Human Resource Management definition
For many years among the issues critical for survival of any business were considered its financial health, company competitiveness and positioning, product and market development, minimizing costs and improving customer relations. Nowadays, more companies recognize that managing people within the organization is no less important than creating a competitive product or launching a successful promotional campaign. Therefore, Human Resource Management (HRM), which concerns the management of personnel, is more often recognized as a fundamental element in any organization. It has become a common notion that an organization’s greatest assets are its people; therefore only effective management of its personnel allows organizations to achieve their goals and objectives.
Once known as Personnel Administration, the discipline of Human Resource Management is continually evolving and expanding. The change in title reflects the way the discipline has moved from being largely administrative in nature to being a strategic and dynamic management function that is entitled to respond to changes in the business environment. The strategic aspect of Human Resource Management has outgrown the boundaries of a departmental concern, and nowadays the main challenge Human Resource Management faces is aligning its planning and operations activities with the general goals and objectives of the company as whole.
Importance of Human Resouce Management
Very often traditional company structure prevents HRM department from actively participating in strategic decision-making. Matters relating to the labor force may be lower down on corporate agenda rather than being front running items – unless they are cost cutting issues. Yet managers may endeavor to define Human Resource Management strategies particularly where there is a belief that investment in the quality and enthusiasm of the work force will add to competitiveness, quality and overall business performance.
For HRM specialists to be valued members of the strategic management group they must be able to offer value added expertise which will contribute to the development and implementation of the firm’s strategic policies and programs. If they contribute such expertise and if it is valued by the senior management of a firm, then personnel specialists will be accepted into the strategic decision-making circle. Proving its ability to have a say in corporate strategic planning is the main challenge facing Human Resource Management function today. This task requires HRM managers to become specialists in areas that far exceed the limits of personnel management and requires the knowledge of business administration, corporate politics and strategic development.
Such is the scale and complexity of the human resource element that the firm has to have the right kind of vision, understanding of staffing issues, organized and coordinated programs relevant to the changing objectives of the business. This is where personnel managers as members of a strategic management team can contribute to shaping how the business as a whole interprets and copes with environmental change – where this relates to employees and employee performance. Here the personnel manager must be a business person – able to relate employees to the competitive imperatives and financial demands of the business. One holding this position should be able to conduct continuing “company diagnostics”, determining whether changing business circumstances demand efficient personnel improvements, re-engineering organizational procedures or corporate culture, as well as constantly maintaining company’s capacity for action in ever-changing environment.
Human Resource Management functions
The goal of strategic analysis, which is performed as a part of the company’s Human Resource Management plan, is to support and reinforce the department’s objectives, and programs, and identify key challenges. Departmental strategic objectives, direction and critical success factors should be coherent with the company’s vision, mission, values, corporate business plan and strategic programs. Human Resource Management strategies are represented by management’s commitments to objectives, policies and practices relating to the people they employ. They can be informal, or formally defined; unwritten and exemplified by how “the management” speaks and acts, and sometimes even volatile. If HRM strategy is defined and documented this is likely to stem from deliberate analysis and a desire to make such policies and programs integral to the realization of goals defined by other strategies – financial, production, customer and marketing. With strong articulation of employment strategies the organization emphasizes that without these, the achievement of business objectives across all its strategic programs may be vulnerable.
Strategic direction is where the department, and the services it plans to provide as a part of the larger organization, is heading towards. This trend should not only correlate with the strategic direction of the company, but also strengthen its positions on the way to achieving corporate goals. Critical success factors are the factors that determine whether the strategic objectives will be achieved; e.g. if employee satisfaction is an objective, then encouraging employee feedback and establishing a fair reward system are critical success factors. Another important consideration is recognizing strategic challenges the department might face, which consist of both internal challenges such as internal organizational issues, and external challenges such as responding to changing public expectations. Then, based on the departmental objectives, direction and key challenges the decision-makers would be able to identify the set of strategic issues that need to be solved. Not all the issues will be of equal importance or urgency. They need to be prioritized with the input of the top management team. Prioritizing the issues helps ensure that the HRM Plan focuses on the department’s most critical issues. Department’s top managers should also be involved in confirming and prioritizing the issues compiled to date, as well as in giving input on the actions that should be taken to address the key issues. Involving top management in prioritizing HR issues and identifying actions is critical because it helps ensure that HRM recommendations are feasible within the constraints of the department and develops top management commitment to and ownership for the HRM Plan implementation. Confirmation of the plan by top management would also ensure their higher efforts in implementing the programs outlined in the plan, as well as their stable financing.
Human Resource Management planning is not a strictly specialized field – both line managers and HR professionals should work as partners to ensure that an integrated HR planning process occurs. The outcome of this collective effort is a strategic plan highlighting HR practices that are priorities for accomplishing business results. Employees need to be invested in, informed, communicated with, consulted and morally involved in the business, or empowered. They should not feel as members who are pushed into doing something they do not want to do. When many people contribute, this creates the feeling of ownership and commitment, unites the team in their effort to ensure the best fulfillment of the plan they all drafted. When people feel that they own the outcome of their work, that it’s their own creation, this builds job satisfaction and creates both committed and happy employees.
Use of modern information technologies to support personnel management is another recent trend in HRM strategy. While working in teams, people need to have stable communication channels, established information flow and reporting schemes. Many routine procedures can be greatly facilitated and improved with use of specialized applications, Internet-based services, computer networking and mobile communication. Even though implementing new technologies implies both extra spending and additional personnel training, it both increases work productivity and job satisfaction, as people feel they are learning new skills and their work conditions are improved. On-line recruitment both increases the pool of prospective applicants and lowers recruitment costs, providing the company with flexible selection process and efficient candidate processing systems. Centralized database systems reduce paperwork and data redundancy, allow for more integrated work effort in shorter time periods. Contemporary communication systems such as intra- and Internet chat rooms, e-mail and voice mail, teleconferencing and mobile telephony allow people across the globe to get instantly connected and conduct real-time meetings and interactive discussions without being bothered by distances and even language differences. Internet technology allows for various flexible working schemes such as home offices, remote assistance, distance learning and the like. There are numerous web-based tools developed for climate surveys that makes it effortless to do customer and employee satisfaction surveys and include flexible administration tool as well as reporting facilities, allowing to get instant reports on employee satisfaction without risking the anonymity of individual people.
Strategic HR management nowadays involves ambiguity, the non-routine, organization-wide implications and significant rather than small-scale change. Strategic needs must be analyzed, objectives agreed and translated into everyday programs, which devolve to line managers for implementation. Qualified personnel is required to carry out departmental strategic planning and aligning it with corporate goals and objectives in the changing business environment. Information systems are needed to keep the staff involved and committed. Success of strategic HR management can be measured in terms of business results and translated into added value for the firm.