Definition and Functions of HRM
Definition and Functions of HRM
Definition and Functions of HRM
Organization has
three basic components, People, Purpose, and Structure. HRM is the study of activates
regarding people working in an organization. It is a managerial function that tries to match an
organization’s needs to the skills and abilities of its employees. Let’s see what is meant by
the three key terms… human, resource, and management.
• Human (Homo-sapiens – Social Animal)
• Resources (Human, Physical, Financial, Technical, Informational etc)
• Management (Function of Planning, Organizing, Leading & Controlling of organizational
resources to accomplish goals efficiently and effectively)
What is human resource management?
As we said that HRM is the management of people working in an organization, it is a subject
related to human. For simplicity, we can say that it is the management of humans or people.
HRM is a managerial function that tries to match an organization’s needs to the skills and
abilities of its employees. Human Resource Management is responsible for how people are
managed in the organizations. It is responsible for bringing people in organization helping
them perform their work, compensating them for their work and solving problems that arise.
Growing Importance of HRM
The success of organizations increasingly depends on people-embodied know-how- the
knowledge, skill, and abilities imbedded in an organization's members. This knowledge base
is the foundation of an organization' core competencies (integrated knowledge sets within an
organization that distinguish it from its competitors and deliver value to customers).
HRM plays important role in creating organizations and helping them survive. Our world is
an organizational world. We are surrounded by organizations and we participate in them as
members, employees, customers, and clients. Most of our life is spent in organization, and
they supply the goods and services on which we depend to live. Organizations on the other
hand depend on people, and without people, they would disappear.
Factors Contributing to the Growing Importance of HRM
a. Accommodation to workers' needs
Workers are demanding that organizations accommodate their personal needs by instituting
such programs as flexible work schedules, parental leave, child-care and elder-care
assistance, and job sharing. The human resource department plays a central role in
establishing and implementing policies designed to reduce the friction between organizational
demands and family responsibilities.
b. Increased complexity of the Manager’s job
Management has become an increasingly complex and demanding job for many reasons,
including foreign competition, new technology, expanding scientific information, and rapid
change. Therefore, organizations frequently ask human resource managers for assistance in
making strategic business decisions and in matching the distinctive competencies of the
firm's human resources to the mission of the organization. Executives need assistance from
the human resource department in matters of recruitment, performance evaluation,
compensation, and discipline.
c. Legislation
The enactment of state laws has contributed enormously to the proliferation and importance
of human resource functions. The record keeping and reporting requirements of the laws are
so extensive that to comply with them, many human resource departments must work
countless hours and often must hire additional staff. Four areas that have been influenced
most by legislation include equal employment, Compensation, safety, and labor relations. An
organization's failure to comply with laws regulating these areas can result in extremely
costly back-pay awards, class action suits, and penalties.
d. Consistency
Human resource policies help to maintain consistency and equity within an organization.
Consistency is particularly important in compensation and promotion decisions. When
managers make compensation decisions without consulting the human resource department
the salary structure tends to become very uneven and unfair promotion decisions also may be
handled unfairly when the HR department does not coordinate the decision of individual
manger.
e. Expertise
Now a days there exist sophisticated personnel activities that require special expertise. For
example, researchers have developed complex procedures for making employee-selection
decisions; statistical formulas that combine interviews, test scores, and application-blank
information have replaced the subjective interviews traditionally used in making selection
decisions. Similarly, many organizations have developed compensation systems with
elaborate benefits packages to replace simple hourly pay or piece rate incentive systems
f. Cost of Human Resource
Human resource activities have become increasingly important because of the high cost of
personal problem. The largest single expense in most organizations is labor cost, which is
often considerably higher than the necessary because of such problems as absenteeism
tardiness and discrimination.
Why are we concerned with HRM?
1. Helps you get results - through others.
Different managerial techniques help mangers to direct the performance of employees in
desirable direction in order to achieve the organizational objectives. Through the efforts of
others working in an organization, managers get things done that require effective human
resource management.
2. Helps you avoid common personnel mistakes
Qualified HR mangers utilize organization resources in such a way that helps to avoid
common personnel mistakes like the following…
a. Hiring the wrong person for the job
b. Experiencing high turnover
c. Finding employees not doing their best
d. Having your company taken to court because of your discriminatory actions
e. Having your company cited under federal occupational safety laws for unsafe practices
f. Allowing a lack of training to undermine your department’s effectiveness
g. Committing any unfair labor practices
3. Helps you to gain Competitive Advantage
Among all the resources possessed by the organizations it is only Manpower or the Human
resources that create the real difference. Because all organizations can have the same
technology, they can possess same type of financial resources, same sort of raw material can
be used to produce the goods and services but the organizational source that can really create
the difference is work force of the organization. Therefore they are the main sources of
innovation creativity in the organizations that can be used as a competitive advantage. In
today’s competitive environment, these are the people which can create competitive
advantageous for the organizations.
The world around us is changing. No longer can we consider our share of the “good Life”
given. If we are to maintain some semblance of that life, we as individual, as organizations,
as society will have to fight actively for it an increasingly competitive global environment. If
organizations are able to manage its work force efficiently/effectively this will be beneficial
for all stakeholders (Organization, Employees and Society).
Challenges/Issues of Managing Human Resources in present era
Following are the main issues that are faced by the mangers to manage the workforce of
today’s organization for achievement of objectives.
a. To Attract People
People will be interested to join any organization if it is providing them quality working
environment, attractive benefit and opportunities to excel in future. Keeping in view the
opportunities in the market, the first issues will be to attract good people for your
organization.
b. To Develop People
Development is related to provide the opportunities for training and development to match
the skills to job in particular areas. It requires careful need assessment for training and
selecting effective training methods and tools. After attracting/selecting, continuous
development of workforce of the organization leads towards development of the organization.
So that they will start playing their important role in the organization.
c. To Motivate
Motivation means to influence performance of others and to redirect the efforts in desirable
direction by using different motivational tools that can help in fulfilling the mission of
organization. Third important issues/concern will be to keep your workforce motivated so
that they should keep on delivering effectively.
Organization: High level of profitability, higher annual sales per employee, high
market value.
Employee: More employment security, more job opportunities, high wages.
Society: Elevating the standard of living, strengthening ethical guidelines.
d. To Keep Talented People
This is related to retention of workforce in organization and to take steps that can prevent
undesirable detachments of talented and motivated workers from the organization.
e. Technological factors: Just as necessity is the mother of invention competition and a host
of other reasons are responsible for the rapid technological changes and innovations. As a
consequence of these changes, technical personnel, skilled workers, computer operators and
machine operators are increasingly required while the demand for other categories of
employers has declined. Hence procurement of skilled employees and their increase in
numbers to match the changing job requirements has become a complicated task.
f. Changes in employee Roles and their Values: Earlier the management could totally
control its employees and get the desired output. Today the employees have to be considered
as a partner in the organization. Changing structure of workforce has led to the introduction
of new values in organization. Among these are moves 1) emphasis on quality of life rather
than quantity ii) equality and justice for employees over economic efficiency iii) participation
over authority. iv) Workers now prefer flexible working hours to fixed time schedule. v)
Level of education in recent years is comparatively very higher. Increased formal education
has led to the change of attitude of the employees.
g. Changing demands of employer: changes always are not on the side of employees.
Organizations also undergo changes and consequently their demands on employees will also
change. The information technological revolution and neck to neck marketing competition of
most of the organizations due to globalization demand that the existing employees adopt to
the ever-changing work situation and learn new skills, knowledge etc to cope with the new
changes.