Unit 1:

Evolution of HRM, Objectives and Function of HRM, Role and Responsibilities of HR

Manager, Relevance of HRM, Systems approach to HRM.

Unit 2:
Human Resource Planning: Purpose and Process, Recruitment and Selection: Source of
Recruitment, Stages in Selection Process , Placement, Goals Analysis: Job Description and Job
Specification
Unit 3:
Training and Development: Training Needs, Training Methods, Application of Computers in
Training, Developing Effective Training Programmes, Concept of HRD, Management
Development Programmes.
Unit 4:
Concept and Objectives of Performance Appraisal, Process of Performance Appraisal, Criteria
for Performance Appraisal, Benefits of Performance Appraisal, Limitation and Constraints, 360
Degree Performance Appraisal, Promotion-Degree, Transfer Air Separation: Promotion,
Purpose, Principles and Types; Transfer: Reasons, Principles and Types; Separation: Lay-Off,
Resignation, Dismissal, Retrenchment, Voluntary, Retirement Scheme.
Unit 5:
Motivation at Work, Major Motivation Theory: An overview, Participative Management
, Compensation Management, Major Elements of Compensation Management, Incentives:
Concepts, Types of Incentives; Incentives schemes in Indian Industries; Fringe Benefits,
Discipline and Employees’ Grievance Redressal.
Unit 1:
Evolution of HRM, Objectives and Function of HRM, Role and Responsibilities of HR
Manager, Relevance of HRM, Systems approach to HRM.
INTRODUCTION TO HUMAN RESOURCE MANAGEMENT
Human Resource Management is a relatively new approach to managing human
beings in any organisation. Human beings are considered as the key
resource in this approach. Since an organisation is a body of people, their
acquisition, development of skills, motivation for higher levels of
attainments, as well as ensuring maintenance of their level of commitment
are all significant activities. All these activities fall in the domain of Human
Resource Management.
Human Resource Management is a process, which consists of four main activities,
namely, acquisition, development, motivation, and maintenance of human
resources.
Scott, Clothier and Spriegel have defined Human Resource Management as that
branch of management which is responsible on a staff basis for
concentrating on those aspects of operations which are primarily concerned
with the relationship of management to employees and employees to
employees and with the development of the individual and the group.
Human Resource Management is responsible for maintaining good human relations in
the organisation. It is also concerned with development of individuals and
achieving integration of goals of the organisation and those of the
individuals.
Northcott considers human resource management as an extension of general
management, that of prompting and stimulating every employee to make his
fullest contribution to the purpose of a business. Human resource
management is not something that could be separated from the basic
managerial function. It is a major component of the broader managerial
function.
According to Edwin B. Flippo, ―Human resource management is the planning,
organising, directing and controlling of the procurement, development,
resources to the end that individual and societal objectives are
accomplished. This definition reveals that human resource (HR)
management is that aspect of management, which deals with the planning,
organising, directing and controlling the personnel functions of the
enterprise.

