CHAPTER ONE

OVERVIEW OF HUMAN RESOURCE MANAGEMENT

INTRODUCTION

Organizations achieve their mission by having resources like Material, Information, Financial
and Human resources. These resources are usually called factors of production /operation or
inputs.

Input Process Output

Human resources (operations) goods or services

Financial resources

Material resources

Information resources

Human resource is all people who work in an organization. It is one of the most crucial and most
vital resources of any organization, because without human resource other resources are useless
and idle.

Generally, all organizations whether government or non-government, public or private, military

or religious depend up on human resources for their operations. The costs incurred on human
resources are investments which increase an income of the organization.

Human Resources Management is defined as management activities designed to provide for and
coordinate the human resources of organization.

Human resources management refers to the practices and policies needed to manage the people
at work.

Page 1 of 7
MAU management department
Human resource management (HRM) is concerned with the effective management and
utilization of human resources in organizations. For most organizations, human resources are
their greatest assets and the optimal utilization of these resources is the key to competitive
advantage in today's increasingly harsh economic environment. Moreover, because effective
human resource management is now so crucial for success, many organizations regard HRM as
the responsibility of all managers, not just specialists in personnel management, as was often the
case in the past. From a strategic point of view, HRM policies and activities are designed to
support and reinforce more general business strategies and objectives. At an operational level,
HRM is concerned with the design and implementation of procedures to optimize the day-to-day
management of people in organizations.

Therefore, Human Resource Management is one of Management disciplines that will equip
management students to get the necessary knowledge, skill and ability to manage human
resources.

MEANING AND DEFINITION

Human Resource Management is the process of recruitment, selection of employee, providing

proper orientation and induction, providing proper training and the developing skills, assessment
of employee (performance of appraisal), providing proper compensation and benefits,
motivating, maintaining proper relations with labor and with trade unions, maintaining
employee’s safety, welfare and health by complying with labor laws of concern state or country.

HRM is the process of achieving organizational objectives by anticipating, acquiring,

developing, retaining, and properly using the HRs in an Organization.

Edwin Flippo defines- HRM as “planning, organizing, directing, controlling of procurement,

development, compensation, integration, maintenance and separation of human resources to the
end that individual, organizational and social objectives are achieved.”

The National Institute of Personal Management (NIPM) of India has defined human resources
management as “that part of management which is concerned with people at work and with their
relationship within an enterprise. Its aim is to bring together and develop into an effective
organization of the men and women who make up enterprise and having regard for the well –

Page 2 of 7
MAU management department
being of the individuals and of working groups, to enable them to make their best contribution to
its success”.

Many great scholars had defined human resource management in different ways and with
different words, but the core meaning of the human resource management deals with how to
manage people or employees in the organization.

IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

Human resource management is important for various reasons. It is one of the most important
and most interesting courses in management. It is important because it deals with people and
people are:

 Very important but very difficult to manage

 All organizations of more than one person deal with people.
It is interesting because human nature is more complex and complicated than any other resource
in the organization.

Human Resource Management is related with effective utilization of human resources. The
importance of HRM can be discussed as:

1. Importance concerned with individual organization

Human Resource Management can help an organization to achieve to its objective more
efficiently and effectively in the following ways:

(a) Procurement of required talents through recruitment, selection, placement, inducting,

training, compensation and promotion policies.

(b) Secures co-operation of all employee of the organization for achieving goals.

(c) Proper utilization of human resources for the success of the enterprise.

(d) Ensure a future team of efficient and competent workers required for the organization.

2. Professional Importance

Page 3 of 7
MAU management department
Professional competency among employees can be achieved through the following ways.

(a) Human resource management provides maximum opportunities to employees for their
personnel development.

(b) Providing healthy relationship among employees

(c) Proper allocation of work among employees.

(d) Providing training facilities for the individual development of employees.

3. Social Importance

HRM is important in social perspective also. It includes the following aspects:

(a) Human resource management enhances the dignity of labor.

(b) Provides suitable job to suitable person and it will help to satisfy the psychological and social
satisfaction of employees.

(c) Helps to provide reasonable compensation to workers, which leads them to have a good
standard of living.

(d) Helps to maintain a balance between jobs and job seekers in terms of numbers, qualification,
aptitude (ability) etc.

(e) Takes health and safety measures which ensures physical and mental health of the employees.

4. National Importance

Effective management of human resources will speed up the economic growth of nation. This in
turn leads to better standard of living and more job opportunities.

OBJECTIVES OF HUMAN RESOURCE MANAGEMENT

Manager's and human resource department achieves their purpose by meeting objectives.
Objectives are benchmarks against which actions are evaluated. Human resource objectives
reflect the intention of senior management and must balance the challenges from the

Page 4 of 7
MAU management department
organization. Hence, objectives of HRM are based on Organizational, Personal and Societal
objectives.

