Personnel Management: Meaning, Definition, Functions, Objectives, Policies

Personnel Management involves strategies that ensure right number of staff, a right combination of talent, training, and performance in jobs.

According to Edwin B. Flippo – “Personnel Management is the planning, organising, directing, and controlling of the procurement, development, compensation, integration and maintenance and separation of personnel to the end that individual, organisational and societal objectives are accomplished.”

Human Resource Management considers ‘personnel’ or ’employees’ as ‘human resources’ and attaches them utmost importance. Besides performing the personnel functions, Human Resource Management is also concerned with development of human resources, provision of health, safety and welfare measures and ensuring better human relations.

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Learn about:-

1. Meaning of Personnel Management 2. Definitions of Personnel Management 3. Growth and History 4. Scope 5. Concept 6. Nature and Characteristics 7. Objectives 8. Role of Personnel Manager 9. Functions 10. Approaches 11. Policies.

Personnel Management: Meaning, Definition, History, Scope, Objectives, Functions, Nature, Approaches and Policies

Contents:

Meaning of Personnel Management
Definitions of Personnel Management
Growth and History of Personnel Management
Scope of Personnel Management
Concept of Personnel Management
Nature and Characteristics of Personnel Management
Objectives of Personnel Management
Role of Personnel Manager
Functions of Personnel Management
Approaches of Personnel Management
Policies of Personnel Management

Personnel Management – Meaning

Personnel management deals with the managerial function of estimating and classifying human resources requirements for meeting organizational goals through people at work and their relationships with each other. It involves strategies that ensure right number of staff, a right combination of talent, training, and performance in jobs.

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Personnel management also includes developing and implementing policies and processes to create a well-managed and employee-supportive work environment.

According to Sison (1991) personnel management is the function of management concerned with promoting and enhancing the development of work effectiveness and advancement of the human resources in the organization through proper planning, organizing, directing, coordinating, and controlling of activities related to procurement, development, motivation, and compensation of employees to achieve the goals of the enterprise.

Edward Flippo states personnel 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.

Many organizations now refer personnel management as human resource management. Personnel management is a term that is still used in many government agencies, and primarily in the non-profit sector, to describe the function that deals with the employment of people within an organization.

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Is Personnel Management a Profession?

Tests that any Occupation must Satisfy to be Called Profession:

A profession means an occupation that requires specialized knowledge and training to supply skilled service or advice to others for a definite fee or salary.

To raise personnel management to the status of a profession, we must subject it to certain tests. First, practice of a profession requires specialized knowledge and training. Personnel management passes this test as there are several institutions—XLRI at Jamshedpur, Institute of Management Technology at Ghaziabad, and Symbiosis in Pune, to name only a few— that teach theory and practice of personnel management. They also have arrangements with business houses which accept their students as interns.

Second, practitioners of a profession need to be members of a registered professional association. Personnel management passes this test too. There is Indian Institute of Personnel Management to regulate the practice of personnel management.

Third, practitioners of a profession need to abide by a code of conduct. Personnel management passes this test too. There is a Code of Conduct prescribed for personnel managers and their association monitors their adherence to it.

Personnel Management – Definitions Propounded by Management Thinkers like Flippo, Jucious, Spates and Institute of Personnel Management in India and UK

According to Indian Institute of Personnel Management “Personnel Management, Labour Management, or Staff Management means, quite simply, the task of dealing with human relationship within an organization.”

The Institute of Personnel Management in UK defined personnel management (1966) as “that part of the management function which is concerned with people at work and with their relationships within an enterprise. Its aim is to bring together and develop into an effective organization, the man and woman who make up an enterprise and having regard to the well-being of an individual and of working groups, to enable them to make their best contribution to its success.”

General Definition of Personnel Management:

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“Personnel management is the administrative discipline of hiring and developing employees so that they become more valuable to the organization. It includes, conducting job analysis; planning personnel needs and recruitment; selecting the right people for the right job; orienting and training; determining and managing wages and salaries; providing benefits and incentives; appraising performance; resolving disputes; and communicating with all employees at all levels.”

HRM as Reincarnation of Personnel Management:

Human Resource Management is the reincarnation of Personnel Management. This is why, many people don’t make any distinction between the two terms and use them interchangeably. However, there is no doubt about the fact that managing human resources or personnel is an integral part of the job of any manager.

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Jucious (1980) has stated that personnel management is the field of management which has to do with planning, organizing, directing, and controlling various operative functions of procuring, developing, maintaining, and utilizing a labour force such as- a) objectives for which the company is established are attained economically and effectively; b) objectives of all levels of personnel are served to the highest possible degree; c) objectives of the community are duly considered and served.

Spates (1944) has defined personnel management as a code of the ways of organization and treating individual at work so that they will each get the greatest possible realization of their intrinsic abilities, thus attaining maximum efficiency for themselves and their group.

The above definition reveals that Personnel Management deals with planning, organising, directing and controlling the personnel functions so as to help the top management in attaining the objectives of individuals, organisation and society. The personnel functions include procurement, development, compensation, integration, maintenance and separation of employees.

Personnel Management – Growth and History (From 1900 to 2000): Early Philosophy, Efficiency & Productivity Movement, Period of Welfarism and a Few Others

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It is very difficult to trace out the exact time of the evolution of personnel management. Even though the stages of the development of personnel management can be easily determined, its development was marked towards the end of 19th century. Prior to this it was somewhat a slow process.

Ordinarily, the growth and history of personnel management is divided into these five periods:

1. Early Philosophy (before 1900)

2. Efficiency and Productivity Movement (1900-1920)

3. Period of Welfarism and Industrial Psychology (1920-30)

4. Period of Human Relations in Industry (from 1930-50)

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5. Modern Period (1950-2000).

Now we shall study them one by one:

1. Early Philosophy of Personnel Management:

The history of modern personnel management begins with the name of Robert Owen. He is called the founder of personnel management, hi the year 1813, he wrote a book, ‘A new view of society’, wherein he has propounded the need of better industrial relation and improvements in the service conditions.

His attitude towards workers was very cordial, liberal and paternalistic. He got good houses constructed for his workers by the side of his factory, eliminated child labour and provided healthy conditions. Mr. J.S. Mill, Andrew & Charles Babbage were also contemporaries of Robert Owen. They all maintained Personnel Management as a science and supported the idea of wage incentives, profit sharing and labour welfare, etc.