FEATURES OF HRM
The features of human resource management can be highlighted as follows:
1. It is an inherent part of management: Human resource management is inherent in
the process of management. This function is performed by all the managers
 throughout the organisation rather that by the personnel department only. If
a manager is to get the best of his people, he must undertake the basic
responsibility of selecting people who will work under him.
2. It is a pervasive function: Human Resource Management is a pervasive function
of management. It is performed by all managers at various levels in the
organisation. It is not a responsibility that a manager can leave completely
to someone else. However, he may secure advice and help in managing
people from experts who have special competence in personnel
management and industrial relations. Central/State Governments.
3. It is basic to all functional areas: Human Resource Management permeates all the
functional area of management such as production management, financial
management, and marketing management. That is every manager from top
to bottom, working in any department has to perform the personnel
functions.
4. It is people centered: Human Resource Management is people centered and is
relevant in all types of organisations. It is concerned with all categories of
personnel from top to the bottom of the organisation. The broad
classification of personnel in an industrial enterprise may be as follows: (i)
Blue-collar workers (i.e. those working on machines and engaged in
loading, unloading etc.) and white-collar workers (i.e. clerical employees),
(ii) Managerial and non managerial personnel, (iii) Professionals (such as
Chartered Accountant, Company Secretary, Lawyer, etc.) and non-
professional personnel.
5. It involves Personnel Activities or Functions: Human Resource Management
involves several functions concerned with the management of people at
work. It includes manpower planning, employment, placement, training,
appraisal and compensation of employees. For the performance of these
activities efficiently, a separate department known as Personnel Department
is created in most of the organisations.
6. It is a continuous process: Human Resource Management is not a “one shot”
function. It must be performed continuously if the organisational objectives
are to be achieved smoothly.
7. It is based on Human Relations: Human Resource Management is concerned with
the motivation of human resources in the organisation. The human beings
can‘t be dealt with like physical factors of production. Every person has
different needs, perceptions and expectations.
The managers should give due attention to these factors. They require human relations
skills to deal with the people at work. Human relations skills are also
required in training performance appraisal, transfer and promotion of
subordinates
Objectives of HRM
The primary objective of HRM is to ensure the availability of competent and willing
workforce to an organization. The specific objectives include the following:
1) Human capital: assisting the organization in obtaining the right number and types of
employees to fulfil its strategic and operational goals.
2) Developing organizational climate: helping to create a climate in which employees
are encouraged to develop and utilize their skills to the fullest and to employ
the skills and abilities of the workforce efficiently
3) Helping to maintain performance standards and increase productivity through
effective job design; providing adequate orientation, training and
development; providing performance-related feedback; and ensuring
effective two-way communication.
4) Helping to establish and maintain a harmonious employer/employee relationship
5) Helping to create and maintain a safe and healthy work environment
6) Developing programs to meet the economic, psychological, and social needs of the
employees and helping the organization to retain the productive employees
7) Ensuring that the organization is in compliance with provincial/territorial and
federal laws affecting the workplace (such as human rights, employment
equity, occupational health and safety, employment standards, and labour
relations legislation) to help the organization to reach its goals.
8) To provide organization with well-trained and well-motivated employees
9) To increase the employees satisfaction and self-actualization
10) To develop and maintain the quality of work life
11) To communicate HR policies to all employees.
12) To help maintain ethical polices and behaviour.

The above stated HRM objectives can be summarized under four specific objectives:
1) Societal Objectives: seek to ensure that the organization becomes socially
responsible to the needs and challenges of the society while minimizing the
negative impact of such demands upon the organization. The failure of the
organizations to use their resources for the society’s benefit in ethical ways
may lead to restriction.
2) Organizational Objectives: it recognizes the role of HRM in bringing about
organizational effectiveness. It makes sure that HRM is not a standalone
department, but rather a means to assist the organization with its primary
objectives. The HR department exists to serve the rest of the organization.
3) Functional Objectives: is to maintain the department’s contribution at a level
appropriate to the organization’s needs. Human resources are to be adjusted
to suit the organization’s demands. The department’s value should not
become too expensive at the cost of the organization it serves.
4) Personnel Objectives: it is to assist employees in achieving their personal goals, at
least as far as these goals enhance the individual’s contribution to the
 organization. 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.

