Module 1

Environmental Context

Introduction:

HRM is concerned with the human beings in an organization. ―The management of man.
Though it is a very important and challenging job because of the dynamic nature of the
employees .As no two people are similar in nature – in every aspect of mental abilities,
tacticians, sentiments, and behaviours; they differ widely not only individually but also as a
group and are subjected to many varied influences. People are responsive, they feel, think and
act therefore they cannot be handled like a machine or shifted and altered like template in a
room layout. They therefore need a tactful handing by management personnel.

Evolution of HRM:
Meaning of HRM:

Human resource management (HRM) involves coordinating, managing, and allocating human
capital, or employees, in ways that move an organisation’s goals forward. HRM focuses on
investing in employees, ensuring their safety, and managing all aspects of staffing, from hiring
to compensation and development.

Definition:

According to Armstrong (1997), Human Resource Management can be defined as ―a

strategic approach to acquiring, developing, managing, motivating and gaining the
commitment of the organization‘s key resource – the people who work in and for it.

According to Dale Yoder ―the management of human resource is viewed as a system in

which participants seeks to attain both individual and group goals.

Human Resource Management Environmental (HRM)

There are two types of a dynamic Human Resource Management environment, External
Environment and Internal Environment. Control over external environment influences the
management of its human resources and internal environment of HRM totally affect the
internal matter of business.

The External Environment of HRM

Components that influence the human resource human resources of a business organization
from outside the organization boundaries is refer to as external environmental factors.
Following are the external environmental factors that affect business organization.

1. Labor Force
A pool of persons external to the organization from which the organization gets its employees
is known as a labor force. How well an organization can do its mission is decided to a large
extent by the capability of employees of the business organization.

2. Legal Considerations
Another important factor influencing human resource management relates to state, federal
and local legislation and many decisions of court interpreting this legislation. In addition,
human resource management is mainly affected by many presidential executive orders.

3. Society
Human resource management is also affected by the society. The business organization must
achieve its aim in line with societal norms in order to remain acceptable to general public.

4. Unions
A set of workers who are combined together in order to deal collectively with their employer
is refer to as union. Although unions keep a potential force, membership of union as a
percentage of non-agricultural work forces changed from 33 percent in 1955 to 9.5 percent
today.

5. Shareholders
The owners of business organization are interested about shareholders. They may at times
challenge programs viewed by management to be advantageous to the organization.

6. Competition
A business organization must be able to keep a provision of competent employees, in order to
grow, succeed and prosper. Other organizations are also strain toward that goal.

7. Customers
Management has the duty of guarantee of that its employment practices do not make enemy
the members of market it serve.

8. Technology
Particular skills are no longer needed as technology changes. This demands the retraining of
the existing employees. The kind and amount of technology required is also affected by the
trend toward a service economy.

9. The Economy
One of main environmental factor influencing human resource management is the economy
of the nation. As a generalization, it is mostly more hard to recruit qualified employees when
the economy is booming. On the other hand, more applicants are typically available when a
downturn is experienced.

The Internal Environment of HRM

Internal environmental factors refer to components that influence human resources of

business organization from inside its boundaries. Following are the internal factors that
influence business organization.
 1. Mission
Mission is the organization’s reason for being or its continuing purpose. Every level of
management should function with an obvious understanding of the mission of business
organization. In fact, goals should be clearly understood by every organizational unit that
coincide with that mission.

2. Policies
Policies are defined as a predetermined guide developed to give counseling in decision
making. Policies can exert important pressure on how managers achieve their tasks.

3. Corporate Culture
Corporate culture is defined as the system of shared beliefs, values and habits inside an
organization that interacts with the formal structure to generate behavioral norms.

4. Management Style of Upper Managers

It is closely connected to corporate culture is the manner in which preferences and attitudes
of one’s superiors influence how a task is performed.

Because of the issues that can consequence if the managerial style of upper-level managers is
not similar from that of lower-level managers, this situation deserves special emphasis here.

