Human Resource Management (HRM) is an operation in companies designed to maximize employee performance in order to meet the employer’s strategic goals and objectives. More precisely, HRM focuses on management of people within companies, emphasizing on policies and systems.
In short, HRM is the process of recruiting, selecting employees, providing proper orientation and induction, imparting proper training and developing skills.
HRM also includes employee assessment like performance appraisal, facilitating proper compensation and benefits, encouragement, maintaining proper relations with labor and with trade unions, and taking care of employee safety, welfare and health by complying with labor laws of the state or country concerned.
The Scope of HRM
The scope of HRM is very wide. It consists of all the functions that come under the banner of human resource management. The different functions are as follows −
Human Resources Planning
It is the process by which a company identifies how many positions are vacant and whether the company has excess staff or shortage of staff and subsequently deals with this need of excess or shortage.
Job Analysis Design
Job analysis can be defined as the process of noticing and regulating in detail the particular job duties and requirements and the relative importance of these duties for a given job.
Job analysis design is a process of designing jobs where evaluations are made regarding the data collected on a job. It gives an elaborate description about each and every job in the company.
Recruitment and Selection
With respect to the information collected from job analysis, the company prepares advertisements and publishes them on various social media platforms. This is known as recruitment.
A number of applications are received after the advertisement is presented, interviews are conducted and the deserving employees are selected. Thus, recruitment and selection is yet another essential area of HRM.
Orientation and Induction
After the employees are selected, an induction or orientation program is organized. The employees are updated about the background of the company as well as culture, values, and work ethics of the company and they are also introduced to the other employees.
Training and Development
Employees have to undergo a training program, which assists them to put up a better performance on the job. Sometimes, training is also conducted for currently working experienced staff so as to help them improve their skills further. This is known as refresher training.
After the employees have put in around 1 year of service, performance appraisal is organized in order to check their performance. On the basis of these appraisals, future promotions, incentives, and increments in salary are decided.
Compensation Planning and Remuneration
Under compensation planning and remuneration, various rules and regulations regarding compensation and related aspects are taken care of. It is the duty of the HR department to look into remuneration and compensation planning.
Features of HRM
Human Resource Management as a discipline includes the following features −
- It is pervasive in nature, as it is present in all industries.
- It focuses on outcomes and not on rules.
- It helps employees develop and groom their potential completely.
- It motivates employees to give their best to the company.
- It is all about people at work, as individuals as well as in groups.
- It tries to put people on assigned tasks in order to have good production or results.
- It helps a company achieve its goals in the future by facilitating work for competent and well-motivated employees.
- It approaches to build and maintain cordial relationship among people working at various levels in the company.
Basically, we can say that HRM is a multi-disciplinary activity, utilizing knowledge and inputs drawn from psychology, economics, etc.
Concept of Human resource management (Define human resource management) (2064/65/66/67/68/70/71/72/73/74/75/76)
The concept of human resource management :- organizational effectiveness largely depends upon the performance of people working in the organization.
Human resource are some people who are willing to contribute their skills, talents and attitude in orders to achieve organizational goals.
HRM is concerned with the people element in the organization. It is concerned with the effective management of available human resources in the organization.
It involves the production utilization of people in order to achieve organizational goals.
HRM in term increasing used to refer to the philosophy policies, procedures and practices related to the effective management of people of the organization. HRM can be a major contribution on the success of organization.
According to Robbins, “Human resource management is a process of four functions: acquisition, development, motivation and maintenance of human development.”
According to French, “Human resource management is the systematic planning, development and control of network of interrelated process affecting and involving all member of organization.”
Nature/ Characteristics of Human Resource Management: (2063/67)
HRM is concerned with the effective management of people possessing energy and capabilities. It is individual oriented. It is specially focused on the human oriented approach. The detailed investigation of human resource in organization is made.
HRM is a pervasive function of management. It is performed in all levels of management. The responsibility of human resource can not be delegated to others. HRM is practically implemented in the organization at various levels
HRM is a continuous function of management. In other words, it is not a one-time process. It will continue till the organization exists. It is continuously monitored at every step of organization existence.
