Unit 1 Topic: Intoduction to HRM, B.Com Hons., VIth Sem, DU - B Com PDF Download

 Page 1


Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  1 
 
 
 
 
 
 
 
 
 
 
 
NME (COMMERCE) 
Human Resource Management 
Lesson:  Introduction to Human Resource Management 
Lesson Developer: Dr. R K Singh
1
, Geetanjali Batra
2
 
College/ Department:
1
Deputy Dean Academic Activities 
and Projects, 
2
A R S D College, University of Delhi 
 
 
 
  
Page 2


Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  1 
 
 
 
 
 
 
 
 
 
 
 
NME (COMMERCE) 
Human Resource Management 
Lesson:  Introduction to Human Resource Management 
Lesson Developer: Dr. R K Singh
1
, Geetanjali Batra
2
 
College/ Department:
1
Deputy Dean Academic Activities 
and Projects, 
2
A R S D College, University of Delhi 
 
 
 
  
Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  2 
 
Lesson: Introduction to Human Resources Management 
Table of Contents: 
1. Learning Outcomes 
2. Introduction 
3. Human Resource Management:  
 3.1 Meaning and Concept 
 3.2 Relevance and Spectrum 
 3.3 Role of HR Manager 
 3.4 skills and Competencies of HR Manager 
4.  Human Resources Development: Definition, Goals and Challenges 
5. The Changing Environment of HRM 
 5.1 Globalisation,  
 5.2 Cultural Environment, 
 5.3 Technological Advances 
6. Challenges of HR Manager 
 6.1 Workforce Diversity, 
 6.2 Employee Empowerment,  
 6.3  Trade Unionism 
 6.4 Technological Changes,  
 6.5 Corporate Downsizing,  
 6.6 Voluntary Retirement Scheme,  
 6.7 Work life Balance 
 6.8 Improvement Programs 
7. HR Role in Strategy Formulation and Gaining Competitive Advantage 
Case study 
Summary 
Exercises 
Glossary 
References 
 
1. Learning Outcomes: 
After reading this lesson you should be able to: 
? understand meaning of human resource management; 
? appreciate the role of hr manager in an organization; 
? list the skills and competencies required by hr manager; 
? challenges faced by hr manager due to environmental dynamics; 
? differentiate between HRM and HRD. 
 
 
2. Introduction: 
In the information age, technology has acted as great equalizer for organizations. In 
order to be different and create competitive edge organizations rely on most important 
resource that is human resources (HR). In order words the key competitive element for 
an  organization is  human resource. This renewable resource has capacity to leverage  
knowledge, skills and ability to learn new trends and work collaboratively towards 
organizational goals. Recognizing the importance of HR function, organizations keep a 
separate HR department. This undertakes all HR related managerial functions about 
Page 3


Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  1 
 
 
 
 
 
 
 
 
 
 
 
NME (COMMERCE) 
Human Resource Management 
Lesson:  Introduction to Human Resource Management 
Lesson Developer: Dr. R K Singh
1
, Geetanjali Batra
2
 
College/ Department:
1
Deputy Dean Academic Activities 
and Projects, 
2
A R S D College, University of Delhi 
 
 
 
  
Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  2 
 
Lesson: Introduction to Human Resources Management 
Table of Contents: 
1. Learning Outcomes 
2. Introduction 
3. Human Resource Management:  
 3.1 Meaning and Concept 
 3.2 Relevance and Spectrum 
 3.3 Role of HR Manager 
 3.4 skills and Competencies of HR Manager 
4.  Human Resources Development: Definition, Goals and Challenges 
5. The Changing Environment of HRM 
 5.1 Globalisation,  
 5.2 Cultural Environment, 
 5.3 Technological Advances 
6. Challenges of HR Manager 
 6.1 Workforce Diversity, 
 6.2 Employee Empowerment,  
 6.3  Trade Unionism 
 6.4 Technological Changes,  
 6.5 Corporate Downsizing,  
 6.6 Voluntary Retirement Scheme,  
 6.7 Work life Balance 
 6.8 Improvement Programs 
7. HR Role in Strategy Formulation and Gaining Competitive Advantage 
Case study 
Summary 
Exercises 
Glossary 
References 
 
1. Learning Outcomes: 
After reading this lesson you should be able to: 
? understand meaning of human resource management; 
? appreciate the role of hr manager in an organization; 
? list the skills and competencies required by hr manager; 
? challenges faced by hr manager due to environmental dynamics; 
? differentiate between HRM and HRD. 
 
