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HUMAN RESOURCE MANAGEMENT

EXECUTIVE SUMMARY Fast global & technological developments have made today’s business environment highly uncertain & even chaotic. Organizations are seeking newer ways to promote their adaptability to the complexities of the changed scenario so as to survive & prosper. Globally organizations are striving to realize competitive success through strategic management of human resources. Thus, people management has never been more important than it is today. Therefore new themes have emerged in the process, replacing some of the old ones. The new thinking in this regard is referred to as Human Resource Management (HRM), which carries a more proactive & strategic connotation. The development of employee commitment through employee involvement & empowerment is one of the key objectives of any HRM discourse. The complex business objectives in today’s business environment are difficult to realize without developing highly committed & motivated employees who would strive to contribute to organizational goals. That is why, human resource issues are no more the preserves of personnel specialists; rather line & general managers are being increasingly involved in handling key HR issues & in evolving, shaping & managing human resource strategies & policies. These developments have given a far greater recognition to the HR function in organizational decision- making processes. Human resource is one of the natural resources of any country’s economy. It is the wealth of the country. In the context of banking, human resource is of greater importance. The deployment of human resource through proper & efficient selection, training & development, is called Human Resource Management.

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HUMAN RESOURCE MANAGEMENT

The success of any bank largely depends on efficient human resource management, apart from operations, marketing & sales, the HR department manages all the efficient people working in operations & marketing divisions in an organization. HYPOTHESIS ‘GROWTH OF BANKING SECTOR DEPENDS ON APPROPRIATE HRM POLICIES’. To analyze this hypothesis I have included a case study on STATE BANK OF INDIA in which I have put forth the range of practices executed by the HR department. I have even interviewed Mr. Rajiv Deka, Branch Manager of SBI & Ms. Rohini Rai, Branch Manager of HDFC Bank, thereby representing the two major sectors of BANKS, i.e., PUBLIC SECTOR & PRIVATE SECTOR.

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HUMAN RESOURCE MANAGEMENT

INTRODUCTION The concept of human resource management is increasingly becoming a most vital function of a modern manager. Human resource management is the management of employees’ knowledge, abilities, talents, aptitudes, creative abilities, etc. Human resources take active role in the modern economic scenario of any country. The abundant physical resources alone cannot benefit the growth of the country without human resource component, which transforms physical resources into productive resources. In fact, the differences in the level of economic development of the countries are largely a reflection of the differences in quality of their human resources. The key element in this proposition is that the values, attitudes, general orientation and quality of people of a country that determines its economic development. “People are our most valuable asset” is a cliché which is no member of any management team would disagree with. The concept of HRM assumes immense importance as HRM plays vital role in meeting the challenging requirements of highly skilled & component human resources due to globalization.

DEFINITION Human resource management is planning, organizing, directing & controlling of the procurement, development, compensation, integration, maintenance & separation of human resources to the end that individual, organizational and social objectives are accomplished.

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HUMAN RESOURCE MANAGEMENT

MEANING Human resources management involves all management decisions & practices that directly affect or influence people or human resources, who work for the organization. In recent years, increased attention has been devoted to how organizations manage human resources. This increased attention comes from the realization that an organization’s employees enable an organization to achieve its goals, & the management of these human resources is critical to the success of the organization. HRM is management function that helps managers to recruit, select, train & develop members for an organization. Obviously HRM is concerned with the people’s dimensions in organizations. HRM refers to set of programs, functions & activities designed & carried out. Human resource management means employing people, developing their resources, utilizing, maintaining & compensating their services in consonance with the job & organizational requirements.

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CORE ELEMENTS OF HRM  People: Organizations mean people. It is the people who staff & manage organizations.  Management: HRM involves application of management functions & principles for acquisitioning, developing, maintaining & remunerating employees in organizations.  Integration & Consistency: Decisions regarding people must be integrated & consistent.  Influence: Decisions must influence the effectiveness of organization resulting into betterment of services to customers in the form of high quality products supplied at reasonable costs.  Applicability: HRM principles are applicable to business as well as nonbusiness organizations too, such as education, health recreation & the like.

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HUMAN RESOURCE MANAGEMENT

SCOPE From entry to the exit of an employee in the organization; Scope of HRM can be described based on the following activities of HRM. Based on these activities we can summarize the scope of HRM into 7 different categories as mentioned below after the activities. Let’s have a look at both of them HRM Activities:1. HR Planning 2. Job Analysis 3. Job Design 4. Recruitment & Selection 5. Orientation & Placement 6. Training & Development 7. Performance Appraisals 8. Job Evaluation 9. Employee & Executive Remuneration 10.Motivation 11.Communication 12.Welfare 13.Safety & Health 14.Industrial Relations

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7 Categories of Scope of HRM: 1. Introduction to HRM 2. Employee Hiring 3. Employee & Executive remuneration 4. Employee Motivation 5. Employee Maintenance 6. Industrial Relations 7. Prospects of HRM SCOPE OF HRM

NATURE OF HRM PROSPECTS OF HRM

EMPLOYEE HIRING

HUMAN RESOURCE MANAGEMENT INDUSTRIAL RELATIONS

EMPLOYEE MAINTENANCE

EMPLOYEE & EXECUTIVE REMUNERATION

EMPLOYEE MOTIVATION

FUNCTIONS OF HUMAN RESOURCE MANAGEMENT Page 7 of 59

HUMAN RESOURCE MANAGEMENT

There are 2 broad functions of HRM. They are: I.

