UNIT - III

HUMAN RESOURCES MANAGEMENT (HRM)

Concepts of HRM, HRD and Personnel Management and Industrial Relations (PMIR), HRM vs PMIR, Basic functions of HR Manager: Manpower
planning, Recruitment, Selection, Training and Development, Placement, Wage and Salary Administration, Promotion, Transfer, Separation,
Performance Appraisal, Grievance Handling and Welfare Administration, Job Evaluation and Merit Rating - Capability Maturity Model (CMM)
Levels - Performance Management System.

HUMAN RESOURCES: controlling the personnel carried out for maximizing

MEANING: employed to attain the goals of an effectiveness of employees as
According to Leon C. Megginson, the term human resources(HR) organization. It is the well as organizations. Thus, it is
represents “ the total knowledge, skills, creative abilities, talents and management of employees the management of skills,
aptitude of an organization’s workforce, as well as the value, attitudes employed in an organization. knowledge, talents, abilities,
and beliefs of the individuals involved”. aptitude etc of human resources.
Definition: It is a reserve function It is a strategic management
function
Human resources Management means” managing(planning,
Employees are treated as a tool Employees are viewed as assets to
organizing, directing and controlling), employing people, developing
which can be purchased, used, be used for the benefit of an
their resources, utilizing, maintaining and compensating their services in replaced and utilized for organization, the employees and
tune with the job and organization requirements with a view to contribute organizational benefits. their family members and the
to the goals of the organization, individual and the society”. society as a whole mutuality of
The various which may represents like Human Resources interests.
Management are labour management, Labour administration, personnel Employees in an organization are Employees are treated as a profit
management, personal administration, human resource capital, Human treated as cost centre and hence all centre and hence expenditure is
asset management, employment administration, industrial relations, efforts are done to control the done to develop human resources
union relations etc. labour cost is considered as a capital
DIFFERENCE BETWEEN PERSONAL MANAGEMENT AND investment for future utility.
HUMAN RESOURCES MANAGEMENT: An employee is paid for his An employee is treated as a social,
HRM is the broader in scope compared to personnel management services and as such, he is treated economical and psychological
which treats the people as Human beings having economic, social and as an economic man. man.
psychological needs whereas the personnel management views personnel
as the economic man who works for money and salary. The differences FUNCTIONS OF HRM:
The various functions performed by the HR manager are
between Personnel Management and Human Resources Management as:
classified into two categories. They are
Personal Management Human resources Management
Concerned with the planning, It refers to the set of programmes, i. Managerial Functions
organizing, directing and functions, activities designed and ii. Operative Functions

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i. Managerial Functions: ii. Operative functions
The various managerial functions include: The operative functions of HRM represents the specific activities of
a) Planning personnel management. The various operative functions are:
b) Organizing a) Procurement
c) Directing b) Development
d) Controlling c) Motivation and compensation
a) Planning: It represents predefined course of action. It involves d) Maintenance
planning of human resources requirements, selection, training, e) Industrial relations
forecasting of personnel needs, changing values, attitudes and f) Recent trends in HRM
behavior of employees etc and its impact on the organization. a) Procurement: The HR manager procure the employees by the
b) Organizing: Organization is a “structure and a process by following sub functions.
which a co-operative group of human beings allocate its task  Job analysis: The process of determining the duties and
among its members, identifies relationship and integrates its responsibilities of a job and requirements of job holder.
activities towards a common objective”. Complex  Manpower planning: It is also known as human resource
relationships exist between the specialized departments and planning
the general departments as many top managers are seeking the  Recruitment: It is a process of attracting or stimulating the
advice of the personnel manager. Thus, an organization individuals to apply for the job.
establishes relationships among the employees so that they can  Selection: process of short listing the applicants based on
collectively contribute to the attainment of company goals. the job requirements.
c) Directing: It represents the execution of plans. It is the basic  Placement: Placement the employees in their right position
function of hr managers at any level which includes  Induction: introducing the organizational policies,
motivating, commanding, leading, activating and coordinating procedures, practices, culture, employees to the newly
the employees, to attain the organizational goals in an effective appointed employee
manner.  Internal mobility: Movement of an employee from one
d) Controlling: After planning, organizing and directing the level to other level or from department to other department
various activities of personnel management, the performance or from one branch to other branch.
is to be verified in order to know that the personnel b) Development: The HR manger is responsible for the development
are performed in conformity with the plans and directions of of skills and knowledge of employees. The HR performs various
an organization. Controlling also involves checking, verifying activities to improve the employee skills and knowledge are:
and comparing of the actual performance with the standard  Human Resources Development
performance, identification of deviations, if any and  Training
correcting.  Executive development

