Functional Area of Management-2

Module:6
• Financial Management is a vital activity in any
organization. It is the process of planning,
organizing, controlling and monitoring financial
resources with a view to achieve organizational
goals and objectives.
• It is an ideal practice for controlling the financial
activities of an organization such as procurement of
funds, utilization of funds, accounting, payments,
risk assessment and every other thing related to
money.
Meaning of Financial Management
• Financial Management means planning, organizing,
directing and controlling the financial activities such
as procurement and utilization of funds of the
enterprise.
• It means applying general management principles
to financial resources of the enterprise.
Scope/Elements
• Investment decisions includes investment in fixed
assets (called as capital budgeting).
• Investment in current assets are also a part of
investment decisions called as working capital
decisions.
• Financial decisions - They relate to the raising of
finance from various resources which will depend
upon decision on type of source, period of
financing, cost of financing and the returns thereby.
• Dividend decision - The finance manager has to
take decision with regards to the net profit
distribution. Net profits are generally divided into
two:
• Dividend for shareholders- Dividend and the rate of
it has to be decided.
• Retained profits- Amount of retained profits has to
be finalized which will depend upon expansion and
diversification plans of the enterprise.
Objectives of Financial Management
• The financial management is generally concerned
with procurement, allocation and control of
financial resources of a concern.
The objectives can be-
• To ensure regular and adequate supply of funds to
the concern.
• To ensure adequate returns to the shareholders
which will depend upon the earning capacity,
market price of the share, expectations of the
shareholders.
• To ensure optimum funds utilization. Once the
funds are procured, they should be utilized in
maximum possible way at least cost.
• To ensure safety on investment, i.e, funds should be
invested in safe ventures so that adequate rate of
return can be achieved.
• To plan a sound capital structure-There should be
sound and fair composition of capital so that a
balance is maintained between debt and equity
capital.
1. Profit maximization
• Main aim of any kind of economic activity is earning
profit. A business concern is also functioning mainly
for the purpose of earning profit.
• Profit is the measuring techniques to understand
the business efficiency of the concern.
• The finance manager tries to earn maximum profits
for the company in the short-term and the long-
term. He cannot guarantee profits in the long term
because of business uncertainties.
• However, a company can earn maximum profits
even in the long-term, if:
• The Finance manager takes proper financial
decisions, He uses the finance of the company
properly
2. Wealth maximization
• Wealth maximization (shareholders’ value
maximization) is also a main objective of financial
management.
• Wealth maximization means to earn maximum
wealth for the shareholders.
• So, the finance manager tries to give a maximum
dividend to the shareholders. He also tries to
increase the market value of the shares.
• The market value of the shares is directly related to
the performance of the company.
• Better the performance, higher is the market value
of shares and vice-versa.
• So, the finance manager must try to maximize
shareholder’s value
3. Proper estimation of total financial requirements 
• Proper estimation of total financial requirements is
a very important objective of financial
management.
• The finance manager must estimate the total
financial requirements of the company. He must
find out how much finance is required to start and
run the company.
• He must find out the fixed capital and working
capital requirements of the company.
• His estimation must be correct. If not, there will be
shortage or surplus of finance. Estimating the
financial requirements is a very difficult job.
• The finance manager must consider many factors,
such as the type of technology used by company,
number of employees employed, scale of
operations, legal requirements, etc.
4. Proper mobilization
•  Mobilization (collection) of finance is an important
objective of financial management.
• After estimating the financial requirements, the
finance manager must decide about the sources of
finance.
• He can collect finance from many sources such as
shares, debentures, bank loans, etc.
• There must be a proper balance between owned
finance and borrowed finance. The company must
borrow money at a low rate of interest.
5. Proper utilization of finance
•  Proper utilization of finance is an important
objective of financial management. The finance
manager must make optimum utilization of finance.
He must use the finance profitable. He must not
waste the finance of the company. He must not
invest the company’s finance in unprofitable
projects.
• He must not block the company’s finance in
inventories. He must have a short credit period.
6. Maintaining proper cash flow
•  Maintaining proper cash flow is a short-term
objective of financial management.
• The company must have a proper cash flow to pay
the day-to-day expenses such as purchase of raw
materials, payment of wages and salaries, rent,
electricity bills, etc.
