Fundamentals of Human Resource Management CBMHR3T03

Syllabus topics (RTMNU)

• Human Resources Management: Definition, Nature and Scope of HRM
• Evolution of HRM
• Challenges of HRM
• Human Resource Managers: Quality, Qualification, Nature & Importance
• Human Resource Planning: Objectives and Policies
• Job Analysis, Job Description and Job Specification
• HRM issues and practices: Problems in Finding the right talent
• Employee Retention
• Changing Global Scenario

Human Resource Management: Definition, Nature and Scope

Definition: Human Resource Management (HRM) is the process of getting, developing, using, rewarding and keeping the people of an organisation so that both the organisation and the employees reach their goals.

Edwin B. Flippo described personnel management as the planning, organising, directing and controlling of the procurement, development, compensation, integration, maintenance and separation of human resources, so that individual, organisational and social objectives are achieved.

Nature of HRM:

1. Part of management: HRM is a basic function of every manager, not only of the HR department.
2. People-oriented: it deals with employees as individuals and as groups.
3. Continuous process: it starts before hiring and continues till the employee leaves.
4. Goal-oriented: it links employee goals with company goals.
5. Universal: it is needed in all organisations — a factory, a bank, a hospital or a school.
6. Multi-disciplinary: it uses ideas from psychology, sociology, economics and law.
7. Future-oriented: it prepares people for future needs through planning and training.

Scope of HRM (main areas):

• Procurement: HR planning, job analysis, recruitment, selection, placement.
• Development: training, career planning, performance appraisal.
• Compensation: wages, salary, incentives, fringe benefits.
• Maintenance: health, safety, welfare and social security.
• Integration and industrial relations: trade unions, collective bargaining, grievance handling, workers' participation.
• Separation: retirement, resignation, retrenchment, exit interviews.

Evolution of HRM

1. Industrial Revolution period: workers were treated like machines; long hours and low pay.
2. Welfare stage: welfare officers were appointed to look after workers. In India, the Factories Act, 1948 made welfare officers compulsory in factories with 500 or more workers.
3. Scientific management (F.W. Taylor): focus on efficiency, time study and piece-rate wages.
4. Human relations stage (Elton Mayo, Hawthorne studies, 1920s-30s): showed that attention, feelings and group behaviour affect productivity.
5. Personnel management stage: a separate personnel department for hiring, records, wages and labour law work.
6. HRM stage: employees are seen as a valuable resource or asset, not a cost.
7. Strategic HRM and digital HR (today): HR is a business partner; it uses data, HR software and AI.

Challenges of HRM

• Globalisation: competition with global firms for skilled people.
• Technology change: automation and AI need re-skilling of staff.
• Workforce diversity: people of different age, gender, language and region work together.
• Attrition: high job-hopping, especially in IT and BPO companies.
• New labour codes and laws: keeping up with legal changes.
• Remote and hybrid work: managing and engaging people who work from home.
• Employee well-being: stress, burnout and work-life balance.

Human Resource Managers: Quality, Qualification, Nature and Importance

Qualities of a good HR manager: good communication, fairness and honesty, patience, problem-solving ability, knowledge of labour laws, leadership, empathy (understanding others' feelings), confidentiality and an open mind towards change.

Qualification: usually a graduate degree with an MBA (HR), MPM (Master of Personnel Management) or MLW (Master of Labour Welfare); knowledge of labour laws and HR software is an added advantage. The Factories Act requires welfare officers to have qualifications laid down by the State Government.

Nature of the HR manager's job: it is both a staff (advisory) role and a line role inside the HR department; the HR manager acts as advisor, counsellor, mediator between management and workers, and change agent.

Importance: gets the right people, builds good industrial relations, reduces disputes and absenteeism, ensures legal compliance, and builds a good employer image.

Human Resource Planning: Objectives and Policies

Definition: Human Resource Planning (HRP) is the process of deciding in advance how many and what kind of people an organisation will need, and how to get them at the right time.

Objectives: (1) ensure the right number and type of people; (2) avoid shortage or surplus of staff; (3) plan training and promotion; (4) control labour cost; (5) prepare for expansion or new technology.

HR policies are general guidelines for HR decisions, e.g. a policy of internal promotion first, equal pay for equal work, no discrimination, and a fixed retirement age.