5. Employees
Employees differ in many manners including their attitudes, capabilities, personalities and
personal objectives. As a consequence, conduct that a manager observes effective with one
employee may not be effective with another.

6. Informal Organization
A group of patterns of human interaction and evolving relationships inside an organization
that are not prescribed officially refers as the informal organization. Such informal
relationships have very potential.

7. Other Units of the Organization

Manager must properly understand the interrelationships that is present among departments
or divisions and should use such relationships for the effective benefit.

8. Labor-Management Agreement
Labor-management agreements are negotiated typically by upper management, but the terms
of the agreements must be implemented throughout the organization by managers.

The changing business In HRM:

In today's dynamic business environment, change is inevitable. Whether it's due to

technological advancements, market shifts, mergers, or other factors, organizations must
adapt to survive and thrive. Human Resources (HR) plays a crucial role in managing
organizational change. HR professionals are the bridge between the leadership team and
employees, and their expertise is essential for ensuring a smooth transition.
Change Management Strategy
HR professionals are responsible for developing and implementing effective change
management strategies. They work closely with leadership to define the objectives, scope,
and timeline of the change initiative. This includes creating a detailed plan that outlines the
steps required for a successful transition, considering the impact on employees, and
identifying potential obstacles.
Communication and Transparency
Effective communication is at the heart of successful change management. HR teams are
responsible for crafting clear, consistent, and transparent messages to employees about the
upcoming changes. They should address the "why" behind the change, its expected impact,
and the benefits it will bring. Open and honest communication builds trust and reduces
uncertainty among employees.
Employee Engagement
HR plays a pivotal role in ensuring that employees are engaged and committed to the change
process. They should provide opportunities for employees to ask questions, share concerns,
and provide feedback. HR can also facilitate training and development programs to equip
employees with the skills needed to adapt to new processes or technologies.
Assessing and Managing Resistance
Resistance to change is natural, and HR professionals are well-equipped to identify and
address it. They can conduct surveys or hold focus group discussions to gauge employee
sentiment and pinpoint areas of resistance. Once identified, HR can work with leaders to
develop strategies to mitigate resistance and foster a more positive attitude towards the
change.
Talent Management and Retention
During times of change, organizations may need to assess their current talent pool. HR is
responsible for identifying individuals who possess the skills and capabilities necessary to
drive the change process. Additionally, they should work on retaining top talent by offering
career development opportunities and recognizing and rewarding employees for their
contributions during the change.
Providing Support Services
HR can provide essential support services to employees during periods of change. This may
include offering counseling services, establishing mentorship programs, or creating employee
resource groups to help individuals navigate the emotional and professional challenges that
can arise during transitions.
Compliance and Legal Considerations
Change initiatives may have legal and compliance implications, such as labor laws or
contractual obligations. HR professionals are well-versed in these areas and ensure that the
organization adheres to all legal requirements during the change process. They can also assist
in negotiating with labor unions if applicable.

The Technological factor in HRM:

The convergence of technology and HRM has yielded a excess of tools and systems that have
streamlined and optimized various HR processes. From recruitment and onboarding to
performance management and employee engagement, technology has brought about
efficiency, accuracy, and enhanced employee experiences.
1. Recruitment and Onboarding: Modern HR practices have embraced digital platforms for
recruitment. Automated applicant tracking systems (ATS) sift through resumes, identify
qualified candidates, and streamline the hiring process. Video interviews and online
assessments enable remote hiring, reducing geographical constraints. Additionally, digital
onboarding processes ensure a smoother transition for new employees.
2. Data-Driven Decision Making: HR analytics tools leverage data to make informed
decisions. These tools help HR professionals gain insights into employee performance,
turnover rates, and engagement levels. Predictive analytics even enable organizations to
forecast future trends and make proactive adjustments to their HR strategies.
3. Learning and Development: E-learning platforms offer a convenient way for employees
to upskill and develop professionally. These platforms offer a range of courses, webinars, and
resources that cater to individual learning preferences, fostering a culture of continuous
learning within the organization.
4. Performance Management: Traditional annual performance reviews are giving way to
continuous performance management systems. Real-time feedback, goal tracking, and regular
check-ins are facilitated through digital tools, promoting employee growth and engagement.
5. Employee Engagement and Well-being: HR tech solutions now focus on enhancing
employee engagement and well-being. Pulse surveys, sentiment analysis tools, and wellness
apps help organizations gauge employee satisfaction and address concerns promptly.
6. Remote Work Enablers: The COVID-19 pandemic accelerated the adoption of remote
work. HR tech played a crucial role in enabling remote collaboration through video
conferencing, project management tools, and virtual team-building activities.

