Introduction
Human Resource Management, or HRM for short, is one of the most important elements in running a successful company, although it isn’t always treated with the time and focus that it deserves. To fully understand what HRM is and its influence on the success or failure of a company, we first must know what it means.
The function of Human Resource Management is to recruit, develop and utilise the staff within an enterprise in the manner in which is most suitable to achieving the aims and objectives of the enterprise.
This essentially translates to “using individuals in the company in the best way possible” though that would be an over-simplified assertion that does not echo the real nature and range of HRM. HRM describes all of the strategies and procedures that are involved in ensuring that all members of staff within a business are pulling in the same direction, and much more importantly, in the right direction. Without having good human resource management a business will be spending effort on tasks that it may not directly benefit from.
At its center, HRM brings together three primary elements that are essential to the productive output of the staff. These factors include motivation, management and leadership, and organisational structures. As a result, HRM can be applied to all levels of management in your business, not just the shop floor workers, and it can even be used to adjust the framework of those levels of management as well.
Why is it Necessary?
Quite simply, companies don’t operate without workers. As a result, some level of human resource management is necessary for any organisation to operate at all, let alone in an efficient and prosperous manner. Even if you don’t appreciate exactly how HRM affects the daily running of your enterprise you will surely be using some kind of HRM in order to keep trading.
Human Resource Management has an effect on every level of your corporate activities with various degrees of visibility. The most obvious HRM tasks involve the hiring and firing of staff as well as monetary systems such as payroll. It can also impact on motivation and communication inside your business, which are much more intangible factors but are critical nonetheless.
It also goes without saying that every business is unique and will have a specific set of challenges to face and opportunities to take advantage of. HRM can act as a versatile tool that translates workforce power into financial profits and can adapt to fully utilise the talents of your company.
We employ Human Resource Management to ensure the staff delivers IBC creation efficiently for maximum profitability.
Impact on Business
While this all appears very interesting and important, how does it actually influence the daily functions of your company, and more importantly, how will it help to boost the performance and success of your company?
Recruitment & Training
This is most likely the area of a business that is most associated with human resources - recruitment. Almost every company in the world, and especially businesses that are expanding, need to recruit people to work for them. Either existing employees have left, or new opportunities have arisen which mean there are roles that must be filled. HRM can ensure your recruitment system gets the right people into the right jobs at an affordable price.
It’s also important to keep your staff training procedures up to date to make sure that your workforce is fully capable of doing the job they are there to do. Regardless of whether it is a new piece of legislation or a new bit of technology that alters the industry, there is an on-going need to keep your company up-to-date and prepared to make use of any opportunity. There is a phrase that states that “if you are not moving forward you are going backwards” which can be applied to business.
You may also discover that the costly practice of external recruitment can be averted if your company has sufficient training facilities in place. It is much easier to teach an existing employee to a higher level and then use outside recruitment to fill the gap remaining at the lower level than it is to recruit straight to a higher level. This technique can be used at almost every single level of management within your company.
Employee Relations
When you have the right people working for you it is important to keep them doing work for you, and to make certain they are doing a decent job. This can be accomplished through good employee relations. The most evident employee relations practice is the art of motivation - a broad topic by itself - but other employee relations issues may include disciplinary and grievance management. All of these factors are an important part of the overall HRM picture.
Finances
You can’t keep employees at your company by good motivational techniques alone. They will want to be paid a fair amount and on time. Payroll ought to be one of the primary systems that is developed when you start a business, but they still need to be taken care of and updated when personnel join, leave or change pay grade.
Industrial Relations
Many firms will have to deal with trade union or other workers rights organisations which can be very forceful when defending the interests of their members. When dealing with such bodies it is advantageous to have individuals within your organisation who can communicate comfortably with them whilst keeping the interests of your own business in mind at the same time. The demand for good industrial relations is far more prevalent in public sector companies.
One of the easiest ways to identify if international business companies have very good worker interaction is to ask current staff if they are content in their work.