2. Efficiency and Productivity Movement:

During the last year of 19th century came the age of efficiency and productivity movement. The two decades of (1900-20) were the year of scientific management movement. During this period, Taylor’s scientific management thought was greatly accepted.

The main contribution of these two decades have been the increase in the size of units, introduction of scientific thinking into actions, job analysis, standard costing, scientific selection and training of workers and the idea of mental revolution. Taylor opposed the idea of trade unionism and worker’s organisations.

3. Period of Welfares and Industrial Psychology:

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After productivity movement then came the period of welfares and industrial philology. Up to 1925, the personnel management had taken a definite form and staff line origination became the basis of personnel management. The opposition of scientific management movement by workers introduced the need of industrial psychology.

The concept of industrial psychology developed many new techniques like psychological testing, interviewing, workers training and non-financial incentives. Industrial psychologists helped to give a professional form to personnel management. The personnel management began to be realised as a profession and a specialists function.

4. Period of Human Relations:

Since 1930 began the period of human relation in industry. Through Hawthorn experiment Prof. Elton Mayo and his companions made the beginning of human relation in industries. Hawthorn experiments proved that human resources have greater influence on production than that of other physical resources.

A worker must be treated as a human being. Social, psychological and moral instincts should be fully recognised by management. Due to these experiments the commodity concept of labour changed to social concept. The decade of 1940-50 is very important from the development of personnel management point of view.

During this decade many new techniques were developed for the selection, training and induction of workers. The personnel philosophy became people-oriented. Trade unions flourished and provision of fringe benefits for workers became common.

5. Modern Times:

The history of personnel management since 1950 up to 1980 is the age of modern development. It may be called as the period of the citizenship concept of labour, where the workers have full right to be consulted in determining the rules and regulations under which they work. The concept of industrial democracy has imposed many new responsibilities upon the personnel managers of industrial houses.

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In modern times the personnel management is a behavioural science and personnel management is an open social system. After1960 the personnel management began to be realised as a behavioural science which completely centred on human elements. The study of organisational behaviour became its main crux. After 1970s the belief of ‘open social and industrial system’ became very popular for business organisations.

During modern times personnel management is fully recognised as a profession dealing with the management of human resources. Some authors call it as ‘manpower management’ also. These all developments are making the scope of personnel management wider and wider.

The concept of HRM emerged from the writings of American academics associated with Human Resource Management School. These academics visualised HRM as a strategic and coherent management-oriented approach to managing people and accomplishing their commitment to promote organisations interests.

The HRM stage appeared when personnel specialists attempted to cope up with the enterprise culture and market economy. HR and business strategy were integrated to evolve strategic HRM approaches. Performance related pay emerged as a motivational device.

Finally in the current stage there is focus on teamwork. Empowerment and learning organisations, specifically the role of HR in the total quality has become imperative. There is increasing stress on process such as – culture management. Personnel directors are engaged in efforts such as downsizing and management of aftermath of a business process reinserting study. Their approach is strategic and aimed at evolving cohesive personnel policies.

Personnel Management – Scope: Organizational Planning & Development, Staffing and Employment, Training and Development and a Few Others

The scope of personnel management is very wide and it is as follows:

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1. Organizational Planning and Development

2. Staffing and Employment

3. Training and Development

4. Compensation, Wage and Salary Administration

5. Employee Services and Benefits

6. Employee Records

7. Labour Relations, and

8. Personnel Research and Personnel Audit

1. Organizational Planning and Development:

Organisational planning relates with the division of all the works to be performed at various position, department and division in such a way that they become manageable and efficient units. The integration and the coordination among the various departments and employees are the pre-requisitions. Differentiation and integration are necessary for the achievement of organisational predetermined objectives.

(i) The determination of an organisations’ needs in terms of long-term and short-term objectives, development of technology (industrial psychology and mechanical engineering) of production, deciding about the nature of product, keeping in mind the external environment.

(ii) Designing of an organisational structure by providing the authority and responsibility among the employees so that organisational goals can be effectively and efficiently achieved, and

(iii) Developing interpersonal relationship through a division of task and the formation of a homogeneous, cohesive and interactive informal group.

2. Staffing and Employment:

The staffing process is a series of events which leads to a continuous filling of positions at all levels in the organisation. This process includes manpower planning, recruitment, selection, placement, induction and orientation, promotion, upgradation, transfer, demotion and separations (resignation, retirement, discharge, disability, death, etc.).

(i) Manpower planning is a forward looking function. Manpower planning is a process of analysing the present and future vacancies that occur, may be due to sick leave, leave of absence, discharge, retirement, promotion, transfer, and an analysis of present and future expansion or contraction in the various departments. Plans are then formulated for internal shifts or contraction in manpower for advertising openings, or for recruiting and selecting new personnel, or for the training and development of present employees.

(ii) Recruitment is concerned with the process of attracting qualified and competent personnel for different jobs. This consist the identification of existing sources of the labour market, the development of new sources and the need for attracting a large number of potential applicants for a good selection.

(iii) Selection process is concerned with the evaluation of potential employees in terms of job specification. This process includes the reception of application, development of application bank, psychological test, comprehensive interview, background investigation, physical examination, final employment decision, placement and induction.

(iv) Placement is concerned with providing the position according to job description; his/her job specification and personality needs.

(v) By induction/orientation it means the introduction of an employee to the organisation and the job by giving him all the possible information about the organisation’s history, philosophy, objectives, policies, and procedures, methods of production, future development opportunities, goodwill of the company in the market, authority and responsibility as well as superior and subordinates of that particular employee.

(vi) Transfer process is concerned with the shifting of an employee from one position to another in which his ability can be best utilised. This is done by developing transfer policy, counselling employees and line management on transfers and evaluating transfer policies and procedures.

(vii) Promotion is concerned with rewarding capable employees by providing them higher position, responsibility and high pay scale. They are providing promotion either on merit basis or on performance basis. For this, a fair, just and equitable promotion policy and procedure have to be developed. Line managers and employees have to be advised on these policies, and

(viii) Separation process is concerned with the resignation; lay-off, disability, discharge or retirement. Exit interviews of employees are arranged and advice is given to the line management on the causes of reduction in labour turnover.

