Everything you need to know about the functions of human resource management.
The functions of Human Resource Management can be divided into two categories: 1. Managerial Functions, and 2. Operative functions.
Functions of Human Resource Management: Managerial and Operating Functions
Functions of Human Resource Management:
The functions of human resource management may be classified as follows:
(A) Managerial Functions
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(B) Operating Functions.
1. Planning
2. Organising
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3. Directing
4. Coordinating
5. Controlling
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1. Procurement
2. Development
3. Promotion, Transfers and Termination
4. Compensation
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5. Integration
6. Welfare Activities
7. Maintenance.
(A) Managerial Functions:
Management is getting the work done through the efforts of other people. It is a distinct process consisting of planning, organising, directing, coordinating and controlling the activities of the employees in an enterprise.
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These functions are discussed below:
Planning involves thinking in advance. It refers to the determination of what is to be done, how and where it is to be done, who is to do it and how results are to be evaluated. It involves the development of forecasts, objectives, policies, programmes, procedures, schedules and budgets. In the contest of personnel management, it requires the determination of human resource needs.
Planning function of personnel management involves:
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(i) Determination of the human resource needs of each department in the organisation on the basis of its requirements.
(ii) Deciding the sources of employment of such persons and arranging to procure the same through recruitment, selection and placement.
(iii) Determination of the training needs of the employees and taking necessary steps to impart the right type of training.
(iv) Motivating the workers for improving their work performance and providing to them selected financial and non-financial incentives.
Organisation means creation of a structure of duties and functions to be performed by different types of employees for the attainment of organisational goals.
The organising function of personnel management involves:
(i) Assignment of task to each employee according to his capacity and calibre. In other words, it decides who should do what job.
(ii) Delegating authority to the employees and fixing the responsibility on them for their performance. In other words, it should clarify who is responsible to whom.
(iii) According a system for assessing the work performance of each employee and communicating the same to the concerned employees.
(iv) Setting up a good organisational structure where every employee is clear about his role in the organisation. For this purpose, it should design the structure of relationship among jobs, personnel and physical factors.
Directing function of personnel management involves:
(i) Issuing orders and instructions to subordinate employees.
(ii) Guiding and teaching the subordinates the proper way of doing their work; and
(iii) Supervising the subordinates to ensure that the work done by them conforms to the plans.
(iv) Directing also includes motivating employees to accomplish their work. The management should take into account the circumstances, psychology, economic and social factors while selecting the techniques of motivation.
Though most of the above decisions are taken by the top management, the personnel department is consulted at every stage.
Coordinating is the function of synchronizing and unifying the various activities in the enterprise, for the achievement of the common objectives of the enterprise. Co-ordination of the personnel is required at all the levels of management. Personnel department is responsible for coordinating the task of developing, interpreting and reviewing personnel policies and programmes relating to the employees. It assists the top management as well as the line managers in this connection.
Controlling means a continuous process of checking, regulating and verifying whether everything occurs according to the predetermined standards and plans. The work-performance of every employee in the organisation is regularly reviewed to find out whether he has done the work according to the standards or not.
If the performance is low, then proper steps will be taken to set it right. Thus, controlling function involves reviewing performance and taking corrective measures.
(B) Operating or Service Functions:
The operative functions of the Human Resources Management are related to procuring, developing, compensating, integrating and maintaining the employees for attaining the organisational goals. These functions are also known as service functions.
They are discussed below:
The procurement function of the Human Resources Management is considered with the procurement of adequate and appropriate number of employees to carry out the work in the enterprise. For this purpose, the personnel department has to find out the requirement of personnel in each department i.e. the number of employees required, their educational and technical qualifications, experience, etc. so that it would be able to procure right type of persons for the various jobs in the enterprise.
The various aspects of procurement functions are:
(a) Procurement i.e. recruitment of adequate and appropriate number of employees. For this purpose, it has to tap possible sources from where prospective labour supply will come.
(b) Collecting information about prevailing wage rates and job requirements.
(c) Selection of suitable candidates through proper procedure and placing them in different places.
(d) Maintaining records of each employee.
(e) Introducing to the new employees the various officers – subordinates as well as higher officers so as to enable them to acquaint fully with the organisation.
The development function of the Human Resources Management is concerned with the development of the employees by improving their working capacity and increasing their skill and proficiency in work. This is done by giving proper training to the employees by different methods.
The personnel department holds suitable training programmes for different types of workers to cover their deficiencies in performance and to improve their efficiency. It will also give job description to the employees to enable them to know their weak points in their work performance.
The various aspects of development programme are as follows:
(a) Training new employees as well as old employees.
(b) Training in safety measures and in various types of policies of the enterprise.
(c) Training through different methods.
(d) Job description to enable the workers to know their work fully well and find out their weak points while performing their work.
(e) Encouraging the workers to give suggestions for improving the performance of the work.
3. Promotion, Transfer and Termination:
The work-performance of the employees is evaluated for the purpose of promotion, demotion, transfer or termination of their services. Merit-rating is a systematic study of evaluating periodically the work- performance of the employees.
These functions of the Human Resources Management are as follows:
(a) Formulation of a proper and satisfactory and incentive promotion policy.
(b) Formulation of a proper policy of transfers and termination.
(c) Undertaking steps to reduce labour-turnover.
The compensation function is concerned with securing sufficient and equitable remuneration to the employees working in the organisation. It undertakes job analysis for the purpose of fixing the remuneration for various jobs. It also takes into account the needs of the job as well as the qualifications, experience etc. of the persons taking up these jobs while fixing the remuneration.
If the employees are paid less than what they deserve, they are likely to leave their job at the earliest opportunity. Well-paid employees are well contented who put in best of their efforts in their work, and who will be loyal to their enterprise.
The various aspects of this function are as follows:
(a) Undertaking job evaluation and determination of the job-worth in money terms.
(b) Collaboration with others concerned in the formulation of proper and fair wage policy and plans.
(c) Assisting in the formulation of pension policy, profit-sharing plans, non-monetary benefits such as labour participation in management etc.
(d) Removal of discrepancies, if any, when found in the wage-in consistencies.
Integration function is concerned with making efforts to effect reconciliation of individual, organisation and social interest. It involves infusing a sense of belonging to the enterprise among the employees. It aims at making the employees identify their personal interest with that of their enterprise, and creating team-spirit among them.
