Human Resource Management
The process of defining HRM leads us to two different definitions. The first definition of HRM is that it is the process of managing people in organizations in a structured and thorough manner. This covers the fields of staffing (hiring people), retention of people, pay and perks setting and management, performance management, change management and taking care of exits from the company to round off the activities. This is the traditional definition of HRM which leads some experts to define it as a modern version of the Personnel Management function that was used earlier.
The second definition of HRM encompasses the management of people in organizations from a macro perspective i.e. managing people in the form of a collective relationship between management and employees. This approach focuses on the objectives and outcomes of the HRM function. What this means is that the HR function in contemporary organizations is concerned with the notions of people enabling, people development and a focus on making the “employment relationship” fulfilling for both the management and employees.
Importance of HRM
Formulation of HR polices– To confirm the highest use of the workforce resource of the organization, it is very important to formulate the HR polices of the company, which has been performed by the HRM Dept.
Implementation of HR policies– HRM also responsible for follow upping, whether the polices are implemented entirely or not.
Review of employee needs– In the current business environment, firms view their employees as more than just resources and instead adopt a “people first” approach. According to this concept, HRM continuously review the employee needs to attain the most satisfaction.
Development of social welfare– HRM follow up with the company’s contribution to social welfare development.
Utilization of Human Resources– HRM is generally accountable to authenticate the hundred percent utilization of the organization’s human resources.
Development of Labor Management Relation– These strategies define the objectives of the organization to manage its relationships with employee and all other organizations. These strategies are aimed at enhancing the overall quality of employee management and ensuring their participation and continuous improvement.
Overall development of organization– The idea here is to adopt a holistic perspective towards HRM that ensures that there are no piecemeal strategies and the HRM policy enmeshes itself fully with those of the organizational goals.
Scope of Human Resource Management
Human resources are undoubtedly the key resources in an organization, the easiest and the most difficult to manage! The objectives of the HRM span right from the manpower needs assessment to management and retention of the same. To this effect Human resource management is responsible for effective designing and implementation of various policies, procedures and programs. It is all about developing and managing knowledge, skills, creativity, aptitude and talent and using them optimally.
It also focuses on managing physical and emotional capital of employees. Considering the intricacies involved, the scope of HRM is widening with every passing day. It covers but is not limited to HR planning, hiring (recruitment and selection), training and development, payroll management, rewards and recognitions, Industrial relations, grievance handling, legal procedures etc. It’s about developing and managing harmonious relationships at workplace and striking a balance between organizational goals and individual goals.
The scope of HRM is extensive and far-reaching. Therefore, it is very difficult to define it concisely. However, I try to classify the same under following heads:
- HRM in Personnel Management: This is typically direct manpower management that involves manpower planning, hiring (recruitment and selection), training and development, induction and orientation, transfer, promotion, compensation, layoff and retrenchment, employee productivity.
It also includes performance appraisal, developing new skills, disbursement of wages, incentives, allowances, traveling policies and procedures and other related courses of actions.
- HRM in Employee Welfare: This particular aspect of HRM deals with working conditions and amenities at workplace. This includes a wide array of responsibilities and services such as safety services, health services, welfare funds, social security and medical services. It also covers appointment of safety officers, making the environment worth working, eliminating workplace hazards, support by top management, job safety, safeguarding machinery, cleanliness, proper ventilation and lighting, sanitation, medical care, sickness benefits, employment injury benefits, personal injury benefits, maternity benefits, unemployment benefits and family benefits.
- HRM in Industrial Relations: Since it is a highly sensitive area, it needs careful interactions with labor or employee unions, addressing their grievances and settling the disputes effectively in order to maintain peace and harmony in the organization. It is the art and science of understanding the employment (union-management) relations, joint consultation, disciplinary procedures, solving problems with mutual efforts, understanding human behavior and maintaining work relations, collective bargaining and settlement of disputes.
The main aim is to safeguarding the interest of employees by securing the highest level of understanding to the extent that does not leave a negative impact on organization. It is about establishing, growing and promoting industrial democracy to safeguard the interests of both employees and management.
Processes in Human Resource Management:
Each organization works towards the realization of one vision. The same is achieved by formulation of certain strategies and execution of the same, which is done by the HR department. At the base of this strategy formulation lie various processes and the effectiveness of the former lies in the meticulous design of these processes.
