The subject of Human Resource Management (HRM) finds its origin in the fact that we humans are social beings who rarely live and work in isolation. We always, both consciously and unconsciously, plan, develop, and manage our relationships. Relationships are the result of our actions and are heavily reliant on our ability to manage our actions. Every individual learns and experiences from childhood how to understand others and how to behave in all situations in life. Later, we apply this knowledge and understanding in carrying out and managing relationships at work. The whole framework of Human Resource Management focuses on the primary challenge of managing workplace relationships.
Along with the points to be discussed, this article also aims to answer some common questions that may arise in the minds of beginners. Some of these are as follows:
- What is hrm in management?
- What human resource management is all about?
- How is human resource management defined by various experts/gurus?
- What does a human resource management professional do?
- What are the various human resource management functions?
- Why human resource management is important?
- What are the objectives of human resource management?
- What Is The Importance/ Significance of HRM?
- What Are The Objectives Of Human Resource Management (HRM)?
- What Are The Functions Of Human Resource Management (HRM)?
- What Is The Role Of Human Resource Management?
- The Diagnostic Model Of Human Resource Management (HRM):
- What Is The Internal And External Environment Of Human Resource Management (HRM)?
- What Are The Forces That Influence Human Resource Management (HRM)?
- Human Resource Management – Organizing The HRM Function
Human Resource Management is the process of recruitment and selection of employees, providing orientation and induction, training and development, assessment of employees (performance appraisal) providing compensation and benefits, motivating, maintaining proper relations with employees and with trade unions, maintaining employee’s safety, welfare and healthy measures in compliance with labor laws of the field.
Human: refers to the workforce possessing a wide variety of skills in an organization.
Resource: refers to limited availability or scarceness.
Management: refers to the ways in which these limited and scarce resources can be optimized and make the best out of them in order to meet the organization’s goals and objectives.
Overall, human resource management is the process of making the best use of a limited skilled workforce. The primary goal of human resource management is to make the best use of the organization’s current human resources.
Let’s take an example of the construction industry and its current situation. It is suffering from a severe shortage of skilled labor. It is expected to triple in the next decade from the current 30%, which will have a negative impact on the sector’s overall productivity, according to industry experts.
Following are some of the definitions of human resource management put forward by hr experts:
“Planning, organizing, directing, controlling of procurement, development, compensation, integration, maintenance, and separation of human resources to the end that individual, organizational and social objectives are achieved.”-Edwin Flippo
“HRM is concerned with the most effective use of people to achieve organisational and individual goals. It is the way of managing people at work, so that they give their best to the organization.”-Ivancevich & Glueck
For any organization to function effectively, it must have resources of men (Human Resource), money, materials, and machinery. Human resources are required to collect, coordinate, and utilize resources in order for an organization’s objectives to be met. Furthermore, effective human resource management is essential. As a result, Human Resource Management (HRM) has emerged as a key function in business organizations.
Compensation, hiring, performance management, organizational development, safety, wellness, benefits, employee motivation, communication, administration, and training are examples of issues dealt with by human resource management which makes it an organizational function.
What Is The Importance/ Significance of HRM?
Human resources are one of the most valuable assets of a business organization. They are their strength. To face the new challenges on the fronts of knowledge, technology, and changing trends in the global economy needs effective human resource management.
HRM’s importance can be seen in three contexts:
Organizational, social, and professional.
- Organizational Significance:
HRM is critical to the success of any organization as a means of achieving its goals. It aids in the achievement of organizational goals in the following ways:
a. A good human resource strategy can aid in attracting and retaining the best employees in the organization.
b. Working to develop the requisite skills and capabilities in employees through training, development, performance appraisal, and other means.
c. Obtaining employees’ willing cooperation through encouragement, engagement, grievance handling, .etc
d. Effective utilization of available human resources.
e. Making sure that the enterprise will have a team of competent and dedicated employees in the future.
- Social Significance:
The social significance of HRM is based on the need for employee satisfaction in the organization. Because these individuals are drawn from society, their effectiveness contributes to societal welfare. Good human resource management practices benefit society as a whole.
a. Employment opportunities multiply.
b. Eliminating human resource waste by conserving physical and mental health.
c. Scarce talents are put to best use. Companies that pay and treat their employees well are always ahead of the competition and produce excellent results.