If tries to make them feel that whatever is good of the enterprise will also be in their own interest and bring about harmony of interests of both employees and the organisation.
For this purpose, there should be proper communication channels at all levels. The grievances of the employees should be redressed at the earliest as it will help in building up good industrial relations, and thereby integrate them fully.
The welfare activities relate to physical and social welfare of the employees.
They include:
(a) Provision of medical facilities such as first aid, dispensaries, hospital, sick-leave, rest etc.
(b) Elimination or minimising of accidents and dangers at work and providing adequate compensation, if they take place.
(c) Provision of restaurants and other recreational facilities.
(d) Observing labour laws strictly and efficiently.
(e) Providing other facilities such as housing, education of children of employees, tours, sports etc.
This function is concerned with maintaining good, healthy and satisfactory working conditions at all times so that the latter would build up good industrial relations. Good working conditions include establishment of health, sanitation and safety standards.
Functions of Human Resource Management (Top Six Functions):
Function # 1. Staffing:
Staffing is a process of matching the jobs with individuals. It is a function of managing the jobs. After organising the total activities to be done, management is in a position to know the man-power requirements of the company at different level in the organisation. The management is in a position to take necessary steps for recruitment, selection, training and placement of employees.
Staffing is a continuous process because existing employees may leave the organisation and new employees may join it. Therefore, business organisation has to recruit additional managerial and operative force to meet the growing recruitments of the enterprise.
According to Koontz and O’Donnell “Staffing involves manning the organisation structure through proper and effective selection, appraisal and development of personnel to fill the roles designed into the structure.”
According to Theo Heimann-“Staffing is concerned with the placement, growth and development of all those members of the organisation whose function is to get the things done through the efforts of other individuals.”
Function # 2. Manpower Planning:
According to E. B. Geisler – “Manpower planning is the process including forecasting, developing and controlling by which a firm ensures that it has the right number of people and right kind of people at the right places, at the right time doing work for which they are economically most useful.”
According to Dale S. Beach, “Human resources planning is a process of determining and assuring that the organisation will have an adequate number of qualified persons, available at the proper times, performing jobs which meet the needs of enterprise and which provide satisfaction for the individuals involved.”
Process or Steps of Manpower Planning:
Manpower planning involves the following basic processes or steps:
(I) Personnel Forecasting:
Every organisation has to forecast future manpower needs. This is done scientifically through econometric and other mathematical projections to trends in the economy and its various sectors, viz.-agriculture, industry, transport, communication, banking etc. This may also be done through judgement projections based upon the experience and the managerial foresight of top management.
(II) Personnel Inventory:
It involves preparing a detailed catalogue of present manpower incorporating their educational and professional qualifications, work experience, personal background, assignments handled, training received etc., the purpose of preparing this inventory is to know the number and the quality of personnel available from within the organisation to man various positions and jobs. Further, whether the organisation decides to go in for expansion, modernization, diversification, etc.
(III) Job Analysis:
This process requires undertaking a detailed analysis of various skills required to do the jobs and to spell out the duties and responsibilities associated with job. This produces two outcomes – (i) one is called job description and the other, (ii) job specification.
The former describes the nature of the job together with the duties and responsibilities associated with it; the latter specifies the quality of personnel needed to man such jobs by specifying the education, professional qualifications and the work experience required on the part of such personnel.
(IV) Planning for Staffing:
The final stage of manpower planning necessitates the preparation of programmes of recruitment, selection, training, transfer, promotion, development and wage and salary administration so that the manpower needs of the enterprise could be effectively met.
Function # 3. Recruitment:
Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organisation. It is a positive process because it increases the selection ratio by attracting a large number of applicants for the advertised jobs.
According to Dales S. Beach-“Recruitment is the development and maintenance of adequate manpower resources. It involves the creation of a pool of available labour upon whom the organisation can depend when it needs additional employees.”
According to Edwin B. Flippo- “Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organisation.”
Further, Roger H. Hawk has written that “the purposes of a recruitment function are primarily straight forward; to seek out, to evaluate, to obtain commitment from, plan and orient the employees to fill positions required for the successful conduct of the work of an organisation.”
Recruitment enables the management to select suitable employees for different jobs. It is significant to point out that hiring of employees through selection is a negative process since it involves the taking of suitable candidates for the organisation and rejection or elimination of the other applicants.
Importance of Recruitment Method:
The method of recruitment that an organisation uses directly affects the efficiency of in its selection and placement of programme in at least three ways:
(1) It determines the number of qualified applicants applying for a particular position.
(2) It influences how well the organisation meets its obligations to hire minority group members and women. This usually entails advertising in minority newspaper, sending recruitment to minority colleges and high schools and cooperating with such agencies as the urban league that specialise in working with the minority community. It also involves actively searching for qualified women when filling positions not traditionally held by women.
(3) It can sometimes affect the subsequent turnover rates of employees. Several studies have shown that when recruiters give applicants realistic expectations about a particular job by pointing out both the positive and negative aspects of it, lower turnover rates result. This is particularly true when the job is fairly complex in terms of the physical and mental demands placed on the incumbents, as in the case of managerial and sales positions.
Other recruiters give applicants unrealistic expectations regarding the company and their future jobs, thereby resulting in frustration, dissatisfaction and early termination. One possible solution to this problem used by several companies is a work sample, which gives the prospective employee a realistic picture of what will be expected of him or her. This involves providing films, video tapes, printed booklets or job visit to realistically depict training and work.
Sources of recruitment can be classified into two broad categories:
(1) Internal i.e., recruitment from within the enterprise.
(2) External i.e., recruitment from outside.
(1) Internal Sources of Recruitment:
There are two important internal sources of recruitment, namely:
(i) Transfer; and
(ii) Promotion.
(i) Transfer:
It involves the shifting of an employee from one job to another. At the time of transfer it is ensured that the employee to be transferred to the new job is capable of performing it. In fact transfer does not involve any drastic change in the responsibilities and status of the employee.
(ii) Promotion:
On the other hand leads to shifting an employee to a higher position carrying higher responsibilities, facilities, status and pay. Most of the companies follow the practice of filling higher jobs by promoting employees who are considered for such positions. Filling vacancies in higher jobs from within the organisation has the advantages of stimulating and preparing the employees for possible transfers or promotions increasing the morale of the employees and simplifying the selection and placement problems.
