CAIIB ABM Unit 20 - Fundamentals of Human Resource Management

CAIIB ABM Unit 20 - Fundamentals of Human Resource Management (Year: 2019)

The Perspective

An organisation is primarily a ramification of the fact that there is an interdependency implied in the satisfaction of needs of individuals alongside with the achievement of organisational objectives

•Formal or Informal
•Two streams of thoughts:

  1. How to organise the activities most systematically and analytically so that specificity in the work processes and operations can be brought about
  2. How to understand an individual’s relation to a given activity now recognised as ‘work’

•Robert Owen (1771-1858): Advocate of better working conditions for ‘vital machines’
•Charles Babbage (1792-1871): Division of labour
•Frederick Taylor (1856-1915): Scientific Management Approach

  1. Conducted ‘Division of Labour’ and ‘Time and Motion’ studies

•Elton Mayo: Howthorne Studies 1924-33

  1. Pointed to various dimensions of human behaviour that were not considered to be of any significance in the restricted approach taken earlier

•Followed by Human relations movement that replaced ‘rational-economic man’ by ‘social man’ perspective
•Later researchers like Chris Argyris, Abraham Maslow, Douglas McGregor and Frederick Herzberg pointed out that individuals are motivated by other than monetary factors too
•Line managers are the delivery points

Development of People Management Functions

•A distinct managerial function since end of nineteenth century

  1. Few organisations had the post of welfare secretary(also referred to as social secretaries)

•Experiment on group behaviour by Prof A K Rice in Ahmedabad Rice Mills in 1952
•The term personnel officer was perhaps first used in the chemical and pharmaceutical industries in 1960s
•The concern for human element did not occur until the socio-psychological upheavels in the late 1920s and early 1930s
•Two major traditions or trends:

  1. Hard headed, profit minded approach to utilisation of human resources
  2. Social welfare viewpoint


Labour and Welfare Department
Personnel Department
HR Department
Classification of HRM Activities

Administration and Maintenance (Personnel)

  1. Conventional component of people management
  2. Administration
  3. Systems related to acquisition, promotion & evaluation, administration, salary and long term benefits
  4. Maintenance Systems
  5. Traditional labour management, grievances and discipline management activities

Human Resource Development

  1. Developmental systems such as induction and socialisation of the individuals, development and growth, performance appraisal and counseling, career planning
  2. Organisational interventions for climate development, employee and organisational development


Supportive Role

  1. Developing systems that deal with people, their problems and organisational dynamics

Systems Development and Research

  1. Planning Future manpower, Recruiting, Utilizing by placement, Motivating, Retaining, Integrating people and their role, Performance and potential assessment, Planning growth of individuals etc

Managerial Role

  1. Technical, managerial, helping, coping and processing competence

Developing Competence

  1. Creating necessary culture and values in the organisation, diagnosing the problem at organisational level and taking corrective steps

Process Role

  1. Creating necessary culture and values in the organisation, diagnosing the problem at organisational level and taking corrective steps


Critical Attributes


Knowledge of -

  1. Performance Appraisal Systems and their functioning
  2. Potential appraisal and mechanism of developing a system
  3. Various tests and measurements of behaviour
  4. Personnel and management
  5. Behavioural Sciences
  6. Career planning processes and practices
  7. Counselling
  8. Behavioural research techniques
  9. Ability to design and coordinate training programmes at worker, supervisor and managerial levels
  10. Understanding of overall organisational culture
  11. Counselling skills


  1. Organizing Ability
  2. Systems Development Skills



  1. Initiative
  2. Faith in human beings and their capabilities
  3. Positive attitude to others
  4. Imagination and creativity
  5. Concern for excellence
  6. Concern for people and their development
  7. Friendly, sociable and affable
  8. Attitude for research and development work
  9. Interest in learning new things
  10. Ability to work as a team member


Competencies for HR Heads


  1. Communication
  2. Initiative
  3. Drive
  4. Creativity
  5. Self-confidence
  6. Teamwork
  7. Influencing Ability
  8. Problem Solving
  9. Inter Personal Skills


  1. Business Knowledge
  2. Change Management
  3. Diversity Management
  4. Service Orientation
  5. Execution Excellence
  6. Financial perspective
  7. Building expertise
  8. Personal credibility
  9. Relationship management
  10. Strategic Thinking and Alignment

Strategic Role in the Future

  1. To become a partner with senior and line managers in strategy execution, helping to move planning from conference room to the market place
  2. To become an expert in the way work is organized and executed, delivering administrative efficiency to ensure that costs are reduced while quality is maintained
  3. To become a champion for employees, vigorously representing their concerns to senior management and at the same time, working to increase employee contribution
  4. To become an agent of continuous transformation, shaping processes and a culture that together improve an organisation’s capacity for change


Development of HR functions in India

  1. During the British raj, the ripples of whatever happened were felt in India
  2. Labour Welfare Officers under the Factories Act
  3. By 1950s the provisions of the Industrial Disputes Act, 1947 began to percolate down
  4. By 1960s demand for personnel professionals with specific knowledge about people management systems and laws rose
  5. Institutes were setup:
  6. Indian Institute of Personnel Management (IIPM), 1947
  7. National Institute of Labour Management
  8. National Institute of personnel Management (NIPM), 1982: Formed upon merger of the above two institutes
  9. Indian Society for Training and Development , 1970
  10. MNCs gave more attention to personnel issues based on home country experience
  11. In India TISCO took proactive measures in the field
  12. Govt. enacted legislations related to employment and employee welfare:
  13. Article 16(1) of the Indian Constitution: Equal opportunity for employment
  14. Apprentices Act, 1961: Training linked to employment
  15. Child Labour Act, 1986
  16. Bonded Labour System Act, 1976
  17. Interstate Migrant Workmen Act, 1979
  18. Next major transformation in 1980s with the onset of the HRD era
  19. Establishment of National HRD network in 1985