DEFINITIONSDEFINITIONSHuman resource management is the Human resource management is the

process of acquiring, training, appraising process of acquiring, training, appraising and compensating employees and and compensating employees and attending to their labour relations, health, attending to their labour relations, health, safety and fairness concerns.---- Desslersafety and fairness concerns.---- Dessler

HRM is a series of integerated decisions HRM is a series of integerated decisions that form the employment relationship; that form the employment relationship; their quality contributing to the ability of the their quality contributing to the ability of the organisations and employees to achieve organisations and employees to achieve their objectives.—--Milkovich & Boudreautheir objectives.—--Milkovich & Boudreau

NATURENATURE

Inherent part of managementInherent part of management : HRM is a part : HRM is a part of Mgt., draws heavily from Mgt. concepts, of Mgt., draws heavily from Mgt. concepts, principle & techniques. This function is principle & techniques. This function is performed by all the managers throughout the performed by all the managers throughout the organization rather than by the personnel organization rather than by the personnel department only.department only.

Pervasive FunctionPervasive Function : All managers at various : All managers at various levels in the organization are required to perform levels in the organization are required to perform the personnel functions on a continuous basis. It the personnel functions on a continuous basis. It is not a responsibility that a manager can leave is not a responsibility that a manager can leave completely to someone else.completely to someone else.

Basic to all Functional areasBasic to all Functional areas : All the : All the departments has to perform personnel departments has to perform personnel functions.functions.

People centredPeople centred : HRM is concerned with : HRM is concerned with people in the organization both present and people in the organization both present and potential. It is concerned with Top mgt., potential. It is concerned with Top mgt., Middle mgt., Supervisory mgt. & Middle mgt., Supervisory mgt. & Operatives.Operatives.

Personnel activitiesPersonnel activities : Manpower planning, : Manpower planning, Employment, Placement, Training, Employment, Placement, Training, Appraisal & Compensation. Performed by Appraisal & Compensation. Performed by HR department.HR department.

Continuous ProcessContinuous Process : It is not a ‘one : It is not a ‘one shot’ function. It requires a constant shot’ function. It requires a constant alertness and awareness to achieve the alertness and awareness to achieve the objectives.objectives.

Based on Human RelationsBased on Human Relations : human : human relations in the organization will be cordial. relations in the organization will be cordial. Motivation of human resource is very Motivation of human resource is very important.important.

SCOPESCOPE

Human resource / Manpower planning – Human resource / Manpower planning – determining the number and kinds of determining the number and kinds of personnel required to fill various position in personnel required to fill various position in the orgnisation.the orgnisation.

Recruitment, selection and placement of Recruitment, selection and placement of personnel – Employment function.personnel – Employment function.

Training and development of employees Training and development of employees for their efficient performance and growth.for their efficient performance and growth.

Appraisal of performance employees.Appraisal of performance employees.

Motivation of work force.Motivation of work force. Remuneration of employees. ---sufficient Remuneration of employees. ---sufficient

wage and fringe benefits.wage and fringe benefits. Social security and welfare of employees. Social security and welfare of employees.

Canteens, crèches, housing, recreation & Canteens, crèches, housing, recreation & health.health.

Review and audit of personnel policies, Review and audit of personnel policies, procedures and practices of the procedures and practices of the organisation.organisation.

Industrial relation aspects is concerned with Industrial relation aspects is concerned with union negotiation and collective bargaining.union negotiation and collective bargaining.

Functions Functions

ManagerialManagerial : HRM is a part of : HRM is a part of organizational management. organizational management.

1.1. Planning Planning :is the conscious determination :is the conscious determination of future course of action to achieve the of future course of action to achieve the desired results. Determination of desired results. Determination of personnel programs that will contribute to personnel programs that will contribute to the goals of enterprise. It includes a the goals of enterprise. It includes a supply and demand forecast for each supply and demand forecast for each category, net shortage and excess of category, net shortage and excess of personnel .personnel .