(2) External Sources of Recruitment:
Every new enterprise has to tap external sources for various positions. Running enterprises have also to recruit employees from outside, for filling the positions whose specifications cannot be met by the present employees.
An important source of recruitment is direct recruitment by placing a notice on the notice board of the enterprise. Specifying the details of the job available. Another name for this type of recruitment is “Recruitment at Factory gate.”
Very common external sources of recruitment are as follows:
(a) Unsolicited Applications:
This type of recruitment serves as a valuable source of manpower. If adequate attention is paid to maintain pending application folders for various jobs, the personnel department may find the unsolicited applicants useful is filling the vacancies whenever they arise.
(b) Advertisement:
Advertisement in newspaper or trade and professional journals is generally used when qualified or experienced personnel are not available from other sources. Most of the senior positions in industry as well as commerce are filled by this method.
(c) Employment Agencies:
Employment exchanges run by the Government are regarded as a good source of recruitment for skilled, semi-skilled and skilled operative jobs. In some cases compulsory notification of vacancies to the employment exchange is required by law. Thus, the employment exchanges bring the job gives in contact with the job-seekers.
(d) Educational Institutions:
Jobs in commerce and industry have become increasingly technical and complex to the point where school and college degrees are widely required. Consequently, many big organisations maintain a close liaison with the universities vocational institutes and management institutes for recruitment to various jobs. Recruitment from educational institutions is the well-established practice of thousands of business and other organisations.
(e) Recommendations:
Applicants introduced by friends and relatives may prove to be a good sources of recruitment and indeed many employers prefer to take such persons because something about their background is known. When a present employees or a business friend recommends a person, a type of preliminary screening takes place.
(f) Labour Contractors:
Labour contractors are an important source of recruitment in many industries in India. Workers are recruited through labour contractors who are themselves employees of the organisation. But, now-a-days this system of recruitment is losing popularity.
Selection process is a tool in the hands of the management to differentiate the qualified and unqualified applicants by applying various techniques such as interviews, tests etc. Therefore, selection is a negative process of employment in which only a few qualify for the job and are offered employments, while all others are denied the opportunities.
It is a decision-making process where the management decides certain norms and principles to adhere to standards on the basis of which, a discrimination between qualified and unqualified candidates may be made. A sound selection policy ensures the selection of a suitable candidate.
Function # 4. Selection Procedure:
These days the selection has become a critical process because it requires a heavy investment of money to get the right type of people. Induction and training costs are also rising. If the right types of persons are not chosen, it will lead to a huge loss of the employer in terms of time, effort and money.
Therefore, it is essential to devise a suitable selection procedure. Each step in the selection procedure should help in getting more and more information about the applicant to facilitate decision-making in the area of selection.
The important steps followed by modern organisations to get right type of persons are as follows:
1. Scrutiny of Application Forms.
2. Preliminary Interview.
3. Application Blank –
(a) Identification,
(b) Education,
(c) Experience,
(d) Expected salaries,
(e) Community activities,
(f) References.
4. Employment Tests –
(a) Trade Tests
(b) Psychological Tests –
(i) Aptitude Tests,
(ii) Intelligence Tests,
(iii) Interest Tests,
(iv) Knowledge Tests,
(v) Projective Tests,
(vi) Personality Tests,
(vii) Judgement Tests,
(viii) Dexterity Tests.
5. Employment Interview.
6. Physical / Medical Examination.
7. Reference Check.
8. Final Selection.
1. Scrutiny of Application Forms:
Selection procedure starts only after the applications are received by a concern. Considering the standards set out by the organisation these applications are scrutinised. The applications are screened out at each step.
The purpose of this procedure is to eliminate the unqualified or unsuitable candidates. It should be brief to have an idea of general education, experience, training, appearance, personality and salary requirements of the candidate etc.
A Blank Application Form or Application Blank is a weeding out device in the selection procedure. It is supplied to the successful candidates in preliminary interviews. Application blank is used to obtain information in the applicant’s own handwriting sufficient to properly identify him and to make tentative inferences regarding his suitability for employment. The application blank should be as simple as possible and incorporate questions having bearing on the fitness of the applicant for the job.
Application blanks give a written record of the following informations:
(a) Identification- This gives an information of family background, data and place of birth, age, sex, height, citizenship, marital status etc.
(b) Education- It includes information about academic career, subjects taken at various schools, certificate and degree levels, grade, division or place awarded in school and college, technical qualification etc.
(c) Experience- Giving full details of past jobs such as nature of work, job responsibilities, periods involved, designation, salaries with allowances, reasons for leaving the present assignment etc.
(d) Salaries Acceptable- Allowances and other fringe benefits.
(e) Community Activities- These consist of details regarding, extra-curricular activities, hobbies, position held in social organisation such as clubs, management, association etc.
(f) References- These may be collected and gathered from reliable and reputed persons.
These days’ psychological and other tests are becoming increasingly popular, as a part of the selection process. The personnel department may guide and help in the selection of types of tests appropriate for particular position. So, before deciding upon the job or jobs suitable for a particular individual. One should know the level of his ability and the knowledge, the pattern of his interest and aptitudes in detail.
This will require the use of employment tests which are as follows:
(a) Trade Tests:
Technical jobs require ‘trade tests’. The purpose of trade test is to assess the capabilities of the candidates for the type of job. Which is being offered to him. For Example—for recruitment of a stenographer in an office, a test can be taken to check his speed at dictation and typing.
(b) Psychological Tests:
As the individuals differ from one another the industrial psychologists have devised certain tests to assist the management in evaluation of the expected performance on the task relative to that of the other candidates.
Some of these tests are the following:
(i) Aptitude Tests:
Aptitude means the potential which an individual has for learning the skills required to do a job efficiently. Aptitude tests measure an applicant’s capacity and his potential for development. These tests are the most promising indices for predicting worker’s success. These are designed to measure the aptitude of applicants and their capacity to learn the skills required on a particular job.
(ii) Intelligence Tests:
These aim at testing the mental capacity of a person with respect to various things. It measures the individual learning ability to grasp or understand instructions and also ability to reason and make judgement. There are verbal and non-verbal individual and group intelligence tests. Intelligence tests are widely used in the selection of personnel for almost every kind of job from the un-skilled to the skilled one.
(iii) Interest Tests:
Interest tests identify patterns of interest that is areas in which the individual shows special concern, fascination and involvement. These tests will suggest what type of jobs may be satisfying to the employees. Interest tests are more often used for vocational guidance also. They help the individuals in selecting occupations of their interest.
