1 Human Resource Management

1.1 Meaning of Human Resources

The ‘human resource’ of an organization is composed of all the efforts, skills or capabilities of all the people who work for that organization. Some organizations may call this ‘human resource’ as ‘staff’ or ‘workforce’ or ‘personnel’ or ‘employees,’ but the basic meaning remains the same. All those who work for an organization are workers. However, the organizations may call those who do manual work as ‘workers’ and describe others who do non-manual work as ‘staff.’ The executives of an organization are supposed to manage its human resource in the most effective manner so that personnel work well in the best interests of the organization, and in their own interests, too. For this purpose, it is essential that good personnel relations are established with the entire workforce.

1.2 Human resource functions

Human resource management refers to the activities of specialist staff that are responsible for the personnel objectives of the organization. The head of this department is responsible for establishing and implementing strategies for the human resource of the organization –its people. Staff members of this department are responsible for providing guidance and assistance to both management and employees. In a sense, it is their job to manage people. They do so by acquiring, retaining and developing the human resource of the organization. The policies of the Human Resource Department affect the entire workforce. Hence it is their responsibility to look after the interests of all –management as well as other employees.

1.3 Organization culture

HR specialists are in a position to influence the culture of an organization. Hence they simply cannot accept the existing situation. They need to be proactive so that they can anticipate changes and initiate timely and appropriate action. In different organizations there are different environments and different ways of doing things. There may be a lot of ‘shared beliefs and values.’ When this shared understanding becomes a part of collective thinking of the personnel of the organization, it leads to the establishment of an ‘organization culture.’ This happens because the personnel work in the common interests of the organization as a whole.

1.3.1 Internal and external influences

The interaction of the management with a variety of internal and external forces leads to the development of a particular organization culture. The figure given below gives an illustration of some important interrelationships which affect and are affected by an organization’s culture.

The purpose and goals of the organization are responsible for establishing a culture, which are seen by top management as their ‘vision.’ It is affected by the policies, structure, employee skills and attitudes, and leadership qualities. The external environment –comprising customers, competitors, government rules, suppliers, etc. –also play a significant role in shaping the organization culture. The decision-making ability of the management, establishment of effective communication channels, and the use of latest technology are all the factors that affect an organisation’s culture.

1.4 Human resource activities in management

Even though it is the responsibility of HR personnel to look after the people in an organisation, everybody in managerial/supervisory role –managers, supervisors, foremen, etc. – have to perform certain HR functions. They may have to be involved in performing the following additional functions in cooperation with the HR department:

  • Employee selection,
  • Induction of new employees,
  • Training and development,
  • Performance appraisal,
  • Working practices,
  • Job structure,
  • Implementing disciplinary procedures,
  • Motivating,
  • Providing communication channels,
  • Implementing safety policy,
  • Planning for effects of change on employees, etc.

The HR department provides support in performing the above activities.

1.5 HR specialists

Modern organizations have grown in size and complexity. Changes in their environments occur at a speed never felt before. Hence it has become essential that there is a ‘division of labour’ in the managerial staff, resulting in ‘specialist managers’ for various departments of an organization. HR specialists can be divided into three categories –Senior HR staff, HR advisors, and HR administrators. However, their presence depends on the size and number of activities of an organization.

1.5.1 Senior HR staff

These are the HR directors and HR managers who are specialists in their work. Their main role is to:

  • Formulate personnel policies for the organization,
  • Get them accepted,
  • Implement them,
  • Advise managers of other departments about the activities related to HR functions,
  • Reflect the views of the workforce to other departmental managers.

The success of the HR activities depends much on how effectively and efficiently these senior HR staff perform their functions.

1.5.2 HR advisors

These do not perform executive functions. Rather they act as ‘internal consultants’ or ‘advisors’ for the organization. They mainly provide consultancy and advice on the following areas:

  • Manpower planning,
  • Industrial relations,
  • Management development,
  • Assessment of relevant matters (e.g. impact of latest changes in the country’s employment law).

