What do you mean by Human Resource Management? Describe its functions.

 Q. What do you mean by Human Resource Management? Describe its functions.

Ans. MEANING OF HUMAN RESOURCE MANAGEMENT: Human Resource Management is that branch of management which is concerned with the recruitment, selection, development and the optimum use of the employees. It ensures that every employee makes his maximum contribution to the achievement of business goals. 

For complete meaning refer:

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FUNCTIONS OF HRM: HRM is concerned with managing resources to effectively and efficiently achieve objectives of the organisation. The major functions of human resource management are:

● (A) Managerial Functions: Human resource manager is supposed to perform basic managerial functions i.e. Planning, Organising, Staffing, Directing and Controlling in relation to his department. These functions are:

(1) Planning: Planning is the first and foremost function of every manager. It is the most essential function for the success of the organisation. Planning implies preparing a blueprint of future programs to achieve the organisation goal. A good plan is necessary for proper utilization of human and physical resources to achieve organisational objectives. 

   Human resource planning is one of the most important functions of HR manger. He has to constantly monitor human resource requirements according to the changing needs of the organisation, anticipate vacancies, anticipate demand and supply of work force for various job categories in the market, determine shortage and surplus of personnels, and develop plan to eliminate shortage of staff and separation plan of the surplus staff. He should determime human resource policies and programs. Besides, human resource planning, human resource research has also become a specialized function of HR department. Recruitment, selection, promotion, transfer, absenteeism, labour turnover etc. are subject of human resource research.

(2) Organising: Every organisation has three important constituents — Work which is to be done, Employees by whom it should be done, and Physical resources which are to be used to get it done. Organising therefore refers to establishing proper relationship among work, employees and physical resources. Need of Organising is felt to achieve desired goals. Process of organising involves the following stages– determination of activities, grouping of activities and assignment of these activities to individuals, delegation of authority and fixation of responsibility. HR department and other departments in the organisation have complex relationship. HR manger provides them proper consultancy services in respect of administration of the employees.

(3) Staffing: Success or failure of an organisation depends on the capability of the workforce working in the organisation. If an organisation lacks suitable and capable employees, it cannot achieve its goals. By way of staffing process, suitable and competent persons are employed at different levels of organisation’s structure. Staffing proces includes the following three aspects: 

(a) To forecast the need of human resources.

(b) To determine the qualifications of the persons to be selected.

(c) To recruit and select the employees and to impart training to them.

Thus, staffing function includes forecasting of human resource planning, recruitment of employees, selection, trainimg and development.

(4) Directing: To motivate and lead the employees in order to achieve the goals of the organisation is called directing. The main components of this process are: 

(a) To direct and command subordinates.

(b) To guide and educate the subordinates.

(c) To supervise the work of the subordinates so as to ensure that everything is going on as per the plan.

(d) To encourage the subordinates to achieve higher productivity.

In an organisation, HR manager performs the function of providing leadership, guiding, supervising and inspiring the workforce. Directing is essential to attain the goals of the organization and to secure the willing and effective co-operation of the employees. Under this function, besides securing the co-operation of the employees, good industrial and human relations are also established. HR manger should make proper coordination among managers of the different departments in the organisation.

(5) Controlling: Final function of a manager is controlling. Under this function, manager ensures whether the work is executed in accordance with the pre-determined plan, or not. Actual work being done is compared with pre-determined standards or work. Deviations are traced and remedial measures are taken. Controlling is an important activity in the field of human resource management whether or not HR policies, objectives and programs are being enforced strictly according to pre-determined plan. If not, shortcomings are looked into and corrective actions are taken to remove the same. This is what is implied under human resource controlling. HR management determines job standards for employees at different levels. Actual work done by them is compared with pre-determined standards. Shortcomings are enquired into and suggestions are given to remove them. Auditing of human resource development programs, analysis of employees turnover records, directing of morale survey, interviewing new employees on schedule date, and comparing organisation’s  human resource management programs with the programs of other organizations etc. are used as a means of controlling.

● (B) Operative Functions: These are also called service functions or staff functions. HR manger is required to have special knowledge of human relations. In this category, main functions of HR manger are:

(1) Procurement of Employees: It is the duty of HR manger to provide for adequate number of employees. It is on the basis of this that manpower forecasting is made and manpower planning is undertaken. Manpower planning is a process on the basis of which the quantity and quality of personnel required are determined and employees requisition prepared accordingly. Manager can proceed ahead to initiate the process of recruitment and selection. Recruitment refers to looking for the prospective employees for the organisation and to motivate them to apply for the vacant posts. It aims at increasing the selection ratio for each job. Selection is a negative process. Under this process, applications of the job-seekers are scrutinized, then the best among the suitable candidates are selected. 