 
2. Introduction: 
In the information age, technology has acted as great equalizer for organizations. In 
order to be different and create competitive edge organizations rely on most important 
resource that is human resources (HR). In order words the key competitive element for 
an  organization is  human resource. This renewable resource has capacity to leverage  
knowledge, skills and ability to learn new trends and work collaboratively towards 
organizational goals. Recognizing the importance of HR function, organizations keep a 
separate HR department. This undertakes all HR related managerial functions about 
Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  3 
 
which you will come to know in detail in ensuing paragraphs. Generally speaking it helps 
procuring and maintaining employees with right skills sets matching organizational 
needs. 
3. Human Resource Management: 
3.1. Meaning and Concept: 
Let us start with the very notion of HR. What makes HR?  The people in the organization 
who form the workforce are called HR. As mentioned above this resource has capability 
to get renewed or recharged that is why acknowledged as most valuable assets of the 
organization. This precious asset needs special managerial attention in the organization. 
This attention is given by Human Resources Management (HRM) which is one of the 
functional areas of management. HRM may be defined as a discipline that studies various 
aspects of workforce in an organisation or as a function of business that manages the 
people in an organization. 
For the sake of convenience study of HRM is clubbed under two broad headings i.e. Hard 
and Soft.  The 'Hard' HRM emphasizes the costs of human resources and places the 
control in the hands of management. Management’s role is to administer the workforce 
effectively and keep them closely coordinated with organisational requirements in terms 
of both numbers and conduct. On the other hand, 'Soft' HRM highlights the 'human' 
aspects of HRM. It involves leading rather than managing the people with the help of 
communication and motivation.  
In order to take the discussion forward let us look at two popular approaches of HRM, 
the Harvard and Michigan. 
Harward and Michigan Model of HRM: 
The Harvard model views employees as resources who are fundamentally different from 
other resources and cannot be managed in the same way. The stress is on the human 
element. Employees are the important stakeholders in an organization and have their 
own needs and concerns along with other stakeholder groups such as shareholders and 
customers. 
The soft Harvard model outlines four decision areas of HRM: 
1. Human Resource Flows: It involves recruitment, selection, orientation, placement, 
appraisal, promotion, and termination. 
2. Reward systems: It is concerned with remuneration systems, bonus, and incentives 
to keep them motivated. 
3. Employee influence: The way authority is delegated, distribution of power, 
responsibility and accountability. 
4. Work Systems – It refers to definition and design of work and arrangement of 
people. 
This model proposes that effective HR decisions would bring ‘FOUR Cs’ to the 
organization like: 
? Commitment: Psychological bonding between people and work achieving resultants 
as reduced absenteeism, less grievances, loyalty towards the organisation, better 
performance, enhanced self-worth. 
? Congruence: alignment of objectives across the organization with appropriate 
sharing between employees and management building high level of trust.  
Page 4


Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  1 
 
 
 
 
 
 
 
 
 
 
 
NME (COMMERCE) 
Human Resource Management 
Lesson:  Introduction to Human Resource Management 
Lesson Developer: Dr. R K Singh
1
, Geetanjali Batra
2
 
College/ Department:
1
Deputy Dean Academic Activities 
and Projects, 
2
A R S D College, University of Delhi 
 
 
 
  
Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  2 
 
Lesson: Introduction to Human Resources Management 
Table of Contents: 
1. Learning Outcomes 
2. Introduction 
3. Human Resource Management:  
 3.1 Meaning and Concept 
 3.2 Relevance and Spectrum 
 3.3 Role of HR Manager 
 3.4 skills and Competencies of HR Manager 
4.  Human Resources Development: Definition, Goals and Challenges 
5. The Changing Environment of HRM 
 5.1 Globalisation,  
 5.2 Cultural Environment, 
 5.3 Technological Advances 
6. Challenges of HR Manager 
 6.1 Workforce Diversity, 
 6.2 Employee Empowerment,  
 6.3  Trade Unionism 
 6.4 Technological Changes,  
 6.5 Corporate Downsizing,  
 6.6 Voluntary Retirement Scheme,  
 6.7 Work life Balance 
 6.8 Improvement Programs 
7. HR Role in Strategy Formulation and Gaining Competitive Advantage 
Case study 
Summary 
Exercises 
Glossary 
References 
 
1. Learning Outcomes: 
After reading this lesson you should be able to: 
? understand meaning of human resource management; 
? appreciate the role of hr manager in an organization; 
? list the skills and competencies required by hr manager; 
? challenges faced by hr manager due to environmental dynamics; 
? differentiate between HRM and HRD. 
 
