Human Resource Management(HRM)

Definition of Human Resource Management (HRM)HRM is central to management teaching and research and has emerged in the last decade as a significant field from its earlier roots in personnel management, industrial relations, and industrial psychology.

People management and high-performance teams have become key functions and goals for managers at all levels in organizations.

Management and human resources management are one and the same.

They should never be separated. Management is personnel administration. Management has three jobs, two of which are directly related to personnel-managing a business, managing managers and managing workers and work.

The word management has three syllables- Manage-Men-T. If T is taken for tact, then etymologically management means how to manage men with tact. A man manages many men tactfully.

Definition of Human Resource Management (HRM)

There exist many definitions of human resource management (HRM).HR experts define HRM from different perspectives.

Few important definitions are presented below:

  • Mary Parker Follett has rightly defined management as a process of efficiently getting things done with and through other people. It means that management is nothing but managing people at work. The staffing function of management is known as HRM.
  • HRM deals with the design of formal systems in an organization to ensure the effective and efficient use of human talents to accomplish organizational goals (Mathis and Jackson, 2005).
  • Dessler (2003) defines HRM as a process of acquiring, training, appraising, and compensating employees, and attending to their labor relations, health and safety, and fairness concerns.
  • One of the well-known definitions was offered by Michael Jucious (1984). He defined human resources management or personnel management “as the field of management involves planning, organizing, directing, and controlling the functions of procuring, developing, maintaining and motivating a labor force”.
  • According to Flippo (1980), HRM is “planning, organizing, directing and controlling of the procurement, development, compensation, integration, maintenance, and separation of human resources to the end that individual, organizational and societal objectives are accomplished”.
  • John Storey (1995), states that HRM is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly a committed and capable workforce, using an integrated array of cultural, structural and personal techniques.
  • According to Gary Dessler, “Human resource management is the process of acquiring, training, appraising and compensating employees and of attending to their labor relations, health & safety and fairness concerns. ”
  • “Human resource management is the set of organizational activities directed at attracting, developing and maintaining an effective workforce ”, – Ricky W. Griffin
  • “Human resource management involves the acquisition, retention, and development of human resources necessary for organizational success”. – Robert Kreitner
  • “Human resource management deals with recruitment, placement, training, and development of organization members”. – James A. F. Stoner
  • Byars and Rue said, “Human resource management encompasses those activities designed to provide for and coordinate the human resources of the organization. ”

Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.

The acquisition function begins with human resource planning. It includes the job analysis, recruitment, selection and socialization of employees. The development function includes employee training, management development, and career development.

As jobs evolve and change, ongoing retraining is necessary to accommodate technological changes.

The motivation function begins with the recognition that individuals are unique and the motivational techniques (job satisfaction, employee performance appraisal, and compensation) must reflect the needs of each individual.

The maintenance function is concerned with providing those working conditions in order to maintain the commitment of employees to the organization. The relationship between managers and employees must be handled effectively if both the employees and the organization are to prosper together.

HRM pervades the organization.

Every person in an organization is involved with personnel decisions. The responsibility for human resource management activities rests with each manager.

If managers throughout the organization do not accept their responsibility, then human resources activities may be done only partially or not at all. It is concerned with managing people at work. It covers all types of personnel.

It is a continuous function.

HRM draws on a number of related disciplines, such as Industrial Psychology, Sociology, Social Psychology, Anthropology, and Economics.

HRM is the field of management, which plans, organizes, controls the functions of procurement, development, maintenance, and utilization of the workforce so that the goals of the individual employee, organization and society can be accomplished. Human resource management can be concluded as a business-oriented philosophy concerned with the management of people in order to obtain added value from them and achieve competitive advantage.

Features of Human Resource Management

HRM is regarded as a subsystem of the organization. It is an emerging discipline. HRM as a discipline has a few important features.

Experts have reviewed a lot of articles on HRM and identified a few major features of HRM.

  1. HRM is an art and a science.
  2. HRM is pervasive.
  3. HRM is a process.
  4. HRM is a continuous process.
  5. HRM is a service function.
  6. HRM must be regulation-friendly.
  7. HRM is Interdisciplinary and fast changing.
  8. HRM is Focused on results.
  9. HRM is People-centered.
  10. Human Relations Philosophy.
  11. HRM is an Integrated Concept.
  12. HRM Develops Team Spirit.

Features of Human Resource Management (HRM)

HRM is an art and a science

The art and science of HRM are indeed very complex.