IMPORTANCE OF HRM
Human Resource Management has a place of great importance. According to Peter F.
Drucker,
―The proper or improper use of the different factors of production depends on the
wishes of the human resources. Hence, besides other resources human
resources need more development. Human resources can increase
cooperation but it needs proper and efficient management to guide it.
Importance of personnel management is in reality the importance of labour functions
of personnel department which are indispensable to the management
activity itself. Because of the following reasons human resource
management holds a place of importance.
[Link] helps management in the preparation adoption and continuing evolution of
personnel programmes and policies.
[Link] supplies skilled workers through scientific selection process.
3. It ensures maximum benefit out of the expenditure on training and development and
appreciates the human assets.
4. It prepares workers according to the changing needs of industry and environment.
5. It motivates workers and upgrades them so as to enable them to accomplish the
organization goals.
6. Through innovation and experimentation in the fields of personnel, it helps in
reducing casts and helps in increasing productivity.
7. It contributes a lot in restoring the industrial harmony and healthy employer-
employee relations.
8. It establishes mechanism for the administration of personnel services that are
delegated to the personnel department.
Thus, the role of human resource management is very important in an organisation and
it should not be undermined especially in large scale enterprises. It is the
key to the whole organisation and related to all other activities of the
management i.e., marketing, production, finance etc. Human
Resource Management is concerned with the managing people as organizational
resources rather than as factors of production. It involves a system to be
followed in business firm to recruit, select, hire, train and develop human
assets. It is concerned with the people dimension of an organization.
The attainment of organizational objectives depends, to a great extent, on the way in
which people are recruited, developed and utilized by the management.
Therefore, proper co-ordination of human efforts and effective utilisation of
human and others material resources is necessary.
SCOPE OF HRM
The scope of HRM is indeed vast. All major activities in the working life of a worker
(from the time of his or her entry into an organization until he or she leaves
the organizations) come under the purview of HRM.
The major HRM activities include HR planning, job analysis, job design, employee
hiring, employee and executive remuneration, employee motivation,
employee maintenance, industrial relations and prospects of HRM.
The scope of Human Resources Management extends to:
1. All the decisions, strategies, factors, principles, operations, practices, functions,
activities and methods related to the management of people as employees in
any type of organization.
2. All the dimensions related to people in their employment relationships, and all the
dynamics that flow from it.
3. The scope of HRM is really vast. All major activities in the working life of a worker
(from the time of his or her entry into an organization until he or she leaves
it) come under the purview of HRM. American Society for Training and
Development (ASTD) conducted fairly an exhaustive study in this field and
identified nine broad areas of activities of HRM.
These are given below:
a) Human Resource Planning: The objective of HR Planning is to ensure that the
organization has the right types of persons at the right time at the right
place. It prepares human resources inventory with a view to assess present
and future needs, availability and possible shortages in human resource.
Thereupon, HR Planning forecast demand and supplies and identify sources of
selection. HR
Planning develops strategies both long-term and short-term, to meet the man-power
requirement.
b) Design of Organization and Job: This is the task of laying down organization
structure, authority, relationship and responsibilities. This will also mean
definition of work contents for each position in the organization. This is
done by “job description”. Another important step is “Job specification”.
Job specification identifies the attributes of persons who will be most
suitable for each job which is defined by job description.
c) Selection and Staffing: This is the process of recruitment and selection of staff.
This involves matching people and their expectations with which the job
specifications and career path available within the organization.
d) Training and Development: This involves an organized attempt to find out
training needs of the individuals to meet the knowledge and skill which is
needed not only to perform current job but also to fulfil the future needs of
the organization.
e) Organizational Development: This is an important aspect whereby “Synergetic
effect” is generated in an organization i.e. healthy interpersonal and inter-
group relationship within the organization.
f) Compensation and Benefits: This is the area of wages and salaries administration
where wages and compensations are fixed scientifically to meet fairness and
equity criteria. In addition labour welfare measures are involved which
include benefits and services.
g) Employee Assistance: Each employee is unique in character, personality,
expectation and temperament. By and large each one of them faces
problems every day. Some are personal some are official. In their case he or
she remains worried. Such worries must be removed to make him or her
more productive and happy.
h) Union-Labour Relations: Healthy Industrial and Labour relations are very
important for enhancing peace and productivity in an organization. This is
one of the areas of HRM.
i) Personnel Research and Information System: Knowledge on behavioral science
and industrial psychology throws better insight into the workers
expectations, aspirations and behaviour.
FUNCTIONS OF HRM
The main functions of human resource management are classified into two categories:
(a) Managerial
Functions and (b) Operative Functions
(a) Managerial Functions: Following are the managerial functions of Human
Resource Management
1. Planning: The planning function of human resource department pertains to the
steps taken in determining in advance personnel requirements, personnel
programmes, policies etc. Afte rdetermining how many and what type of
people are required, a personnel manager has to devise ways and means to
motivate them.
2. Organisation: Under organisation, the human resource manager has to organise the
operative functions by designing structure of relationship among jobs,
personnel and physical factors in such away so as to have maximum
contribution towards organisational objectives. In this way a personnel
manager performs following functions: (a) preparation of task force; (b)
allocation of work to individuals; (c) integration of the efforts of the task
force; (d) coordination of work of individual with that of the department.
3. Directing: Directing is concerned with initiation of organised action and
stimulating the people to work. The personnel manager directs the activities
of people of the organisation to get its function performed properly. A
personnel manager guides and motivates the staff of the organisation to
follow the path laid down in advance
. 4. Controlling: It provides basic data for establishing standards, makes job analysis
and performance appraisal, etc. All these techniques assist in effective
control of the qualities, time and efforts of workers.
(b) Operative Functions: The following are the Operative Functions of Human
Resource
Management:
1. Procurement of Personnel: It is concerned with the obtaining of the proper kind
and number of personnel necessary to accomplish organisation goals. It
deals specifically with such subjects as the determination of manpower
requirements, their recruitment, selecting, placement and orientation, etc.
2. Development of Personnel: Development has to do with the increase through
training, skill that is necessary for proper job performance. In this process
various techniques of training are used to develop the employees. Framing a
sound promotion policy, determination of the basis of promotion and
making performance appraisal are the elements of personnel development
function.
3. Compensation to Personnel: Compensation means determination of adequate and
equitable remuneration of personnel for their contribution to organisation
objectives. To determine the monetary compensation for various jobs is one
of the most difficult and important function of the personnel management. A
number of decisions are taken into the function, viz., job-evaluation,
remuneration, policy, inventive and premium plans, bonus policy and co-
partnership, etc. It also assists the organisation for adopting the suitable
wages and salaries, policy and payment of wages and salaries in right time.
4. Maintaining Good Industrial Relation: Human Resource Management covers a
wide field. It is intended to reduce strikes, promote industrial peace, provide
fair deal to workers and establish industrial democracy. It the personnel
manager is unable to make harmonious relations between management and
labour industrial unrest will take place and millions of man-days will be
lost. If labour management relations are not good the moral and physical
condition of the employee will suffer, and it will be a loss to an organization
vis-a-visa nation. Hence, the personnel manager must create harmonious
relations with the help of sufficient communication system and co-
partnership.
5. Record Keeping: In record-keeping the personnel manager collects and maintains
information concerned with the staff of the organisation. It is essential for
every organisation because it assists the management in decision making
such as in promotions.
6. Personnel Planning and Evaluation : Under this system different type of activities
are evaluated such as evaluation of performance, personnel policy of an
 organisation and its practices, personnel audit, morale, survey and
performance appraisal, etc.
PROCESS OF HRM