Managerial Functions

II.

Operational Functions

Managerial Functions: Managerial functions of Personnel management include planning, organizing, directing, co-ordinating & controlling.  Planning: It is the charting out of programmes & changes in advance in the achievement of organizational goals. Hence, it involves planning of human resources requirements, recruitment, selection, training etc. It also involves forecasting of personnel needs, changing values, attitudes & behavior of their employees & their impact on the organization.  Organizing: In the words of J. C. Massie, an organization is a “structure & process by which co-operative groups of human beings allocated its tasks among its members, identifies relationships & integrates its activities towards a common objective.” Given the complex relationships that exist between specialized departments & the general departments, many top managers seek the advice of personnel manager. In this manner, the organization establishes relationships among the employees so that they can together contribute to the achievement of organizational goals.  Directing:

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After planning & organizing comes the execution of plan. The willing & effective

cooperation

of

employees

towards

the

achievement

of

organization’s goals has to be brought about by proper direction. Identifying & utilizing maximum potentials of people is possible through motivation & command. Direction, therefore, is an important managerial function in ensuring optimum employee contribution.  Co-ordinating: It is the task of matrixing various employees’ efforts to ensure successful goal achievement. The Personnel manager co-ordinates various managers at different levels as far as the personnel functions are concerned.  Controlling: After planning, organizing, directing & co-ordinating, the various activities, the performance is to be verified in order to know, at various points of time, whether the activities are performed as per plans & directions. It involves checking, verifying & comparing actual with the plans, identification of deviations if any & correcting the deviations. Auditing training programmes, analyzing labour turnover, overseeing morale surveys, conducting exit interviews are some of the controlling functions of personnel management.

Operative Functions: Page 9 of 59

HUMAN RESOURCE MANAGEMENT

The operative functions of HRM relate to employment, development, compensation & relations. All these are interacted by managerial functions. Also, they are to be performed in conjunction with management functions.

EMPLOYMENT

Human Resource Planning Recruitment Selection Induction Placement

HUMAN RESOURCE DEVELOPMENT

Performance Appraisal Training Management Development Career Planning & Development Organisation Change Organisation Development

COMPENSATION MANAGEMENT

Job Evaluation Wage & Salary Administration Fringe Benefits

HUMAN RELATIONS

Motivation Morale Job Satisfaction Communication Grievance & Disciplinary Procedures Quality of Work Life & Quality Circles

ORGANI S ATI ONALDESI GNJ OBDESI GNJ OBANALYSI S  Employment:

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Employment function is securing & employing the people having required level of human resources essential for achieving the organizational objectives. It involves job analysis, human resources planning, recruitment, selection, placement, induction & handling internal mobility.  Job Analysis: It is the study & collection of data relating to the operations & responsibilities of a specific job. It includes: a. Collection of data & information & facts relating to the various aspects of jobs including men, machines & materials. b. Drawing up of job description, job specification, job requirements & employee specification with which nature, level & quantum human resources can be finalized. c. Providing the guidelines, plans & the basis for job design & for all operative functions of HRM.  Human Resource Planning: This is the process which assures the organization that it will have adequate number of qualified persons, at requisite times, performing in a way to satisfy the needs of the organization & also provide satisfaction to the individual employee, so employed. The process involves: a. Estimating the present & future requirements of human resources based on objectives & long range plans of the organization. b. Calculation of net human resource requirements based on the present availability of human resources. c. Taking suitable steps to identify, mould, change & develop the strength of existing employees so as to meet the future requirements. Page 11 of 59

HUMAN RESOURCE MANAGEMENT

d. Preparation of action plans to acquire the balance human resources from outside the organization & to develop the existing employees.  Recruitment: It is the process of searching for future employees (requirement) & ensuring they apply for jobs in the organization. It involves: a. Identification of existing sources of candidates & developing them. b. Seeking out & identifying new sources of applicants. c. Motivating the right type of candidates to apply for jobs in the organization. d. Ensuring a healthy balance between internal & external sources.  Selection: It is the process of ascertaining the qualifications, experience, skill, knowledge, etc. of an applicant to ascertain his/her suitability for the job applied. This includes: a. Developing application blanks. b. Creating & developing valid & reliable testing techniques. c. Formulating interviewing techniques. d. Checking of references. e. Setting up for medical examination policy & procedure. f. Line Managers to be involved in the decision making. g. Sending letters of appointment. h. Employing the selected candidates, when he reports for duty.  Placement: It is a process of allotting to the selected candidate the most suitable job, as per the job requirements & employee specifications. Page 12 of 59