2.2. OrganizingOrganizing : is the process of dividing work : is the process of dividing work (personnel activity) in to convenient tasks or (personnel activity) in to convenient tasks or duties, grouping of such duties in the form of duties, grouping of such duties in the form of positions, grouping of various positions in to positions, grouping of various positions in to departments and sections, assigning duties in to departments and sections, assigning duties in to individual positions and delegating authority to individual positions and delegating authority to each position so that work is carried out as each position so that work is carried out as planned.planned.

3.3. Directing Directing :when people are available in the :when people are available in the organization, they must know what they are organization, they must know what they are expected to do in the organization. It include expected to do in the organization. It include communicating, motivating and leading. To communicating, motivating and leading. To guide and motivate people to accomplish guide and motivate people to accomplish personnel programmes.personnel programmes.

4.4. Controlling Controlling : Involves comparing actuals with : Involves comparing actuals with standards and corrective action. It involves standards and corrective action. It involves performance appraisal, critical examination of performance appraisal, critical examination of personnel records and statistics and personnel personnel records and statistics and personnel audit. audit.

OperativeOperative :Duties/ tasks which are specifically :Duties/ tasks which are specifically entrusted to the human resource department.entrusted to the human resource department.

A.A. Employment Employment : proper kind and number of : proper kind and number of persons are necessary to achieve the objective persons are necessary to achieve the objective of the organisation. It includes manpower of the organisation. It includes manpower planning , recruitment, selection, planning , recruitment, selection, Induction ,Placement.Induction ,Placement.

B.B. DevelopmentDevelopment : To train each employee : To train each employee properly to develop technical skills & develop properly to develop technical skills & develop him for the higher jobs. There is On-the-job him for the higher jobs. There is On-the-job and Off- the job methods are available.and Off- the job methods are available.

C.C. Compensation Compensation : Determination of adequate : Determination of adequate and equitable remuneration. The personnel and equitable remuneration. The personnel can be compensated both in terms of monetry can be compensated both in terms of monetry as well as non-monetary terms. While fixing as well as non-monetary terms. While fixing the wage, the following factors should be the wage, the following factors should be considered. Basic needs of the personnel, considered. Basic needs of the personnel, legal provisions regarding minimum wage, legal provisions regarding minimum wage, capacioty of the organization to pay, wage capacioty of the organization to pay, wage level afforded by competitors. Job evaluation level afforded by competitors. Job evaluation and performance appraisal can be followed. and performance appraisal can be followed.

D.D. Maintenance ( Working Conditions and Maintenance ( Working Conditions and Welfare)Welfare) : Measures taken for health , : Measures taken for health , safety, cafeteria, rest rooms, counseling, safety, cafeteria, rest rooms, counseling, group insurance recreations etc…group insurance recreations etc…

E.E. MotivationMotivation : HR manager helps the : HR manager helps the various departmental mangers to design various departmental mangers to design a system financial and non-financial a system financial and non-financial reward to motivate employees.reward to motivate employees.

F.F. Personnel recordsPersonnel records :Records of their :Records of their training, achievements, transfer, training, achievements, transfer, promotion, absenteeism and labour promotion, absenteeism and labour turnover, policies…turnover, policies…

G.G. Industrial RelationsIndustrial Relations : settlement of disputes, : settlement of disputes, collective bargaining …..collective bargaining …..

H.H. Separation Separation : HR manager has to ensure the : HR manager has to ensure the release of retirement benefits…..release of retirement benefits…..

AdvisoryAdvisory : Gives advise relating human : Gives advise relating human resource of the organization.resource of the organization.

A.A. Top ManagementTop Management : evaluation of personnel : evaluation of personnel Programme, policies & procedures.Programme, policies & procedures.