The Economic factor in HRM

1. Labor Force: Human resources make up the labor force of a country, which is essential for
economic production. A skilled and educated workforce can drive innovation, productivity,
and competitiveness in various sectors.

2. Productivity and Efficiency: Investing in education, vocational training, and skill

development programs improves the productivity and efficiency of workers. Well-trained and
skilled individuals can contribute more effectively to economic activities, leading to
increased output and economic growth.

3. Innovation and Entrepreneurship: Human resources are crucial for driving innovation and
entrepreneurship. Individuals with knowledge, creativity, and entrepreneurial skills can
develop new ideas, start businesses, and drive technological advancements, leading to
economic progress.

4. Education and Human Capital: Education and skill development contribute to the
formation of human capital, which refers to the knowledge and skills acquired by individuals.
Human capital enhances productivity, promotes technological advancements, and increases
the overall competitiveness of a country.

5. Demographic Dividend: Countries with a young and growing population can harness
the demographic dividend by investing in education, healthcare, and employment
opportunities. When the youth population is equipped with education and skills, it can
become a significant driver of economic growth.

The Political factor in HRM:

1. Employment Laws and Regulations: Changes in labor laws, such as minimum

wage, working hours, and anti-discrimination policies, directly affect HR functions
like payroll, benefits administration, and workplace diversity initiatives.
2. Immigration Policies: Shifts in immigration regulations can impact the availability of
skilled labor, especially in industries reliant on global talent.
3. Political Stability: In regions with political unrest or instability, organizations face
challenges in maintaining workforce stability and ensuring employee safety.
4. Policy Changes and Compliance: Governmental policy shifts in areas like
healthcare, retirement benefits, and worker safety can necessitate significant
adjustments in HR policies.
5. Economic Policies: Fiscal and monetary policies influence employment rates and
economic growth, impacting recruitment, compensation, and training needs.
The Legal factor in HRM:

1. Equal Employment Opportunity (EEO): EEO is a legal requirement that prohibits

discrimination in all aspects of employment, including recruitment, hiring, promotion,
training, and compensation, based on protected characteristics such as race, color,
religion, sex, national origin, age, and disability. Employers must comply with EEO
regulations to avoid lawsuits, fines, and other legal consequences.
2. Fair Labor Standards Act (FLSA): FLSA sets minimum wage, overtime pay, child
labor standards, and record-keeping requirements for employees. Employers must
comply with FLSA regulations to avoid lawsuits, penalties, and other legal
consequences.
3. Family and Medical Leave Act (FMLA): FMLA requires covered employers to
provide eligible employees with job-protected leave for qualified medical and family
reasons. Employers must comply with FMLA regulations to avoid lawsuits, penalties,
and other legal consequences.
4. Occupational Safety and Health Act (OSHA): OSHA sets safety and health standards
for workplaces and requires employers to provide a safe and healthy work
environment for employees. Employers must comply with OSHA regulations to avoid
lawsuits, fines, and other legal consequences.

