Human Resource Management
Human Resources Management is defined as policies and practices Involved in carrying out the “people” or human resource aspects of a management position, including recruiting, screening, training, rewarding and appraising and providing direction for the people who work in the organization. It can also be performed by line managers.
Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training. HRM is also a strategic and comprehensive approach to managing people and the workplace culture and environment. Effective HRM enables employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization's goals and objectives.
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Human Resource Management is moving away from traditional personnel, administration, and transactional roles, which are increasingly outsourced. HRM is now expected to add value to the strategic utilization of employees and that employee programs impact the business in measurable ways. The new role of HRM involves strategic direction and HRM metrics and measurements to demonstrate value.
Human Resource Management features include:
- Organizational management
- Personnel administration
- Manpower management
- Industrial management.
HRM functions are changing business environment
- Conducting job analyses (determining the nature of each employee’s job).
- Planning labour needs and recruiting job candidates
- Recruitment
- Selecting job candidates
- Orienting and training new employees
- Managing wages and salaries (compensating employees)
- Providing incentives and benefits
- Appraising performance
- Communicating (interviewing, counselling, disciplining)
- Training and developing managers
- Building employee commitment.
Challenges in HRM in changing Environment
- Environmental Challenges - Environmental challenges refer to forces external to the firm that are largely beyond management’s control but influence organizational performance. They include: rapid change, the internet revolution, workforce diversity, globalization, legislation, evolving work and family roles, and skill shortages and the rise of the Service sector. Six important environmental challenges today are:
- Rapid Change - If they are to survive and prosper, they need to adapt to change quickly and effectively. Human resources are almost always at the heart of an effective response system.
- Work force diversity - Firms that formulate and implement HR strategies that capitalize on employee diversity are more likely to survive and prosper.
- Globalization - One of the most dramatic challenges facing as they enter the twenty-first century is how to compete against foreign firms, both domestically and abroad. Weak response to international competition may be resulting in upwards layoffs in every year. Human resources can play a critical role in a business's ability to compete head-to-head with foreign producers.
- Legislation - How successfully a firm manages its human resources depends to a large extent on its ability to deal effectively with government regulations. Operating within the legal framework requires keeping track of the External legal environment and developing internal systems to ensure compliance and minimize complaints. Many firms are now developing formal policies on sexual harassment and establishing internal administrative channels to deal with alleged incidents before employees feel the need to file a lawsuit.
- Technology - The world has never before seen such rapid technological changes as are presently occurring in the computer and telecommunications industries. One estimate is that technological change is occurring so rapidly that individuals may have to change their entire skills three or four times in their career.
- Skill Shortages and the Rise of the Service Sector - Expansion of service-sector employment is linked to a number of factors, including changes in consumer tastes and preferences, legal and regulatory changes, advances in science and technology that have eliminated many manufacturing jobs, and changes in the way businesses are organized and managed.
- Organizational Challenges - Organizational challenges refer to concerns that are internal to the firm. However, they are often a by-product of environmental forces because no firm operates in a vacuum. These issues include: Competitive position (cost, quality, and distinctive capability), decentralization, downsizing, organizational Restructuring, self-managed work teams, small businesses, organizational culture, technology, and Outsourcing. HR policies can influence an organization's competitive position by Controlling costs, improving quality, and creating distinctive capabilities, Restructuring
- Individual Challenges - Human resource issues at the individual level address the decisions most pertinent to specific employees. These individual challenges almost always reflect what is happening in the larger organization. For instance, technology affects individual productivity; it also has ethical ramifications in terms of how information is used to make HR decisions (for example, use of credit or medical history data to decide whom to hire). The individual issues include matching people and organization, ethics and social responsibility, productivity, empowerment, brain drain, and job insecurity.
Different Perspectives of HR Management
- The Normative Perspective - The normative perspective of human resource management bases itself on the concepts of hard HRM and soft HRM.
- Hard HRM - Hard HRM is the basis for the traditional approach toward human resource management. It stresses the linkage of functional areas such as manpower planning, job analysis, recruitment, compensation and benefits, performance evaluations, contract negotiations, and labor legislations to corporate strategy. This enforces organization interests over the employees' conflicting ambitions and interests.
- Soft HRM -Soft HRM is modern approach to strategic human resource management. This model considers human capital as assets rather than resources and lays stress on organizational development, conflict management, leadership development, organizational culture, and relationship building as a means of increasing trust and ensuring performance through collaboration. This approach works under the assumption that what is good for the organization is also good for the employee.
- The Critical Perspective - The critical perspective of human resource management is a reaction against the normative perception. This perspective espouses a gap between rhetoric, as organizations claim to follow soft HRM policies when they actually enforce hard HRM.
- The Behavioural Perspective - This theory holds that the purpose of human resource intervention is to control employee attitudes and behaviours to suit the various strategies adopted to attain the desired performance. This perspective thus bases itself on the role behavior of employees instead of their skills, knowledge, and abilities.
- The Systems Perspective - The systems perspective describes an organization in terms of input, throughput, and output, with all these systems involved in transactions with a surrounding environment. The organized activities of employees constitute the input, the transformation of energies within the system at throughput, and the resulting product or service the output. A negative feedback loop provides communications on discrepancies.
- Agency or Transaction Cost Perspective - the agency or transaction cost perspective, which holds the view that the strong natural inclination of people working in groups is to reduce their performance and rely on the efforts of others in the group. When one person delegates responsibility to another person, conflicts of interests invariably arise. The human resource department needs to adopt the approach that minimizes transaction cost to the organization.
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