Human Resource Management: Everything you need to know
From benefits to strategies, here is everything your HR team needs to know about Human Resource Management (HRM).
Human Resources is a central department in any business with members of staff. Good Human Resource Management strategies should provide a strategic approach to managing people efficiently and effectively, which in turn should help the business reach its full potential, and keep its employees happy and fulfilled in the process.
The most apt Human Resource Management definition? Managing people to improve their performance and productivity.
What Is Human Resource Management (HRM)?
HRM is recruiting, hiring, deploying, and managing a business’ employee cohort. In short, Human Resource Management is designed to maximize an employee’s productivity and workplace performance in order to fit with the company’s business objectives and aspirations.
HRM is also known as HR (Human Resources), and the HR department is usually responsible for making hiring and firing happen, and streamlining payroll. They are also usually responsible for creating and upholding policies to govern what is expected and allowed in the working environment, and in the relationship between employer and employee.
Done well, HR provides the know-how, training, tools, legal advice, and administration needed to sustain and grow a company.
Why is Human Resource Management important?
HRM is important because your hiring strategy looks to find employees who fit company culture – as they are more likely to stay for a longer period, be happier, and be more productive (36% more productive, according to this recent report). Recruiting and training are costly business processes, whilst happiness and productivity go hand-in-hand en route to business efficacy.
It’s in everybody’s interest (not to mention the office atmosphere!) for employees to be ‘on the same page’ when it comes to company culture.
HR focuses on employees as a business’ assets – or ‘human capital’ (hence some HR departments’ choice to rebrand as HCM – Human Capital Management). The goal is to make the best use of these business ‘assets’ by balancing and supporting their productivity and ensuring the maximal ROI (return on investment).
How does Human Resource Management work?
HRM relies on dedicated HR professionals. When the right HR team is assembled, HRM can be the foundation of business growth and success. The role of the practices HRM instates is to create and reinforce company culture. As well as recruiting appropriate employees, the HR team completes training programs and development for new and existing employees. HR will also often ensure that a business is ‘up to date’ in comparison with its competitors, making sure workplace benefits and salaries are attractive and appropriate, and job roles fit with market requirements.
Although some smaller organizations only need one HR expert/generalist, larger organizations will require an HR department whose size can vary considerably, full of role-specific HR experts. In this situation, there may be a member of the team who specializes in recruitment, for example, whilst another might handle visa handling or benefits.
As well as helping a company achieve its goals via human asset management, the HR team is often at least partly responsible for ensuring the business’ overall mission, as well as values and vision, are transparent and shared across the whole company. HR will often utilize metrics to analyze their choices and demonstrate value.
Strategies for Human Resource Management
Several Human Resource Management Strategies are considered foundational. These include:
- Recruitment
- Performance management
- Learning and development
- Planning
- Compensation and benefits
- HR IT systems
- Data and analytics to assess HR policy success
Strategic HRM provides a framework to unite employee management with development practices in order to achieve long-term business goals. This strategy looks to long-term resourcing issues to hit an organization’s goals and the evolution of the business.
Objectives and outcomes for Human Resource Management
At its core, the role of Human Resource Management is maintaining productivity in a business’ employee cohort, in order to help achieve the business’ goals. There are many different ways to do this, and many different approaches, but HR will endeavor to make the best use of an employee’s skill set and abilities, beginning with making sure they have been given adequate training. They will also outline the crucial company policies, procedures, rules, and regulations that employees should know.
Secondarily, HR will usually want to ensure that a business’ employees are enjoying a high level of workplace satisfaction. They may also choose to instigate some policies to raise employees’ quality of life, at home as well as at work. The HR department will also maintain the legal, social, and ethical policies the workplace will be defined by.
Human Resource Management will ensure these objectives are reached, often by breaking them down into four central Human Resource Management principles:
- Business bjectives
- Social objectives
- Functional objectives
- Employee objectives
Business objectives are choices taken to support an organization’s efficiency. This includes training, task-specific recruitment and, importantly, keeping staff.
Social objectives are the measures a firm uses to respond to the company’s, and its employees’, social needs. It also encompasses the business’ ethical stance. This will include issues like equal opportunities, and equal pay. Some companies choose to take stronger action on these objectives to ensure a strong and diverse workforce without institutional bias toward a particular ethnic group, gender, or sexuality.
Functional objectives help to maintain the business’ efficiency. This means ensuring that the HR budget is spent appropriately.
Employee objectives are resources provided to employees to ensure their own personal development. This may entail offering training or career development, as well as the more social and personal aspects of employee satisfaction.
What does good Human Resource Management look like?