Placement of newly selected employees in the organisation and giving them full information about the policies, programmes, objectives of the organisation and also about other employees etc. are the functions performed by the HR manager.

(2) Development of Personnel: After selection of the employees, there remains a special need for training and development so that they may perform their jobs in a better way. HR manager makes necessary arrangement for training and development of employees of all the departments. In this category of development, following functions are covered:

(a) Performance Appraisal: HR manager makes provisions for the performance appraisal of the employees. On its basis, he decides who deserves promotion, who needs training, who are to be transferred. He also takes decision regarding promotion of competent employees and punishment for incompetent one.

(b) Training: It is a short-term process. It concerns with adding to the knowledge and skill of non-managerial employees so as to enable them to perform specific functions efficiently. On the basis of work performance, it is found out so as to which employees need training. Accordingly, proper training programmes are conducted and the end-result of different training programmes are assessed.

(c) Development: It is a long-term process. Theoretical knowledge is imparted to the managers to enable them to achieve the objectives of the organisation. It includes fixation of work standards, comparing actual work with standard work, finding areas of managerial development, explaining development programmes, knowing the effect of different managerial development works, making provisions of educational facilities, holding of seminars and symposiums etc. All these help to develop human resources.

(3) Compensation Function: HR manager makes adequate provisions for adequate wages and salary for the workers and employees serving the organisation. It includes job evaluation, wage and salary survey, determination of wage rate, determination of mode of wage payment, incentive payment plans, bonus, benefits and services etc.

(4) Integration: Besides activities to work, the employees must also have willingness to work. Willingness to work is influenced by the extent to which interests of the management have been integrated with the interests of the employees. In case, the interests and objectives of the employees are not served, then the goals of the organisation cannot be achieved. Integration of interests of management and that of the employees is the main function of HR manager.

(5) Maintenance functions: Another important function of HR manager is to maintain the employees in the organisation. HR manager is required to obtain the best employees and having obtained them, it must look after them in such a way that they would like to stay in the organisation and accomplish their work in the best possible manner.

(6) Separation Functions: If the primary function of HR manager is to procure the services of human resources, its final function is to separate them. The latter function is opposite to the former or primary function. It include the following:

(a) Retirement 

(b) lay-off

(c) Termination

(d) Discharge

(e) Suspension.

(7) Career Planning and Development: HR manager plans to one’s career and implementation of careers plan by means of education, training, jobs search and acquisition of work experiences. It includes internal and external mobility.

(8) Organisation Development: OD is an organisation’s well planned effort, managed from the top, with a goal of increasing organisational performance through planned interventions. It helps to change attitudes, values, organisation structures and managerial practices in an effort to improve organisational performance. 

So, the main functions of HR manager is to develop a human resources philosophy in the entire organisation. He also influences personnel policies by providing the necessary inputs to the top management. He also plans and design new HR methods. He also inspires the line managers who are primarily responsible for the implementation of HR methods provided to them by the HR department.

What is Primary data? Difference between primary and secondary data. Methods of collecting primary data.

 Q. What do you mean by Primary Data? Differentiate between primary data and secondary data. What are the different methods of collecting primary data? 

Ans. MEANING OF PRIMARY DATA: Data collected by the investigator for his own purpose, for the first time, from beginning to end, is called primary data. It is collected from the source of origin. In the words of Wessel, “Data originally collected in the process of investigation are known as primary data”.

MEANING OF SECONDARY DATA: According to Wessel, “Data collected by other persons are called secondary data”. These data are, therefore, called second-hand data.

DIFFERENTIATE BETWEEN PRIMARY DATA AND SECONDARY DATA: The following are the points of difference between primary and secondary data.

(1) Difference in Originality: Primary data are original because these are collected by the investigator from the source of their origin. On the other hand, secondary data are already in existence and, therefore, are not original. Primary data are used as raw material while secondary data are finished products.

(2) Difference in the Suitability of Objectives: Primary data are always related to a specific objective of the investigator. These data, therefore, do not need any adjustment for the concerned study. On the other hand, secondary data have already been collected for some other purpose. Therefore, this data need to be adjusted to suit the objective of study in hand.