- Professional Significance:
The professional significance of HRM is contained in the development of people and the provision of a healthy environment for the effective utilization of their abilities. This can be done by:
a. Developing people on a continuous basis to meet the challenges of their job.
b. Promoting teamwork and team spirit among employees.
c. Providing excellent opportunities for advancement to people with the potential to rise.
d. Creating an environment and providing incentives for the development and utilization of creativity.
What Are The Objectives Of Human Resource Management (HRM)?
The primary goal of human resource management is to ensure the availability of the right people for the right jobs in order to effectively achieve organizational goals.
Werther and Davis categorized HRM objectives into four categories, as illustrated in the picture below:
- Societal Objectives:
Societal objectives are socially and morally accountable for society’s needs and difficulties. During the process, they must mitigate the negative impact of such demands on the business. Companies that fail to use their resources for the benefit of society in ethical ways may face restrictions. For instance, society may restrict human resource decisions to laws that enforce special provisions in employing and laws that deal with discrimination, safety, or other such aspects of societal concern.
- Organisational Objectives:
The organizational objectives acknowledge the function of human resource management in organizational effectiveness. HRM is not an end in itself; it is simply a useful tool for assisting the business in achieving its primary goals. Essentially, the HR department exists to serve the rest of the organization.
- Functional Objectives:
Functional objectives strive to keep the department’s contribution at a level appropriate for the organization’s needs. Human resources must be adjusted to meet the demands of the organization. The level of service provided by the department should be tailored to the needs of the company it serves.
- Personal Objectives:
Personal objectives assist employees in achieving their personal goals, at least to the extent that these objectives increase the individual’s contribution to the organization. The personal goals of employees must be met if they are to be maintained, retained, and motivated. Or else, staff performance and satisfaction may suffer, leading to employee turnover.
What Are The Functions Of Human Resource Management (HRM)?
Human Resource Management (HRM) functions can be divided into three types.
- Managerial Functions,
- Operative Functions,
- Advisory Functions
The following are the Human Resource Management Managerial Functions:
a. Human Resource Planning – This HRM function determines the number and type of employees required to achieve organizational goals. Research is a key part of this function; information is gathered and analyzed to identify current and future human resource needs, as well as to forecast changing employee values, attitudes, and behavior and their impact on an organization.
b. Organising – In organization tasks are allocated among its members, relationships are identified, and activities are integrated towards a common objective. Relationships are established among the employees so that they can collectively contribute to the attainment of the organization’s goals.
c. Directing – Activating employees at a different level and making them contribute maximum to the organization is possible through proper direction and motivation. Through motivation and command, it is possible to tap the maximum potential of employees.
d. Controlling – After planning, organizing, and directing, the actual performance of employees is checked, verified, and compared with the plans. Control measures must be implemented if actual performance deviates from the plan.
- Operative Functions:
The following are the operative functions of human resource management:
a. Recruitment and Selection – Recruitment of candidates is the function preceding the selection, which brings the pool of prospective candidates for the organization so that the management can select the right candidate from this pool.
b. Job Analysis and Design – Job analysis is the process of describing the nature of a job and specifying the human requirements like qualification, skills, and work experience to perform that job. The goal of job design is to outline and organize tasks, duties, and obligations into a single unit of work in order to achieve specific goals.
c. Performance Appraisal – Human resource professionals are required to perform this function to ensure that the performance of employees is at an acceptable level.
d. Training and Development – This function of human resource management helps the employees to acquire skills and knowledge to perform their jobs effectively. There are training and development programs in place for both new and existing employees. Through training and development, employees are prepared for higher-level responsibilities.
e. Wage and Salary Administration – Human resource management determines what is to be paid for different types of jobs. Human resource management decides employees’ compensation which includes – wage administration, salary administration, incentives, bonuses, fringe benefits, etc.
f. Employee Welfare – This function refers to various services, benefits, and facilities that are provided to employees for their well-being.
g. Maintenance – Human resources is considered an asset for the organization. Employee turnover is not regarded as beneficial to the organization. Human resource management is always striving to retain its top performers within the organization.
h. Labour Relations – This function refers to the interaction of human resource management with employees who are represented by a trade union. Employees band together to form a union in order to have a greater say in decisions affecting wages, benefits, working conditions, and so on.
i. Personnel Research – Personnel research is done by human resource management to gather employees’ opinions on wages and salaries, promotions, working conditions, welfare activities, leadership, etc. Such researches help in understanding employees satisfaction, employees turnover, employee termination, etc.
j. Personnel Record – This function involves recording, maintaining, and retrieving employee-related information like – application forms, employment history, working hours, earnings, employee absents and presents, employee turnover, and other data related to employees.
