UNIT 2 THE CONCEPT AND FUNCTIONS

OF HUMAN RESOURCE
MANAGEMENT

Objectives

After reading this unit, you should be able to:

l
understand the meaning and concept of human resource management; and
l
explain the functions of HR, and responsibilities and new roles of HR
practitioners.

Structure

2.1 Introduction
2.2 Concept of HRM
2.3 Objectives of HRM
2.4 Human Resource Functions
2.5 Summary
2.6 Self Assessment Questions
2.7 Further Readings
2.1 INTRODUCTION
Human resource management (HRM) is an approach to the management of people,
based on four fundamental principles. First, human resources are the most important

assets an organisation has and their effective management is the key to its
success.
Second, this success is most likely to be achieved if the personnel policies and
procedures of the enterprise are closely linked with, and make a major contribution
to,
the achievement of corporate objectives and strategic plans. Third, the corporate
culture and the values, organisational climate and managerial behaviour that
emanate
from that culture will exert a major influence on the achievement of excellence.
This
culture must, therefore, be managed which means that organisational values may need

to be changed or reinforced, and that continuous effort, starting from the top,
will be
required to get them accepted and acted upon. Finally, HRM is concerned with
integration - getting all the members of the organisation involved and working
together
with a sense of common purpose.

2.2 CONCEPT OF HRM

HRM is a strategic approach to the acquisition, motivation, development and
management of the organisation’s human resources. It is a specialised field that
attempts to devd .ng an appropriate corporate culture, and introducing programmes
which reflect and support the core values of the enterprise and ensure its success.

HRM is proactive rather than reactive, i.e., always looking forward to what needs
to
be done and then doing it, rather than waiting to be told what to do about
recruiting,
paying or training people, or dealing with employee relations problems as they
arise.
The techniques for the application of HRM will include many familiar functions of
personnel managers, such as manpower planning, selection, performance appraisal,
salary administration, training and management development. These will be overlaid
by special programmes designed to improve communication systems, involvement,
commitment, and productivity.

Broadly, there are three meanings attached to the concept of HRM. In the first
place,
persons working in an organization are regarded as a valuable source, implying that

there is a need to invest time and effort in their development. Secondly, they are
human resources which means that they have their own special characteristics and,
therefore, cannot be treated like material resources. The approach focuses on the
need
to humanise organisational life and introduce human values in the organisation. And

thirdly, human resources do not merely focus on employees as individuals, but also
on
other social realities, units and processes in the organisation. These include the
role or
the job a person has in the organisation, the dydadic unit, (consisting of the
person and
his superior), the various teams in which people work, inter-team processes, and
the
entity of the total organisation.

In its essence, HRM is the qualitative improvement of human beings who are
considered the most valuable assets of an organization-the sources, resources, and
end-users of all products and services. HRM is, no doubt, an outgrowth of the older

process and approach. But it is much more than its parent disciplines, viz.,
personnel
management, and behavioural science. HRM is also more comprehensive and deep-
rooted than training and development. Its approach is multi-disciplinary from the
beginning to the end. It is a scientific process of continuously enabling the
employees
to improve their competency and capability to play their present as well as future
expected roles so that the goals of the organization are achieved more fully and at
the
same time the needs of the employees are also met to an adequate extent.

HRM is a production model approach to personnel management. The HRM model is

characterised as being employee-oriented with an emphasis on the maximisation of
individual skills and motivation through consultation with the workforce so as to
produce high levels of commitment to company strategic goals. It is a resource to
be
used to its fullest capacity. It is an asset to be invested in. HRM is concerned
with
both the structure of work in a firm and with all the related employment practices
that
are needed to carry out the work. HRM is not simply about HR or ‘people practices’,

it is about the management of work and people in the firm. Managing people includes

both individual and collective dimensions. The traditional personnel management is

non-strategic, separate from the business, reactive, short-term, and constrained by
a
limited definition of its role as dealing with mostly unionised and low level
employees.
The major attention of traditional personnel function is on personnel
administration or
management while the major attention of HRM is on developing people and their
competencies. If personnel management is curative, HRM is preventive. The key
distinguishing feature of HRM is its evolving strategic role.