3. Training and Development:

It is a very difficult process and it is concerned with increasing knowledge, capabilities, skills, talent, thinking power, decision making ability, logical ability of individuals and groups so that they may contribute effectively and efficiently to the achievement of an organisational goals.

This process covers the following aspects:

(i) Training is a learning experience, in that it seeks a relatively permanent change in an individual that will improve his or her ability to perform on the job.

(ii) Management development activities attempt to instil sound reasoning process to enhance one’s ability to understand and interpret knowledge rather than imparting a body of serial facts or teaching a specific set of motor skills. So, development focuses more on the employee’s personal growth.

(iii) The determination of training needs at all levels, employee counselling and communication and programmes for managerial, professional and employee development, and

(iv) Self-initiated developmental activities (formal education), reading and participation in the activities (seminar and conference), school/college/professional institutions.

This area covers the training needs of the company that are identified at each level, suitable training programmes are developed, the services of trainers are enlisted, workers and executives are identified for training, motivation and guidance are provided for joining training programmes, the line manager is advised in conducting training programmes. The effectiveness of training programmes has to be evaluated by follow-up.

4. Compensation, Wage and Salary Administration:

It is concerned with the remuneration to the employees for services rendered and motivating them to attain the performance.

The components of these processes are as follows:

(i) Job evaluation through which the relative worth of a job is determined. This is done by selecting perfect job evaluation technique, analysing and dividing jobs into various categories and then determines their relative value in various categories.

(ii) Wage and salary programme consists of developing and conveying a suitable wage and salary programme. There are several factors influencing wage and salary administration such as organisation’s ability to pay, supply and demand of labour, the cost of living, prevailing market rate, the living wage, productivity, trade union’s bargaining power, job requirement, managerial attitudes, skill levels available in the market and psychological and social factors. On the basis of these factors, wage and salary rates have to be determined and implemented and their effectiveness evaluated.

(iii) The incentive plan includes non-monetary incentives which have to be developed, administered and reviewed time-to-time for motivating the employee. Non-monetary incentives include housing facility, canteens, school and recreational facility, transportation facility, etc.

(iv) The performance appraisal is related with evaluating employee performance at work in terms of predetermined standards in order to develop a sound and effective system of rewards, punishment and identifying employees’ eligibility for promotions. For this purpose, performance appraisal plans, programmes and techniques are identified, their implementation evaluated and reports are submitted to the concerned authorities.

(v) Motivation is concerned with motivating employees by creating such a condition that they may get social and psychological satisfaction. For that, a programme for non-monetary incentives (like higher responsibility, recognition, symbol of status) is formulated, communication system is developed to solve the problems and for building of a healthy interpersonal relationship, morale and attitude surveys are undertaken and the health of human organisation diagnosed. The line management has to be advised on the implementation of the plan and the way of improving the morale of employees.

5. Employee Services and Benefits:

These aspects are concerned with the process of sustaining and maintaining the workforce in an organisation.

They include the following areas:

(i) Safety provision inside the factory. For this purpose, policies, techniques, procedures for the health and safety of the employees are developed, the line management is advised on implementation of safety programmes, and training has to be given to workers in safety practices, the causes of accidents have to be investigated and the effectiveness of the safety programmes evaluated periodically.

(ii) Employee counselling and communicating are the process through which employees are given counsel in solving their work-related problems, mental problems and personal problems. The line management has to be advised on the problems which may occur frequently.

(iii) The medical services include the provision of preventive medical, safety and health improvement facilities for employees. A periodical medical check-up of employees, training in hygienic and preventive measures are undertaken. Safety measures are also provided like glove, goggles, helmet, etc.

(iv) The welfare facilities include recreational services like entertainment activities, sports and games, film show, etc. Welfare facilities also covers housing, educational facility, canteen, transport. Suitable policies and programmes are framed and efforts are made to administer these services satisfactorily. The effectiveness of such programmes has to be assessed.

(v) Fringe benefits and other additional items are made available to employees are as follows-

a. Old-age benefit like pension, gratuities, provident fund, unemployment and women’s maternity compensation,

b. Sickness benefit, accident benefit, insurance, medical facility, hospitalisation facility, voluntary retirement benefits,

c. Paid rest periods, travel time, etc.

d. Paid vacation or bonus in lieu of vacation, paid sick and maternity leave, payment for holidays, and

e. Profit-sharing benefits, employees’ educational and training expenditure and special wage payments ordered by the labour courts.

These benefits are given to employees for maintaining employees, to provide them social security and to reduce absenteeism and labour turnover. Policies and programmes for implementing these have to be properly assessed.

6. Employee Records:

Complete and up to date information is maintained about employees so that these records may be utilised at the time of transfer, promotion, demotion, giving merit pay or sanctioning leave at the time of termination of service/retirement.

Such records covers information regarding education and qualification, performance of psychological test and interviews, job performance, leave, present, absent, number of hours worked, promotions, rewards and punishments.

7. Labour Relations:

Labour relations means the maintenance of healthy and peaceful labour-management relations in order to run smooth and uninterrupted flow of work/production.

Labour relations area covers the following aspects:

(i) Grievance handling policy and procedures are developed, after finding out the nature and causes of grievances/problems and locating the area of dissatisfaction. Collective bargaining has to be developed so that all the grievances may be settled through mutual understanding and discussion. Such bargaining and administering agreement relating to wages, working conditions and living conditions, leave, non-monetary facilities and employee-employer relationship.

(ii) Rules and regulations are framed for the maintenance of discipline in the organisation and a proper system of reward and punishment can be developed.

(iii) Efforts are made to acquire knowledge of the labour laws of the country and acquaint the line management with the provisions which are directly concerned with organisation.

8. Personnel Research and Personnel Audit:

These aspects are concerned with the following areas:

(i) A systematic inquiry into any aspect like how to enhance an organisation’s personnel programmes consisting of recruitment, selection, placement, training and development, wages and salary, etc.

(ii) Data relating to quality, productivity, labour turnover, grievances, absenteeism, strike, lockout, wages, accidents, etc., which are observed and supplied to the top managements.

(iii) Policy, procedures, findings and feedback submitted to the top executives so that it may alter or improve existing personnel policies and procedures.

(iv) Morale, attitude and interest surveys.

In large organisations, some of these functions are performed by persons other than personnel department.