HRM is not a static concept but a dynamic function. It is also affected by internal environment like human resource policies, goals of the organization, structure etc. it is also affected by external environment like PESTEL factors.
HRM is a system of input, processing and output. It utilizes the input, process it and also provide output. Therefore, human resource management is the combination of input, processing and output, which is considered as a system.
Objectives of Human Resource Management:(2059/63/65/71)
Human resource management is the important component of management. It is the combination of four functions. The main objectives of human resource management are as follows:
1. Goal Achievement:
Human resource management makes effective utilization of available human resources by providing them training, and development. The goal of the organization is achieved when there is proper utilization of potential human resources
2. Structure Maintenance:
Every organization has it’s organizational structure. The objectives of human resource management is to maintain adequate organizational structure. It helps to improve the relationship among the human resource in the organizational setting.
3. Goal Harmony:
In an organization, there are individual and organizational goals, it brings harmony in organizational goals and individual goals of employees. It recognize and satisfies individual need in order to achieve overall organizational goals.
4. Productivity Improvement:
Human resource management is concentrated in providing different training and other opportunities to the employees in order to increase skill and productivity of individual employees. Better quality of human resources result in improved productivity.
Human resource management avoid wastage and promote efficiency of human resources. It ensures cost-effective utilization of human resources. The higher the productivity, higher is the efficiency of employees. In this way, the main objective of human resource management (HRM) is also to increase the efficiency of individual employee.
Functions / Areas of Human Resource Management:
1. Human Resource Planning:
The important function of human resource management is to prepare human resource planning. It involves demand and supply of employees. While making human resource planning, the human resource department has to review the organizational goals. A human resource information system provides detailed information about the current employees, which helps for making good plan.
2. Recruitment and Selection:
One of the important functions of human resource management is the recruitment and selection. Recruitment is a process of making a pool or qualified candidates. Selection is the process of accepting the best candidates from many candidates. Recruitment function starts with the application process. Information from job analysis and human resource information system is used for selecting the best candidates.
3. Training and Development:
Training and development is also the another function of human resource management and development is required to develop the skill, ability and motivation of employees. Human resource department has to engage in assessing training need. On-the-job training and off-the-job training can be provided to the employees.
4. Performance Appraisal:
Performance appraisal is the process of evaluating performance of employees regarding strength and weakness. It helps to assess hoe well the employees are performing their job. Human resource manager have to design appraisal technique to get feedback from employees.
5. Job Analysis:
It is the basic function of human resource management. It involves the collection of job related information to prepare job description and job specification. Job description includes information about what a person has to do. In job specification, it indicates the qualification, experience and skills required to perform the job as mentioned in job description.
6. Compensation and Benefit:
Compensation reward people through pay incentives and benefits of the work done. Benefit reward people with additional compensation. They are direct form of compensation such as, health care, family related and other benefits. Compensation and benefit are the major source of the motivating employees at work.
7. Health and Safety:
Providing healthy work environment is another important function of human resource management. Every organization has to take care of it’s employees’ health and safety. The working place are getting more and more and increase in use of chemical and other harmful substance.
8. Employees’ Relation:
Another important function of human resource management is to maintain good relation between employees and employer. In this process, the human resource department helps to develop mechanism for developing understanding between employees and employer. Human resource department help to develop the mechanism to solve the conflict. It involves handling grievance, labor management, handling conflict etc.
HUMAN RESOURCE MANAGEMENT SYSTEM (2072) – 10 marks
A system is a unified whole composed of interrelated and interacting part to achieve common goals. Human resource management is an open system. It consists of input, processing. Output and feedback component. It has both internal and external environment.
It is a major component of human resource management system. It is the first step in the system. It consists of the following components:-
Ø Human energy and competency:
Energy is represented by physical strength. Competencies are represented by skills, knowledge, experience, potential for growth etc.
Ø Organizational Plan:
The human resource management system is guided by organizational plan. These input components are very essential to support human resource management system. Organizational plan consists of overall organizational goals and targets.