B.B. Department headsDepartment heads : performance appraisal , : performance appraisal , job analysis, manpower planning training , job analysis, manpower planning training , recruitment…recruitment…

Importance of HRM / Role of HR Importance of HRM / Role of HR ManagerManager

Policy FormulationPolicy Formulation : HR policies are : HR policies are indented to communicate to the employees indented to communicate to the employees the basic ground rules under which the the basic ground rules under which the organization functions and to avoid organization functions and to avoid discrimination, inconsistency and confusion. discrimination, inconsistency and confusion. HR manager helps top management in the HR manager helps top management in the formulation of policies on wage and salary, formulation of policies on wage and salary, administration, transfer, appraisal, welfare administration, transfer, appraisal, welfare activities, personnel records and work activities, personnel records and work environment.environment.

Advisory RoleAdvisory Role : advice to line managers , : advice to line managers , Department Heads, Top management. Matters Department Heads, Top management. Matters like grievance over distribution of overtime work, like grievance over distribution of overtime work, disciplinary action, labour laws, preparation of disciplinary action, labour laws, preparation of reports.reports.

Linking Pin RoleLinking Pin Role : Linking Pin between : Linking Pin between management and the workers.management and the workers.

Representative RoleRepresentative Role : generally act as a : generally act as a spokesman of the top management, spokesman of the top management, representative of company. Sometimes worker’s representative of company. Sometimes worker’s representative, particulary in non-unionised representative, particulary in non-unionised organisations.organisations.

Decision making Role : Plays effective role Decision making Role : Plays effective role in decision making on issues related to in decision making on issues related to human resource.human resource.

Mediator Role : Mediator in the event of Mediator Role : Mediator in the event of conflict between employees, group of conflict between employees, group of employees, superior & subordinate and employees, superior & subordinate and even between management and even between management and employees.employees.

Leadership Role : provides leadership, Leadership Role : provides leadership, guidance and counseling to employees. guidance and counseling to employees.

Welfare Role : Act as welfare officer. He is Welfare Role : Act as welfare officer. He is concerned with provision of canteen, concerned with provision of canteen, crèches, hospital and other welfares.crèches, hospital and other welfares.

Research Role : on the basis of records he Research Role : on the basis of records he undertake various research in various undertake various research in various personnel areas absenteeism, labour personnel areas absenteeism, labour turnover etc..turnover etc..

Human Resource PlanningHuman Resource Planning

Human resource planning is the process by which an Human resource planning is the process by which an organisation ensures that it has the right number and organisation ensures that it has the right number and kind of people, at the right place, at the right time, kind of people, at the right place, at the right time, capable of effectively and efficiently completing capable of effectively and efficiently completing those tasks that will help the organisation to achieve those tasks that will help the organisation to achieve its overall objectives. ---- Decenzo & Robbinsits overall objectives. ---- Decenzo & Robbins

Manpower planning is the process of determining Manpower planning is the process of determining manpower requirements and the means for meeting manpower requirements and the means for meeting those requirements in order to carry out the those requirements in order to carry out the integrated plan of the organization. -----Colemanintegrated plan of the organization. -----Coleman

scopescope Listing of current manpower with the Listing of current manpower with the

organisation.organisation. Assessing the extent to which the current Assessing the extent to which the current

manpower is utilised to the advantage of the manpower is utilised to the advantage of the organisation.organisation.

Phasing out the surplus manpower/if any.Phasing out the surplus manpower/if any. Analysing the requirements of manpower in Analysing the requirements of manpower in

future in the light of expansion plan, retirement future in the light of expansion plan, retirement of personnel.of personnel.

Making manpower procurement plan.Making manpower procurement plan. Designing training programmmes for different Designing training programmmes for different

categories of manpower.categories of manpower.

Objectives Objectives

To ensure optimum use of human resource To ensure optimum use of human resource currently employed.currently employed.

To determine future recruitment level.To determine future recruitment level. To provide control measures to ensure that To provide control measures to ensure that

necessary resources are available as and when necessary resources are available as and when required.required.

To anticipate redudancies and avoide To anticipate redudancies and avoide unnecessary dismissals.unnecessary dismissals.

To forecast future skill requirements to serve as To forecast future skill requirements to serve as a basis for training and development a basis for training and development programmes.programmes.

To assess future housing needs of To assess future housing needs of employees.employees.

To cost the manpower component in new To cost the manpower component in new projects.projects.

