What is Human Resource Management?

Human Resource Management (HRM) is a collective term for all the formal
systems created to help in managing employees and other stakeholders within
a company. Human resource management is tasked with three main functions,
namely, the recruitment and compensation of employees, and designating
work. Ideally, the role of HRM is to find the best way to increase the
productivity of an organization through its employees. Despite the ever-
increasing rate of change in the corporate world, the HRM role is not likely to
change in a significant way.

Until recently, a company’s HR department was categorized in the lower

rungs. This is surprising considering the crucial role that this department plays
in replenishing and nourishing an organization’s resources.

Principles of Human Resource Management

The HR department has transformed significantly from the task-oriented

nature of administration it used to be in the 1980s. It is now viewed as a
strategy-focused extension of every firm. The HR department thrives on
specific principles, as highlighted below:

1. Commitment

One aspect that the HR department tries to deal with is job security. To
guarantee job security, many employees know that they need to show
commitment to the company and their job duties. The HR management
comes in to put measures in place that ensure that staffing levels correspond
to the company’s needs and that, in the process, assure employees of their
long-term positions within the organization. The firm demonstrates its long-
term commitment to the workers by providing regular training, performance
evaluations, and goal-setting activities.
 

2. Competence

Competence is one of the core principles that supports a company’s growth

and development. It is also an aspect that affects employees’ job satisfaction
and how the company benefits society. The success of a firm depends on the
competency of its employees. The HRM department tries to sustain workforce
competency by providing training opportunities. It also schedules orientation
programs, which provide avenues to enlighten new employees on a
company’s mission and objectives.

Training and orientation are essential in improving employees’ skills,

knowledge, and competency. The benefit of having a competent workforce is
that it leads to the production of safe and reliable products and services that
consumers can rely on. In the absence of a high level of competence, a
company will be susceptible to lawsuits and legal claims resulting from the
products and services that it renders.

Main Functions of Human Resource Management

1. Employee Recruitment

Recruitment is the process of identifying talent gaps in a company and finding

the right people to fill the roles. There are four stages in the employee
recruitment process:

 Job analysis – This involves defining the various aspects of a job

through job description and specification. Through job description, the
HRM department identifies the tasks required for a specific job while the
latter defines the requirements an individual needs to fulfill that job.
 Sourcing – This encompasses the different techniques a company
employs to attract potential candidates to fill a given position. This can
be achieved through internal and external advertisements.
  Screening and selection – This is the process of evaluating the
candidates who apply for the job. The evaluation is performed to
determine the skills, qualifications, competency, and job-related
experience that potential candidates bring to the table.
 Selection of the right candidates – Once the best candidate has been
selected, the next process that follows is onboarding. This is simply
helping the new recruits become productive members of the company.

2. Employee Orientation

Another core function of human resource management is employee

orientation. Also known as onboarding, it is the process of teaching new
recruits the necessary skills, knowledge, and behaviors so that they can
transition to the new company effectively.

Employee orientation is a broad process conducted by the HR department,

and it’s done through different methods, including lectures, meetings, videos,
mentoring, and team-building exercises. The main objective of the orientation
is to provide new recruits with adequate information regarding the company’s
targets, rules, policies, and activities.

3. Employee Development

Employee development refers to all the efforts for improving personal, team,
and organizational effectiveness. One aspect the human resource department
tackles is talent development. This involves aligning the employees’ skills with
the company’s needs. In addition to hiring, training, and orienting employees,
HRM should also improve their career opportunities.

Essentially, it is more economical to improve a company’s current workforce

than to hire new employees in the future. So, employee development is a
trade-off through which human resource management saves money by
avoiding the potential costs of hiring new employees.
Processes in Human Resource
Management (HRM)
Employees are the biggest asset of every organisation as their productivity levels are
directly proportional to the organisation’s success. However, the guiding principle in
every organisation is that ‘general interest must prevail over the individual interest of
the employees’. This is possible only through proper strategic planning and
execution, which is carried out by the Human Resource (HR) department of the
organisation. Thus, the HR department plays a key role in ensuring a successful run
of an organisation.

They follow various processes in order to formulate stellar strategies. The processes
are stated below:

1. Human resource planning (Recruitment, Selecting, Hiring, Training, and

various other processes).
2. Remuneration to employees and other benefits
3. Performance management
4. Employee relations
These core processes should go in a step by step manner starting from planning
of Human Resource Management (HRM) to Employee relations. However,
Performance Management System may vary from one organisation to another.

Human Resource Management (HRM)

This is the most significant and primary process for formulating appropriate strategy
for the organisation. This includes putting the right person in the right place
according to his skills and achievements. It starts with the recruitment and goes until
the proper training of the employee so that he becomes an asset for the company.

