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Human Resource Management

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After studying this chapter, students should be able to understand the following:

Describe HRM?

Explain why are we concerned about HRM?

Discuss Road-map of HRM


This chapter introduces the students with the basic concepts of the human resource management (HRM).

During the lecture, we will be discussing the three

main things, i.e. the introduction to HRM, the

importance of HRM, and a brief discussion of the

topics that will follow today’s lecture.

A basic concept of management states that manager

works in organizations. Organization has three basic

components, People, Purpose, and Structure. HRM is

the study of activates regarding people working in an

organization. It is a managerial function that tries to

match an organization’s needs to the skills and abilities

of its employees. Let’s see what is meant by the three

key terms… human, resource, and management.

• Human (Homo-sapiens – Social Animal)

• Resources (Human, Physical, Financial, Technical, Informational etc)

• Management (Function of Planning, Organizing, Leading & Controlling of organizational

resources to accomplish goals efficiently and effectively)

Functions of HRM

Basic functions that all managers perform: planning, organizing, staffing, leading, and controlling. HR

management involves the policies and practices needed to carry out the staffing (or people) function of


HRM department regardless of the organization’s size must perform following human resource

management functions…

• Staffing (HR planning, recruitment and selection)

• Human resource development

• Compensation and benefits

• Safety and health

• Employee and labor relations

• Records maintaining, etc.

• HR research (providing a HR information base, designing and implementing employee

communication system).

• Interrelationship of HR functions.

A. What is human resource management?

As we said that HRM is the management of people working in an organization, it is a subject related to

human. For simplicity, we can say that it is the management of humans or people. HRM is a managerial

function that tries to match an organization’s needs to the skills and abilities of its employees. Human

Resource Management is responsible for how people are managed in the organizations. It is responsible for

bringing people in organization helping them perform their work, compensating them for their work and

solving problems that arise.

Growing Importance of HRM

The success of organizations increasingly depends on people-embodied know-how- the knowledge, skill,

and abilities imbedded in an organization's members. This knowledge base is the foundation of an

organization' core competencies (integrated knowledge sets within an organization that distinguish it from

its competitors and deliver value to customers).

HRM plays important role in creating organizations and helping them survive. Our world is an

organizational world. We are surrounded by organizations and we participate in them as members,

employees, customers, and clients. Most of our life is spent in organization, and they supply the goods and

services on which we depend to live. Organizations on the other hand depend on people, and without people,

they would disappear.

Factors Contributing to the Growing Importance of HRM

a. Accommodation to workers' needs

Workers are demanding that organizations accommodate their personal needs by instituting such programs

as flexible work schedules, parental leave, child-care and elder-care assistance, and job sharing. The human

resource department plays a central role in establishing and implementing policies designed to reduce the

friction between organizational demands and family responsibilities.

b. Increased complexity of the Manager’s job

Management has become an increasingly complex and demanding job for many reasons, including foreign

competition, new technology, expanding scientific information, and rapid change. Therefore, organizations

frequently ask human resource managers for assistance in making strategic business decisions and in matching

the distinctive competencies of the firm's human resources to the mission of the organization.

Executives need assistance from the human resource department in matters of recruitment, performance

evaluation, compensation, and discipline.

c. Legislation and litigation

The enactment of state laws has contributed enormously to the proliferation and importance of human

resource functions. The record keeping and reporting requirements of the laws are so extensive that to

comply with them, many human resource departments must work countless hours and often must hire

additional staff.

Four areas that have been influenced most by legislation include equal employment, Compensation, safety,

and labor relations. An organization's failure to comply with laws regulating these areas can result in

extremely costly back-pay awards, class action suits, and penalties.

d. Consistency

Human resource policies help to maintain consistency and equity within an organization. Consistency is

particularly important in compensation and promotion decisions. When managers make compensation

decisions without consulting the human resource department the salary structure tends to become very

uneven and unfair promotion decisions also may be handled unfairly when the HR department does not

coordinate the decision of individual manger.

e. Expertise

Now a days there exist sophisticated personnel activities that require special expertise. For example,

researchers have developed complex procedures for making employee-selection decisions; statistical

formulas that combine interviews, test scores, and application-blank information have replaced the

subjective interviews traditionally used in making selection decisions. Similarly, many organizations have

developed compensation systems with elaborate benefits packages to replace simple hourly pay or piece rate

incentive systems

f. Cost of Human Resource

Human resource activities have become increasingly important because of the high cost of personal

problem. The largest single expense in most organizations is labor cost, which is often considerably higher

than the necessary because of such problems as absenteeism tardiness and discrimination.