1. Personal Objective

 Human resource management strives to satisfy the personal objectives of the members
of an organization through monetary (provision of fair and consistent pay scales) and
non-monetary (like provision of conducive work environment) devices.

 To assist employees in achieving their personal goals, at least in so far as these goals
enhance the individual’s contribution to the organization. This is necessary to maintain
employee performance & satisfaction for the purpose of maintaining, retaining &
motivating the employees in the organization.

2. Functional Objectives:

 To maintain department’s contribution & level of services at a level appropriate to the

organization’s needs.

3. Organizational Objective

 The goal of HRM is the creation of workforces that have proper ability and motivation
to accomplish the basic organizational objectives.

 To recognize the role of HRM in bringing about organizational effectiveness. HRM is

only means to achieve to assist the organization with its primary objectives.

4. Societal Objective

 To be ethically and socially responsible to the needs and challenges of the society
while minimizing the negative impact of such demands upon the organization.
 Human resource management relate to the satisfaction of social and community
objectives, such as

 serving the customers honestly,

 providing a higher standard of living in the community,

 bringing comfort and happiness to society,

 using resources to the society benefit,

Page 5 of 7
MAU management department
  Being responsive to the needs and challenges of the society, such as Equal
Employment Opportunity, employing the disadvantaged groups of the society, etc.).

EVOLUTION & DEVELOPMENT OF HRM

The origin of HRM is unknown. It viewed as a generic activity involving the management of
other people’s labor in production; HRM goes back to the dawn of human history. Certain HR
functions, even though informal in nature, were performed whenever people came together for a
common purpose. The buildings of ancient great structures including the great pyramids, rocky
hewn churches of Lalibela, the Axum Stele, the Great Wall of China etc. implies the HR
activities were performed in the past From 2000 B.C. up to 1500 B.C., the Chinese used
employee screening techniques, & the Greeks used an apprentice system. These actions of our
past recognized the need to select & train individuals for jobs constructing such a building &
monumental achievement, requires certain HR activities like;
• HR planning, HR selection, HR training, HR monitoring and HR decision-
making.
Before 1900, improving the working life of individuals was a major concern of reformers. Some
employees attempted to start unions or strike for improved conditions. However, HR
management as a specialized function in organizations began its formal emergence shortly before
1900. Before that time, most hiring, firing, training, and pay-adjustment decisions were made
by individual supervisors. Also, the scientific management studies conducted by Frederick W.
Taylor and others, beginning in 1885, helped management identify ways to make work more
efficient and less fatiguing, thus increasing worker productivity.
As organizations grew larger, many managerial functions such as purchasing and personnel
began to be performed by specialists. The growth of organizations also led to the establishment
of the first personnel departments about 1910. Work by individuals such as Frank and Lillian
Gilbreth dealt with task design and efficiency. The Hawthorne Studies, conducted by Elton
Mayo in the mid- 1920s, revealed the impact of work groups on individual workers. Ultimately,
these studies led to the development and use of employee counseling and testing in industry.
1930s TO 1950s In the 1930s, the passage of several major labor laws, such as the National
Labor Relations Act of 1935, led to the growth of unions. The importance of collective
bargaining and union/management relations following the labor unions’ rise to power in the

Page 6 of 7
MAU management department
1940s and 1950s expanded the responsibilities of the personnel area in many organizations,
especially those in manufacturing, utilities, and transportation. Such work as keeping payroll
and retirement records, arranging stockholder visits, managing school relations, and organizing
company picnics was often the major role of personnel departments. The role of the HR
department in the organization as a staff function to support operational (line) departments
expanded during this period, and line/staff issues grew to influence HR departments in the
following decades.
1960s TO 1980s Increased legal requirements and constraints arising from the social legislation
of the 1960s and 1970s forced dramatic changes in the HR departments of most organizations.
HR departments had to become much more professional and more concerned about the legal
ramifications of policies and practices. Also, organizations took a new look at employee
involvement and quality of work as a result of concerns about the impact of automation and job
design on worker productivity.
During the 1980s, the strategic role of HR management became essential as organizations
reduced staff, closed plants, or “restructured.” Out placing employees and retraining the rest
became prime concerns of HR departments. Containing the costs of health-care benefits also
grew in importance.
1990s During the 1990s, organizational restructuring continued. A study of HR executives
involved in reengineering the HR management in their companies found that the traditional HR
function began shifting its emphases. The HR managers of the future will need to be more
strategic and proactive.
Changing demographics and increasing shortages of workers with the needed capabilities have
grown in importance. Related to the demographic shifts, HR management has had to address the
issues and implications of workforce diversity. Both the outsourcing of HR activities and the
computerization of the administrative aspects of HR activities, even in small firms, have received
attention as well. Finally, growth in issues involving employee rights, such as drug testing and
smoking restrictions, are affecting how HR activities are managed.

Page 7 of 7
MAU management department