Human Resource Management
Introduction
Human Resource Management, or HRM for short, is one of the most critical elements in running a successful business, though it is not always treated with the time and emphasis that it deserves. To fully understand what HRM is and its impact on the success or failing of a company, we first need to know what it means. The following is a satisfactory definition:
The purpose of Human Resource Management is to recruit, develop and utilise the personnel within an enterprise in the manner in which is most suitable to accomplishing the aims and objectives of the organisation.
This essentially translates to “using people in the company in the best way possible” although that would be an over-simplified statement that does not reflect the real nature and scope of HRM. HRM describes all of the methods and procedures that are involved in ensuring that all members of staff within a business are pulling in the same direction, and more significantly, in the right direction. Without good human resource management a business will be expending energy on jobs that it may not directly gain from.
At its center, HRM brings together three primary elements that are fundamental to the productive output of the staff. These factors include motivation, management and leadership, and organisational structures. Consequently, HRM can be applied to all levels of management within your organisation, not just the shop floor workers, and it can even be used to modify the framework of those levels of management as well.
Why is it Necessary?
Put simply, companies don’t work without employees. As such, some level of human resource management is necessary for any business to operate at all, let alone in an effective and prosperous manner.
Human Resource Management has an effect on every level of your corporate activities with varying degrees of visibility. The most obvious HRM tasks involve the hiring and firing of employees as well as financial systems such as payroll. It can also impact on motivation and communication within your company, which are far more intangible variables but are critical nonetheless. Poor HRM practice in these less visible domains can have a negative impact on your company but go unnoticed for long periods of time.
It also goes without saying that every business is different and will have a different set of issues to face and opportunities to take advantage of. HRM can work as a versatile tool that translates workforce power into financial gains and can adjust to fully utilise the talents of your firm. Without it, your competitors may well be afforded the chance to prosper where you missed out.
HRM approaches can encourage a friendly operating environment for One firm I know of that are specialists in new ibc company formation invariably place employee inspiration near the top of their priority list.
Impact on Business
While this all sounds very interesting and significant, how does it actually influence the daily operations of your business, and more importantly, how will it help to improve the performance and profitability of your firm? The impact of HRM can be broken down into the following areas.
Recruitment & Training
This is most likely the part of a business that is most affiliated with human resources - recruitment. Almost every company in the world, and particularly businesses that are growing, have to recruit people to work for them. Either existing employees have left, or new possibilities have arisen which mean there are roles that must be filled. HRM can make sure your recruitment system gets the right people into the right jobs at a cost-effective 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 fresh piece of legislation or a new bit of technology that changes the industry, there is an on-going requirement to keep your company up-to-date and ready to make use of any opportunity. There is an expression 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 process of external recruitment can be averted if your company has adequate training facilities in place. It is far easier to teach an existing staff member to a higher level and then use outside recruitment to fill the gap left at the lower level than it is to hire directly to a higher level.
Employee Relations
When you have the suitable people working for you it is necessary to keep them working for you, and to be sure they are doing a decent job. This can be accomplished by means of good employee relations. The most obvious employee relations exercise is the art of motivation - a broad topic by itself - but other employee relations issues may include disciplinary and grievance management.
Finances
You cannot keep employees at your organisation by good motivational techniques alone. They will want to be paid a fair amount and on time. Payroll ought to be one of the initial systems that is created when you start a company, but they still need to be maintained and updated when personnel join, leave or switch pay grade. Improper management of your payroll program can rapidly lead to disaster in terms of your workforce.
Industrial Relations
Numerous companies will have to deal with trade union or other workers rights organisations which can be very forceful when defending the interests of their own members. When interacting with such bodies it is beneficial to have people within your organisation who can connect effectively with them whilst keeping the interests of your own organisation in mind as well.
Regardless of the industry they operate within, whenever a offshore bvi seeks to expand it have to use recruitment to expand its current workforce.
Workforce Planning
We have seen the effect that human resource management can have on a company and on the whole it seems like good HRM will have a beneficial effect on any business. As a rule, this is the case, but effective HRM does not just happen overnight.
One way to apply HRM ideas to your company is through workforce planning - a system that has the goal of making sure your staff can complete the upcoming tasks needed 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 necessary and the proper skill mix. Recruitment and training procedures are devised with a long term emphasis in order to make sure that the organisation is able to operate without being limited by a shortage of appropriate labour. It is a bit of a balancing act, but when done properly can produce many benefits.Workforce planning can be split into four main parts; requirements, recruitment, selection, and training and development.
Requirements
Evaluating your workforce requirements is essential to the proper planning of your staff in the short-term and long-term future. If your company is subject to seasonal changes in demand, for example in the tourism industry, or is prone to seasonal fluctuations in workforce then your workforce planning must take these variables into consideration.
Recruitment
Whether you are recruiting externally or from inside your existing workforce you still want to find the right person to fill the role. As part of your workforce planning you should draw up a job description that details the function that will be undertaken as well as a person specification which will give an indication of the kind of person that would be a perfect fit for the job and your organisation.
Selection
The selection procedure can be as involved or as easy as you deem necessary. Over and above standard job interviews there are a number of ways you can learn about about applicants for your jobs, including aptitude tests, group interviews or even psychometric testing.
Training & Development
The principal goal of staff training and development is to produce a better quality of worker in your company. Workforce planning can use training to plug upcoming gaps in the skill set of your workforce which is commonly faster and more economical than external recruitment. Training and development can also go some way towards motivating your staff.
Before spending great amounts of cash on a ready made company aquisition project research ought to be done on the competition and consumers within that sector.
Workforce Motivation
It almost goes without saying that properly motivated workers are going to produce a better standard of output and have a greater quantity of output than unsatisfied workers. This improved work rate will inevitably lead to a rise in the profitability of a company.
Essentially, all motivational tactics can be separated into two models that are often called 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 old idea but the basic principle is still relevant to companies today.
Whether you use the carrot approach or the stick strategy will largely depend on your own management approach, as well as the business you work in and the type of people that you employ. Irrespective of your approach, motivational factors can be broken down into a further two groupings; financial and non-financial motivators.
Financial
The most typical financial motivators are payment plans. You can pay workers in numerous different ways, either a fixed amount for a set service, by an hourly or daily rate, or a rate linked to production, such as a commission structure. Whichever method is employed, the workforce is motivated to work because they will receive money for doing so.
Another financial motivation method involves what are known as incentive schemes, where by additional financial rewards are handed out for good overall performance. This may include commission above a fixed salary, performance-related pay levels or even offering a share of company profits. Again, the motivating aspect here is the money alone.
Non-financial
Several human resource theorists have their own ideas about the different elements 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 great majority of people.
The Changing Face of HRM
As previously stated, HRM is a flexible tool that is there to match up the characteristics of your staff to the objectives of your organisation. As a result, it has had to keep adapting to a corporate climate that is constantly changing for one reason or another. Moreover, it is a good idea to constantly review your own HRM policies and not to rest on your laurels.
Perhaps there is a new piece of government legislation that may have an effect of how your business can carry out its operations, or maybe a fresh manufacturing technology will come along that can revolutionise your industry. Either way, if you want to ensure that your staff is performing to its optimum level then your HRM strategy should be flexible enough to cope with an ever-changing world. After all, what might seem like a risk to most will often appear as an opportunity to a good entrepreneur.