HRM essentially emphasises and incorporates those expectations which are not being
fulfilled through the traditional personnel management. It integrates in a
meaningful
way the various sub-systems like performance appraisal, potentiality appraisal and
development, career planning, training and development, organisation development,
research and systems development, rewards, employee welfare and quality of work
life, industrial relations, and human resource information. Under the HRM approach,

some basic assumptions about human resources are also different from the
traditional
approach. The important assumptions of HRM are as follows:

1) The members of an organisation are reservoirs of untapped resources.

2) There is scope for unlimited development of these resources.
3) It is more in the nature of self-development than development thrust from
outside.
4) The organisation also undergoes development with the overall benefits along
with the development of its members.
The Concept and
Functions of Human
Resource Management
Human Resource 5) The organisation further develops a culture in which utmost
emphasis is placed
Management: Context,

on harmonious superior-subordinate relations, teamwork, collaboration among

Concept and Doundaries

different groups of individuals, open communication, and above all, integration

of the goals of the organisation with the needs of the employees.

6) Top management takes the initiative for HRM, formulates necessary plans and
strategies, and creates an overall climate and support for its implementation.
The management of human resources is more of an art than a science. In practice it
is
an “art” full of pitfalls, judgment calls, and learning from past mistakes.

Table 1: Some Basic Assumptions Underlying Traditional Personnel Function and

Human Resources System

Traditional Personnel Function (TPF) Human Resource Development (HRD)

1. TPF is an independent function
2. There are several sub-functions
under TPF
3. The main task of TPF is to respond
effectively to the demands
(coping role)
4. TPF has the main responsibilities for
their personnel matters
5. The main responsibilities of TPF
relate to salary and job administration,
and management of people and their
development
6. The major attention of TPF is on
personnel administration or
management
7. Personnel system and procedures
should be designed to achieve
maximum efficiency
8. People in an organisation are
motivated mainly by salary and
rewards
1. HRD is a sub-system of a larger
system (organisation)
2. HRD is an organic whole: All theparts are interlinked
3. The main task of HRD is to
develop enabling capabilities
(proactive role)
4. All managers irrespective of
functions share the responsibility
of human resource functions
5. The responsibilities of HRS
relate to HRS, people, systems,
and the process of the total
organisation
6. The major attention of HRS is on
developing people and their
competencies
7. HR systems and procedures should
be designed on the basis of process
values to reduce human wastage
8. People are primarily motivated by
challenges and opportunities for
development and creativity

2.3 OBJECTIVES OF HRM

The primary objective of HRM is to ensure the availability of competent and willing

workforce to an organisation. Apart from this, there are other objectives too.
Specifically, HRM objectives are four fold: societal, organisational, functional,
and
personal.

Societal Objectives

The societal objectives are socially and ethically responsible for the needs and
challenges of society. While doing so, they have to minimize the negative impact of

such demands upon the organisation. The failure of organisations to use their
resources for society’s benefit in ethical ways may lead to restrictions. For
example,
the society may limit human resource decisions to laws that enforce reservation in
hiring and laws that address discrimination, safety or other such areas of societal

concern.
Organisational Objectives
The organisational objectives recognise the role of human resource management in
bringing about organisational effectiveness. Human resource management is not an
end in itself; it is only a means to assist the organisation with its primary
objectives.
Simply stated the human resource department exists to serve the rest of the
organisation.
The Concept and
Functions of Human
Resource Management
Functional Objectives
Functional objectives try to maintain the department’s contribution at a level
appropriate to the organisation’s needs. Human resources are to be adjusted to suit
the
organisation’s demands. The department’s level of service must be tailored to fit
the
organisation it serves.
Personal Objectives
Personal objectives assist employees in achieving their personal goals, at least
insofar
as these goals enhance the individual’s contribution to the organisation. Personal
objectives of employees must be met if they are to be maintained, retained and
motivated. Otherwise, employee performance and satisfaction may decline giving rise

to employee turnover.
Table 2: HRM Objectives and Functions

HRM Objectives Supporting Functions

1. Societal Objectives 1. Legal compliance
2. Benefits
3. Union-management relations
2. Organisational Objectives 1. Human resource planning
2. Employee relations
3. Selection
4. Training and development
5. Appraisal
6. Placement
7. Assessment
3. Functional Objectives 1. Appraisal
2. Placement
3. Assessment
4. Personal Objectives 1. Training and development
2. Appraisal
3. Placement
4. Compensation
5. Assessment