The general HRM processes are as follows:

1.  Recruitment

It is a positive process of posting job openings and attracting prospective employees

to apply for their desired job openings in an organisation so that the eligible
candidate can be selected.

2.  Selection

Selection is quite a necessary process in HRM. It involves eliminating the unsuitable

candidates through the process of tests or interviews and identifying the suitable
ones, which are the best fit for the positions.

3. Hiring 

This entails to the process of officially offering the job to the ideal candidate and
giving them the date of joining.

4. Training and development 

The hired candidates are given training and their skills are brushed so that they
become more efficient in their work and handle future challenges.

Performance management

There should be proper management of the work done and the future goals.
Performance management refers to appraising the performance of the employees
and enhancing it. For such a management, it is necessary to encourage the
employees so as to raise their confidence levels.  This can be done by providing
them with fair rewards so that they work in their optimum productivity levels.

Remuneration to employees and benefits

Fair salary or remuneration plays a very important role in motivating an employee to

accomplish organisational goals. If the employees get rewards for their best
performance, they will get job satisfaction. The rewards not just includes salaries,
but it also includes incentives and fringe benefits.
Employee Relations

There should be a sound relation between the employee and the organisation. There
are various factors which motivate as well as demotivate the employees to stick with
the organisation. These factors include working environment, laboor law and
relations, compensation, etc. The employers must ensure all these factors to build
employee relationships that in turn garner better employee retention.

Importance of Human Resource

Management
Human Resource Management (HRM) is a modern approach of maintaining people at
workplace which focuses on acquisition, development, utilization and maintenance of
human resource.
HRM is development oriented. It is concern of managers of all level and provides space
for employee involvement, performance and growth. Several companies nowadays
prefer HRM to personnel management because HRM plays vital role in maintaining
quality team of working experts. Besides, it has several importance which are discussed
below.

To maintain quality of work life

Quality of work life is the perception of employees regarding the relationship between
working condition with management. Simply, it is the relationship between employees
and total work environment.
Quality of work life is concerned with the employee’s perception of physical as well as
psychological wellbeing at workplace and it can be obtained by maintaining work
autonomy, work freedom, job recognition, belongingness, rewards, etc.
To increase productivity and profit
Human resource management ensures right quality and quantity of personnel in
workplace, apart from which, it creates opportunities to facilitate and motivate
individual and group of employees to grow and advance their career. Motivated
employees work hard to meet their personal career goal which directly influences
productivity of organization. Minimizing cost and maximizing profit is the essence of
productivity.

To produce employees who are easily adaptable to change

Human resource management performs various functions, among which training and
development of employees is one of the vital ones. Training and development programs
keep employees updated with skills necessary to adjust with alteration of organization’s
environment, structure and technology.

To match demand and supply of human resource

Human resource management probes existing human resource in certain interval of
time to identify if the company has adequate number of workers or not. In case when
company has inadequate human resource, human resource management performs
activities like recruitment and selection to balance the need. In the same way, it lay-off
inefficient employee in case when the company has excessive employees.
To retain employees and motivate them to accomplish
company’s goal

Utilizing human resource to their fullest and maintaining them in the company for a long
term is a major function of human resource management. Under this function, HRM
performs tasks like providing fringe benefits, compensation and rewards to the
deserving employees. These activities do not only help in retaining employees in the
company but also in achieving organization’s goal effectively.

To recognize merit and contribution of employee

Human resource management performs timely appraisal of employee’s performance in
order to recognize excellent and poor workers. The excellent workers are then rewarded
as a return for their contribution.

To create a feeling of belongingness and team spirit in the

employee
Human resource management designs job on the basis of teamwork. As teamwork
demands contribution from every team member, HRM focuses on making each and
every employee feel valued so that employee contributes best from their side.

To sustain business in the market

Human resource management makes sure that the company has the best employee
because promising employees are capable of taking their company ahead in the race by
delivering excellent results. This guarantees organization’s success and stability in
future.

To resolve conflicts

In any company, either big or small, conflicts may arise between any parties/group.
Conflicts are inevitable and they should not be ignored. Human resource management
acts as a consultant to sort out such conflicts timely and conduct other organizational
activities smoothly.

To develop corporate image

Every company should maintain good public image in order to sustain in the market.
Any individual would like to work for companies which are known for moral and social
behavior. On the other hand, companies that do not treat their employees in a good
manner can run through employee deficiency and even collapse.

