HR POLICY AND

FUNCTIONS
Chapter 1

DEFINITION
Human resource management is the art of
managing human workforce in an organization
in an optimum manner which is beneficial to the
employee as well as the organization in achieving
the organizational goal.

EVOLUTION OF HRM

HISTORY
Human Resource Management Managing People
Deals with understanding the problems of the
people and their Management.
Royal Commission on Labour (1929) Govt of
India
Labour Officer (1931)
(employment,
Dismissal, working conditions, housing, medical,
recreational activities).

HISTORY (Cont)
Industrial Disputes Act (1946) and Factories Act (1947)
added policies of leave, wages, bonus & retirement (WO)

During 60s & 70s, growth in business, competition & increasing

size

attracting and retaining people

formulating policies on

Human Resource Planning, Recruitment and Selection, Training

and Development, Performance and potential appraisal, internal

mobility & compensation management (added to WOs function).

Welfare Officer

Personnel Manager

HR Manager

Reason for transition

(PM HR Manager)

Increasing labour cost

Periodic stoppage of work (strike)
Government legislation (law)
Changes in production and distribution methodologies
Information technology
Strategic use of employees contribution

DIFFERENCE BETWEEN
PM & HRM
PERSONNEL MANAGEMENT

HUMAN RESOURCE MANAGEMENT

Management of people

Management of employees knowledge,

attitudes, abilities, talents, creative abilities
and skills/competencies

Traditional, routine, maintenance-oriented,

administrative function

Continuous, on-going development function

aimed at improving human processes

Less important auxiliary function

(independent function with independent
sub-functions) cost centre

Strategic management function (systems

thinking approach) Profit centre

Reactive, responding to demands as and

when they arise

Proactive, anticipating, planning and

advancing continuously

Responsibility of the personnel department

Concern for all managers in the organization

and aims at developing the capabilities of all
line managers to carry out the human
resource related functions

DIFFERENCE BETWEEN
PM & HRM
PERSONNEL MANAGEMENT

HUMAN RESOURCE MANAGEMENT

Scope is narrow with a focus on

administering people

Views the organization as a whole and lays

emphasis on building a dynamic culture

Recruitment, selection and administration of

manpower

Satisfy the human needs of the people at

work that helps to motivate people to make
their best contribution

Motivators in PM are compensation,

rewards, job simplification and so on

Work groups, challenges and creativity on

the job as motivators

Employee is treated as an economic unit as

his services are exchanged for wages/salary

Employee in HRM is treated not only as

economic unit but also a social and
psychological entity

Treats employee as a commodity or a tool or

like equipment that can be bought and used

Employee is treated as a resource and as a

human being

Preserves information and maintains its

secrecy

Communication is one of its main tasks

(vertical, lateral and feedback type
communication)

DIFFERENCE BETWEEN
HRM & HRD
HUMAN RESOURCE MANAGEMENT

HUMAN RESOURCE DEVELOPMENT

Subset of the entire management processes

of an organization

Subset of HRM

Scope of HRM is wider

Scope of HRD as compared to HRM is

narrower

Emphasizes that employees, their abilities

and their attitudes -used effectively and
efficiently to achieve organizational as well
as employees' goals.

HRD emphasizes mainly on training and

development , career development,
counseling, updating latest technology,
mentorship and thus its employee skill
development

Takes care of all the human - to motivate to

achieve organizational goals

Focuses on upgrading the skills and

competencies -performance of the
employees on the job

Objectives of HRM
To help the organization reach its goals (through reconciliation of individual
goal with the Organisation)
To ensure effective utilization and maximum development of human
resources by respecting and satisfying their needs.
To achieve and maintain high morale among employees.

To provide the organization with well-trained and well-motivated employees

to increase their performance .
To increase to the fullest the employee's job satisfaction and self-actualization.

To develop and maintain a quality of work life.

To develop overall personality of each employee in its multidimensional
aspect.
To inculcate the sense of team spirit, team work and inter-team collaboration.

Scope of HRM
1. Personnel aspect - This is concerned with manpower
planning, recruitment, selection, placement, transfer, promotion, training
and development, layoff and retrenchment, remuneration, incentives,
productivity etc.
2. Welfare aspect - It deals with working conditions and amenities such as
canteens, creches, rest and lunch rooms, housing, transport, medical
assistance, education, health and safety, recreation facilities, etc.

3. Industrial relations aspect - This covers union-management relations,

joint consultation, collective bargaining, grievance and disciplinary
procedures, settlement of disputes, etc.

HRM Functions
Organizational
Behaviour

Personnel
Management

Industrial
relations &
Labour
Legislations

Organizational Behaviour
Focus on the behaviour of the employees (individual,
group and total organisation).