1- Organizations Mission and Objectives

Human resource processes should be in alignment with the organizational goals and objectives to
enhance efficiency and effectiveness.

2- Job analysis and design- Objectives are achieved in an organization through a process of
various tasks, duties and functions. Job analysis is the process and procedure used to collect and
classify information about tasks that are required to be fulfilled. It is the basis of Job
Specification and Job Description.

3- Human Resource Planning- It is the process of providing capable and motivated people to
carry out the organizations mission strategy. It is the process of decision making regarding the
acquisition and utilization of human resource.

4- Recruitment and Selection- Recruitment is the process of attracting the best qualified
individuals to apply for a given job. Selection is a series of steps from initial applicant screening
to the final hiring.

5- Human Resource Development- It is a process of learning, training and development of

employees through an organized and systematic approach for achieving organizational goals.

6- Performance Management- It is a multi step process of aligning employees’ work behaviors

with the strategy and goals of the organization.

It helps in creating an environment where the employees can perform to the best of their abilities.

7- Compensation Management- It is the strategic process of analyzing, developing,

implementing , administering a total compensation system for all the employees in the
organization to keep them motivated, satisfied and productive.

8- Safety and Health Management- It is a process of designing and implementing policies and
practices to promote and preserve the physical and mental well being of the employees.

9- Industrial Relations- It is required to maintain harmony between the employees and the
management.

ROLES OF HR MANAGER

In the modern era, the HR Manager typically performs a variety of roles, such as the role of
conscience, of a counselor, a mediator, a company spokesman, a problem-solver and a change
agent. He performs many miscellaneous roles in accordance with the needs of a situation, such as
1. The Conscience Role: Under this role, the HR Manager reminds the management of their
moral and ethical obligations towards employees.

2. The Counsellor Role: Under this role he encourages the employees to meet him frequently for
consultation and discussion of their mental, physical and career problems and at times even their
family problems.

3. The Mediator Role: Under this role, he tries to settle disputes between labour and management
as also those between an individual and a group. He is not only a peace maker but also serves as
a liaison and communicating link.

4. The Spokesman Role: under this role, he works as a spokesman for or as a representative of
his organization. This he is able to do as he deals intimately with many key organizational
activities and functions and has a better overall picture of his company‘s operations.

5. The Problem-Solver Role: He is a problem-solver in respect of issues involving human

resource management and overall long-range organizational planning.