1.5.3 HR administrators

These are the members of office staff who are responsible for all the day-to-day activities of the HR department. After the decisions have been made by the senior management, a variety of procedures and documents have to be generated. For example, even if there is a minor change in the organisation’s policy of sickness leave and pay, several documents have to be amended to reflect this change. If there is a change in the organisation’s safety policy, revised statements will have to be prepared and distributed to every employee.

Moreover, the HR department is involved with all the detailed arrangements of personnel activities concerning every other department of the organisation. HR department has to create and maintain personnel records of all the employees. They have also to keep updating these records in a timely manner.

1.6 Strategic aspects of HRM

The strategic aspects of HR managers are the following:

  • Innovation: They must think of new ideas in order to have more effective and efficient HR systems.
  • Long-term planning: They must devise long-term HR plans for the organisation so that the objectives and goals of the organisation may be achieved in a systematic manner.
  • Advisory function: They must assist managers of other departments with HR activities so that the operational aspects of HR policies are carried out effectively. However, this involvement of HR department depends on the structure and size of the whole organisation.

1.7 The HR manager

The effectiveness of the HR manager is influenced by his/her personal attributes as well as his/her managerial abilities.

1.7.1 HR manager as a person

An HR manager is a ‘person.’ Some are men while others are women. Both can be very successful in their jobs. As a person, the HR manager behaves like any other human being, and is influenced by feelings and emotions, needs, motivations, and the need to be loyal. In order to perform HR functions effectively, the HR Manager has to rise above personal beliefs, prejudices and attitudes. He/she must make an effort to be impartial in various conflicting situations. Moreover, he/she must have the strength to be able to bring about an acceptable compromise between the conflicting viewpoints of the management and the employees. This needs strength of character, and an understanding of human behaviour. An HR manager, who is able to do so, is definitely successful in his/her chosen career.

1.7.2 HR manager as a manager

As a manager he/she is responsible for the various activities of the HR department – planning, organizing and coordinating the work of the HR department, training them, motivating them, supervising their activities, and providing them with ‘leadership.’

As an HR manager, he/she is responsible for a number of activities relating to the entire workforce of the organization. He/she has to manage a number of subordinates in the department. They have to be trained and motivated in order to perform in the best interests of the organization. Hence he/she should have an excellent knowledge of the functional aspect of work, and be skilled in maintaining good human relationships.

1.8 Industrial relations

Every worker in an organization needs to be dealt with in a fair and dignified manner. However, problems may arise because of the conflicting viewpoints of the workers and the management. Such differences are bound to come up in any organization. There are “opposing forces” of workers and management. In such situations the HR managers of the enterprises involved have extremely difficult roles to play because:

  • Workers think the HR personnel are controlled by the management, and will think of the interests of the management only, and
  • The directors of the company are suspicious of HR managers, and think that they are pushing for a solution beneficial only to the workers.

In such an environment of distrust from both the sides – management as well as employees – the HR manager has to ensure that he/she retains the confidence of both the management as well as the employees. This is a very skilled and diplomatic role that he/she has to play. He/she has to be seen by both the parties as not being partial to any. He/she has to see that the interests of the management are served, and at the same time, the legitimate aspirations of the employees are protected. It is his/her role to ensure that harmonious relationship is developed and retained between the management and the employees. He/she is actually a middleman between the two sides.

1.9 The role of HR department

An organization is divided into a number of departments depending on its size and activities. Some departments are concerned with the ‘primary functions’ such as production and sales. Other departments provide ‘services’ which assist in the efficient performance of primary activities of the organization. One of the most important departments of this type is the HR department. It provides a variety of services to:

  • other departments,
  • employees of the organization (and directly or indirectly to their families also),
  • the organization as a whole.

In the strict sense of the term, HR department may be classified as ‘non-productive,’ but the quality and efficiency of this department plays a significant role in the smooth running of the whole organization, as it looks after one of the most important resources – the human resource.

1.9.1 The HR policy

Policy making is the most important aspect of the total planning activity of an organization. A policy states how the organization intends to achieve its overall objectives. In order to achieve the aims of the organization in the interest of the whole organization – including its workforce – it has to operate as per the policy framed by the top management. Such a policy should be framed in consultation with:

  • the HR manager and his/her senior subordinates, and
  • if necessary, with representatives of trade unions and staff associations.