(iv) Knowledge Tests:
These are devised to measure the depth of the knowledge and proficiency in certain skills already achieved by the applicants such as engineering, accounting etc.
(v) Projective Tests:
In projective techniques the applicant projects his personality into free responses about pictures shown to him which are ambiguous.
(vi) Personality Tests:
These determine personality traits of the candidate such as cooperativeness against dominance or the emotional balance, the temperamental qualities of a person. It is very difficult to device and use personality tests because they are concerned with discovering clues to an individual’s value system, his emotional reaction, maturity etc.
(vii) Judgement Tests:
These are used for evaluating ability to apply knowledge judiciously in solving a problem.
(viii) Dexterity Tests:
These are used to discover the ability to use the different parts of body in a co-ordinated manner. These are useful in identifying accident prone candidates for certain manufacturing jobs.
Psychological tests are simply a step and not a replacement for the other .phase of the selection process.
This type of interview must be conducted in a friendly atmosphere. The candidate must be made to feel at ease. The questions should better be asked on the basis of job specifications. Unwarranted questions should be avoided. A verification of the information furnished by the candidate in Application Blank may be made.
An additional information may be sought for future record. The candidate should be given a chance to ask questions to satisfy himself regarding the history of the concern, future prospects, salary offered and nature of job etc.
Further, the proper physical arrangement for the interview is of great importance. It enhances the reputation of the organisation in the eyes of the candidates. The interview should be conducted in a room free from any disturbance, noise and interruption, so that interview may be held confidentially and in a quiet environment.
Another important condition for successful interviewing is that the interviewer should look ready for the meeting and the room should also look ready for private discussion. Privacy and comfort are recognised as aids to free talk. People generally speak more freely and frankly when they are at ease and do not feel threatened.
If the applicant crosses all the above hurdles, an investigation may be made on the reference supplied by the applicant regarding his past employment, education, character, personnel reputation etc. Referees may be called upon the telephones. They may be contacted through mail or personal visit. Additional information may also be recorded by asking questions from referees.
Medical examination is a part of selection process for all suitable applicants. It is conducted after the final decision has been made to select the candidate. A thorough physical examination is also essential to ensure that the candidate is able to handle the job efficiently.
Medical examination is done with having three purposes:
(a) It serves to ascertain the applicant’s physical capability to meet the job requirements.
(b) It serves to protect the organisation against the unwarranted claims under worker’s compensation laws or against law suits for damages.
(c) It helps to prevent communicable diseases entering the organisation.
A proper medical examination will ensure higher standard of health and physical fitness of the employees and will reduce the rates of accident, labour turnover and absenteeism.
If a candidate successfully passes through, the appointment letter may be given to him mentioning the post on which selected, the terms of appointment, pay scales, etc. When he joins the organisation; the personnel manager should introduce him to the company and his job. Normally, in the initial stage the candidates are appointed on probation basis because it is considered better to try them for a few months on the job itself.
This is because no procedure of selection in complete in itself to find out the whole picture of the personality and qualities of a candidate. It is only by observing a person at work that one can find out how he does his work and behaves with fellow employees and supervisors.
If during the probation period, an employee is not found suitable, the management may transfer him to some other job to which he may be expected to do justice. But if the organisation cannot offer him a job which he can do well, the management may back him or give him time and training to improve himself.
Function # 5. Transfer:
Transfer means the shifting of an employee, from one job to another, from one unit to another or from one shift to another and may involve a new geographical location. It may be initiated by the organisation or by the employees with the approval of the organisation.
The word ‘transfer’ has got a number of objectives and they are as follows:
(1) It is moving employees to positions with a higher priority in terms of organisation goals.
(2) It is helpful in placing employees in positions more appropriate to their interests or abilities.
(3) It is helpful in filling department vacancies with employees from overstaffed departments.
Further, the term ‘transfer’ refers to change in which the pay, status and job conditions of new position or job are almost the same as that of the old. A transfer may be associated with a higher pay but it is counterbalanced by changes in other conditions. Transfer may be resorted to, due to change in organisational structure or changes in the volume of work.
Transfers may become necessary in an organisation for a variety of other reasons also. Sound personnel policy requires that if a person is misfit for a job, he should not be discharged, but transferred to a job for which he is most suited. Transfers may stimulate the employees if these are handled properly.
Following are the various types of transfers depending on the purpose for which they are made:
(I) Production Transfers:
Production transfers are made from one department which is over-staffed to the other department where manpower needs have increased or vacancies have occurred through separations. They prevent lay-offs from the overstaffed departments. These types of transfers stabilize employment in the organisation and so they must be controlled centrally through the personnel department.
(II) Remedial Transfers:
These transfers are made to rectify the situation caused by faulty selection and placement procedures. For example—if the initial placement of an individual is faulty or he cannot adjust on one job, a transfer to a more appropriate job is desirable. This will act as a follow up measure of selection and placement procedures and will help the employees to adjust themselves to suitable jobs.
(III) Versatility Transfer:
These types of transfers are made to increase versatility of the employees from one job to another and from one department to another. Transfers are used as a device to train the employees. The employee is provided a broader job experience by moving from one job to another. Such transfers help the employees to get prepared for further promotions. Besides, these will help the organisation because enrichment of employees would make them not only more effective but also ready for filling higher jobs.
Whatever may be the reasons of a transfer but one thing must be clear in the mind that transfers should not be made frequently or without any reason because when an employee is transferred from one department to another or from one job to another, he is bound to be unsettled for some time. He will take time to get accustomed to his new assignment and environment.
Sometimes, it has been seen that transfers by rotation are also adopted as a part of personnel policy to provide training opportunities to employees of gaining experience in as many departments and types of work as possible.
Elements of a Sound Transfer Policy:
To run the department smoothly and systematically a transfer policy must be evolved.
The Transfer Policy must be in writing and should provide the following:
(1) It should specify clearly the types and circumstances under which transfers will be used.
(2) It should lay down the basis of transfers.
(3) It should indicate the executive responsible for initiating and approving the transfers.
(4) It should indicate whether the transfers can be made only within a department or between different departments.
(5) It should also be written that when an employee is transferred, his previous seniority will be retained.
(6) It should provide for timely communication of the transfer decision by the immediate supervisor of the employee.
