Human resource management

Human resource management(HRM) is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business.

The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations.

In simple terms, HRM means employing people, developing their capacities, utilizing, maintaining and compensating their services in tune with the job and organizational requirements.

Its features include:

• Organizational management
• Personnel administration
• Manpower management
• Industrial management

Personnel administration is also frequently called personnel management, industrial relations, employee relations. But these traditional expressions are becoming less common for the theoretical discipline. Sometimes even employee and industrial relations are confusingly listed as synonyms.

Although these normally refer to the relationship between management and workers and the behavior of workers in companies.

The theoretical discipline is based primarily on the assumption that employees are individuals with varying goals and needs, and as such should not be thought of as basic business resources such as trucks and filing cabinets. The field takes a positive view of workers assuming that virtually all wish to contribute to the enterprise productively and that the main obstacles to their endeavors are lack of knowledge, insufficient training, and failures of process.

Human Resource Management(HRM) is seen by practitioners in the field as a more innovative view of workplace management than the traditional approach. Its techniques force the managers of an enterprise to express their goals with specificity so that they can be understood and undertaken by the workforce, and to provide the resources needed for them to successfully accomplish their assignments. As such, HRM techniques, when properly practiced, are expressive of the goals and operating practices of the enterprise overall. HRM is also seen by many to have a key role in risk reduction within organisations.

Synonyms such as personnel management are often used in a more restricted sense to describe activities that are necessary in the recruiting of a workforce, providing its members with payroll and benefits, and administrating their work-life needs. So if we move to actual definitions, Torrington and Hall (1987) define personnel management as being:

“a series of activities which: first enable working people and their employing organisations to agree about the objectives and nature of their working relationship and, secondly, ensures that the agreement is fulfilled."

While Miller (1987) suggests that HRM relates to:

".......those decisions and actions which concern the management of employees at all levels in the business and which are related to the implementation of strategies directed towards creating and sustaining competitive advantage"

Academic theory

The goal of human resource management is to help an organisation to meet strategic goals by attracting, and maintaining employees and also to manage them effectively. The key word here perhaps is "fit", i.e. a HRM approach seeks to ensure a fit between the management of an organisation's employees, and the overall strategic direction of the company (Miller, 1989).

The basic premise of the academic theory of HRM is that humans are not machines, therefore we need to have an interdisciplinary examination of people in the workplace. Fields such as psychology, industrial relations, industrial engineering, sociology, economics, and critical theories such as postmodernism, post-structuralism play a major role.

One widely used scheme to describe the role of HRM, developed by Dave Ulrich, defines 4 fields for the HRM function:

• Strategic business partner
• Change management
• Employee champion
• Administration

However, many HR functions these days struggle to get beyond the roles of administration and employee champion, and are seen as reactive rather than strategically proactive partners for the top management. In addition, HR organisations also have difficulty in proving how their activities and processes add value to the company. Only in recent years have HR scholars and professionals focused on developing models that can measure the value added by HR.

Business practice

Human resources management involves several processes. Together they are supposed to achieve the above mentioned goal. These processes can be performed in an HR department, but some tasks can also be outsourced or performed by line-managers or other departments. When effectively integrated they provide significant economic benefit to the company.

• Workforce planning
• Recruitment: sometimes separated into attraction and selection

• Skills management
• Training and development
• Personnel administration
• Compensation in wage/salary
• Time management
• Travel management: sometimes assigned to accounting rather than HRM
• Payroll: ometimes assigned to accounting rather than HRM
• Employee benefits administration
• Personnel cost planning
• Performance appraisal
• Labor relations

HRM strategy

An HRM strategy pertains to the means as to how to implement the specific functions of HRM. An organization's HR function may possess recruitment and selection policies, disciplinary procedures, reward/recognition policies, an HR plan, or learning and development policies, however all of these functional areas of HRM need to be aligned and correlated, in order to correspond with the overall business strategy. An HRM strategy thus is an overall plan, concerning the implementation of specific HRM functional areas.

An HRM strategy typically consists of the following factors:

• "Best fit" and "best practice" - meaning that there is correlation between the HRM strategy and the overall corporate strategy. As HRM as a field seeks to manage human resources in order to achieve properly organisational goals, an organisation's HRM strategy seeks to accomplish such management by applying a firm's personnel needs with the goals/objectives of the organisation. As an example, a firm selling cars could have a corporate strategy of increasing car sales by 10% over a five year period. Accordingly, the HRM strategy would seek to facilitate how exactly to manage personnel in order to achieve the 10% figure. Specific HRM functions, such as recruitment and selection, reward/recognition, an HR plan, or learning and development policies would be tailored to achieve the corporate objectives.

• Close co-operation between HR and the top/senior management: in the development of the corporate strategy. Theoretically, a senior HR representative should be present when an organisation's corporate objectives are devised. This is so since it is a firm's personnel who actually provides a service. The personnel's proper management is vital in the firm being successful, or even existing as a going concern. Thus, HR can be seen as one of the critical departments within the functional area of an organisation.

• Continuous monitoring of the strategy, via employee feedback, surveys, etc.

The implementation of an HR strategy is not always required, and may depend on a number of factors, namely the size of the firm, the organisational culture within the firm or the industry that the firm operates in and also the people in the firm.

An HRM strategy can be divided, in general, into two facets - the people strategy and the HR functional strategy. The people strategy reffers to the careful correlation of HRM policies/actions to attain the goals laid down in the corporate strategy. The HR functional strategy relates to the policies employed within the HR functional area itself, regarding the management of persons internal to it i.e to ensure its own departmental goals are met.

Summary

The Human Resources Management (HRM) function includes a variety of activities, and key among them is deciding what staffing needs you have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. Usually small businesses (for-profit or nonprofit) have to carry out these activities themselves because they can't yet afford part- or full-time help. However, they should always ensure that employees have—and are aware of—personnel policies which conform to current regulations. These policies are often in the form of employee manuals, which all employees have.

Note that some people distinguish a difference between HRM (a major management activity) and HRD (Human Resource Development, a profession). Those people might include HRM in HRD, explaining that HRD includes the broader range of activities to develop personnel inside of organizations, including, e.g., career development, training, organization development, etc.

There is a long-standing argument about where HR-related functions should be organized into large organizations, e.g., "should HR be in the Organization Development department or the other way around?"

The HRM function and HRD profession have undergone major changes over the past 20–30 years. Many years ago, large organizations looked to the "Personnel Department," mostly to manage the paperwork around hiring and paying people. More recently, organizations consider the "HR Department" as playing an important role in staffing, training and helping to manage people so that people and the organization are performing at maximum capability in a highly fulfilling manner.

References

• Wilkinson, A. (1988). "Empowerment: theory and practice". Personnel Review. 27 (1): 40–56. doi:10.1108/00483489810368549. Retrieved 2007-10-17.
• Legge, Karen (2004). Human Resource Management: Rhetorics and Realities (Anniversary ed.). Basingstoke: Palgrave Macmillan. ISBN 1-403-93600-5. OCLC 56730524.