Job Analysis, Job Description and Job Specification

Job analysis is the process of collecting and studying information about a job — its duties, responsibilities, working conditions and the skills needed to do it. Methods: observation, interview, questionnaire, and work diary.

HRM Issues and Practices

Problems in finding the right talent: skill gap between college education and industry needs, competition for skilled people, high salary expectations, and fake resumes. Firms respond through campus hiring, employee referrals, apprenticeships and skill training.

Employee retention: keeping good employees for a long time. Practices: fair pay, career growth, recognition, flexible work, good manager relations, and employee engagement activities.

Changing global scenario: multinational companies, cross-cultural teams, remote working across countries, gig workers (short-term, task-based workers such as delivery partners) and the need to follow international standards.

Likely exam questions

1. (Long, 8/16 marks) Define Human Resource Management. Explain its nature and scope.
2. (Long, 8/16 marks) What is Human Resource Planning? Explain job analysis and distinguish between job description and job specification.
3. (Short, 4 marks) Explain the challenges of HRM.
4. (Short, 4 marks) State the qualities of a good HR manager.
5. (Short, 4 marks) What is employee retention? Give four ways to retain employees.

Syllabus topics (RTMNU)

• Manpower Planning: concept, importance, definition and challenges
• Recruitment & Selection: Sources of Recruitment
• Selection Process
• Test Types
• Interview Types
• Training & Development: Design & Evaluation of T&D Programmes
• Methods of Training
• Induction & Orientation
• Career Development
• Performance and Potential Appraisal: Process and techniques, theories & Issues

Manpower Planning: Concept, Definition, Importance and Challenges

Definition: Manpower planning is the process of estimating the future need for employees (number and skills) and making plans to have the right people in the right jobs at the right time.

Concept: it compares demand for manpower (how many people are needed) with supply (how many are available inside and outside), and plans to close the gap by hiring, training, transfer or reducing staff.

Steps: (1) study company objectives; (2) forecast demand; (3) estimate supply; (4) find the gap (shortage or surplus); (5) action plan; (6) review.

Importance:

1. Avoids shortage or excess of staff.
2. Reduces labour cost and wastage.
3. Helps plan training and promotions in advance.
4. Supports expansion, new plants and new technology.
5. Helps meet legal needs such as reservation policy in government bodies.

Challenges: uncertain future business, fast technology change, high attrition, inaccurate data, resistance from managers and unions, and government policy changes.

Recruitment and Sources of Recruitment

Definition: Recruitment is the process of searching for suitable candidates and encouraging them to apply for jobs in the organisation. It is a positive process (it increases the number of applicants).

Internal sources are cheaper and motivate staff; external sources bring fresh talent and new ideas.

Selection Process, Test Types and Interview Types

Definition: Selection is the process of choosing the most suitable candidate from those who applied. It is a negative process because it rejects many applicants.

Steps of selection:

1. Screening of applications
2. Preliminary interview
3. Selection tests
4. Main (final) interview
5. Reference and background check
6. Medical examination
7. Final selection and appointment letter
8. Placement and induction

Types of tests: aptitude test (ability to learn), intelligence test (reasoning, IQ), personality test (nature and attitude), interest test (likes and dislikes), achievement or trade test (present skill, e.g. typing speed), and psychometric tests (measure mental qualities).

Types of interviews: structured (fixed questions), unstructured (free talk), panel (many interviewers), stress interview (tests behaviour under pressure), group discussion, telephone/video interview, and behavioural interview (asks about past real situations).

Training and Development: Design, Evaluation and Methods

Training is the process of improving an employee's knowledge and skills for the present job. Development is long-term growth of the person for future, higher jobs.

Design of a T&D programme: (1) training need analysis; (2) set objectives; (3) choose trainer, content and method; (4) conduct the programme; (5) evaluate.

Evaluation (Kirkpatrick model, four levels): Reaction (did trainees like it?), Learning (what did they learn?), Behaviour (do they use it on the job?), Results (did output, quality or sales improve?).

Methods of training:

• On-the-job: job rotation, coaching, apprenticeship, understudy, job instruction training.
• Off-the-job: lectures, case studies, role play, vestibule training (a model workplace set up separately), simulation, e-learning.