6. The Change- Agent Role: He serves as a change agent in respect of introduction and
implementation of major institutional changes.

SKILLS OF HR MANAGER

These skills fall into the four basic categories:

1. Human Relations Skills:
The ability to understand and work well with other people is important to virtually any career,
but human relations skills are especially significant for human resource management today.
Given the significance of human resources, many managers are calling for HRM to become the
“source of people expertise” in the organization.
HR managers therefore need to know how people play a role in giving the organization an
advantage against the competition as well as the policies, programs, and practices that can help
the organization’s people do so. Today’s HR professionals must be skilled at communicating,
negotiating, and team development.
2. Decision-Making Skills:
Human resource managers must make a wide variety of decisions that affect whether employees
are qualified and motivated and whether the organization is operating efficiently and complying
with the law.
Especially at organizations that give HRM departments a role in supporting strategy, HR
decision makers also must be able to apply decision-making skills to strategic issues. This
requires knowledge of the organization’s line of business and the ability to present options in
terms of costs and benefits to the organization, stated in terms of dollars. Decisions must also
take into account social and ethical implications of the alternatives.
3. Leadership Skills:
HR managers need to play a leadership role with regard to the organization’s human resources.
In today’s environment, leadership often requires helping the organization manage change.
Fulfilling this leadership role includes diagnosing problems, implementing organizational
changes, and evaluating results, especially in terms of employees’ skills and attitudes.
Changes typically produce conflict, resistance, and confusion. HR professionals must oversee the
change to ensure success. HRM provides tools for overcoming resistance to change, teaching
employees to operate under new conditions and encouraging innovation. A survey of large
corporations found that in 87 percent of the companies, organization development and change
were managed by the HR department.
4. Technical Skills:
In any field, including management, “technical skills” are the specialized skills of that field. In
human resource management, professionals need knowledge of state-of-the-art practices in such
areas as staffing, development, rewards, organizational design, and communication.
New selection techniques, performance appraisal methods, training programs, and incentive
plans are constantly being developed and often include the use of new software and computer
systems. New laws are passed every year, and technical skills require knowledge of how to
comply.
Professionals must be able to evaluate the worth of new techniques and critically evaluate them
in light of HRM principles and business value to determine which are beneficial.

QUALITIES OF HR MANAGER

I. Personal Qualities:
1. Intelligence:
HR Manager should be enough intelligent to understand the situation and react on it. He should
be so intelligent that he must be capable of judging the situation without depending on others.
2. Emotional Stability:
HR manager should be emotionally stable. He should not loose temper and he should not be
moody. Moodiness, short temper, inconsistency are the enemies of HR manager. He should be
confident and objective in his approach. Whatever he does should be based on the facts and
information that he collects and not on the rumour.
3. Communication Skill:
He should have good communication skill with a good command over the language he is using.
Ability to express clearly, explain the policies and programmes precisely and convince the others
quickly are the important qualities of good communication and HR manager should possess all
these qualities.
4. Motivational Skill:
HR manager should have the qualities to motivate his subordinates. He should encourage and
inspire his people by highlighting their positive nature. This requires study of his subordinates
and understanding their requirement.
5. Analytical Skill:
He must be capable of analysing the problem scientifically and solving it quickly. He must be
able to differentiate the “right and “wrong”, “important” and “un-important” and should have
ability to judge accurately.
6. Leadership Skill:
He should have good leadership qualities to lead the entire team of an organization. He should
have qualities to win the confidence of all of his subordinates. For this purpose, he must be un -
biased, impartial and firm in his dealings. He should have physical fitness, moral courage and
above all he must be sincere, loyal, regular and honest in his duties.
II. Job Related Qualities:
1. Technical Knowledge or Quality:
He should have the technical knowledge of the field or discipline relevant for human resource
management. He must have thorough knowledge of concepts, principles and theories of human
resource management and he must be able to apply these theories and principles in to practice.
He should have the minimum knowledge of the product which his company is producing and he
should be aware of general law, constitution & government policy towards labour and general
economic conditions prevailing in the country.
2. Training & Experience:
HR manager must be well trained in industrial relation, industrial psychology and labour
legislation so that he can carry out his work with confidence and zeal. Training and knowledge
on these areas help him to maintain good relation with his subordinates who in turn help him to
carry out his duties smoothly and satisfactorily.
3. Educational Qualification:
To be able to discharge his duties successfully, he should be well qualified in the discipline of
HR management and other relevant discipline. He must be basically graduate in any discipline
and post Graduate or Diploma with a specialization in HRM, MBA with HRM or MA in
Sociology or social work or [Link] with HRM and degree in law will be an added qualification
to become a successful HR manager.
.
RELEVANCE OF HRM

