The importance of personnel management was first expressed by Robert Owner (1771 – 1858). He understood the importance of human factor in the industry. An industry cannot exist without human force. It has to employ workers and create conditions which would encourage their participation in production work or construction work as the case may be. Personnel Administration tries to bring about maximum development in individual’s skills and to maintain good relations between employer and employees.

In India, the construction industry has the largest potentials for labour/personnel employment, it is second only to agriculture. There is an opportunity to provide employment to a majority of unemployed, even though they are today not properly organised. There is uncertainty of employment and the output of labour is very law. Their bargaining strength is also low because it is not organised. This is the reasons why they are paid low wages.

The following are the basic principles of personnel policy.

  •  It should be stable.

  • It should give due respect to employees.

  • The employee should have an easy access to personnel manager to express his difficulties.

  • It should make provisions for the permanent employment of suitable persons.

  •  It should provide chances of promotions.

  • It should guard employees against unnecessary retrenchment.

  • It should guarantee fair wages.

  •  It should provide safe working conditions.

  •  It should organise social activities.

  • It should create machinery for free construction of employers and employees.

  • It should provide reasonably good medical facilities.


This is the age of competition for higher production and employees are to play a vital part in this process. Better quality work depends upon the competence of the labour employed. To have steady of qualified and efficient workers, an organised system of recruitment helps a great deal. Due to complex organisational system, separate department is created and it is known as ‘Personnel Department’. The functions of Personnel Department are as follows:

  • To determine manpower requirements of the organisation.

  • To select and recruit new employees. 

  • To place selected persons in suitable jobs.

  • To maintain a record of employees.

  • To transfer them according to need.

  • To promote them to higher position with better salaries.

  • To discharge them in case of difficulties.

  • To create healthy atmosphere.