(7) The rate of remuneration for the employee on the new job (to which he is transferred) must be decided.
Function # 6. Promotion:
The term ‘Promotion’ is the advancement of an employee to a better job. By better job is meant a job which entails greater responsibilities and more prestige or status, needs greater skills and brings increased rate of pay or salary.
For an employee, a job may be better even if it has more favourable working hours, better location or working conditions. Employees do seek there placement to better jobs in these terms as well. But such placements cannot be called promotions.
Only the advancement of a present employee to a job which involves greater skill or responsibilities and higher pay in considered as promotion. Further, promotion is the way of recognizing and developing the abilities of present employees by filling the skilled and responsible positions from within, rather than from outside.
According to Scott and Spriegal-“A promotion is the transfer of an employee to a job that pays more money or that enjoys some preferred status.”
Similarly, Pigors and Myres have said that- “A promotion is the advancement of an employee to a better job, better in terms of greater responsibilities, more prestige or status, greater skill and especially, increased rate of pay or salary.”
Thus, Edwin B. Flippo has said that-“A promotion involves a change from one job to another that is better in terms of status and responsibility.”
Promotion consists of the following elements:
(1) Transfer of an employee to some higher job having more prestige, better status, more benefits and privileges.
(2) Re-assignment of an employee to a position having increased responsibilities.
(3) Higher job grade.
Thus, promotion places an employee in a position which carries greater prestige and status, increased responsibilities as well as higher earnings.
When the salary of an employee is increased without corresponding change in job grade, it is upgrading and not promotion. If there is an increase in responsibility without an increase in pay it is called ‘Dry Promotion.’
Functions of Human Resource Management (Managerial and Operative Functions):
Managerial Functions of HRM:
(a) Planning- The process of transforming an organisation’s philosophy and mission into practices and policies.
(b) Organising- Determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made.
(c) Directing- It includes motivating employees, leading others, selecting most effective communication channels and resolving conflict.
(d) Controlling- It ensures that the activities are being carried out in accordance with the stated plans.
Operative Functions of HRM:
(a) Determination of Manpower Need:
To determine the need of manpower is the most important function of procurement. What quantity and quality of personnel is required should be known.
(b) Recruitment and Selection:
i. To develop different sources of supply of applicant for different jobs.
ii. To design a standard requisition for use by the operations, department in requesting for personnel.
iii. To design an application for each category of employees.
iv. To ascertain qualifications, experience and skills of an applicant.
v. To introduce (after a careful study) a testing programme and interview applicants by a trained interviewer.
vi. To thoroughly investigate and medically examine the successful candidates prior to employment.
(c) Placement:
To assign employees to jobs for which they appear best qualified on the basis of selection techniques.
(d) Induction:
i. To introduce a uniform procedure for introducing new employee to the company and to the respective department.
ii. Copy of rules and regulations is to be given to each employee supplemented by short discussion about the company and its products.
iii. Department head or supervisor is to designate a fellow employee to guide newcomers during the first few days of joining.
i. Development here refers to both employees’ training and management development.
ii. To increase the employees’ competencies in their job by improving their knowledge, skills and abilities.
iii. To organise supervisory training programmes which emphasises techniques of handling issues regarding human relationship.
iv. Training and development is widely accepted as a method for enhancing the employee skills, increasing the individual and organisational.
(b) Performance Appraisal and Promotion:
i. To assesses an individual employee’s job performance and productivity in relation to certain pre-established criteria and organisational objectives.
ii. To devise appropriate appraisal for each class of employees.
iii. Well-constructed performance appraisal can be valuable tools for communication with employees as -pertaining to how their job performance stands with organisational expectations.
iv. To help in the establishment and supervision of employees’ career goals.
(c) Compensation:
i. To provide adequate, equitable and fair remuneration to the employees.
ii. To formulate wage scales for each job classification.
iii. To consider payment of bonus.
iv. To consider effective means of stimulating and rewarding executives.
v. To provide stability of employment, as far as possible, through careful scheduling of operation and financial planning.
(d) Integration:
(a) Discipline and Grievances:
(i) To discuss the issue and inform them of their decision after the meeting is over.
(ii) To render special assistance on problem cases referred to personnel department.
(iii) To establish an efficient mechanism for adjustment of individual complaints.
(b) Quits, Layoff and Rehiring:
(i) To establish an exit interview as standard practice to determine all the facts leading to resignation of an employee.
(ii) To determine relative weight of factors (length of service, proficiency, etc.) in deciding layoffs.
(iii) To determine policy with respect to rehiring.
(c) Relationship between Management and Trade Unions:
(i) To establish a healthy relationship between management and unions/labours.
(ii) To maintain a harmonious industrial relations between labour and management.
(iii) Helps in collective bargaining.
(iv) Avoid industrial conflicts.
(v) Active worker’s participation in management and decision making process.
(d) Relationship with Government:
(i) A good relationship is helpful in achieving higher growth and productivity.
(e) Maintenance:
(i) To develop a good system of record keeping.
(ii) To formulate check list for carrying out annual personnel audit.
(iii) To provide social security measures like sickness benefits and medical benefits.
(a) Policy:
A policy is a statement of intent, and is implemented as a procedure or protocol. Policies are generally adopted by the Board of or senior governance body within an organisation whereas procedures or protocols would be developed and adopted by senior executive officers.
(b) Procedures:
A procedure is a particular way of accomplishing something. It should be designed as a series of steps to be followed as a consistent and repetitive approach or cycle to accomplish an end result.
(c) Rules:
Prescribed courses of action that explicitly state what is to be done under a given set of circumstances.
Advantage of Personnel Policies:
1. Protect workers (and the organisation) from being abused.
2. Uniformity.
3. Overcoming obstacles.
4. Speedy decision.
5. To protect the worker from unfair employment discrimination, harassment, unfair labour practices, or other problems in the workplace.
6. Personnel policies protect both workers and the organisation.
Steps in Policy Formulation and Administration:
1. Initiating the need.
2. In absence of policy an individual or group may express the need for it.
3. Fact-finding.
Sources from which Facts, can be Gathered:
1. Putting the policy in writing.
2. Communicating the policies.
3. Evaluating an existing policy.
1. Originated Policies- Policies which are usually established formally and deliberately by top managers
2. Implied Policies- Policies which are not formally expressed. Implied policies are inferred from the behaviour of members such as dress code, soft spoken, be patient while talking to customer etc.
