Human Resource Managementand

Organisational Behaviour(With Case Studies)

(Strictly as per the New Syllabus of Pune University for BBA, Semester III)

Sheetal KejriwalM.Com.(Business Administration) & NET,

Assistant Professor,Birla College of Arts, Science & Commerce,

Kalyan.

Nikitaa PrajapatiMBA (HR), Pursuing Ph.D.

Head of B.M.S. Department,L.D. Sonawane College, Kalyan.

Pradnya M. GaikwadB.Sc. (Chem.), MBA - HRM, SET,

Assistant Professor,MAEER’s MITSOM College, Pune

MUMBAI NEW DELHI NAGPUR BENGALURU HYDERABAD CHENNAI PUNE LUCKNOW AHMEDABAD ERNAKULAM BHUBANESWAR INDORE KOLKATA GUWAHATI

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First Edition : 2015

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PREFACE

The book gives an insight to the subject HRM and Organisation Behaviour.

It includes the basic concepts of HRM and Organisation Behaviour as well as it

has complete relevance with the syllabus designed by Pune University. The book

is written for the second year BBA students of Pune University. The book has

been given a student-friendly approach and it will appeal all the students and

will make the study more easy to understand, we wish.

This book tries to explain the concepts of Human Resource Management

and Organisation Behaviour in simple terms. The book is divided into 5 units

that are Introduction to HRM, HRP, Training and Development, Performance

appraisal and salary and wage management and lastly Introduction to Human

Resource Management.

Although a lot of care has been taken in ensuring the quality and accuracy

in book, still there is always a room for improvement. Suggestions from teachers

and students are appreciated for improvement in subsequent editions.

Authors

SYLLABUSLearning Objectives:

1. To introduce to the students the functional department of human resource management and acquaint themwith planning, its different functions in an organization.

2. To introduce the human resource processes that are concerned with planning, motivating and developingsuitable employees for the benefit of the organization.

Units Name of the Topic No. ofLectures

Unit -1

Introduction to Human Resource Management: Definition and Concept of Human Resource I Personnel Management. History of Human Resource Management. Importance of Human Resource Management. Functions of Human Resource Management. Organization of HRM- Personnel Department in Line Organization. Personnel Department in Functional Organization. Personnel Department in Line and Staff Organization.

Role of personnel manager Administrative Role Operational Role Strategic Role

Challenges before Human Resource Management.

08

Unit -2

Human Resources Planning: Definition and Objectives of Human Resource Planning. Process of Human Resource planning. Factors Influencing Estimation of Human Resources. Concept of Recruitment-Recruitment Policy-Sources of Recruitment Methods of Recruitment, Traditional vs. Modern Recruiting methods. Concept of Selection, Importance of Selection and Procedure, Standards for

Selection Test. Distinguish between Recruitment and Selection.

09

Unit -3

Training and Development: Meaning and Definition Needs-Objectives Importance of Training Training Methods Evaluation of Training Programme Methods of Evaluation

Concept of Management Development Management Development Process and Methods. Evaluation of Management Development Programme

Distinguish between Training and Development

09

Unit -4

Performance Appraisal & Wage and Salary Administration:Part A : Performance Appraisal Concept and Objectives of Performance Appraisal. Process of Performance Appraisal. Performance Appraisal Methods. 360 Degree Feedback System. Factors Effecting for a Sound Performance Appraisal Policy. Problems with Performance Appraisal. Challenges in Performance Management. Case Study on Performance Appraisal.

Part B : Wage and Salary Administration Methods of Wage Payments. Employee Remuneration Factors. Determining the Level of remuneration. Profit Sharing-Fringe Benefits and Employee Services – Wages & Salary

Administration. Case Study on Wage and Salary Administration.

14

Unit -5

Introduction to Organizational Behaviour: Meaning, Definition, Scope, Disciplines Contributing to Organizational

Behaviour. Emerging Aspects of Organization Behaviour. Challenges and Opportunities for Organization Behaviour. Organization Behaviour Across Cultures. Models and Approaches of Organizational Behaviour. Organization Changes and Development. Nature of Change – Levels of Change, Types of Change. Resistance to Change. Cases of Organizational Behaviour.

8

PAPER PATTERN

Time: 3 Hours Total Marks: 80

Instruction1. All questions are compulsory.2. Figures to the right indicate full marks.

