People have different opinions, priorities, goals, and beliefs depending on their backgrounds, and for them to be productive in any organization, they must be properly managed. Human Resource Management(HRM) refers to the strategic and coherent manner in which employees are managed so that even with their differing individual traits, they can collectively work together towards the attainment of the objectives and goals of the firm. HRM ensures that highly skilled and qualified employees with the abilities to perform specific tasks are recruited, placed, trained, developed, and motivated to ensure that their maximum potential is tapped. These are just a few functions and importance of Human Resource Management. This article provides comprehensive details to help you understand the concept of HRM, its functions, and importance.
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What is Human Resource Management? Simply put, HRM is the procedure involved in the handling of employees in an organization. It seeks to maximum the methods by which a company gets things done through people who are employed in that company. HRM is devoted to shaping a desired organizational culture and introducing programs that mirror and support the core values of the organization.
Evolution of Human Resource Management (HRM)
Before the terminology HRM was embraced worldwide, other names were assigned to it. Below is how HRM has evolved over the years.
1. Welfare and payroll administration
This is one of the earliest concepts. During this period, personnel functions were performed by supervisors, line managers, and early specialists.
2. Personnel management
This concept referred to an administrative discipline of hiring and developing workers so that they become more valuable to the organization.
3. Training, personnel management, and industrial relations
The concept emerged in the 1960s and the 1970s. This is where the training of the employee is narrowed down to the exact tasks they must carry out on the job.
4. Human resource management
The term HRM was embraced in the mid-1980s and referred to the formal systems devised for the management of workers.
5. Strategic human resource management
SHRM emerged in the late 1980s. It was the proactive management of workers designed to aid businesses to best meet the needs of their employees while promoting overall organizational goals.
Functions of Human Resource Management
Equipping the business to meet the challenges of an expanding and competitive sector is the overall role of HRM although this is attained through the various human resource management functions. Effective human resource management enables a firm to attain its goals and objectives. The main functions of human resource management are classified into two; managerial functions and operative functions.
Managerial functions of human resource management
It entails the steps taken in determining in advance, the personnel requirements, programs, and policies that will lead to the attainment of overall organizational goals and objectives.
Refers to the preparation of tasks and allocation of work to individuals.
3. Directing and coordinating
The HR manager directs the activities of the organization for optimal performance.
It provides basic data for establishing standards, making job analysis and creating a performance appraisal. This will lead to effective quality control of time and effort of the workers.
Operative functions of Human Resource Management
1. Recruitment of personnel
HRM focuses on obtaining the appropriate type and number of manpower necessary to attain organization goals.
2. Training and development of personnel
On-the-job and off-the-job training techniques are used to develop the technical and soft skills of the employees.
3. Compensation of employees
The HRM should ensure fair, equitable, and adequate remuneration of personnel for their contribution to the organisation’s objectives.
4. Maintaining good industrial relationships
Human resource management aims at reducing conflicts, promoting industrial harmony, providing fair deals to workers, and establishing industrial democracy.
5. Record keeping
Personnel manager collects and maintains information concerned with the staff of the organization for decision-making processes such as promotion.
6. Personnel planning and evaluation
Different types of activities are evaluated, such as performance and personnel policies to limit deviations from the recommended standards.
Theories of Human Resource Management
Human resource management principles and techniques are drawn from theories found in different disciplines. The following are the theories of human resource management.
1. Resource Dependence theory
This theory holds that workers are scarce resources, and should, therefore, be carefully managed.
2. Competitive Advantage theory
In order to gain from competitive advantage, creation and support of an organizational culture that ensures effective management of training and performance management functions is key.
3. Agency theory
The employer and employee have a principal-agent relationship. This relationship can be clearly spelled out on paper, and there can be a psychological contract between the two parties. In case of disagreement between the two, the legal implications have to be considered and if possible, litigation should be avoided.
4. Human Capital theory
People are valuable assets, therefore, employers should invest in people like in other assets such as machinery in the firm.
5. Role Behaviour theory
Here, HRM concentrates on enhancing the information of roles for employees.
