Human resources is the use of human in the manufacture of goods in an industry rather than the use of machines. Even if there is a total automation in an industry, the organization will require a person to on the button. This shows how important man power is to any kind of organization.

All organizations, irrespective of size or extent of its resource, commercial or not for profit, have people i.e they have human resources. Organization survive and thrive only because of the concept of Human Resource Management (HRM).

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History of HRM is as old and complex as the history of work and organization. HR is the most important asset possessed by any organization. The strategists talk about sustainable competitive advantage. It is the HR which helps to hold the advantage.

Human Resource management is a process and philosophy of acquisition, development, utilization, and maintenance of competent human force to achieve goals of an organization in an efficient and effective manner.

Concept of HRM contains two versions – the hard version and the soft version. The hard version or variant emphasizes the need to manage people in ways that will obtain added value from them and thus achieve competitive advantage.

On the other hand, soft version is concerned with treating employees as valued assets, a source of competitive advantage through their commitment, adaptability and hug; quality. Today’s HRM is a combination a from the versions. HRM is management : “Tamar energy and capabilities.

     Characteristics of Human Resource Management

  1. It is an art and a science: The art and science of HRM is indeed very complex. HRM is both the art of managing people by recourse to creative and innovative approaches; it is a science as well because of the precision and rigorous application of theory that is required.

It is pervasive: Development of HRM covers all levels and all categories of people, and management and operational staff. No discrimination is made between any levels or categories. All those who are managers have to perform HRM. It is pervasive also because it is required in every department of the organization. All kinds of organisations, profit or non-profit making, have to follow HRM.

It is a continuous process: First, it is a process as there are number of functions to be performed in a series, beginning with human resource planning to recruitment to selection, to training to performance appraisal.

To be specific, the HRM process includes acquisition (HR planning, recruitment, selection, placement, socialisation), development (training and development, and career development), utilisation (job design, motivation, performance appraisal and reward management), and maintenance (labour relations, employee discipline, grievance handling, welfare, and termination). Second, it is continuous, because HRM is a never-ending process.

HRM is a service function: HRM is not a profit centre. It serves all other functional departments. But the basic responsibility always lies with the line managers. HRM is a staff function – a facilitator. The HR Manager has line authority only within his own department, but has staff authority as far as other departments are concerned.

HRM must be regulation-friendly: j The HRM function has to be discharged in a manner that legal dictates are no: violated. Equal opportunity and equal pay for all, inclusion of communities in employment, inclusion of tribal’s (like ) Posco or Vedanta projects) and farmers 1 in the benefits and non-violation of human rights must be taken care of by the HRM.

Interdisciplinary and fast changing: It encompasses welfare, manpower, personnel management,

and keeps close association with employee and industrial relations. It is multi- disciplinary activity. utilising knowledge and inputs from. psychology, sociology, economics, etc It is changing itself in accordance with the changing environment. It has I travelled from exploitation of workers to treating them as equal partners in the task.

Focus on results: HRM is performance ! oriented. It has its focus on results, rather than on rules.

           It encourages people to 1 give their 100%. It tries to secure the I best from people by winning the whole hearted cooperation. It is a process c| bringing people and organization together so that the goals of each are met. It is commitment oriented.

People-centred: HRM is about people at work both as individuals and a group. It tries to help employees to develop their potential fully. It comprises people- related functions like hiring, training and development, performance appraisal and working environment.

HRM has the responsibility of building human capital. People are vital for achieving organizational goals. Organizational performance depends on the quality of people and employees.

Human relations philosophy: HRM is a philosophy and the basic assumption is that employees are human

beings and not a factor of production like land, labour or capital. HRM recognises individuality and individual differences. For every manager to be successful, he must possess social skills to manage people with differing needs.

  • An integrated concept: HRM in its scope includes Personnel aspect, Welfare aspect and Industrial relations aspect in itself. It is also integrated as it concern with not only acquisition, but also development, utilization, and maintenance.


Human capital is very important in business because of the following reasons:

  1. Provision of personnel: Human capital provides the required skills or personnel needed during the process of production.
  2. It influences other factors of production: Human capital plays an active role in other factors of production like land and capital because without human capital, other factors will remain idle.
  • Production of goods and services: Human capital especially the active working population provide goods and services needed by the populace including the aged and the children.
  • Operation of machines: Human capital is required in industries to operate machines and carry out the various production processes.
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  • It improves the efficiency of work: Human capital especially the highly skilled and experience one do guarantee efficiency of work in all organizations.
  • It promote productivity: Good and efficient human capital is well known to ensure maximum productivity in all organizations.
  • It ensure profitability: The combined effort of human capital in the area of qualitative education, experience and training enable organization to turn out quality products which are offer to sales in order to make goods profits.

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