HRM is both the art of managing people by recourse to creative and innovative approaches; it is a science as well because of the precision and rigorous application of theory that is required.

HRM is pervasive

HRM has universal application. That is, it can be used for business as well as for other organizations such as schools, colleges, hospital, religious organizations, etc.

Development of HRM covers all levels and all categories of people, and management and operational staff. It is pervasive also because it is required in every department of the organization. All kinds of organizations, profit or non-profit making, have to follow HRM.

HRM is a process

HRM is a process involving four important functions like acquisition, development, motivation, and maintenance of

HRM is a continuous process

HRM is not a one-time process. It is a continuous process. It has to continuously change and adjust according to the changes in the environment, and changes in the expectations of the staff, etc. HRM has to give continuous training and development to the staff due to changes in technology.

HRM is a service function

HRM is not a profit center. It serves all other functional departments. But the basic responsibility always lies with the line managers. HRM is a staff function – a facilitator.

The HR Manager has line authority only within his own department but has staff authority as far as other departments are concerned.

HRM must be regulation-friendly.

The HRM function has to be discharged in a manner that legal dictates are not violated.

HRM is Interdisciplinary and fast changing

It is about welfare, manpower, personnel management, and keeps close association with the employee and industrial relations. It is a multidisciplinary activity utilizing knowledge and inputs from psychology, sociology, economics, etc.

HRM is Focused on results

HRM is performance oriented. It has its focus on results, rather than on rules. It encourages people to give their 100%. It tries to secure the best from people by winning the wholehearted cooperation.

HRM is People-centered

HRM is about people at work both as individuals and a group. It tries to help employees to develop their potential fully.

It comprises people-related functions like hiring, training, and development, performance appraisal, working environment, etc. HRM has the responsibility of building human capital.

People are vital for achieving organizational goals. Organizational performance depends on the quality of people and employees.

Human Relations Philosophy

HRM is a philosophy and the basic assumption is that employees are human beings and not a factor of production like land, labor or capital. HRM recognizes individuality and individual differences.

HRM is an Integrated Concept

HRM in its scope includes personnel aspect, welfare aspect, and industrial relations aspect in itself. It is also integrated as it concerns with not only acquisition, but also development, utilization, and maintenance.

HRM Develops Team Spirit

HRM tries to develop the team spirit of the full organization. Team spirit helps the staff to work together in achieving the objectives of the organization. Nowadays more importance is given to teamwork and not to individuals.

Importance of Human Resource Management

An organization cannot build a good team of working professionals without good Human Resources.

The key functions of the Human Resources Management (HRM) are included recruiting people, training them, performance appraisals, motivating employees as well as workplace communication, workplace safety, and much more.

  1. Recruitment.
  2. Performance Appraisals.
  3. Maintaining Work Atmosphere.
  4. Budget Control.
  5. Conflict Resolution.
  6. Training and Development.
  7. Employee Satisfaction.
  8. Cost Savings.
  9. Performance Improvement.
  10. Sustaining Business.
  11. Corporate Image.


This is one of the major responsibilities of the human resource team. The HR managers come up with plans and strategies for hiring the right kind of people.

They design the criteria which are best suited for a specific job description.

Performance Appraisals

HRM encourages the people working in an organization, to work according to their potential and gives them suggestions that can help them to bring about improvement in it.

The team communicates with the staff individually from time to time and provides all the necessary information regarding their performances and also defines their respective roles. Performance appraisals, when taken on a regular basis, it motivates the employees.

Maintaining Work Atmosphere

This is a vital aspect of HRM because the performance of an individual in an organization is largely driven by the work atmosphere or work culture that prevails at the workplace.

A good working condition is one of the benefits that the employees can expect from an efficient human resource team. A safe, clean and healthy environment can bring out the best in an employee. A friendly atmosphere gives the staff members’ job satisfaction as well.

Budget Control

Human resources curb excessive spending through developing methods for training workforce management costs, which includes negotiating better rates for benefits such as health care coverage.

In addition, human resources ensure competitive and realistic wage-setting based on studying the labor market, employment trends and salary analysis based on job functions.

As some small businesses have budget constraints, this human resources function is especially helpful.

Conflict Resolution

Workplace conflict is inevitable, given the diversity of personalities, work styles, backgrounds and levels of experience among employees.

A human resources manager or a staff person specially trained to handle employee relations matters can identify and resolve the conflict between two employees or a manager and employee and restore positive working relationships.