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  Career planning and development to find out the place where the required manpower available and develop
c) Motivation and compensation: The operational efficiency the strategies to attract them. This process is known as ‘recruitment’.
depends on the motivational levels of employees. The HR should Recruitment is one of the initial step in the process of
motivate the employees by: employment or selection. Recruitment can be defined as the “ process of
Job design: The method through with the employees fulfills their searching and attracting the prospective applicants to apply for the job
duties and responsibilities. vacancy in the organization”.
Job evaluation: The relative worth of a job. OBJECTIVES OF RECRUITMENT:
Flexible work scheduling: The work timing of an employee can The basic objectives of recruitment include:
be selected according to their convenience.  To attract multi-skilled and talented applications towards the
Compensation: The remuneration paid to an employee for their organization.
contribution in the organization.
 To introduce new talent at each level in the organization.
Incentives: addition benefits to the employee for their
performance  To stimulate the most suitable applicants to the organization.
Performance appraisal: Measuring the performance of employees.  Increase pool of applicants
d) Maintenance: HR plays a key role to maintain the work  Meet the organization’s legal and social obligations with respect
environment in a safe and secure manner. to the composition of workforce.
 Safety  To minimize the cost of recruitment.
 Security SOURCES OF RECRUITMENT:
 Welfare Recruitment can be done by using various internal and external sources.
 Health Internal Sources: employee referrals, promotion, transfer, previous CV
e) Grievance handling: analysis, campus recruitment etc.
 Collective bargaining External sources: advertisements, employment exchanges, professional
 Empowerment membership agencies, consultancies, data banks, etc.
 Industrial relations JOB ANALYSIS:
f) Emerging trends: The effective utilization of human resources require the knowledge of
 HR audit duties and responsibilities of a job as well as the skills and knowledge
required for fulfilling those duties and responsibilities. The HR collects
 HR accounting
this information by conducting job analysis.
 HR record
Job analysis is a process of studying and collecting the information
 Human Resource Information System
related to the operations, duties and responsibilities of specific job.
 Global HRM ASPECTS OF JOB ANALYSIS:
RECRUITMENT: The job analysis compressed job description and job specification.
Human Resource Planning ends with determining the need of number i. Job description: It is an organized and factual statement of the
and type of manpower required to the organization, the HR manager has duties and responsibilities of a specific job. It represents the
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 duties, responsibilities of the job, the policies and procedures to time to achieve the goals and objectives of an organization in an effective
do the job etc. It includes: and efficient manner.
Job title In simple words HRP is process of ensuring the manpower of an
Duties organization with respect to present and future needs of an organization
Responsibilities in terms of: 4R’s
Job location Right number
Machines, tools and equipment used Right kind
Working conditions Right place
Job summary Right time
Supervision given/taken etc OBJECTIVES OF HRP:
ii. Job specifications: It is a statement of minimum human qualities HRP can be conducted to take the different HR decisions like:
required to perform the job effectively. It represents:  Optimum utilization of human resources by placing the right
Education number and right kind of man in their right place and right time.
Experience  Develop the existing employees according to the future changes.
Training (Ex: technological enhancement)
Initiative  Estimate the need of manpower in future.
Skills  Balance the demand and supply of manpower.
Knowledge
Emotional characteristics  Recruit and retain the right quality and right quantity of
Unusual sensory demands such as vision, smell, hearing etc manpower.
BENEFITS OF JOB ANALYSIS:  Arrange the employees for the strategic decisions of a business
Effective job analysis is a basis for all the other hr functions. Some of like expansion, diversification etc.,
them are:  Estimate the cost of human resources.
i. Employment – recruitment, selection, placement, orientation,
 Develop effective work culture and industrial relations.
performance appraisal
JOB EVALUATION:
ii. Organizational audit Job evaluation determines the worth or money value of a job.
iii. Training and development International Labour Organization defines job evaluation as “an attempt
iv. Performance appraisal to determine and compare which the normal performance of a particular
v. Promotion and transfer job makes on normal workers without taking into account the individual
vi. Grievance handling abilities or performance of the workers concerned” .
vii. Wages and salary administration Wandell L. French define job evaluation as “a process of determining the
viii. Industrial relations relative worth of a job within the organization, so that different wages
may be paid to jobs of different worth”.
HUMAN RESOURCE PLANNING/MANPOWER PLANNING:
HRP can be defined as a process through which an organization ensures OBJECTIVES OF JOB EVALUATION:
the available number and kind of personnel at right place and at right  To determine the hierarchy of jobs
