Overview Of Hrm

OVERVIEW OF HUMAN RESOURCE MANAGEMENT

In the last decade, Indian organizations have experienced competition from a number of multinational corporations who started operating in various sectors like banking, insurance, manufacturing, hotels, airlines, mutual funds etc. Before 1991-92, most public and private sector companies of India worked in a secure/controlled business environment. In the last decade, however, a number of major changes have been observed in Indian industry. Firstly, Indian consumers are exposed to world class products and services provided by MNCs. Secondly, huge amounts of foreign investment has flowed to local industries. Thirdly, a number of mergers and acquisitions have taken place like TOTAL-FINA ELF, GLAXO SMITH KLINE/BEECHAM, HINDUSTAN LEVER AND BROOKE BOND INDIA LTD., JENSEN NICHOLSON, ICICI LTD. AND ICICI BANK, etc. Multinationals like Hyundai and LG have set up new plants, which have better technology as compared to the earlier Indian manufacturers. Government is slowly opening more and more sectors of the economy.

These changes have compelled Indian manufacturing and service organizations to improve their products and services and offer better products to Indian consumers. Some companies have made excellent attempts in this direction, likes, Tata Motors’ Indica and Scorpio by Mahindra & Mahindra. Many companies are attempting to introduce innovation in all spheres of business and make serious attempt to satisfy customers. Simultaneously, it is also observed that organizations which are not able to improve their products and services are shutting down. Government is not willing to support loss-making enterprises indefinitely. Thus, it is obvious that those organizations that are capable of improvement and innovation are likely to survive, while inefficient organizations are doomed close. Therefore, it is necessary for all organizations to make efforts to continuously improve, and enhance their competitiveness. It will require maximum utilization of all physical resources and human resources of the organization. If the organizations can successfully utilize human resources, they can become more successful in the new competitive environment.

Historical Evolution of Human Resource Discipline

Management of any organization requires physical, technological, financial and people resources. In the early period of industrialization in the 18th and 19th century, businessmen paid more attention to technical and financial resources for achieving profit. However, large numbers of workers were employed in steel, coal mining, tea plantation and chemical industries. Therefore businessmen had to pay some attention to their health, working conditions, payment of salaries etc. The Labour Movement in India during 1920s and 30s paid attention to working condition of labour and their welfare, in various industries. A report of the Royal Commission of Labour in India (1929-31) recommended appointment of labour officers to deal with the recruitment practices. Various labour legislations like Factory Act, Trade Union Act, etc., contained suitable provisions for dealing with various contentious issues related to labour like working conditions, salary, compensation, etc.

In the beginning, in many organizations, a department called Administration or Establishment was created. The main role of this department in various organizations was to look after routine administrative activities related to employees like maintaining employee records, leave record, salary and retirement benefits, etc. Even today, these activities are an integral part of the human resource management function. In the early days of industrialization, companies were mainly concerned with the administration function alone. The focus of the department was to ensure that required number of employees were available throughout the year, for ensuring that business targets were met. Thereafter, the nomenclature of `personnel and administration department’emerged. In addition to routine administrative activities, addition of the word `personnel’ implied a more human approach towards management of employees in the organization. During 1970s and 80s, a comprehensive philosophy of human resource management evolved mainly due to contributions of researchers in the area of industrial sociology and organizational behaviour. In this approach, there is emphasis on following issues.

1. Employees have various needs and feelings, which should be recognized.

2. The organization should treat employees as resources for achievement of goals of organization.

3. Organisation should try to develop these resources by enhancing knowledge, skill and attitude of employees.

During this phase, training and development activity received lot of attention from businessmen and managers, and many organisations developed scientific systems of training and development.

It was observed in the past, that human resource activities in many organizations were proceeding in one direction, and business activities were proceeding in another direction. In other words, activities of human resource department remained disconnected from mainstream business activities. Therefore, a need was felt to align the human resource strategies with those of business strategies, of the organization. The concept of strategic human resource management is basically what this issue is all about.

During 1990s, strategic human resource management came into the limelight. Strategic human resource management is concerned with creating linkage between business and human resource activities. The objective of strategic human resource management is to ensure that HRM is fully integrated into strategic planning.

Strategic human resource management has been defined as “The linkage of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility.” (Catherine and Gratton 1994). The term `strategic HR’ indicates that HR actions will influence a company’s plans and business goals. Any company should initiate such HR actions, as it can create a highly committed work force, perfectly capable of meeting challenges of a competitive market in future.

Structure of Human Resource Department

In every reasonably sized organization - whether manufacturing or service - there is sure to be a personnel department/HR department. Primary objective of this department is to ensure that the organization has the required number of people, equipped with adequate