HRM is more relevant in today‘s context due to the following compulsions:

1. Change Management: Today, terms such as ―Learning Organization‖. ―Managing

Organizational Change‖, ―Change Agents‖ and the like are being increasingly encountered. It is
now an accepted fact that any organization can survive in today‘s socio-economic environment
only if it is proactive to environment changes. Advances in information technology too are
focusing organizations to change their very way of thinking.

2. Competence: It is often said, ―Give a man a job that he excels at and he would not have to
work.‖ In the organizational context, it may not be always feasible to allocate tasks to individuals
at which each one excels, but surely we can enhance competence of individuals for specific tasks
through well-designed training programmes. It is equally important to take note of the interests
of the individual. It is much easier to train him in tasks closer to his inherent liking. It is,
however, seen that many managers do not realize the importance of this aspect and would prefer
sub-optimal performance form an employee rather than spare him for training/ retraining because
in the latter case the employees would not be available for work during that manager‘s tenure.
What is not appreciated is that without the required competence, an employee would either shirk
from the assigned tasks or would do a lousy job. After a while such an employee would attempt
recognition through destructive means because he is unable to make a mark as a good performer.

3. Commitment: The extent to which the employees are committed to their work and
organization has a significant bearing on an organization‘s performance. Commitment levels can
be assessed in a number of ways. One can make use of informal interviews and questionnaires,
statistics on absenteeism, grievances, and voluntary separations. Transparency in organizational
functioning, employees‘ perception of various HRM policies, channels of communication, and
role models played by superiors strongly influence employee commitment.

4. Congruence of objectives: Even well-qualified and committed employees could pursue goals
at variance to the organizational objectives. It is, therefore, essential that all newcomers to the
organization are properly socialized into the existing community and are made aware to the
organizational values, work ethos, customs and traditions. It is important that they know what the
organization stand for and what it wants to achieve and in the process, what is expected from
each individual, so that he can find reason and meaning for his existence in the organization.
This exercise is commonly referred as socialization.

5. Motivation: Another aspect of human behavior is the employee‘s willingness to work and the
desire to constantly improve his performance. There are different schools of thought on
motivation but essentially, all agree that work is not inherently distasteful. People want to
contribute to meaningful goals, particularly, those they have in setting. Most people can exercise
far more creativity, selfdirection and self-control than their present jobs demand. It is, however,
necessary to create an environment in which all members can contribute to the limits of their
ability. Subordinates must be encouraged to participate in the process of decision-making,
continually broadening their self-direction and selfcontrol as this would not only lead to direct
improvement in operating efficiency but would also ensure their grooming for higher
responsibilities.

EVOLUTION OF HRM

From industrial revolution era to the present era, various stages to development of management
of human resource practices may be classified as follows:

1. Industrial revolution era— 19th century

2. Trade union movement era — close to the 19th century

3. Social responsibility era — beginning of the 20th century

4. Scientific management era— 1900-1920s

5. Human relations era— 1930s-1950s

6. Behavioural science era— 1950s-1960s

7. Systems and contingency approach era – 1960 onwards

8. Human resource management era — 1980 onwards

The classification of various stages of development of management of human resources in terms

of period shows the beginning of that era. In each era, emphasis has been put on a particular
approach of managing people at work. A succeeding era does not mean the complete end of
preceding era but there has been overlapping in these.

Main features of these eras and the type of practices related to managing human resources are as
follows:

1. Industrial Revolution Era: The systematic development of HRM started with industrial
revolution that started during 1850s in Western Europe and USA. The industrial revolution
consisted, essentially, the development of machinery, the use of mechanical energy in production
processes, and consequently the emergence of the concept of factory with large number of
workforce working together. The factory system replaced the old cottage system. Industrial
revolution brought out a number of changes like centralized work locations with large number of
workers working together, mechanized production process, migration of workers from their
place of origin, and indirect contact between factory owners and workers.