Source:
William B. Werther, Jr., and Keith Davis, Human Resources and Personnel
Management, p. 15.
Human Resource
Management: Context,
Concept and Doundaries

2.4 HUMAN RESOURCE FUNCTIONS

The role of human resource management is to plan, develop, and administer policies
and programmes designed to make expeditious use of an organisation’s human
resources. It is that part of management which is concerned with the people at work

and with their relationship within an enterprise. Its objectives are: (1) the
effective
utilisation of human resources; (2) desirable working relationships among all
members
of the organisation; and (3) maximum individual development.

The major functional areas in human resource management are: (1) planning,

(2) staffing, (3) employee development, and (4) employee maintenance. These four
areas and their related functions share the common objective of an adequate number
of
competent employees with the skills, abilities, knowledge, and experience needed
for
further organisational goals. Although each human resource function can be assigned

to one of the four areas of personnel responsibility, some functions serve a

variety of
purposes. For example, performance appraisal measures serve to stimulate and guide
employee development as well as salary administration purposes. The compensation
function facilitates retention of employees and also serves to attract potential
employees to the organisation. A brief description of usual human resource
functions
is given below:
Human Resource Planning: In the human resource planning function, the number
and type of employees needed to accomplish organisational goals are determined.
Research is an important part of this function because planning requires the
collection
and analysis of information in order to forecast human resources supplies and to
predict future human resources needs. The basic human resource planning strategy is

staffing and employee development.

Job Analysis: Job analysis is the process of describing the nature of a job and
specifying the human requirements, such as skills, and experience needed to perform

it. The end product of the job analysis process is the job description. A job
description
spells out work duties and activities of employees. Job descriptions are a vital
source
of information to employees, managers, and personnel people because job content has

a great influence on personnel programmes and practices.

Staffing: Staffing emphasises the recruitment and selection of the human resources
for
an organisation. Human resources planning and recruiting precede the actual
selection
of people for positions in an organisation. Recruiting is the personnel function
that
attracts qualified applicants to fill job vacancies.

In the selection function, the most qualified applicants are selected for hiring
from
among those attracted to the organisation by the recruiting function. On selection,

human resource functionaries are involved in developing and administering methods

that enable managers to decide which applicants to select and which to reject for
the
given jobs.

Orientation: Orientation is the first step toward helping a new employee adjust
himself to the new job and the employer. It is a method to acquaint new employees
with particular aspects of their new job, including pay and benefit programmes,
working hours, and company rules and expectations.

Training and Development: The training and development function gives employees
the skills and knowledge to perform their jobs effectively. In addition to
providing
training for new or inexperienced employees, organisations often provide training
programmes for experienced employees whose jobs are undergoing change. Large
organisations often have development programmes which prepare employees for
higher level responsibilities within the organisation. Training and development
programmes provide useful means of assuring that employees are capable of
performing their jobs at acceptable levels.
Performance Appraisal: This function monitors employee performance to ensure that
it is at acceptable levels. Human resource professionals are usually responsible
for
developing and administering performance appraisal systems, although the actual
appraisal of employee performance is the responsibility of supervisors and
managers.
Besides providing a basis for pay, promotion, and disciplinary action, performance
appraisal information is essential for employee development since knowledge of
results (feedback) is necessary to motivate and guide performance improvements.

Career Planning: Career planning has developed partly as a result of the desire of
many employees to grow in their jobs and to advance in their career. Career
planning
activities include assessing an individual employee’s potential for growth and
advancement in the organisation.

Compensation: Human resource personnel provide a rational method for determining

how much employees should be paid for performing certain jobs. Pay is obviously
related to the maintenance of human resources. Since compensation is a major cost
to
many organisations, it is a major consideration in human resource planning.
Compensation affects staffing in that people are generally attracted to
organisations
offering a higher level of pay in exchange for the work performed. It is related to

employee development in that it provides an important incentive in motivating

employees to higher levels of job performance and to higher paying jobs in the
organisation.

Benefits: Benefits are another form of compensation to employees other than direct
pay for work performed. As such, the human resource function of administering
employee benefits shares many characteristics of the compensation function.
Benefits
include both the legally required items and those offered at employer’s discretion.
The
cost of benefits has risen to such a point that they have become a major
consideration
in human resources planning. However, benefits are primarily related to the
maintenance area, since they provide for many basic employee needs.