Q1. Theory Questions (15 marks)

OR

Theory Questions

Q2. Theory Questions (15 marks)

OR

Theory Questions

Q3. Theory Questions (15 marks)

OR

Theory Questions

Q4. Theory Questions (15 marks)

OR

Theory Questions

Q5. Write Short Note (any 4 out of 6) (20 marks)

CONTENTS

1. Introduction to Human Resource Management 1 – 15

2. Human Resources Planning 16 – 28

3. Training and Development 29 – 38

4. Performance Appraisal and Wage & Salary Administration 39 – 58

5. Introduction to Organisational Behaviour 59 – 81

1

Introduction toHuman Resource Management

Introduction Evolution of HRM Objectives of HRM Scope of HRM Importance of HRM Personnel Management Difference between HRM and Personal Management Functions of HRM Role of an HR Manager Challenges before HRM Organization of HRM Globalization and Its Impact on Human Resource Question Bank for Practice

INTRODUCTIONPeople are making organization and all the resources like money, information or technology

depend upon the decisions which are taken by people. So, it could be said that the success of anybusiness is dependent on the people who are working for it. Therefore, in every organization there isa requirement where there must be someone who could manage these people by looking aftervarious issues such as recruitment, selection, training and development, appraisals and various othermatter related to employment. Earlier these responsibilities were looked after by personnelmanagement.

In this era of globalization, organizations are facing many economic, political and socialchallenges where these challenges show the need for organizations to mould itself. Efforts are beingmade by organization through people who are employed in it and these people are considered asresources. The concept of human resource includes management of knowledge, skill, capabilities,values, attitude and talent. A human resource manager has to handle expectation and build effectiveworkface. Human resources functions at all the level of management and it plays a vital role in everyorganization. H.R.M. is dynamic in nature as it deals with different people in different ways, at

different situation to carry out different results. In short, HRM is the task of dealing with humans,molding and developing the human behavior& attitude favorable towards his job and according toorganizational requirements.

DefinitionsAccording to Prof. Michael J. Jucius H.R.M. can be defined as “The field of management which

has to do with planning, organizing, directing and controlling various operative functions of procuringdeveloping maintaining and utilizing a labour force, such that the – (i) Objectives for which thecompany is established are attained economically and effectively. (ii) Objectives of all levels ofpersonnel are severed to the highest possible degree and (iii) Objectives of the community are dulyconsidered and served”.

According to Edwin B. Flippo (2007), Human Resource Management is- “the planning,organization, directing and controlling of the procurement, development, compensation, integration,maintenance and re-production of human resources to the end that individual, organizational andsocietal objectives are accomplished”.

According to Arm Strong (1999), HRM has been defined as a strategic and coherent approach tothe management of an organization’s most valued assets –the people working there who individuallyand collectively contribute to the achievement of its goals.

EVOLUTION OF HRM

MeaningThere is a considerable difference between recent HRM and the personnel management which

was existing earlier. By the end of 20th century, personnel management had gone through majorchanges and over the past years approaches like scientific management approach by Fredrick Taylorand human relations approach by Hawthorne have also become obsolete. However, human resourceapproach has gained its importance and is in demand even in recent times. Stages of evolution ofHRM are explained in detail.

(1) Industrial revolution: Due to rapid industrialization many labourers were employed inlarge scale production. It was difficult for employers to guide or control labours as a resultsupervisors were appointed, who looked after employee problems. Employees wereexploited and their work was not recognized. In due course of time, few measures weretaken to protect employees and for their welfare.

(2) Growth of trade union: Due to the exploitation of workers trade Union started growing forwelfare of employees. Unions tried to solve employee’s grievance by forcing managementto give better wages and working conditions for employees. Strikes, were common as aresult their was a need for certain machinery which could settle down employee grievance.

(3) Scientific management approach: Fredrick Taylor is considered as the father of scientificmanagement, he mainly worked on motions required for performing the job and the timeneeded to complete the task. Performance standards were formed for each job, where thesestandards were based on scientific data rather than on superior judgment. Those workers,

whose output was above the standard performance level received additional incentives. As aresult, it can be commented that scientific management approach was completely based onmotivation by money.

(4) Human relations approach: It was developed by Hawthrone where he conducted hisstudies during 1930s and 1940s and he tried to shift organizations attention to humanrelations approach. He suggested that employee’s productivity is not only influenced bymonetary rewards but it also depends on sociological and psychological factors. He tried toexplain that employee satisfaction could lead to higher productivity.