(3) Difference in Cost of Collection: Primary data are costlier in terms of time, money and efforts involved than the secondary data. This is because primary data are collected for the first time from the source of origin. Secondary data are simply collected from the published or unpublished reports. Accordingly, these are much less expensive. 

It may be noted that there are no fundamental differences between primary data and secondary data. Data are data, whether primary or secondary. These are classified as primary or secondary just on the basis of their collection: first-hand or second-hand. Thus, a particular set of data when collected by the investigator for a specific purpose from the source of origin would be primary data. And the same set of data, when used by some other investigator for his own purpose would be known as secondary data. 

METHODS OF COLLECTING PRIMARY DATA:

The primary data may be collected by using any of the following methods:

(1) Direct Personal Investigation: In this method, data are collected personally by the investigator himself. There is a face-to-face contact with the persons from whom the information is to be obtained. Data are collected by asking questions relating to the enquiry to the informants. Suppose, if an investigator wants to collect data about the involvement in politics of the students of Kurukshetra University, Kurukshetra, he would go to the campus and contact each student and obtain the required information.

▶ Suitability: This method is suitable particularly when:

(1) the field of investigation is limited.

(2) a greater degree of originality of the data is required.

(3) information is to be kept secret; and

(4) investigation needs lot of expertise, care and devotion. 

▶ Merits: 

(1) Originality: Data have a high degree of originality according to this method.

(2) Accuracy: Data are fairly accurate when personally collected.

(3) Reliable: Because the information is collected by the investigator himself, reliability of the data is not doubted.

(4) Other information: When in direct contact with the informants, the investigator may obtain any other related information as well.

(5) Uniformity: There is a fair degree of uniformity in the data collected by the investigator himself from the informants. Comparison becomes easy because of uniformity of data.

(6) Flexible: This method is fairly flexible because the investigator can always make necessary adjustments in his set of questions.

▶ Demerits:

(1) Not Proper for Wide Areas: Direct personal investigation becomes very difficult when the area of the study is very wide.

(2) Personal Bias: This method is highly prone to the personal bias of the investigator. As a result, the data may lose their credibility.

(3) Costly: This method is very expensive in terms of the time, money and efforts evolved.

(4) Wrong Conclusions: In this method, area of investigation is generally small. The results are, therefore, less representative. This may lead to wrong conclusions.

(2) Indirect Oral Investigation: In this method, the investigator obtains the information not from those persons for whom the information is needed. Information is collected orally from other persons who are expected to posses the necessary information. These other persons are known as witnesses. Indirect oral Investigation is usually adopted in those cases where information through direct sources is not possible or less reliable. For example, if a case of murder is to be investigated, it would be quite impossible to know the facts by contacting the persons directly who are involved in it. In such case, information is to be obtained from third persons such as friends, neighbours, witnesses, etc. 

▶ Suitability: This method is suitable particularly when:

(1) the field of investigation is large.

(2) it is not possible to have direct contact with the concerned informants.

(3) the concerned informants are not capable of giving information because of their ignorance.

(4) Enquiry committees and commissions appointed by the Government generally adopted this method.

▶ Merits: 

(1) Wider Area: This method can be applied even when the field of investigation is very wide. 

(2) Less costly: This is relatively a less costly method.

(3) Expert opinion: Using this method an investigator can seek opinion of the experts and thereby make his information more reliable.

(4) Free from Bias: This method is relatively free from the personal bias of the investigator.

(5) Simple: This is relatively a simple method of data collection.

▶ Demerits:

(1) Less Accurate: The data collected by this method are relatively less accurate. This is because the information is obtained from persons other than the concerned informants.

(2) Biased: There is possibility of personal bias of the witness giving information.

(3) Wrong Conclusions: This method may lead to doubtful conclusions due to ignorance and carelessness of the witness.

(3) Information from Local Sources or Correspondents: In this method, the investigator appoints local agents or correspondents in different places to collect information. These correspondents collect the information in their own way and send the same to the central office where the data are processed. Newspapers agencies generally adopt this method. This method is generally adopted by various government departments where regular information is to be collected from a wide area. For example, in the construction of wholesale price indices, regular information is obtained from correspondents appointed in different areas.

▶Suitability: This method is suitable particularly when:

(1) accuracy of the data is only modestly needed.

(2) regular and continuous informations are needed.

(3) the area of investigation is large.