Labour Relations: The term “labour relations” refers to interaction with employees
who are represented by a trade union. Unions are organisation of employees who join

together to obtain more voice in decisions affecting wages, benefits, working

conditions, and other aspects of employment. With regard to labour relations, the
personnel responsibility primarily involves negotiating with the unions regarding
wages, service conditions, and resolving disputes and grievances.

Record-keeping: The oldest and most basic personnel function is employee record-
keeping. This function involves recording, maintaining, and retrieving employee-
related information for a variety of purposes. Records which must be maintained
include application forms, health and medical records, employment history (jobs
held,
promotions, transfers, lay-offs), seniority lists, earnings and hours of work,
absences,
turnover, tardiness, and other employee data. Complete and up-to-date employee
records are essential for most personnel functions. More than ever employees today
have a great interest in their personnel records. They want to know what is in
them, why
certain statements have been made, and why records may or may not have been
updated.

Personnel records provide the following:

i) A store of up-to-date and accurate information about the company’s employees.

ii) A guide to the action to be taken regarding an employee, particularly by
comparing him with other employees.
iii) A guide when recruiting a new employee, e.g. by showing the rates of pay
received by comparable employees.
iv) A historical record of previous action taken regarding employees.
v) The raw material for statistics which check and guide personnel policies.
vi) The means to comply with certain statutory requirements.
The Concept and
Functions of Human
Resource Management
Human Resource Personnel Research: All personnel people engage in some form of
research activities.
Management: Context,

In a good research approach, the object is to get facts and information about
personnel

Concept and Doundaries

specifics in order to develop and maintain a programme that works. It is impossible

to
run a personnel programme without some pre-planning and post-reviewing. For that
matter, any survey is, in a sense, research. There is a wide scope for research in
the
areas of recruitment, employee turnover, terminations, training, and so on. Through
a
well-designed attitude survey, employee opinions can be gathered on wages,
promotions, welfare services, working conditions, job security, leadership,
industrial
relations, and the like. Inspite of its importance, however, in most companies,
research
is the most neglected area because personnel people are too busy putting out fires.

Research is not done to put out fires but to prevent them.

Research is not the sole responsibility of any one particular group or department
in an
organisation. The initial responsibility is that of the human resource department,
which however should be assisted by line supervisors and executives at all levels
of
management. The assistance that can be rendered by trade unions and other
organisations should not be ignored, but should be properly made use of.

Apart from the above, the HR function involves managing change, technology,
innovation, and diversity. It is no longer confined to the culture or ethos of any
single
organisation; its keynote is a cross-fertilisation of ideas from different
organisations.
Periodic social audits of HR functions are considered essential.

HR professionals have an all-encompassing role. They are required to have a

thorough
knowledge of the organisation and its intricacies and complexities. The ultimate
goal
of every HR person should be to develop a linkage between the employee and the
organisation because the employee’s commitment to the organisation is crucial. The
first and foremost role of HR functionary is to impart continuous education to
employees about the changes and challenges facing the country in general, and their

organisation in particular. The employees should know about their balance sheet,
sales
progress, diversification plans, restructuring plans, sharp price movements,
turnover
and all such details. The HR professionals should impart education to all employees

through small booklets, video films, and lectures.

The primary responsibilities of a human resource manager are:

l
To develop a thorough knowledge of corporate culture, plans and policies.
l
To act as an internal change agent and consultant.
l
To initiate change and act as an expert and facilitator.
l
To actively involve himself in company’s strategy formulation.
l
To keep communication lines open between the HRD function and individuals

and groups both within and outside the organisation.

l
To identify and evolve HRD strategies in consonance with overall business
strategy.

l
To facilitate the development of various organisational teams and their working
relationship with other teams and individuals.

l
To try and relate people and work so that the organisation objectives are
achieved effectively and efficiently.

l
To diagnose problems and to determine appropriate solution particularly in the
human resources areas.

l
To provide co-ordination and support services for the delivery of HRD
programmes and services.