(5) Human resource approach: this approach considers people as important resource for anorganization as people have emotion and they are not considered as factors of productions.Some of the principles of human resources approach are:– Employees are not machines and they are assets to an organization

– Organizational policies and practices must be according to the requirement ofemployees and they should help employees for their growth and development.

– Job and task are main motivation for employees. Individual employee need must befulfilled to maintain motivation.

– It is important to create a healthy and supporting work environment to motivate anddevelop employees for the organizational development.

When an employee is considered as asset it improves his motivational level which ultimatelyleads to better performance. This better performance by employees leads to higher organizationalperformance and when the organization reaps benefits due to better performance by employees, itshould share some rewards with employees. Employee rewards may be monetary or non-monetary.Thus, human resource approach benefit organization and employees both achieve their goals.

EmployeePerformance

OrganisationPerformance

EmployeeRewards

EmployeeMotivation

HUMAN RESOURCE APPROACH

Source: ICFAI center of management research

Objectives of HRMObjective of HRM are as follows:

1. To provide training to employees to develop skills, increase productivity and enhanceindividual and organizational performance for achieving desired results

2. To provide a link between top management and employees3. To arrange and maintain manpower requirements in organization for its smooth functioning4. To develop employee benefit scheme, for improving employee motivation5. To create healthy work environment resulting in employee satisfaction.6. To enhance quality of work life for psychological well being of employees7. To follow ethical practices amongst employees8. To maintain competent work force for organization growth and prosperity

Scope of HRMScope of HRM is far- reaching and vast knowledge of HRM is very important to all employees.

HR becomes important when there are groups of employees as these employees have the ability tothink and react on situations. Various activities are performed by HR manager such as HR planning,job analysis, designing job, recruitment and selection, training and development, compensation andmany more activities by coordinating with industrial activities.

Scope of HRM can be classified as follows.1. HRM in personnel management: It involves managing manpower and activity like

manpower planning, hiring, training and development, transfer, promotions, compensationare included in personnel management. Its main objective is overall development ofemployees which could lead to organizational development.

2. HRM in employee welfare: Its deal with work environment and other facilities at work. Itincludes appointment of safety officers and creating healthy working environment andoffering various benefits like sickness benefit, maturity benefit, and disablement benefits. Italso includes employee welfare and establishing good relations between employer andemployees.

3. HRM in industrial relations: It involves safeguarding employee interest by havingharmonious relationship between employer and employees. Industrial relations includedisciplinary procedures, collective bargaining and maintaining cordial work relations bysettlement of disputes mutually. It tries to promote industrial democracy by protecting theemployees and the employers.

Importance of HRMEvery organization for efficient functioning requires materials and human resources, where

these human resources are considered as a powerful weapon for achieving organizational objectives.HRM tries to develop these human resources and ensures full utilization of available resources within

the organization. In this Era of globalization, importance of HRM can be realized at 3 levels.

1. At organizational level: HRM plays an important role for getting right quantity and qualityof manpower.

(a) In organization HRM involves recruitment, selection, training & development forimproving productivity and retaining these trained employees.

(b) It also focuses on performance appraisals and highlights the areas where training isrequired for organizational upliftment.

(c) It also involves motivating employees to achieve better results and tries to maintaininter-departmental, individual and inter-group co-ordination for healthy workenvironment.

2. Impact on society: Organizational work culture & environment has created an impact onemployees where this impact is generally experienced even by family members ofemployees in society. Factors such as secured job, proper salary standards, incentives, bonusaffects the standard of living of an employee who is living in society.

3. National level: Countries with low literacy rate are poor as qualified resources are less ascompared to developed countries. One of the major cause of a country remaining poor isimproper utilization of available resources. Whereas, a countries with high literacy rate aresuch as there is ample amount of qualified & talented resources. As a result, it can becommented that available human resources should be utilized & managed property forupliftment in a country.

Personnel ManagementIt deals with the management of manpower or employees. In recent times, human resource

management is broadly used in place of personnel management. Personnel management deals withcompany’s human resources and method in which these resources are developed and utilized byforming personnel policies for the employees. Personnel management looks after various functionslike procurement, training and development, compensation management, grievance management,appraisals, cordial industrial relations etc..

