UNIT- I-PERSONNEL MANAGEMENT
Meaning: Personnel Management (staffing function of Management), also known as Human Resource Management. Personnel
management is concerned with the proper use of human factors. Personnel management may be defined as that part of the
management process, which is primarily concerned with the human constituents of an organisation.
Definition: The personnel function is concerned with procurement, development, compensation, integration and maintenance of
the personnel of an organisation for the purpose of contributing towards the accomplishment of that organisations major goals or
objectives. Therefore, personnel management is the planning, organising, directing and controlling of the performance of those
operative functions.
Edwin B. Flippo
PRINCIPLES OF PERSONNEL MANAGEMENT:
Principles of personnel management help the personnel
managers to conduct and direct the policies in a proper way.
These principles are:
1. Principle of Maximum Personnel Development:
By this principle, the workers are developed to the maximum
extent, so that their developed ability, cleverness,
productivity and efficiency can be used for the firms
objective.
2. Principle of Scientific Selection:
This principle enables to have a right person for the right job.
3. Principle of High Morale:
Ideal wage policy should be offered to the workers so that
their morale becomes high and they work with interest.
4. Principle of Dignity of Labour:
The labour should feel proud of their work.
5. Principle of Team Spirit:
Team spirit must be developed in the workers. They should
work collectively with collective responsibility, and should
have sense of cooperation, unity and mutual trust.
6. Principle of Effective Communication:
There must be effective communication between the
management and workers otherwise complex problems like
mistrust, hatred and ill- will arise which in turn affects the
production of the organisation.
7. Principle of Joint Management:
This creates responsibility in the labour with increasing
mutual faith and friendship. This improves the labour
relations.
8. Principle of Fair Reward:
Labour should be given proper compensation for the work.
This develops industrial piece.
9. Principle of Effective Utilisation of Human Resources:
Personnel management should be developed for the effective
use of the human resources. Proper training should be
awarded to the personnel for their development.
SCOPE OF PERSONNEL MANAGEMENT:
(1) Employment Function:
It covers areas connected with the employment of employees
such as manpower requirements, recruitment, selection,
placement and induction.
(2) Training Function or Development Function:
In order to perform work properly, employees must be
trained. This function is concerned with increasing the
efficiency of employees by enhancing their skill.
(3) Formulation of Promotion Policy:
This function deals with the formulation of policy setting out
the basis of promotion (viz., seniority, merit or both).
(4) Job Analysis:
In job analysis, factors concerning jobs are analyzed (such as
skill, responsibility, working conditions, training,
qualifications etc.). It is concerned with anatomy of a job. It
is a detailed study of job from all angles.
(5) Merit Rating:
It refers to the evaluation of an employees performance after
he has been placed on the job.
(6) Job Evaluation:
In order to know the worth of the job in terms of money job
evaluation process may be undertaken.
(7) Compensation:
This function deals with the determination of fair wages for
the employees. Wages may be paid according to the time
spent or units produced or there may be a combination of
time and piece rate system in the form of incentive plans.
(8) Providing Service and Benefits:
This function is concerned with the provision of good
working conditions and other benefits such as safety
provisions, counselling, medical services, recreational
facilities, etc. The scope of personnel management is
changing over the years.
According to Andrew F. Sikula Changes definitely are
taking place in personnel administration. Some personnel
sub-functions seem to be breaking away from personnel
others seem to be new sub-areas, while still others seem to be
changing only in terms of their relative emphasis and degree
of importance.
While importance of appraisal and wage administration is
declining, certain other areas of personnel management
(Manpower planning, staffing, training etc.) are getting
prominence.
Nature of Personnel Management:
The following points will bring out the nature of
personnel management:
1. Managing People:
Personnel management is concerned with managing people at
work. It does not manage only organized or unorganized
workers in the organization, but everyone working in the
enterprise. It covers all persons including clerical staff,
executives, managers.
2. Concerned with Employees:
Personnel management deals with employees both as
individuals as well as in groups. The aim is to motivate
people for getting best results from them.
3. Helping Employees:
The employees are helped to develop their talent fully by
providing them appropriate opportunities. This will give
them job satisfaction and may improve their performance at
work.
4. Universal Application:
ADVERTISEMENTS:
Personnel management may be used everywhere and in every
type of organization. It is equally useful in a government,
semi-government, non-profit organizations as is beneficial to
industrial and commercial houses. It is a part of general
management and has roots extending throughout and beyond each organization.
