Why Human Resource Management Is ImportantEmployees are the foundation of every successful business. This is why human resource (HR) management is so important. Show
The HR department performs a wide variety of duties and is responsible for helping employees feel safe, valued and properly supported. Exceptional human resource management ensures that the HR department runs smoothly and continues to evolve over time. If this sounds interesting to you and you’re curious about a career inhuman resource management, read on to learn why it’s so valuable in the professional world. What is Human Resource Management?The simplest human resource description would be to say it’s the department of a company or organization that handles the relationship between employees and leadership. Human resource management (HRM) is the sector of HR that oversees these departments. HR covers a number of positions, responsibilities, and aspects of company efficiency and staff well-being—and each area of human resources requires strong leadership from an experienced manager. Some of the most important responsibilities within the HRM department include: Hiring and Training New EmployeesAn HR professional holding a management position is often in charge of recruiting, hiring, and training new employees. This means the HR team is responsible for finding candidates who meet the necessary qualifications for specified positions and fully vetting a company’s hires. Human resource managers are also expected to embrace and promote diversity among staff, orient team members to their new work environment, and ensure healthy interactions between employees and organizational leadership. But what does a human resource manager do exactly when it comes to hiring and training? Some of the most common tasks for this type of HR manager may include:
The bottom line –An HR professional is often the face of the company for potential new employees. Recruitment, hiring, and training policies are supervised and improved upon with the help of HR managers. Keeping Employees Safe and HappyA human resource department is also in charge of keeping employees safe, healthy, and satisfied. With proper HR management, workplace policies keep up with necessary protective measures and implementation and provide solutions to issues between team members, avoiding risk for the company and its employees. Daily duties for an HR manager who specializes in employee relations may include:
The bottom line – HR managers are in charge of many duties, but employee well-being should always remain a top priority. As a human resource manager, you’ll spend a lot of time speaking to employees, listening to concerns, and managing workplace relationships. The main goal of a successful, strategic HRM should be to ensure the staff feels safe, respected, and heard at all times. Managing Company RiskThe HR department works with organizational leadership to help manage risk and compliance. Human resource managers should be well-versed in business law, ethics, statistics, and problem-solving in order to help manage their company’s risk. As an HR manager, you may be put in charge of the following risk management responsibilities:
The bottom line – Human resource management is intended to protect the company and its employees. As a risk management specialist, you’ll help manage your company’s risk in a manner that involves statistical analysis, knowledge of business law, and overall improvement of company policies and practices. Learning Objectives
Every organization, large or small, uses a variety of capital to make the business work. Capital includes cash, valuables, or goods used to generate income for a business. For example, a retail store uses registers and inventory, while a consulting firm may have proprietary software or buildings. No matter the industry, all companies have one thing in common: they must have people to make their capital work for them. This will be our focus throughout the text: generation of revenue through the use of people’s skills and abilities. What Is HRM?Human resource management (HRM) is the process of employing people, training them, compensating them, developing policies relating to them, and developing strategies to retain them. As a field, HRM has undergone many changes over the last twenty years, giving it an even more important role in today’s organizations. In the past, HRM meant processing payroll, sending birthday gifts to employees, arranging company outings, and making sure forms were filled out correctly—in other words, more of an administrative role rather than a strategic role crucial to the success of the organization. Jack Welch, former CEO of General Electric and management guru, sums up the new role of HRM: “Get out of the parties and birthdays and enrollment forms.… Remember, HR is important in good times, HR is defined in hard times” (Frasch, et. al., 2010). It’s necessary to point out here, at the very beginning of this text, that every manager has some role relating to human resource management. Just because we do not have the title of HR manager doesn’t mean we won’t perform all or at least some of the HRM tasks. For example, most managers deal with compensation, motivation, and retention of employees—making these aspects not only part of HRM but also part of management. As a result, this book is equally important to someone who wants to be an HR manager and to someone who will manage a business. Human Resource RecallHave you ever had to work with a human resource department at your job? What was the interaction like? What was the department’s role in that specific organization? The Role of HRMKeep in mind that many functions of HRM are also tasks other department managers perform, which is what makes this information important, despite the career path taken. Most experts agree on seven main roles that HRM plays in organizations. These are described in the following sections. StaffingYou need people to perform tasks and get work done in the organization. Even with the most sophisticated machines, humans are still needed. Because of this, one of the major tasks in HRM is staffing. Staffing involves the entire hiring process from posting a job to negotiating a salary package. Within the staffing function, there are four main steps:
Development of Workplace PoliciesEvery organization has policies to ensure fairness and continuity within the organization. One of the jobs of HRM is to develop the verbiage surrounding these policies. In the development of policies, HRM, management, and executives are involved in the process. For example, the HRM professional will likely recognize the need for a policy or a change of policy, seek opinions on the policy, write the policy, and then communicate that policy to employees. It is key to note here that HR departments do not and cannot work alone. Everything they do needs to involve all other departments in the organization. Some examples of workplace policies might be the following:
These topics are addressed further in Chapter 6 “Compensation and Benefits”, Chapter 7 “Retention and Motivation”, Chapter 8 “Training and Development”, and Chapter 9 “Successful Employee Communication”. Compensation and Benefits AdministrationHRM professionals need to determine that compensation is fair, meets industry standards, and is high enough to entice people to work for the organization. Compensation includes anything the employee receives for his or her work. In addition, HRM professionals need to make sure the pay is comparable to what other people performing similar jobs are being paid. This involves setting up pay systems that take into consideration the number of years with the organization, years of experience, education, and similar aspects. Examples of employee compensation include the following:
Since this is not an exhaustive list, compensation is discussed further in Chapter 6 “Compensation and Benefits”. RetentionRetention involves keeping and motivating employees to stay with the organization. Compensation is a major factor in employee retention, but there are other factors as well. Ninety percent of employees leave a company for the following reasons:
Despite this, 90 percent of managers think employees leave as a result of pay (Rivenbark, 2010). As a result, managers often try to change their compensation packages to keep people from leaving, when compensation isn’t the reason they are leaving at all. Chapter 7 “Retention and Motivation” and Chapter 11 “Employee Assessment” discuss some strategies to retain the best employees based on these four factors. Training and DevelopmentOnce we have spent the time to hire new employees, we want to make sure they not only are trained to do the job but also continue to grow and develop new skills in their job. This results in higher productivity for the organization. Training is also a key component in employee motivation. Employees who feel they are developing their skills tend to be happier in their jobs, which results in increased employee retention. Examples of training programs might include the following:
We address each of these types of training and more in detail in Chapter 8 “Training and Development”. Dealing with Laws Affecting EmploymentHuman resource people must be aware of all the laws that affect the workplace. An HRM professional might work with some of these laws:
The legal environment of HRM is always changing, so HRM must always be aware of changes taking place and then communicate those changes to the entire management organization. Rather than presenting a chapter focused on HRM laws, we will address these laws in each relevant chapter. Worker ProtectionSafety is a major consideration in all organizations. Oftentimes new laws are created with the goal of setting federal or state standards to ensure worker safety. Unions and union contracts can also impact the requirements for worker safety in a workplace. It is up to the human resource manager to be aware of worker protection requirements and ensure the workplace is meeting both federal and union standards. Worker protection issues might include the following:
We take a closer look at these issues in Chapter 12 “Working with Labor Unions” and Chapter 13 “Safety and Health at Work”. Figure 1.1
Caption: Knowing the law regarding worker protection is generally the job of human resources. In some industries it is extremely important; in fact, it can mean life or death. ReSurge International – Tom Davenport Operating On A Patient – CC BY-NC-ND 2.0. CommunicationBesides these major roles, good communication skills and excellent management skills are key to successful human resource management as well as general management. We discuss these issues in Chapter 9 “Successful Employee Communication”. Awareness of External FactorsIn addition to managing internal factors, the HR manager needs to consider the outside forces at play that may affect the organization. Outside forces, or external factors, are those things the company has no direct control over; however, they may be things that could positively or negatively impact human resources. External factors might include the following:
For example, the recent trend in flexible work schedules (allowing employees to set their own schedules) and telecommuting (allowing employees to work from home or a remote location for a specified period of time, such as one day per week) are external factors that have affected HR. HRM has to be aware of these outside issues, so they can develop policies that meet not only the needs of the company but also the needs of the individuals. Another example is the Patient Protection and Affordable Care Act, signed into law in 2010. Compliance with this bill has huge implications for HR. For example, a company with more than fifty employees must provide health-care coverage or pay a penalty. Currently, it is estimated that 60 percent of employers offer health-care insurance to their employees (Cappelli, 2010). Because health-care insurance will be mandatory, cost concerns as well as using health benefits as a recruitment strategy are big external challenges. Any manager operating without considering outside forces will likely alienate employees, resulting in unmotivated, unhappy workers. Not understanding the external factors can also mean breaking the law, which has a concerning set of implications as well. Figure 1.2
An understanding of key external factors is important to the successful HR professional. This allows him or her to be able to make strategic decisions based on changes in the external environment. To develop this understanding, reading various publications is necessary. One way managers can be aware of the outside forces is to attend conferences and read various articles on the web. For example, the website of the Society for Human Resource Management, SHRM Online1, not only has job postings in the field but discusses many contemporary human resource issues that may help the manager make better decisions when it comes to people management. In Section 1.3 “Today’s HRM Challenges”, we go into more depth about some recent external issues that are affecting human resource management roles. In Section 1.1.2 “The Role of HRM”, we discuss some of the skills needed to be successful in HRM. Figure 1.3
Most professionals agree that there are seven main tasks HRM professionals perform. All these need to be considered in relation to external and outside forces. Key Takeaways
Exercises
1Society for Human Resource Management, accessed August 18, 2011, http://www.shrm.org/Pages/default.aspx. ReferencesCappelli, P., “HR Implications of Healthcare Reform,” Human Resource Executive Online, March 29, 2010, accessed August 18, 2011, http://www.hreonline.com/HRE/story.jsp?storyId=379096509. Frasch, K. B., David Shadovitz, and Jared Shelly, “There’s No Whining in HR,” Human Resource Executive Online, June 30, 2009, accessed September 24, 2010, http://www.hreonline.com/HRE/story.jsp?storyId=227738167. Rivenbark, L., “The 7 Hidden Reasons Why Employees Leave,” HR Magazine, May 2005, accessed October 10, 2010, http://findarticles.com/p/articles/mi_m3495/is_5_50/ai_n13721406. Which department is responsible for training?The HR Department is responsible for the effective analysis of training needs, overall design, structure and delivery of training programs as well as demonstrating return on investment of all learning and development activities.
Which department is responsible for managing employees?In simplest terms, the HR (Human Resources) department is a group who is responsible for managing the employee life cycle (i.e., recruiting, hiring, onboarding, training, and firing employees) and administering employee benefits.
What is the HR function responsible for?Through the people professionals who work within it, the HR function helps an organisation deliver its corporate strategy and objectives by effectively recruiting and developing people and managing their performance. HR objectives are delivered differently in different types of organisations.
Which department is responsible for recruitment?Recruitment Agencies
The two organizations through which the Department ensures recruitment of personnel for the Government are the Union Public Service Commission (UPSC) and the Staff Selection Commission (SSC).
What are the 3 main responsibilities of human resources?What are the three major roles of human resources management? Running payroll, writing job descriptions, creating workplace policies and procuring benefits packages are typical of HR administration.
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