Edwin Flippo defines personnel management as “planning, organizing, directing, controlling ofprocurement, development, compensation, integration, maintenance and separation of humanresources to the end that individual, organizational and social objectives are achieved".

According to E.F.L. Breach “personnel management is that part of management processeswhich is primarily concerned with the human constituents of an organization.”

Difference between HRM andPersonnel Management

HRM Personnel Management

1 HRM is broad in scope. 1 Personal Management has a limited scope.

2 HRM depends on integrated initiative. 2 Personnel Management depends onpiecemeal initiative.

3 HRM is the recent development. 3 Personnel Management precedes HRM.

4 HRM deals with present needs of anorganisation and also prepares organisationfor future requirement.

4 Personnel Management responds to theneeds of organisation, when they arise.

5 HRM uses latest methods of training andmanpower development.

5 Personnel Management uses traditionalmethods of training & manpowerdevelopment.

6 Employees & their development is givenimportance in HRM.

6 Policies & Procedures dominate personnelmanagement rather than employees.

7 Decision making is quick in HRM. 7 Decision making is slow in Personnelmanagement.

FUNCTIONS OF HRMHR manages performs various functions starting from identifying potential candidates for jobs,

till their separation. They encourage employees & also try to bring harmony between employers –employee relationship.

Performance of an organisation is mainly dependent on the efficiency of HR department. HRpersonnel are the important link between the top management and the employees.

Functions of HRM can be mainly classified into 2 categories:

1. Managerial functions2. Operative functions

1. MANAGERIAL FUNCTIONS OF HR DEPARTMENT PLANNING: It includes estimating human resource requirement & forecasting personnel

needs. ORGANISING: It includes organising the resource to carry out the functions of the

organisation, effectively and also includes division of labour STAFFING: It is process to acquire and maintain a competent work force at all the levels

through manpower planning, recruitment, selection, placement and induction. DIRECTING: It is the process which involves directing the existing resources towards

organisational goals. CONTROLLING: It is accounting and rectification of activities to ensure that activity

being performed is according to the plan.

Operative Functions of HR DepartmentOperative functions include certain core functions which are only performed by the HR

department. It includes employing new people, developing them, compensating them andmaintaining good employee relations. Let us now discuss these functions in detail.

Operativefunctions

Employment

EmployeeRelations

CompensationManagement

HumanResource

1. EmploymentIt is the primary function of HRM, as it involves procurement of manpower having suitable

knowledge, skills and experience necessary to perform the job. Procurement is based on theprinciple “Right man for the right job.” It includes functions like job analysis, manpower planning,recruitment, selection, induction & placement

EMPLOYMENT

Job Analysis

Manpower Planning

Recruitment

Selection

Induction

Placement

Functions of HRM(a) Job Analysis: Job analysis is the process of collecting information related to job and also

identifies the skills required to perform a job.(b) Manpower Planning: Manpower planning involves forecasting manpower requirements for

an organisation and the future supply of manpower.(c) Recruitment: It is a process of attracting capable applicants for a vacancy in the

organisation.(d) Selection: It involves choosing the right person among many qualified for the given job.(e) Induction: It is introduction of new employees to organisation & its traditions, beliefs,

values, policies & procedures.(f) Placement: Placement is allocation of a new employee on his job.

1. Development of Human ResourceIt mainly focuses on development of employees which could lead to better productivity and

organisations can achieve their desired goals. Development is done through training programmeswhich tries to fill the gap between current performance and desired performance of employees. Itinvolves functions such as

(a) Performance Appraisal: It involves evaluating performance of an employee and preparinga plan for improvement of an employee, so that he can meet the future needs of anorganisation.

(b) Training & Development: Training is giving knowledge and skills necessary to perform agiven job, where as Development means developing employees to meet future challenges.

(c) Career Planning and Development: It identifies career goals of an employee andpreparing plans for achieving these career goals.

2. Compensation ManagementIt involves all the benefits an employee receives during his job for the contributions done by

him towards organisation. Compensation includes salary, incentives, bonus and benefits which arebased on job evaluation.

3. Employee RelationsIt involves maintaining cordial relations between employer and employee or between other

groups of employees. It also includes increasing productivity by maintaining satisfied work force,developing leadership skills in employees and forming a proper grievance management system formaintaining discipline within organisation. Employees relations try to increase quality of work bystriking balance between work and personal life of employees.