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  To ranks or grade the jobs in the organization requirements, skills requirement, physical requirements,
 To ensure fair and equitable wages. responsibilities, working conditions and each factor can
METHODS OF JOB EVALUATION: be raked based on the job.
The techniques used to evaluate the jobs are categorized into two groups. SELECTION PROCESS:
i. Non-analytical methods/non –quantitative methods Selection of individual can takes place by analyzing the various aspects
ii. Analytical methods / quantitative methods like qualification, experience, skill, knowledge, capabilities, physical
i. Non analytical/non-quantitative methods: fitness, behavior and attitude of an individual. HR collects information
These are simple and crude techniques of job evaluation. Under about the applicants and short list them in different stages. The stages
this method the job will be considered as a single unit. It includes: include:
a) Ranking method: It is the simplest and most inexpensive i. Preliminary interview/ screening: The applications received
method. The evaluation committee assesses the job on the after recruitment can be filtered by eliminating the unqualified or
basis of its title or job content. Each job compared with unsuitable applications. In some cases the junior HR will take an
other job and its position can be determined. interview of applicants to match the fitness of applicants with
b) Job-grading method: Here the jobs are placed into respect to the job vacancy requirements, which is known as
different grades. A grade is a group of different jobs of preliminary interview. Generally this will takes place at end of
similar difficulty or similar skills and knowledge effective recruitment.
required. The skills, knowledge, responsibilities and ii. Selection test: once the applicants shortlisted in the preliminary
authorities of a job compared and placed in the respective interview they are tested with respect to different aspects
grades. depending upon the level of job and company selection policies.
Grade 1: Assistants Generally the test conducted to determine ability, aptitude and
Grade 2: officers personality of individuals. The test selected should be reliable,
Grade 3: Assistant managers valid, objective and standardized.
Grade 4: Deputy Managers
a. Ability test/ achievement test: It helps to determine the
Grade 5: Mangers
ii. Analytical methods/quantitative methods: Under this method efficiency of the applicant to fulfill duties and
the jobs are evaluated by dividing into different factors. These responsibilities of a job. This test can be conducted by
include:  Job knowledge test
a) Point-ranking method: This method involves selection  Work sample test
of job factors, construction of degrees for each factor and b. Aptitude test: This test assist to know the readiness of an
assignment of points to each degree. The job factors can applicant when training is provided. The general and
be selected based on the type of job. mental ability of an individual can be tested by different
b) Factor comparison method: Under this method a job aptitude tests.
can be classified into various factors such as metal
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  Intelligence test(IQ) – verbal, reasoning, word reactions and maturity characteristic mood. These can be
fluency, comprehension vocabulary, picture represented by self-confidence, emotional control,
arrangement, etc. optimism, decisiveness, sociability, conformity,
 Emotional Quotient (EQ): For some of the jobs objectivity, patience, fear, initiative, sympathy, stability.
emotional quotient is more important than  Thematic Apperception Test(TAT)
intelligence. The test used to measure emotional  Ink-Blot test
quotient include: iii. Employment interview: It is the most important step in the
Test Measure Related jobs selection process. Interview can be defined as the in depth and
Skill test Perfectness artistic, product design, oral examination of an applicant. Here the interviewer comparing
design of machine, tools the profile of the applicants, the observed results as a mean to the
etc job requirements. An interviewer can employ any one of the type
Mechanical Spatial skilled, mechanical
of interview.
Aptitude test visualization, employees, technicians
perceptual etc a. Formal interview
speed and b. Informal interview
knowledge of c. Structured interview
mechanical d. Unstructured interview
matters e. Stress interview
Psychomotor Test Manual Repetitive jobs, semi- f. Panel interview
dexterity, motor skilled workers
g. Situational interview
ability, eye-
hand The suitable interview should be selected by reducing the
coordination problems in the interview process.
Clerical aptitude Spelling, Office work. iv. Medical Examination: The physical fitness an individual effect
test computation, their work performance. Generally the physical qualities like
comprehension, vision, perfect hearing, unusual stamina, tolerance of
copying, word hardworking conditions, clear tone, dangerous diseases etc can
measuring be tested. The result of medical examination will be recorded in
c. Situation test: It measures the ability of an individual to the personal records of applicant. The results of medical
cope up with the various situations. examination help to assist whether the applicant is medically
 Group Discussion suitable to the specific job, health problems, psychological
 In basket attitude, physical measurements, physical capabilities of
d. Personality test: These tests prove deeply to discover applicant etc.
clues to an individual’s value system, his emotional

