Human Resource Management Techniques
Introduction
Human Resource Management, or HRM for short, is one of the most important factors in running a prosperous business, although it isn’t always handled with the time and focus that it deserves. To fully understand what HRM is and its impact on the success or failing of a business, we first must know what it means.
The purpose of Human Resource Management is to recruit, develop and utilise the personnel within an enterprise in the manner in which is most appropriate to achieving the aims and objectives of the enterprise.
This effectively translates to “using individuals in the business in the best way possible” although that would be an over-simplified assertion that doesn’t reflect the true nature and range of HRM. HRM describes all of the methods and procedures that are involved in making sure that all members of staff within a company are pulling in the same direction, and more importantly, in the right direction.
At its core, HRM brings together three primary elements that are fundamental to the productive output of the workforce. These elements include motivation, management and leadership, and organisational structures. As a result, HRM can be employed on all levels of management in your organisation, not just the shop floor staff, and it could even be used to alter the framework of those levels of management as well. It is a broad subject that is explored in more detail in this article.
Why is it Necessary?
Put simply, companies don’t work without workers. As a result, some level of human resource management is required for any organisation to operate at all, let alone in an efficient and profitable manner.
Human Resource Management has an impact on every level of your business activities with various degrees of visibility. The most evident HRM tasks involve the hiring and firing of staff as well as monetary systems such as payroll. It can also impact on motivation and communication inside your business, which are much more intangible aspects but are crucial nonetheless.
It also goes without saying that every company is unique and will have a specific set of issues to face and opportunities to take advantage of. HRM can work as a flexible tool that converts workforce potential into financial gains and can adapt to fully utilise the talents of your firm.
HRM is a universal business technique and could be employed on firms that can assist with setting up a new Ltd Company as well as almost any other type of enterprise as well.
Impact on Business
Whilst this all appears very interesting and significant, how does it actually influence the daily functions of your company, and more importantly, how will it help to improve the performance and success of your company?
Recruitment & Training
This is most likely the area of a business that is most affiliated with human resources – recruitment. Almost every business in the world, and particularly businesses that are growing, need to recruit people to work for them. Either current employees have left, or new opportunities have arisen which mean there are roles that must be filled.
It is also important to keep your staff training procedures up to date to make certain that your workforce is fully capable of doing the job they are there to do. Whether it is a fresh piece of legislation or a new bit of technology that alters the market, there is an on-going need to keep your organisation up-to-date and ready to make use of any opportunity. There is a phrase that states that “if you are not moving forward you are going backwards” which can be applied to business.
You may also find that the expensive process of external recruitment can be averted if your organisation has adequate training facilities in place. It is far easier to teach an existing worker to a higher level and then use outside recruitment to fill the gap remaining at the lower level than it is to recruit directly to a higher level.
Employee Relations
When you have the right people working for you it is necessary to keep them doing work for you, and to be sure they are doing a good job. This can be accomplished through good employee relations. The most obvious employee relations practice is the art of motivation – a broad topic by itself – but other worker relations issues may include disciplinary and grievance management.
Finances
You cannot keep employees at your company by good motivational methods alone. They’ll want to be paid a fair amount and on time. Payroll must be one of the primary systems that is developed when you launch a business, but they still need to be taken care of and updated when staff join, leave or switch pay grade.
Industrial Relations
Several firms will have to deal with trade union or other workers rights establishments which can be incredibly forceful when protecting the interests of their own members. When dealing with such bodies it is advantageous to have people within your company who can connect comfortably with them whilst keeping the interests of your own organisation in mind at the same time. The demand for good industrial relations is significantly more prevalent in public sector organisations.
Among the easiest ways to identify if company companies have good employee interaction is to ask existing staff if they are content in their jobs.
Workforce Planning
We have seen the effect that human resource management can have on a company and overall it looks like good HRM will have a good effect on any organisation. As a rule, this is the case, but effective HRM doesn’t just occur overnight. It should be planned according to the goals of the organisation and then performed thoroughly.
One way to apply HRM concepts to your business is through workforce planning – a process that has the goal of making sure your staff can finish the upcoming tasks needed for your company to be successful.
Definition
Workforce planning is the method of anticipating ahead of time the human resource requirements of any enterprise, both in terms of the number of employees necessary and the appropriate skill mix. Recruitment and training policies are designed with a long term focus in order to ensure that the company is able to operate without being limited by a shortage of appropriate labour.
Requirements
Analysing your workforce demands is essential to the proper planning of your staff in the short-term and long-term future. If your company is subject to seasonal changes in demand, such as in the tourism industry, or is prone to seasonal fluctuations in staff levels then your workforce planning has to take these variables into consideration. Also bear in mind any approaching retirements or periods of maternity/paternity leave or you could experience a shortage of qualified workers.
Recruitment
Whether you are hiring people externally or from inside your existing workforce you still need to find the correct individual to fill the role. As part of your workforce planning you should draw up a job description that details the role that will be carried out as well as a person specification which will give an indication of the sort of person that would be a perfect fit for the job and your business.
Selection
The selection procedure can be as involved or as easy as you deem necessary. Over and above regular job interviews there are numerous ways you can learn about about candidates for your jobs, including aptitude tests, group interviews or even psychometric testing. These sophisticated techniques might not be relevant to all workforce planning projects but are an option to employers.
Training & Development
The principal goal of staff training and development is to develop a much better quality of worker in your company. Workforce planning can use training to plug upcoming gaps in the skill set of your workforce which is generally quicker and more cost effective than external recruitment.
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Workforce Motivation
It almost goes without saying that properly motivated workers are going to produce a better standard of work and have a higher quantity of production than unsatisfied workers. This improved working rate will undoubtedly lead to an increase in the profitability of a company.
Essentially, all motivational tactics can be separated into two sets that are often called the “carrot and stick” approach to motivation. The analogy refers to the two ways to make a donkey carry your possessions, either by tempting it with a carrot, or threatening it with a hit from a stick!
Whether you use the carrot approach or the stick approach will largely depend on your own management style, as well as the business you work in and the type of individuals that you employ. Irrespective of your method, motivational factors can be broken down into a further two groups; financial and non-financial motivators.
Financial
The most typical financial motivators are payment plans. You can pay workers in a number of different ways, either a set amount for a set service, by an hourly or daily fee, or a rate related to production, such as a commission scheme. Whichever method is used, the workforce is motivated to work because they will get money for doing so.
Another financial motivation technique involves what are called incentive schemes, where additional financial rewards are given out for good performance. This may include commission beyond a fixed salary, performance-related pay levels or even providing a share of company profits. Once again, the motivating factor here is the money alone.
Non-financial
Many human resource theorists have their own thoughts about the different factors that motivate people to work, although these are often seen as an added bonus to a worker. It is widely acknowledged that money is the main motivational factor for the vast majority of people.
The Changing Face of HRM
As previously stated, HRM is a flexible application that is there to match the features of your staff to the goals of your organisation. As a result, it has had to keep adapting to a corporate climate that is continuously changing for one reason or another. Furthermore, it is a good idea to continuously review your own HRM procedures and not to rest on your laurels.
Maybe there is a new piece of government law that will have an impact of how your company can carry out its trading, or maybe a fresh manufacturing technology will come along that can revolutionise your sector. Either way, if you want to ensure that your staff is performing to its optimum level then your HRM system should be flexible enough to cope with an ever-changing world. After all, what may seem like a threat to most will often appear as an opportunity to a shrewd entrepreneur.