ROLE OF AN HR MANAGERHuman resource requires more concentration and cautious management, than any other

resource of an organization. The last two decades have seen a noticeable change in HRM particularlyin those activities, which involve acquiring, developing, motivating and utilizing human resourcesactively in the business. Now, worldwide it is agreed that human resource is one of the major meansof increasing efficiency, productivity and prosperity of the firm. It is clear that today organizationsuse more sophisticated and more encouraging method of utilization 6Ms i.e. man, money, material,machine, method and market. This efficient utilization is dependent on the roles which are handledappropriately by HR managers. Managing human resource is one of the biggest challenges for amanager as every individual is different from the other in terms of culture, beliefs, values, social class.This leads to complex scenario, where every individual behaves differently and motivational factorsare different for them. Due to these issues, HR managers have to perform various roles such asadministrative, operational and strategic.

Administrative role: It includes policy formulation and execution, housekeeping, recordsmaintenance, welfare administration, legal compliance etc.

Policy maker: The human resource manager assists management in the development ofpolicies related to talent acquisition and retention, wage and salary administration, welfareactivities, personnel records, working conditions etc.

Administrative expert: The administrative role is deeply oriented to processing and recordkeeping. Maintaining employee files, and HR related databases, processing employeebenefit claims, answering queries regarding leave, transport and medical facilities,submitting required reports to regulatory agencies are examples of the administrative natureof HR management. These activities must be performed competently and successfully tomeet changing requirements of employees, customers and the government.

Advisor: The personnel manager performs functions like advising, suggesting, counsellingand assisting the line managers in discharging their responsibilities relating to grievanceredressal, conflict resolution, employee selection and training. Personnel advice includesmaking reports, communication of guidelines for the understanding and implementation ofpolicies, providing information about labour laws etc.

Housekeeper: The administrative roles of a personnel manager include recruiting, pre-employment testing, reference checking, employee surveys, time keeping, wage and salaryadministration, benefits and pension administration, maintenance of records etc.

Counsellor: The personnel manager discusses various problems of the employees relatingto work, career, their supervisors, colleagues, health, family, financial, social, etc. andrecommends them on minimizing and overcoming problems, if any.

Welfare officer: Personnel manager is projected to be the Welfare Officer of the company.As a Welfare officer, he provides and maintains canteens, hospitals, creches, educationalinstitutes, clubs, libraries, conveyance facilities, co-operative credit societies and consumerstores. According to Factories Act, Welfare officers are expected to take care of safety,health and welfare of employees.

Legal consultant: Personnel manager plays a role of grievance handling, settlement ofdisputes, managing disciplinary cases, collective bargaining, enabling the process of jointconsultation, interpretation and implementation of various labour laws, contacting lawyersabout court cases, filing suits in labour courts, industrial tribunals, civil courts.

Operational role: It looks after the day-to-day operations necessary to meet the needs ofemployees. It includes crucial tasks such as Procurement, development, compensation,amalgamation, maintenance and separation.

Procurement: Planning, Recruitment and Selection, orientation and Placement. Development: Training, Development, Career planning and counseling. Compensation: Wage and Salary determination and management. Amalgamation: Amalgamating human resources with organizational resources. Maintenance: Sustaining and improving working conditions, retention of employees within

organization. Separations: Managing separations caused by resignations, terminations, lay-offs, death,

medical sickness etc.Strategic role: As human resource has turned out to be the key competitive advantage, the

human resource manager plays a more strategic role. Here, HR manager takes into account the

overall picture of business’s growth and implements ways to make a direct contribution to long-termgoals. Here, HR managers attempt to project future business needs and tries to develop currentemployees and programs to meet those needs. Improving the employer-employee relationship is thestrategic role of a human resources manager. Human resources managers create personnel strategyand determines the functional processes necessary to meet organizational goals.

Workplace Safety: Creating a free work atmosphere is a strategic role of every humanresources manager. It includes risk management from on-the-job injuries. Reducingaccidents through training employees for proper use of complex machinery.

Employee Training: Human resources managers' plays a strategic role related to employeetraining and development and prepares the employees for future positions within thecompany. Succession planning, promotion-from-within policies and performance evaluationare major roles of human resources manager's. Training and development motivateemployees and helps to improve employee retention.