Induction and Orientation; Career Development

Induction (orientation) is introducing a new employee to the company, its rules, people and job, so that they feel at home. Example: Infosys runs a well-known training programme for freshers at its Mysuru campus.

Career development is planning an employee's growth path within the company through training, job rotation, mentoring and promotion. It improves loyalty and reduces attrition.

Performance and Potential Appraisal

Performance appraisal is the regular evaluation of an employee's work against set standards. Potential appraisal judges whether the employee can handle higher jobs in future.

Process: set standards → tell employees → measure actual performance → compare → discuss with employee (feedback) → take action (training, increment, promotion).

Techniques:

• Traditional: ranking, paired comparison, graphic rating scale, checklist, critical incident method, essay method.
• Modern: Management by Objectives (MBO), 360-degree appraisal (feedback from boss, peers, subordinates and customers), BARS (Behaviourally Anchored Rating Scales), assessment centre, Key Result Areas (KRAs).

Theories related to appraisal: Goal-setting theory (Edwin Locke — clear, hard goals raise performance, the base of MBO), Expectancy theory (Victor Vroom — effort rises when people expect a reward), and Equity theory (J.S. Adams — employees compare their rewards with others).

Issues (errors): halo effect (one good quality colours the whole rating), horns effect (opposite), central tendency (rating everyone average), leniency or strictness, recency effect (only recent work remembered), and personal bias.

Likely exam questions

1. (Long, 8/16 marks) What is recruitment? Explain the internal and external sources of recruitment and the steps in the selection process.
2. (Long, 8/16 marks) Define performance appraisal. Explain its process and the traditional and modern techniques of appraisal.
3. (Short, 4 marks) Explain the importance of manpower planning.
4. (Short, 4 marks) Distinguish between recruitment and selection.
5. (Short, 4 marks) What is induction? Why is it important?

Syllabus topics (RTMNU)

• Compensation: Meaning, Types, Criteria and Importance
• Rewards, incentives and other benefits
• Labour Welfare: Safety & health
• Programs and Policies
• Government intervention
• Work life balance: stress management
• Work stress and Counselling
• Collective Bargaining: Features
• Pre-Requisites of collective bargaining
• Agreement at different levels
• Successful Participation of Workers in Management

Compensation: Meaning, Types, Criteria and Importance

Meaning: Compensation is the total of all money and non-money rewards an employee gets in return for work — wages or salary, allowances, incentives and benefits.

Types of compensation:

1. Direct (monetary) compensation: basic pay, dearness allowance (DA), house rent allowance (HRA), overtime, commission, bonus.
2. Indirect compensation (fringe benefits): provident fund, gratuity, insurance, medical facility, paid leave, canteen, transport.
3. Non-monetary rewards: recognition, certificates, job title, flexible hours, growth chances.

Criteria for fixing compensation:

• Nature of the job (found by job evaluation)
• Skill, education and experience of the employee
• Pay given by other firms for similar jobs (market rate)
• Cost of living (price rise)
• Paying capacity of the company
• Legal rules — minimum wages, bonus, equal pay for men and women
• Trade union bargaining strength

Importance: attracts good people, motivates employees, reduces turnover, builds fairness and job satisfaction, improves productivity, and keeps the firm within the law.

Rewards, Incentives and Other Benefits

Rewards are given for good performance (e.g. "Employee of the Month"). Incentives are extra payments linked to output or results.

• Individual incentives: piece rate, sales commission, Halsey and Rowan premium plans (bonus for time saved).
• Group incentives: team bonus, profit sharing, gain sharing.
• Long-term incentives: ESOP (Employee Stock Option Plan) — shares given at a lower price, common in Indian IT companies and startups.
• Other benefits: leave travel allowance, group insurance, crèche, education help for children, retirement benefits.

Labour Welfare: Safety and Health, Programs and Policies, Government Intervention

Meaning: Labour welfare means all facilities and services given to workers, inside and outside the workplace, for their comfort, health and better life.

Safety and health: fencing of machines, fire safety, safety shoes and helmets, first-aid boxes, clean drinking water, proper light and air, regular medical check-ups and safety training.

Welfare programs:

• Intra-mural (inside the factory): canteen, rest rooms, washrooms, crèche, first aid.
• Extra-mural (outside): housing, schools, hospitals, transport, sports and recreation.

