1 Session 1: Introduction to HRM

Learning Objectives

After completing this session, you will be able to:

  • Explain the role of HRM in organizations.
  • describe the functions of human resource management.
  • explain how managers develop and implement a human resource plan

Source: “Introduction to HRM” by NPTEL is licensed under CC BY-NC-SA 4.0

What Is HRM?

(HRM) is the process of employing people, training them, compensating them, developing policies relating to them, and developing strategies to retain them. As a field, HRM has undergone many changes over the last twenty years, giving it an even more important role in today’s organizations. In the past, HRM meant processing payroll, sending birthday gifts to employees, arranging company outings, and making sure forms were filled out correctly—in other words, more of an administrative role rather than a strategic role crucial to the success of the organization. Jack Welch, former CEO of General Electric and management guru, sums up the new role of HRM: “Get out of the parties and birthdays and enrollment forms.… Remember, HR is important in good times, HR is defined in hard times” (Frasch, et. al., 2010).

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It’s necessary to point out here, at the very beginning of this text, that every manager has some role relating to human resource management. Just because we do not have the title of HR manager doesn’t mean we won’t perform all or at least some of the HRM tasks. For example, most managers deal with compensation, , and retention of employees—making these aspects not only part of HRM but also part of management. As a result, this book is equally important to someone who wants to be an HR manager and to someone who will manage a business.

The Role of HRM

Keep in mind that many functions of HRM are also tasks other department managers perform, which is what makes this information important, despite the career path taken. Most experts agree on seven main roles that HRM plays in organizations. These are described in the following sections.

Source: Human Resource Management by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0

Role of HR Executives – HRM Functions

The Management process involves the following functions: planning, organizing, staffing, leading, and controlling.  The  HR Manager needs to be  involved in  conducting job  analyses; planning labor needs and recruiting job candidates; selecting job candidates; orienting and training new employees; managing wages and salaries; providing incentives and benefits; appraising performance; communicating; training and developing managers; building employee commitment; being knowledgeable about equal opportunity, affirmative action, and employee health and safety; and handling and labor relations.

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Managing HR is not only the HR Manager’s job. Managers don’t want to make mistakes while managing, such as hiring the wrong person, having their company taken to court because of discriminatory actions, or committing unfair labor practices. Hence the line manager plays an important role in managing people, as well. Most line managers are responsible for line functions, coordinative functions, and some staff functions.

Line and Staff Aspects of HRM – Although most firms have a human resource department with its own manager, all managers tend to get involved in activities like recruiting, interviewing, selecting, and training.  Human Resource Managers also have line, coordinative, and staff functions. However, they exert line authority only within the HR department. They have implied authority with line managers due to the fact that they have the ear of top management on many important issues contributing to organizational health.

Nowadays, employers are experimenting with offering human resource services in new ways.  For example, some employers organize their HR services around the following four groups:  transactional, corporate, embedded, and centers of expertise.

In recruiting and hiring, it’s generally the line manager’s responsibility to specify the qualifications employees need to fill specific positions.  Then the HR staff takes over.  They develop sources of qualified applicants and conduct initial screening interviews. They administer appropriate tests, then refer the best applicants to the line manager, who interviews and selects the ones he/she wants.  Line managers may also move to HR functions for a couple of years during their careers.

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The HRM functions largely comprise:

human resource requirements to support the business at the right time

Conducting job analyses and identifying nature of each job

Recruiting and selecting candidates

Orienting and training new employees

Managing wages and salaries

Providing incentives and benefits

Appraising performance

Communications – including counselling and discipline

Training and developing

Building employee commitment

Managing statutory compliances under labour laws

Employee health and safety

Handling grievances and labour relations

HR Managers also play a role in the strategic planning of the organization.  Every company needs its human resource management policies and activities to be strongly connected to its strategic plans. Strategic human resource management ‘SHRM’ means formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic goals. The following items could be included in the HR strategic planning steps:

a) Evaluate Company’s Competitive Environment

b) Formulate Business Strategy

c) Identify Workforce Requirements

d) Formulate HR Strategic Policies and Activities

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Many employers quantify and computerize the map’s activities. The HR Scorecard is one of the tools that helps to assign financial and non-financial metrics to the HRM function and helps to align the function with the overall strategic plan.

HR Managers also play a technological role in the present times.  They may manage the HRIS or may use SAP for managing HR data.  For the learning function they may manage a Learning Management System (LMS) and for Performance Management, Compensation etc. they may use various packages and tools which may be purchased or customized for the organization.

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Assessing the competition in terms of benchmarking salaries and benefits is also an important function so that an organization stays abreast of the competition in terms of attracting the best talent.

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Key Takeaways

  • The process of human resource management consists of actions that an organization takes to attract, develop, and retain quality employees.
  • Human resource managers engage in strategic human resource planning—the process of developing a plan for satisfying the organization’s human resource needs.


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Human Resource Management by Icfai Business School is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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