6. Transaction Cost theory
The idea here is that human resource management should reduce loopholes in employment relationships such as contracts review, monitor and ensure compliance to set objectives, targets and standards.
7. Organizational Learning theory
Believing that the success of an organization depends on the ability of employees to learn, this theory argues that HRM should facilitate continuous learning, thus, making the business a learning organization that is at a competitive edge.
8. Organizational Life Cycle theory
Proponents of this theory argue that human resources should be managed depending on the stage of growth of the business, e.g. initial startup stage, growth stage, maturity stage, or decline phase.
9. Strategic Contingency theory
Organizations have several strategic typologies to adopt, and the decision on the typology to embrace depends on the organizational environment. Human resources should depend on a particular typology chosen.
10. Organizational Change theory
Organizations go through various forms, quality levels, and states over time. HRM should ensure congruence between stated goals, changes, and performance.
Focus of Human Resource Management
Human resource management focuses on:
1. Recruitment and selection
This is the process of hiring people to fill vacant positions in the organization. HRM concentrates on recruiting and selecting candidates who meet the job description by having the required skills, knowledge, and abilities to conduct the tasks efficiently and effectively. Also, HRM ensures that selected candidates are properly placed where they will give maximum benefits to the organization.
2. Employee compensation and benefits
Compensation refers to all forms of pay received by workers, arising from their employment. Employee benefits, on the other hand, are non-financial forms of compensation provided in addition to cash to enhance the standards of living of the employees and motivate them to perform better at work.
3. Performance management
PM refers to the procedure undertaken by managers together with employees, whereby they plan, monitor, and review workers’ work objectives and overall contribution to the organization.
4. Organization development
This is a planned effort for a workgroup and business, managed by the management and supported by the employees, to enhance organizational effectiveness through planned changes in processes and systems.
5. Employee health and safety
Human resource professionals greatly contribute in making sure that employee health and safety is provided by the organization. The workplace should be a safe and harmless place that meets the OSHA requirements.
6. Employee wellness
Wellness programs support employees’ efforts to maintain a fit and healthy lifestyle e.g. medical plans.
7. Employee motivation
Employee motivation is a factor which induces an employee to perform tasks optimally in the organization. Lack of motivation results in underperformance and loss of competitiveness, resulting in a decline in productivity. There are extrinsic motivators and intrinsic motivators. Extrinsic motivating factors are external things which cause an employee to work towards the fulfilment of a task while intrinsic motivators refer to intrinsic factors that trigger individual workers to perform better, i.e. come from within the employee.
8. Employee training and development
Training is the process of improving the skills of the employee in order for them to optimally perform tasks. Training is purely job-focused but development is psychological and soft skills oriented.
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Importance of Human Resource Management
- HR contributes to industrial harmony and healthy employer-employee relations, by managing disputes properly.
- It motivates workers so that they can accomplish the goals of the organization.
- It establishes a mechanism for the administration of personnel services delegated to the personnel department.
- It ensures that the firm has enough skilled workers through proper recruitment and selection process.
- It ensures maximum benefit out of expenditure on training and development of workers and appreciates the human assets.
- It helps management prepare and adopt personnel programs and policies that are beneficial to the firm.
- Through innovation and experimentation in the fields of personnel, HRM aids in reducing costs and increasing productivity.
- Through training and creation of a learning organization, HRM prepares workers according to the changing needs of industry and environment.
Trends in HRM
The field of human resource management is changing rapidly. Emerging and current trends include:
- Blended workforce and changing skill requirements
- Hiring the visually impaired and workforce diversity.
- Improving and increasing wellness benefits.
- Work-from-home opportunities.
- Increased scrutiny of workplace policies and ethics.
- Globalization and its effect on the workplace
- Business process re-engineering for better productivity
- Mass customization
- More decentralization of work sites
- Advanced technology and employee involvement
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Clearly, organizations cannot overlook the functions and importance of human resource management. Therefore, firms need to invest in HRM for the overall good and realization of set goals and objectives because employees are a unique, intangible, and non-imitable resource that will enable the firm to out-do competition.