(4) the information is to be used by journals, magazines, radio, TV, etc. 

▶ Merits: 

(1) Economical: This method is quite economical in terms of time, money and efforts involved.

(2) Wider Coverage: Investigator can cover wider cover. 

(3) Continuity: The correspondents keep on supplying almost regular information.

(4) Suitable for Special Purpose: This method is particularly advantageous for some special purpose investigations, e.g., price quotations from different grain markets for the construction of Index Number of Agricultural Prices.

▶ Demerits:

(1) Less Originality: In this method, there is less originality. Investigation depends more on estimation rather than actual enumeration.

(2) Lack of Uniformity: There is lack of uniformity of data. This is because data is collected by a number of correspondents.

(3) Personal Bias: This method suffers from personal bias of the correspondents.

(4) Less accurate: The data collected by this method are not very accurate.

(5) Delay in Collection: Generally, there is delay in the collection of information through this method.

(4) Mailed Questionnaire Method: In this method, a list of questions (known as questionnaire) related to the survey is prepared and sent to the informants by post. The questionnaire contains questions and provides space for answers. A covering letter is addressed to the informant explaining the object of survey and making a request to fill up the questionnaire and send it back to within a specified time. It is also assured that the information would be kept secret. The informants write the answers against the questions and return the completed questionnaire to the investigator.

▶ Suitability: This method is most suited when:

(1) the area of study is very wide and

(2) when the informants are educated.

▶ Merits: 

(1) Economical: This method is economical in terms of time, money and efforts involved.

(2) Originality: This method is original and, therefore, fairly reliable. This is because the information is supplied by the concerned persons themselves.

(3) Wider area: This method can cover wider area.

▶ Demerits: 

(1) Lack of interest: Generally, the informants do not take in interest in questionnaires and fail to return the questionnaires. Those who return, often send incomplete answers.

(2) Lack of flexibility: This method lacks flexibility in the sense that when questions are not properly replied, these cannot be changed to obtain the required information.

(3) Limited Use: This method has limited use in that questionnaires are answered only by the educated informants. Thus, this method cannot be used when the informants are uneducated.

(4) Biased: If the informants are biased, the informations will also be biased.

(5) Less Accuracy: The conclusions based on such investigation have only limited accuracy. This is because some questions may be difficult and accurate answers may not be possible.

(5) Schedules Filled through Enumerators: In this method, a questionnaire is prepared as per the purpose of enquiry. The enumerator himself approaches the informants with the questionnaire. The questionnaires which are filled by the enumerators themselves by putting questions are called schedules. Thus, under this method, the enumerator himself fills the schedules after making enquiries from the informants. Enumerators are those persons who help the investigators in collecting the data. The enumerators are given training to fill the schedules and put the questions intelligently in the interest of accuracy of information.

▶ Suitability: This method is mostly used when:

(1) field of investigation is large.

(2) the investigation needs specialised and skilled investigators.

(3) the investigators are well versed in the local language and cultural norms of the informants.

▶ Merits:

(1) Wide Coverage: This method is capable of wider coverage in terms of area involved. Even illiterates will also provide information.

(2) Accuracy: There is a fair degree of accuracy in the results. This is because investigations are done by specialized enumerators.

(3) Personal Contact: Unlike in the case of mailing questionnaires, there is personal contact with the informants in this method. Accordingly accurate and right answers are obtained.

(4) Impartiality: This method is impartial. This is because the enumerators themselves do not need the required information; so they are impartial to the nature of information they obtain.

(5) Complete: Schedules have the merits of completeness, because these are filled in by the enumerators themselves.

▶ Demerits 

(1) Expensive: This is a very expensive method of investigation because of the involvement of trained investigators.

(2) Difficulties regarding Enumerators: Competent enumerators may not be available. Accuracy of the information accordingly suffers.

(3) Time Consuming: Enumerators may need specialised training for particular investigators. The process of investigation thus becomes time consuming.

(4) Not suitable for Private Investigation: Since this method is very expensive, it is generally not suitable for private investigations. This method is generally used by the Government institutions.

(5) Inaccurate Data: If the enumerators are biased, the data will not be accurate.

Monetary policy: Meaning and instruments.

 Q. What is meant by Monetary Policy? Explain the main instruments of monetary policy. 

Ans. Meaning of Monetary Policy: Monetary policy refers to that policy through which central bank of the country (Reserve Bank in India) controls (i) the supply of money, (ii) availability of money, and (iii) the cost of money in order to attain a set of objectives focusing on growth and stability of the economy.

