What is HRM?
Human Resources Management refers to the philosophy, policies, procedures, and practices related to the management of an organization’s employees. Human resources management is particularly related with all the activities that contribute to successfully attracting, developing, motivating, and maintaining a high-performing workforce that results in organizational success (Sims 2002, p. 2-3). Human resources management covers the every aspect of the relationship between the individual and firm including recruitment, contractual obligations, individual training and motivation, corporate planning, performance monitoring, grievance handling and general welfare, dismissal and redundancy (Vernon 2002, p.101). Human resources management involves the establishment and execution of policies, programs, and procedures that influence the performance, capabilities, and loyalty of the employees of an organization. Through these policies and procedures, individuals are attracted, retained, motivated, and developed to perform the work of the organization. It is through these policies and procedures that the organization seeks to mold and shape the actions of its employees to operate successfully, comply with various public policies, provide satisfactory quality of employment, and improve its position in the market place through strengthened ability to compete an serve (Clardy 1996, p.1).
How does HRM add value to Organizations?
Human Resource Management adds value to the organization because:
1. It provides the right kinds of talent to the organization at the right time. HRM is expected to assure that a supply of qualified labor in a timely fashion (Clardy 1996, p.20).
2. It ensures that the organization is properly staffed. When done effectively, the staffing, recruitment, and selection process provides a flow of qualified individuals for filling open positions within the organization on a timely and efficient basis (Clardy 1996, p. 41).
3. Using appraisals, the employees are assesses and evaluated. Employee appraisals have very profound implications for both the employees and for the future success of the organization (Clardy 1996, p.58).
4. Using effective pay systems, the management can focus employees’ efforts toward desired organizational goals (Clardy 1996, p.79).
5. Ensures that the employees are properly skilled to perform their tasks and supports the organization’s growth through career development. The goal of training as part of the human resources management processes is to create cost-effective programs that build the skills to perform effectively (Clardy 1996, p.103).
Over the last decades, a decrease in administrative practices of the HR department and a growing focus on specialist services such as staffing, rewarding, training and labor relations may be observed. As the economic environment becomes more complex and organization’s capacity to change has become a crucial issue, there is a growing accent on the strategic role of HRM in helping the organization to survive (Buyens and de Vos 1999, p. 31). As we move further into the twenty-first century it is now becoming clear that the effective management of an organization’s human resources is a major source of competitive advantage and may even be the single most important determinant of an organization’s performance over the long term. Organizations have started to realize that their success is dependent on their ability to attract, develop, and retain talented employees. The human resources management practices are now being seen as a source of added value to the organization. HRM practices according to Sims (2002) are increasingly viewed as a means to contribute profitability, quality, and other organizational goals through enhancing and supporting organizational operations. Mannix and Peterson (2003), argues that a carefully crafted human resources strategy can be or at least can result in, a source of competitive advantage in the market place.
Human resource management adds value to an organization though:
1. Strategic Management of Human Resources
Integration of Human resources management with managerial planning and decision making such as international human resources, forecasting, planning, and mergers and acquisitions is essential. A closer integration between top management’s goals and HRM practices helps to elicit and reward the types of behavior necessary for achieving an organization’s strategy.
2. Recruitment and Selection
Employee recruitment includes interview, screening, and selection of most qualified candidates, filling of positions through transfer or promotion, and coordinating temporary employment. The aim of recruitment is to identify a suitable pool of applicants quickly, cost efficiently, and legally. Selection or staffing involves assessing and choosing job candidates.
3. Training and Development
Training and development such as orientation, performance management skills training, and productivity enhancement are planned learning experiences that teach employees how to perform their current and future jobs. Training focuses on present jobs, whereas development prepares employees for possible future jobs.
4. Performance Appraisals
Through the performance appraisal process, organizations measure the adequacy of their employees’ job performance and communicate these evaluations to them. Performance appraisals are a critical link in the HRM process, as they assess how well employees are performing and determine appropriate rewards or remedial actions to motivate employees to continue appropriate behaviors and correct inappropriate ones. The HRM role in performance appraisal is one of working with other managers in the organization to establish the appraisal process, the performance dimensions to be measured, the procedures to ensure accuracy, and requirements for discussion of appraisal results with employees.