NEW Economic Policy:

New Economic Policy 1991 was implemented by the administration of Narasimha Rao in
response to the economic crisis. The NEP reflected clearly a number of worldwide
developments, including the collapse of the socialist economy and the increasing acceptance
of global economic globalization.

In the Indian economy, the LPG reforms of 1991 transformed the nature of Indians
themselves. This subject is currently the basis of the Indian economy. It is vital for the Mains
across the disciplines to have a fair grasp of the shift that it brought in the Indian economy
and world events.

Objectives of New Economic Policy:

The goal of the NEP was to reduce inflation rates and build up adequate reserves of foreign
money to increase its economic growth rate.

• The major aim is to plunge the Indian Economy into the 'globalisation' arena and provide it
with a new direction in the market.

• It aimed at economic stabilisation and a market economy by eliminating all types of

unnecessary regulations.

• It urged private actors in all areas of the economy to expand their engagement. This is why
the reserved government sector numbers have decreased.

• Without many limitations, it aimed to enable the worldwide movement of products,

services, capital, people resources and technology.
Features of New Economic Policy:

Macroeconomic stabilisation and structural changes were part of the reform programme.

• Structural reforms are a medium- and long-term programme, address sector adaptations,
supply-side issues, and bring vitality to the economy and competitiveness.

• Macroeconomic stabilisation is a short-term macroeconomic crisis resolution programme

that regulates overall economic demand.

• It featured liberalised trade and investment policies that focused on exports, industrial
deregulation, disinvestment and public sector changes, as well as capital and financial sector
reforms.

• Focus areas of 1991 Economic Reforms were Liberalization, Privatization and

Globalisation.

Meaning and Types in India

1. Liberalisation Removal of Industrial Licensing and Registration: Previously private sector

had to obtain license from Govt. for starting a new venture. In this policy private sector has
been freed from licensing and other restrictions. Industries licensing is necessary for
following industries:

(i) Liquor

(ii) Cigarette

(iii) Defence equipment

(iv) Industrial explosives

(v) Drugs

(vi)Hazardous chemicals
 2. Privatisation: privatisation means permitting the private sector to set up industries
which were previously reserved for the public sector. Under this policy many PSU’s
were sold to private sector. Literally speaking, privatisation is the process of involving
the private sector-in the ownership of Public Sector Units (PSU’s).
The main reason for privatisation was in currency of PSU’s are running in losses due
to political interference. The managers cannot work independently. Production
capacity remained under-utilized. To increase competition and efficiency privatisation
of PSUs was inevitable. Step taken for Privatisation:
The following steps are taken for privatisation:
1. Sale of shares of PSUs: Indian Govt. started selling shares of PSU’s to public and
financial institution e.g. Govt. sold shares of Maruti Udyog Ltd. Now the private
sector will acquire ownership of these PSU’s. The share of private sector has
increased from 45% to 55%.
2. Disinvestment in PSU’s: The Govt. has started the process of disinvestment in
those PSU’s which had been running into loss. It means that Govt. has been selling
out these industries to private sector. Govt. has sold enterprises worth Rs. 30,000
crores to the private sector.
3. Minimisation of Public Sector: Previously Public sector was given the importance
with a view to help in industrialisation and removal of poverty. But these PSU’s could
not able to achieve this objective and policy of contraction of PSU’s was followed
under new economic reforms. Number of industries reserved for public sector was
reduces from 17 to 2.
(a) Railway operations (b) Atomic energy

3. Globalization: Globalisation means to make Global or worldwide, otherwise taking

into consideration the whole world. Broadly speaking, Globalisation means the
interaction of the domestic economy with the rest of the world with regard to foreign
investment, trade, production and financial matters.
Steps taken for Globalisation: Following steps are taken for Globalisation:
(i) Reduction in tariffs: Custom duties and tariffs imposed on imports and
exports are reduced gradually just to make India economy attractive to the
global investors.
(ii) Long term Trade Policy: Forcing trade policy was enforced for longer
duration.

