What is Human Resource Management (HRM)?
Human resources management is the process of managing people in an organization. It is mainly concerned with peoples’ dimensions in the organization. It means employing people, developing, utilizing, maintaining, and compensating their services with the job and organizational requirements. Employees working in the organization are viewed as a valuable resource. They should be managed effectively to increase productivity and contribute to the ability of the organization to compete in the local and global markets. It is believed that better people achieve better results. Human resource management is concerned with the philosophy, policies, principles, and practices related to human management aspects.
Decenzo and Robbins defined, “Human resource management as a process of four functions- acquiring, development, motivation, and maintenance of human resource.”
According to Byars and Rue, “Human resource management encompasses those activities designed to provide for and coordinate the human resources of an organization.”
In general, the term ‘human resource management’ is the new version of personnel management. Personal management was limited to activities of a single department whereas human resource management cover the entire area of human aspects.
Characteristics of Human Resource Management
Focus on humans:
Human resource management is mainly concerned with the people working in the organizations. It focuses on individuals who possess the energy and capabilities to ensure the jobs are done through people to achieve results. It enhances and uses human potentiality.
A function of management:
Human resource management is a part of management principles and functions. It involves managerial functions such as planning, implementing, and controlling the acquisition, development, utilization, and maintenance of human resources.
Continuous process:
Human resources management is a continuous function focusing on building a competitive workforce in the organization. It is not just concerned with the present but also the features as well. It requires constant awareness of human relations and their importance every day in an organization.
Dynamic:
Human resources is greatly affected by the changes in the environment. Human resources management adopts the changes in the environment and acts accordingly. Thus, they are responsive to different environmental forces. They are dynamic.
Pervasiveness:
Human resource management covers all levels of human resources at work in the organization. It is performed by all levels of management. Human resource work may take different shapes and forms at each level but the basic objective of achieving organizational effectiveness remains the same.
Mutuality:
Human resource management creates a harmonious relationship between the company and workers. In other words, human resource management promotes mutuality between employers and employees, such as mutual goals, mutual influence, mutual respect, mutual rewards, and mutual responsibilities.
Objectives of Human Resource Management
Societal objectives:
The societal objectives are socially and ethically responsible for the needs and challenges of society. While doing so, they have to minimize the negative impact of such demands upon the organization. The failure of organizations to use their resources for society’s benefit in ethical ways may lead to restrictions.
Organizational objectives:
The organizational objectives recognize the role of Human resource management in bringing about organizational effectiveness. Human resource management is not an end in itself. It is not only a means to assist the organization with its primary objectives.
Functional objectives:
Functional objectives try to maintain the department’s contribution at a level appropriate to the organization’s needs. Human resources are to be adjusted to suit the organization’s demands.
Personal objectives:
Personal objectives assist employees in achieving their personal goals because these goals enhance the individual’s contribution to the organization. Employees’ objectives must be met if they are to be maintained, retained, and motivated.
Harmony of goals:
An organization has many departments or divisions. Every department has its own goal to attain. Some of those department goals may be contradictory in nature.
Functions of Human Resources Management
The functions of Human resource management can broadly be classified into two categories. They are managerial and operative functions.
Managerial functions
Managerial functions of Human resource management involve planning, organizing, directing, and controlling. Managerial functions can be explained as:
Planning
Planning functions determine the human resources requirement and changes in advance that will contribute to the organizational goals.
Organizing
The organizing function involves the allocation of tasks among organizational members, identifies relationships, and integrates its activities toward a common objective.
Directing
The crucial function of Human resource management at any level is motivating, commanding, leading, and influencing people.
Controlling
Controlling involves checking, verifying, and comparing the actual with the plans. Various activities of Human resource management need to be verified in other to know that human resource functions are performed according to the predetermined plans.
Operative functions
The operative functions of Human resource management are related to specific activities of HRM such as acquisition, human resource development, compensation, human relations, etc. They can be explained as:
Acquisition
The acquisition means placing the right number of people at the right time in the organization. It consists of the following activities:
- Human resource planning: It is the process of predetermining future human resource requirements. Planning ensures organization that it has the right number of qualified people in the right jobs at the right time.
- Recruitment: Recruitment is seeking and attracting prospective candidates for job vacancies. It stimulates people to apply for the jobs.
- Selection: Selection involves choosing qualified and right persons from among the prospective candidates.
Human Resources Development
Without proper development of human resources, the competencies of employees to handle the job is not possible.
- Employee training: New and existing employees need additional training and skill development to cope with their current jobs. Training can be on-the-job and off the job.
- Management development: Management development is concerned with the enhancement of executives’ conceptual abilities.
Compensation
It is the process of providing equitable and fair remuneration to the employees.
- Job evaluation: It is the process of determining the relative worth of jobs. It is concerned with identifying job evaluation techniques and determining the relative value of jobs in various categories.
- Wages and salary administration: It is the process of developing suitable wage and salary programs.
- Social security measures: It involves providing compensation to those workers who have accidents, sickness, medical benefits pension, etc.
