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Definition of HRM

Human Resource Management, shortly known as HRM refers to a systematic

branch of management that is concerned with managing people at work so that
they can give best results to the organisation. It is the application of
management principles to the people working in the organisation. It aims at
improving the performance and productivity of the organisation by finding out
the effectiveness of its human capital. Therefore, HRM is an art of placing the
right person at the right job, to ensure the best possible use of organisation’s
The process involves an array of activities that begins with the recruitment,
selection, orientation, & induction, training & development, performance
appraisal, incentives & compensation, motivation, maintaining workplace
safety, health & welfare policies, managing relationship with the organisation,
managing change.
Definition of HRD
The term Human Resource Development or HRD refers to the
development of people working in an organisation. It is a part of HRM; that
aims at improving skills, knowledge, competencies, attitude and behaviour
of employees of the organisation. The purpose of the HRD is to empower
and strengthen the abilities of the employees so that their performance will
get better than before.
Human Resource Development involves providing such opportunities to the
employees that will prove beneficial in their all around development. Such
opportunities include training & development, career development,
performance management, talent management, coaching & mentoring, key
employee identification, succession planning and so on. Nowadays, there
are many organisations work for the human resource development of
employees from the day they join the enterprise, and the process continues,
until the end of their employment term.
Comparison Chart
Meaning Human Resource Management Human Resource Development
refers to the application of means a continuous
principles of management to development function that
manage the people working in intends to improve the
the organization. performance of people working
in the organization.
What is it? Management function. Subset of Human Resource

Function Reactive Proactive

Objective To improve the performance of To develop the skills,

the employees. knowledge and competency of

Process Routine On-going

Dependency Independent It is a subsystem.

Concerned with People only Development of the entire


 Human Resource Knowledge

 A commitment to on-going HR learning
 Communication skills in HR
 Critical thinking skills
 An Ethical Approach
 Human Resource Organization Skills
Problem solving and conflicts management
In future, human resource managers will be required to play
significant roles in the following areas:

a) Total quality management

b) Business process reengineering
c) Downsizing and voluntary retirement schemes.
d) Empowerment of workers
e) Humanization of work and quality of work life
f) Flexible work schedules
An organization operating in the fast and modern business
environment is not possible only by passing some
responsibilities to the employees you have to make them enable
quickly decision maker at a lower level at lower people generally
have a closure and deeper understanding of many of the
processes and produces that get the job done and get the
strategic vision of the organization to be achieved.
• Faster problem solving.
• Increased morale and productivity.
• Greater involment leads to greater
• Lower levels of management stress.
• Lack of experience, increases risk.
• Potential for decreased efficiency
• In a business enterprise, downsizing is reducing the number of
employees on the operating payroll.
• Some users distinguish downsizing from a layoff , with
downsizing intended to be a permanent downscaling and a
layoff intended to be a temporary downscaling in which
employees may later be rehired.
• Businesses use several techniques in downsizing, including
providing incentives to take early retirement and transfer to
subsidiary companies, but the most common technique is to
simply terminate the employment of a certain number of
• Rightsizing is downsizing in the belief that an enterprise really
should operate with fewer people.
• Dumbsizing is downsizing that, in retrospect, failed to achieve
the desired effect.
• Voluntary retirement scheme (VRS) is an early
retirement option given by the employer to its eligible
employee by compensating them for taking a early
• Most of the public sector banks, PSU and private
companies opted for voluntary retirement scheme (VRS)
in past to restructure there organization.
• Voluntary retirement scheme (VRS) is also accepted by
trade union as it’s legally allowed by companies to off-
load there surplus manpower.

Income tax act provides an exemption up to Rs. 5, 00, 000 for

Voluntary retirement scheme i.e. amount received up to Rs. 5, 00,000
will be exempted and the balance amount will be taxable in the hands
of employee under the head salary.
• Human Resource system is basically a data based system developed
HR in decision making and reporting.
• The Human Resource Information System (HRIS) is a software or
online solution for the data entry, data tracking, and data
information needs of the Human Resources, payroll, management,
and accounting functions within a business.
• It is useful for all processes that you want to track and from which
you hope to gather useful and purposeful data. HRIS is a system
collecting, storing, maintaing data about HR.
• Normally packaged as a database, hundreds of companies sell some
form of HRIS and every HRIS has different capabilities.
• Procurement function-inventory of present and future needs of HR.
• Development function:-
(i) Cost benefit calculation training and development.
(ii) Career and suction plans.
• Compensation function-linkage between wages and productivity.
• Maintenance function- absenteeism, griverence, accident etc.
• Integration function-communication and leadership climate.
Determination of needs for HRIS

Constitution of a project team

Development of a project plan

Designing and developing the system


Identification and training of users


Implementation and maintence

Evaluation of the effectiveness of

• Reduction in the amount and cost of stored HR data.
• Availability timely accurate information
• Development of performance standards for HR.
• More meaningful career planning and consulling at all the
• Higher capabilities to quickly and effectively staff selection
teams for problem solving.