Employee Relations: It is believed that strengthening the employer-employee relationshipdepends solely on the employee relations areas of the HR department. It includes salaries,benefits, safety, training and employee development. The strategic role of a humanresources manager is to determine, how to identify and solve workplace issues, as well ashow to attract a diverse pool of applicants through efficient recruitment and selectionprocesses.

Thus, it can be commented that Strategic role of HR manager is vital for both short term andlong term success of business.

CHALLENGES BEFORE HRMDue to globalization, HR has gone through several changes as social, economical and

technological environment is changing. These changes has become a major challenge for HRmanagers as managing complex tasks such as recruiting & selecting right person on right time,designing strategies as per organizational requirement, developing measures to ensure that besttalent is retained within organization is difficult due to changes. Few challenges are discussed belowunder Organizational, Workplace & Department level.

1. Challenges at Organization level are:– Developing proper organization culture.

– Motivating employees.

– Developing competitive strategies.

– Integrating HR plans with organizations plans.

– Eliminating skill gap due to environmental changes.

– Retaining talented employees.

– Developing a favorable environment of learning within organization.

2. Challenges at Workplace are:– Challenge related to grievance redressal.

– Challenge related to adjusting in new technology & bringing about change withinorganization.

– Focus on improving managerial skills & effectiveness.

– Managing workplace diversity.

3. Challenges at human resources department level are:– Challenges related to development of personnel policies as per organizational

requirement.

– Challenges relating to full utilization of manpower.

– Challenges relating to reducing processes within organization so that human resourcescan be managed effectively.

– Managing employee relations and workforce stress.

Organisation of HRMAny organisation consists of a large number of people. As the organisation grows, number of

people working in it increases and it becomes necessary to bring every employee under control. Thisraises the need to create system, that could bring all the employees together. This system whichbinds employees and focuses on organisational objective is organisational structure.

Organisational structure gives details of authority, hierarchy, different positions withinorganisation and size of organisation.

Organisational structure is mainly in 3 forms line organisation, staff organisation and functionalorganisation. Line organisational structure focuses on having a direct contract over sub-ordinates,whereas staff organisationl structure focuses on supportive activities to fulfill organisationalobjectives, staff organisational structure helps in facilitating line functions. In functionalorganisational structure special authority is given to staff functioning to direct line functionaries.

Personnel Department in Line OrganizationLine organizational structure is common in small organizations. Here, authority flows in a direct

line from supervisors to subordinates. Every employee is clear who his superior is and who has theauthority to issue orders. Managers have complete authority in their areas of operation and aresolely responsible for final results. Line authority implies the right to give orders and to havedecisions implemented. The principle of one boss is followed in these organisations. Authority isclear and employees working can contact top management only through their immediate bosses. Inshort, it can be said that Line managers have responsibility for directly supervising individualemployees or teams, where they report to a top-level management on the performance and well-being of the employees or teams they manage.

Responsibilities of the Line Managers in HRResponsibilities carried out by line managers include:

Day-to-day employee management. Managing operational costs. Providing technical expertise. Delegating work and roles. Monitoring work and checking quality. Measuring operational performance.

Line Relationship Works in 3 Ways.

1. Acts as a chain of control: It is necessary that superiors control sub-ordinates to fulfillorganizational task. This is the heart of line organization.

2. Acts as a chain of communication: It is the activity of conveying information which flowswithin organization. Communication is strong in line organizations as top management givesorders or directions and lower level gives reports and feedback.

3. Clarifies responsibilities: In line organization, responsibilities of employees are clear andemployees are appraised on the basis of the responsibilities clarified.

TOPMANAGEMENT

GENERALMANAGER

PRODUCTIONMANAGER

FINANCEMANAGER

HUMANRESOURCEMANAGER

FIG. 1: LINE ORGANISATION STRUCTURE

Personnel department in line and staff organizationThe line-and-staff organization combines the line organization with staff departments that

support and advise line departments. Staff managers are authorized to assist and advise linemanagers in fulfilling their basic organizational goals. Staff positions serve the organization byindirectly supporting line functions. Staff positions consist of staff personnel and staff managers.Staff personnel use their technical knowledge to assist line personnel and support top managementin various business activities. Staff managers provide support, advice, and knowledge to otherindividuals in the chain of command. Many medium and large-sized firms display line-and-stafforganizational structures. The distinctive characteristic between simple line organizations and line-

and-staff organizations is the multiple layers of management within line-and-staff organizations.

