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What is the purpose of a company?
To use resources, capital, investments, and knowledge to execute an idea. But who uses these resources? It’s the people. The workers. The employees. And this is where HRM or Human Resource Management comes into play.
What is Human Resource Management (HRM)?
In the past, HRM had more of an administrative role. Its duties were mostly ensuring forms were correctly filled, processing payroll, arranging company outings, etc. However, it has gone through series of changes, specifically in the last 20 years.
It has molded HRM from an administrative to a strategic role. From its many lists of important duties, the fundamentals are:
· Streamlining the entire process of employing people.
· Training new as well as old employees.
· Compensating them appropriately for their jobs.
· Putting in place the policies related to the workplace and
· enforcing them legally through contractual obligations. And finally,
· developing strategies to reduce turnover and retain employees for the long-term.
The Role of Human Resource Management
The world of human resources is filled with high rewarding opportunities. This is why many people recommend pursuing a career in HR management. You can read here 5 reasons why you should study HR management. Here are some key responsibilities of HRM which give this career incredible value.
1. Staffing and organizing the entire hiring process.
Obviously, you need people to run a company. And not just any type of people, you need competent people as well. Those that have the skills and can fit into the culture of the company. HRM is responsible for this task. Therefore, HRM takes care of:
· Forming a staffing plan and deciding the number of workers for a task depending on available resources.
· Setting workplace policies while also catering for diversification.
· Recruiting competent employees for job positions.
· Negotiating and setting appropriate salary packages for the new and old employees.
2. Setting up workplace policies.
HRM is also responsible for setting up workplace policies. It is vital that these policies be in line with the company’s vision and do not violate any ethical or legal rights. For example, some policies are:
· Fair-pay policy,
· Discipline process policy,
· Grievance policy,
· Ethics policy,
· Internet usage policy, etc.
3. Compensations and Benefits
HRM professionals are also responsible to ensure employees are fairly compensated for their jobs. The compensation should be aligned according to the task difficulty and it should be market competitive.
While it should also be ensured that the company itself does not get overburdened and can continue its functions applicably. Some common examples of employee compensations and benefits are:
· Health Benefits,
· Retirement Plans,
· Vacation time and sick leave,
· Yearly or Occasional Bonuses, etc.
4. Employee Retention
There is no doubt about the importance of employee retention. No company wants to go through the entire hiring process over and over again. It affects loyalty and costs the company both in terms of time and money.
This is because the hiring process is time-consuming and getting the new recruits ready for their job requires training. This causes extra time and training money. Besides, the more hours spent on training employees are the hours when productive work could have been accomplished.
This is why it is necessary HRM focuses on keeping and motivating employees to stay with the firm. They can do this by taking care of some of the following problems – these are the reasons why 90% of employees leave a firm.
· Unsatisfying job.
· Problems in the workplace or with the workplace.
· Problems with supervisors.
· Unmatching employee and company culture.
Human Resource Management Very Important Organ
HRM is undoubtedly the most important organ of a firm. It has tremendous direct and indirect duties. Its role in streamlining and optimizing company processes is necessary to achieve individual and organizational successes. The 4 key roles discussed above would be enough to convince anyone of its importance.