• If the company has a good cash flow, it can take
advantage of many opportunities such as getting
cash discounts on purchases, large-scale
purchasing, giving credit to customers, etc.
• A healthy cash flow improves the chances of
survival and success of the company.  
7. Survival of company
•  Survival is the most important objective of financial
management. The company must survive in this
competitive business world.
• The finance manager must be very careful while
making financial decisions. One wrong decision can
make the company sick, and it will close down.
8. Creating reserves
•  One of the objectives of financial management is to
create reserves.
• The company must not distribute the full profit as a
dividend to the shareholders. It must keep a part of
it profit as reserves. Reserves can be used for future
growth and expansion. It can also be used to face
contingencies in the future.
9. Proper coordination
•  Financial management must try to have proper
coordination between the finance department and
other departments of the company.
10. Create goodwill
•  Financial management must try to create goodwill
for the company. It must improve the image and
reputation of the company.
• Goodwill helps the company to survive in the short-term and
succeed in the long-term. It also helps the company during bad
times.
11. Increase efficiency
•  Financial management also tries to increase the efficiency of
all the departments of the company.
• Proper distribution of finance to all the departments will
increase the efficiency of the entire company.
12. Financial discipline
•  Financial management also tries to create a financial
discipline. Financial discipline means:
 
• To invest finance only in productive areas. This will bring high
returns (profits) to the company.
• To avoid wastage and misuse of finance.
• To invest finance only in productive areas. This will
bring high returns (profits) to the company.
• To avoid wastage and misuse of finance.
13. Reduce cost of capital
•  Financial management tries to reduce the cost of
capital. That is, it tries to borrow money at a low rate
of interest. The finance manager must plan the
capital structure in such a way that the cost of capital
it minimized.
14. Reduce operating risks
•  Financial management also tries to reduce the
operating risks. There are many risks and
uncertainties in a business.
• The finance manager must take steps to reduce
these risks. He must avoid high-risk projects. He
must also take proper insurance.
15. Prepare capital structure
• Financial management also prepares the capital
structure. It decides the ratio between owned
finance and borrowed finance.
• It brings a proper balance between the different
sources of capital.
• This balance is necessary for liquidity, economy,
flexibility and stability.
Functions of Financial Management
1.Estimation of capital requirements: A finance
manager has to make estimation with regards
to capital requirements of the company.
• This will depend upon expected costs and
profits and future programmes and policies of
a concern.
• Estimations have to be made in an adequate
manner which increases earning capacity of
enterprise.
2. Determination of capital composition: Once the
estimation have been made, the capital structure
have to be decided.
• This involves short- term and long- term debt equity
analysis.
• This will depend upon the proportion of equity
capital a company is possessing and additional
funds which have to be raised from outside parties.
3.Choice of sources of funds: For additional funds to
be procured, a company has many choices like-
• Issue of shares and debentures
• Loans to be taken from banks and financial
institutions
• Public deposits to be drawn like in form of bonds.
• Choice of factor will depend on relative merits and
demerits of each source and period of financing.
4.Investment of funds: The finance manager has to
decide to allocate funds into profitable ventures so
that there is safety on investment and regular
returns is possible.
5.Disposal of surplus: The net profits decision have to
be made by the finance manager. This can be done
in two ways:
• Dividend declaration - It includes identifying the
rate of dividends and other benefits like bonus.
• Retained profits - The volume has to be decided
which will depend upon expansional, innovational,
diversification plans of the company.
6. Management of cash: Finance manager has to
make decisions with regards to cash management.
• Cash is required for many purposes like payment of
wages and salaries, payment of electricity and
water bills, payment to creditors, meeting current
liabilities, maintenance of enough stock, purchase
of raw materials, etc.
7.Financial controls: The finance manager has not
only to plan, procure and utilize the funds but he
also has to exercise control over finances.
• This can be done through many techniques like
ratio analysis, financial forecasting, cost and profit
control, etc.
Key Concepts of Financial Management
• Effective financial management contributes to
profitability.
Corporate Life Cycle Strategy
• Financial management in a business means
planning and directing the use of the company’s
financial resources – the cash it generates through
its operations and the capital obtained from
investors or lenders.