5. Continuous Application:
Personnel management is continuously used in every type of situation. It is not something which may be used here and there or now
and then. In the words of George Terry, It cannot be turned on and off like water from a faucet; it cannot be practiced only one
hour each day or one day a week. Personnel management requires a constant alertness and awareness of human relations and their
importance in everyday operations.
Objectives of Personnel Management:
According to Michael J. Jueius, personnel management should aim at:
(a) Attaining economically and effectively the organizational goals,
(b) Serving to the highest possible degree the individual goals, and
(c) Preserving and advancing the general welfare of the community.
Personnel Management has been assigned the task of not only helping the organization and its employees but also the society at
large.
The objectives of personnel management are discussed as follows:
1. Enterprise Objectives:
The primary objective of personnel management is to help in achieving organizational goals. There will be a need for co-operation
from everyone in the organization for achieving business goals. This requires that such persons should be employed who are
capable of taking up the jobs assigned to them.
They should also be given proper training for undertaking the work effectively. This will be ensured by a suitable policy of
recruitment, training and placement. The satisfaction of employees should be ensured to get their wholehearted co-operation. This
may be done by looking after their convenience at work and offering them financial and other incentives. The enterprise objectives
will only be achieved if everybody works for their attainment. Employees should be motivated to contribute their maximum to the
organizational goals.
2. Personnel Objectives:
Personnel management aims at the material and mental satisfaction to each employees in the organization. This will be possible
when employees are provided with proper work environment and job satisfaction. The work place should be neat and clean and
properly ventilated. Job satisfaction will include good remuneration, job security, avenues for promotion, financial and other
incentives for improving performance.
3. Social Objectives:
Personnel management also aims at preserving and advancing general welfare of the community. An enterprise owes a
responsibility to the society at large. It can serve the society by creating more employment opportunities, producing quality goods at
cheap rates. It can also help society by using productive resources in a best possible way and minimizing their waste.

Evolution of Human Resource Management

The evolution of the concept of Human Resource Management is presented below
Period before industrial revolution The society was primarily an agriculture economy with limited production. Number of
specialized crafts was limited and was usually carried out within a village or community with apprentices assisting the master
craftsmen. Communication channel were limited.
Period of industrial revolution (1750 to 1850) Industrial revolution marked the conversion of economy from agriculture based
to industry based. Modernization and increased means if communication gave way to industrial setup. A department was set up to
look into workers wages, welfare and other related issues. This led to emergence of personnel management with the major task as
Workers wages and salaries
Workers record maintenance
Workers housing facilities and health care
An important event in industrial revolution was growth of Labour Union (1790) The works working in the industries or
factories were subjected to long working hours and very less wages. With growing unrest , workers across the world started protest
and this led to the establishment of Labour unions. To deal with labour issues at one end and management at the other Personnel
Management department had to be capable of politics and diplomacy , thus the industrial relation department emerged.
Post Industrial revolution The term Human resource Management saw a major evolution after 1850. Various studies were
released and many experiments were conducted during this period which gave HRM altogether a new meaning and importance.
A brief overview of major theories release during this period is presented below
Frederick W. Taylor gave principles of scientific management (1857 o 1911) led to the evolution of scientific human resource
management approach which was involved in
Workers training
Maintaining wage uniformity
Focus on attaining better productivity.
Hawthorne studies, conducted by Elton Mayo & Fritz Roethlisberger (1927 to 1940). Observations and findings of Hawthrone
experiment shifted the focus of Human resource from increasing workers productivity to increasing workers efficiency through
greater work satisfaction.
Douglas McGregor Theory X and Theory Y (1960) and Abraham Maslows Hierarchy of needs ( 1954) These studies and
observations led to the transition from the administrative and passive Personnel Management approach to a more dynamic Human
Resource Management approach which considered workers as a valuable resource.
As a result of these principles and studies , Human resource management became increasingly line management function , linked to
core business operations. Some of the major activities of HR department are listed as-
Recruitment and selection of skilled workforce.
Motivation and employee benefits
Training and development of workforce
Performance related salaries and appraisals.
 Strategic Human Resource Management Approach
With increase in technology and knowledge base industries and as a result of global competition , Human Resource Management is
assuming more critical role today . Its major accomplishment is aligning individual goals and objectives with corporate goals and
objectives. Strategic HRM focuses on actions that differentiate the organization from its competitors and aims to make long term
impact on the success of organization.
