Lesson 1, Topic 1
In Progress

HRM is and how it relates to the management process


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The management function concerned with getting, training motivating and keeping competent employees. The quality of an organization is to a large degree determined by the quality of the people it employs. Success for most organizations depends on finding the employees with the skills to successfully perform the tasks required to attain the company’s strategic goals. Staffing and human resources management decisions and methods are critical to ensuring that the organization hires and keeps the right personnel.

Some of you may be thinking, sure personnel decisions are important. But aren’t most of them made by people specifically handling human resource issues? It’s true that in many organizations, a number of activities grouped under the label human resource management (HRM) are done by specialists. In other cases, HRM activities may even be outsourced to companies such as Daksh Eservices or Ma Foi. Not all managers have HRM staff support. Many small business managers, for instance, are obvious examples of individuals who frequently must do their hiring without the
assistance of HRM specialists. Even managers in larger organizations are often involved in recruiting candidates, reviewing application forms, interviewing applicants inducing new employees, making decisions about employee training, providing career advice to employees, and evaluating employees’ performance. So, even if an organization provides HRM support activities, every manager is involved with human resource decisions in his or her unit.

The key components of an organization’s HRM process represent eight activities, or steps that if properly executed, will staff an organization with competent high performing employees who are capable of sustaining their performance level over the long term.

The first three steps represent employment planning: the addition of staff through recruitment, the reduction in staff through downsizing, and selection. When executed properly these steps lead to the identification and selection of competent employees and assist organizations in achieving their strategic directions. Accordingly once an organization’s strategy has been established and the organization structure had been designed, it’s now time to add the people. That’s one of the most critical roles for HRM and one that has increased the importance of human resource managers to the organization.

Once you select competent people, you need to help them adapt to the organization and to ensure that their job skills and knowledge are kept current. These goals are accomplished through orientation and training and development. The last steps in the HRM process are designed to identify performance goals, correct performance problems if necessary, and help employees sustain a high level of performance over their entire work life. The activities involved include performance appraisal, compensation and benefits and safety and health.

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The entire employment process is influenced by the external environment. Many of the factors introduced (e.g. globalization, downsizing, diversity) directly affect all management practices, but their effect is probably greatest in the management of human resources, because whatever happens to an organization ultimately influences what happens to its employees. So, before we review the HRM process, let’s examine one primary environmental force that effects it – employment and discrimination laws.

What is Human Resource Management?

Human Resource Management (HRM) is the integrated use by an organization of systems, policies and management practices to recruit, develop and retain employees who will help the organization meet its goals. HRM plays an important role in assuring employee satisfaction, improving performance and productivity. This can further an organization’s competitive advantage, and directly contribute to the organization’s success. HRM is not just an issue for an organization’s HRM department or for HR professionals. It is also the responsibility of leaders and managers,
who exercise HR functions with their staff every day. HRM provides managers with skills and tools to enhance their own performance and the performance of their employees. By using these tools and working closely with HR professionals, managers can help build their employees’ capabilities and strengthen employee commitment to the organization. This in turn will strengthen individual and organizational performance, and further the organization’s ability to meet its goals according to performance objectives and standards.

Why is Human Resource Management important?

An effective HRM system allows organizations to address human resource issues strategically. This helps the workforce deliver high quality health services, despite internal and external challenges to the organization. A strong human resource management system helps organizations prioritize their organizational and business strategies while effectively managing the changes inherent in health sector reform and decentralization. HRM helps attract and retain competent employees, assists employees and managers in adapting to organizational change and facilitates
the use of technology to determine how and where work is done. HRM is perhaps one of the most misunderstood, but most important management systems. Employees are an organization’s most important asset, as well as its most expensive: personnel costs often consume 70-80% of an organization’s budget.

How HRM is related to the management process?

➢  With a strong and equitable HRM system, employees:

➢  Receive compensation that reflects their level of responsibility.

➢ Feel more motivated and understand how their work relates to the organization’s mission and values.

➢  Are more satisfied with their jobs.

➢ With a strong and equitable HRM system, organizations:                                                     

➢Are better equipped to achieve their goals.
➢ Increase the level of employee performance.

➢ Save costs through the improved efficiency and productivity of workers.

Improve their ability to manage change.

At the organizational level, HRM and HR professionals play many important roles. They include:

  1. Acting as a strategic partner with senior managers and leaders by aligning HR strategies and practices with overall organizational strategies;

2.  Acting as an administrative expert for recruiting and hiring staff, evaluating employee performance, staff development and training, rewarding, supervising and delivering other HR processes that contribute to an organization’s smooth operations;

3.  Representing and supporting employees; and,

4.  Acting as a change agent to prepare employees and implement processes for change within an organization. At the national level, HRM can help to support and enhance health-sector policies and practices to ensure a workforce whose staff, qualifications and placement are appropriately allocated. Organizations need to be able to accurately predict the HR needs       to maintain service delivery and improve access to care and quality of care.

Staff training and development are driven by the need to bolster staff skills according to organizational competencies, goals and directions. Relationships with union officials need to be established and well maintained. HRM is responsible for participating in organizational capacity building; instituting new employee incentives; and re-shaping HRM policies, processes and procedures, super vision systems and job descriptions. 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. But what exactly are and entails these processes? Let’s explore further.

The following are the various HR processes:

1.  Human   resource   planning      (Recruitment,   Selecting,   Hiring,   Training,   Induction,

Orientation, Evaluation, Promotion and Layoff).

2.  Employee remuneration and Benefits Administration

3.  Performance Management.

4.  Employee Relations.

The efficient designing of these processes apart from other things depends upon the degree of correspondence of each of these. This means that each process is subservient to other. You start from Human resource Planning and there is a continual value addition at each step. To exemplify, the PMS (performance Management System) of an organization like Infosys would different from an organization like Walmart. Let’s study each process separately.

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 criterion.

▪    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 upgradation.

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.

Performance Management: 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 Relations: 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 health and safety, Employer- 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

ACTIVITY 1.1

Discuss the strategic role of Human Resource Management.

2.  Why Human Resource Management is important?

3.  How HRM is related to management process?

4.  Explain the various HR processes