Human Resource Management

What is Human Resource Management?

Let’s start with a brief definition. Human Resource Management, or HRM, is the practice of managing people to achieve better performance.

For example, if you hire people into a business, you are looking for people who fit the company culture as they will be happier, stay longer, and be more productive than people who won’t fit into the company culture.

Another example is engagement. Engaged employees are more productive, deliver higher quality work and make customers happier. This means that if we can find ways to make employees more engaged, we help the company.

             The HR department provides the knowledge, tools, training, legal advice, administration, and talent management, which is crucial to sustaining and advancing a company. 

What is a Human Resource? 

It may feel a bit weird to refer to people as ‘human resources’. Human Resources are all the people that in one capacity or another work for or contribute to an organization.

These people make up a company’s workforce. They can be regular employees, for example, but also contractors. Especially with the rise of the gig economy, more and more people are starting to work for an organization on a contract basis without having a traditional labor contract.

These people include independent contractors, workers provided by contract firms, on-call workers, and temporary help agency workers.

               An independent contractor can be under contract for years at the same organization, while an agency worker can work at 20 different companies throughout one year. Because these people are all involved in the company to a different extent, the way they are managed and involved in the organization should also be different.

Also, there are increasingly non-humans at work at the company.

In this case, we’re talking about the increase in robotization. Robots are increasingly involved in day-to-day work and the interaction between man and machine is becoming increasingly essential to the success of the organization. Although these machines are not considered ‘human resources’, there is a case to be made that they should be included in some way as they are part of the workforce.

The seven HR basics

When we talk about Human Resource Management, several elements are considered cornerstones for effective HRM policies. These cornerstones are:

1. Recruitment & selection

2. Performance management

3. Learning & development

4. Succession planning

5. Compensation and benefits

6. Human Resources Information Systems

7. HR data and analytics

1. Recruitment & selection

Recruitment and selection are arguably the most visible elements of HR. We all remember our first interview, right?

Recruiting candidates and selecting the best ones to come and work for the company is a key HR responsibility. People are the lifeblood of the organization and finding the best fits is a key task.

2. Performance management

Once employees are on board, performance management becomes important. Performance management is the second HR basic. It involves helping people to become their best selves at work, boosting the company’s bottom line. 

Usually, employees have a defined set of responsibilities that they need to take care of. Performance management is a structure that enables employees to get feedback on their performance – to reach their best performance. 

3. Learning & development

People are the product of life experiences, the country and era they grow up in, and a range of cultural influences. Within HR, learning and deem sure that employees adapt to changes in processes, technology, and societal or legal shifts. 

Learning and development helps employees to reskill and upskill. Learning & Development (L&D) is led by HR and good policies can be very helpful in advancing the organization toward its long-term goals. One of the HR trends for 2023 is bringing learning into day-to-day work and helping employees develop soft and hard skills that are aligned with organizational goals.      

4. Succession planning

Succession planning is the process of planning contingencies in case of key employees leaving the company. If, for example, a crucial senior manager quits his/her job, having a replacement ready will guarantee continuity and can save the company significant money.

Succession planning is often based on performance ratings and L&D efforts. This results in the creation of a talent pipeline. This is a pool of candidates who are qualified and ready to fill (senior) positions in case of someone leaving. Building and nurturing this pipeline is key to good people management.

5. Compensation and benefits

Another one of the HR basics is compensation and benefits. Fair compensation is key in motivating and retaining employees. One of the fundamentals of human resource management concerning pay is ensuring equity and fairness.

Making the right offer of pay is a key part of attracting the best talent. This must be balanced with the budget and profit margins of the company. HR should monitor pay increases, and set standards of merit. HR may also carry out a pay audit on occasion. 

Compensation comprises primary compensation and secondary compensation. Primary compensation involves directly paid money for work, which often is a monthly salary and sometimes performance-based pay.

Secondary benefits are all non-monetary rewards. This can include extra holidays, flexible working times, day-care, pensions, a company car and laptop, and much more.

6. Human Resource Information System

The last two HR basics are not HR practices but tools to do HR better. The first is the Human Resource Information System or HRIS. An HRIS supports all the cornerstones we discussed above. For example, for recruitment and selection, HR professionals often use an Applicant Tracking System, or ATS, to keep track of applicants and hires.

For performance management, a performance management system is used to keep track of individual goals and put in performance ratings.

7. HR data and analytics

The last of the HR fundamentals revolves around data and analytics. In the last half-decade, HR has made a major leap towards becoming more data-driven.

The Human Resource Information Systems we just discussed is essentially a data-entry system. The data in these systems can be used to make better and more informed decisions.

An easy way to keep track of critical data is through HR metrics or HR KPIs These are specific measurements that answer how a company is doing on a given measurement. This is referred to as HR reporting. 

Conclusion

There are 7 Human Resource Management basics. None of these HR fundamentals are isolated. They all interact and affect each other. Think of these 7 basics as building blocks – strong management of each fundamental element contributes to the strength of the next. Collectively, these HR fundamentals enable a workforce not only to perform better but to perform at its very best.

References ;

Human Resource Management

Gary Dessler (online)

Six Competencies for the Future of Human Resources

Dave Ulrich, Jon Younger, Wayne Brockbank, Mike Ulrich (online)

Victory Through Organization

Dave Ulrich, David Kryscynski, Wayne Brockbank, Mike Ulrich (online)

The HR Scorecard

Brian Becker, Mark Huselid, Dave Ulrich (online)

Strategic Human Resource Management: An HR Professional’s Toolkit

Karen Beaven (online)