HPS 2109: PRINCIPLES AND PRACTICE OF HUMAN RESOURCE MANAGEMENT
Introduction
People are critical to the success of any business. Employee performance can be an asset or a
liability to a business. As an HR professional, you will play a vital role in the success of your
business. Good human resource management (HRM) is essential for companies of all sizes. In this
article, we will look at the fundamentals of HRM.
We will start with a brief description of HRM and HR. Then we'll dive into the seven basic
principles of HRM that you need to know to understand what it does. We will finish with some
information on technical terms, such as HRIS (Human Resources Information System).
What is human resources management?
HRM, is the practice of managing people to achieve better performance. For example, if you hire
people in a company, you look for people who fit the company culture, because they will be
happier, stay longer and be more productive than people who do not fit the company culture.
Another example is engagement. Engaged employees are more productive, deliver better quality
work and make customers happier. This means that if we can find ways to make employees more
engaged, we help the company.
The HR department provides the knowledge, tools, training, legal advice, administration and talent
management that are essential for maintaining and developing a business. Human resource
management therefore boils down to optimising the performance of the company through better
human resource management. The next question is: who are these human resources?
What is a human resource?
Human resources are all the people who, in one capacity or another, work for or contribute to an
organisation. These people make up the workforce of an organisation. They can be regular
employees, for example, but also contractors. Particularly with the rise of the gig economy, more
and more people are starting to work for an organisation on a contractual basis without having a
traditional employment contract. These people include independent contractors, workers supplied
by contracting companies, on-call workers and temporary agency workers.
An independent contractor may be under contract for years with the same organisation, while a
temporary worker may work in 20 different companies in a year. Since these people are all involved
in the company to a different degree, the way they are managed and involved in the organisation
must also be different. In addition, there are more and more non-humans at work in the company.
In this case we are talking about the increase of robotisation. Robots are more and more involved
in daily work and the interaction between man and machine is becoming more and more essential
for the success of the organisation. Although these machines are not considered "human
resources", they should be included in some way, as they are part of the workforce.
1
,SCOPE OF HRM
The Scope of Human Resource management into the following aspects:
1. The Personnel Aspect
This aspect of HRM is concerned with the manpower planning, recruitment, selection,
placement, induction, transfer, promotion, demotion, termination, training & development,
layoff & retrenchment, wage & salary administration, incentives, productivity etc.
2. The Welfare Aspect:-
The welfare aspect is concerned with working conditions & amenities such as canteens,
crèches, rest rooms, lunch rooms, housing, transport, education, medical help, health &
safety, washing facilities recreation & cultural activities etc.
3. The Industrial Aspect:-
This aspect is concerned with employees. It includes union management relations, joint
consultation, negotiating collective bargaining, grievance handling, disciplinary actions,
settlement of industrial disputes etc.
IMPORTANCE OF HRM
1.Importance for the Organisation: HRM is important for the organisation to the following:
• Good human resource practices help in attracting & retaining the best people in the
organisation.
• In order to make use of latest technology the appointment of right type of persons is
essential. The right people can be fitted into new jobs properly only if the management performs
its HR function satisfactorily.
• Globalisation has increased the size of the organisation who employ thousands of
employees in different countries. The performance of the company depends upon the qualities of
the people employed. This has further increased the importance of HRM
• HR planning alerts the organisation to the types of people it will need in the short , medium
& long run.
• HR development is essential for meeting the challenges of future. The importance of HRM
has increased because of the shortage of really managerial talent in the country.
2. Importance for the employees
• HRM stress on the motivation of employees by providing them various financial & non-
financial incentives.
2
,• Right organisational climate is also stressed upon so that the employees can contribute their
maximum to the achievement of the organisational objectives.
• Effective management of HR promotes team wok & team spirit among employees.
• It offers excellent growth opportunities to people who have the potential to rise.
• It also encourages people to work with diligence & commitment.
3. Importance for the society:
Good HR efforts lead to productivity gains (ration of output to input) to the society, since it enables
the managers to reduce costs, save scarce resources, enhance profits & offer better pay, benefits &
working conditions to employees.
OBJECTIVES OF HRM
1) Societal Objectives
• To manage human resources in an ethical & socially responsible manner.
• To ensure compliance with legal & ethical standards.
• To minimise the negative impact of societal demands upon the organisation.
2) Organisational Objective
• HR department, like any other department in an organisation, should focus on achieving
the goals of the organisation first. If it does not meet this purpose, the HR department cannot exist
in the long run.
• HR department should recognise its role in bringing about organisational effectiveness.