What is good Human Resource Management? Having happy employees who therefore deliver for their company. HRM is crucial in our world of blurred work-life boundaries, as employees increasingly have higher expectations of their company and the benefits it offers. This pre-pandemic study illustrates that, even then, 64% of employees were feeling that their work and personal lives were increasingly blended. Almost all participants (93%) wanted to work for a company that cared for them, as an individual, and over half (51%) wouldn’t work for a company that didn’t have strong social and environmental commitments. A company’s sphere of influence, and the sense that it’s ‘doing good’ in some way, is ever more important.
The best Human Resource Management understands all this, and that factors in how the company conducts itself, both internally and externally, will play a big role in employee retention.
Alongside company culture and employee development, good HR departments are looking at how their firm can be the best it can be, to recruit and retain the best talent.
Academically, there are two schools of thought when considering how to implement the best HRM: best fit, and best practice.
Best fit suggests that to add value, all HR policies should be in alignment with the business’ strategy. With best fit, the HR department would develop its policies according to business strategy. This includes planning future activities, objectives, and policies around achieving a business’ aims. HR should thus focus on both the business’ needs and the needs of its employees.
Best practice suggests that there are a set of HR processes that universally work to provide increased business performance. Studies illustrate that certain HR policies function to maximize performance, regardless of the industry or corporation they are applied to. These bundles of activities, it is argued, will create workplace competence, bolster motivation, and instigate a work-design boosting employee commitment. Best practice HR is said to result in higher levels of quality and productivity, whilst minimizing wastage and absenteeism.
There are several structural tenets of good HRM, too. One is that it should give employees a sense of security. Since most people come to work in order to be able to provide for themselves and their families, being a strong and stable presence is important (especially in the current, unpredictable times, with the rising cost of living). As well as the formal contract you’ve signed with an employee (you work, you get paid), there exists an informal contract too – one that suggests that if an employee works hard or puts in extra graft, they’ll be well taken care of. Security should underpin much of what HR does – be it hiring new staff or undertaking the difficult job of letting people go.
Another ‘soft’ skill of HR is hiring the right people. It’s not just about offering anyone with the right employment history the job; you want the best fit possible. Research suggests that there is a 400% difference in performance between high achievers and the average performer (across industries as broad as athletics, entertainment and research) – so it’s crucial to offer enough to get that high achiever on board. Tests such as personality assessments, reference checks, IQ scoring, work tests, and peer assessment are all put in place to ascertain three key characteristics of the potential staff member – their ability, their trainability, and their commitment.
Do they already have the appropriate skills (technical and soft)? Secondly, can they be trained to improve these skills – do they have the aptitude to learn? Finally, will they commit to the organization, and stay with the business once they’re fully trained up and hitting peak productivity? The answers to all of these questions have to be gauged by the hiring committee – likely made up, at least in part, by HR management.
The role of HR managers in Human Resource Management
The HR management team shoulders a lot of corporate responsibility. As well as the aforementioned recruitment, onboarding and retention of employees, and ‘hard’ responsibilities such as legal compliance, compensation, and planning, there are a set of ‘softer’ responsibilities that are more personal, more subjective, and more flexible. These will change depending on the HR manager themselves, the people they are trying to manage, and the business they are trying to support. These are responsibilities like career development, benefits, training and development, performance management, employee engagement, team building, and planning for the future.
On a personal level, there are several qualities that are often found in a great HR manager. Having a sympathetic, empathetic attitude is a central one: it can be hard to balance care about individual employees with company policy, getting what is best for both the employee and the business. A sense of social responsibility comes into play here, too. Integrity and patience are elements of this. Responsiveness is also a key skill. The ability to make quick decisions confidently and competently can be crucial. A sense of authority and leadership ensures that systemic change to company culture takes hold, whilst good communication skills are clearly central to creating an atmosphere that is transparent and supportive.
Human Resource Management is both nuanced and subjective. Although some strategies are considered ‘the right way to do it’, the intimacies of how these strategies are played out all comes down to the HR team in place who instigate the changes. That’s why your HR department is so important; they’re a crucial arm of your corporate direction and efficiency.
Although “there is no single HRM strategy that will deliver success in all situations”, according to the CIPD (2010), “organizations need to define a strategy which is unique to their own situation in terms of context, goals, and the demands of the organizational stakeholders”.
Here at UNLEASH, we’ve been diving into what makes HR strategies successful for some time. A recent on-demand webinar on the topic has been exploring key measures of HR project success with Head of Capabilities for Future of Work at Prudential, Wagner Denuzzo. We’re supporting that with data from our latest research too – which explores success rates, investment in HR tech projects, and digital adoption. Have a watch here.
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Editorial content manager
Jon has 20 years' experience in digital journalism and more than a decade in L&D and HR publishing.
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