B. Why are we concerned with HRM?

1. Helps you get results - through others.

Different managerial techniques help mangers to direct the performance of employees in desirable direction

in order to achieve the organizational objectives. Through the efforts of others working in an organization,

managers get things done that require effective human resource management.

2. Helps you avoid common personnel mistakes

Qualified HR mangers utilize organization resources in such a way that helps to avoid common personnel

mistakes like the following…

a. Hiring the wrong person for the job

b. Experiencing high turnover

c. Finding employees not doing their best

d. Having your company taken to court because of your discriminatory actions

e. Having your company cited under federal occupational safety laws for unsafe practices

f. Allowing a lack of training to undermine your department’s effectiveness

g. Committing any unfair labor practices

3. Helps you to gain Competitive Advantage

Among all the resources possessed by the organizations it is only Manpower or the Human resources that

create the real difference. Because all organizations can have the same technology, they can possess same

type of financial resources, same sort of raw material can be used to produce the goods and services but the

organizational source that can really create the difference is work force of the organization. Therefore they

are the main sources of innovation creativity in the organizations that can be used as a competitive

advantage. In today’s competitive environment,

these are the people which can create competitive

advantageous for the organizations.

The world around us is changing. No longer can we

consider our share of the “good Life” given. If we

are to maintain some semblance of that life, we as

individual, as organizations, as society will have to

fight actively for it an increasingly competitive

global environment. If organizations are able to

mange its work force efficiently/effectively this will

be beneficial for all stakeholders (Organization,

Employees and Society).

Challenges/Issues of Managing Human Resources in present era

Following are the main issues that are faced by the mangers to manage the workforce of today’s

organization for achievement of objectives.

a. To Attract People

People will be interested to join any organization if it is providing them quality working environment,

attractive benefit and opportunities to excel in future. Keeping in view the opportunities in the market, the

first issues will be to attract good people for your organization.

b. To Develop People

Development is related to provide the opportunities for training and development to match the skills to job

in particular areas. It requires careful need assessment for training and selecting effective training methods

and tools. After attracting/selecting, Continuous development of workforce of the organization leads

towards development of the organization. So that they will start playing their important role in the



c. To Motivate

Motivation means to influence performance of others and to redirect the efforts in desirable direction by

using different motivational tools that can help in fulfilling the mission of organization. Third important

issues/concern will be to keep your workforce motivated so that they should keep on delivering effectively.

d. To Keep Talented People

This is related to retention of workforce in organization and to take steps that can prevent undesirable

detachments of talented and motivated workers from the organization.

C. Discussion on the road-map of HRM

For the convenience and attainment of our course objectives, we divide our course into 42 modules. Each

module includes information for you to acquire and understand, issues for you to consider, and skills for

you to develop.

Road Map of the Course

The list of topics, which we call the ‘road map’ of this course, is given below…

1. Introduction

2. Basic concepts of management and its relationships with HRM

3. Components of an organization

4. Concepts of people working together

5. Individual vs. Group behavior and Teams

6. History of HRM

7. New trends at workplace with changing environment

8. Workforce diversity, pros and cons

9. Functions of HRM

10. Relationship between HR specialist and line managers

11. Legal and ethical issues in HRM

12. Human resource planning (HRP)Human resource information system (HRIS)

14. Job analysis

15. Job analysis continued Job analysis outcomes.

16. Recruitment

17. Source of recruitment

18. Selection

19. Selection Tests

20. Selection process, continued

21. Socialization

22. Training & development

23. Maximizing learning

24. Career management

25. Performance Performance Appraisal

27. Job evaluation and pricing

28. Compensation system

29. Benefits

30. Role of money in performance of employee

31. MotivationOccupation health and safety

33. Stress management

34. Communication in organization

35. Trade union

36. Conflict and Negotiation

37. Power & politics

38. Discipline

39. HR auditing



40. HR control process

41. Leadership

42. Leadership in organization

43. Employee separation

44. International dimension of HRM

45. Conclusion & Review.

Key Terms

Human Resource

Management The staffing functions of the management process. Or the policies and

practices needed to carry out the “people” or human resource aspects of a

management position, including recruiting, screening, training, rewarding,

and appraising etc.

Manager Individuals in an organization who direct the activities of others. Member

of the organization performing the management function

Motivation: Motivation means to influence performance of others and to redirect the

efforts in desirable direction by using different motivational tools that can

help in fulfilling the mission of organization

Organization A systematic arrangement of people to accomplish some specific purpose.

Competitive Advantage Any factor that allows an organization to differentiate its product or

service from those of its competitors to increase market share.

Stakeholders All individuals and groups that are directly or indirectly affected by an

organization’s decisions

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