Personnel Management – Concept

First concept, Personnel Management is concerned with managing people to “at work. Such people or personnel do not simply refer to “rank and file employees” or “unionized labour” but also include “higher personnel” and “non-unionized labour.”

In other words, it covers all levels of personnel, including blue-collared employees (craftsmen, foremen, operatives and labourers), and white-collared employees (professional, technical workers, managers, officials and proprietors, clerical workers and sales workers).

The shape and form that personnel administrative activity takes, however, may differ greatly from company to company; and, to be effective, it must be tailored to fit the individual needs of each organisation.

Second concept, it is concerned with employees, both as individuals as well as a group, the aim being to get better results with their collaboration and active involvement in the organisation’s activities, i.e., it is a function or process or activity aiding and directing individuals in maximising their personal contribution.

Third concept,personnel management is concerned with helping the employees to develop their potentialities and capacities to the maximum possible extent, so that they may derive great satisfaction from their job. This task takes into consideration four basic elements, namely, the capacities, interests, opportunities and personality of the employees.

i. Capacities — referring to those abilities or attainments, inherited or acquired, that an employee has, is capable of and must to a certain degree exercise in his work.

ii. Interests — not only an individual’s desires and ambitions, but also his instinctive impulsive tendencies, vague yearnings, and ill-defined cravings that may or may not stir him to his fullest action in performing his duties.

iii. Opportunities — not only opportunities for advancement, but opportunities to exercise his capacities and satisfy his interests.

iv. Personality — the sum total of a workers’ reaction to his experiences and environment, personality is manifest by an individuals’ reception by others. The employees’ personality has great influence upon his opportunities.

Since the employee is both a social and economic entity, possessing different characteristics in various work situations; there can be a perfect adjustment of the employee in his work unit if the he possesses the exact capacities required for the work. The work similarly affords the opportunity for exercising these capacities, and his interests are generally satisfied in the performance of his job.

However, a happy combination of the four elements are seldom achieved in actual practice; and a lack of balance forms one of the major causes of waste in production. The best or ideal personnel management, therefore, recognises the individual differences involving these elements and tries to eliminate or reduce them.

Fourth concept, since recruitment, selection development and utilisation of, and accommodation to people are an integral part of any organised effort, Personnel Management is inherent in all organisations. It is not confined to industry alone; it is equally useful and effective in government departments, military organisations, and non-profit institutions.

It is a major part of the general management function and has roots and branches extending throughout and beyond each organisation. Therefore, it is rightly the central pervasive system of all organisations.

This point has been summarized by Pigors and Myers in these words- “Personnel administration permeates all types of functional management, such as production management, financial management, sales management and research management. It applies in non-industrial organisations, government, non-profit institutions, and armed services. Unless these managers themselves expect to perform all the duties for which they are responsible, they have to secure the co-operation of other people within their part of the total organisation. In short, every member of the management group, from top to bottom, must be an effective ‘personnel administrator’ because he depends on the co-operative efforts of his subordinates.”

As Bakke says- “Human relations, industrial relations and personnel relations sire just new names for an aspect of the general managerial function as old as management itself.” It is more than the management of people by supervisors; and it is also more than the responsibilities assigned to the personnel department.

As a field of discipline, personnel management is faced with many challenging problems centering on social responsibility, work design, staffing, style of leadership and supervision, compensation and appraisal, collective bargaining, organisational development and organisational climate.

Fifth concept, personnel management is of a continuous nature. In the words of George R. 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.”

Finally, personnel management attempts at getting the willing co-operation of the people for the attainment of the desired goals, for work cannot be effectively performed in isolation without the promotion and development of an esprit de corps.

Taking the above concept into consideration, it may be observed that personnel management is an approach; a point of view; a new technique of thinking and a philosophy of management, which is concerned not only with managing people, but also with solving the human problems of an organisation intelligently and equitably, and in a manner which ensures that employees’ potential is properly developed, that maximum satisfaction is derived by them from their work, that the objectives of the organisation are achieved and that good human relations are maintained within the organisation.

Personnel management can be of full value to an organisation only when it is consistently thought out and applied at all levels and to all management functions; in corporate policies, in the systems, procedures and in employment practices, etc. This integrative aspect of personnel management is, therefore of vital importance.

Personnel Management – Nature and Characteristics

The nature and characteristics of Personnel Management can be described on the basis of the following factors:

a. Continuous Nature:

Personnel function is of a continuous nature.

“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 to human relations and their importance in everyday operation.” —Terry

Some persons require constant reminders for taking work from them. There are some others who would work efficiently after receiving a word of praise or a pat on the back. Besides, it is necessary that there should be a system which continuously guides the workers in the proper use of technological innovations.

b. Principles:

Personnel Management is based on certain guiding principles. These principles form the basis of organising and treating the workers and also provide a set of techniques for the various activities of the Personnel Department. These techniques help in recruitment, selection, training, wage payment systems, incentives, etc.

c. Team Spirit:

Personnel Management aims at strengthening the team spirit. Isolated individuals cannot contribute substantially towards the achievement of the objectives. Personnel Management infuses team spirit among workers and managers.

It promotes group satisfaction and makes the group members realise that they are a part and parcel of the enterprise and they have to put sincere efforts for the growth of their organisation.

d. Optimum Output:

Personnel Management helps in getting the most suitable persons for various jobs in the organisation, arranges for their training and places them at jobs for which they are most suited. It is concerned with improving efficiency of the employees and getting the best results from the human efforts.

Scott, Clothier and Spriegal pointed out that Personnel Management diagnoses the innate qualities of the employees, nourishes the same and makes the best use of them.

They rightly stated:

1. Every worker must be able to exercise in his work his capacities, inherited or acquired.

2. All his interests, including his instinctive and impulsive tendencies, his ambitions and desires, should get a place. He should get opportunities to advance and to exercise his capacities and to satisfy his interests.

3. He should not feel that his personality is being ignored. By personality here is meant the sum total of his reaction to his experiences and environment.

Personnel Management – 2 Important Objectives: Primary and Secondary Objectives

One of the principles of management is that all the work performed in an organisation should, in some way, directly or indirectly, contribute to the objectives of that organisation.

This means that the determination of objectives, purposes or goals is of prime importance and is a prerequisite to the solution of most management problems. Objectives are pre-determined ends or goals at which individual or group activity in an organisation is aimed.