In order to manage people in the factory system of industrial revolution, three systems of HRM
were developed- recruitment of workers, training for workers, and control of workers. However,
the basic philosophy of managing workers revolved around master-servant relationship.

2. Trade Union Movement Era: Shortly after the emergence of factory system, workers started
to organize themselves based on their common interests to form workers’ associations which
were subsequently known as trade unions. The basic objectives of these associations were to
safeguard interest of their members and to sort out their problems which arose primarily because
of employment of child labour, long hours of work, and poor working conditions. Later, other
aspects of work such as economic problems and wages, employee benefits and services, etc. also
became issues. These trade unions started such weapons as strikes, slowdowns, walkouts,
boycotts, etc., for the acceptance of their demands. These activities of the trade unions forced
owners and managers to adopt employee grievance handling systems, arbitration as a means of
resolving conflicts between owners/managers and workers, disciplinary practice, expansion of
employee benefit programmes, holiday and vacation time, clear definition of job duties, job
rights through seniority, and installation of rational and defensible wage structures.

3. Social Responsibility Era: In the first decade of 20th century, some factory owners started
adopting a more humanistic and paternalistic approach towards workers. Paternalistic approach
to labour management is based on the philosophy that labour is just like a child and owner is just
like a father and the owner should take care of his labour just like a father takes care of his
children. Those industrialists who adopted paternalistic approach offered a number of
concessions and facilities to labour force like reduced number of work hours, improved facilities
at workplace, model villages to workers, etc. All these practices led to the development of social
welfare aspect of labour management. Many critics to paternalistic approach viewed that this
approach was adopted to overcome the problems posed by labour union movement as plenty of
trade unions emerged which frequently interrupted work performance. Employers observed that
workers were going out of their control and to overcome this problem, they implemented welfare
scheme. Thus, this was a compulsion rather than a philosophy.

4. Scientific Management Era: Around the beginning of 20th century, Taylor started to find out
‘one best way of doing thing’ based on time and motion studies. On the basis of his experiments,
he was able to increase workers’ productivity considerably and wrote many papers based on
these experiments and a book on scientific management. The main principles of scientific
management are: (i) Replacing rule of thumb with science, (ii) harmony, not conflict, (iii)
cooperation, not individualism, and (iv) development of each and every person. Scientific
management techniques relevant to management of workers are- functional foremanship,
standardization and simplification of work, and differential piece wage system.

5. Human Relations Era: Around 1920s, management researchers gave a close look at the
human factor at work and the variables that affected people’s behaviour. Before that, Hugo
Munsterberg wrote a book on ‘Psychology and Industrial Efficiency’ which suggested the use of
psychology in the field of personnel testing, interviewing, attitude measurement, learning, etc.
This brief period was termed as ‘Industrial Psychology Era’. In 1924, a group of professors from
Harvard Business School, USA, began an enquiry into the human aspects of work and working
conditions at Hawthorne plant of Western Electric Company, Chicago. They conducted
researches from 1924 to 1932 and arrived at the conclusions that productivity of workers
depended on-

(i) social factors at the workplace, (ii) group formation and group influence, (iii) nature of
leadership and supervision, and (iv) communication. They concluded that in order to have better
productivity, management should take care of human relations besides the physical conditions at
the workplace.

Consequently, the concepts of social system, informal organization, group influence, and non-
logical behaviour entered the field of management of personnel.
 6. Behavioural Science Era: In contrast to human relations which assume that happy workers
are productive workers, the behavioural scientists have been goal and efficiency- oriented and
consider understanding of human behaviour to be the major means to that end. They have tried
several sophisticated research methods to understand the nature of work and the people in the
work environment. The contribution of behavioural scientists to management practices consists
primarily of producing new insights rather than new techniques. It has developed or expanded a
useful way of thinking about the role of the manager, the nature of organizations, and the
behaviour of individuals within organizations. As against human relations model, they have
given the concept of human resource model. Major conclusions of the contributions made by
behaviouralists are as follows:

i. People do not dislike work. If they have been helped to establish objectives, they will want to
achieve them. In fact, job itself is a source of motivation and satisfaction to employees.

ii. Most people can exercise a great deal of self-direction and self-control and generate more
creativity than required in their current job. Therefore, their untapped potential remains
unutilized.

iii. Managers’ basic job is to use untapped human potential in the organization.