Workforce Planning
We have seen the effect that human resource management may have on a company and generally it seems like good HRM will have a beneficial effect on any company. As a rule, this is the case, but effective HRM doesn’t just happen overnight.
One way to implement HRM concepts to your business is via workforce planning - a system that has the aim of making sure your workforce can complete the upcoming tasks required for your company to be successful. It can be defined as:
Definition
Workforce planning is the method of anticipating ahead of time the human resource requirements of any enterprise, both in terms of the quantity of employees needed and the proper skill mix. Recruitment and training policies are devised with a long term emphasis in order to ensure that the company is able to operate without being limited by a shortage of appropriate labour.
Requirements
Analysing your workforce demands is essential to the proper planning of your staff in the short-term and long-term future. If your business is subject to seasonal shifts in demand, such as in the tourism industry, or is prone to seasonal fluctuations in staff levels then your workforce planning has to take these factors into consideration. Also bear in mind any approaching retirements or times of maternity/paternity leave or you could suffer from a shortage of qualified employees.
Recruitment
Whether you are hiring people externally or from inside your existing workforce you still want to find the correct individual to fill the role. As part of your workforce planning you ought to draw up a job description that details the job that will be undertaken as well as a person specification which will give an indication of the kind of person that would be a good fit for the job and your business. By combining and prioritising the components of these two descriptions you will be able to recognise the ideal job applicant.
Selection
The selection procedure can be as involved or as easy as you deem necessary. Beyond regular job interviews there are numerous ways you can learn about about applicants for your jobs, including aptitude tests, group interviews and even psychometric testing.
Training & Development
The main goal of staff training and development is to produce a much better standard of worker in your business. Workforce planning can use training to fill upcoming gaps in the skill set of your workforce which is usually faster and more cost effective than external recruitment. Training and development may also go some way toward motivating your staff.
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Workforce Motivation
It almost goes without saying that properly motivated workers are going to deliver a better standard of work and have a greater quantity of output than unhappy workers. This improved working rate will inevitably lead to an increase in the profitability of a company. Yet motivation is still a bit of taboo subject among some managers.
Essentially, all motivational tactics can be separated into two sets that are often referred to as the “carrot and stick” approach to motivation. The analogy refers to the two approaches to make a donkey carry your belongings, either by tempting it with a carrot, or threatening it with a strike from a stick! It is a fairly dated idea but the basic principle is still relevant to businesses today.
Whether you use the carrot strategy or the stick strategy will generally depend on your own management approach, as well as the industry you work in and the type of people that you hire. Regardless of your approach, motivational factors can be broken down into a further two groups; financial and non-financial motivators.
Financial
The most common financial motivators are payment schemes. You can pay workers in numerous different ways, either a set amount for a fixed service, by an hourly or daily rate, or a rate linked to production, such as a commission structure.
Another financial motivation technique involves what are called incentive schemes, where additional financial rewards are handed out for good performance. This may include commission above a fixed salary, performance-related pay levels or even providing a share of company profits.
Non-financial
Several human resource theorists have their own ideas about the different factors that motivate people to work, although these are often seen as an added bonus to a worker. It is widely acknowledged that money is the critical motivational factor for the majority of people. If you want to learn more about these ideas I would recommend looking up the work of Elton Mayo, Abraham Maslow as well as Fredrick Herzberg.
The Changing Face of HRM
As previously stated, HRM is a versatile application that is there to match the features of your staff to the goals of your organisation. As a result, it has had to keep changing to a corporate climate that is constantly changing for one reason or another. Furthermore, it is a good idea to constantly evaluate your own HRM procedures and not to rest on your laurels.
Perhaps there is a new piece of government law that may have an effect of how your business can carry out its trading, or maybe a new manufacturing technology will come along that will revolutionise your industry. Either way, if you want to make certain that your staff is performing to its highest level then your HRM strategy should be adaptive enough to cope with an ever-changing economy.