Many positions exist within a line-and-staff organization. Some positions are essential for thecompany's mission, whereas others are secondary—in the form of support and indirect contribution.A line position is directly concerned with the day-to-day operations of the organization, suchas producing or selling a product or service. Line positions are occupied by line personnel and linemanagers. Line managers carry out the primary activities of a business and are important to the basicfunctioning of the organization.

Line managers take the major decisions and direct line employees to achieve company goals. Anexample of a line manager is a marketing executive.

Line-and-Staff OrganizationAlthough, a marketing executive does not actually manufacture the product or service, he or

she directly contributes to the firm's overall objectives through market forecasting and creatingproduct or service demand. Therefore, line positions; connect with activities that are functionally anddirectly related to the primary workflow of an organization.

Staff positions serve the organization in some way by supporting line functions. Although, staffmanagers are not part of the chain of command associated to direct production of products orservices, they do have authority over personnel. An example of a staff manager is a legal adviser. Heis not directly engaged in profit-making activities, but does provide legal support to those who do.

FIG. 2: LINE AND STAFF ORGANISATION

Personnel Management in Functional Organisation:The concept of ‘Functional Organization’ was developed by F.W. Taylor, who is known as the

father of scientific management. As the name suggests, functional organization implies that theorganization should be based on various functions. Taylor’s functional approach is mainly based onprinciple of specialization and tries to obtain organizational balance.

The principle of specialization is dependent on the concept that both the workers and the

supervisors can develop a higher degree of proficiency by separating the manual from the mentalrequirements. Taylor suggests that there should be functionalisation even at the shop-level, whereworkers have to produce goods. He felt that the usual practice of putting one manager’s in-charge ofsome 40 to 50 workers should be avoided.

While developing the concept of Functional Foremanship, F.W. Taylor suggested that it isunscientific to overload a manager with entire responsibility of running a department. He said thatdirection of work should be determined by functions and not by sheer authority.

He thought that to be successful in performing his duties a manager should possess diversequalities viz., education, special or technical knowledge, manual dexterity or strength, tact, energy,honesty, common sense and good health”.

Spriegel explains Functional Organization as . “Each worker, instead of coming into contact withone superior, would receive his orders from a group of specialized supervisors, each of whomperforms a particular function.”

Functional organization also operates at top level management. The whole work in theorganization is divided in different departments. Similar type of work and dealings are put in onedepartment under the control of a departmental manager or head. Various departments are alsoknown as functional areas of management viz., Purchases, Sales, Finance, Production, and Personneletc. The individual managers of these departments will be responsible for carrying out a range ofactivities of their departments in the organization.

For example, marketing manager will be accountable for carrying out marketing activities andpersonnel manager will be accountable for looking after the personnel matters in all thedepartments of the organization.

BOARD OFDIRECTORS

MARKETINGDEPARTMENT

R&DDEPARTMENT

OPERATIONSDEPARTMENT

FIG. 3: FUNCTIONAL STRUCTURE

GLOBALIZATION AND ITS IMPACT ON HUMAN RESOURCEHuman resource is the most important tool for achieving organizational goals as all the

resources in an organization are dependent upon decisions which is taken by human’s resource. Dueto globalization, there are tremendous technological changes coming up in the nature of jobs.Following trends are existing at work place like:

Shifting a manufacturing jobs to service jobs. Various strategies are developed to manage employees.

Companies believe in having a satisfactory workforce by enhancing employees creativityand skills.

Health, welfare and safety benefits are provided to all the employees. Employees having knowledge and required skills are occupying chief positions in

organisation. Diversity in workforce is existing, as it provides equitable work environment, where no

member has an advantage or disadvantage. Views of young employees are accepted by the companies. Thus, we can say that various

changes have come up due to globalization and organizations are forming appropriatepolicies to attract and retain young talent within the organization.

QUESTION BANK FOR PRACTICE1. What is human resource management? Give its objectives.2. Discuss the role of an HR manager.3. What are the functions of human resource management?4. What is the impact of globalization on human resource?5. What are the challenges faced by HR managers?6. Write short notes on:

(a) Managerial functions of HRM

(b) Scope of HRM

(c) Personnel management

(d) Difference between HRM & personal management

(e) Personnel department in line organization.