Current Challenges of Human Resource Management
Changing environment is standing as a challenge to human resource managers. Some of the most revealing challenges faced by HRM are as follows:
Globalization
Globalization refers to the tendency of firms to extend their sales or manufacturing to new markets in foreign countries. Many countries of the world have started the globalization process and this globalization of markets and manufacturing has vastly increased international market competition. Business activities have increased across the world, which influences on the HRM policy and practice. Therefore, human resource managers must be familiar with host countries’ attitudes, beliefs, and values.
Technological Change
There have been significant changes in the current skill requirements to work in modern organizations. Due to the increase in information technology, new jobs are created and many old jobs are given new forms. As foreign investment is increasing, the demand for skilled and knowledgeable workers has also increased in great respect.
Workforce diversity
A wide variety of factors such as globalization increasing population, involvement of females and youngsters in new careers, and knowledgeable workers have created a heterogeneous workforce. Such diversity is increasing in developing as well as developed countries. In Nepalese organizations, especially in public enterprises diversity has increased due to the political ideology of the workforce. This has increased the role and responsibilities of human resources managers to handle diversity-related issues and problems at work.
Security of employment
With the terrible events of September 11 in the USA where terrorists attacked the World Trade Center and the Pentagon, the issue of National security has emerged in the business sector. The terrorist attack caused the loss of jobs for over half of a million people in the US alone. Over a million people and thousands of business organizations were affected directly or indirectly. Terrorism is an internal problem facing almost every country directly and indirectly. Human resource managers must make policies or provide greater security and economic benefits to employees and customers to protect the business in the long run.
Contingent workforce
In the dynamic business environment, organizations employ two types of workers. The first group is core employees who are permanent nature or full-time employees. Another group is contingent workers who are hired for shorter periods. These contingent employees are mainly part-time, temporary, and contract workers. To manage human resources in the organization, contingent employees should be treated as strategic employees to fulfill their just-in-time requirements. HR managers will also have the responsibility of adopting them to the organization.
The challenges of HR managers include attracting and retaining skilled contingent workers and managing any conflict between core and contingent workers.
Decentralized worksites
people are no longer needed to work at the office nowadays. knowledge workers have replaced highly skilled jobs and thus work sites are decentralized. With the increasing use of computers, fax, email, and internet networks, employees are not required to stay in the office and work for 8 hours; rather they can work at home and report to the head office with computer linkage. Decentralized worksites reduce space and cost in industrial nations.
Components of Human Resource Management
HRM involves the acquisition, development, motivation, and maintenance of an organization’s human resources. The following are the components or areas of the HRM.
Acquisition
The acquisition means placing the right number of people at the right time in the organization. It consists of the following activities.
Human Resource Planning
It is the process of predetermining future human resource requirements. Planning ensures organization that it has the right number of qualified people in the right jobs at the right time.
Recruitment
Recruitment is the process of seeking and attracting prospective candidates for job vacancies. It stimulates people to apply for the jobs.
Selection
Selection involves choosing qualified and right persons from among the prospective candidates. Job vacancies can be filled from internal or external sources. The selection process may involve reviewing application forms, psychological testing, interviewing, reference checking, etc.
Socialization
The acquisition function is completed when the selected applicants have been placed in the organization and have adapted to the organization’s culture and work environment. This adaptation process is called socialization.
Development
The development component is intended to improve the performance of employees. Without proper development of human resources, the competencies of employees to handle the job is not possible. It involves the following activities.
Employee training
New and existing employees need additional training and skill development to cope with their current job. Training can be on the job and off the job.
Management development
Training emphasizes the development of employees whereas management development is concerned with the enhancement of managers’ conceptual abilities.
Career development
It involves the career paths of employees to match the long-term needs of the individual and the organization.
Motivation
Highly motivated employees tend to be more productive and have lower rates of absenteeism and turnover. Employee motivation is vital to the success of any organization. Motivation components consist of:
Needs satisfaction
The employees of any organization are motivated towards the performance of assigned tasks when their needs are satisfied. Therefore, satisfied employees produce better results.
Performance appraisal
The performance appraisal process and its outcomes will affect an employee’s motivation. Employee effectiveness in achieving goals can be measured through performance on the job.
Reward management
Reward or punishment is determined by performance appraisal which influences motivation. Intrinsic rewards are satisfaction from doing the job itself. Extrinsic rewards include money, promotion, and fringe benefits.
Maintenance
The maintenance component ensures to retention of employees in the organization who are performing at a high level. It is concerned with providing those working conditions, which provide safe and healthful working conditions and satisfactory labor relations. Maintenance components consist of:
Compensation
An employee should be paid what he deserves. The pay structure to the employees should be fair which is also based on job evaluation.
Grievance handling
If the job and conditions of employment are not as promised to them, it will result grievance. Collective bargaining and unions may solve such grievances. A sound industrial relationship is very important to settle the disputes.
Employee welfare
It consists of various activities and programs that promote employee welfare such as safety, health, sports, recreation, and other facilities. Welfare activities play an important role in employees to strengthen the relationships and cooperation