Human Resource Management Techniques
Introduction
Human Resource Management, or HRM for short, is one of the most critical factors in running a successful company, although it is not always treated with the time and focus that it deserves. To fully understand what HRM is and its influence on the success or failure of a company, we first must know what it means.
The function of Human Resource Management is to recruit, develop and use the staff within an enterprise in the manner in which is most appropriate to accomplishing the aims and objectives of the organisation.
This basically translates to “using people in the company in the best way possible” though that would be an over-simplified assertion that does not reflect the true nature and scope of HRM. HRM describes all of the methods and processes that are involved in ensuring that all members of staff in a business are pulling in the same direction, and more importantly, in the right direction.
At its center, HRM brings together three primary elements that are fundamental to the productive output of the workforce. These factors include motivation, management and leadership, and organisational structures. Consequently, HRM can be applied to all levels of management in your company, not just the shop floor personnel, and it can even be used to adjust the framework of those levels of management as well.
Why is it Necessary?
Quite simply, businesses don’t run without employees. As a result, some level of human resource management is necessary for any business to operate at all, let alone in an effective and profitable manner.
Human Resource Management has an impact on every level of your corporate activities with varying degrees of visibility. The most evident HRM tasks include the hiring and firing of staff as well as financial systems such as payroll. It can also impact on motivation and communication within your business, which are far more intangible factors but are critical nonetheless. Bad HRM practice in these less visible arenas can have a damaging impact on your organisation but go undetected for long intervals.
It also goes without saying that every organisation is unique and will have a different set of issues to face and opportunities to take advantage of. HRM can work as a versatile tool that translates workforce power into financial profits and can adapt to fully utilise the strengths of your firm.
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Impact on Business
Whilst this all sounds very interesting and important, how does it actually impact on the daily functions of your company, and more importantly, how will it help to improve the performance and profitability of your firm? The effect of HRM can be broken down into the following areas.
Recruitment & Training
This is most likely the part of a company that is most affiliated with human resources – recruitment. Almost every business in the world, and especially businesses that are expanding, must recruit people to work for them. Either current employees have left, or new possibilities have arisen which mean there are roles that need to be filled.
It is also important to keep your staff training procedures up-to-date to make sure that your workforce is fully capable of doing the job they are there to do. Regardless of whether it is a fresh piece of legislation or a new bit of technology that changes the marketplace, there is an on-going need to keep your organisation up-to-date and ready to take advantage of any opportunity.
You may also find that the expensive process of external recruitment can be avoided 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 hire straight to a higher level. This technique can be used at almost every single grade of management inside your business.
Employee Relations
When you have the suitable people working for you it is important to keep them working for you, and to ensure they are doing a good job. This can be achieved via good employee relations. The most evident employee relations exercise is the art of motivation – a wide topic by itself – but other employee relations issues may include disciplinary and grievance management.
Finances
You can’t keep employees at your company by good motivational techniques alone. They’ll want to be paid a fair sum and on time. Payroll should be one of the initial systems that is developed when you start a company, but they still need to be taken care of and updated when personnel join, leave or change pay grade. Poor management of your payroll program can rapidly lead to disaster in terms of your workforce.
Industrial Relations
Numerous firms will have to work with trade union or other workers rights establishments which can be incredibly forceful when protecting the interests of their members. When dealing with such bodies it is beneficial to have individuals within your company who can communicate effectively with them whilst keeping the interests of your own company in mind at the same time.
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Workforce Planning
We have seen the impact that human resource management may have on a business and on the whole it looks like good HRM will have a positive effect on any business. As a rule, this is the case, but good HRM doesn’t just happen overnight.
One way to apply HRM concepts to your business is through workforce planning – a process that has the aim of making sure your staff can complete the upcoming tasks needed for your business to be successful. It can be defined as:
Definition
Workforce planning is the method of anticipating in advance the human resource needs of any enterprise, both in terms of the number of employees required and the proper skill mix. Recruitment and training policies are designed with a long term emphasis in order to make sure that the organisation is able to function without being limited by a shortage of appropriate labour. Workforce planning can be broken down into four main parts; requirements, recruitment, selection, and training and development.
Requirements
Analysing your workforce demands is vital to the proper planning of your staff in the short-term and long-term future. If your business is subject to seasonal changes in demand, such as in the tourism industry, or suffers from seasonal fluctuations in staff levels then your workforce planning has to take these variables into consideration.
Recruitment
Whether you are hiring people externally or from inside your existing workforce you still want to find the right person to fill the position. As part of your workforce planning you ought to draw up a job description that details the function that will be undertaken as well as a person specification which will give an indication of the type of person that would be a perfect fit for the job and your business. By combining and prioritising the components of these two documents you will be able to identify the ideal job candidate.
Selection
The selection procedure can be as involved or as simple as you deem necessary. Outside of regular job interviews there are several ways you can learn about about applicants for your jobs, including aptitude tests, group interviews or even psychometric testing.
Training & Development
The primary goal of staff training and development is to develop a much better standard of worker in your company. Workforce planning can use training to fill upcoming gaps in the skill set of your staff and is commonly faster 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 deliver a better standard of output and have a higher quantity of production than unhappy workers. This improved working rate will undoubtedly lead to an increase in the profitability of a business.
Essentially, all motivational tactics can be separated into two models that are often referred to as the “carrot and stick” approach to motivation. The analogy relates to the two ways to make a donkey carry your belongings, either by tempting it with a carrot, or threatening it with a hit from a stick!
Whether you use the carrot strategy or the stick approach will largely depend on your own management style, as well as the industry you work in and the type of people that you employ. Irrespective of your approach, motivational factors can be separated into a further two groupings; financial and non-financial motivators.
Financial
The most common financial motivators are payment schemes. You can pay workers in numerous different ways, either a fixed amount for a fixed service, by an hourly or daily rate, or a rate linked to production, such as a commission structure.
Another financial motivation method involves what are known as incentive schemes, where by additional financial rewards are handed out for good overall performance. This may include commission beyond a fixed salary, performance-related pay levels or even providing a share of company profits. Again, the motivating aspect here is the money alone.
Non-financial
Many human resource theorists have their own ideas about the different factors that motivate people to work, although these are often seen as a bonus to an employee. It is broadly acknowledged that money is the critical motivational factor for the vast majority of people. If you would like to learn more about these ideas I would recommend looking up the work of Elton Mayo, Abraham Maslow and Fredrick Herzberg.
The Changing Face of HRM
As previously mentioned, HRM is a flexible application that is there to match the characteristics of your staff to the objectives of your organisation. As a result, it has had to keep adapting to a business climate that is continuously changing for one reason or another. Furthermore, it is a good idea to constantly review your own HRM policies and not to rest on your laurels.
Perhaps there is a new piece of government legislation that may have an impact of how your business can carry out its operations, or maybe a new manufacturing technology will come along that will revolutionise your industry. Either way, if you want to make sure that your staff is performing to its optimum level then your HRM strategy should be flexible enough to cope with an ever-changing economy. After all, what may seem like a risk to many will often appear as an opportunity to a shrewd entrepreneur.