Training and Development

Human resources conduct needs assessments for the organization’s current workforce to determine the type of skills training and employee development necessary for improving skills and qualifications.

Companies in the beginning or growth phases can benefit from identifying training needs for existing staff. It’s much less expensive than the cost to hire additional staff or more qualified candidates.

In addition, it’s a strategy that also can reduce turnover and improve employee retention.

Employee Satisfaction

Human resources specialists usually are charged with the responsibility of determining the level of employee satisfaction — often an ambiguous measurement at best.

With carefully designed employee surveys, focus groups and an exit interview strategy, human resources determines what underlies employee dissatisfaction and addresses those issues to motivate employees.

Cost Savings

The cost to hire new or replacement workers, including training and ramp-up time, can be exorbitant for employers, especially small businesses.

With a well- constructed recruitment and selection process, the human resources function can minimize expenses regarding advertising job postings, training new employees and enrolling new employees in benefits plans.

Performance Improvement

Human resources develop performance management systems.

Without a human resources staff person to construct a plan that measures performance, employees can wind in jobs that aren’t suitable for their skills and expertise.

Additionally, employees whose performance falls below the employer’s expectations can continue on the payroll, thereby creating Masted money on low- performing employees.

Sustaining Business

Through succession planning that human resources development, the company identifies employees with the promise and requisite capabilities to eventually transition into leadership roles with the company. This is an important function as it can guarantee the organization’s stability and future success.

Corporate Image

Businesses want to be known as the “employer of choice.

Employers of choice are the companies that receive recognition for the way they treat employees; they are the companies for whom people want to work.

Becoming an employer of choice means human resources balance recruiting the most qualified applicants, selecting the most suitable candidates and retaining the most talented employees.

Any organization, without a proper setup for HRM, is bound to suffer from serious problems while managing its regular activities. For this reason, today, companies must put a lot of effort and energy into setting up a strong and effective HRM.

Nature of HRM

Human Resource Management brings organizations and people together so that the goals of each are met. The nature of HRM includes:

  • Broader function.
  • People oriented.
  • Action-oriented.
  • Development-oriented.
  • Continuous function.
  • Future-oriented.

Broader function.

Human Resource Management is a comprehensive function because it is about managing people in the organization.

People oriented.

HRM is the process which brings people and organizations together so that their goals can be achieved.


Human resource management believes in taking action in order to achieve individual and organizational goals.


Development of employees is an essential function of human resource management in order to get maximum satisfaction from their work so that they give their best to the organization.

Continuous function.

As human resource is a living factor among all factors of production, therefore it requires continuous improvement and innovations in order to get excellence.


HRM is a very important activity which will help the organization to achieve its objectives in the future by providing well motivated and competent employees.

Components of Human Resource Management

The components of Human Resources Management are as follows:

  1. Human Resources Planning.
  2. Job and work design.
  3. Staffing.
  4. Training and development.
  5. Performance appraisal and review.
  6. Compensation and reward.
  7. Employee protection and representation.
  8. Organization improvement.

Components of Human Resource Management

Elaborations of the components are as follows:

Human Resources Planning

It is the process of assessing the organization human resources needs in the light of organizational goals and making plans to ensure that a competent, stable workforce is employed.

The planning process includes an analysis of skill levels among employees and in the external labor market of current and expected job openings, of plans for expanding or reducing staff throughout the organization and of the external legal environment.

Planning process that is closely related to the staffing process and depend also on the overall strategic plans of the organization.

Job and Work design

It specifies the task to be performed by individuals and groups within the organization and establishes the rules, schedules, and working conditions under which people perform those tasks.

Through careful design or circumstance or both evens converge to create jobs to which people are assigned and conditions surrounding those jobs.

Some of the systems used to help manage the process of job design include techniques such as time and motion study and work simplification, which aim to make jobs easy to learn and workers more efficient.

Other job design systems such as job enrichment, involve techniques to restructure jobs to make them more interesting and challenging. Periodic discussions within a work tern about the allocation of tasks can be considered a job design system.


It is the process that results in the continuous assignment of workers to all position in the organization.

This broad process includes the following activities; Attracting qualified people to the organization, selecting from among candidates; bringing new people from aboard and assigning and maintaining them to their jobs; reassigning employees through transfer, promotion or demotion and ultimately managing employees operation through resignation, discharge or retirement.

Training and development

This component is a complex mixture of activities intended to improve the performance of individuals and groups within the organization.

Some organizations that carry out the complex and specialized operation and are confronted with rapid changes in technology are heavily committed to training and development.