Welfare policies of a company state its commitment to safe and decent conditions, e.g. a zero-accident policy or an employee assistance programme.

Government intervention: the Government makes welfare compulsory through laws — Factories Act, 1948 (health, safety, welfare, canteen in factories with more than 250 workers, crèche where more than 30 women workers are employed); Employees' State Insurance Act, 1948; Employees' Provident Funds Act, 1952; Maternity Benefit Act, 1961. These are now being merged into the Occupational Safety, Health and Working Conditions Code, 2020 and the Code on Social Security, 2020. Labour welfare boards and labour inspectors check compliance.

Work-Life Balance: Stress Management, Work Stress and Counselling

Work-life balance means a healthy balance between time and energy given to work and to personal life (family, health, rest).

Work stress is the physical and mental pressure an employee feels when job demands are more than his or her ability to cope.

Causes of work stress: heavy workload, long hours, tight deadlines, job insecurity, poor relations with boss, unclear role, and conflict between work and family.

Effects: headache, high BP, anger, absenteeism, low productivity, mistakes and high turnover.

Stress management:

• Individual level: time management, exercise, yoga and meditation, enough sleep, hobbies.
• Organisational level: clear roles, fair workload, flexible hours, work from home, leave policy, wellness programmes.

Counselling is a confidential talk between a trained counsellor and an employee to help solve personal or work problems. Types: directive (counsellor advises), non-directive (employee finds own solution) and participative (both together). Many firms run Employee Assistance Programmes (EAPs) for this.

Collective Bargaining: Features and Pre-requisites

Definition: Collective bargaining is the process in which representatives of employers and of workers (trade union) discuss and agree on wages, working conditions and other terms of employment.

Features:

1. Collective: workers bargain as a group, not alone.
2. Bipartite: only two parties — employer and union; the government is not a party.
3. Continuous: it does not end with one agreement.
4. Give and take: both sides make compromises.
5. Flexible and voluntary.
6. Democratic: leads to self-government in industry.

Pre-requisites (conditions for success): a strong and recognised trade union, a positive attitude of management, willingness to compromise, honest sharing of facts, freedom of association, and faithful implementation of the agreement.

Agreements at Different Levels; Workers' Participation in Management

Levels of collective bargaining:

• Plant (unit) level: between one factory and its union.
• Industry level: one agreement for a whole industry, e.g. wage settlements between the Indian Banks' Association (IBA) and bank employees' unions.
• National level: between national federations of employers and central trade unions.

Workers' Participation in Management (WPM) means giving workers a voice in management decisions that affect them.

Forms: Works Committees (under Industrial Disputes Act, 1947, in units with 100 or more workers), Joint Management Councils, workers on the Board of Directors, suggestion schemes, quality circles and employee shareholding.

Conditions for successful WPM: trust between both sides, strong single union, training of workers, sharing of information, and support of top management.

Likely exam questions

1. (Long, 8/16 marks) What is compensation? Explain its types, criteria for fixing compensation and its importance.
2. (Long, 8/16 marks) Define collective bargaining. Explain its features, pre-requisites and levels.
3. (Short, 4 marks) What is labour welfare? Distinguish intra-mural and extra-mural welfare facilities.
4. (Short, 4 marks) Explain the causes of work stress and ways to manage it.
5. (Short, 4 marks) What is Workers' Participation in Management? State its forms.

Syllabus topics (RTMNU)

• Talent Management: Meaning, definition, significance
• Process & strategies for talent management
• Artificial Intelligence in HRM: Meaning of AI in HRM
• Role of AI in HRM
• Advantages of AI in HRM
• Challenges Posed by AI in HRM
• HR Analytics: Definition, Meaning, Importance
• Key Metrics
• Data Requirements and Implementation
• Human Resource Information System (HRIS): Concept, meaning and importance

Talent Management: Meaning, Definition and Significance

Definition: Talent management is the planned process of attracting, developing, motivating and keeping high-performing and high-potential employees so that the organisation always has the right skills for its present and future needs.

Meaning in simple words: finding the best people, growing them, and making sure they stay.