Motivation
Job satisfaction
Communication
Supervision
Inter and Intra group behaviour
Organisational Development
Structures and Designs

Personnel Management
Policy Formulation and Implementation on
Human Resource Planning
Recruitment and Selection
Training and Development
Performance and Potential Appraisal
Promotions
Transfers
Quality of Work Life
Compensation Management

Industrial Relations and Labour

Legislations

Union-Management Relationship
Union Structure
Collective Bargaining
Grievance Handling
Discipline Management
Implementaion of various Labour Legislations.

Categories of HR Functions
Line Functions

Staff Functions
(advisory Functions)

HR Department activities
(hiring and retaining employees)

HR Planning
Job Analysis
Recruitment and Selection
Induction training
Performance and Potential Appraisal
Internal mobility
Training and development
Compensation Management
Union Management
Motivational Schemes, etc.

Assisting other Managers in performing their

duties without creating human problems

Educate Managers on issues such as

Harassment
Conducing surveys on various issues
Employment of special group employees
helping in setting up compensation
packages
dealing with indiscipline
Others problems of managing Human
Resources
(ensures smooth flow of activities in the Orgn)

Hall Mark of HR Policies

Policies are designed Management of the people in the Orgn, ensure parity
and justice to all employees.
HR Policies are governed by Labour Laws.
Indian Constitution Promises social, economical and political justice and
equality to status and opportunity.
Articles of Indian Constitution that influence HR activities are

Article 16 (equality in education and employment)

Article 24 (Prohibition of Child Labour)
Article 39 (equal pay for equal work)
Article 43 (to provide living wages)
Article 43a (participation of workers in Management)

Roles of HR Manager
Business and Strategic Partner
Employee Advocate
Change Champion

Assessment Centre (Procedure not a location)

Employees are not contended by just having a job, but growth and individual
development is required.
It uses variety of techniques to evaluate the employees (promotions /
supervisory positions)
Use situational test to observe specific job behavior. (assessors do SWOT
analysis)
Elements required for an Assessment Centre: (IPMA International
Personnel Management Association)

Job analysis to determine attributes, skills, abilities, etc.

Multiple Assessment Technique must be used Job related Simulations
Multiple Assessors (thoroughly trained) must be used for each assessee
Systematic Procedure should be used to record observations
Assessors must prepare report (as discussion / using statistical techniques)

Benefits of Assessment Centre

Helps to identify supervisory / managerial potential early, provide
lead time for training before occupying new position
Identify T&D needs
Training to assessor, helps to know Organisation little better

Opportunity for the Orgn to review HRM Policies.

GSK started its assessment centre recently: (3 functions)
Selection of candidate and confirming their potential

Assist in Target development

Guides in career development

Assessment Tools (used by GSK)

Simulation
Structured interview

Presentation

Empowerment (USA 1970)

Redistribution of power in work setting (liberate the range of thought
and action)
Providing greater freedom and discretion to employees
Develop mutual trust
Liberal sharing of information
Become team player
A Major electronic company launched 2 programs to increase the
effectiveness of the supervisor.
Traditional competency training
Empowering (flexibility, access to resources, control
over working conditions)
Employee can be empowered after training and adding responsibility
and accountability. Eg. Reliance Industries Ltd.

Job Enrichment
(Hackman and Oldham 1975)
Job needs to satisfy the inner desire of actualization & satisfaction.
Providing discretion, flexibility and variety of job to increase the
employees willingness to contribute.
7 Characteristics:
Skill variety
Task variety
Task significance
Autonomy
Feedback from job
Feedback from others
Dealing with others

Parity and Justice

Fairness in the treatment of job.

According to the Preamble of Indian Constitution Sovereign,

Socialist, secular, democratic republic - promises social,
economic and political justice, liberty of thought, expression,
worship, equality of status, opportunity and dignity of individual.
(Article 14, 15, 16, 24, 39, 41, 43a).
HRM approach has to be
Flexible
Innovative
Constantly responding to the challenges of the environment

Downsizing / Rightsizing
Activities undertaken by the management to improve efficiency,
productivity and competitiveness of organisations by reducing the
workforce.
To workout the irreducible number of core employees required to
operate the system.
Large staff increase cost, inhibits speed, create road blocks in
responding to challenges , curtails innovation and creativity.
Smaller number of well trained employees + good infrastructure =
increase the effectiveness at work.

Reasons for Downsizing / Rightsizing

Mergers, acquisitions and sell off

To reduce labour cost and to enhance revenue (cutting down salary

/ wages bills)
Modernization and upgradation of technology, less manual work.

Multitasking
Eg: Tata Steel 78,276 (Jan 1994) reduced to 50,910 (Oct 2000)
under Early Seperation Scheme

Human Resource Information System

Defined as a composite of database, computer applications, hardware
and software that are used to collect, record, store, manage, deliver and
manipulate data for Human Resource Management.
Systematic way of sorting data and information for each employee, to aid
in planning, decision making and report generation.
Requirements of HRIS:
Duties and responsibilities of every job in the organisation
Skills possessed by every employee

Future human resource needs of the organisation

Current productivity of human resources
Identification of training needs