Another view of the process as a way to faster the career development of their employees at all levels.

But almost all employees in any organization need some initial training or orientation when they start new jobs.

Performance Appraisal and Review

This component is the ongoing evaluation of individual and group contribution to the organization, and the communication of those evaluations to the persons involved.

Such evaluations are made for a variety of purposes:

To provide feedback about performance, to determine the need for training, to make decisions about a pay increase, to select people for promotion, to make judgments about the need for discipline.

The communication of appraisals (review) is part of this Process because how the appraisal is communicated will affect the extent to which it becomes a learning experience.

Compensation and Reward

This component is the flow of events that determines what wages, salaries, and incentives are paid and what supplemental benefits and non- financial rewards are provided.

The presence or absence of rewards and recognition is important to employee morale and performance.

Non-financial rewards such as recognition staffed unpaid volunteers.

Some of the systems involved in the management of this process include job evaluation, plant-wide productivity plans, suggestion plans, and wage and benefit surveys.

Protection and Representation

Most organizations have formal or informal ways to protect employees-to some extent at least from arbitrary and impulsive treatment and from physical damages and health hazards.

In addition, individuals or group may represent to interacts of others, again either informally or in an organized formal fashion. An important element of this process is accommodation.

Collective bargaining and health and safety management.

Organization improvements

This component is the flow of events that determines the strategic by which organizations attempt to improve their effectiveness or employee satisfaction or otherwise enhance the organizational environment.

Goal of this component is to increase the level of cooperation, teamwork, and performance throughout the organization.

The focus may be organizational outcomes such as product or service quality on the quality of the working life in the organization or on both.

Challenges of Human Resource Management

Human resource management operates in an open environment.

So, it is affected by internal and external changes in the environmental forces.

It operates in a dynamic environment; hence, the change may create opportunities as well as threats for the organization. The main issue behind human resource management challenges is the emerging trends in the organizational environment and policies/procedures to encounter such issues to achieve organizational objectives.

The ever-changing external and internal environment poses a variety of challenges to human resource management. The primary concern of it is how to deal with people in the organization.

Due to this ever-changing socio-economic, technological and political condition, the HR managers shall have to face more problems in the future in the management of the workforce.

These challenges can be studied under three dimensions as follows;

  1. Environmental Challenges.
  2. Organizational Challenges.
  3. Individual Challenges.

1. Environmental Challenges

Environmental challenges refer to forces and institutions that are beyond access to management. These forces are external to the organization and beyond the control of management.

Hence, managers face difficulties in managing such environmental issues. Environmental challenges consist of the following factors:

  • Globalization Movement
  • Change in Economic Outlook
  • Change in Political Environment
  • Change in Socio-cultural Environment
  • Change in Technological Environment

2. Organizational Challenges

Organizational challenges are internal to the firm; often they are the by-product of environmental challenges. The management has control over these issues and can be managed by efficient management.

Moreover, under organizational challenges, we review the components of the specific environment of the company. It consists of the following aspects:

  • Work Force Diversity
  • Organizational Objectives
  • Downsizing
  • Business Process Re-engineering
  • Decentralization
  • Management of Human Relation
  • Computerized Information System

3. Individual Challenges

These forces are related to the personal aspect of the organization. It includes all the complexities that are raised due to organizational interaction with people. These are similar to the organizational challenges but are primarily concerned with the individual. Some of its components are as follows:

  • Brain Drain
  • Individual Norms and Values
  • Mobility of Professional personnel between organizations
  • Aspirations of Employees

Suggestions to meet the challenges of HRM

On the basis of the various issues and challenges the following suggestions will be of much help to the philosophy of HRM with regard to its futuristic vision:

  1. There should be a properly defined recruitment policy in the organization that should give its focus on professional aspect and merit-based selection.
  2. In every decision-making process, there should be given proper weight to the aspect that employees are involved wherever possible. It will ultimately lead to a sense of team spirit, team-work and inter-team collaboration.
  3. Opportunity and the comprehensive framework should be provided for the full expression of employees’ talents and manifest potentialities.
  4. Networking skills of the organizations should be developed internally and externally as well as horizontally and vertically.
  5. For performance appraisal of the employee’s emphasis should be given to 360-degree feedback which is based on the review by superiors, peers, subordinates as well as self­review.
  6. 360 degrees feedback will further lead to an increased focus on customer services, creating the highly involved workforce, decreased hierarchies, avoiding discrimination and biases and identifying performance threshold.
  7. More emphasis should be given to Total Quality Management. TQM will cover all employees at all levels; it will conform to customer’s needs and expectations; it will ensure effective utilization of resources and will lead towards continuous improvement in all spheres and activities of the organization.
  8. There should be the focus on job rotation so that the vision and knowledge of the employees are broadened as well as potentialities of the employees are increased for future job prospects.
  9. For proper utilization of manpower in the organization, the concept of six sigma of improving productivity should be intermingled with the HRM strategy.
  10. The capacities of the employees should be assessed through a potential appraisal for performing new roles and responsibilities. It should not be confined to organizational aspects only but the environmental changes of political, economic and social considerations should also be taken into account.
  11. The career of the employees should be planned in such a way that the individualizing process and socializing process come together for fusion process and career planning should constitute the part of human resource planning.

Objectives of Human Resource Management

The objective is a specific result that a person or system aims to achieve within a time frame and with available resources.

In general, objectives are more specific and easier to measure. Objectives are basic tools that underlie all planning and strategic activities; they serve as the basis for creating policy and evaluating performance.

All the functions of the organization should contribute to the objectives of the organization. This means that the determination of objectives is of prime importance and is a prerequisite to the solution of most management problems.

Objectives are predetermined goals at which individual or group activity in an organization is aimed.

The formulation of the objectives of an organization is necessary for the following reasons:

  1. Human beings are goal-directed. People must have a purpose to do some work.
  2. Objectives serve as standards against which performance is measured.
  3. The objectives stand out as guidelines for organizational performance. They help in establishing the character of an organization.

The central focus for HR management must be on contributing to organizational success. Werther and Davis (1998) categorized HRM objectives into broadly four types:

1. Societal.

HRM may contribute ethically and socially regarding the needs and challenges emerging in society. If an organization fails to use its resources for social benefits in ethical ways it may lead to restriction by society.

2. Organizational.

The main objective of HRM is to achieve organizational goals by bringing organizational effectiveness. HRM is not an end, but it is a means to assist the organization in order to attain its objectives.

3. Functional.

The functional objective of HRM deals with the contributions of different departments regarding their needs and effectiveness in order to attain the organization’s goal.

4. Personal.

HRM also deals with the personal objectives of the individuals so that personal and organizational objectives can be compatible in order to achieve maximum productivity and attain competitive advantage.

These personal objectives are important in order to maintain, retain and motivate employees.

The specific objectives of human resources management can be described as follows:

  • To maintain and sustain industrial peace. Without peace, prosperity is not possible. It is true for a nation as well as for a business organization. Without industrial peace, all resources remain under-utilized.
  • To improve the productive contribution of people to the organization. In a competitive environment, productivity improvement is very significant. Productivity is the function of ability and motivation. Training and education can improve ability. The HR managers must take measures to increase employees’ willingness to put more effort. Excellent companies in the USA also encourage productivity through people.
  • To attract and secure appropriate people capable of performing effectively and efficiently the organization’s specific tasks. This is important for obtaining and sustaining competitive advantage.
  • To generate maximum individual development of the people within the organization. Individuals get internally developed through training and experience. It is a motivating factor, according to human behavior experts Maslow and Herzberg. It should be kept in mind that today’s industries are knowledge-based and skill-intensive.
  • To recognize and satisfy individual needs.
  • To maintain high employee morale and better human relationships inside the organization.
  • To promote employee discipline through performance-based incentives. It creates a healthy and friendly working environment through the appropriate work design and assignment of jobs.
  • To provide a favorable environment for employees so that people working in the organization can work creatively.
  • To bridge the gap between individual goal and organizational goal and thus results in good harmony.

M.W. Cumming (1989) has described the objectives of HR management in these words: HR management aims to achieve both efficiency and justice, neither of which can be pursued successfully without the other.

It seeks to bring together and develop into an effective organization, the men and women who make up an enterprise, enabling each to make his own best contribution to its success both as an individual and as a member of a working group.

According to Mathis and Jackson (1999), the main goal of HR management is to enhance the human capital of the organization. Human capital is the total value of human resources to the organization.

It is composed of the people in the organization and what capabilities they have and can utilize in their jobs.

As a part of strategic roles, HR managers are often seen as responsible for expanding the capabilities of the human resources in the organization.

The Philosophy of Human Resource Management

Philosophy is an academic subject that exercises reason and logic in an attempt to understand reality and answer fundamental questions about knowledge, life, morality, virtue, and human nature.