Significance:

1. Competitive advantage: skilled people are hard to copy, unlike machines.
2. Leadership pipeline: future leaders are ready when senior people retire (succession planning).
3. Lower attrition: talented people stay when they see growth.
4. Higher productivity and innovation.
5. Better employer brand: good candidates want to join (e.g. Tata Group's reputation as an employer).

Process and Strategies for Talent Management

Process:

1. Planning: find which key skills and roles are needed.
2. Attracting: employer branding, campus hiring, referrals.
3. Selecting: choose people with the right skills and attitude.
4. Developing: training, mentoring, job rotation, leadership programmes.
5. Retaining: fair pay, recognition, career paths.
6. Succession planning and review: identify and prepare successors for key posts.

Strategies: build a strong employer brand; identify high-potential employees using a 9-box grid (performance vs potential); personalised career plans; mentoring and coaching; performance-linked pay and ESOPs; internal job postings; a culture of learning and well-being.

Artificial Intelligence in HRM: Meaning and Role

Meaning: Artificial Intelligence (AI) in HRM means using computer systems that can learn from data and make predictions or decisions to carry out HR tasks such as screening resumes, answering employee queries and analysing performance.

Role of AI in HRM:

• Recruitment: AI tools scan thousands of resumes and shortlist matching candidates; chatbots schedule interviews.
• Onboarding: chatbots answer new joiners' questions on policies and leave.
• Training: learning platforms suggest courses based on each employee's skill gaps.
• Performance management: analyses work data and gives continuous feedback.
• Attrition prediction: identifies employees likely to leave so HR can act early.
• Payroll and attendance: face-recognition attendance, automatic salary calculation.

Advantages of AI in HRM and Challenges Posed by AI in HRM

In India, the Digital Personal Data Protection Act, 2023 requires firms to handle personal data, including employee data, lawfully and with care.

HR Analytics: Definition, Meaning and Importance

Definition: HR analytics (people analytics) is the collection and analysis of employee data to improve HR decisions and business results.

Meaning: instead of guessing, HR uses numbers — for example, finding out why turnover is high in one department.

Importance: better hiring decisions, reduced attrition, correct workforce planning, measuring training value, fair pay decisions, and linking HR to business goals.

HR Analytics: Key Metrics, Data Requirements and Implementation

Key metrics (with simple formulas):

• Attrition (turnover) rate = (Employees who left during the period ÷ Average number of employees) × 100
• Absenteeism rate = (Man-days lost ÷ Total man-days scheduled) × 100
• Time to hire = days from job opening to offer accepted
• Cost per hire = Total recruitment cost ÷ Number of hires
• Training ROI, revenue per employee, employee engagement score, offer acceptance rate.

Example: a firm had on average 200 employees and 30 left in a year. Attrition rate = 30 ÷ 200 × 100 = 15%.

Data requirements: employee master data (age, qualification, joining date), attendance, payroll, performance ratings, training records, exit interview data and engagement surveys. Data must be accurate, complete, up to date and kept confidential.

Implementation steps: (1) decide the business question; (2) collect and clean data; (3) choose tools (Excel, HR software, dashboards); (4) analyse and find patterns; (5) present findings to managers; (6) act and track results.

Human Resource Information System (HRIS): Concept, Meaning and Importance

Meaning: HRIS is a computer-based system that collects, stores, processes and reports all information about employees and HR activities in one place.

Concept: it works as an HR database plus software modules — employee records, recruitment, attendance and leave, payroll, training, performance and employee self-service. Examples: SAP SuccessFactors, Oracle HCM, and Indian products such as Zoho People and Keka.

Importance:

1. Quick and accurate information for decisions.
2. Saves paperwork, time and cost.
3. Error-free payroll and statutory reports (PF, ESI, TDS).
4. Employee self-service — staff can apply for leave or download payslips themselves.
5. Base for HR analytics and manpower planning.
6. Better data security with access control.

Likely exam questions

1. (Long, 8/16 marks) What is talent management? Explain its significance, process and strategies.
2. (Long, 8/16 marks) Explain the meaning and role of Artificial Intelligence in HRM. State its advantages and challenges.
3. (Short, 4 marks) Define HR analytics and state its importance.
4. (Short, 4 marks) Explain any four key HR metrics.
5. (Short, 4 marks) What is HRIS? State its importance.