HRM is the management of people working in an organization, it is a subject related to human. For simplicity, we can say that it is the management of humans or people. HRM is a managerial function that tries to match an organization’s needs to the skills and abilities of its employees. Human Resource Management is responsible for how people are managed in the organizations. It is responsible for bringing people in organization helping them perform their work, compensating them for their work and solving problems that arise.
Growing Importance of HRM
The success of organizations increasingly depends on people-embodied know-how- the knowledge, skill, and abilities imbedded in an organization's members. This knowledge base is the foundation of an organization' core competencies (integrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers). HRM plays important role in creating organizations and helping them survive. Our world is an organizational world. We are surrounded by organizations and we participate in them as members, employees, customers, and clients. Most of our life is spent in organization, and they supply the goods and services on which we depend to live. Organizations on the other hand depend on people, and without people, they would disappear.
Factors Contributing to the Growing Importance of HRM
a. Accommodation to workers' needs
Workers are demanding that organizations accommodate their personal needs by instituting such programs as flexible work schedules, parental leave, child-care and elder-care assistance, and job sharing. The human resource department plays a central role in establishing and implementing policies designed to reduce the friction between organizational demands and family responsibilities.
b. Increased complexity of the Manager’s job
Management has become an increasingly complex and demanding job for many reasons, including foreign competition, new technology, expanding scientific information, and rapid change. Therefore, organizations frequently ask human resource managers for assistance in making strategic business decisions and in matching the distinctive competencies of the firm's human resources to the mission of the organization. Executives need assistance from the human resource department in matters of recruitment, performance evaluation, compensation, and discipline.
c. Legislation and litigation
The enactment of state laws has contributed enormously to the proliferation and importance of human resource functions. The record keeping and reporting requirements of the laws are so extensive that to comply with them, many human resource departments must work countless hours and often must hire additional staff. Four areas that have been influenced most by legislation include equal employment, Compensation, safety, and labor relations. An organization's failure to comply with laws regulating these areas can result in extremely costly back-pay awards, class action suits, and penalties.
Human resource policies help to maintain consistency and equity within an organization. Consistency is particularly important in compensation and promotion decisions. When managers make compensation decisions without consulting the human resource department the salary structure tends to become very uneven and unfair promotion decisions also may be handled unfairly when the HR department does not coordinate the decision of individual manger.
Now a days there exist sophisticated personnel activities that require special expertise. For example, researchers have developed complex procedures for making employee-selection decisions; statistical formulas that combine interviews, test scores, and application-blank information have replaced the
subjective interviews traditionally used in making selection decisions. Similarly, many organizations have developed compensation systems with elaborate benefits packages to replace simple hourly pay or piece rate incentive systems
f. Cost of Human Resource
Human resource activities have become increasingly important because of the high cost of personal problem. The largest single expense in most organizations is labor cost, which is often considerably higher than the necessary because of such problems as absenteeism tardiness and discrimination.
Why are we concerned with HRM?
1. Helps you get results - through others.
Different managerial techniques help mangers to direct the performance of employees in desirable direction in order to achieve the organizational objectives. Through the efforts of others working in an organization, managers get things done that require effective human resource management.
2. Helps you avoid common personnel mistakes
Qualified HR mangers utilize organization resources in such a way that helps to avoid common personnel mistakes like the following…
a. Hiring the wrong person for the job
b. Experiencing high turnover
c. Finding employees not doing their best
d. Having your company taken to court because of your discriminatory actions
e. Having your company cited under federal occupational safety laws for
f. Allowing a lack of training to undermine your department’s effectiveness
g. Committing any unfair labor practices
3. Helps you to gain Competitive Advantage
Among all the resources possessed by the organizations it is only Manpower or the Human resources that
create the real difference. Because all organizations can have the same technology, they can possess same type of financial resources, same sort of raw material can be used to produce the goods and services but the organizational source that can really create the difference is work force of the organization. Therefore they are the main sources of innovation creativity in the organizations that can be used as a competitive advantage. In today’s competitive environment,
these are the people which can create competitive advantageous for the organizations.