Philosophy is distinguished from other ways of addressing such problems by its critical, generally systematic approach and its reliance on rational argument.

In more casual speech, by extension, “philosophy” can refer to “the most basic beliefs, concepts, and attitudes of an individual or group” (Blackburn, Simon 1994).

The basic guide to HR management action in any company derives from its philosophy toward people. A philosophy exists in every company, although it is not written down. It guides to personnel policies. There are two contrasting views regarding employees at work:

Labor is viewed as a technical factor of production.

They are treated as a commodity and they can be bought and sold. They are considered as cogs in the machine. They can be hired and fired at will. Writings of Taylor and Adam Smith reinforced these concepts.

Employees must be controlled and closely supervised by management to attain company goals. This approach treats employees with limited potentiality. This is consistent with the Theory X suggested by Douglas McGregor.

Labor has been viewed as a human factor with a lot of positive potentials.

So they must be treated with respect and dignity. People are assets- not cost. Investment in people is very rewarding. Management must develop and utilize the talent of people to achieve common goals.

Japan is the first country, which realized the importance of human beings in its attempt to improve productivity. When Japan realized this truth and recognized human values, it achieved unprecedented progress in all fields.

Although we are endowed with fertile land, rich in natural gas, possess a large population with the homogeneous background.

Significance of HRM

HRM plays a very significant role in the development of the nation. Efficient and committed human resource leads to effective exploitation and utilization of a nation’s natural, physical and financial resources.

Skilled and developed human resource ensures the development of a country. If people are underdeveloped then that country will be underdeveloped. Effective HRM enhances economic growth, which, in turn, leads to a higher standard of living and maximum employment.

For an enterprise, effective HRM leads to the attainment of its goal efficiently and effectively. Many organizations use the phrase,” Our people are our most important asset”.

It acknowledges the important role that employees play in organizational success.

HRM helps an organization to establish a sustainable competitive advantage. Managers should consider their employees as strategic business partners, not just as costs to be minimized or avoided.

HRM must be forward thinking. They must not simply react to what management states. Rather, they must take the lead in assisting management with the people component of the organization.

One study reported that an organization’s high-performance work practices could increase its market value by as much as 30%.

High performance work practices include self-directed work team, job rotations, high levels of skill training, problem solving groups, quality management process, encouragement of innovative behavior, extensive employee involvement, implementation of employee suggestions, pay- based on performance, coaching and mentoring, a significant amount of information sharing, cross-functional integration, etc.

HRM helps an enterprise in the following ways :

  1. Hiring the required skill set and retaining them through effective human resource planning, recruitment, selection, placement, orientation, and promotion policies.
  2. Developing of employees by enhancing necessary skills and right attitude among employees through training, development and performance appraisals, etc.
  3. Taking care of the optimum utilization of the available human resource.
  4. Ensuring that HRM also ensures that the organization has a competent team and dedicated employees in the future.
  5. Leading to improved quality of work life, and enabling effective teamwork among employees by providing a healthy working environment
  6. Providing opportunities for the personal development of an employee.
  7. Enabling healthy relationships among teams and allocating work properly to employees as well as teams.
  8. HRM is playing an important role in society; it helps labor to live with pride and dignity by providing employment which, in turn, gives them social and psychological satisfaction.
  9. Maintaining the balance between openings job and job seekers.

Historical Evolution of HRM

History of HRM is as old and complex as the history of work and organization. Human resource management is evolving rapidly. HR management history is fascinating. Human resource management is both an academic theory and a business practice that addresses the theoretical and practical techniques for managing a workforce (Panzyp, 2007: Reed and Gusdorf, 2010).

The History of Human Resource Management starts to be interesting with the evolution of large factories. It was in the 18th century. The rapid development of a new industrial approach to work changed the world dramatically.

Quick and cheap production became a priority for many industries. The factories hired thousands of workers, who worked up to 16 hours a day. Soon, many entrepreneurs discovered that satisfied employees are more effective and can produce more than depressed employees.

Many factories started to introduce voluntary programs for employees to increase their comfort and satisfaction.

On the other hand, the government started to intervene to introduce some basic human rights and work safety legislation.

Human resource management has its roots in the late and early 1900s when workers’ jobs became less labor intensive and more working with machinery. The scientific management movement began.

This movement was started by Frederick Taylor when he wrote about it in a book titled The Principles of Scientific Management. The book stated, “The principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for each employee.

Taylor believed that management should use the techniques used by scientist to research and test work skills to improve the efficiency of the workforce.