 
2. Introduction: 
In the information age, technology has acted as great equalizer for organizations. In 
order to be different and create competitive edge organizations rely on most important 
resource that is human resources (HR). In order words the key competitive element for 
an  organization is  human resource. This renewable resource has capacity to leverage  
knowledge, skills and ability to learn new trends and work collaboratively towards 
organizational goals. Recognizing the importance of HR function, organizations keep a 
separate HR department. This undertakes all HR related managerial functions about 
Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  3 
 
which you will come to know in detail in ensuing paragraphs. Generally speaking it helps 
procuring and maintaining employees with right skills sets matching organizational 
needs. 
3. Human Resource Management: 
3.1. Meaning and Concept: 
Let us start with the very notion of HR. What makes HR?  The people in the organization 
who form the workforce are called HR. As mentioned above this resource has capability 
to get renewed or recharged that is why acknowledged as most valuable assets of the 
organization. This precious asset needs special managerial attention in the organization. 
This attention is given by Human Resources Management (HRM) which is one of the 
functional areas of management. HRM may be defined as a discipline that studies various 
aspects of workforce in an organisation or as a function of business that manages the 
people in an organization. 
For the sake of convenience study of HRM is clubbed under two broad headings i.e. Hard 
and Soft.  The 'Hard' HRM emphasizes the costs of human resources and places the 
control in the hands of management. Management’s role is to administer the workforce 
effectively and keep them closely coordinated with organisational requirements in terms 
of both numbers and conduct. On the other hand, 'Soft' HRM highlights the 'human' 
aspects of HRM. It involves leading rather than managing the people with the help of 
communication and motivation.  
In order to take the discussion forward let us look at two popular approaches of HRM, 
the Harvard and Michigan. 
Harward and Michigan Model of HRM: 
The Harvard model views employees as resources who are fundamentally different from 
other resources and cannot be managed in the same way. The stress is on the human 
element. Employees are the important stakeholders in an organization and have their 
own needs and concerns along with other stakeholder groups such as shareholders and 
customers. 
The soft Harvard model outlines four decision areas of HRM: 
1. Human Resource Flows: It involves recruitment, selection, orientation, placement, 
appraisal, promotion, and termination. 
2. Reward systems: It is concerned with remuneration systems, bonus, and incentives 
to keep them motivated. 
3. Employee influence: The way authority is delegated, distribution of power, 
responsibility and accountability. 
4. Work Systems – It refers to definition and design of work and arrangement of 
people. 
This model proposes that effective HR decisions would bring ‘FOUR Cs’ to the 
organization like: 
? Commitment: Psychological bonding between people and work achieving resultants 
as reduced absenteeism, less grievances, loyalty towards the organisation, better 
performance, enhanced self-worth. 
? Congruence: alignment of objectives across the organization with appropriate 
sharing between employees and management building high level of trust.  
Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  4 
 
? Competence: HR policies to attract employees retain them and develop their skills 
benefiting organisation benefits with improved self-worth and economic well-being of 
employees. 
? Cost Effectiveness: effectiveness in economic operations in the organization with 
appropriate wages, salaries and other incentives to employees with minimization or 
avoidance of loss of revenue due to strikes and lockouts, etc. 
The Michigan model has a harder, less humanistic approach to HRM. It holds that 
employees are resources like any other business resource and have to be managed 
similar to equipment and raw materials. They must be obtained at lowest possible cost 
and developed and exploited to the maximum. It is also known as the 'matching model' 
or 'best-fit' approach to HRM as it requires that human resource strategies should be 
closely synchronized to the overall strategies of the business.  
 
3.2: Relevance and Spectrum of HRM: 
By now it is established that Human Resource Management is very important function of 
the organization that enables the organization not only to get work done rather to have 
an edge over others.  It involves managing all aspects of the work force in an 
organisation. It aims to provide an optimal work environment to the employees so that 
their skills are fully utilized to achieve organizational goals. It entails recruitment, 
selection, performance appraisal, compensation and development of employees, etc. 
 