To decide whether any of enterprise To decide whether any of enterprise activities be off-loaded or subcontracted. activities be off-loaded or subcontracted. (maintenance)(maintenance)

To control cost aspect of human resource.To control cost aspect of human resource.To formulate transfer and promotion To formulate transfer and promotion

policies.policies.

Process Process

1.1. Objectives of manpower planning : HRP Objectives of manpower planning : HRP must be integrated with the overall must be integrated with the overall organizational plan. The ultimate organizational plan. The ultimate purpose of HRP should be decided.purpose of HRP should be decided.

2.2. Analysis of current manpower inventory : Analysis of current manpower inventory : analysis of current manpower supply analysis of current manpower supply may be undertaken by department, by may be undertaken by department, by function, by occupation, or by level of function, by occupation, or by level of skill or qualification.skill or qualification.

3.3. Demand forecasting : A proper forecast of Demand forecasting : A proper forecast of manpower required in the future ( say after one manpower required in the future ( say after one year, two years, three years and so on) must be year, two years, three years and so on) must be attempted .attempted .

Employment Trends : The manpower planning Employment Trends : The manpower planning committee at the corporate level should make an committee at the corporate level should make an examination of number of employees on the examination of number of employees on the payroll during the past five years to know the payroll during the past five years to know the trend.trend.

Replacement Needs : Need of replacement Replacement Needs : Need of replacement arises due to death , retirement, resignation and arises due to death , retirement, resignation and termination of employees.( supervisory. Skilled, termination of employees.( supervisory. Skilled, managerial, clerical)managerial, clerical)

Productivity : Gains in productivity add to the Productivity : Gains in productivity add to the growth potential of the organisation.Planning growth potential of the organisation.Planning for productivity gains has several aspects. for productivity gains has several aspects.

i.i. The first and important one relates to affecting The first and important one relates to affecting gains by improvement in existing manapower gains by improvement in existing manapower utilisation.utilisation.

ii.ii. The second aspect relates to installation of The second aspect relates to installation of more productive tools , equipments or more productive tools , equipments or process. (Automation). process. (Automation).

iii.iii. The last aspect relates to the matching of skills The last aspect relates to the matching of skills with the requirements of the jobs.(Job with the requirements of the jobs.(Job Analysis)Analysis)

Growth and Expansion : Expansion of Growth and Expansion : Expansion of various plants and divisions.various plants and divisions.

Absenteeism : it mean a situation when Absenteeism : it mean a situation when a person fails to come for work when he a person fails to come for work when he is scheduled to work. Planning expert is scheduled to work. Planning expert should consider the rate of absenteeism.should consider the rate of absenteeism.

Work study : workload analysis.Work study : workload analysis.

4.4. Supply forecasting : there is two sources Supply forecasting : there is two sources of supply – internal and external.of supply – internal and external.

i.i. Human Resource audit : It gives idea about Human Resource audit : It gives idea about the potential and capabilities of people the potential and capabilities of people working in an organisation. (management working in an organisation. (management inventories, skill inventories)inventories, skill inventories)

ii.ii. Replacement Charts : These are meant for Replacement Charts : These are meant for listing each key position and indicating time listing each key position and indicating time when it it is likely to be vacated.when it it is likely to be vacated.

5.5. Estimating the Net Human Resource Estimating the Net Human Resource Requirements: compare the demand Requirements: compare the demand forecast with the projected internal supply forecast with the projected internal supply of human resource.of human resource.

6.6. Action Plan for Redeployment Action Plan for Redeployment /redundancy : In the case of surplus staff /redundancy : In the case of surplus staff position, employees caan be redeployed to position, employees caan be redeployed to other jobs / departments. If it is cannot be other jobs / departments. If it is cannot be redeployed , offer golden handshake under redeployed , offer golden handshake under VRS scheme.VRS scheme.

7.7. Determining Job Requirements of position Determining Job Requirements of position to be filled : accurate job description help in to be filled : accurate job description help in finding suitable candidates.finding suitable candidates.