The industrial welfare movement began also around the same time. This was usually a voluntary effort by employers to improve the conditions in their factories.

The effort also extended into the employee’s life outside of the workplace. The human relations movement is the major influence of modern human resource management. This movement was influenced by the Hawthorne Studies and the belief that employees worked better in a social system. Employees were viewed as a social man.

The second rapid development of human resources started at the beginning of the 20th century.

Most organizations introduced Personnel Management. The personnel department had large responsibilities. It was dealing with issues and introducing the new law requirements. It had the responsibility for the implementation of different social and workplace safety programs.

Everything was focused on the productivity of employees.

The regular productivity increments were the key measure for the management of employees. The significant change was introduced after the II World War because the military developed many training programs for new soldiers. After the war, the training became a respected process in the personnel department.

During this period, the trade unions evolved. The trade unions changed the rules of the game. The employer got a strong partner to discuss with.

Trade unions introduced many improvements at no significant costs for the employer. Today, trade unions are not as strong as they were used to be, but many organizations still benefit or suffer from a strong presence of trade unions in their factories.

The real HR revolution began in the ’60s of the 20th century. The technology and the globalization have changed the rules of the game. Most HR functions are running complex HRIS solutions, which make information about employees available anywhere and anytime to managers and HR professionals.

It was around the middle of the 1980s that human resource as it is more often abbreviated, begin to establish itself. It was quickly realized that the personnel department and training functions both undertook work around the human element of the business and that is putting these together formed a synergy.

It was also realized that there was a need for the consideration of the workforce when planning business change, organizational changes, and restructuring. There was a need to educate the staff to respond to such changes. In effect, the strategic direction of the business needed to consider and reflect the people as the largest asset of any business.

Human Resources Management and HR directors came into being, providing executive level interaction or even higher and the establishment of human resources was fully accepted by the 1990s and taken forward since to include all aspects of a business that applies to the people within that business.

In the latter part of the 1990s and into the early 2000s there has been a further evolution to take the HR role back to the business managers. The decisions and actions being taken near to the people with the old style HR divisions being streamlined into a more consultative role provided knowledge and best practice guidelines but only interacting at a strategic level.

The economy of the wealthy western countries shifted towards the services economy. The quality of services became a crucial competitive advantage. HR became necessary because the structure of the workforce changed. Leadership development was the right answer.

Managers and leaders have to think global today; they have to understand different cultural backgrounds. The corporate culture cannot be country specific; it has to reflect many nations working for the organization. This is a fantastic opportunity for Human Resources.

Human Resources Management is global today. The global HR policies drive processes in different countries, but the processes produce comparable results.

The future of Human Resource Management is bright. The globalization cannot be stopped because nations collaborate. The organizations become less country-specific, and they cannot identify themselves with one country. New technologies will bring other revolutions to offices.

The commute working is standard today, but it will become a norm. The technology will connect employees as they would sit in the next cubicle. ICT will allow quick and instant access to information about employees and managers will be able to make all decisions and approvals online.

However, the future of Human Resources will be about new networking methods.

Changing Role of HRM

The role of human resource management is changing very fast.

This change is required in order to help corporations achieve their goals. In recent years, it has been seen that HRM has undergone many phases.

Initially main focus of HRM was on hiring and firing, however, in current corporate scenario HRM has much more responsibilities like relationship building and legislative role. HR role is now shifting from protecting to strategic partner.

As the business world changes, so does the role of HR professionals.

Since human resource is a business-driven function, effectiveness depends on a thorough understanding of the strategic corporate direction, as well as the ability to influence key policies and decisions.

In addition, human resource management challenges must be defined and solutions determined in order to succeed.

Nowadays, most of the high performing organizations are flattened with the least hierarchy which requires highly skilled employees to gain a competitive edge in the market.

So the HR role has drastically changed to develop and implement company strategy in order to achieve its goals.

The late 20th and early 21st century saw a number of shifts that suggested changes in the nature of work in the future.

These include the growing use of contingent workers (people who are hired, as needed, to perform specific tasks, but are not employed by the company), the use of virtual workers (those who may or may not work for the company, but who are not physically located on the company’s premises), and the growing impact of technology on the need for certain types of employees, which causes increased need in some areas and declined need in others.

As HRM is concerned with people who work in an organization, it becomes very important for HRM to hire good people, train them, and retain good employees in order to achieve the organization’s long term objectives.