• Although a company may have an accounting staff
or an outside accounting firm to provide financial
guidance, financial management is one of the most
important aspects of the business owner’s job.
Keeping an Eye on the Cash
• A goal of the cash management function is to make
certain the business enterprise always has the
resources it needs to meet its financial obligations
on time.
• A cash deficit compared to what the owner forecast
can cause serious harm to the company’s image
and operations.
• For example, the company may not be able to fill an
important order because it cannot pay for the raw
materials needed to make the products.
• Managing accounts receivable and accounts
payable is part of effective cash management.
• The business owner wants to make certain he is
collecting all the funds due the company – the
accounts receivable – as quickly as he can.
• Conversely, he seeks to stretch out the time he
takes to pay bills from outside vendors.
• In doing so, he doesn’t want the company to get a
reputation for paying so slowly that his suppliers
insist on strict terms such as payment upon
delivery.
Planning and Forecasting
• The financial management aspect of planning
involves accurately forecasting the company’s
revenues, expenses and resulting net profit.
• The business owner uses the forecast – sometimes
called a budget – as a tool to manage the company.
Significant negative variances to forecast indicate
that the business environment and his company’s
performance in the marketplace were not what he
assumed they would be when he created his annual
plan.
• Analyzing these variances focuses his attention on
changes he needs to make to his strategies or
operations to get the company back on course to
reaching its goals.
Accurate Financial Reporting
• A business owner and his management team
require timely and accurate reports in order to
make decisions and run the company effectively.
• The staff members responsible for financial
management must determine the key pieces of
information the owner and his team need for
decision making.
• They then design reports to provide this
information in a format that is most useful to the
management team.
• The most significant metrics vary by the type of
company. A hotel owner, for example, keeps a close
eye on occupancy – the percentage of rooms used.
• A decline in occupancy compared to the same
month in the previous year would prompt
investigation by the financial staff into whether this
was due to unusual circumstances such as bad
weather or indicative of competitors taking
business away from the hotel.
Analyzing the Capital Structure
• Startup companies often need to obtain outside capital
from wealthy individuals or venture capital firms in
order to fund the company until it reaches the
breakeven point.
• As the company grows, it may need additional
infusions of capital to fund expansion. The financial
management function determines the best form of
capital for the venture – debt, equity or a combination
– how much is required and when it is needed.
• Larger companies with stable cash flow can borrow
funds from financial institutions rather than having to
give up an equity share to investors in order to get the
capital the company requires.
Human Resource Management
• Human Resource Management is a function within
an organization which focuses mainly on the
recruitment of, management of, and providing
guidelines to the manpower in a company.
• It is a function of the company or organization
which deals with concerns that are related to the
staff of the company in terms of hiring,
compensation, performance, safety, wellness,
benefits, motivation and training.
• Human Resource Management is also a
premeditated approach to manage people and the
work culture.
• An efficient human resource management enables
the workforce of an organization to contribute
efficiently and effectively towards the overall
achievement of a company’s goals and objectives.
• The traditional method of human resource
management involved planned exploitation of
staffs.
• This new function of human resource management
involves HRM Metrics and measurements and
strategic direction to display value.
• According to Armstrong (1997), Human Resource
Management can be defined as “a strategic
approach to acquiring, developing, managing,
motivating and gaining the commitment of the
organisation’s key resource – the people who work
in and for it.”
The important assumptions of HRM are as follows:
1) The members of an organisation are reservoirs of
untapped resources.
2) There is scope for unlimited development of these
resources.
3) It is more in the nature of self-development than
development thrust from outside.
4) The organisation also undergoes development with
the overall benefits along with the development of
its members.
5) The organisation further develops a culture in which
utmost emphasis is placed on harmonious superior-
subordinate relations, teamwork, collaboration
among different groups of individuals, open
communication, and above all, integration of the
goals of the organisation with the needs of the
employees.
6) Top management takes the initiative for HRM,
formulates necessary plans and strategies, and
creates an overall climate and support for its
implementation.
• The management of human resources is more of an
art than a science. In practice it is
• an “art” full of pitfalls, judgment calls, and learning
from past mistakes.