• HRM is not an end in itself. It is only a means to assist the organisation with its primary
objectives.
3) Functional Objectives
• To maintain the HRM departments contribution at a level appropriate to the organisation’s
needs. Resources are wasted when HRM is either more or less sophisticated to suit the
organisation’s demands.
• The department’s level of service must be tailored to fit the organisation it serves.
• HRM should employ the skills & abilities of the workforce efficiently. It should aim at
making the people’s strength more productive & beneficial to the organisation.
• HRM should aim at providing the organisation with well trained & well motivated
employees.
4) Personnel Objectives
• HRM should increase employees job satisfaction to the fullest extent.
3
, • HRM should also meet the self -actualisation needs of the employees. It should stimulate
every employee to achieve his potential.
• HRM should assist the employees in achieving their personal goals, at least in so far as
these goals enhance the individual’s contribution to the organisation.
• HRM should develop & maintain a quality of work life. It makes employment in the
organisation a desirable, personal & social situation. Organisational performance can never be
improved without the quality of work life.
• The HRM should also communicate HR policies to all employees. It will help the HRM in
tapping the ideas, opinions, feelings, & the views of the employees.
Principles of Human Resource Management
Key Principles of HRM: HR Principles are a fundamental truth established by research,
investigation, and analysis. Principles are guidelines to doing things. The following are considered
as the key principles of HRM:
Principle of Individual Development: To offer an equal opportunity to every employee so as to
realize his/her potential and capability.
Principle of the Scientific Selection: To place the right individual in the right job.
Principle of the Free Flow of Communication: To open & encourage upward, downward,
formal, and informal communication.
Principle of Participation: To associate with employees at each and every level of decision-
making.
Principle of a Fair Remuneration: To pay fair and equitable wages & salaries to talented
employees.
Principle of an Incentive: To review the performances of the employees and to reward them
accordingly.
Principle of the Dignity of Labor: To treat each and every employee with respect and dignity.
Principle of Labor-Management co-operation: To promote industrial relations and labor laws.
Principle of Team Spirit: To ensure co-operation & teamwork amongst the employees.
Principle of Contribution to National Prosperity: To provide a higher work purpose to all the
employees and to contribute to the national prosperity and integrity
FUNCTIONS OF HRM
The HRM functions can be divided into managerial functions-may include operative functions,
Human Resource Development, compensation, Human Relations, Industrial relations.
4
Introduction
People are critical to the success of any business. Employee performance can be an asset or a
liability to a business. As an HR professional, you will play a vital role in the success of your
business. Good human resource management (HRM) is essential for companies of all sizes. In this
article, we will look at the fundamentals of HRM.
We will start with a brief description of HRM and HR. Then we'll dive into the seven basic
principles of HRM that you need to know to understand what it does. We will finish with some
information on technical terms, such as HRIS (Human Resources Information System).
What is human resources management?
HRM, is the practice of managing people to achieve better performance. For example, if you hire
people in a company, you look for people who fit the company culture, because they will be
happier, stay longer and be more productive than people who do not fit the company culture.
Another example is engagement. Engaged employees are more productive, deliver better quality
work and make customers happier. This means that if we can find ways to make employees more
engaged, we help the company.
The HR department provides the knowledge, tools, training, legal advice, administration and talent
management that are essential for maintaining and developing a business. Human resource
management therefore boils down to optimising the performance of the company through better
human resource management. The next question is: who are these human resources?
What is a human resource?
Human resources are all the people who, in one capacity or another, work for or contribute to an
organisation. These people make up the workforce of an organisation. They can be regular
employees, for example, but also contractors. Particularly with the rise of the gig economy, more
and more people are starting to work for an organisation on a contractual basis without having a
traditional employment contract. These people include independent contractors, workers supplied
by contracting companies, on-call workers and temporary agency workers.
An independent contractor may be under contract for years with the same organisation, while a
temporary worker may work in 20 different companies in a year. Since these people are all involved
in the company to a different degree, the way they are managed and involved in the organisation
must also be different. In addition, there are more and more non-humans at work in the company.
In this case we are talking about the increase of robotisation. Robots are more and more involved
in daily work and the interaction between man and machine is becoming more and more essential
for the success of the organisation. Although these machines are not considered "human
resources", they should be included in some way, as they are part of the workforce.
1
,SCOPE OF HRM
The Scope of Human Resource management into the following aspects:
1. The Personnel Aspect
This aspect of HRM is concerned with the manpower planning, recruitment, selection,
placement, induction, transfer, promotion, demotion, termination, training & development,
layoff & retrenchment, wage & salary administration, incentives, productivity etc.