In recent years all the above HR roles are being used strategically and so now HRM is termed as SHRM. The concept of SHRM is discussed in Chapter Four.

Management and Human Resource Management

Human Resource Management has come to be recognized as an inherent part of management, which is concerned with the human resources of an organization.

Its objective is the maintenance of better human relations in the organization by the development, application, and evaluation of policies, procedures, and programs relating to human resources to optimize their contribution towards the realization of organizational objectives.

In other words, HRM is concerned with getting better results with the collaboration of people. It is an integral but distinctive part of management, concerned with people at work and their relationships within the enterprise.

HRM helps in attaining maximum individual development, desirable working relationship between employees and employers, employees and employees, and effective modeling of human resources as contrasted with physical resources. It is the recruitment, selection, development, utilization, compensation, and motivation of human resources by the organization.

Human resource management is a vital part of any smallest or largest enterprises. Fundamental activities pertaining to all the employees or human resources of an organization must be managed effectively. If these human resources are neglected or mismanaged, the organization is unlikely to do well and infect may fail.

From a positive standpoint, it is people (human resources) that create organization and make them survive and prosper. It is their efforts, talents, and Skills in using other resources, such as knowledge, materials, and energy that results in the creation of successful products and services.

It is clear that the employees are a critical factor in making an organization successful.

Further, the authority must be skillful in integrating human resources with other important resources, including finances and technology. Human Resources Management is a broad concept referring to the philosophy, policies, procedures, and practices used in managing people throughout the organization.

In other words, it can say- human resources management is the systematic planning and control of a network of the fundamental organizational process affecting and involving all organization members.

These processes include human resources planning the job and work design, job analysis, staffing, training and development, performance appraisal and review, compensation and reward, employee protection and representation and organization’s improvement.

To further control and refine these processes, systems are continuously planned, developed and implemented by management, frequently with the help of non-management employees.

All managers are heavily involved in human resource management.

Typically, key policy decisions in human resources management are made jointly by the human resources directors and other top managers.

Further, the human resources department typically makes decisions at various steps in personnel procedures (such as initial screening and referral), whereas other managers make decisions at other steps in those procedures (such as making the final selection from among several qualified candidates).

Although this joint decision making can lead to strains in the relationship, broad management participation in the development of human resources policies will tend to minimize these tensions.

The organization-wide impact of human resources management, coupled with the vital nature of the organizational processes involved. Thus we can say that human resources management is a vital aspect of the total management process.

Difference between Management and HRM

1. DefinitionManagement is the process of forecasting and planning, organizing, commanding, coordinating and controlling.Human resource management deals with recruitment, selection, placement, training, and development of an organization’s employees.
2. FunctionMajor functions of Management are planning, organizing, commanding, coordinating and controlling.Major functions of HRM includes recruitment, selection, placement, training, and development, performance appraisal, etc.
3. PrincipleHenry Fayol identified 14 principles of Management. Among those are Division of Labor, Authority.& Responsibility, Unity of Command, Unity of Direction, Order, Equity, Discipline, etc. important.Major principles of HRM are s scientific selection, employee development, fair remuneration, the dignity of labor, team spirit, etc.
4. FatherHenry Fayol is known as the Father of Management.There is no recognized Father of HRM.
5. Major ContributorHenry Fayol, F. W. Taylor, Elton Mayo, etc, are the major contributors to Management.Gary Dessler, Decenzo & Robbins, Keith Davis, etc. are the major contributors of HRM.
6. ObjectiveTo achieve organizational objectives effectively.To utilize human resources effectively.
7. AreaManagement is a broader concept.HRM is narrower and a part of management.
8. ResponsibilityManagement has the social responsibility to the welfare of society.HRM has the responsibility for the welfare of the organization’s employees.
9. IntegrationManagement integrates Human, Physical and Financial Resources.HRM integrates Human resources only.
10. Skill RequiredConceptual, Technical and Human skills.Human skills only.



So, Human Resource Management (HRM) has been defined as a process of acquisition, development, motivation, maintenance, and utilization of manpower for the purpose of effective and timely achievement of organization goal/s.

Human resources management is also a management function concerned with hiring motivating and maintaining people in an organization. It focuses on people in an organization.

In the other word, we can say that Human resources management is the planning, organizing, directing and controlling of the procurement, development, compensation, integration, maintenance, and separation of human resources to the end that individual organizational and social objectives are accomplished.

HRM is the term increasingly used to refer to the philosophy, policies, procedures, and practices related to the management of people within an organization.

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