An HR policy should be based on the principles which will govern the relationship of the organization with its workforce. The policy must:

  • be stated in clear terms;
  • be understood easily by all – management and employees;
  • have standardized effect on all employees.

The HR policy should concentrate on the following aspects:

  • clear and detailed procedures regarding various specified activities such as recruitment, selection, promotion, and training of employees;
  • activities concerning a good “work climate” and employee satisfaction.

The long-term view of an HR policy may focus on the following examples:

  • There will be Equal Opportunity Policy (including sex, age, belief) for promotion.
  • Training and development activities will be made available to all employees.
  • Every employee will have the right to fair treatment concerning disciplinary matters.
  • Negotiations with employees or their representatives will be done in good faith in the interest of the organization as well as the employees.

1.9.2 Operating plans

After laying down the general policy the HR department needs to create operating plans. These are normally prepared on a year-by-year basis. They are likely to relate to matters such as the following:

  • Setting up basic manpower/human resource plan
  • Recruitment
  • Remuneration
  • Training and development
  • Health and safety
  • Employee welfare
  • Industrial relations
  • Attending to grievances and disciplinary procedures, etc.

1.10 Effects of a good HR policy

When a company wants to have a good “work climate,” it has to allocate a substantial amount of finance for the activities of the HR department. But this expenditure is worthwhile because the formulation and pursuance of a good HR policy leads to greater understanding throughout the organization. The effects of the HR policy can be seen in any activity of the organization. This is so because it is the responsibility of every department to get things done through the “efforts of the people.” After adopting this policy, it must be acted upon by every foreman, supervisor and manager in every department and section.

1.11 Responsibilities of HR department

HR management is concerned with the people who work for an organization, and with their activities and relationships within that organization.

Its primary function is two-fold:

  • to bring together all the employees of an organization, without whose joint efforts the organization could not prosper;
  • to develop and encourage their united interest in the success of the organization.

This is not an easy task. An organization has a number of individuals who have a wide variety of differing characters, attitudes, needs and opinions. The larger the organization, the greater is the task of developing unity and harmony. In order to achieve this aim, the HR department undertakes the following wide-ranging activities. Depending on the size of the organization, these activities may be handled by separate sections.

1.11.1 Employment section

This section is responsible for maintaining adequate supply of manpower. It keeps in contact with each employee during all the phases of their employment – recruitment, induction, training and development, transfers, promotions, retirement. It is also responsible for maintaining relevant records pertaining to all the employees.

1.11.2 Promotion section

This section is usually a part of the employment section, and is responsible for evaluating the suitability of employees for promotion. It makes recommendations for promotion, which are then forwarded to higher level for necessary action.

1.11.3 Training, education and development section

This section has the following responsibilities:

  • It must arrange training of all newcomers within the organization in order to ensure that they perform their jobs effectively.
  • It is responsible for ensuring that activities related to further training, education and development are continued on a regular basis. It must arrange internal workshops, external programmes, distance/online learning programmes, etc.

1.11.4 Medical section

This section is responsible for ensuring healthcare for employees. It may be done through in-house medical practitioner or external medical centres. However, basic first-aid services should be made available within the organization so that immediate treatment can be provided in case of minor injury or accident. Periodic general medical examination may also be organized. If an organization provides good healthcare facilities to its employees, it will be able to ensure that not many “man hours” are lost.

1.11.5 Staff welfare

This section is usually divided in two parts:

  • Safety division: The aim of this division is to locate areas of danger, and to eliminate them by adopting efficient safety measures and practices. Large organizations usually employ safety officers to look after this function.
  • Employee services division: This division is concerned with a wide range of activities such as cafeteria, recreational facilities, holiday programmes, legal facilities, etc. The scope of this function depends on the size and finances of an organization.

1.11.6 Industrial relations section

This section is concerned with setting up and maintaining procedures for joint consultation with employees, methods for settling grievances at the shop-floor, etc.