Some insights to look upon for the HR Management Trends year 2017 are:
1. Alteration in the rules of Overtime:
The rule is proposed to raise the minimum level of salary for the white coll ar exemptions. Which could result in currently
working 4.6 million exempt employees losing their exemption instantly. Rest of the 500,000 to one million exempt
employees working currently could lose their status of exempt in the next ten years. This is due to the automatic increase in
the threshold level of the salary.
2. Increment in the utilization of data and analytic tools:
In the present the crucial factor of managing and recognizing the competitive situations related to business lifecycle is abl e
with the collection, processing and analyzing of big data. To gain the increasing competitive edge the companies must use
analytics to gain data-driven insights into the workforce trends and engage to achieve refine recruitment, performance
incentives, and compensation to arrange the evolving interests and goals of the employees. At this instant data can be pulled
from a firms HR tech systems. Predictive algorithms are used and applied t o make decisions to hire and manage the
workforce. With this, the productivity could be increased and turnover could be decreased which is seen as a big win.
The greater focus on a significant tech trend is at the master data hr management trends. The analytics have seen a
tremendous growth in the last few years but the master data management was not present. With being aware of analytics
power the companies have also understood the need for standardization of data. Data cannot be rolled up and analytics cannot
be performed if everyone does things differently.
3. Requirement of integrated workforce management system:
For establishments with or more than 50 full time or equivalent employees an Act has transformed which was once an annual
enrollment event into the process of reporting and tracking the extensive data on a monthly basis. To meet the terms of the
law various workers in Finance, Tax, Legal, IT and HR who didnt share data may now need to incorporate to help avoid
expensive penalties. It will be a challenge to gather the required data from the multiple systems. Owing to this it will beco me
more significant that a business considers an integrated management solution for human capital. Changing the tech support
models in the HR organization would be a great help.
The HR could take it to greater level with the support of IT and Tech support. Employers still use separate payroll, benefits
administration and HR systems for management and applicant tracking which might be appropriate for some organization but
there is some disadvantages and integration seems difficult. The employers are choosing single system for several work.
Moving to single vendor who could provide all areas of HR technology solution in a single integration.
4. Priority- Engagement of the employee:
Gradually most of the firms are focusing on driving better performance by improving the engagement of the employee.
According to the research by Gallup the establishments success financially such as profitability, productivity and customer
engagement is strongly connected to employee engagement which leads to essential outcome from business. The midsized
companies require revenue, growth and innovation to thrive which could be derived from the engaged employees. According
to a study, the larger midsized companies with 150 to 999 employees quoted three talent related reasons to find out the
decline in the growth. Out of which 23 percent were the disengaged emp loyees, 18 percent were employees unable to attract
qualified talent and 17 percent were the employee unable to retain key talent.
Organizations big concern in the last few years is to find and keep the great talent. Employees with the ability to perform
with technology would help in development of the workforce. Organizations look for methods to engage different employee
demographics due to shifting workforces. Engaged employee with knowledge of Technology could be a great help. Integrated
systems to stand-alone systems there are various solutions available to match the requirements of the talent in a company.

5. More Millennial:
While much of the workforce in the organization consists of the retiring generation Z on the other end the growth of
millennial workforce is indicated. According to a research approximately, half of the global workforce would be Millennias
by 20202. While in some companies, the majority is already millennial. The organization that wants to hold and attract fresh
talent would have to recruit the unit of digital natives. As this generation is a tech trend it is also important to ensure that
their journey right from the hiring phase to on-boarding is supported on social and mobile platforms.
6. Merging of Business:
As for the HR trend of the year the Merging of the business would continue and the situation will continue to stay
challenging for most of the industries. More and more challenges will be raising for the organization with Generation y on
one hand and affectivity and effectiveness of the HR paired with analytics on the other hand. Becoming the most attractive
employer for the future workforce would not be easy.
7. Remaking performance reviews:
The hr management trends performance review is to better understanding of changes that needs to be done to improve the
ability to perform. The most trending topic is remaking performance reviews which include dropping rate of performance
several companies have already implemented this tactic. Some are directing it in their firm. While few are abol ishing
individual bonus. Many of the companies in some time have done interesting things to improve their performance.
8. Development in the human side of the business:
In the present vibrant business setting most organization have the ability to flourish but are instead struggling since they
dont tap into their complete potential or empower people. The success was driven by structure, process and encouraging
employees to function like a machine. These approach needs to be changed the success in the future would need the industry
to work more on the human side of the business. People have evolved to deal with uncertainty by the means of cooperation,
collaboration and utilizing the conflicts in a productive manner. It is essential that business encourages their employee to
 grow mindsets equipped towards conversation, connection and experimentation. Curiosity is a must, we need to question
constantly whether we are performing things simply as that is how it has been done always and acquire new perspective to
recognize potential better solutions.
