Human Resource Management (HRM) is the set of policies and practices for acquiring, developing, motivating and retaining people so the organisation reaches its goals. This is the overview; Later posts in the series go deeper into strategic HRM, performance management and HRD. People are often the one resource that competitors cannot copy easily.
1. HRM: scope and evolution
HR evolved from personnel administration (records, payroll, compliance) to HRM (managing people as a resource) to strategic HRM (people strategy tied to business strategy). Functions fall into three groups:
| Group | Functions |
|---|---|
| Managerial | Planning, organising, directing, controlling people matters |
| Operative | Procurement, development, compensation, integration, maintenance, separation |
| Advisory | Advise line managers, top management and unions |
The HR department supports, but every manager is partly an HR manager. Dave Ulrich’s four roles: strategic partner, administrative expert, employee champion and change agent.
2. Human resource planning
HR planning ensures the right number and type of people at the right time. Steps: analyse organisational plans, forecast demand (trend analysis, ratio analysis, workload and expert methods) and supply (internal skills inventory, Markov analysis of movement, and the external labour market), identify gaps, and plan action (hire, train, redeploy, outsource, or reduce). Succession planning prepares replacements for key roles. Tools: workforce analytics and scenario planning.
3. Job analysis and design
Job analysis collects facts about a job through observation, interviews, questionnaires and logs. It produces:
- Job description: duties, responsibilities, reporting, conditions.
- Job specification: the qualifications, skills and traits required.
Job design shapes how work is organised: job enlargement (more tasks), job rotation, job enrichment (more autonomy) and flexible work (flexitime, remote, job sharing). Competency frameworks list the knowledge, skills and behaviours needed for each role.
4. Recruitment and selection
Recruitment builds a pool of candidates; selection chooses among them.
| Recruitment source | Examples |
|---|---|
| Internal | Promotions, transfers, referrals |
| External | Campus, job portals, agencies, social media, walk-ins |
Employer branding attracts talent. Selection process: screening of applications, tests (aptitude, personality, skills), interviews, reference and background checks, medical examination, offer and induction.
| Interview type | Notes |
|---|---|
| Unstructured | Free-flowing; prone to bias |
| Structured | Same questions for all, scored on a rubric; far more reliable |
| Behavioural | “Tell me about a time…” using the STAR method |
| Panel / stress / case | Test group handling, pressure or problem-solving |
A selection tool should be reliable (consistent) and valid (predicts job performance). Common errors: halo effect, similarity bias and first-impression bias.
In the real world: Google moved toward structured interviews and work-sample tests because unstructured interviews predict performance poorly. Many Indian IT companies recruit in bulk on campuses and train for months before deployment. Zappos famously offers new hires a payment to quit during training, to test commitment.
5. Training and development
Training improves present job skills; development prepares for future roles. Process: needs analysis (organisation, task and person), design, delivery and evaluation.
| Method | Examples |
|---|---|
| On the job | Coaching, mentoring, job rotation, apprenticeship, understudy |
| Off the job | Lectures, simulations, case studies, role-play, e-learning |
Evaluation follows Kirkpatrick’s four levels: reaction, learning, behaviour and results. Orientation and induction help new joiners settle and reduce early attrition.
In the real world: Infosys trains new engineers at a large campus in Mysuru before they join client projects, and TCS and Wipro run similar programmes. GE’s Crotonville is a well-known leadership development centre.
6. Performance appraisal
Appraisal evaluates performance for feedback, pay, promotion and development. Methods: graphic rating scale, ranking, paired comparison, forced distribution, critical incident, BARS (behaviourally anchored rating scales), management by objectives (MBO), 360-degree feedback and assessment centres. Common errors: halo, leniency, strictness, central tendency, recency and bias. Good practice: clear criteria, regular feedback, trained raters and a fair appeal route. (See Performance Management, later in the series.)
7. Compensation and benefits
Compensation includes base pay, variable pay (incentives, bonus), benefits (provident fund, insurance, leave), perquisites and non-monetary rewards. Principles: internal equity (job evaluation by ranking, classification, point or factor comparison), external competitiveness (salary surveys) and individual fairness (performance). Employee stock options (ESOPs) align long-term interests, especially in start-ups. The cost-to-company (CTC) shows total employer spend. Statutory elements in India include the minimum wage regime, bonus, gratuity, provident fund and ESI. (Compensation and Welfare Management is covered later in the series.)
8. Employee relations and Indian labour law
Employee relations cover discipline, grievance handling, communication, engagement and relations with trade unions and collective bargaining. Discipline follows natural justice: notice, a fair hearing and a proportionate penalty. Grievance procedures give a step-by-step route to resolve complaints. Employee engagement and well-being are central to retention.
India has consolidated many older central labour laws into four codes, on wages, industrial relations, social security and occupational safety, health and working conditions. Familiar older Acts that informed them include the Industrial Disputes Act, the Factories Act, the Payment of Wages Act and the Maternity Benefit Act. The POSH Act requires an internal committee to address sexual harassment at work. HR must also manage diversity and inclusion, equal opportunity and ethical conduct.
9. HR in the digital age
HRIS and cloud HR suites automate payroll, attendance, onboarding and learning. HR analytics studies attrition, hiring quality and engagement data. AI screens CVs and powers chatbots, with risks of algorithmic bias that HR must audit. Remote and hybrid work, gig and contract talent, upskilling and employee experience are current priorities. Separation covers resignation, retirement, layoff, termination and exit interviews to learn why people leave.
In the real world: Netflix’s “keeper test” (“would I fight to keep this person?”) is an unusual and controversial talent-management policy. Whatever the policy, each stage of the employee life cycle (attract, select, onboard, develop, retain, separate) is an HR responsibility.
One-minute recap
| Topic | Key idea | Where you meet it |
|---|---|---|
| HRM scope | Personnel to strategic; Ulrich’s four roles | HR structure |
| HR planning | Demand, supply, gap, succession | Headcount plans |
| Job analysis | Job description and specification | Hiring, grading |
| Recruitment and selection | Sources; structured interviews | Campus drives, panels |
| Training | Needs analysis; Kirkpatrick levels | Induction, upskilling |
| Appraisal | Methods and rater errors | Reviews, 360 feedback |
| Compensation | Equity, variable pay, ESOPs | CTC, bonus design |
| Employee relations and law | Discipline, grievances, labour codes | Compliance, POSH |
| HR digital | HRIS, analytics, AI | Payroll, hiring tools |
Next in MBA Revisited: Entrepreneurship Development.
Written by Claude, Anthropic’s AI assistant, as part of MBA Revisited, a quick refresher of the PGDM subjects one at a time.