OBJECTIVES OF HRM
• The primary objective of HRM is to ensure the
availability of competent and willing workforce to
an organisation.
• Apart from this, there are other objectives too.
• Specifically, HRM objectives are four fold: societal,
organisational, functional, and personal.
Societal Objectives
• The societal objectives are socially and ethically
responsible for the needs and challenges of society.
While doing so, they have to minimize the negative
impact of such demands upon the organisation.
• The failure of organisations to use their resources
for society’s benefit in ethical ways may lead to
restrictions.
• For example, the society may limit human resource
decisions to laws that enforce reservation in hiring
and laws that address discrimination, safety or
other such areas of societal concern.
Organisational Objectives
• The organisational objectives recognise the role of
human resource management in bringing about
organisational effectiveness.
• Human resource management is not an end in
itself; it is only a means to assist the organisation
with its primary objectives.
• Simply stated the human resource department
exists to serve the rest of the organisation.
Functional Objectives
• Functional objectives try to maintain the
department’s contribution at a level appropriate to
the organisation’s needs.
• Human resources are to be adjusted to suit the
organisation’s demands.
• The department’s level of service must be tailored to
fit the organisation it serves.
Personal Objectives
• Personal objectives assist employees in achieving
their personal goals, at least in so far as these goals
enhance the individual’s contribution to the
organisation.
• Personal objectives of employees must be met if
they are to be maintained, retained and motivated.
Otherwise, employee performance and satisfaction
may decline giving rise to employee turnover.
• Under the influence of giving away the traditional
method, HRM has got a new terminology called
Talent Management.
• Human Resource Management functions can be of
three types like Operative, Managerial, and
advisory. Let’s see them one by one.
Functions of Human Resource Management
☆ Operative Functions
• Recruitment: This is the most challenging task for
any HR manager. A lot of attention and resources
are required to draw, employ and hold the
prospective employees.
• A lot of elements go into this function of
recruitment, like developing a job description,
publishing the job posting, sourcing the prospective
candidates, interviewing, salary negotiations and
making the job offer.
• Training and Development: On the job training is
the responsibility of the HR department. Fresher
training may also be provided by some companies
for both new hires and existing employees.
• This Fresher training is mainly done to make the
employees up to date in their respective areas as
required by the company.
• This function makes the employees understand the
process and makes it easy for them to get on their
jobs with much ease.
• During the process of the training and
development, the results are monitored and
measured to find out if the employees require any
new skills in addition to what he/she has.
• Professional Development: This is a very important
function of Human Resource Management. This
function helps the employees with opportunity for
growth, education, and management training.
• The organization undertakes to sponsor their
employees for various seminars, trade shows, and
corporal responsibilities. This, in turn, makes the
employees feel that they have been taken care by
their superiors and also the organization.
• Compensation and Benefits: A company can attain
its goals and objectives if it can acclimatize to new
ways of providing benefits to the employees. Some
of the benefits given by companies are listed below
for our understanding:
• Working hour flexibility, Extended vacation,
Dental/Medical Insurance, Maternal/Paternal
Leave, Education Reimbursement for children
• Performance Appraisal: The employees of any
organization will be evaluated by the HR
department as per the performance.
• This function of Human Resource Management is to
help the organization in finding out if the employee
they have hired is moving towards the goals and
objectives of the organization.
• On the other hand, it also helps the company to
evaluate whether the employees needs
improvement in other areas.
• It also helps the HR team in drawing certain
development plans for those employees who have
not met the minimal requirements of the job.
• Ensuring Legal Compliance: To protect the
organization this function plays a crucial role.
• The HR department of every organization should be
aware of all the laws and policies that relate to
employment, working conditions, working hours,
overtime, minimum wage, tax allowances etc.
• Compliance with such laws is very much required
for the existence of an organization.
• Career Planning: Career planning has developed
partly as a result of the desire of many employees
to grow in their jobs and to advance in their career.
• Career planning activities include assessing an
individual employee’s potential for growth and
advancement in the organisation.
• Record-keeping: The oldest and most basic personnel
function is employee recordkeeping.
• This function involves recording, maintaining, and
retrieving employee related information for a variety
of purposes.