The formulation of the objectives of an organisation is necessary for the following reasons:

(i) Human beings are goal-directed. People must have a purpose to do some work. Announced organisational goals invest work with meaning.

(ii) Objectives serve as standards against which performance is measured.

(iii) The setting of goals and their acceptance by employees promotes voluntary co-operation and co-ordination; self-regulated behaviour is achieved.

(iv) The objectives stand out as guidelines for organisational performance. They help in setting the pace for action by participants. They also help in establishing the “character” of an organisation. Ralph C. Davis has divided the objectives of an organisation into two categories- (a) Primary objectives, and (b) Secondary objectives.

Objective # 1. Primary Objectives:

Primary objectives, in the first instance, relate to the creation and distribution of some goods or services. The personnel department assists those who are engaged in production, in sales, in distribution and in finance. The goal of personnel function is the creation of a work force with the ability and motivation to accomplish the basic organisational goals.

Secondly; they relate to the satisfaction of the personal objectives of the members of an organisation through monetary and non-monetary devices. Monetary objectives include profits for owners; salaries and other compensation for executives; wages and other compensation for employees; rent for the landowners and interest for share/stock-holders.

Non-monetary objectives include prestige, recognition, security, status, Thirdly, they relate to the satisfaction of community and social objectives, such as serving the customers honestly, promoting a higher standard of living in the community, bringing comfort and happiness to society, protecting women and children, and providing for aged personnel.

Objective # 2. Secondary Objectives:

The secondary objectives aim at achieving the primary objectives economically, efficiently and effectively.

The fulfilment of the primary objectives is contingent upon:

(i) The economic need for, or usefulness of, the goods and services required by the community/society.

(ii) Conditions of employment for all the members of an organisation which provide for satisfaction in relation to their needs, so that they may be motivated to work for the success of the enterprise.

(iii) The effective utilization of people and materials in productive work.

(iv) The continuity of the enterprise.

The methods adopted by business organisations in fulfilling the primary purposes must be consistent with the ethical and moral values of society and with the policies and regulations established by legislative action.

On the personnel men lies the responsibility for ensuring a satisfactory accomplishment of the objectives of an organisation and of its employees, for if they are not reasonably achieved, the basic objectives of the organisation will suffer. It is for this reason that, while framing company personnel objectives care is taken to consider the interests and needs of the employees and of employee goals. This is done by integrating the employee interests and the management interests with a view to achieving the objectives of the entire organisation.

Personnel Management – Role of Personnel Manager

Personnel Department comes into the picture as a service department to the management in recruitment, induction, placement, merit rating, promotions, transfers and training. The personnel manager is a staff officer whose function is to provide specialised services to the line officers and advice and counsel them on personnel problems. Looked at in this light, a personnel manager has to advise the line manager, the final decision resting with the latter.

The classical or traditional view, therefore, is that the staff shall advice and the line shall decide. But the line of demarcation between line and staff functions, that is to say between deciding and advising is a thin one. When advice is accepted it becomes the basis of decision-making. The staff advisory authority really assumes the role of decision-making when the line has known from experience the sanctity and practicality of the advice.

Most of the time the line executives have no time to decide on staff advice and generally accept it as decision in toto because of the staff advisers’ technical competence in their specialities. In this manner, the personnel officer, by virtue of his sound and practical advice, acquires the status of a decision maker on behalf of the line officer concerned who will welcome such technical assistance.

In organisations where the personnel function has established its technical competence and professional expertise, the advisory relationship at the plant and corporate levels has almost always resulted in decision-making authority on behalf of line management and general management of the organisation.

In studies at Princeton University by Helen Baker and Robert France and at MIT by Charles Myers and John Turnbull, it was found that personnel officers would define their capacity as one of giving advice, assistance and counsel to the line organisation, but when questioned about their specific actions, it became apparent that they were actually making the decisions.

When this is the situation in an advanced management setting such as the USA, it is much more relevant in our own developing management practice. Here, personnel function cannot afford to remain merely advisory but has to assume many diverse roles in working with the line according to the exigencies of the organisation, its management philosophy and the industrial environment.

The activities of personnel department are thus directed towards making line control of the human element stronger and more effective. The personnel manager should rank equally with the other executives, operating under the supervision and directly responsible to the Chief executive.

Personnel Management – 2 Broad Categories of Functions: Managerial and Operative Functions

The functions of personnel management are broadly divided into two categories such as managerial functions and operative functions.

1. Managerial Functions:

Management is a process of allocating the organization’s inputs both economic and human by planning, organizing, leading, and controlling for the purpose of producing goods and services as desired by the customers so that the organization becomes able to achieve its goal. The managerial functions include planning, organizing, leading and controlling.

i. Planning:

A plan refers to a pre-determined course of action to accomplish the set of objectives of the organization. It specifies what and how operative personnel functions are to be performed and who is to perform it. This function deals with the determination of the future course of action to achieve desired results.

Planning of personnel today prevents crisis tomorrow. Planning is the foundation of most successful actions of the enterprise. The personnel manager is expected to determine the personnel programme regarding recruitment, selection, and training of employees.

ii. Organizing:

This function is concerned with proper grouping of personnel activities, assigning of different activities to different individuals and delegation of authority.

iii. Directing:

This involves supervising and guiding the personnel. In other words it involves managing managers, managing workers and the work through the means of motivation, proper leadership, effective communication as well as co-ordination. While achieving results, the personnel managers must, invariably take care of the concerns and expectations of employees at all levels. A personnel manager must develop the ability to command and direct others.

iv. Motivating:

Motivation is the key to successful management of any enterprise. A personnel manager must inculcate in the workers a keen appreciation, respect and love for organizational policies.

v. Controlling:

Control is the process of measuring actual results with some standard of performance, finding the reason for deviations of actual from desired results and taking corrective actions if necessary. This function ensures that the activities are being carried out in accordance with stated plans to achieve the objectives of the organization.

2. Operative Functions:

The operative functions essentially belong to activities concerned with procuring, developing compensating, utilizing and maintaining an efficient workforce.

i. Procurement:

Procurement function deals with recruiting the required number of employees with necessary qualification, skill and experience in order to achieve the goal of the organization effectively. It is mainly concerned with hiring the right people, in the right place, at the right time.