- Advisory Functions:
Human Resource Management’s Advisory Functions are as follows:
Human Resource Management is an expert in human resource management and can provide advice on matters pertaining to the organization’s human resources. Human Resource Management can provide guidance to:
a. Advised to Top Management Personnel
The manager advises the top management in the formulation and evaluation of personnel programs, policies, and procedures.
b. Advised To Departmental Heads Personnel
The manager provides advice to the heads of various departments on issues such as personnel planning, job analysis, job design, recruiting, selection, placement, training, performance appraisal, etc
What Is The Role Of Human Resource Management?
HRM’s role is to plan, develop, and implement policies and programs that make the best use of an organization’s human resources. It is the branch of management concerned with people at work and their interactions within organizations. Its goals are as follows:
(a) effective use of human resources,
(b) desirable working relationships among all members of the organization, and
(c) maximum individual development.
Human resources are primarily administrative and professional in nature. HR personnel is primarily concerned with administering benefits and other payroll and operational functions, and they do not consider themselves to be a part of the firm’s overall strategy.
HR professionals have an all-encompassing role. They are required to have a thorough knowledge of the organization and its intricacies and complexities. Every HR professional’s ultimate goal should be to create a link between the employee and the organization because employees’ commitment to the organization is vital.
Various management gurus have debated various roles for the HR manager based on the major responsibilities that they fulfill in the organization. A few of the most widely used models are listed below.
Pat Mc Lagan has proposed nine roles that HR professionals play.
- To bring to the attention of strategic decision-makers issues and trends affecting an organization’s external and internal people, as well as to recommend long-term strategies to support organizational excellence and endurance.
- To plan and design human resource systems and actions for implementation in order to have the greatest possible impact on organizational performance and progression.
- To aid in the development and implementation of strategies for transforming one’s own organization through the pursuit of values and visions.
- To establish a positive relationship with customers by providing them with the best services; maximizing resource utilization; and fostering commitment among those who assist the organization in meeting the needs of customers, whether directly or indirectly connected to the organization.
- Identifying learning needs in order to design and develop structured learning programs and materials to help individuals and groups learn faster.
- To enable individuals and groups to work in new situations and to expand and change their perspectives, so that those in positions of power shift from authoritarian to participative leadership models.
- Assist employees in analyzing their competencies, values, and goals in order to identify, plan, and implement development plans.
- He also assists individual employees in instilling values in the workplace and focusing on interventions and interpersonal skills to assist people in changing and maintaining change.
- He evaluates Human Resource Development(HRD) practices and programs, as well as their impact, and communicates the findings so that the organization and its people can accelerate their change and development.
The Diagnostic Model Of Human Resource Management (HRM):
The Diagnostics Model of HRM is the tool of gaining insight information of the organization. Although, it varies from organization to organization few methods are common in every diagnostics study like:
1- Study of the Organisation. Its system, methods, policy, procedure, etc.
2- Discussions with top management and key personnel
3- Employees from all departments, regardless of their designations or levels, be interviewed.
4- Finding the gaps
5- Again, discuss the gaps with the key people.
6- Finding the solutions.
7- Implementation and execution of the solution
8 -Periodical Audits.
What Is The Internal And External Environment Of Human Resource Management (HRM)?
The Environment in Human Resource Management: Internal and External Environment
What is an environment? In simple words, the environment comprises all those forces which have their bearing on the functioning of various activities including human resource activities. Environment scanning enables human resource(HR) managers to become more proactive in a changing and competitive environment. Human resource management is carried out in two settings: internal and external. These are discussed one by one:
I. Internal Environment:
These are the internal factors of a company. Internal pressures have a significant impact on HR operations. Unions, organizational culture, conflict, professional bodies, organizational objectives, policies, and so on comprise the internal environment of HRM. A brief mention of these is as follows.