3.3: Role of HRM 
For sake of convenience HRM roles are categorized as follows:  
 
? Advice Related to Policy Development: 
 
HRM provides details regarding incentive plans used by competitors, opinion of 
employees, information about complaints of customers, pending legislation etc. Unique 
capabilities of HR personnel act as a driving force in strategy formulation. 
 
? Role in Strategy Implementation: 
 
HRM provide competent workforce to execute strategies of the organization.  This 
improves overall organisational competitiveness. 
 
? Employment and Staff Services: 
 
HRM contributes to the strategic organizational issues like selection, recruitment, 
promotion, training and development, improvement in quality of work life, payment of 
salaries, leave, conditions of service and job classification superannuation etc. 
 
? General Employee Administration and Monitoring: 
The HRM ensures healthy, safe and productive work environment. It helps in 
management of change, team development, introduction of new technology and shares 
responsibility with management for the day to day running of the business etc. It 
Page 5


Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  1 
 
 
 
 
 
 
 
 
 
 
 
NME (COMMERCE) 
Human Resource Management 
Lesson:  Introduction to Human Resource Management 
Lesson Developer: Dr. R K Singh
1
, Geetanjali Batra
2
 
College/ Department:
1
Deputy Dean Academic Activities 
and Projects, 
2
A R S D College, University of Delhi 
 
 
 
  
Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  2 
 
Lesson: Introduction to Human Resources Management 
Table of Contents: 
1. Learning Outcomes 
2. Introduction 
3. Human Resource Management:  
 3.1 Meaning and Concept 
 3.2 Relevance and Spectrum 
 3.3 Role of HR Manager 
 3.4 skills and Competencies of HR Manager 
4.  Human Resources Development: Definition, Goals and Challenges 
5. The Changing Environment of HRM 
 5.1 Globalisation,  
 5.2 Cultural Environment, 
 5.3 Technological Advances 
6. Challenges of HR Manager 
 6.1 Workforce Diversity, 
 6.2 Employee Empowerment,  
 6.3  Trade Unionism 
 6.4 Technological Changes,  
 6.5 Corporate Downsizing,  
 6.6 Voluntary Retirement Scheme,  
 6.7 Work life Balance 
 6.8 Improvement Programs 
7. HR Role in Strategy Formulation and Gaining Competitive Advantage 
Case study 
Summary 
Exercises 
Glossary 
References 
 
1. Learning Outcomes: 
After reading this lesson you should be able to: 
? understand meaning of human resource management; 
? appreciate the role of hr manager in an organization; 
? list the skills and competencies required by hr manager; 
? challenges faced by hr manager due to environmental dynamics; 
? differentiate between HRM and HRD. 
 
 
2. Introduction: 
In the information age, technology has acted as great equalizer for organizations. In 
order to be different and create competitive edge organizations rely on most important 
resource that is human resources (HR). In order words the key competitive element for 
an  organization is  human resource. This renewable resource has capacity to leverage  
knowledge, skills and ability to learn new trends and work collaboratively towards 
organizational goals. Recognizing the importance of HR function, organizations keep a 
separate HR department. This undertakes all HR related managerial functions about 
Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  3 
 