• Records which must be maintained include
application forms, health and medical records,
employment history (jobs held, promotions,
transfers, lay-offs), seniority lists, earnings and hours
of work, absences, turnover, tardiness, and other
employee data.
• Complete and up-to-date employee records are
essential for most personnel functions. More than
ever employees today have a great interest in their
personnel records.
• They want to know what is in them, why certain
statements have been made, and why records may
or may not have been updated.
• Personnel Research: All personnel people engage in
some form of research activities. In a good research
approach, the object is to get facts and information
about personnel specifics in order to develop and
maintain a programme that works.
• It is impossible to run a personnel programme
without some pre-planning and post-reviewing.
• For that matter, any survey is, in a sense, research.
There is a wide scope for research in the areas of
recruitment, employee turnover, terminations,
training, and so on.
• Through a well-designed attitude survey, employee
opinions can be gathered on wages, promotions,
welfare services, working conditions, job security,
leadership, industrial relations, and the like.
• Inspite of its importance, however, in most
companies, research is the most neglected area
because personnel people are too busy putting out
fires.
• Research is not done to put out fires but to prevent
them.
• Research is not the sole responsibility of any one
particular group or department in an organisation.
• The initial responsibility is that of the human
resource department, which however should be
assisted by line supervisors and executives at all
levels of management.
• The assistance that can be rendered by trade
unions and other organisations should not be
ignored, but should be properly made use of.
• Apart from the above, the HR function involves
managing change, technology, innovation, and
diversity.
• It is no longer confined to the culture or ethos of
any single organisation; its keynote is a cross-
fertilisation of ideas from different organisations.
• Periodic social audits of HR functions are considered
essential.
• HR professionals have an all-encompassing role.
They are required to have a thorough knowledge of
the organisation and its intricacies and complexities.
• The ultimate goal of every HR person should be to
develop a linkage between the employee and the
organisation because the employee’s commitment to
the organisation is crucial.
• The first and foremost role of HR functionary is to
impart continuous education to employees about the
changes and challenges facing the country in general,
and their organisation in particular.
• The employees should know about their balance
sheet, sales progress, diversification plans,
restructuring plans, sharp price movements,
turnover and all such details.
• The HR professionals should impart education to all
employees through small booklets, video films, and
lectures.
☆ Managerial Functions
1.Human Resource Planning - In this function of
HRM, the number and type of employees needed to
accomplish organizational goals is determined.
• Research is an important part of this function,
information is collected and analyzed to identify
current and future human resource needs and to
forecast changing values, attitude, and behaviour
of employees and their impact on organization.
2. Organizing - In an organization tasks are allocated
among its members, relationships are identified,
and activities are integrated towards a common
objective.
• Relationships are established among the
employees so that they can collectively contribute
to the attainment of organization goal.
3. Directing - Activating employees at different level
and making them contribute maximum to the
organization is possible through proper direction
and motivation.
• Taping the maximum potentialities of the
employees is possible through motivation and
command.
4.Controlling - After planning, organizing, and
directing, the actual performance of employees is
checked, verified, and compared with the plans.
• If the actual performance is found deviated from
the plan, control measures are required to be
taken.
☆ Advisory Functions
• Human Resource Management is expert in
managing human resources and so can give advice
on matters related to human resources of the
organization.
Human Resource Management can offer advice to:
1. Advised to Top Management
• Personnel manager advises the top management in
formulation and evaluation of personnel programs,
policies, and procedures.
2. Advised to Departmental Heads
• Personnel manager advises the the heads of various
departments on matters such as manpower
planning, job analysis, job design, recruitment,
selection, placement, training, performance
appraisal, etc.
 HR department Interrelation With
other Functionaries
• How HR collaborates with other business functions
for hiring
• For any organisation which wishes to be successful,
it is important that it collaborates within
organization. The HR department, especially, is an
integral part of this collaboration.
• A car can only run properly if all of its four wheels
are working together. This is so true for all
successful organizations.
• ‘Collaboration’ is the key to a workplace success
and it could finally determine why businesses fail or
efficient employees leave.
• For all Human Resource functions, it is no different
and ‘Collaboration’ has become the operative word.
• Over the past decade, Human Resource functions
have undergone a rapid transformation from being
just in charge of handling recruitment to a strategic
business partner.