iv. Manager should create a healthy environment wherein all persons can contribute to the best
of their capacity. The environment should provide a healthy, safe, comfortable, and convenient
place to work.

v. Managers should provide opportunity for self-direction by their subordinates and they must
be encouraged to participate fully in all important matters.

vi. Operating efficiency can be improved by expanding subordinate influence, self- direction,
and selfcontrol. vii. Work satisfaction may improve as a ‘by-product’ of subordinates making
full use of their potential. Behavioural science era led to the development of two-way
communication, participation of employees in decision making, joint goal-setting, group
dynamics, management development, and management of change in the organization. These
contributions of behavioural science era are backbone of behavioural approach of human
resource management even in the present context.

7. Systems and Contingency Approach Era: maximum attention of thinkers in management in

the present era. It is an integrated approach which considers management of human resources in
its totality based on empirical data. The basic idea of this approach is that analysis of any object
must rely on a method of analysis involving simultaneous variations of mutually-dependent
variables. This happens when systems approach is applied in managing human resources.

8. Human Resource Management Era: When the factory system was applied in production,
large number of workers started working together. A need was felt that there should be someone
who should take care of recruiting, developing, and looking after welfare of these workers. For
this purpose, industrial relations department came into existence in most of the large
organizations which was concerned mostly with workers. However, as the time passed and the
complexity of managing human resources in large business organizations increased, the scope of
industrial relations department was extended to cover supervisory staff and subsequently
managerial personnel. Industrial relations department was named as personnel department. With
the increasing competition for market share, competition for resources including human talents,
and increased knowledge in the field of managing human resources, people were not treated
merely as physiological beings but socio-psychological beings as a prime source of
organizational effectiveness and arge organizations changed the nomenclature of their personnel
department to human resource ‘department to reflect the contemporary view. Even the American
Society for Personnel Administration, the largest professional association in the field of human
resource management, changed its name to the Society for Human Resource Management in
1990. At the academic level, similar pattern was followed and the title of personnel management
course was changed to human resource management. Since then, the expression is gradually
replacing the hackneyed term ‘personnel management’.

HUMAN RESOURCE MANAGEMENT IN INDIA

References about Personnel management in Arthasastra which indicates job description of

supervisor and performance linked pay foR gold smiths

• Tradional craftsman goods shipped to Europe

• Master servant relationship in 17th centuary 1828-Robert Owen father of co-operative

movement wrote a book titled as “New view society”- Improving working conditions and work
life of labourers

• After 1850 British rulers institutionalized for running the government which leads to personnel
management system 1931-Role of Royal commission of labour

• Industrial revolution

• Awakwning of labour

• Government attitude towards labour 1941-First tripartite labour conference 1948-Factories Act,
Cultural and social changes. Changes in social value of labour Changes in managerial value
1950-1969 III five year plans-Private and public sector projects 1990- Personnel management
and IR in public sector undertakings After 1990 the emphasis is shifted to human values and
productivity through people

• Role of Public sector companies like BHEL, SAIL and SBI • 1995 Progressive efforts of in HR
• 1997- Focus on product and customer
• Leading to customer satisfaction, bench marking, core competence, empowerment and learning
organization.

• Transition of HR Labour relations,

•Personnel management

• Human resources management

• Human capital management

• Strategic HRM

SYSTEMS APPROACH TO HRM

A system is a set of interrelated but separate elements or parts working towards a common goal.

The enterprise procures and transforms inputs such as physical, financial and human
resources into outputs such as products, services and satisfactions offered to people at large.
To carry out its operations, each enterprise has certain departments known as subsystems such as
production sub-system, finance sub-system, marketing sub-system, HR sub-system etc. Each
sub-system consists of a number of other subsystems.

As the central sub-system, HRM interacts closely and continuously with all other sub-systems of
an organisation. The quality of people in all sub-systems depends largely upon the policies,
programmes and practices of the HRM sub-system.

HRM has become very significant in the modern era of automation and computerisation, because
machine is useless without competent people who can run it. The significance is due to the
following factors:

1. Increase in the size and complexity of organisations.

2. Rise of professional and knowledgeable workers.

3. Rapid technological developments.

4. Increasing proportion of women in the workforce.

5. Growing expectations of society from employers.

6. Revolution in information technology.

7. Rapidly changing jobs and skills requiring long-term manpower planning.