking

 Tracks employee hours, locations, and project time
 Allows for accurate compensation
Human resource information systems (HRIS)
 Stores employee data and information
 Helps with planning, decision making, and reporting
 Provides comprehensive information about employees and jobs
 Maintains data security and privacy
 Can use predictive analytics to help HR professionals make
data-driven decisions
Performance management Helps manage employee performance.
Other computer applications in HRM Centralized data management,
Onboarding apps, and Planning software tools.
Benefits of computer applications in HRM
 Decreases time complexity
 Provides flexibility
 Solves record keeping problems
 Processes large amounts of data without fear of loss
 Provides managers with big and sophisticated databases
 Provides managers with information more swiftly
 Improves access to HR data
 Streamlines and standardizes processes
Human resource accounting and audit
The American Accounting Association’s committee Human resource
accounting (1973) has defined Human resource accounting as “the
process of identifying and measuring data about human resources and
communicating this information to interested parties.

Human resource (HR) accounting and HR audits are different ways of

assessing an organization's HR practices and policies. HR accounting
focuses on the financial side, while HR audits focus on improving HR
practices.
Human resource accounting
 Involves identifying and reporting investments in an
organization's HR
 Treats human resources as assets
 Generates data about human resources
 Assigns value to human resources
 Presents human assets on the balance sheet
 An extension of standard accounting principles
HR audit
 Involves investigating HR practices, policies, and procedures
 Focuses on process efficiency and employee well-being
 Aims to improve HR practices and employee engagement
 Ensures that the organization complies with employment laws
and regulations
 Covers a wide variety of topics, including recruitment,
compensation, payroll, and employee relations
  Can be internal or external
The goal of both HR accounting and HR audits is to help an
organization achieve its goals and avoid errors