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Unit 1: Introduction to Human Resource Management

1.5.1 Technological Innovation Notes

Rapid technological changes and innovations are taking place all over the world. As a result
of these, technical personnel are increasingly required. Hence, procurement of technically
skilled employees is necessary to match the changing job requirements.
1.5.2 Economic Factors

Economic conditions influence financial “health” of an organization. Under favourable
economic conditions, expansion of existing programs and creation of new programs are very
likely. With less favourable or deteriorating conditions, contraction or cancellation of some
programs may be necessary. Thus, a number of economic factors affect human resources
management of an organization by influencing its operations.
1.5.3 Employees Organizations

Employees’ organizations have mustered strength to match the growth of industrialisation.
Labour unions seek to bargain with management over the terms and conditions of employment
for their members. As a consequence, most HR activities are subject to joint decision-making
when employees are represented by unions.
1.5.4 Labour Markets

In labour markets, organizations seek employees (demand for labour), and individuals offer
their services to organizations (supply of labour). Labour supply and demand have
implications on all activities, but particularly for compensation and external staffing.
Moreover, they are generally not subject to organizational control, thereby creating potential
turbulence and uncertainty for HR management.
1.5.5 Changing Demand of Employers

Organizations also undergo changes and consequently their demands on employees also
change. The technological revolution and stiff business competition demands that the existing
employees adapt to every changing work situation and learn new skills, knowledge etc., to
cope up with the new changes.
1.5.6 Legal Factors

One of the most important external factors that affect HRM is the legal environment. The
management cannot handle the human resources at will. It has to manage its employees
according to the legislation enacted by the government at the centre and the states.

The Important Legislations Enacted in India Affecting HRM are: Factories Act, Trade Unions Act,
Workmen’s Compensation Act, The Payment of Wages Act, The Minimum Wages Act,
Payment of Gratuity Act, and The Maternity Benefit Act. The government is the Custodian
of industrial and economic activities.

1.5.7 Human Resource in the Country
The structure, values and the level of education of human resources in the country influence
the HRM function of any organization. The influence of manpower in the country can be
studied through:
• Change in the structure of employment with the entry of workforce with different
backgrounds.
• Changes that have taken place in the structure of the workforce over the years and led
to the emergence of new values in organizations.

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