l
To evaluate the impact of an HRD intervention or to conduct research so as to
identify, develop or test how HRD in general has improved individual or
organisational performance.
The following are the nine new roles of HR practitioner as suggested by Pat
McLegan: The Concept and
Functions of Human
1) To bring the issues and trends concerning an organisation’s external and
internal Resource Management
people to the attention of strategic decision-makers, and to recommend long-term
strategies to support organisational excellence and endurance.
2) To design and prepare HR systems and actions for implementation so that
they can produce maximum impact on organisational performance and
development.
3) To facilitate the development and implementation of strategies for transforming
one’s own organisation by pursuing values and visions.
4) To create the smoothest flow of products and services to customers; to ensure
the
best and most flexible use of resources and competencies; and to create
commitment among the people who help us to meet customers’ needs whether
those people work directly for the organisation or not.
5) To identify learning needs and then design and develop structured learning
programmes and materials to help accelerate learning for individuals and groups.
6) To help individuals and groups work in new situations and to expand and change
their views so that people in power move from authoritarian to participative
models of leadership.
7) To help people assess their competencies, values, and goals so that they can
identify, plan, and implement development actions.
8) To assist individuals to add value in the workplace and to focus on the
interventions and interpersonal skills for helping people change and sustain
change.
9) To assess HRD practices and programmes and their impact and to communicate
results so that the organisation and its people accelerate their change and
development.
There are four roles which HR play, according to Dave Ulrich. The first, strategic
partner role-turning strategy into results by building organisations that create
value;
the second, a change agent role-making change happen and, in particular, help it
happen fast; the third, an employee champion role-managing the talent or the
intellectual capital within a firm; and the fourth, an administrative role-trying
to get
things to happen better, faster and cheaper.
Human resource management has received tremendous attention in recent years. Its
role in organisations has also undergone a substantial change and many
organisations
have gradually oriented themselves from the traditional personnel management to a
human resource management approach, although many see it as the “old wine in a
new bottle.” The basic approach of HRM is to perceive the organisation in its
totality.
Its emphasis is not only on production and productivity but also on the quality of
life.
It seeks to achieve the fullest development of human resources and the fullest
possible
socio-economic development.
Activity A
With business going global and competition becoming intense today HR has travelled
a long way from its conventional role as a support function to being a strategic
business partner in the present technology leveraged era. Discuss this statement by

citing suitable examples from your own organisation.

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Resource ..........................................................................
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Management: Context,
Concept and
Doundaries ........................................................................
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2.5 SUMMARY
The human resources of an organisation represent one of its largest investment. The

objectives of HRM include getting the organisation right, providing effective

motivation and leadership, obtaining and developing the right people, paying and
treating them fairly, and getting them involved in working productively. The
attainment of these objectives necessitates the performance of several functions.
The
main HRM systems are: (1) appraisal system; (2) career system; (3) training system;

(4) work system; (5) cultural system; and (6) self-renewal system. All systems and
sub-systems of HRM must be incorporated in the organisation while setting the goals

and objectives. This will also integrate the purposes and processes and make HRM
more meaningful. Human resources functions are many and varied and include such
things as human resource planning, recruiting, selecting, training, counselling
employees, compensation management, and employer-employee relations. In small
organisations, most human resource functions are performed by owners or operating
managers. Large organisations usually have a human resource or personnel
department that is responsible for co-ordinating and directing the human resource
functions. Successful human resource management is essential to organisational
growth and success. In the light of new challenges, there are indications that
human
resource people will play an increasingly important role in an organisation’s long-
range planning and policy-making activities.
2.6 SELF-ASSESSMENT QUESTIONS
1. What is “Human Resource Management”?
2. What functions does a human resource department normally perform?
3. Explain the new roles of HR managers.
2.7 FURTHER READINGS
Armstrong, M., Managing People, Kogan Page, Vol. 4, India, 1999.

Beaumont, P.B., Human Resource Management: Key Concepts and Skills, Sage
Publications, London, 1993.
Cascio, W.F., Managing Human Resources: Productivity, Quality of Work Life,

Profits, McGraw-Hill Book Company, New York, 1992.

Purcell J., Boxall P., Strategy and Human Resource Management, Palgrave,
Macmillan, New York, 2003.

Rao, T.V. and Others, HRD in the New Economic Environment, Tata McGraw-Hill
Book Company, New Delhi, 1994.