3. External Imposed Policy- Policies are sometime imposed on the business by external agencies such as government and trade unions.
Procurement function involves four important steps:
(A) Manpower Planning-
(i) Determination of quality of personnel needed
(ii) Determination of quantity of personnel required
(B) Recruitment/Selection
(C) Placement
(D) Induction
In order to determine the kind and quality of personnel, it is important to have knowledge of nature and requirements of jobs. The securing of this knowledge requires getting through three closely related processes.
These are:
(a) Job Analysis
(b) Job Description
(c) Job Specification
Job analysis is the process of gathering information about a job. The process of job analysis is essentially one of data collection and then analysing the data. It provides the analyst with the basic data pertaining to specific jobs in terms of duties, responsibilities, skills, knowledge etc.
Data collected for job analysis may be classified as follows:
1. Job title
2. Nature of job
3. Operations involved in doing the job
4. Materials and equipments to be used in doing the job
5. Personal attributes required to do the job, e.g., education, training, physical strength, mental capabilities etc.
6. Relation with other jobs
Methods Used to Collect Information about Job Analysis:
1. Questionnaire
2. Checklist
3. Interview
4. Observation
5. Participation
6. Technical Conference
7. Self-recording
8. Critical Method
1. Provides complete knowledge about jobs.
2. First step in the process of selection techniques.
3. By revealing the knowledge and skills for doing a job, it determines training needs of the workers.
1. Organisational analysis.
2. Selection of representative positions to be analysed.
3. Collection of job analysis data.
4. Preparation of job analysis.
5. This step involves describing the content of the job in terms of functions, duties, responsibilities, operations, etc.
6. Preparation of job specification.
Job description is a written summary of task, duties and responsibilities of a job. The result of Job analysis is set down in job description.
The main points included in job description are:
1. The location of job
2. The title of job.
3. The title of individual to whom a job holder is responsible
4. The job title of individuals who are responsible to job holders
5. A brief description of overall purpose of job.
6. The main tasks carried out by job holder
7. Details of equipment or tool used
8. Characteristic position of job holders, his isolation or association with others
Job specification is the statement of minimum acceptable human qualities necessary to perform a job satisfactorily. It involves important attributes of a person in terms of education, experience, skill, knowledge and activities to perform a particular job.
It can be defined as a strategy for procurement, development, allocation and utilisation of an enterprise’s human resources.
1. Procurement- Deals with the task of hiring workers of the desired skill mix
2. Development- Helps in keeping and raising the skill standards of workers
3. Allocation- Helps in adjusting shortages and surpluses in manpower supply through promotions and transfers.
4. Utilisation- Deals with the dynamics of leadership and motivation
Objectives of Manpower Planning:
1. To ensure optimum use of human resources currently employed
2. To determine future recruitment level
3. To ensure that necessary resources are available as and when required
4. To forecast future skill requirement to serve as a basis for training and development programmes
5. To decide whether any of the enterprises activities, e.g., maintenance offloaded and subcontracted
The task of recruitment and selection begins after the quality and quantity of personnel needed have been decided.
There are a number of steps involved in this task:
1. Placing the requisition
2. Recruitment
3. Selection
4. Placement
5. Induction
Recruitment:
The success of both parties is critically dependent on synchronisation of the two researches, which in turn depends upon three factors-
1. Communication medium
2. Perception
3. Motivation
1. Preliminary Process (Interview)
2. Receiving of Application Forms
3. Screening of Application Forms
4. Employment Test
5. Interview
6. Reference Check
7. Physical Examination
(a) Training- increase knowledge, skill and abilities for specific job.
(b) Training vs Education- Education- Increase general knowledge and understanding environment.
(c) Development – Wider concept includes both training and education aim to improve overall personality of an individual.
1. To become technology savvy.
2. To enhance/improve performance.
3. To remain competitive.
4. To bridge the gap between what the employee has and what the job demands.
5. To make employees versatile.
6. To learn a job quickly.
Functions of Human Resource Management (Two Categories):
The functions of Human Resource Management can be divided into two categories:
1. Managerial functions, and
2. Operative functions.
1. Managerial Functions:
(i) Planning:
It is the main function of management. It is concerned with manpower planning, studying labour turnover rate, forecasting future personnel requirement and planning for selection and training procedures, etc.
(ii) Organizing:
It is the process of establishing harmonious authority-responsibility relationships among the members of the organization. The network of authority- responsibility is called the organization structure. This structure serves as a framework within which people can work together for attainment of organizational goals.
(iii) Staffing:
It is the process concerned with filling all the positions in the organization with adequate and qualified personnel. It is the responsibility of the human resource department to recruit, select, train, place, compensate, maintain, promote, and retire the employees of the organization at the appropriate time and in the most effective manner.
(iv) Direction:
This is the function of guiding, motivating, supervising and leading people towards the attainment of planned targets of performance. Direction is concerned with the execution of plans, which involves issuing instructions to the workers, supervising people, motivating them and influencing employees’ behaviour.
(v) Controlling:
Controlling means measurement of actual performance, comparing it with the set standards, finding deviations if any, and taking corrective actions. This process ensures that everything is moving according to the plans.
2. Operative Functions:
The managerial functions are common to all types of managers. On the other hand, operative functions are the specialised functions related to a specific field.
The operative functions of Human Resource Management are:
(i) Procurement:
It is concerned with obtaining the proper kind and right number of personnel at the right time and at the most economical rates. It deals specifically with the determination of manpower requirement, recruitment, selection, induction and placement.
(ii) Development:
Various training and development programmes are to be provided to the employees to develop their skills and increase their productivity. This function also includes framing of promotion policy, determining the basis of promotion and making performance appraisals.
(iii) Compensation:
Compensation means determination of adequate and equitable remuneration of personnel for their contribution to organization objectives. The importance of monetary compensation cannot be underestimated even though non-financial incentives also play an important role in raising the morale of employees. The compensation function includes job evaluation, remuneration policy, incentive and premium plans, etc.
(iv) Integration:
It deals with the integration of individuals, societal and organizational goals. This function mainly focuses on employee satisfaction, grievance handling, and maintenance of discipline and free flow of communication at all levels.