which you will come to know in detail in ensuing paragraphs. Generally speaking it helps 
procuring and maintaining employees with right skills sets matching organizational 
needs. 
3. Human Resource Management: 
3.1. Meaning and Concept: 
Let us start with the very notion of HR. What makes HR?  The people in the organization 
who form the workforce are called HR. As mentioned above this resource has capability 
to get renewed or recharged that is why acknowledged as most valuable assets of the 
organization. This precious asset needs special managerial attention in the organization. 
This attention is given by Human Resources Management (HRM) which is one of the 
functional areas of management. HRM may be defined as a discipline that studies various 
aspects of workforce in an organisation or as a function of business that manages the 
people in an organization. 
For the sake of convenience study of HRM is clubbed under two broad headings i.e. Hard 
and Soft.  The 'Hard' HRM emphasizes the costs of human resources and places the 
control in the hands of management. Management’s role is to administer the workforce 
effectively and keep them closely coordinated with organisational requirements in terms 
of both numbers and conduct. On the other hand, 'Soft' HRM highlights the 'human' 
aspects of HRM. It involves leading rather than managing the people with the help of 
communication and motivation.  
In order to take the discussion forward let us look at two popular approaches of HRM, 
the Harvard and Michigan. 
Harward and Michigan Model of HRM: 
The Harvard model views employees as resources who are fundamentally different from 
other resources and cannot be managed in the same way. The stress is on the human 
element. Employees are the important stakeholders in an organization and have their 
own needs and concerns along with other stakeholder groups such as shareholders and 
customers. 
The soft Harvard model outlines four decision areas of HRM: 
1. Human Resource Flows: It involves recruitment, selection, orientation, placement, 
appraisal, promotion, and termination. 
2. Reward systems: It is concerned with remuneration systems, bonus, and incentives 
to keep them motivated. 
3. Employee influence: The way authority is delegated, distribution of power, 
responsibility and accountability. 
4. Work Systems – It refers to definition and design of work and arrangement of 
people. 
This model proposes that effective HR decisions would bring ‘FOUR Cs’ to the 
organization like: 
? Commitment: Psychological bonding between people and work achieving resultants 
as reduced absenteeism, less grievances, loyalty towards the organisation, better 
performance, enhanced self-worth. 
? Congruence: alignment of objectives across the organization with appropriate 
sharing between employees and management building high level of trust.  
Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  4 
 
? Competence: HR policies to attract employees retain them and develop their skills 
benefiting organisation benefits with improved self-worth and economic well-being of 
employees. 
? Cost Effectiveness: effectiveness in economic operations in the organization with 
appropriate wages, salaries and other incentives to employees with minimization or 
avoidance of loss of revenue due to strikes and lockouts, etc. 
The Michigan model has a harder, less humanistic approach to HRM. It holds that 
employees are resources like any other business resource and have to be managed 
similar to equipment and raw materials. They must be obtained at lowest possible cost 
and developed and exploited to the maximum. It is also known as the 'matching model' 
or 'best-fit' approach to HRM as it requires that human resource strategies should be 
closely synchronized to the overall strategies of the business.  
 
3.2: Relevance and Spectrum of HRM: 
By now it is established that Human Resource Management is very important function of 
the organization that enables the organization not only to get work done rather to have 
an edge over others.  It involves managing all aspects of the work force in an 
organisation. It aims to provide an optimal work environment to the employees so that 
their skills are fully utilized to achieve organizational goals. It entails recruitment, 
selection, performance appraisal, compensation and development of employees, etc. 
 
3.3: Role of HRM 
For sake of convenience HRM roles are categorized as follows:  
 
? Advice Related to Policy Development: 
 
HRM provides details regarding incentive plans used by competitors, opinion of 
employees, information about complaints of customers, pending legislation etc. Unique 
capabilities of HR personnel act as a driving force in strategy formulation. 
 
? Role in Strategy Implementation: 
 
HRM provide competent workforce to execute strategies of the organization.  This 
improves overall organisational competitiveness. 
 
? Employment and Staff Services: 
 
HRM contributes to the strategic organizational issues like selection, recruitment, 
promotion, training and development, improvement in quality of work life, payment of 
salaries, leave, conditions of service and job classification superannuation etc. 
 
? General Employee Administration and Monitoring: 
The HRM ensures healthy, safe and productive work environment. It helps in 
management of change, team development, introduction of new technology and shares 
responsibility with management for the day to day running of the business etc. It 
Introduction to Human Resource Management 
 Institute of Life Long Learning, University of Delhi  5 
 
manages conflict between personal and organizational goals to have a conducive and 
collaborative work environment. 
 
? Compensation and Benefits Analysis:  
 
The HRM ensures fair wage for employees in accordance with services rendered by them. 
In other words HRM deals with issues pertaining to remuneration of employees in 
relation to their job and performance.  
 
? Training and Development: 
 
HRM identifies areas for improvement in HR to have better organizational performance 
and growth and development of the employee.  
? Feedback and Reporting:  
HRM provides information to decision-makers on matters relating to the needs and 
performance of employees. 
 
 
Figure 1: Role of HR 
 
 
 
 
 
 
 
Role 
of HR
Advice related 
to policy 
development
Strategy 
Implementation
Employment 
and staff 
services
General 
Employee 
Administration 
and monitoring
Compensation 
and benefits 
Analysis
Training and 
Development
Feedback and 
reporting