The following are the various HR processes:
- Human resource planning (Recruitment, Selecting, Hiring, Training, Induction, Orientation, Evaluation, Promotion and Layoff).
- Employee remuneration and Benefits Administration
- Performance Management.
- Employee Relations.
Human Resource Planning
Generally, we consider Human Resource Planning as the process of people forecasting. Right but incomplete! It also involves the processes of Evaluation, Promotion and Layoff.
- Recruitment: It aims at attracting applicants that match a certain Job criteria.
- Selection: The next level of filtration. Aims at short listing candidates who are the nearest match in terms qualifications, expertise and potential for a certain job.
- Hiring: Deciding upon the final candidate who gets the job.
- Training and Development: Those processes that work on an employee onboard for his skills and abilities up gradation.
Employee Remuneration and Benefits Administration:
The process involves deciding upon salaries and wages, Incentives, Fringe Benefits and Perquisites etc. Money is the prime motivator in any job and therefore the importance of this process. Performing employees seek raises, better salaries and bonuses.
It is meant to help the organization train, motivate and reward workers. It is also meant to ensure that the organizational goals are met with efficiency. The process not only includes the employees but can also be for a department, product, and service or customer process; all towards enhancing or adding value to them.
Nowadays there is an automated performance management system (PMS) that carries all the information to help managers evaluate the performance of the employees and assess them accordingly on their training and development needs.
Employee retention is a nuisance with organizations especially in industries that are hugely competitive in nature. Though there are myriad factors that motivate an individual to stick to or leave an organization, but certainly few are under our control.
Employee relations include Labor Law and Relations, Working Environment, Employee heath and safety, Employee- Employee conflict management, Employee- Employee Conflict Management, Quality of Work Life, Workers Compensation, Employee Wellness and assistance programs, Counseling for occupational stress. All these are critical to employee retention apart from the money which is only a hygiene factor.
All processes are integral to the survival and success of HR strategies and no single process can work in isolation; there has to be a high level of conformity and cohesiveness between the same.
Job Analysis – A Basic Understanding
Job Analysis is a systematic exploration, study and recording the responsibilities, duties, skills, accountabilities, work environment and ability requirements of a specific job. It also involves determining the relative importance of the duties, responsibilities and physical and emotional skills for a given job. All these factors identify what a job demands and what an employee must possess to perform a job productively.
Importance of Job Analysis
The details collected by conducting job analysis play an important role in controlling the output of the particular job. Determining the success of job depends on the unbiased, proper and thorough job analysis. It also helps in recruiting the right people for a particular job. The main purpose of conducting this whole process is to create and establish a perfect fit between the job and the employee.
Job analysis also helps HR managers in deciding the compensation package and additional perks and incentives for a particular job position. It effectively contributes in assessing the training needs and performance of the existing employees. The process forms the basis to design and establish the strategies and policies to fulfill organizational goals and objectives.
Motivation is the word derived from the word ’motive’ which means needs, desires, wants or drives within the individuals. It is the process of stimulating people to actions to accomplish the goals. In the work goal context the psychological factors stimulating the people’s behavior can be –
- desire for money
- team work, etc.
One of the most important functions of management is to create willingness amongst the employees to perform in the best of their abilities. Therefore the role of a leader is to arouse interest in performance of employees in their jobs. The process of motivation consists of three stages:-
- A felt need or drive
- A stimulus in which needs have to be aroused
- When needs are satisfied, the satisfaction or accomplishment of goals.
Therefore, motivation is a psychological phenomenon which means needs and wants of the individuals have to be tackled by framing an incentive plan.
Performance Management as a HR Management concept:
Performance management is the process of reviewing an employee’s performance during the preceding year or cycle and deciding where he or she stands as far as their peers in the same band are concerned.
The process of reviewing results, arriving at a rating and then deciding upon the bonus or salary hike is what performance management is all about.
There are different rounds to the performance appraisal process.
- In the first round, the people who participate in an employee’s appraisal are the employee and his or her manager. In this round, the manager gives a frank assessment of the employee’s performance after giving a chance to the employee to self-assess.
- The second round consists of the manager and the manager’s manager. This round is mostly about deciding the band in which the employee falls post the rating and in comparison with his or her peers. This process of rationalizing the employee’s performance with others is called “normalization”. In some organizations, this takes place in the third round where the HR manager is involved as well. In any case, the ratings cannot be decided without the HR manager’s assent to the same. Once these rounds are over, the bonus level or the salary hike are decided.
