Human Resource Management Significance, Functions, Objectives of HRM, Evolution and Development of HRM

Introduction to Human Resource Management (HRM)

Management is the art of getting things done through people. While managers deal with finance, operations, and information, the Human Resource (HR) is the only “living” resource.

Human Resource Management (HRM) is the process of acquiring, developing, maintaining, and retaining competent workforce to achieve the goals of an organization effectively and efficiently. It brings people and organizations together so that the goals of each are met.

According to Leon C. Megginson, HR is:

“The total knowledge, skill, creative abilities, talents and aptitudes of an organization’s workforce, as well as the values, attitudes and beliefs of the individuals involved.”

The most widely accepted definition in academic circles is by Edwin B. Flippo:

“Human Resource Management is the planning, organizing, directing and controlling of the procurement, development, compensation, integration, maintenance, and separation of human resources to the end that individual, organizational and social objectives are accomplished.”

Objectives of HRM

HRM is not just about hiring; it has a multi-dimensional purpose. The objectives can be classified into four primary categories:

1. Advisory Role: Advising management on HR policies to ensure a highly motivated and high-performing workforce.

2. Talent Management: Attracting, hiring, rewarding, maintaining, and developing the human resources of the organization.

3. Crisis Management: Handling difficult human relations situations to ensure organizational stability.

4. Communication Link: Acting as a bridge between the workforce and management.

5. Custodian of Values: Maintaining organizational standards and ethics regarding the treatment of employees.

6. Organizational Objectives: To recognize the role of HRM in bringing about organizational effectiveness. HRM is not an end in itself; it exists to assist the organization in achieving its primary goals.

   Examples: Human resource planning, employee selection, training, and development to ensure the right people are in the right jobs.

Functions of HRM

HRM functions are broadly divided into Line and Staff roles.

• Line Function: Directing the activities of people in their own department. The HR manager exerts line authority within the HR department.

• Line managers are directly responsible for achieving organizational goals.

• They have authority over employees.

• HR activities performed by line managers include:

  • Selecting employees

  • Training workers on the job

  • Appraising performance

  • Motivating employees

  • Maintaining discipline

Example:
A production manager hiring and supervising workers is performing a line function.

• Staff (Service) Function:

  • Staff managers advise and assist line managers.

  • They do not have direct authority over workers.

  • HR department mainly performs staff functions such as:

    • Framing HR policies

    • Designing recruitment and training programs

    • Advising on wage structure

    • Handling labor laws and compliance

    • Providing expert guidance

  Example:
  The HR manager advising department heads on recruitment or labor laws is performing a staff function.

• Coordinative Function: Ensuring that line managers (like production or sales managers) are implementing HR policies (e.g., sexual harassment policies).

Evolution of HRM (India Focus)

The journey of HRM in India has evolved through several distinct phases, influenced by British rule, independence, and economic liberalization.

Phase 1: The “Commodity” Concept (Pre-1920s)

• Labor was treated merely as a commodity to be bought and sold.

• Focus: Exploitation, low wages, long hours. No concept of welfare.

Phase 2: The Beginning of Welfare (1920s – 1930s)

• Trade unionism began to rise.

• Royal Commission on Labour (1931): Recommended the appointment of “Labour Officers” to protect workers’ interests and handle grievances. This was the birth of the HR role in India.

Phase 3: The Legalistic Era (1940s – 1960s)

• Post-independence, the government enacted strict labor laws.

• Factories Act, 1948: Made “Welfare Officers” mandatory in factories with 500+ workers.

• Role: The HR manager was a “Law Man” or “Welfare Officer,” focused on compliance and court cases.

Phase 4: The Personnel Management Era (1970s – 1980s)

• The focus shifted from mere welfare to efficiency and administration.

• The term “Personnel Management” became popular.

• Role: The HR manager acted as a “Liaison Man” between management and unions.

Phase 5: The HRD Era (1980s – 1990s)

• Companies realized people are assets.

• Pioneers like L&T and SAIL introduced Human Resource Development (HRD) departments.

• Focus: Training, development, and career planning.

Phase 6: Strategic HRM (Post-1991 Liberalization)

• With the opening of the economy (LPG), competition increased.

• HRM became a Strategic Partner.

• Focus: Talent retention, performance-linked pay, and aligning HR with business strategy.

Phase 7: The Digital & Future Era (2000s – Present)

• Use of HRIS (Human Resource Information Systems), AI in recruitment, and focus on “Employee Experience.”

• Role: HR is now a “Change Agent” and business enabler.

Difference Between Personnel Management & HRM

The shift from Personnel Management (PM) to Human Resource Management (HRM) represents a change in philosophy.

Policies, Principles & Strategy

Personnel Policies: These are guides to thinking and action. They provide a roadmap for managers (e.g., “We promote from within first”). Policies ensure uniformity, better control, and confidence among employees.

HR Principles: These are fundamental truths or laws (e.g., principle of fair remuneration). They are universally applicable and guide the formulation of policies.

Strategic HRM: This is the modern approach. It links HRM with strategic goals to improve business performance. It views employees as a source of competitive advantage.

• Traditional HR: Reacts to problems.

• Strategic HR: Proactively designs policies to help the company win.

How HRM Contributes to Success

HRM is the “life-giving element” of an organization. Without it, resources like money and machinery are useless.

1. Growth Instrument: It ensures competence and effective management, crucial for survival.

2. Liaison: It balances the needs of employees with the goals of the employer.

3. Professional Field: It moves focus from simple management to development, handling skill-building and capacity utilization to meet modern challenges.

Strategic Role of HRM

In modern organizations, HR is no longer just a support function that maintains files. It sits at the boardroom table.

1. Alignment with Business Strategy: HR ensures that the company has the right people to execute its business goals. (e.g., If the strategy is “Innovation,” HR hires creative talent and rewards risk-taking).

2. Change Agent: HR leads organizational change (e.g., Mergers, Digital Transformation) by managing employee resistance and culture.

3. Talent Management: In the “War for Talent,” HR strategically builds a brand to attract and retain the best brains in the industry.

4. Competitive Advantage: Technology can be copied, but People cannot. HR builds a unique workforce culture that competitors cannot replicate (e.g., Google’s culture).