This function involves various sub functions such as:

a. Human Resource Planning:

It is the process by which the management determines how the organization should move from its current manpower position to its desired manpower position. Through planning, management strives to have the right number and the right kinds of people, at the right places, at the right time, doing things which result in both organization and the individual receiving maximum long-run benefit.

b. Job Analysis:

It is the formal and detailed examination of jobs. It is a systematic investigation of the tasks, duties and responsibilities necessary to do a job.

c. Recruitment:

It is the process of identifying and generating a pool of potential candidates and motivating them to apply for exiting or anticipated job openings.

d. Selection:

Selection refers to the process of picking individuals, from the pool of qualified candidates, who have required qualifications to fill jobs in an organization. It is the way by which an organization chooses from a list of applicants the person (s) who best meets the selection criteria for the position available, considering current environmental conditions.

e. Placement:

It is the process of assigning a specific job, rank and responsibility to each of the selected candidates. It implies matching the requirements of a job with the candidate’s qualifications, skills, abilities, and their expectations towards the organization.

f. Induction/Orientation:

After an employee is selected and placed on an appropriate job, the process of familiarizing him with the job and the organization starts. This is known as induction/orientation, the process through which a new recruit is introduced into the job.

g. Internal Mobility:

It involves the movement of employees from one job to another in the same organization. Internal movements are basically of two types horizontal and vertical. Horizontal movements are between locations and divisions within the same category or level of manpower which are caused by transfer. Vertical movements are caused by either promotion or demotion.

ii. Development:

Development functions deal with the personal and professional development of the employees. It is concerned with activities meant to improve, mould, change and enhance the knowledge, skills, and efficiency of the workers based upon the current and future requirement of the organization.

It includes various sub functions such as:

a. Training:

Training is the act of increasing the knowledge and skills of an employee for performing a particular job by updating the knowledge, developing skills, bringing about attitudinal and behavioural changes, and improving the ability of the trainee to perform his/her tasks efficiently and effectively.

Hence personnel management is concerned with drafting and directing training programmes for all levels of employees, arranging for their on- the-job and off-the-job training, holding seminar and conferences etc.

b. Executive Development:

It is a planned, systematic and continuous process of learning and growth by which managers are able to enhance their conceptual and analytical skills, which help them in managing their employees in a better way. It is primarily concerned with improving the performance of managers by giving them stimulating opportunities for growth and development.

c. Career Planning and Development:

A Career is the pattern of wok-related experiences (i.e. job positions, job duties, decisions, and subjective interpretations about work-related events) and activities over the span of the person’s work life. Career planning involves planning of an employee’s career and implementing career plans by means of education, learning and training.

Career development refers to a set of activities or programme designed to match an employee’s needs, abilities and goals with current or future opportunities within organization.

d. Human Resource Development (HRD):

HRD is a process by which the employees of an organization are helped to help themselves and develop the organization.

iii. Motivation and Compensation:

Motivation (both intrinsic and extrinsic) and compensation have the greatest role to play for employees in the organization. It is said that the employee who is highly motivated and adequately compensated (cash or kind) can give the best effort to achieve organizational effectiveness and efficiency.

This function includes various sub functions such as:

a. Job Design:

It is the work arrangement (or rearrangement) aimed at reducing or overcoming job dissatisfaction and employee alienation arising from repetitive, monotonous and mechanistic tasks.

Through job design, organizations try to raise productivity levels by offering non-monetary rewards such as greater satisfaction from a sense of personal achievement in meeting the increased challenge and responsibility of one’s work. Job enlargement, job enrichment, job rotation, and job simplification are the various techniques used in a job design exercise.

b. Work Scheduling:

Redesigning the nature of the work itself is not the only way to motivate the employees. Alternation of the work arrangement (work scheduling) is another way to motivate the employees. There are basically three ways to alter the work arrangement which are-flexitime, job sharing and telecommuting.

c. Job Evaluation:

It is the process of analysing and assessing the various jobs systematically to ascertain their relative worth in an organization. Jobs are evaluated on the basis of their contents and are placed in the order of their importance.

d. Performance Management:

It is the process of planning performance, appraising/ evaluating performance, giving its feedback, and counselling an employee to improve his/ her performance.

e. Compensation Administration:

It is the process of deciding how much an employee should be paid (basic wage, incentives and benefits like fringe benefits, social security measures, workmen’s compensation and welfare amenities) on the basis of his/her skill, experience, nature of the job, position in the organizational hierarchy and work load.

One of the important objectives of compensation administration is to attract, develop, motivate and retain competent employees for achieving the goals of organization in an effective and efficient manner.

iv. Maintenance:

This function deals with sustaining and improving the conditions in the organization that have become established. The objectives of maintenance function are to protect and preserve the physical and psychological health of employees through various welfare measures.

This function includes various sub functions such as:

a. Health and Safety:

A healthy organization is free from illness and follows all the safety norms and regulations strictly. Hence this function requires that managers at all levels are expected to know and enforce safety and health standards throughout the organization for maintaining the well being of the employees.

b. Employee Welfare:

This function includes the efforts to make life worth living for workmen by providing both intramural and extramural welfare facilities. Intramural facilities include canteen, drinking water, first aid, creche, common room etc. Extra mural welfare facilities include housing, transportation, education, schooling, theater etc.

c. Social Security Measures:

This function includes provision of social security measures to the employees in addition to fringe benefits. Social Security is an instrument for social transformation and progress and must be preserved, supported and developed as such. It helps men and women get social benefits and get free from anxiety for tomorrow, which in turn make them more productive.

The various measures are workmen’s compensation to those workers(or their dependents) who are involved in accidents (Workmen’s Compensation Act, 1923), maternity benefits to women employees (Maternity Benefit Act,1961),sickness and medical benefits (Employment State Insurance Scheme,1948),measures for old age, invalidity and death (Employment Provident Fund Scheme,1925,-Coal Mines Provident Fund Bonus Scheme, 1948; Employees Provident Fund Act,1952; Employees Family Pension Scheme, 1971; The Assam Tea Plantation Provident Fund Act, 1965; and The Seamen’s Provident Fund Act,1966), and other measures [The Survivorship Pension Scheme, 1971;The Lay-off and Retrenchment Compensation (Industrial Dispute Act, 1947 with amendment in 1953)]

v. Integration Function:

This tries to integrate the goals of an organization with employees’ aspirations through various employee-oriented programmes with the objective of achieving goal compatibility. Hence personnel management tries to achieve reconciliation of individual, societal, and organisation interests.