Trade unions are created to protect the interests of their members/employees. Human resource operations such as recruiting, selection, training, remuneration, industrial relations, and separations are carried out in conjunction with labor leaders.
- Organisational Culture and Conflict:
As individuals have personalities, organizations have cultures. Each organization has its own culture that distinguishes it from the others. Culture can be defined as the members of an organization sharing some core values or beliefs. Reliance Industries Limited’s culture has been of “value for time.”. The culture of the Tata conglomerate is “get the best people and set them free”. HR practices need to be implemented that best fit the organization’s culture. There is often conflict between organizational culture and employees’ attitudes. Conflict usually surfaces because of dualities such as personal goal vs. organizational goal, discipline vs. autonomy, rights vs. duties, etc. Such conflicts have their bearings on HR activities in an organization.
- Professional Bodies:
Like other professional bodies, the Society for Human Resource Management – SHRM (Also called as Human Resource Management Society), founded in 1948 and headquartered in Alexandria, Virginia, U.S.A, is the HR professional body and a membership association that promotes the role of HR as a profession and works to provide education, certification, and networking to its members and also lobbies the U.S congress regarding various issues related to HR and labor management. Thus, professional bodies also influence the HR functions of an organization.
II. External Environment:
The external environment includes forces like economic, political, technological, demographic, etc. which exert considerable influence on HRM. Each of these external forces is examined here.
Growth rate and strategy, industrial production, national and per capita incomes, money and capital markets, competitions, industrial labor, and globalization are all examples of economic forces. All of these factors have a significant impact on wage and salary levels. Growing unemployment has an impact on the recruitment and selection of employees in organizations.
- Political :
The impact of political institutions on HRM practices is covered by the political environment. A democratic political system, for example, raises workers’ expectations for their well-being. Three institutions make up the overall political environment:
a. Legislature: This is called Parliament at the central level and Assembly at the state level A plethora of labor laws are enacted by the legislature to regulate working conditions and employment relations.
b. Executive: It is the Government that implements the law. In other words, the legislature decides and the executive acts.
c. Judiciary: This acts as a watchdog for the two. It guarantees that both the legislative and the executive act within the bounds of the constitution and in the best interests of the people as a whole. These have an impact on all HR activities, from planning to placement to training to retention and maintenance.
The methodical application of structured knowledge to practical problems is what technology is all about. Technological advancements have an impact on HR operations in several ways: First; technology makes the work more intellectually or technologically advanced. Second, it causes employees to be displaced if they are not properly equipped for the job. Third, the job becomes more difficult for the personnel who must deal with technological demands. Fourth, technology limits workplace human interaction. Finally, employees become highly professionalized and informed about the work they do.
Demographic variables include sex, age, literacy, mobility, etc. The modern workforce in the USA is primarily characterized by Whites, Blacks, Asians, Hispanics., etc along with significantly low population race groups like American Indians, Alaska Natives, Hawaii Natives., etc. Now, workers are called knowledge workers’ and the organizations wherein they work are called ‘knowledge organizations’.
As a result, the traditional distinction between manual and non-manual workers is becoming increasingly blurred. Employees are demanding parity in remuneration and responsibility across various employee categories and levels.
What Are The Forces That Influence Human Resource Management (HRM)?
The forces that influence HRM:
In brief, there are two external and internal environments that play a major role in shaping any company or organization’s human resources management decision-making. Every HR manager has to consider them while making decisions. They are as follows:
A. External forces:
External forces include political, legal, economic, technological, and cultural factors.
three institutions such as the legislature, executive and judiciary constitute the political environment.
a) Legislature (parliament at the center level), (Assembly at the state level) is the law-making body.
b) Executive is the law implementing body.
c) Judiciary has the role of watchdog. It makes sure that both legislature and executive work within the confines of the constitution and in the public interest.
Economic growth, industrial production, agriculture, population, national and per capita income, money and capital markets, suppliers, competitors, customers, and industrial labor are the components of the economic environment.
With the introduction of new technology the following things take place;
a) Jobs become more intellectual or upgraded
b) New technology dislocates workers
c) Technology has impacts on workers
d) The job holder should be highly professionalized and knowledgeable
- Cultural factors:
The cultural factors influence the HR function in the following segments; knowledge, belief, art, morals, laws, customs, and other capabilities and habits of an individual.