Ø Human Resource Plan:
Human resource plan is also the important input component. It is the process of making plan of future human resources. It is also the process of marketing future, human resource demand and supply.
Ø Human Resource (management) Inventory:
Management inventory represent inventory of current human resources available in the organization. Management inventory is an important component of making human resource plan.
Ø Job Analysis:
Job analysis specifies job requirement, qualification and skills for various jobs. It mainly consists of job description and job specification.
Ø Labor Market:
Labor market serves as the major source of supply for human resource. It may be schools, colleges, universities, training institutions, manpower agents etc.
The important processing component o human resource management systems are as follows:-
Acquisition ensures right number of people at right place and at the right time in the organization. Acquisition mainly consists of recruitment (identifying potential candidates), selection (selecting the best candidates and rejecting the wrong one), socialization (adaptation of new employees in the organization.)
Development ensures competencies of employees to handle job. It is also the process of training and developing the employees. It mainly consists of training, management development, career development and interpersonal development.
Motivation ensures willingness of employees for doing job effectively. The employees should be motivated toward their jobs in order to increase productivity and efficiency. Motivation consists of need, satisfaction, job design, performance appraisal and reward management.
Maintenance ensures retention of employees in the organization. Highly qualified manpower should be retained (hold) in the organization. Maintenance involves compensation management, employees’ discipline, grievances (hopeless) handling and employees’ welfare.
The human resource management system also consists of certain output. Output components of human resource management are as follows:-
Ø Goal Achievement:
This refers to overall organizational goal achievement. The goal of societal well-being is also one of the goals of organization.
Outcome of Human resources
Human resource outcome is the output related to human resource management. The main outcomes of human resources are as follows:-
1. Quality of Work Life:
The term quality of work life (QWL) refers to making job more interesting, challenging and satisfying. Quality of work life concept has been developed to satisfy employee’ important performance need for working and sharing their experience in the organization.
The major component of QWL consists of the followings:-
Ø It attempts to create a democratic organization where everyone has a voice in deciding issues.
Ø It tries to share the financial reward of the organization, so that every one benefit from a greater co-operation.
Ø QWL helps to create greater job security of an individual.
The concept of productivity refers to the ratio of output to input in order to increase productivity, the rate of output should be higher than input. Human resource manager and others line managers can contribute to productivity by utilizing their workforce effectively and efficiently, productivity depends up on different factors such as; investment, innovation, learning, motivation etc.
3. Readiness for Change:
The increasing challenges from environmental forces force everyone to cope with this environment. In the present situation, managers, workers, and union members should be ready to work with the change process. Everyone has to be prepared for any sort of changes to meet the current and future challenges. In other words, employees should be ready for any sort of changes.
Challenges of Human Resource Management :- ( Challanges faced by human resource manager)
In today’s business environment, the job of managing people is getting more difficult. Different factors directly affect human resource management. Therefore any changes in the environment have challenges for human resource management. Some of the challenges of HRM are as follows:-
Globalization is the process by which, transaction of business organization have been globalized across the world. Globalization provide platform for selling goods and services from one country to another country. Only those companies can survive from these processes which are able to employ and retain qualified people. The challenges for human resource department are to review current HR policies in order to meet globalization.
2. Increasing concern for security and employment:
Security and employment is also the major concern for HRM. The increasing worldwide terrorism is a major challenge not only for nation but also for the organization all over the world. Therefore, national security provided to people is equally important. The 9/11 terrorist attack in the USA (World Trade Centre & Pentagon) was a great challenge for the world. Million of people and thousands of business organizations were affected by this incident. Therefore, the internal security problem and external challenges is a major threat for any country.
3. Work force Diversity:
The success of organization depends on how much it can respond to the situation of workforce diversity, workforce from different countries with different value, cultures, language, education, training background representing different races and religions are participating in work place. The role and responsibility of HRM is to handle diversity related problems.
4. Contingent Workforce:
Contingent workforce refers to the part time, temporary workers appointed for short-term contract. Employers are now interested in appointing workers on contingent basis to fulfill the demand of business. Employees of contingent nature can maintain a balance between family and work. Moreover, they are challenges for HRD. Since they are part timers, it is the role of HRD to use their skills. It is very difficult for the organization to use their skills for a long time.