Structural reforms and their implications for HRM in India:

Structural reforms are a set of policies and programs that are designed to change the
underlying structure of an economy. These reforms can include changes to the way that
markets operate, the way that businesses are regulated, and the way that the government
interacts with the economy.
The concept of structural reforms in the Indian economy was first introduced in the early
1990s, in the wake of the balance of payments crisis. The government at the time recognized
that the Indian economy needed to be reformed in order to become more competitive and
efficient.

Since then, the Indian government has implemented a number of structural reforms,
including:

o Liberalization of the trade and investment regime: The government has reduced tariffs
and other barriers to trade, and has made it easier for foreign investors to invest in
India.
o Privatization of state-owned enterprises: The government has privatized a number of
state-owned enterprises, in order to reduce the government's role in the economy.
o Deregulation of the financial sector: The government has deregulated the financial
sector, in order to make it easier for businesses to get loans and other financial
services.
o Reform of the labour market: The government has reformed the labour market, in
order to make it easier for businesses to hire and fire workers.

These reforms have had a significant impact on the Indian economy. They have helped to
increase economic growth, reduce poverty, and improve the lives of millions of Indians.

1. Response of the management to structural adjustment:

All entities across industries and sectors, including startups, continue to benefit from
these reforms.

The key focus areas of the initiatives are:

o Simplifying procedures related to applications, renewals, inspections, filing records,

etc.
o Rationalisation by repealing(cancelling), amending or subsuming(considering)
redundant laws
o Promoting digitisation by creating online interfaces to eliminate manual forms and
records
o Decriminalising minor technical or procedural defaults

2. Response of workers to structural adjustment:

India needs structural reforms to address issues like low and jobless growth, infrastructure
deficits and inefficient public sector companies. The key areas that need reforms are labour
markets, agriculture, land acquisition, privatization of public sector enterprises, banking
sector and tax reforms. However, implementing such reforms faces challenges like political
opposition, vested interests benefiting from the status quo and lack of political will.

 Labour force in India can be divided into organised and unorganised

sectors. The major socio-economic problem of India is that the majority of its
 citizens are struggling to earn a good living. It is not just employment that
causes their problems, but the poor quality of that employment: insufficient
and uncertain incomes, and poor working conditions, regardless of where they
work.
 Vocational Training: Establish recognising/accrediting agencies for vocational
training institutes is necessary to optimise and empower India’s labour
workforce.
 Social Security: State governments should enact legislation for the welfare of
unorganised workers, which should clearly identify the resources to be raised,
benefits to be given as well as the institutional mechanism.
 Employment Information Service: To support the new initiatives to provide
employment guarantees in backward districts, employment information
services need to be provided through e-governance.

3. Response of unions to structural adjustment:

Trade Unions are formed to protect and promote the interests of their members. Their
primary function is to protect the interest of workers against discrimination and unfair labour
practices

Trade unions need to adopt innovative measures to make their presence felt among workers
and following are the Measures may be considered:

1. Collective bargaining
2. Workers participation in the management
3. Increasing the number of members
4. Changing public perception of trade unions
5. Education and training
6. Legal assistance
7. Carrying out research
8. Welfare activities

The economic reforms in India have created an anti-worker environment. However, what
should give hope is the fact that the judiciary is gradually becoming critical of its judgements
concerning trade unions and workers’ rights. "The attractive mantras of globalization and
liberalization are fast becoming the basis justification for existing of the judicial process, and
an impression has been created that the constitutional courts are no longer sympathetic
towards the plight of industrial and un-organized workers." Hence, Trade unions would
continue to remain relevant provided they adopt a pragmatic and realistic approach in
spreading its popularity and solving the genuine problems of the workers

Objectives of HRM:

1) Societal Objectives :-
 To manage human resources in an ethical & socially responsible manner.

 To ensure compliance with legal & ethical standards.

 To minimise the negative impact of societal demands upon the organisation.

