ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
UNIT- 1
FOUNDATIONS OF HRM
INTRODUCTION OF HUMAN RESOURCE MANAGEMENT:
Human Resource Management (HRM) is a vital function of management that deals
with the effective management of people in an organization. It focuses on acquiring,
developing, motivating, and retaining employees to achieve organizational goals.
In modern organizations, human resources are considered the most valuable asset, as
the success of any organization largely depends on the quality, skills, and commitment
of its workforce.
HRM involves planning, organizing, directing, and controlling human resources to
ensure the right people are placed in the right jobs at the right time. It aims to create
a healthy work environment where employees can contribute effectively and grow
professionally.
MEANING OF HUMAN RESOURCE MANAGEMENT:
HRM is about managing people at work in a way that helps the organization grow and
employees perform their best. It involves recruiting, selecting, training, developing,
motivating, compensating, and maintaining employees to ensure both organizational
success and employee satisfaction.
Human Resource Management (HRM) is the systematic and strategic approach to
managing people in an organization so that they contribute effectively to the
achievement of organizational goals.
DEFINITION OF HRM:
Edwin B. Flippo “Human Resource 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.”
Dale Yoder “Human Resource Management is the effective utilization of manpower to
achieve organizational objectives.”
FEATURES OF HUMAN RESOURCE MANAGEMENT (HRM) :
1. Human-Centred Approach: HRM focuses on people as valuable assets, not merely as
factors of production. It recognizes employees’ needs, abilities, emotions, and aspirations.
2. Goal-Oriented: HRM aligns human resource activities with organizational goals and
strategies to achieve long-term success.
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]
ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
3. Continuous Process: HRM is an ongoing and never-ending process, covering the entire
employee lifecycle from recruitment to retirement.
4. Management-Oriented Function: HRM is a managerial function involving planning,
organizing, directing, and controlling human resources at all levels of management.
5. Development-Oriented: HRM emphasizes training, development, skill enhancement, and
career growth of employees.
6. Integrated System: All HR functions recruitment, training, appraisal, compensation, and
welfare are interrelated and coordinated.
7. Employee and Employer Welfare: HRM aims to maintain a balance between
organizational objectives and employee satisfaction.
8. Universal Application: HRM principles are applicable to all types of organizations
business, educational institutions, hospitals, NGOs, and government organizations.
9. Participative Management: Encourages employee participation in decision-making,
teamwork, and open communication.
10. Dynamic: HRM adapts to changes in technology, labour laws, market conditions, and
organizational structure.
11. Ethical and Legal Compliance: HRM ensures fair practices, equality, transparency, and
compliance with labour laws and ethical standards.
12. Focus on Quality of Work Life: HRM promotes a healthy work environment, work–life
balance, safety, and well-being of employees.
SIGNIFICANCE /IMPORTANCE OF HUMAN RESOURCE MANAGEMENT :
1. Achieves Organizational Goals: HRM helps in attaining organizational objectives by
ensuring the right people are placed in the right jobs at the right time.
2. Optimum Utilization of Human Resources: It ensures maximum utilization of employee
skills, knowledge, and abilities, reducing wastage of human talent.
3. Improves Employee Performance: Through training, development, and performance
appraisal, HRM enhances employee efficiency and productivity.
4. Enhances Employee Motivation and Morale: HRM provides fair compensation,
incentives, recognition, and welfare facilities, which boost employee morale.
5. Reduces Employee Turnover: Effective HR practices increase job satisfaction and loyalty,
thereby reducing absenteeism and labour turnover.
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]
ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
6. Maintains Healthy Industrial Relations: HRM promotes cordial relations between
management and employees, minimizing conflicts and disputes.
7. Ensures Legal Compliance: HRM ensures compliance with labour laws and regulations,
safeguarding the interests of employees and employers.
8. Facilitates Organizational Growth: By developing skilled and competent employees,
HRM supports long-term growth and sustainability of the organization.
9. Builds Positive Organizational Culture: HRM creates a work environment based on trust,
cooperation, ethics, and teamwork.
10. Social and Ethical Responsibility: HRM encourages ethical practices, equal opportunity,
and employee welfare, contributing to social development.
EVOLUTION OF HUMAN RESOURCE MANAGEMENT (HRM):
The evolution of HRM explains how the management of people has developed over time,
shifting from simple labour control to a strategic and human-centric approach.