2. The Welfare Aspect:-
The welfare aspect is concerned with working conditions & amenities such as canteens,
crèches, rest rooms, lunch rooms, housing, transport, education, medical help, health &
safety, washing facilities recreation & cultural activities etc.
3. The Industrial Aspect:-
This aspect is concerned with employees. It includes union management relations, joint
consultation, negotiating collective bargaining, grievance handling, disciplinary actions,
settlement of industrial disputes etc.
IMPORTANCE OF HRM
1.Importance for the Organisation: HRM is important for the organisation to the following:
• Good human resource practices help in attracting & retaining the best people in the
organisation.
• In order to make use of latest technology the appointment of right type of persons is
essential. The right people can be fitted into new jobs properly only if the management performs
its HR function satisfactorily.
• Globalisation has increased the size of the organisation who employ thousands of
employees in different countries. The performance of the company depends upon the qualities of
the people employed. This has further increased the importance of HRM
• HR planning alerts the organisation to the types of people it will need in the short , medium
& long run.
• HR development is essential for meeting the challenges of future. The importance of HRM
has increased because of the shortage of really managerial talent in the country.
2. Importance for the employees
• HRM stress on the motivation of employees by providing them various financial & non-
financial incentives.
2
,• Right organisational climate is also stressed upon so that the employees can contribute their
maximum to the achievement of the organisational objectives.
• Effective management of HR promotes team wok & team spirit among employees.
• It offers excellent growth opportunities to people who have the potential to rise.
• It also encourages people to work with diligence & commitment.
3. Importance for the society:
Good HR efforts lead to productivity gains (ration of output to input) to the society, since it enables
the managers to reduce costs, save scarce resources, enhance profits & offer better pay, benefits &
working conditions to employees.
OBJECTIVES OF HRM
1) Societal Objectives
• To manage human resources in an ethical & socially responsible manner.
• To ensure compliance with legal & ethical standards.
• To minimise the negative impact of societal demands upon the organisation.
2) Organisational Objective
• HR department, like any other department in an organisation, should focus on achieving
the goals of the organisation first. If it does not meet this purpose, the HR department cannot exist
in the long run.
• HR department should recognise its role in bringing about organisational effectiveness.
• HRM is not an end in itself. It is only a means to assist the organisation with its primary
objectives.
3) Functional Objectives
• To maintain the HRM departments contribution at a level appropriate to the organisation’s
needs. Resources are wasted when HRM is either more or less sophisticated to suit the
organisation’s demands.
• The department’s level of service must be tailored to fit the organisation it serves.
• HRM should employ the skills & abilities of the workforce efficiently. It should aim at
making the people’s strength more productive & beneficial to the organisation.
• HRM should aim at providing the organisation with well trained & well motivated
employees.
4) Personnel Objectives
• HRM should increase employees job satisfaction to the fullest extent.
3
, • HRM should also meet the self -actualisation needs of the employees. It should stimulate
every employee to achieve his potential.
• HRM should assist the employees in achieving their personal goals, at least in so far as
these goals enhance the individual’s contribution to the organisation.
• HRM should develop & maintain a quality of work life. It makes employment in the
organisation a desirable, personal & social situation. Organisational performance can never be
improved without the quality of work life.
• The HRM should also communicate HR policies to all employees. It will help the HRM in
tapping the ideas, opinions, feelings, & the views of the employees.
Principles of Human Resource Management
Key Principles of HRM: HR Principles are a fundamental truth established by research,
investigation, and analysis. Principles are guidelines to doing things. The following are considered
as the key principles of HRM:
Principle of Individual Development: To offer an equal opportunity to every employee so as to
realize his/her potential and capability.
Principle of the Scientific Selection: To place the right individual in the right job.
Principle of the Free Flow of Communication: To open & encourage upward, downward,
formal, and informal communication.
Principle of Participation: To associate with employees at each and every level of decision-
making.
Principle of a Fair Remuneration: To pay fair and equitable wages & salaries to talented
employees.
Principle of an Incentive: To review the performances of the employees and to reward them
accordingly.
Principle of the Dignity of Labor: To treat each and every employee with respect and dignity.
Principle of Labor-Management co-operation: To promote industrial relations and labor laws.
Principle of Team Spirit: To ensure co-operation & teamwork amongst the employees.
Principle of Contribution to National Prosperity: To provide a higher work purpose to all the
employees and to contribute to the national prosperity and integrity
FUNCTIONS OF HRM
The HRM functions can be divided into managerial functions-may include operative functions,
Human Resource Development, compensation, Human Relations, Industrial relations.
4