• Human Resource is the fine thread that binds
together talent management and business leaders
to achieve the important objective of business
goals.
• Gone are the days when HR was all about hiring,
onboarding, training, and development and
retaining.
• Today communication and collaboration are core to
all HR functions.
• Effective collaboration and communication help all
HR functions to not only attract the best talent but
also drive performance by giving the employee a
fair idea about career progression.
• Rapid advancements have been made to the way
HR collaborates with all business functions to
achieve well-defined targets.
• Hiring the right talent has to be a strategic agenda
for business heads in an organization. The games
have changed and so are the rules.
• Hiring managers are giving up traditional ways of
hiring. Today the focus is on a more socially-driven
collaborative working culture.
• It is no brainer anymore that the success of HR
function depends on effective collaboration. While
HR can definitely enable business functions in
identifying right tools in ensuring cultural fitment,
compensation benchmark in salary negotiations,
background verification and other related issues,
• but these can only be derived through an effective
collaboration of all stakeholders involved.
• Predominantly organizations across sectors would
leave the accountability of driving right hiring to HR
and hence this has become a core function
entrusted to HR.
• But right from planning compensation,performance
management to career development everything
involves a successful collaboration of all
stakeholders.
• However, workforce planning could end up being a
disaster for any organization if all the stakeholders
• don’t collaborate with the objective of achieving
business goals.
• To point out, the following points for critical for
successful HR collaborates with business leaders
across functions while driving this important
people’s agenda:
• Workforce planning: This is an activity that gets
decided at the beginning of the year jointly by
business and HR considering the projected attrition,
business growth, and the overall company
performance.
• While the overall accountability of this exercise lies
with HR but they normally collaborate with other
business factions and maintain this record of
workforce planning.
• In a nutshell, effective workforce planning will
ensure that the right kind of staff is employed for a
right cost at the right time.
• For any organization, people cost to take up the
chunk of their entire budget so immaculate
planning of workforce will ensure the fiscal health
of the organization.
• But this a hectic process that that involves a
staggering number of inputs from different
verticals.
• It all starts with getting the budgetary input from
finance and the headcount for all department.
• It is then passed on to HR and it is their task to
refine the plan.
• This, in turn, is passed on to other departments like
marketing, sales, tech, and product to understand
their requirement and work accordingly.
• Creating Manpower Requisition Form (MRF) from
time to time: As and when there are hiring
requirements the normal process followed is to
seek approved MRF and the budget for each such
role.
• During the hiring process once the approved MRF is
in place HR kick-starts the research process for the
concerned JD.
• Understanding the business need: It has become
pertinent for HR functions to understand the
business needs for the vertical.
• Together with the business function, HR can
collaborate to decide on the multiple steps of
selection and zero down on the assessment
techniques based on the complexity involved in a
specific role.
• Baselining expectations while hiring: Baselining
expectations while hiring for an important position
becomes critical.
• In many cases, we have seen lot many candidates
are lined up but selection takes a lot of time
because of frequent changes to the JD.
• It ultimately results in a delay in closing the
position and also waste of several man hours.
• HR has to play a larger role by going back to the
business and try to understand why specific
candidates are being rejected and what specific
competencies are expected from incumbents.
• This baselining of expectations helps the hiring
team in going ahead with clarity as far as the search
process is concerned.
• This would ultimately result in quick hiring
turnaround.
• Invest in contemporary interviewing techniques:
HR invests a lot of time in training people managers
by teaching them the art of interviewing.
• We are doing something called the Appreciative
Enquiry that helps us in assessing cultural fitments
of the candidate as against the defined corporate
values.
• Increasingly it is becoming important for HR and
hiring manager to keep a track of where the
organization is losing its maximum talent to and
where does this talent reside so that right mapping
of required competency can be done against the
appropriate candidate.
 
• One critical point is that HR teams are excellent in
interviewing skills but they don’t understand the
nuances of technology, sensibility and the
criticalities of the job.
• So we do workshops for the HR teams in bringing
them up to speed so that we can run effective
hiring programs with all business verticals.
• Amidst all these planning, we generally tend to
forget to make things warm for the fresh hires.