5. Decentralized work sites:
With the increasing use of information technology, work places are decentralized. Due to the use of computers, e-mails and internet network, today’s employees are not required to sit in the office from 9 AM to 5 PM instead they can work at home and report to the head office with the help of computer linkage. However, challenges are there for HR department to monitor and evaluate the performance of workforce. Human resource department have to ensure the quality of work in decentralized work sites.
6. Employees Involvement:
The need for employees’ involvement at work place is increasing to make them able to contribute to a given job. Similarly, when the organization is larger in size, it is difficult for lower level management to work without responsibility and resources. To enhance employees’ contribution, it is essential to delegate authority. The challenges for HR manager are to make the people engaged and use their maximum effort. To make the employees involved the best motivating factors will be to provide opportunities to work in challenging job.
Human Resource Management in Nepal:
Ø Nepalese organizations are in the age of personnel management. There is least concern with developing and utilizing HR potentiality.
Ø There is nepotism and favoritism in most of the Nepalese organizations.
Nepalese top managers spend a lot of time in hiring and transferring employees.
Ø There is over supply of human resources. Manpower planning is lacking in Nepal.
Ø HR development has remained an area of least priority in Nepalese organization. Training is not regarded as an investment in human resources.
Ø Nepalese organizations are not oriented towards productivity improvement. There is no harmony between individual and organizational goals.
Ø Private enterprises lack systematic performance appraisal systems. Public enterprises have legally prescribed performance appraisal system, but in practical they are not used.
It can be concluded that the output of HR quality of work life, productivity and readiness to change has not been achieved.
HUMAN RESOURCE PLANNING (2055/56/58/64/65/68/69/72/76)
There has been increasing competition in the market to provide quality and low cost product and services. In this situation the human resource department in the organization has to plan human resource activities in order to ensure quality manpower, however many organization pay less attention to the proper plan and utilization of human resources. HR/ employment/ manpower planning/ human resource planning is the process of acquiring and utilizing human resources in the organization. If the organization has right number of employees at the right time, critical problems can easily be solved.
HR planning is prepared by human resource department in consultation with line department by determining the right number of people – the demand and supply of manpower. The HR planning and supply of manpower. The HR planning matches the demand and supply of human resources in order to meet future activities.
1. According to Schuler, “Personnel and HR planning involves forecasting human resource needs for the organization planning the step necessary to meet those need.”
2. According to Decenzo & Robbins, “Employment planning is the process of determining organization human resources.
Characteristics of Human Resource Planning:
1. Aspect of Acquisition Function:
Human resource planning function id related to acquisition function of human resource management. In other words, the acquisition function of human resource management starts with the proper human resource planning.
2. Future Oriented:
Every planning activity is related to future. HR planning is also future oriented. The HR planning is made today and implemented in the future. HR planning estimates the future human resources of the organization.
3. Estimation of Demand and Supply of Manpower:
HR planning estimate the future demand and supply of manpower for any organization. HR planning helps to make necessary arrangement of surplus and deficit of human resources in the organization.
4. Goal Oriented:
HR planning is made in order to achieve certain goals. The main objective of HRP is to preplan the human resources for the future. HRP is made today for the future in order to achieve short-term and long-term goals.
5. Quantitative and Qualitative Aspect:
In HRP, the human resources needed for the future is not only determined in quantity but other aspect regarding human resources is also determined. Quantitative aspect such as skill, attitude and ability of human resources is also estimated.
6. Integral Part of Organizational Plan:
Any organization determines different types of corporate of organizational plan. HRP is important part of corporate planning. HRP is important to make organizational planning.
7. Time Horizon:
Human resource planning considers short-term and long-term goal of the organization. It estimates these goals remaining within a fix period of time. In other words, human resource planning considers time horizon.