Today’s Top 10 Human Resource Management

Challenges
Due to the fluctuating economy as well as local and global advancements,
there are many changes occurring rapidly that affect HR in a wide range of
issues. In the Survey of Global HR Challenges: Yesterday, Today and
Tomorrow, conducted by PricewaterhouseCoopers on behalf of the World
Federation of Personnel Management Associations (WFPMA), several
challenges for human resource management were revealed. This survey, which
concluded that “despite national and regional differences, there was
remarkable unanimity,” disclosed the following top 10 human resource
management challenges:

% of
Challenges
Companies

1. Change management 48%

2. Leadership development 35%

3. HR effectiveness measurement 27%

4. Organizational effectiveness 25%

5. Compensation 24%

6. Staffing: Recruitment and availability of skilled local

24%
labor

7. Succession planning 20%

8. Learning and development 19%

 9. Staffing: Retention 16%

10. Benefits costs: Health & welfare 13%

Taking a Closer Look at the Top 3 Human Resource

Management Challenges
1. Change Management

Since this is generally not a focal point for HR professional training and
development, change management represents a particular challenge for
personnel management. The WFPMA finds that “This may also be the reason
why it is cited as the foremost issue as HR continues to attempt to help
businesses move forward. An intensified focus on training may be needed to
develop added competencies to deal with change management.”

2. Leadership Development

As the second of the biggest challenges for human resource management,

leadership development needs to be a critical strategic initiative. HR
professionals are faced with being expected to provide the essential
structures, processes, tools, and points of view to make the best selection and
develop the future leaders of the organization. The WFPMA reports that,
“Across the globe leadership development has been identified as a critical
strategic initiative in ensuring that the right employees are retained, that the
culture of the organization supports performance from within to gain market
position, and that managers are equipped to take on leadership roles of the
future so that the organization is viable in the long term.”

3. HR Effectiveness Measurement

How can improvement happen without the right tools to measure HR

effectiveness? As with many other areas of business, this profession also needs
to be able to measure results in terms of transaction management, as well as
in terms of the positive influence on business. “Utilizing metrics to determine
effectiveness is the beginning of a shift from perceiving HR’s role as purely an
administrative function to viewing the HR team as a true strategic partner
within the organization,” the WFPMA says. “In fact, the next section reports
that survey participants believe a critical future issue for HR will be
organizational effectiveness – again supporting HR’s critical role as a strategic
partner to management.”

This world federation also notes that, “Where HR departments have

traditionally focused on measuring their own effectiveness, there is an
evolving recognition that they can provide organizational value by measuring
the effectiveness of the entire business organization. The shift is significant as
it represents movement from simply counting the numbers hired to
determining the ROI of collective and individual hires on a long-term basis.
Going beyond measuring turnover, this new approach considers ‘bad’ turnover
and ‘good’ turnover along with the overall cost of replacement hires.”

The HR Numbers Speak Volumes

When you start looking at the numbers, you realize the significant impact of
trends and challenges in human resource management. There are many
variables that influence human resource management. To give you a glimpse
at some of the upcoming changes, the HR Leadership Council has released the
following statistics:

 One in four high potentials plans to leave their organization in the next
year
 By effectively developing employees, managers can be better coaches
and improve performance by up to 25%
 Three out of five organizations have either restructured or plan to
restructure within the next six months
 Recent declines in employee engagement further decreased overall
productivity by 3 to 5%
 Leaders with strong people development skills are 50% more likely to
outperform revenue expectations
  Delivering on critical onboarding activities boosts new hire performance
by 11.3%
 77% of midsized companies use (or plan to use) wellness to reduce costs
 46% of midsized-company CFOs anticipate a merger or acquisition in
less than six months

Expand Your HR Skills and Enhance Your Expertise

To meet or exceed all of these human resources management challenges,
you’ll need proven tools and strategies. One of the best ways to gain the
necessary expertise is by earning your Human Resources Development Master
of Science degree entirely online. In Villanova’s online HR master’s degree
program, you’ll learn how to:
 Implement strategic organizational change for increased quality,
productivity and employee satisfaction
 Construct an effective training program
 Design a compensation system that motivates employees
 Structure benefit packages and measure their success
 Identify principles for developing, utilizing and conserving human
resources
 Use data and statistics to make informed business decisions
 Leverage technology to enhance the contributions of the human
resource function to an organization
 Develop financial management and budgetary skills

As a student in Villanova University’s HR master’s degree program, you’ll gain

advanced knowledge in core human resource competencies, with a focus on
developmental, strategic and global issues. Engaging online courses in a
video-based e-learning environment will empower you with the latest tools,
proven processes and best practices across a range of key topics, including
organizational change, human resource planning, compensation, international
human resources, organizational training and project management for HR
professionals.