The clarity of role and accountability is maintained with the help of various departments and reporting lines. Apart from it,
they also create artificial obstacles that block progress. Consolidating people into silos with similar skills and function
supports the pattern that is needed to solve simple as well as complex problems. However, it discourages them from working
with people from other department or separate from business. It does not inspire to have any kind of conversation that would
help to solve the major issues that are faced currently. The perspective of viewing fear and failure needs to be redefined by
the businesses. Most of us allow fear to control us. One could eliminate it by taking back the control and looking behind the
curtains created by our fear that is enacted by ourselves. With more integration, fewer silos and risks success becomes quite
easy.
9. Cloud remains in the projection:
Human Resource Management moving to the cloud is hardly new concept. However, it is still in its early stage of adaptation.
Almost every major HR software dealer is offering or planning to offer its solution in the cloud form. Cloud
computing provides faster updates, increased flexibility, innovation and decrease in the cost. The HR managerscould be in
relief who deal with the expense of upgrading the system each year and downtime. As it will now be done by the vendor
automatically. Oracle, ADP, Workday, SAP, Ultimate Software and Info are included in the Core HR sol utions on the cloud
along with other solutions.
10. Going Mobile:
The using of the mobile app within Human Resource Management is still in its initial stage. However with the appearance of
more cloud-based apps and SaaS approach, things are changing. The Millennial employees have great expectancy in this area.
The growing use of mobile apps will ease the administrative burden on HR and will considerably develop the usage of self -
service. People involved with digital means apply for jobs through the help of mobile devices. To attract the talents from
Generation X the employer needs to offer hiring and valuable information for mobile devices. Vendors are stepping up with
attractive interfaces and mobile games and improving the ease of use. More vendors will be wit nessed taking out their system
from the mobile version of their system to mobile apps because apps tend easy navigation, provide more functionality and are
visually attractive. The Mobile apps are advantageous despite it apps pose major data privacy issues for eg: local laws can put
serious restrictions on using mobile apps for employee data.
Understanding the working environment and contributing to the success of the organization is the main role of t he HR
Management Trends professional. Following the latest trends of the Human Resource management will help the organization
to thrive amongst other competitive industries. Apart from following the trend, it is vital that significant changes in the
method of Human resource management are modified from time to time. The modern up to date techniques will not only be
beneficial but also will be less stressful. It aids in selecting the talented workforce for the business.
HRM IN INDIA
he concept of human resource management has grown through an evolutionary process in India. The various stages of development
have greatly contributed to this process of evolution What all began began to put an end to exploitation in the sweated industries.
The exploitation of labour took on such an inhuman form and character that the state had to intervene by putting in legislative
measures to protect the people who were the victims of this naked exploitation. The concept of 'welfarism' which formed the
bedrock of management of human resources owed to these legislative measures. Taking a cue from the state many progressive
minded employers thought of this aspect of employees welfare. They started changing in their attitudes by introducing a series of
social welfare measures in the form of better amenities and facilities for the employees. This kind of altruisitic thoughts led to kind
of paternalism in Indian managers.
Sir Jamshedji Tata described his employees as his children. The creation of position like 'Welfare Officer' and their appointments
under the Factories Act and other legislative measures led to the emergence and growth of a profession. The developments in the
middle of the last century necessitated substantial work connected with the establishment which fell outside the realm of welfare
officers but the specialized nature of the work required personnel who could professionally handle recruitment , manpower training,
planning, discipline and other roles which called for professional expertise. This was the second phase during which many
organizations recruited professional personnel managers to take care of the responsibilities of the areas mentioned afore.. There
were organizations which blended two roles of the personal officer with welfare officer together.
This phase also witnessed a steady increase in the number of legislation in the sphere of industrial relations in relation to settlement
of disputes and conducting the affairs of the organization in consonance with the letter and spirit of the Standing Orders. This
development led to the appointment of professionals who could deal with industrial relations representing the conflict management
concerns of the organization as well as meeting the requirements of the new industrial relations machinery. Many forward-looking
companies established industrial relations and welfare department besides the personnel department under one umbrella. It was only
in the seventies and later decades that more behavioural and technological chamges were considered necessary in management of
human resources. The erstwhile personnel and welfare functions were broadened to cover areas like behavioural and motivational
techniques, performance appraisal systems, management by objectives as well as incentive schemes to improve the performance of
the employees. In a dramatic development during this period, management became aware of work culture and work values.