This function includes various sub functions such as:

a. Grievances Redressal:

A grievance is an employee’s dissatisfaction or feeling of personal injustice relating to his/her employment. Organizations try their level best to reduce the intensity of grievance among the employees either by open door policy or step ladder method.

b. Discipline:

It is the force or instrument that induces the group or the individual to follow rules, regulations, standards and procedures necessary for the smooth running of an organization. Discipline can be positive (employees comply with rules and regulations out of an inherent desire to cooperate with the system of the organization) or negative (employees follow rules and regulations out of fear of punishment).

c. Collective Bargaining:

It is a methodology adopted by the organizations, in which both the employers and the workers collectively resolve their differences with or without the intervention of a third party. Collective bargaining is a procedure by which the terms and conditions of workers are regulated by agreements between their bargaining agents and employers.

Both the employer and the employees usually begin the process with divergent views but ultimately try to reach a compromise, making some sacrifices. As soon as a compromise is reached, the terms of agreement are put into operation.

d. Trade Unionism:

It is a continuous association of wage earners with the objective of maintaining and improving the conditions of their working lives. The Trade Union Act, 1926 defines a trade union as a combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between employees and employers or between employees and employees, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more trade unions.

The various objectives of trade unions are providing job security to the employees, safeguarding workers’ interests, improving the working conditions in the organization, helping the employees in developing skills according to the job entrusted them, enabling the workers’ participation in management, protecting the rights of the workers, helping in maintaining good industrial relations, and negotiating with management on industrial conflicts.

e. Employee Participation and Empowerment:

It is the process whereby employees are involved in decision making processes, rather than simply acting on orders. Employee participation is a part of process of empowerment in the workplace. Empowerment involves decentralizing power within the organization to individual decision makers further down the line.

f. Team and Team work:

Team is a group whose individual efforts result in performance that is greater than the sum of the individual inputs. The various types of team that operate in organizations are problem-solving teams, self-managed work teams, cross-functional teams, and virtual teams. Organizations believe in team work to enhance their productivity.

g. Industrial Relations:

It involves harmonious relations between employers and employees, employees and employees and employers and government. Improper industrial relations lead to dissatisfaction and discontent among the parties and require intervention of various dispute prevention and settlement mechanisms.

vi. Upcoming Issues:

Human resource management is a continuous and dynamic process. It requires constant up-gradation as per the industry demands.

It involves various new dimensions such as:

a. Human Resource Audit:

It is the mechanism to review the current HR policies, practices and systems of the organization to ensure that they fulfill the rules and regulations. The audit also helps in identifying the areas of improvement in the HR functions, In other words human resource audit functions as a strategic planning tool to help the organization in evaluating the effectiveness of human resources functions.

b. Human Resource Accounting:

It is the process of assigning, budgeting, and reporting the cost of human resources incurred in an organization, including wages and salaries and training expenses. It can be measured through monetary measures as well as non-monetary measures.

c. Human Resource Information System:

It is the system used to acquire, store, manipulate, analyze, retrieve, and distribute important information regarding an organization’s human resources.

d. Human Resource Research:

It is the process of evaluating the effectiveness of human resource policies and practices and developing more appropriate ones.

e. Stress and Counselling:

Stress is a dynamic condition in which an individual is confronted with an opportunity, a demand, or a resource related to what the individual desires and for which the outcome is perceived to be both uncertain and important. Stress results in job dissatisfaction, mental illness, physical illness, absenteeism and increased turnover. Hence organizations are adopting various strategies to counsel the employees in order to reduce their stress level.

f. International Human Resource Management:

It is a set of distinct activities, functions and processes that are directed at attracting, developing and maintaining the human resources of a multi-national corporation. IHRM is the result of interplay among the three dimensions such as human resource activities, types of employees and countries of operation.

Personnel management is an art for yet another simple reason that it cannot adopt simply a mechanical approach of labour. The machines can be more productive by Specialisation but men cannot be more productive simply by mechanically training them for the job. We may be able to purchase machinery and plant with the lowest direct outlay, but we cannot hire labour on the principle of the cheapest is the best we can keep plant and machinery so long as they are useful to us economically and we can throw them out for better when necessary.

But we cannot throw out the human labour in way. In other words, we cannot adopt a purely mechanical or crude approach towards the labour. A mechanical approach would certainly result in the creation of various management problems.

This is the reason why organisation has to face many personnel problems whenever the management is influenced by the old and traditional philosophy which used to consider men as screws in the machines. Employees are now no longer screws in the machines, particularly because the work force has realised its, growing strength.

The personnel management, as an art, must therefore, treat human beings as live components of the organisation. It must remember that human beings, unlike machines, are very sensitive to any change that the management may introduce in its philosophy and working. The management, therefore, must skillfully introduce any change in its procedures and practices as well as in its policies, in such a way that they are with the knowledge, and as far as possible, with the consent of the employees.

The personnel practices and conventions must also be such that the employees would take pride in their work and would like to prove their capacity and willingness to work together, persistently and consistently, for the organisation, with a dear purpose in view. In other words, it is the task of the personnel to see that the morale of employees is always high. It is precisely for this reason that the personnel management is as an art.

It must understand the nature of group dynamics and must be able to make the effective use of individuals groups. It must see to it that nobody feels that his capacity and willingness to work is not fully utilized. The art of personnel management lies in assessing the skill and calibre of employees and inducing them to work without making such use of hierarchical authority.

From this point of view the personnel management has three-fold responsibilities:

1. It must so organise the work and assign the duties that there is a proper co-ordination and harmony at all the levels of management. This would bring team spirit and create a network of interlinking system between all groups.

2. There must be a proper delegation of authority as well as responsibility. The employee should be trained to undertake the responsibility willingly and voluntarily and must be given suitable latitude and freedom also to carry out the responsibility well.

3. For effective co-ordination and team spirit, there must be a free flow of communication inside the organisation. For effective communication, employees must be given as much information as possible. Unreliable sources of information may create wrong impression. Facts should not be concealed from subordinates simply because they will get annoyed. Nobody should be taken by surprise.