8.8. Employment plan : Preparing the Employment plan : Preparing the programmes of recruitment , selection, programmes of recruitment , selection, transfer, promotion…. transfer, promotion….

9.9. Training and development programe : Training and development programe : the talents of the employees are not fully the talents of the employees are not fully productive without a systematic T & D.productive without a systematic T & D.

10.10. Evaluation of effectiveness of HRPEvaluation of effectiveness of HRP

Objectives of HRP

Demand & Supply

forecasting

Determine Net Manpower

Requirements

Redeployment&

RedundancyPlan

Employment Program

T & D Programme

Appraisal ofHRP

Inventory of HR Skills

Benefits of HRPBenefits of HRP

1)1) HRP results in reduced labour costsHRP results in reduced labour costs2)2) It is a better basis for planning employee It is a better basis for planning employee

development.development.3)3) It enables identification of the gaps of the existing It enables identification of the gaps of the existing

manpower.manpower.4)4) It leads to improvement in the overall business It leads to improvement in the overall business

planning process.planning process.5)5) It helps in formulating managerial sucession plan.It helps in formulating managerial sucession plan.6)6) It leads to greater awareness of the importance It leads to greater awareness of the importance

of sound management.of sound management.7)7) It serve as a tool to evaluate the effect of It serve as a tool to evaluate the effect of

alternative manpower action and policies.alternative manpower action and policies.

Quantitative aspects of HRPQuantitative aspects of HRP

Demand forecastingDemand forecasting : Estimating the : Estimating the requirements of different kinds of personnel in requirements of different kinds of personnel in future. HRP forecast should be the annual future. HRP forecast should be the annual budget and long-term corporate plan translated budget and long-term corporate plan translated in to activity levels of each functions and in to activity levels of each functions and department. There are three basic techniques.department. There are three basic techniques.

1.1. Managerial judgmentManagerial judgment :Used in smaller :Used in smaller companies. This simply requires manager to companies. This simply requires manager to sit down, think about their future workloads sit down, think about their future workloads and decide how many people they need. It and decide how many people they need. It might be done on a might be done on a

bottom-up basis – line managers bottom-up basis – line managers submitting proposalssubmitting proposals

Top-down approach : Forecasts are Top-down approach : Forecasts are prepared by the top management. These prepared by the top management. These are reviewed and agreed with the are reviewed and agreed with the departmental managers.departmental managers.

The best way to adopt both the bottom-up The best way to adopt both the bottom-up and top-down approach.and top-down approach.

2.2. Work study techniqueWork study technique : It can be used when it : It can be used when it is possible to apply work measurement to know is possible to apply work measurement to know how long operations should take and the how long operations should take and the amount of labour required.amount of labour required.

planed outputplaned output Work-load analysis : in this , the manpower Work-load analysis : in this , the manpower

planning expert needs to find out sales planning expert needs to find out sales forecast, work schedules and thus determine forecast, work schedules and thus determine the manpower required per unit of product.the manpower required per unit of product.

Work-force analysis : it is necessary to keep Work-force analysis : it is necessary to keep sufficient margin for absenteeism, labour sufficient margin for absenteeism, labour turnover and idle time on the basis of past turnover and idle time on the basis of past experience.experience.

3.3. Statistical techniquesStatistical techniques :For long range & :For long range & more accurate personnel forecasting.more accurate personnel forecasting.

i.i. Ratio and Trend analysis : Calculation on the Ratio and Trend analysis : Calculation on the basis of established ratios. It is worked out for basis of established ratios. It is worked out for number of years based on the past records of number of years based on the past records of the organisation and future trends are the organisation and future trends are projected on these ratios. (supervisory & projected on these ratios. (supervisory & managerial)managerial)

ii.ii. Econometric model : it helps in understanding Econometric model : it helps in understanding the nature of relationships among different the nature of relationships among different variables at the different levels. Suitable for variables at the different levels. Suitable for large organisations. It refers to the science of large organisations. It refers to the science of economic measurement.economic measurement.

iii.iii. Regression analysis : In this human Regression analysis : In this human resource needs is the dependent resource needs is the dependent variable and independent variables are variable and independent variables are business activity, HR productivity…business activity, HR productivity…

iv.iv. Bureck-smith model : Forecasting based Bureck-smith model : Forecasting based on the selected key variables that affect on the selected key variables that affect an organisations HR needs.an organisations HR needs.