5. Career Development
Organizations are becoming more active in developing career development programs. Many organizations are designing career programs in an attempt to increase overall organizational performance and employee productivity, and to attract, develop, and retain the most qualified employees in this increasingly competitive and global environment.
6. Compensation
The aim of compensation practices is to help organizations establish and maintain a competent and loyal workforce at an affordable cost.
7. Health and Safety
The human resources department ensures that the employees are working is an environment that is safe and healthful. Organizations try to create a safer and more healthful working environment by instituting accident prevention programs and programs designed to ensure the health and mental wellbeing of their employees. Organizations are taking more responsibility for helping employees deal with problems caused by stress or substance abuse through wellness and employee assistance programs.
Adding Value to Organizations through Strategic HRM
Strategic human resource management involves the linking of HRM with the strategic goals and objectives of the organization in order to achieve a progressive business performance and achieve an organizational structure that promotes innovation and flexibility (Buyens and de Vos 1991). Strategic HRM according to Burke and Cooper (2004) has emerged as a major approach to improving the competitive advantage of the firm. The goals and objectives of HRM are aligned with the strategic objectives and plans of the organization. The role of HRM is to determine the human resources needed to support strategic objectives and to ensure that employees are selected, trained, evaluated, and rewarded in ways that further the achievement of business objectives. Strategic HRM is frequently described as a linear, balanced process that begins with the identification of goals that will guide human resource practices. The integration of the HR programs with the goals of the organization will result to the organization’s increased value. The recruitment, compensation, performance appraisal, promotion, training and other functions are designed and managed so that they work towards the strategic objectives of the firm (p.92). Strategic HRM has the purpose of improving the way that human resources are managed within firms. The main objective of strategic HRM is to improve organizational performance as judged by its impact on the organization’s declared corporate strategy (Brewster et al 2004, p. 29). Strategic human resources management means accepting the HRM function as a strategic partner in both the formulation of the organization’s strategies and the implementation of those strategies through activities such as recruiting, selecting, training, and rewarding personnel (Sims 2002, p. 27). The enhanced value of innovation in determining competitive advantage requires organizations to attract, train and develop, and retain employees of the highest quality. Over time and throughout rapidly changing circumstances, organizations must be able to sustain the competitive advantage that the knowledge and skills of these employees provide. In the past, competitive advantage could be gained through finding better, cheaper access to financial capital, or marketing a new product, or inventing some new technologies. While cheap and ready access to capital, high-quality products, and new technology remain important components of any organization’s competitive advantage, today’s business environment requires a greater focus on the human resources element in business. Out of this realization has come SHRM (Sims 2002).
Key Roles of Strategic Management that add value
According to Ulrich et al (1995), HR has important value-added roles in the organization. These roles must be effectively delivered by the HR because they are essential to the achievement of the organization’s goals. The HR roles according to Ulrich (1997) are:
1. Management of strategic human resources
The focus of this role is on the alignment of the HR strategies and practices to the business strategy. The HR professional becomes a strategic partner that creates a concrete HR practices based on the organization’s strategy.
2. Change and transformation management
This role is also seen as a source of added value to the organization. The HR professionals must help to identify and implement the change processes all throughout the organization. The HR professionals act as mediums and guards of cultural changes.
3. Employee management
This role address issues such as the daily problems, expectations and needs of employees. Identifying and meeting the specific needs of the employees will result to better employee contribution.
4. Management of the administration of the organization
The role of HRM is to make sure that the administrative processes like involving hiring, training, evaluation and promotion are designed and delivered efficiently and correctly.
Effective HRM practices can improve an organization’s competitive advantage through the creation of cost leadership and differentiation. Maintaining a committed and competent workforce is important in order to succeed in today’s competitive global environment (Sims 2002).
The HRM function focuses its activities on ways to help the organization achieve corporate goals like growing operations through recruiting and hiring employees, orienting and training them, and making their initial and future job assignments. When organizations view the HRM area as a true strategic partner, they also use input from HRM managers in their initial formulation of corporate strategy (Sims 2002).
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