2) Organisational Objective:-

 HR department, like any other department in an organisation, should focus on achieving

the goals of the organisation first. If it does not meet this purpose, the HR department cannot
exist in the long run.

 HR department should recognise its role in bringing about organisational effectiveness.

 HRM is not an end in itself. It is only a means to assist the organisation with its primary
objectives.

3) Functional Objectives:-

 To maintain the HRM departments contribution at a level appropriate to the organisation’s

needs. Resources are wasted when HRM is either more or less sophisticated to suit the
organisation’s demands.

 The department’s level of service must be tailored to fit the organisation it serves.  HRM
should employ the skills & abilities of the workforce efficiently. It should aim at making the
people’s strength more productive & beneficial to the organisation.

 HRM should aim at providing the organisation with well trained & well motivated
employees.

4) Personnel Objectives

 HRM should increase employees job satisfaction to the fullest extent.  HRM should also
meet the self-actualisation needs of the employees. It should stimulate every employee to
achieve his potential.

 HRM should assist the employees in achieving their personal goals, at least in so far as
these goals enhance the individual’s contribution to the organisation.

 HRM should develop & maintain a quality of work life. It makes employment in the
organisation a desirable, personal & social situation. Organisational performance can never
be improved without the quality of work life

 The HRM should also communicate HR policies to all employees. It will help the HRM in
tapping the ideas, opinions, feelings, & the views of the employees.

Scope of HRM:
1. Human Resource Planning
HRM involves strategic planning to ensure the right people are in the right positions at the
right time. This encompasses forecasting future human resource needs, assessing the current
workforce, and identifying gaps that need to be addressed through recruitment, training, or
other strategies.
2. Recruitment and Selection
This aspect involves attracting and selecting suitable candidates for various roles within the
organization. It includes creating job descriptions, conducting interviews, and implementing
selection processes to ensure the best fit between candidates and job requirements.
3. Job Analysis, Design, and Evaluation
HRM encompasses analyzing job roles, designing them for efficiency and productivity, and
evaluating their worth within the organization. This ensures that job roles are well-defined
and contribute to the overall objectives of the organization.
4. Training and Development
HRM is responsible for identifying training needs, designing training programs, and fostering
continuous learning and development for employees. This enhances their skills and keeps
them updated with industry trends.
5. Performance Appraisal and Management
HRM oversees the process of evaluating employee performance against set goals and
providing feedback. This aids in recognizing high performers, addressing performance issues,
and aligning individual goals with organizational objectives.
6. Compensation and Rewards Management
Managing compensation packages, benefits, and incentives falls under HRM’s scope. This
includes determining fair salaries, offering employee benefits, and designing reward systems
to motivate and retain employees.
7. Employee Empowerment
HRM promotes employee empowerment by fostering a conducive work environment,
encouraging participation, and facilitating open communication within the organization.
8. Grievance Handling and Discipline
HRM is involved in addressing employee grievances and managing disciplinary actions when
necessary. This ensures a fair and respectful workplace environment.
9. Union and Association Relations
Maintaining positive relationships with employee unions and associations is also part of
HRM’s scope. This involves negotiation, conflict resolution, and working collaboratively to
address concerns.
10. Strategic HRM
Aligning HRM strategies with overall organizational goals and objectives is a critical aspect.
HRM contributes to the organization’s success by developing human resource strategies that
support the company’s long-term vision.

Importance of HRM:

 It helps management in the preparation adoption and continuing evolution of

personnel programmes and policies.
 It supplies skilled workers through scientific selection process.
 It ensures maximum benefit out of the expenditure on training and development and
appreciates the human assets.
 It prepares workers according to the changing needs of industry and environment.
 It motivates workers and upgrades them so as to enable them to accomplish the
organisation goals.
 Through innovation and experimentation in the fields of personnel, it helps in
reducing casts and helps in increasing productivity.
 It contributes a lot in restoring the industrial harmony and healthy employer-employee
relations.
 It establishes mechanism for the administration of personnel services that are
delegated to the personnel department.