1. Labour Welfare Stage (Before 1900)
Focus was on welfare of workers such as safety, working hours, and basic facilities
Employers adopted welfare measures mainly to improve productivity
No formal HR department existed
Key features: Welfare officers, basic employee care
2. Scientific Management Stage (1900–1920)
Introduced by F.W. Taylor
Emphasized efficiency, productivity, and task specialization
Workers were treated more like machines than humans
Key features: Time and motion studies, wage incentives
3. Personnel Management Stage (1920–1950)
Focus shifted to recruitment, selection, training, and wage administration
Personnel managers handled employee records and industrial relations
Still a routine and administrative function
Key features: Employee hiring, compensation, grievance handling
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]
ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
4. Human Relations Stage (1930–1950)
Influenced by Elton Mayo’s Hawthorne Experiments
Emphasized social and psychological needs of workers
Recognized the importance of motivation, leadership, and group behaviour
Key features: Job satisfaction, teamwork, morale
5. Behavioural Science Stage (1950–1970)
Based on psychology and sociology
Focus on employee behaviour, motivation, leadership, and communication
Use of motivation theories (Maslow, McGregor, Herzberg)
Key features: Training, leadership development, organizational behaviour
6. Human Resource Management Stage (1970–Present)
Employees viewed as valuable organizational assets
HRM aligned with organizational strategy
Focus on development, performance management, and employee engagement
Key features: Strategic HRM, performance appraisal, career planning
7. Strategic & Digital HRM (Modern Era)
HRM plays a strategic role in decision-making
Use of HR analytics, AI, and digital tools
Focus on talent management, diversity, and work–life balance
Key features: E-HRM, talent analytics, remote workforce management
FUNCTIONS OF HRM:
[Link] Functions: The managerial functions of Human Resource Management are
concerned with the basic management activities applied to human resources. These functions
ensure proper planning, utilization, and control of manpower in an organization.
1. Planning
Determining current and future human resource requirements
Forecasting manpower demand and supply
Preparing HR plans, policies, and programs
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]
ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
Example: Planning the number of faculty required for the next academic year.
2. Organizing
Designing the organizational structure
Assigning duties, responsibilities, and authority related to HR activities
Coordinating HR tasks among departments
Example: Defining roles of HR manager, line managers, and supervisors.
3. Directing
Guiding and motivating employees to achieve organizational goals
Providing effective leadership, supervision, and communication
Encouraging teamwork and morale
Example: Motivating staff through incentives and recognition.
4. Controlling
Monitoring HR activities to ensure they are performed as planned
Evaluating employee performance and HR policies
Taking corrective actions when deviations occur
Example: Reviewing training effectiveness and employee performance reports.
B. Operational Functions: The operative functions of Human Resource Management are
concerned with the day-to-day management of employees in an organization. These functions
help in acquiring, developing, motivating, and maintaining the workforce.
1. Procurement
Manpower planning
Recruitment and selection
Placement and induction
Purpose: To ensure the right person is appointed to the right job.
2. Development
Training and development programs
Skill enhancement and career planning
Executive and leadership development
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]
ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
Purpose: To improve employee knowledge, skills, and abilities.
3. Compensation
Wage and salary administration
Incentives, bonuses, and fringe benefits
Employee rewards and recognition
Purpose: To provide fair and equitable remuneration.
4. Integration
Aligning employee goals with organizational goals
Motivation, communication, and teamwork
Employee engagement and participation
Purpose: To maintain harmonious relationships between employees and management.
5. Maintenance
Employee welfare measures
Health, safety, and working conditions
Grievance handling and industrial relations
Purpose: To retain employees and ensure job satisfaction.
6. Separation
Resignation, retirement, termination, layoffs
Exit interviews and final settlements
Purpose: To ensure a smooth and fair separation process.
MEANING OF PERSONNEL MANAGEMENT:
Personnel Management is the traditional approach to managing employees in an
organization. It mainly focuses on administrative functions such as recruitment, wage
payment, employee records, and maintaining discipline.
Personnel Management is concerned with hiring, paying, and maintaining workers
according to organizational rules. It treats employees primarily as workers or labor, and
its main aim is to ensure smooth day-to-day operations by following rules, procedures,
and labour laws.
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]
ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
FEATURES OF PERSONNEL MANAGEMENT
1. Administrative in Nature: Focuses on routine activities like record keeping, attendance,
payroll, and service conditions.
2. Employee-Oriented: Concerned with employee welfare, safety, and working conditions.
3. Reactive Approach: Acts after problems arise, such as disputes, grievances, or
absenteeism.
4. Rule and Procedure Oriented: Strictly follows organizational rules, policies, and labour
laws.
5. Limited Scope: Concentrates mainly on recruitment, wages, and discipline, not on long-
term development.
6. Short-Term Focus: Emphasizes immediate operational needs rather than future planning.
7. Separate Department: Personnel management is handled by a separate personnel
department, not shared by all managers.
8. Emphasis on Industrial Relations: Focuses on maintaining peaceful relations between
management and workers, often through trade unions.
PERSONNEL MANAGEMENT TO STRATEGIC HUMAN RESOURCE:
The shift from Personnel Management to Strategic Human Resource Management (SHRM)
reflects how organizations moved from administrative control of employees to strategic
management of human capital aligned with business goals.