Importance of Human Resource Planning: (2057/60/62/64/66/68/70/76)
1. Goal (Objective) Achievement:
Human resource planning focus on overall organizational goals. The human resource planning ensures the optimum achievement of objectives. The forecast of human resources are based on the objectives, strategies and plan of the organization.
2. Minimize Future Risk and Uncertainty:
Human resource planning is made to minimize future risk and uncertainty by forecasting the need of technical and other manpower. This will help to reduce the chances of losses by making optimum utilization of human resources.
3. Effective Utilization Human Resource:
Human resource planning ensures that the organization acquire and retain the quality human resource. Existing human resource can be deployed to ensure their effective utilization.
4. Implement Business Strategy:
Without proper human resource planning, business strategy can not be implemented. Human resources are the people who have to work in order to implement the business strategy. It is only possible through human resource planning.
5. Human Resource Development:
Human resource planning anticipate skill requirement for various level of human resources. This provides adequate time for planning and development programs. In other words, human resource planning uses the employees properly.
6. Promote Awareness:
Human resource planning promotes awareness that human resource activities are equally important at every level. Both line and staff managers directly and indirectly have to be involved in human resource activities. In other words, human resource planning promote awareness among human resources.
HUMAN RESOURCE PLANNING PROCESS (2057/58/60/61/62/64/65/70/71/73)
HRP is the process of anticipating future business and environmental demand on an organization and attempting to provide sufficient manpower. The important phases of HRP are as follows:-
1. Environmental Analysis:-
Environmental analysis include an analysis of external (PESTEL) and the internal environment (organizational objectives and plans). After an analysis of the internal and external environment, it is possible for top managers and HR manager to find out strength and weakness. On the other hand, it can analyze opportunities and threats.
2. Determining HR Objectives and Policies:-
After an analysis of internal and external environment, it is important to develop HR objectives and policies. These objectives and policies are important to tap (use) the HR in business opportunities. The human resource information system (HRIS) helps by providing related information in this course of action.
3. Human Resource Forecast:-
Once the information is analyzed regarding current human resources, the next step is to make a human resource forecast in order to meet the future requirement. It consists of demand and supply forecasting (internal and external supply).
4. Action Plan:-
Action plan is known as implementation plan. It is the execution of HRP and objectives. The major activities required for the implementation of HRP are recruitment, selection, socialization, training, development, transfer, promotion etc.
5. Control and Evaluation:-
Once HRP is executed, it is important to monitor and evaluate in order to know how the HRP matches human resource objectives. The best way to monitor and evaluate the effect of human resource planning (HRP) on human resource manager is to develop certain indicators. The result of evaluation is feed-back to the human resource managers.
Human Resource Planning in Nepal:
1. Poor Tradition of Human Resource Planning:
Nepal has a poor tradition of human resource planning. The Nepalese managers’ trend to regard human resource planning as an area of low priority because of this, Nepalese organization lacks right numbers and kinds of people at the right place and at the right time.
2. Lack of Assessment of Current Human Resource:
Most Nepalese organizations lack up-to-date human resource inventory which describes the skills current available. They also lack effective human resource data base information.
3. Missing Demand Forecast:
Nepalese organization lack proper demand forecast in terms of number and skills of people required. Business organizations relate revenue forecast which serve as the basis for the forecast of human resource demand.
4. Missing Supply Forecast:
Nepalese organization lack proper supply forecast of human resource from inside and outside sources. Promotion and transfer are not planned in advance. Given the professionals and skilled technicians are suffering from unemployment.
5. Mismatch of Demand and Supply:
Nepalese organizations do not proper attention to matching demand and supply forecast to determine shortage and surplus. Succession planning is not done by Nepalese manager.
6. Short-term Horizon:
Human resource planning in Nepal has generally one year horizon strategic planning is very much lacking. Implementation of human resource planning is not effective.
7. Over Staffing and Under Staffing:
Most government agencies and public enterprises in Nepal suffer from over staffing. The number one priority of Nepalese politician is not done by Nepalese managers.
8. Private Sector Performance:
The family owned and managed private sector organizations do not bother about human resource planning. They prefer to hire relatives, friends and “near and dear”