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Prepared by: M. Umrez, Dept of MBA, MLRIT, HYD
 v. Reference and background check: Once the applicant The contact of employment contains the details of the
shortlisted in the final interview and medical test he/she asked to employment like job title, duties and responsibilities of the job,
submit name and contact details of some references so that the date of appointment, working hours, compensation details,
holidays and leave policy, grievance procedure, promotion,
HR determine the accuracy of information provided by the
termination policies, appraisal policy, etc.
applicant. The reference check may include the academic ix. Evaluation of Selection programme: The effectiveness of
achievements, work experience, personal details etc. Generally selection can be decided based on the quality and committed
this can be done by making a call or e-mail. But in many of the personnel hired.
organizations the reference and background check does not given PERFORMANCE APPRAISAL:
more importance and some organizations simply omit this step. It is one of the step in the performance management process.
vi. Selection Decision: It is the most critical step in the selection Performance appraisal is a system used to measure or evaluate the
process, where the line and HR manager take the final decision performance of employees. Performance of an employee(appraise) can
about the acceptance or rejection of the applicant based on the be appraised by different individuals(appraiser) like supervisors,
results of above tests. The unsuitable applicant not only results in managers, subordinates, colleagues, peers, customers etc.
economical implications but also effects social and behavior of OBJECTIVES:
the others in the organization. The results of performance appraisal is used to take hr decisions like:
vii. Job offer: Once the applicant fulfils all the above stages  Promotion
successfully the hr issue a job offer letter to them. The job offer  Transfer
letter give the assurance to the appointee for the job/position in  Need of training
the organization and contains the date of reporting. If the  Compensating
appointee is already employed in some other organization then  Assess the employee performance
the date of reporting should be long enough to get the relieving  Develop the employee performance
from the previous employer and it should also consider the time PERFORMANCE APPRAISAL METHODS:
required for the appointee to relocate. After receiving the offer The performance of an employee can be evaluated by using various
techniques.
letter the appointee can express their opinion about the
i. Traditional methods:
acceptance of the job or request for the modification in the terms
a) Essay method
and conditions or they simply reject the job offer.
b) Check list method
viii. Contracts of Employment: Once the appointee accepts the job
c) Critical incident method
offer, based upon the agreed terms and conditions the employer
d) Paired comparison method
execute some employment documents such as attestation form
e) Confidential method
and contract of employment. The attestation form is used for the
ii. Modern methods:
further reference, which contains details of the appointee
a) 3600 appraisal
authenticated and attested by them.
b) Management By Objective (MBO)
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 c) Behaviorally Anchored Rating Scale (BARS) views and knowledge. This the knowledge can be gained
d) Ranking method through sharing.
e) HR accounting  Programmed Instructions (PI): The instructions to be
TRAINING METHODS: followed to fulfill the job can be given to the employees
Depending upon the availability of time, job and need of training in a printed form and the trainee follow those instructions.
organizations employ different methods of training from the following: PROMOTION:
i. On the job training methods: Under these methods the training Promotion represents the mobility of an employee from the lower level
can be provided by placing the trainee in their actual jobs for to the higher level with in the organization. This promotion may takes
which they hired. The various on the job methods include: place within the same department or to the other department or even to
 Job Instruction training (JIT): A knowledgeable or the other company (branch), which is termed as transfer cum promotion.
existing employee gives instructions to the new employee TRANSFER:
It is the mobility of an employee from one place to other place. Transfer
to do fulfill his/her job.
of employee may be between the departments or between the branches.
 Coaching: An expert act as a coach and guide the coachee Depending upon the performance of employee the transfer may become
(trainee) to do their jobs in a effective manner. appreciation to the employee or punishment.
 Job Rotation: The employee will be moved to a higher SEPARATION:
level job in the same or different department or company It represents the division of employee from the employer. The employee
for a period of time like 1hour in a day or 1day in a week, separation may be in different forms like resignation, retirement,
termination, death of employee, switching of an employee etc.
or 1week in a month etc and come back to his actual job
WAGES AND SALARY ADMINISTRATION:
again after the specific time period. Wages can be defined as the remuneration paid to the workers daily or
 Internship/apprenticeship: it is training programme hourly basis. Wages can be paid in two forms.
jointly sponsored by college, universities and industries  Piece based pay: Here the wages can be paid depending upon
to provide the practical knowledge to the students. the work done by the employee i.e no of pieces that the worker
ii. Off the job training: Here the trainee is separated from the actual produced.
work place and allowed only after completion of training.  Time based pay: In this system the wages can be decided based
 Lecture method: The expert give theoretical knowledge to on the time spent by the worker.
the trainees Salary is the remuneration paid to the clerical and managerial personnel
 Vestibule training: The work environment can be created employed on monthly or annual basis.
in the class room and knowledge about the materials, Minimum wages Act, 1948 regulates the wages and salary should be paid
to the employees.
equipment, tools, machines can be demonstrated.
 Conference method: This method possesses the
involvement of group of individuals with their ideas,

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Prepared by: M. Umrez, Dept of MBA, MLRIT, HYD