HRM itself is the new avatar of 'Personnel Management'. Personnel management was largely concerned with the technical aspects of hiring, evaluating, training, and compensating employees. HRM on the other hand leaves scope for career building of the employee, development of a professional relationship and the satisfaction aspect. as per the latest trend, the 'individual' acquires a central place in the HR policies being devised by the management. HRM mainly intends to bring optimum out of the individual so that the company gets maximum output and in turn the individual too gets his due share of profit. This further inspires the individual as well as the team to perform par excellence.
Human Resource Management is a very crucial and an integral part of any organization. The very fact that now people are being considered as resource instead of liability marks the importance of human beings constituting this resource. Human Resource environment as such is affected mainly by the following five factors;
ii. i. Economic: The economic environment of host country, inflation rates, growth factors and the levels of unemployment affect the HR policies.
ii. Demographic: The demographic composition of the workforce like the communities involved, the caste consideration (this becomes a reasonable factor in case of some of the developing economies), the male-female composition, the population density of the country/ region also helps in devising effective HR strategies.
iii. Socio-cultural: Religion and culture never tell a person to 'not to work', yet people of some socio-cultural background are found to be less workaholic than others. The effect of family systems like 'Joint family system' or 'Nuclear family system' become crucial factors in forming the habits of individuals and thus formulating of HR policies. Employees sometimes prefer flexibility in their work schedule depending upon the local festive season, local climatic conditions etc.
iv. Technological: Rapid technological advancements have reduced the dependence on muscle power to a certain extent. Modernization and automation lead to increased accuracy and less redundancy in the output while increasing the comfort level of the workforce.
v. Politico Legal: Prevailing political situation in the country, the party in power, the ideology of government functionaries affect the business environment. Whether it's a democracy, autocracy, monarchy, one party system, or a multi-party system gives enough room for strategy planners to devise HR policies accordingly. The law of the land has always to be kept in mind while doing the recruitments or managing the human resources. For example in some countries, formation of 'workers union' is not allowed while in some others it's mandatory.
All these efforts are to be kept in mind while devising strategies/ policies for HRM, with the prime objective of HRM being 'developing congruence between individual goals and organizational objectives while striving for realizing higher standards of performance, satisfaction and quality of working life'. The HR manager is therefore directly responsible towards the retention and upkeep of 'human assets' in an