Functions of HRM:

MANAGERIAL FUNCTION: Managerial function includes

a) Planning:- It is pre-determined course of action. Planning pertain to formulating strategies

of personnel programmes & changes in advance that will contribute to the organisational
goals. In other words it involves planning of HR, requirements, selection, training etc.

b) Organising:- an organisation is a means to an end. It is essential to carry out the

determined course of action. Acc. to J.C Massie, an organisation is a structure & a process by
which a co-operative group of human beings allocates its task among its members, identifies
relationship & integrates its activities towards a common objective.

c) Directing:- activating employees at different level & making them contribute maximum to
the organisation is possible through proper direction & motivation. Taping the maximum
potentialities of the employees is possible through motivation & command.

d) Controlling:- after planning, organizing, & directing the actual performance of employees
is checked, verified & compared with the plans. It the actual performance is found deviated
from the plan, control measures are required to be taken

ii) OPERATIVE FUNCTIONS the operative functions of HRM are related to specific
activities like
 1) Employment:- It is concerned with securing & employing the people possessing the
required kind & level of human resources necessary to achieve the organisational objectives.
It includes

i) Job Analysis:- it is the process of study & collection of information relating to the Role &
Responsibilities of a specific job.

ii) HR Planning:- it is a process for determination & assuring that the organisation will have
an adequate number of qualified persons, available at proper times, performing jobs, which
would meet the needs of the organisation & which would provide satisfaction for the
individuals involved.

iii)Recruitment:- it is the process of searching for prospective employees & stimulating them
to apply for jobs in an organisation.

iv) Selection:- it is the process of ascertaining the qualifications, experiences, skills,

knowledge etc of an applicant with a view to appraising his/her suitability to a job.

v) Placement:- it is the process of assigning the selected candidate with the most suitable job
in terms of job requirements. It is matching employee specifications with job requirements.

vi) Induction & Orientation:- Induction & orientation are the techniques by which a new
employee is rehabilitated in the changed surrounding & introduced to the practices, policies,
purposes & people of the organisation.

2. Human Resource Development:

It is the process of improving, moulding & changing the skills, knowledge, creative
ability, aptitude, values, commitment etc based on present & future job organisational
requirements. It includes.
i) Performance Appraisal:- it is the systematic evaluation of individuals with
respect to their performance on the job & their potential for development.
ii) Training:- it is the process of imparting to the employees technical &
operating skills & knowledge.
iii) Managerial Development:- it is the process of designing & conducting
suitable executive development programmes so as to develop the
managerial & human relations skill of employees.
iv) Career Planning & Development:- it is the planning of one’s career &
implementation career plans by means of education, training, job search &
acquisition of work experience. It includes internal mobility & external
mobility.
v) Transfer:- it is process of placing employees in the same level jobs where
they can be utilised more effectively in consistence with their potentialities
& needs of the employees & the organisation.
vi) Promotion:- it deals with upward reassignment given to an employee in
the organisation occupy higher position which commands better status or
 pay keeping in view in human resources of the employees & the job
requirement.
vii) Demotion:- it deals with downward reassignment to an employee in the
organisation.
viii) Retention Management:- employers prefer to retain more talented
employees while they retrench less talented employees. Employers modify
existing human resource strategies & craft new strategies in order to pay
more salaries, provide more benefits & create high quality of work life to
retain the best employees.
3. Compensation :- It is the process of providing adequate, equitable & fair
remuneration to the employees. It includes
i) Wage & salary Administration:- it is the process of developing &
operating a suitable wage & salary programme
ii) Incentives:- it is the process of formulating administrating & reviewing
the schemes of financial incentives in addition to regular payment of
wages & salary.
iii) Fringe Benefits:- these are the various benefits at the fringe of the wage.
Management provides these benefits to motivate the employees & to meet
their life’s contingencies. Ex:- housing facilities, canteen facilities,
medical facilities, disablement benefits etc.
iv) Social Security Measures:- management provide social security to their
employees in addition to the fringe benefits. These includes worker men
compensation, maternity benefits for women , medical benefits , retirement
benefits lie PF, pension, gratuity etc.
4. Human Relations:- It is the process of interaction among human beings. Human
relations is an area of management in integrating people into work situation in a way
that motivates them to work together productively cooperatively & with economic,
psychological & social satisfaction.
5. Industrial relations:- It refers to the study of relations among employee, employer,
government & trade unions. It includes Trade union, collective bargaining, Quality
circles etc,.
Linking corporate strategies and policies with hrm:

1) Recruit correctly : Align people to company goals

A good way to ensure that the right people stay with the company is the select the right
people. A company can align a part of the HR’s incentive to the tenure of the people they hire
along with other measures. This will ensure that the HR takes that extra effort to not allow
people with a history of switches to get in. The company cans take steps such as doing away
with monthly recruitment targets to an extent, so that there are no mass recruitments to fulfill
the assigned quotas.

2) Job Definition: Clearly tell people what they need to do

HR needs to know why a particular job exists, where does it fit in within the organization,
what is it expected to achieve, on which areas does it effect and the nature of those effects on
the organization. In addition, the HR needs to know the skills required to effective perform
the job.
Once the HR is clear on what the job entails and the skills required, they are in a better
position to judge candidates that fit the job. They should communicate the job description to
the candidate being interviewed so that only the people who are truly interested show up.

Another aspect that HR should concentrate on is to showcase the corporate culture of the
organization. If the organization believes in team work, the HR can mention that the
incentives are measures on team productivity.

3) Goal setting: Help employees in goal setting

Managers need to help employees in setting and reaching goals .Employees want to know
how their work is impacting the company objectives. Managers hold critical responsibility for
this as a failure to meet these goals will have the consequences on the manager, employee
and the organization. Hence a balanced approach towards goal setting should be followed. A
manager's job is to provide 'supportive autonomy' that's appropriate to the person's level of
capability." The key is to be hands-on while giving your people the room they need to
succeed on their own.

4) Incentives: Inform employees what is important.

A score card concentrating on the key success parameter (identified by the company) can be
implemented to motivate people to work towards a common goal. The financial incentives
should be used more a support structure rather than drivers for the change. Change will need
to come from the people at the trenches and we will need some agent that will help transform
people.
5) Use the Bench: The bench can be productive
Most IT companies use the concept of “bench”. They hire more people with the intent to be
ready to deploy people quickly once they sign a contract. The bench can be a place where
people’s creativity and initial zeal is quickly eroded as they are typically not assigned work in
the initial 6 -8 months of employment.
6) Democratization – One of the ways the employee democratization can be
encouraged is involving the employee decision making from all levels of hierarchy before
making decisions affecting the employees. These decisions can vary from very simple to
organizations decisions having moderately high complexity.

Organization of HRM Department:

The process of creating an organization structure is known as organizing. The modern HR

Department is organized in a flexible way with very few management layers in order to
facilitate free flow of communication.

The HR functions are divided into three principal groups:

 HR Front Office
 HR Back Office
 HR Centre of Excellence

HR Front Office:

Organization of personnel department known as HR front office is responsible for striking

rapport with internal groups or client. A designated official generally would be meeting the
requirements of clients.

HR Back Office:
It centralizes traditional HR agenda such as HR administration, payroll, welfare amenities
etc. The back office would take care of legal requirements and regulatory framework. The
back office people would be responsible for keeping personnel files, records and data in an
accessible form-updated almost every week.

HR Centres of Excellence:

This independent department looks after functions such as recruitments, training &
development, compensation and benefits, industrial relations etc. These centres works in the
close coordination with HR front office and HR back office while trying to get the best out of
employees through excellent HR practices and procedures.