1. Personnel Management Stage (Traditional Approach)
Employees viewed as labour or cost
Focus on administrative activities like recruitment, wages, attendance, and records
Reactive approach—problems handled after they arise
Responsibility limited to the personnel department
Short-term and rule-based
2. Human Resource Management Stage (Modern Approach)
Employees viewed as valuable resources
Focus on development, motivation, and performance
Proactive approach—anticipating workforce needs
Shared responsibility of line managers and HR managers
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]
ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
Long-term orientation
3. Strategic Human Resource Management Stage (SHRM)
Employees viewed as human capital and strategic partners
HR policies aligned with organizational strategy and competitive advantage
Focus on talent management, leadership development, and succession planning
Use of HR analytics, technology, and data-driven decisions
Emphasis on organizational culture, innovation, and sustainability
Personnel
Aspect HRM Strategic HRM
Management
View of
Labour Resource Strategic asset
Employees
Nature Administrative Developmental Strategic
Performance &
Focus Rules & procedures Business alignment
growth
Long-term & future-
Time Horizon Short-term Long-term
oriented
Role of HR Support function Management function Strategic partner
DIFFERENCES BETWEEN HRM AND PERSONNEL MANAGEMENT
Human Resource Management
Basis Personnel Management
(HRM)
Modern approach that treats Traditional approach that treats
Meaning
employees as valuable assets employees as workers or labor
Nature Strategic and proactive Administrative and reactive
Employee development and
Focus Routine employee administration
organizational growth
Approach Future-oriented Short-term oriented
Role of
Considered partners in achieving goals Considered tools for production
Employees
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]
ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
Human Resource Management
Basis Personnel Management
(HRM)
Wide scope including training,
Limited scope mainly
Scope development, motivation, and career
recruitment, wages, and discipline
planning
Handled by personnel department
Decision Making Shared by all managers
only
Performance Focus on performance improvement Focus on maintaining discipline
Emphasis and productivity and procedures
Industrial Emphasizes employee involvement Emphasizes trade unions and
Relations and engagement collective bargaining
Uses both financial and non-financial
Motivation Mainly financial incentives
incentives
Flexibility Flexible and adaptable to change Rigid rules and procedures
Employee-centric and organization- Employee-oriented but rule-
Orientation
centric bound
MEANING OF HR POLICIES:
HR Policies are written statements of principles and rules that guide management in decision-
making related to employees. They ensure fairness, consistency, and uniformity in HR
practices.
Example: Policy on recruitment, promotion, leave, discipline, or compensation.
OBJECTIVES OF HR POLICIES:
To ensure uniform and fair treatment of employees
To guide management in HR decision-making
To maintain discipline and consistency
To comply with labour laws and regulations
To protect the interests of both employees and employer
TYPES OF HR POLICIES:
1. Recruitment and Selection Policy
Guidelines for hiring employees
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]
ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
Internal vs external recruitment
Equal employment opportunity
Selection methods and criteria
Purpose: To ensure right person for the right job.
2. Training and Development Policy
Induction and orientation programs
Skill development and refresher training
Career development and promotion planning
Purpose: To improve employee competence and growth.
3. Promotion and Transfer Policy
Basis of promotion (merit, seniority, or both)
Transfer rules and procedures
Career advancement opportunities
Purpose: To ensure fair growth and mobility.
4. Compensation and Benefits Policy
Wage and salary structure
Incentives, bonuses, and allowances
Fringe benefits such as PF, gratuity, insurance
Purpose: To attract, motivate, and retain employees.
5. Leave and Attendance Policy
Working hours and shifts
Types of leave (CL, SL, EL, maternity leave)
Attendance rules and late-coming penalties
Purpose: To maintain discipline and work-life balance.
6. Performance Appraisal Policy
Performance evaluation methods
Appraisal frequency
Linkage with promotion, increment, and rewards
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]
ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
Purpose: To assess and improve employee performance.
7. Discipline and Conduct Policy
Code of conduct and ethics
Disciplinary actions and penalties
Rules for misconduct and indiscipline
Purpose: To maintain order and discipline.
8. Health, Safety, and Welfare Policy
Workplace safety standards
Health check-ups and hygiene
Welfare facilities (canteen, rest rooms, insurance)
Purpose: To ensure employee well-being.
MEANING OF HR PROCEDURES
HR procedures are written instructions that specify the exact steps to be followed while
performing HR activities such as recruitment, training, leave, appraisal, discipline, and
separation.
HR procedures tell employees and managers how to do things the right way.