(v) Maintenance:
This function deals with sustaining and improving of already established conditions. This function is concerned with the establishment of proper health, medical and safety measures. Arrangement and proper maintenance of health and safety standards are essential for providing working environment which is conducive to the organization.
(vi) Good Industrial Relations:
The human resource manager has to see that harmonious relations are maintained between the management and the workers. Good industrial relations are intended to reduce conflict, promote industrial peace, provide fair deal to workers and establish industrial democracy.
(vii) Record Keeping:
The personnel manager has to collect and maintain information concerned with the staff of the organization. It is essential for every organization as it assists in decision-making such as in case of promotion.
(viii) Separation:
Separation refers to the process by which the employees leave the organization and return to the society. The final function of Human Resource Management is to assist the employees in separating themselves from the organization smoothly. This function deals not only with resignations and retirements, but also with retrenchment, lay-off, etc.
Functions of Human Resource Management (Classified):
The functions of HRM can be broadly classified into two categories, viz:
1. Managerial functions and
2. Operative functions.
1. Managerial Functions:
Managerial functions of human resource management involve planning, organising, directing, and controlling. All these functions influence the operative functions.
(i) Planning:
It is a pre-determined course of action. Planning is determination of human resource programmes and changes in advance that will contribute to the organisational goals. In other words, it involves planning of human resources, requirements, recruitment, selection, training, etc. It also involves forecasting of human resource needs, changing values, attitudes and behaviour of employees and their impact on organisation.
(ii) Organising:
An organisation is a means to an end. It is essential to carry out the determined course of action. In the words of J.C. Massie, an organisation is a “structure and a process by which co-operative group of human beings allocates its task among its members, identifies relationships and integrates its activities towards common objective.”
Complex relationships exist between the specialised departments and the general departments, as many top managers are seeking the advice of human resource manager. Thus, organisation establishes relationships among the employees so that they can collectively contribute to the attainment of company goals.
(iii) Directing:
The next logical function after completing planning and organising is the execution of the plan. The basic function of human resource management at any level is motivating, commanding, leading and activating people. The willing and effective co-operation of employees for the attainment of organisational goals is possible through proper direction. Tapping the maximum potentialities of the people is possible through motivation and command.
Thus, direction is an important managerial function in building sound industrial and human relations besides securing employee contributions. Co-ordination deals with the task of blending efforts in order to ensure successful attainment of an objective. The human resource manager has to co-ordinate with various managers at different levels as far as human resource functions are concerned. Human resource management function should also be co-ordinated with other functions of management like management of material, machine and money.
(iv) Controlling:
After planning, organising and directing the various activities of the human resource management, the performance is to be verified in order to know that the human resource functions are performed in conformity with the plans and directions. Controlling also involves checking, verifying and comparing of the actual with the plans, identification of deviations, if any, and correcting of identified deviations.
Thus, action and operation are adjusted to predetermined plans and standard through control. Auditing training programmes, analysing labour turnover records, directing morale surveys, conducting separate interviews are some of the means for controlling the human resource management function.
2. Operative Functions:
The operative functions of human resource management are related to specific activities of human resource management, viz., HR acquisition/employment, development, compensation, engagement and utilisation, human relations, HR analytics and other issues, retention, separation and re-employment. All these functions are interacted by managerial functions.
I. HR Acquisition/Employment:
It is the first operative function of HRM. HR acquisition/employment is concerned with securing and employing the people possessing required kind and level of human resources necessary to achieve the organisational objectives. It covers the functions such as job analysis, human resource planning, recruitment, selection, placement, induction and internal mobility.
(i) Job Design and Job Analysis:
Job design is the process of designing on the content of a job in terms in duties, responsibilities, and the sociological and psychological factors involved in the process of discharging the responsibilities. Job analysis is the process of study and collection of information relating to the operations and responsibilities of a specific job.
(ii) Human Resources Planning:
It is a process for determining and assuring that the organisation will have an adequate number of qualified persons, available at proper times, performing jobs which would meet the needs of the organisation and which would provide satisfaction for the individuals involved.
It involves-
(a) Estimation of present and future requirements and supply of human resources based on objectives and long range plans of the organisation.
(b) Calculation of net human resources requirements based on present inventory of human resources.
(c) Taking steps to mould, change, and develop the strength of existing employees in the organisation so as to meet the future human resource requirements.
(d) Preparation of action programmes to get the rest of human resources from outside the organisation and to develop the human resources of existing employees.
(iii) Recruitment:
It is the process of searching for prospective employees and stimulating them to apply for jobs in an organisation.
It deals with:
(a) Identification of existing sources of applicants and developing them.
(b) Creation/identification of new sources of applicants.
(c) Stimulating the candidates to apply for jobs in the organisation.
(d) Striking a balance between internal and external sources.
(iv) Selection:
It is the process of ascertaining the qualifications, experience, skill, knowledge etc., of an applicant with a view to appraising his/her suitability to a job.
This function includes:
(a) Framing and developing application blanks.
(b) Creating and developing valid and reliable testing techniques.
(c) Formulating interviewing techniques.
(d) Checking of references.
(e) Setting up medical examination policy and procedure.
(f) Line manager’s decision.
(g) Sending letters of appointment and rejection.
(h) Employing the selected candidates who report for duty.
(v) Placement:
It is the process of assigning the selected candidate with the most suitable job in terms of job requirements. It is matching of employee specifications with job requirements.
This function includes:
(a) Counseling the functional managers regarding placement.
(b) Conducting follow-up study, appraising employee performance in order to determine employee adjustment with the job.
(c) Correcting misplacements, if any.
(vi) Induction and Orientation:
Induction and orientation are the techniques by which a new employee is rehabilitated in the changed surrounding and introduced to the practices, policies, purposes and people, etc., of the organisation.
(a) Acquaint the employee with the company philosophy, objectives, policies, career planning and development, opportunities, product, market share, social and community standing, company history, culture, etc.
(b) Introduce the employee to the people with whom he or she has to work such as peers, supervisors and subordinates.
(c) Mould the employee attitude by orienting him to the new working and social environment.
II. Human Resources Development:
It is the process of improving, moulding and changing the skills, knowledge, creative ability, aptitude, attitude, values, commitment, etc., based on present and future job and organisational requirements.
This function includes:
(i) Performance Management:
It is the systematic evaluation of individuals with respect to their performance on the job and their potential for development.
It includes:
(a) Developing policies, procedures and techniques.
(b) Helping the functional managers.
