Fundamentals of Human Resources Management: Caiib Paper 1 (Module C), Unit 1

Fundamentals of Human Resources Management: Caiib Paper 1 (Module C), Unit 1

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We all know that CAIIB exams are conducted by the Indian Institute of Banking and Finance (IIBF).  CAIIB is said to be one of the difficult courses to be cleared for the bankers. But we assure you that with the help of our “CAIIB study material”, you will definitely clear the CAIIB exam.
CAIIB exams are conducted twice in a year. Candidates should have completed JAIIB before appearing for CAIIB Exam. Here, we will provide detailed notes of every unit of the CAIIB Exam on the latest pattern of IIBF.
So, here we are providing “Unit 1: Fundamentals of Human Resources Management of “Module C: HRM in Banks” from “Paper 1: Advanced Bank Management (ABM)”.

The Article is Caiib Unit 1: Fundamentals of Human Resources Management

The Perspective

An appropriate beginning to understand the fundamentals of people management would be to appreciate the foundations of an organization.  An organization 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 organizational objectives. An organization is coming together of individuals in order to attain a common goal/purpose.

  • 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 famous for his  ‘division  of  labour’  concept and ‘time and motion’ studies and further substantiated by Gantt and Gilberths. Some of the major assumptions in this approach could be summarized as:
  1. The tasks can be broken down to simple units for people to understand and perform
  2. People will do a given activity in return for money
  3. People will have to do what is defined by the organization and in turn by technology.

Elton Mayo: Howthorne Studies 1924-33

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

The history of management of people as a distinct managerial function goes back   to the end of the nineteenth and the beginning of the twentieth century. With a significant increase in the number and size of organizational units as a sequel to the Industrial Revolution, there was a need to have special departments like finance, accounting, production, etc.

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

♦Relationship between HRM & HRD and Their Structures and Functions

HRM is an essential branch of management that deals with making the optimum usage of organizational human resources by nurturing better work conditions for all concerned. On the other hand, HRD is a branch of HRM that focuses on the growth and development of the workforce in any organization.

Basis of Differentiation HRM HRD
Definition and full form The full form of HRM is Human Resource Management. It refers to how the principles of management can be applied to manage the employees working in an organization effectively. The full form of HRD is Human Resource Development. It refers to continuous development functions that are implemented for improving the performance of those working in an organization.
Nature HRM is a management function. HRD is a sub-function of HRM.
Function The functions of HRM are reactive and are usually applied to gaining holistic organizational goals. The functions of HRD are proactive and have to be applied consistently to enhance the productivity of employees.
Goal The objective of HRM is related to improving the overall performance of employees. HRD goals are usually connected with skill development, knowledge enhancement, and increasing the competency of employees.
Process Most HRM processes are routine and have to be carried out as and when the need arises. HRD processes are ongoing and not occasional.
Dependency HRM is an independent entity in itself. It comprises of different sections inclusive of recruitment and retention, HRD, compensation, performance, appraisal management, etc. HRD is a subsystem of HRM and draws many functions, attributes, and processes from HRM.
Concerned with HRM deals with and has concerns for people only. It handles recruitment, rewards, etc. HRD is concerned with the development of all aspects and people within an organization and manages its skill development processes.
Levels of formality HRM functions are generally formal and are applied via classroom/laboratory training, etc. HRD functions may be informal as in mentorships, employees receive coaching from superiors, usually managers.

 

Role of HR Professionals

  • Supportive Role: This relates to the strengthening of the operating and executive levels and consolidating the strengths in an organization.
  • Role of System Development and Research: This pertains to developing systems that deal with people, their problems and organizational dynamics. This was already present in the traditional role.
  • Managerial role: This relates to performing managerial functions like planning future manpower, recruiting, utilizing by placement, returning, motivating-integrating people and their role, performance and potential assessment, planning the growth of individuals, etc.
  • Role of Developing Competence: This refers to developing technical, managerial, and processing competence among the human resource. The new perspective also includes helping and coping competence.
  • Process Role: An effective organization needs to respond to the changing environment for which it has to develop coping skills. Creating necessary culture and values in the organization, diagnosing the problem at organizational level and taking corrective steps are the related responsibilities of the HR functionaries.

Technical

  • Knowledge of performance appraisal systems and their functioning in various organizations
  • Knowledge of potential appraisal and mechanism of developing a system
  • Knowledge of various tests and measurements of behaviour
  • Ability to design and coordinate training programmes at worker, supervisor and managerial levels.
  • Professional knowledge of personnel and management
  • Knowledge of behavioural sciences
  • Understanding of overall organizational culture
  • Knowledge of career planning, processes and practices
  • Knowledge and skills in counselling
  • Knowledge of techniques in behavioural research

Managerial

  • Organizing ability
  • Systems development skills

Personality

  • Initiative
  • Faith in human beings and their capabilities
  • Positive attitude to others
  • Imagination and creativity
  • Concern for excellence
  • Concern for people and their development
  • Friendly, sociable and affable
  • Attitude for research and development work
  • Interest in learning new things
  • Ability to work as a team member

Strategic Role in the Future

  • To become a partner with senior and line managers in strategy execution, helping to move planning from conference room to the market place.
  • 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.
  • To become a champion for employees, vigorously representing their concerns to senior management and at the same time, working to increase employee contribution.
  • 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

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

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