OBJECTIVES OF HR PROCEDURES:
To ensure uniform implementation of HR policies
To reduce confusion and ambiguity
To maintain discipline and consistency
To support fair and transparent decision-making
To ensure compliance with labour laws
MAJOR HR PROCEDURES
1. Recruitment and Selection Procedure:
Identification of manpower requirement
Approval from management
Job analysis and job description
Advertisement / sourcing of candidates
Receiving and screening applications
Selection tests and interviews
Final selection and appointment letter
Induction and orientation
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]
ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
2. Training and Development Procedure
Identification of training needs
Preparation of training plan
Selection of training methods
Implementation of training program
Evaluation of training effectiveness
3. Performance Appraisal Procedure
Setting performance standards
Communicating expectations
Measuring employee performance
Performance review and feedback
Appraisal results and corrective action
4. Leave and Attendance Procedure
Submission of leave application
Approval by reporting authority
Updating leave records
Monitoring attendance and punctuality
5. Disciplinary Procedure
Identification of misconduct
Issue of show-cause notice
Conducting domestic enquiry
Explanation by employee
Decision and punishment / corrective action
6. Compensation and Payroll Procedure
Attendance and work-time verification
Wage/salary calculation
Deductions (PF, ESI, tax, etc.)
Salary approval and payment
Record maintenance
7. Promotion and Transfer Procedure
Identification of vacancy
Performance and eligibility review
Approval by management
Issue of promotion/transfer order
Updating employee records
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]
ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
MEANING OF HUMAN RESOURCE DEVELOPMENT (HRD)
Human Resource Development (HRD) refers to the systematic process of improving the
knowledge, skills, abilities, and attitudes of employees to enhance their performance and
support organizational growth. In simple words, HRD focuses on developing people, not just
managing them.
FEATURES OF HUMAN RESOURCE DEVELOPMENT (HRD)
[Link] Process: HRD is an ongoing process aimed at continuous improvement of
employee skills and abilities.
[Link] on Development: Emphasizes training, learning, career growth, and personality
development of employees.
[Link] and Systematic: HRD activities are well-planned and organized to achieve
specific developmental goals.
[Link]-Oriented: Concentrates on individual growth along with organizational
development.
[Link]-Oriented: Prepares employees for future roles and responsibilities.
[Link] Competency: Enhances knowledge, skills, attitudes, and behaviour of
employees.
[Link] and Organizational Development: Promotes teamwork, leadership development,
and organizational effectiveness.
DIFFERENCE BETWEEN HRM AND HRD:
HRM (Human Resource HRD (Human Resource
Basis
Management) Development)
Meaning Management of human resources Development of employee skills
Focus Managing people efficiently Developing people continuously
Nature Administrative and operational Developmental and growth-oriented
Time
Short-term focus Long-term focus
Frame
Approach Control-oriented Learning-oriented
Objective Achieve organizational goals Enhance employee potential
Activities Recruitment, selection, compensation Training, development, career planning
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]
ೊ ೕ ಇ ಟೂ ಆ ಾಮ ಅಂ ಾ ೇ ೆ ಂ
Jyothy Institute of Commerce and Management
Approved by Govt. of Karnataka and AICTE, New Delhi, Affiliated to Bangalore University
An ISO 21001:2025 Cer fied Ins tu on
IMPORTANCE OF HRM IN MODERN ORGANIZATION:
In today’s dynamic, competitive, and technology-driven environment, Human Resource
Management (HRM) plays a crucial role in the success of modern organizations.
1. Effective Utilization of Human Resources: HRM ensures the right person is placed in the
right job, leading to optimum use of employee skills and abilities.
2. Talent Acquisition and Retention: HRM helps in attracting, selecting, developing, and
retaining talented employees, which is essential in a competitive labour market.
3. Employee Training and Development: HRM focuses on continuous training, skill
development, and HRD, enabling employees to adapt to technological and organizational
changes.
4. Improved Employee Performance and Productivity; Through performance appraisal and
motivation, HRM enhances efficiency, productivity, and quality of work.
5. Employee Motivation and Job Satisfaction: HRM promotes fair compensation,
recognition, and career growth, improving morale and commitment.
6. Managing Workforce Diversity: HRM helps manage a diverse workforce by promoting
equality, inclusion, and teamwork.
7. Healthy Industrial Relations: HRM maintains good employer–employee relationships,
reducing conflicts and improving cooperation.
8. Compliance with Labour Laws: HRM ensures adherence to labour laws, ethical practices,
and organizational policies.
9. Change Management: HRM supports organizations during technological changes,
restructuring, and globalization by managing resistance and developing adaptability.
10. Organizational Growth and Sustainability: By aligning human resources with strategic
goals, HRM contributes to long-term growth and competitive advantage.
#40/5, Thataguni, Off Kanakapura Road, Bengaluru – 560082. Mob: 9740093491
E-Mail : principal@[Link] Website: www. [Link]