(c) Reviewing of reports and consolidation of reports.
(d) Evaluating the effectiveness of various programmes.
(ii) Training:
It is the process of imparting the employees the technical and operating skills and knowledge.
It includes:
(a) Identification of training needs of the individuals and the company.
(b) Developing suitable training programmes.
(c) Helping and advising line management in the conduct of training programmes.
(d) Imparting of requisite job skills and knowledge to employees.
(e) Evaluating the effectiveness of training programmes.
(iii) Management Development:
It is the process of designing and conducting suitable executive development programmes so as to develop the managerial and human relations skill of employees.
It includes:
(a) Identification of the areas in which management development is needed.
(b) Conducting development programmes.
(c) Motivating the executives.
(d) Designing special development programme for promotions.
(e) Using the services of specialists, and/or utilising of the institutional executive development programmes.
(f) Evaluating the effectiveness of executive development programmes.
(iv) Career Planning and Development:
It is the planning of one’s career and implementation of career plans by means of education, training, job search and acquisition of work experiences. It includes internal and external mobility.
Internal Mobility:
It includes vertical and horizontal movement of an employee within an organisation. It consists of transfer, promotion and demotion.
Transfer:
It is the process of placing employees in the same level jobs where they can be utilised more effectively consistence with their potentialities and needs of the employees and the organisation.
It also deals with:
(a) Developing transfer policies and procedures.
(b) Guiding employees and line management on transfers.
(c) Evaluating the execution of transfer policies and procedures.
Promotion:
It deals with upward reassignment given to an employee in the organisation to occupy higher position which commands better status and/or pay keeping in view the human resources of the employees and the job requirements.
(a) This function covers the formulating of equitable, fair and consistent promotion policies and procedures.
(b) Advising line management and employees on matters relating to promotions.
(c) Evaluating the execution of promotion policies and procedures.
Demotion:
It deals with downward reassignment to an employee in the organisation.
(a) Develop equitable, fair and consistent demotion policies and procedure.
(b) Advising line managers on matters relating to demotions.
(c) Oversee the implementations of demotion policies and procedures.
(v) Organisation Development:
It is a planned process designed to improve organisational effectiveness and health through modifications in individual and group behaviour, culture and systems of the organisation using knowledge and technology of applied behavioural science.
III. Compensation/ Remuneration:
It is the process of providing adequate, equitable and fair remuneration to attract, motivate and retain the employees. It includes job evaluation, wage and salary, incentives, bonus, fringe benefits, social security measures, etc.
(i) Job Evaluation:
It is the process of determining relative worth of jobs:
(a) Select suitable job evaluation techniques.
(b) Classify jobs into various categories.
(c) Determining relative value of jobs in various categories.
(ii) Wage and Salary Administration:
This is the process of developing and operating a suitable wage and salary programme.
It covers:
(a) Conducting wage and salary survey.
(b) Determining wage and salary rates based on various factors.
(c) Administering wage and salary programmes.
(d) Evaluating its effectiveness.
(iii) Incentives:
It is the process of formulating, administering and reviewing the schemes of financial incentives in addition to regular payment of wages and salary.
It includes:
(a) Formulating incentive payment schemes.
(b) Helping functional managers on the operation.
(c) Review them periodically to evaluate effectiveness.
(iv) Bonus:
It includes payment of statutory bonus according to the Payment of Bonus Act, 1965, and its latest amendments.
(v) Social Security Measures:
Managements provide social security to their employees in addition to the fringe benefits.
These measures include:
(a) Workmen’s compensation to those workers (or their dependents) who involve in accidents.
(b) Maternity benefits to women employees.
(c) Sickness benefits and medical benefits.
(d) Disablement benefits/allowance.
(e) Dependent benefits.
(f) Retirement benefits like provident fund, pension, gratuity, etc.
(vi) Fringe Benefits:
These are the various benefits at the fringe of the wage. Management provides these benefits to motivate the employees and to meet their life’s contingencies.
These benefits include:
(a) Disablement benefit.
(b) Housing facilities.
(c) Educational facilities to employees and children.
(d) Canteen facilities.
(e) Recreational facilities.
(f) Conveyance facilities.
(g) Credit facilities.
(h) Legal clinic.
(i) Safety, Health, medical, maternity and welfare facilities.
(j) Company stores.
IV. Human Resource Engagement and Utilisation:
i. Motivation
ii. Leadership
iii. Communication
iv. Participation, Empowerment and Quality Circles
HR engagement and utilization includes motivating, involving and leading employees towards organizational mission and strategies. Engagement and utilisation of human resources would be effective by communicating the organizational goals clearly, encouraging employees to participate in decision-making and implementation, empowering the employees so that they manage the total workstation rather than looking for directions. Further quality circles enable employees to prevent and set right the workstations.
V. Human Relations, HR Analytics, and other Issues:
i. Industrial Relations
ii. Unions and Associations
iii. Grievance and Discipline
iv. Conflicts and Collective Bargaining
v. HR Accounting, Audit, Research and Information, and
vi. Ethical and Contemporary Issues.
Performance of Various functions of human resource management would result in creation and development of human relations would in turn affect the effective performance of human resource management functions.
VI. Retention, Separation and Re-Employment:
i. Retention Management
ii. Separations- Natural, Employee-initiated and Employer initiated
iii. Re-Employment.
Organisations prefer to retain competent employees. However, sometimes employees prefer to separate from the organsiation. In such cases organizations should allow employees to leave and use the situations to create social capital. Employees separate from the organization one day or the other due to natural separations like deaths, retirement and company closures, employee- initiated separations like employee resignations and voluntary retirements and employer-initiated separations like discharge, lay-off and retrenchments.
Though the employees separate from organizations due to retirements and retrenchments, some retired employees are re-employed due to the shortage of skilled employees and some of the retrenched employees are also reemployed when the companies’ business turn-around to normal conditions. Thus the relations among employees, trade unions, employers and their associations and government should be sustainable.
The effectiveness in performing human resources management functions, results in contributing to the objectives of the organisation, individual employees and the goals of the society and/or government responsibly and ethically. The objectives of human resources management are formulated on the basis of organisational objectives, individual employee goals, social goals and the functional analysis of human resource and human resources management. Further, the discussion about the meaning and definition of HRM can be made full-fledged by studying the objectives and policies of HRM. Hence, we now discuss the objectives of HRM.