The world around us is changing. No longer can we consider our share of the “good Life” given. If we are to maintain some semblance of that life, we as
individual, as organizations, as society will have to fight actively for it an increasingly competitive global environment. If organizations are able to
mange its work force efficiently/effectively this will be beneficial for all stakeholders (Organization, Employees and Society). Challenges/Issues of Managing Human Resources in present era Following are the main issues that are faced by the mangers to manage the workforce of today’s organization for achievement of objectives.
a. To Attract People
People will be interested to join any organization if it is providing them quality working environment, attractive benefit and opportunities to excel in future. Keeping in view the opportunities in the market, the first issues will be to attract good people for your organization.
b. To Develop People
Development is related to provide the opportunities for training and development to match the skills to job in particular areas. It requires careful need assessment for training and selecting effective training methods and tools. After attracting/selecting, Continuous development of workforce of the organization leads towards development of the organization. So that they will start playing their important role in the organization.
c. To Motivate
Motivation means to influence performance of others and to redirect the efforts in desirable direction by using different motivational tools that can help in fulfilling the mission of organization. Third important issues/concern will be to keep your workforce motivated so that they should keep on delivering effectively.
d. To Keep Talented People
This is related to retention of workforce in organization and to take steps that can prevent undesirable detachments of talented and motivated workers from the organization.
Functions of HRM department:
An organization must have qualified individuals, in specific jobs at specific places and times, in order to accomplish its goals. Obtaining such people involves
job analysis, human resource planning, recruitment, and selection. Job analysis is the systematic process of determining the skills, duties, and knowledge required for performing specific jobs in an organization. Human resource planning (HRP) is the process of systematically reviewing human resource requirements to ensure that the required numbers of employees, with the required skills, are available when needed. Recruitment is the process of attracting such individuals in sufficient numbers and encouraging them to apply for jobs with the organization. Selection is the process through which
the organization chooses, from a group of applicants, those individuals best suited both for open positions and for the company.
b. Human Resource Development
A major HRM function that consists not only of training and development but also individual career planning and development activities and performance appraisal, an activity that emphasizes T&D needs. Training is designed to provide learners with the knowledge and skills needed for their present jobs.
Development involves learning that goes beyond today’s job; it has a more long-term focus. Human resource development (HRD) helps individuals, groups, and the entire organization become more effective. It is essential because people, technology, jobs, and organizations are always changing. Career planning is an ongoing process whereby an individual sets career goals and identifies the means to achieve them. Career development is a formal approach used by the organization to ensure that people with the proper qualifications and experiences are available when needed. Through performance appraisal, employees and teams are evaluated to determine how well they are performing their assigned tasks.
c. Compensation and Benefits
The term compensation includes all rewards that individuals receive as a result of their employment. The reward may be one or a combination of the following:
Pay: The money that a person receives for performing a job.
Benefits: Additional financial rewards other than base pay include paid
vacations, sick leave, holidays, and medical insurance.
Non financial rewards: Non monetary rewards, such as enjoyment of the work
performed or a pleasant working environment.
d. Safety And Health
Safety involves protecting employees from injuries caused by work-related accidents. Health refers to the employees’ freedom from illness and their general physical and mental well-being. These aspects of the job are important because employees who work in a safe environment and enjoy good health are more likely to be productive and yield long-term benefits to the organization.
e. Employee And Labor Relations
Since 1983, union membership has fallen approximately 8 percent, to only 13.9 percent of the workforce, the lowest level since the Great Depression. Subtracting government employees, unions represent only 9.5 percent of the private industry workforce. Even so, a business firm is required by law to recognize a union
and bargain with it in good faith if the firm’s employees want the union to represent them. In the past, this relationship was an accepted way of life for many employers. But most firms today would like to have a union-free environment.
f. Human Resource Research
Although human resource research is not listed as a separate function, it pervades all HRM functional areas, and the researcher’s laboratory is the entire work environment.
g. Interrelationships of HRM Functions
All HRM functional areas are highly interrelated. Management must recognize that decisions in one area will affect other areas. The interrelationships among the five HRM functional areas will become more obvious as we address each topic throughout the book.