It is an economic policy that manages the size and growth rate of the money supply in the economy. It is primarily concerned with the management of interest rate and the total supply in money in circulation and is generally carried out by central bank.

In the words of G.K. Shaw, “By monetary policy, we mean any conscious action undertaken by the monetary authorities to change the quantity, availability or cost (rate of interest) of money.”

Main instruments of Monetary Policy: 

Monetary policy instruments to credit control is often categorised as Quantitative and Qualitative. Quantitative instruments are applied as non-discriminatory credit policy of the central bank: all sectors of economy are uniformly treated while monetary policy is being pursued. Qualitative instruments are applied as discriminatory credit policy of the government: different sections are treated differently depending on the prevailing situation in the country. Qualitative credit control is also called selective credit control.

I. Quantitative Instruments: Following are the instruments for quantitative credit control:

(1) Bank Rate: Bank rate is an important instrument of credit control. Bank rate is that minimum rate of interest at which central bank of a country is willing to discount the first grade securities of other banks or lends on approved securities. Rise in Bank rate raises the rate of interest and fall in bank rate lowers rate of interest. When bank rate is raised, there is contraction of credit, fall in aggregate demand and hence fall in prices. On the contrary, to check deflation in the country, bank rate is lowered.

(2) Open Market Operations: When the central bank of a country buys or sells securities in the open market is called Open Market Operations. If the credit is to be contracted, the central bank begins to sell securities in the open market. On the contrary, if the central bank wants to expand credit, it begins to buy securities in the open market. In the event of inflation, central bank sells securities in the open market. As a result of it, credit is contracted, aggregate demand goes down and prices tend to fall. On the contrary during depression, the central bank buys securities as a result of which credit expands, aggregate demand increases and prices tend to rise.

(3) Change in Minimum Reserve Ratio: Commercial banks are required to keep a given percentage of their total deposits as cash reserve with the central bank. If the central bank wants to contract credit, it raises the cash reserve ratio. As a result, banks have to keep a larger percentage of their deposits in terms of cash with the central bank. It reduces their cash reserves. Lower cash reserves reduces credit creation capacity of the commercial banks. On the other hand, when the central bank wants to expand credit, it lowers the cash reserve ratio. This leaves the banks with larger cash reserves to create credit.

(4) Change in Liquidity Ratio: Every bank is required to keep a given proportion of its total assets in the form of liquid (or near liquid) assets. It is called liquidity ratio. When the central bank is to contract credit, it raises liquidity ratio. On the contrary, when the central bank is to expand credit, it lowers the liquidity ratio.

II. Qualitative (or Selective) Policy Instruments:

(1) Change in Margin Requirements of Loans: When the central bank feels that the traders are stock piling (collects/hoards) certain commodities as a result of which their prices are rising, then it controls the availability of credit for these goods by changing margin requirement. It means that the margin between the value of the goods pledged as security and the amount of loan is increased. Supposing a person pledges goods worth ₹100 as security with a bank and gets a loan amounting to ₹80. In this example, margin requirement is ₹20, or say 20 per cent. If the margin requirement is raised, then the borrower will have to pledge goods of greater in order to secure loan of a given amount. This way credit is contracted. Supposing, margin requirement is raised to ₹60 only against the security of goods worth ₹100 only. Obviously, if the margin requirement is lowered, there will be expansion of credit. 

(2) Rationing (allocating, distributing) of credit: Central bank is the lender to the last resort to commercial banks. Hence, if it so chooses, it can introduce rationing of credit in order to control credit. Rationing of credit may have any of the four variants:

(i) The central bank can decline loan to a specified category of commercial banks.

(ii) The central bank can reduce the quantum of loans for all the banks.

(iii) Central bank can fix credit quota for different banks.

(iv) Central bank can determine the limit of credit granted to industry and trade. As a result of credit rationing banks become cautious in advancing loans; accordingly flow of credit is restricted.

(3) Direct Action: Sometimes, the central bank may initiate direct action against the commercial banks defying its directives. The central bank may impose strict restrictions on the functioning of defaulting banks including denial of loans.

Quantitative and Qualitative credit control are not ‘either-or’ forms of credit control. These are complementary to each other. Both quantitative as well as quantitative policy instruments may be simultaneously pursued with a view to achieving the objectives of monetary policy.