HUMAN RESOURCE MANAGEMENT

This function includes: a. Counselling the concerned managers regarding the placements. b. Overseeing the follow-up studies, employee performance appraisal to monitor employee adjustment to the job, in the coming days. c. Correcting wrong/misjudged placements, if any.  Induction & Orientation: These are procedures by which a new employee is rehabilitated in the new surroundings & introduced to the practices, procedures, policies, people, etc. of the organization. It includes: a. Familiarizing the employee with company philosophy, objectives, policies, career planning & development, company product, market share, history, culture, etc. b. Introduce new employee to the people—his colleagues, supervisors & subordinates. c. Mould the employees by orientation methods to the new working conditions.  Human Resource Development: This process involves improving, moulding, & developing the skills, knowledge, creativity, attitude, aptitude, values, commitment, etc. based on the present & future job & company requirements.

 Performance Appraisal: It is the continuous & systematic evaluation of individual employees with respect to their performance & their potential for future development. Page 13 of 59

HUMAN RESOURCE MANAGEMENT

It includes: a. Enunciating policies, procedures & techniques. b. Assisting functional managers. c. Reviewing & summarizing reports. d. Evaluating the effectiveness of various programmes.  Training: It is the process of transmitting the employees the technical & operating skills & knowledge. It includes: a. Identification of training needs of the individuals & for the organisation. b. Developing appropriate training programmes. c. Assissting & advising the management in the conduct oftraining programmes. d. Transmitting requisite job skills & job knowledge to the employees. e. Asses the effectiveness of the training programmes.

 Management Development:

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HUMAN RESOURCE MANAGEMENT

It is the process of designing & conducting appropriate executive development programmes so as to develop the managerial & human relations skills of the employees. It includes: a. Identification of the areas in which management development is needed. b. Conducting development programmes. c. Motivating executives/managers. d. Designing

special

development

programmes/

assessment

procedures for promotions. e. Utilising the services of specialists—both internal & external for development

&/or

Institutional

(external)

development

executive

development

programmes. f. Evaluating

the

effectiveness

of

programmes.  Career Planning & Development: It is the planning of one’s career & implementation of career palns by means of education, training, job search & acquiring of work experience. It includes: a. Internal mobility—vertical & horizontal transfers, promotions & demotion. b. Transfer—process of placing employees in the same level jobs where they can be utilised more effectively as per the needs of the organisation. This also means—developing transfer policies, offering assistance & guidance to employees under transfer orders & evaluating transfer policy periodically.

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c. Promotion—it deals with the upward assignment of employees to occupy higher positions (with better status & pay) in consonance with resoueces of employees & job requirement. The department must ensure that: i. Equitable, fair & consistent promotions are formulated & administered. ii. Managers & employees are given assistance & guidance on the subject of promotion. iii. Execution of promotional policies are as per policies & procedures. d. Demotion—is the downward assignment of an employee in an organisation. The department must ensure that: i. Equitable, fair & consistent demotion policies are drawn up. ii. Assisting & advising employees regarding demotions. iii. Ensure

fair

implementation

of

demotion

policies

&

procedures.  Organisational Development: The planned process drawn up to improve organisational effectiveness through changes in individual & group behaviour, culture & systems of the organisation—drawing models from applied behavioural science.  Human Relations: Administering

various human

resources

policies

like employment

development & compensation & interactions among the employees on one hand & employees & the management on the other, create a sense of working relationships between workers & management & trade unions. Basically they are all interactions between human beings.

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Human relations, is therefore, is an important area in management which integrates people into worksituations in a way that motivates people to work together with economic, psychological & social satisfaction thereby increasingtheir productivity.

Hence

Human Resources

Management

functions will centre around: a. Understanding perception, personality, learning, intra & inter personal relations, inter & intra group relations. b. Motivating all employees. c. Promoting employee morale. d. Developing communication skills. e. Developing leadership skills. f. Redressing satisfactorily through a well defined grievance procedure. g. Handling disciplinary cases by established disciplinary procedures & in all fairness. h. Providing adequate counselling to solve employees’ personal, work & family problems, thereby releasing their stress & strain.

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FUNCTIONS OF HRM ALONG WITH OBJECTIVES

HRM Objectives Social Objectives Organisational Objectives

Functional Objectives

Personal Objectives

Supporting HRM Functions Legal Compliance Benefits Union Management Relations Human Resource Planning Employee Relations Recruitment & Selection Training & Development Performance Appraisals Placement & Orientation Employee Assessment Performance Appraisals Placement & Orientation Employee Assessment Training & Development Performance Appraisals Placement & Orientation Compensation Employee Assessment

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OBJECTIVES  Societal Objectives: to be ethically & socially responsible to the needs & challenges of the society while minimising the negative impact ofsuch demands upon the organisation...