En = En = (Lagg + G) /x(Lagg + G) /x

YY

En =En = estimated level of HR needed in ‘n’ estimated level of HR needed in ‘n’ plan period.plan period.

Lagg =total business activity of ‘n’ period in Lagg =total business activity of ‘n’ period in terms of valueterms of value

G = total growth in business activity in ‘n’ G = total growth in business activity in ‘n’ period based on the current prices.period based on the current prices.

X = average productivity improvement in ‘n’ X = average productivity improvement in ‘n’ period over the current period.period over the current period.

Y = business activity—personnel ratio of the Y = business activity—personnel ratio of the current year.current year.

4.4. Delphi TechniqueDelphi Technique : A small group : A small group designs questionnaire about the problem designs questionnaire about the problem under study which is sent to various under study which is sent to various experts related to the field. Filled up experts related to the field. Filled up questionnaires are analyzed. If any questionnaires are analyzed. If any divergence in opinion, a revised divergence in opinion, a revised questionnaire sent to large experts. It will questionnaire sent to large experts. It will continue until some consensus reached.( continue until some consensus reached.( Fashion trends for next year). Here It can Fashion trends for next year). Here It can be used to know the trends in changing be used to know the trends in changing job profile & personnel profile across the job profile & personnel profile across the country and international level. It helps to country and international level. It helps to get experts view in different functional get experts view in different functional area.area.

Supply forecastingSupply forecasting : Manpower suply : Manpower suply forecasting measures the number of forecasting measures the number of people likely to be available from within people likely to be available from within and outside an organisation, after and outside an organisation, after making allowance for absenteeism, making allowance for absenteeism, internal movements and promotions, internal movements and promotions, wastage and change in work hours and wastage and change in work hours and other working condition of work.other working condition of work.

1.1. Markov AnalysisMarkov Analysis : Historical flows of : Historical flows of personnel (transitions) through the personnel (transitions) through the organisation are represented by organisation are represented by probabilities. (probabilities. (Ref.—p174 HRM, L.M Prasad)Ref.—p174 HRM, L.M Prasad)

2.2. Simulation techniquesSimulation techniques : It considers : It considers alternative flows which are examined for effect alternative flows which are examined for effect on future manpower supplies. Alternative flows on future manpower supplies. Alternative flows reflect the anticipated result of policy or reflect the anticipated result of policy or programme changes concerning voluntary programme changes concerning voluntary turnover retirement , promotion etc…turnover retirement , promotion etc…

3.3. Renewal analysisRenewal analysis : this technique future flows : this technique future flows and supplies of manpower by calculating (i) and supplies of manpower by calculating (i) vacancies created by the organisation (ii) the vacancies created by the organisation (ii) the results of decision rules governing the filling of results of decision rules governing the filling of vacancies.vacancies.

4.4. Goal programmingGoal programming : The goal to optimize the : The goal to optimize the desired stafing pattern subject to a set of desired stafing pattern subject to a set of constraints (salary budget, new recruitment constraints (salary budget, new recruitment permitted.)permitted.)

5.5. Human resource inventoryHuman resource inventory : It is the : It is the cataloguing the present and future potentials. cataloguing the present and future potentials. It includesIt includes

Skill inventory (non-managerial) : Personal Skill inventory (non-managerial) : Personal data, skills-education, job experience, training, data, skills-education, job experience, training, special achievements, salary, job history, special achievements, salary, job history, potential of employees.potential of employees.

Management inventory :Personal data, work Management inventory :Personal data, work history, strength and weakness, career plan, history, strength and weakness, career plan, promotion potentials, number and type of promotion potentials, number and type of employee managed, total budget managed, employee managed, total budget managed, special achievements.special achievements.