• Post offer rolls out, jointly HR and the departmental
manager must make an earnest effort to get in
touch with fresh hires and keep them warm.
• The idea is to keep open ongoing engagement.
• They must be told the tales about basic
organization background and the growth story so
that the settling-in period for the new hires is
reduced to critical time.
• That helps a newcomer in feeling welcomes and
also help them realize where they are landing.
• HR will have to have a good relationship with all the
departments in an organisation. Firstly people of
various departments are recruited by HR and hence
it starts with finding out what the department is all
about, how it functions, what are the kind of
resources needed etc.
• Then in Core HR operations as well, HR needs to
connect with the other departments for payroll,
leaves,confirmation,rewards and recognition etc.
• I would like to conclude by saying that HR is one
which builds and binds with the other departments
and continuosly works with them to achieve the
company's goals and objectives.
• HR is a service department it needs to provide its
services to all departments for following:
Recruitment, Performance Appraisal, Training and
development ,Compensation Design - [ for all depts.
as a company] ,Employee Feedback [ Surveys],
Communications, Motivational Events
• Therefore HR interacts with all departments. The
objective is to ensure that human capital is
acquired, developed and retained - this is with the
objective that organization is able to achieve its
objectives and people to achieve their aspirations
and ambitions.
 The primary responsibilities of a human resource
manager are:
• To develop a thorough knowledge of corporate
culture, plans and policies.
• To act as an internal change agent and consultant.
• To initiate change and act as an expert and
facilitator.
• To actively involve himself in company’s strategy
formulation.
• To keep communication lines open between the
HRD function and individuals and groups both
within and outside the organisation.
• To identify and evolve HRD strategies in
consonance with overall business strategy.
• To facilitate the development of various
organisational teams and their working relationship
with other teams and individuals.
• To try and relate people and work so that the
organisation objectives are achieved effectively and
efficiently.
• To diagnose problems and to determine
appropriate solution particularly in the human
resources areas.
• To provide co-ordination and support services for
the delivery of HRD programmes and services.
• To evaluate the impact of an HRD intervention or to
conduct research so as to identify, develop or test
how HRD in general has improved individual or
organisational performance.
The following are the nine new roles of HR
practitioner as suggested by Pat McLegan:
1) To bring the issues and trends concerning an
organisation’s external and internal people to the
attention of strategic decision-makers, and to
recommend long-term strategies to support
organisational excellence and endurance.
2) To design and prepare HR systems and actions for
implementation so that they can produce maximum
impact on organisational performance and
development.
3) To facilitate the development and implementation
of strategies for transforming one’s own
organisation by pursuing values and visions.
4) To create the smoothest flow of products and
services to customers; to ensure the best and most
flexible use of resources and competencies; and to
create commitment among the people who help us
to meet customers’ needs whether those people
work directly for the organisation or not.
5) To identify learning needs and then design and
develop structured learning programmes and
materials to help accelerate learning for individuals
and groups.
6) To help individuals and groups work in new
situations and to expand and change their views so
that people in power move from authoritarian to
participative models of leadership.
7) To help people assess their competencies, values,
and goals so that they can identify, plan, and
implement development actions.
8) To assist individuals to add value in the workplace
and to focus on the interventions and interpersonal
skills for helping people change and sustain change.
9) To assess HRD practices and programmes and their
impact and to communicate results so that the
organisation and its people accelerate their change
and development.
There are four roles which HR play, according to
Dave Ulrich.
• The first, strategic partner role-turning strategy into
results by building organisations that create value;
• the second, a change agent role-making change
happen and, in particular, help it happen fast;
• the third, an employee champion role-managing
the talent or the intellectual capital within a firm;
• and the fourth, an administrative role-trying to get
things to happen better, faster and cheaper.
Human resource management has received
tremendous attention in recent years.
• Its role in organisations has also undergone a
substantial change and many organisations have
gradually oriented themselves from the traditional
personnel management to a human resource
management approach, although many see it as the
“old wine in a new bottle.”
• The basic approach of HRM is to perceive the
organisation in its totality.
• Its emphasis is not only on production and
productivity but also on the quality of life.
• It seeks to achieve the fullest development of
human resources and the fullest possible socio-
economic development.