There should be an atmosphere of mutual trust and tolerance. Finally, the personnel management as an art will become meaningful, if the personnel manager undertakes the work willingly, enthusiastically and in responsible manner. Personnel management is dynamic phenomenon and is in itself a leadership. Personnel management is a comprehensive force which holds all the employees together.

Personnel management is an accommodating factor which makes it possible for all the employees to live together, to act together and to sustain their interests in the organisation. A personnel management is disciplinary power that keeps the organisation, as a whole, moving towards the goal and, therefore, personnel management is certainly an art which only an enlightened leadership, with a wider social perspective can practice.

Personnel Management – Top 5 Approaches: Commodity Approach towards Labour, Protective Approach, Social Approach, Profit Sharing & Collective Bargaining

The managerial attitude towards labour or workers has been termed as personnel philosophy in the area of personnel management. Different approaches have been adopted by management in dealing with their employees.

Approach # 1. Commodity Approach towards Labour:

This was the traditional approach towards workers. The observation that wages were high when labour was scarce in relation to demand and were low when labour was in excess of demand gave rise to the idea that labour was like a commodity and it can be bought like other commodities. In this approach money was accepted as the only motivator for more work. At that time there was no government intervention and no labour laws and the labour was exploited.

During this approach workers were loaded with more work, low wages and unhealthy working conditions were prominent. Eventually trade unions came into existence to protect the rights of workers.

Approach # 2. The Protective Approach:

After First World War, employers began to realise that welfare of employees had a direct effect upon their productivity.

Hence various facilities like first aid, safety, lunch rooms, and rest rooms were introduced to provide the welfare facilities. It was considered as a duty of the employer and the employer who was not providing these facilities was considered as backward.

Now-a-days various labour legislations have made these welfare provisions obligatory on the part of the employers.

Approach # 3. The Humanitarian or Social Approach:

This approach came into existence due to materialistic approach of management. This approach stated that factory is a social system and its employees are human beings same human values. So the management should be have with them dignity and respect.

During this approach, the workers movement became more organised and demanded more and more share in the development of the business. The idea of industrial democracy was rooted. As a citizen in democracy has certain fundamental rights so to workers as industrial citizens have a right to be consulted in determining the rules and regulations under which they work.

The legal recognition of this approach is recent in origin. There is more and more workers participation in management

Approach # 4. Profit Sharing:

This is too recent approach of personal management. By this approach the workers are considered to be the partners of the enterprise. There is an agreement between the employer and the workers to share the profits of the organisation. This approach shows that worker is not merely a cog of the machine, but his status has been increased to that of the partner of the organisation.

Approach # 5. Collective Bargaining:

Collective bargaining is another recent approach. In collective bargaining, in this the representative of the management and the representatives of the workers enter into an agreement on the matter for which there is disagreement between the two. The views of the workers are taken into consideration for solving any problem or dispute amicably and in a peaceful manner.

Personnel Management – Policies (With Characteristics and Advantages)

Personnel policy statements are detailed guidelines regarding the manpower management principles and practices pertaining to an organization. The personnel policies of an organization tend to vary from industry to industry and the nature of the business.

They provide the fundamental guidelines regarding the procurement, management, retention, development of manpower in the organization and facilitate the organization to maintain cordial employee relationships, welfare activities of the employees and effective trade union management relationships at the workplace.

Characteristics of an Effective Personnel Policy:

The personnel policies of an organization have the following features, namely:

1. Relatedness to Objectives – The personnel policies help organizational members and managers to have their focus on the organizational objectives and help them to achieve the organizational goals by having the right people with right form of skills and capabilities for the right positions in the organizations.

2. Preciseness – Personnel policies like any other organizational policies and strictly precise, objective in nature. They aim to realize the best potential of human resources in the organization, by encouraging them to higher performance levels, fostering training and development. They also decide the framework for reward and incentive schemes for employees catering to their motivation and retention in the organization.

3. Factual – The personnel policies are based on facts and figures that are relevant to the organization and the industry standards, norms, rules and regulations. Personnel policies also take into consideration the statutory compliance frameworks and develop comprehensive guidelines for the organizations to adhere to the same.

4. Easily Understandable – Personnel policies are generally simple; easily understandable to employees at all levels in an organization.

5. Stable and Flexible – Personnel policies are generally stable in nature; yet they are flexible to changes in cases of impending organizations changes and administrative requirements.

6. Appropriateness – All personnel policies are appropriate and factual in nature. They form the basis of managerial decision making with respect to personnel decisions as well as disciplinary guidelines for the employees in the organization. The personnel manual as maintained by most organization is based on such appropriate and factual information regarding the company’s personnel activities.

7. Just, Fair and Equitable – Any personnel policy by their very nature attempt to be fair, justifiable, rational, equitable and transparent in their very design and applicability.

8. Reasonable – Personnel policies are reasonable in terms of decisions taken by the management based on actions or fact and figures related to an organization.

9. Reviewable – Personnel policies are reviewable and changeable as and when required by the organization.

10. Development Oriented – Personnel policies should emphasize on the overall development of the employees, catering to their training as well as career related development needs.

Advantages of Personnel Policy:

The common advantages of having a personnel policy involve the following benefits:

1. Delegation – Personnel policies ensure a framework for delegation of authority in terms of responsibilities of employees working at various levels of the organization.

2. Uniformity – Personnel policies also facilitate the uniformity of personnel related decisions in organizations and provide a guideline for line managers and supervisors for managing employees at the workplace. They also form the basis of discipline and grievance management and help the managers of an organization to take decisions with respect to dispute settlement and union related problems.

3. Better Control – Personnel policies facilitate better control to managers in terms of solving work related problems, settling grievances, disputes and maintaining a uniform code of conduct and discipline in the workplace.

4. Standards of Efficiency – Many personnel policies also determine the standards of employee performance and efficiency indicators in organizations.

5. Confidence – Personnel policies can instil an element of confidence amongst the employees by indicating the guidelines for various reward, incentive schemes and promotional as well as career upliftment opportunities in the organization.

6. Speedy Decision Making – Personnel policies also promote speedy decision making with respect to manpower related decisions like payment of increments, bonus, promotions, transfers etc.

7. Coordination – Personnel policies facilitate interdepartmental coordination, delegation of authority. It also acts as a guideline for managing union relations.