B. Internal forces:
Internal forces are:
- Strategy, task, and leadership;
- Organizational culture and conflict;
- Professional bodies.
Human Resource Management – Organizing The HRM Function
All organizations need an HR function. Almost all companies pay close attention to their products (quality, price, delivery, etc.), or else they will have unhappy customers. They pay attention to their customers – old ones need attention and new ones need to be identified and sold – making sales and marketing a crucial concern. Everyone pays attention to finance – we are all in business to make money and to spend it wisely.
But the fourth wall in the foundation – the people who make it all happen – is often given little or no attention, and very rarely the same level of attention and concern as the other three.
Microbusinesses frequently claim that they are too small and cannot afford a seasoned HR professional, and they are typically correct. In reality, there are few situations when a small business needs the services of an HR specialist.
The little things are where tiny firms discover a gap. The first problem is finding qualified candidates. Choosing the best candidate is not an easy task. Entrepreneurs are inherently confident — and in recruiting, they are often overconfident.
Good hiring does not happen spontaneously; it is something that must be studied and may be taught. This is the time when a savvy boss in a small business would conduct the study and, most likely, seek expert assistance.
Interviewing skills do not come naturally, and inexperienced interviewers sometimes do more talking than the candidate. Checking references is also important, and digging for information is a specialist talent. Seeking expert assistance pays for itself many times over.
Rewarding staff for a job well done, or decreasing awards when performance deteriorates, should not be random. Internal equity is crucial, and getting paid correctly saves money while keeping pay off the table as a point of disagreement.
And when variable remuneration (bonuses, etc.) enters the picture, disaster is on the horizon. Variable compensation is a specialized issue that should not be taken lightly.
Saying farewell to an employee is another action that should be prepared in a professional setting. There are hazards everywhere – the law imposes obligations, employee relations must be addressed, and termination expenses must be controlled.
None of these challenges should be left to untrained or amateur efforts – the stakes are just too high. We let someone go because there was an issue; don’t make things worse by handling the termination in an unprofessional manner.
For small businesses that cannot afford an HR specialist, the option is to designate someone within to handle the clerical side of things — filling out and sending documents to insurers, for example.
There are independent HR specialists with experience and knowledge that can assist on a short project basis or by the hour when professional guidance is required.
A professional interview conducted by an HR specialist should not be expensive, and it will be a good value if it prevents bad hiring or assists in identifying the appropriate and best individual. When constructing a bonus plan, professional counsel is vital — the risks of making a rewards disaster are high, and the repercussions may be severe and costly.
Inadvertently incentivizing the incorrect behavior can backfire disastrously and have far-reaching implications.
As a result, the HR function is just as important in small businesses as it is in large ones, even if the challenges are less frequent and sometimes a bit less complex.
But the same small organization that would not consider handling its own corporate tax returns should manage its HR needs the same way – seek professional advice to improve the likelihood of top HR performance and to minimize risks and headaches.
It’s important for organizations today to align their human resources to better meet strategic objectives. Failure to do so wastes time, energy, and resources.
When organizations review their recruitment and selection processes for fit, communicate the mission and vision statements, use joint goal setting, design an appropriate reward system, empower the workforce, promote and develop from within, and use teams to achieve synergy, they are more likely to achieve this alignment with their corporate objectives.
Human Resource Management is a management function that assists managers in the planning, recruitment, selection, training, development, remuneration, and retention of members for an organization. HRM has four objectives societal, organizational, functional, and personal development. It must also be noted that HRM is a dynamic subject in terms of both work and study, influenced by HR trends that existing and prospective HR professionals and HR representatives ought to adopt and work on in order to develop exceptional qualities and stay competitive.
An organization must have established policies, definite procedures(viz., use of a balanced scorecard), and well-defined principles governing its personnel, all of which contribute to the organization’s effectiveness, continuity, and stability. The use of behavioral science in modern times in a corporate setting has proven to be essential in achieving the aforementioned organizational objectives. Alongside this, organizations should also create and maintain an employee handbook that can further provide guidance and flexibility for the effective management of human resources.
In modern times, AI tools like ChatGPT are also being used by hr people to accomplish their day-to-day hr tasks with ease. Thus, giving an indication of the transformation of this field in the future.