“If you pick the right people and give them the opportunity to spread their wings – and put compensation and rewards as a carrier behind it – you almost don’t have to manage them.— Jack Welch
Most of us would have heard the term “compensation” in the context of getting paid for the work that we do. From the perspective of the employers, the money that they pay to the employees in return for the work that they do is something that they need to plan for in an elaborate and systematic manner.
It can be said that compensation is the “glue” that binds the employee and the employer together and in the organized sector, this is further codified in the form of a contract or a mutually binding legal document that spells out exactly how much should be paid to the employee and the components of the compensation package.
Types of Compensation
There are several ways to classy compensation. We have selected three of the most typical dichotomies:
- Intrinsic versus Extrinsic Rewards
- Financial versus Non financial Rewards
- Performance based versus Membership based Rewards
The Job Evaluation that is a system for arriving at the net worth of employees based on comparison with appropriate compensation levels for comparable jobs across the industry as well as within the company.
Factors like Experience, Qualifications, Expertise and Need of the company determine how much the employer is willing to pay for the employee.
Individuals in an organization form its vital resource and must be valued, nurtured and retained. Employees are the most valuable assets and truly the backbone of an organization. Every employee in his/her own way contributes towards the success or failure of an organization. Without employees in an organization, even the most powerful machinery with the latest technology would not function.
Employee development is a joint initiative of the employee as well as the employer to upgrade the existing skills and knowledge of an individual. It is of utmost importance for employees to keep themselves abreast with the latest developments in the industry to survive the fierce competition.
Examples of Employee Development Activities:
Employee development activities must be defined keeping in mind an employee’s current stage and desired stage. Knowing an employee’s current and desired stage helps you find the gaps and in which all genres he/she needs to be trained on. Human resource professionals must encourage employees to participate in internal or external trainings, get enrolled in online courses to increase their professional knowledge and contribute effectively.
B Personal Growth
Employees start taking their work as a burden only when an organization does not provide any added benefits or advantages which would help in their personal growth.
Soft skills classes, fitness sessions, loans with lower interest rates are certain initiatives which not only motivate an employee to do quality work but also help in employee development.
Objective of employee benefits
A. Societal Objectives:
-To urban nation of interdependent wage earners
– To help provide security
– Receive most benefits favorable tax treatment
B. Organizational objectives
- Reduce Fatigue
- Discourage labor unrest
- Satisfy employee objectives
- Aid recruitment
- Reduce turnover
- Minimize overtime costs
C. Employee objects:
The real advantages to employees of employer provided benefits are lower costs and availability.
Categories of benefits and services
Most companies today offer a wide variety of benefits, especially larger companies. Some of the benefits are compulsory. For the composition of benefit plans there are many major categories of benefit plans may be offered. They are as follows
1. Required or mandatory security
2. Voluntary security
3. Retirement related security
4. Time of security
5. Health insurance
6. Financial service
7. Social & recreation service
a. Required /Mandatory Security
Federal & state government requires that an employer provide a certain limit of protection or a security floor for each employee. There are three primary areas of compulsory securities-
-Social security benefit
b. Voluntary security
Two of the major security benefits programs used by employer’s are-
– Supplemental unemployment benefits
Over 90 percent of full-time workers at companies with more than 100 employees are covered by retirement plans, according to the employee benefits Research institute.
d. Time -off related benefits
-Leave of absence
e. Health and insurance related benefits
A. Health benefits
- Cost containment method
- Employee co-payment
- Employee payment of deductible
- Wellness program
- Providing more information
B. Non- Medical insurance benefits
f. Financial, Social and Recreational Benefits:
- Non financial benefits
- Stock benefits
- Educational benefits
The objectives of the HRM span right from the manpower needs assessment to management and retention of the same. To this effect Human resource management is responsible for effective designing and implementation of various policies, procedures and programs. It is all about developing and managing knowledge, skills, creativity, aptitude and talent and using them optimally.
It also focuses on managing physical and emotional capital of employees. Considering the intricacies involved, the scope of HRM is widening with every passing day. It covers but is not limited to HR planning, hiring (recruitment and selection), training and development, payroll management, rewards and recognitions, Industrial relations, grievance handling, legal procedures etc.