CHAPTER : 1

Human Resource
Management &
Economic
Liberalization
 Evolution & Development of
HRM
The concept of HRM emerged in the mid 1980s against the
background of the works of famous writers on management :
Pascale & Athos and peters and Waterman, who produced lists of
the attributes.

The American Society for Training and Development (ASTD) has

developed a Human Resources Wheel in 1983.

It has Highlighting different functions of HRM leading to quality

of work life, productivity and readiness for change.
 Organizational/
T&D OD Focus Job design
focus

Personnel
HRP focus
research and Compensation/
Selection and
information Benefits focus
Staffing
systems

Employee
Union relation
assistance
focus..
focus
 one of the first overt statement of the HRM concept
was made by the Michigan School. They explained
the human resources cycle that consists of 4 generic
processes.

Selection Appraisal

Developm
Rewards ent
Development of
HRM:

The The factor The

commodit of Paternalisti
y concept production c concept

The
The The
human
emerging humanitari
resources
concept an concept
concept
 Meaning of LPG
LIBERALISATION :
1)Liberalization (or liberalisation) refers to a relaxation
of previous government restrictions, usually in areas
of social or economic policy.
Liberalization refers to relaxation of
previous government restrictions
usually in areas of social and
economic policies.
Thus, when government liberalizes
trade it means it has removed the
tariff, subsidies and other
restrictions on the flow of goods
and services between countries.
PRIVATISATION :

1) Privatization is the incidence or

process of transferring ownership
of a business, enterprise,
agency or public service from
the public sector (government) to
the private sector (business).

2) It will help the profit making public

sector units to modernize and
diversify their business.

3) It will help in making public

sector units more competitive.
GLOBALISATION :

1) Globalization (or globalisation) describes an ongoing

process by which regional economies, societies
and cultures have become integrated through
globe-spanning networks of exchange.

2) The term is sometimes used to refer specifically to

economic globalization: the integration of
national economies into the international
economy through trade, foreign direct
investment, capital flows, migration, and the
spread of technology.
Challenges faced by HRM

HR
Change Leadership
Effectiveness
Management Development
Measurement

Rights,
Recruitment
Discriminatio Training and
and
n and Conflict Safety
Outsourcing
Resolution

Finding and
Managing
Retaining
Diversity
Talent
 Internal Change in
Vision
environmen industrial
penetration
t relations

Building Job design

and Increasing
organizatio
organizatio size of
nal
nal workforce
capabilities
structure
Change in
Technologic legal
al advances environmen
t
Impact of LPG on:
HRD
Wages
Employment
Trade unions
Quality circles
Collective bargaining
Diversity Management
Participative
PACT OF LPG ON: HRD
Global competitiveness has created
customers diagonally opposite to what we have
today this is the problem, challenge and
opportunity.

Response to global competitiveness

involves new Customers.

Meeting the requirements and desires

off new customers. So demands for
competent, developed human resources
with human approach towards customers.
Thus, liberalization has positive impact on
HRD.

HRD strategies of industries of liberalized

India would be:

Providing the scope for internal

customers approach in structuring
organization.

Enriching the jobs at all levels.

Creating autonomous job.

Preferring empowerment rather than

PACT OF LPG ON: WAGES
Wages do provide a source of motivation for
employees to perform effectively.

The people are leaving the country just

because of high wages offered by other
countries.

As a result of globalisation, there is now

free mobility of labour.

International companies can advertise

through the Internet and recruit
employees from across borders.
PACT OF LPG ON: EMPLOYMENT

The shift towards creation of new

business by MNCs or in joint ventures
with domestic companies increases capital
flow and technology and creates new jobs
usually.

Thus, the net result is the creation of

more jobs, in the higher skill category and
reduction of jobs in the lower skill
category as some domestic firms are trimmed
out.

This call for measures of retraining,

ACT OF LPG ON: TRADE UNIONS
Trade unions in India played a phenomenal
role in protecting the interest of the workers
even by controlling and regulating the
management at the organization.

But trade union now play an important

role by co-operating with the
management, as the survival of the
organization under competitive environment
would be at stake.

Trade unions in India oppose

implementation of economic liberalization
as they do not generally favor the
 The trade union do favour the growth of
small-scale sector; they oppose privatization of
public enterprise.

Though the trade unions voice their

argument against new economic policy on
various platforms and through different
means they have in fact not responded
effectively to the possible fall out in
employment and salaries.
ACT OF LPG ON: QUALITY CIRCLES
Quality management, up gradation and
maintenance are the central plan of the new
economic policy.

Quality circles would play a dominant role in

quality improvement.

Theses schemes would receive the attention

in Indian industry forthe enhancement
skills, up gradation of knowledge etc to
match the human resources the requirements
of new technology.
CT OF LPG ON: COLLECTIVE BARGAIN

The socialist pattern of society and

dominance of trade unionism have
attributed importance to collective
bargaining in deciding various issued
relating to labor problems and personnel
policies

But under market economy most of the

problems would be decided on the basis
of individual issue rather than collectively
.

Most of the private sector organizations have

CT OF LPG ON: DIVERSITY MANAGEM
In the recent, managing diversity has
emerged as a strategic challenge in the
area of the human resource management due
to globalization.

Managing diversity can be classified into two

broad categories: cross national and
international.

The diversified agenda also includes

differences in age, sexual orientation,
region, physical and mental capabilities.

The increasing globalization of

IMPACT OF LPG ON: PARTICIPATIVE
MANAGEMENT
The purpose of participative management is
to satisfy the social and psychological
needs of employees for association, sense
of belongingness and satisfaction of
involvement in decision making.

Participative management provides added

competitive advantage to the industries.

Hence the significance of participative

management would be overstated under
Liberalized economy.