Human resource management (HRM) is the practice of recruiting, hiring, deploying, and managing an organization’s employees. HRM is often referred to simply as human resources (HR). A company or organization’s HR department is usually responsible for creating, putting into effect, and overseeing policies governing workers and the relationship of the organization with its employees. The term human resources were first used in the early 1900s, and then more widely in the 1960s, to describe the people who work for the organization, in aggregate.
HRM is employee management with an emphasis on those employees as assets of the business. In this context, employees are sometimes referred to as human capital. As with other business assets, the goal is to make effective use of employees, reducing risk and maximizing return on investment (ROI).
The modern HR technology term human capital management (HCM) has been used more frequently compared to the term HRM. The term HCM has had widespread adoption by large and midsize companies and other organizations of software to manage many HR functions.
What is the importance of HRM?
The role of HRM practices is to manage the people within a workplace to achieve the organization’s mission and reinforce the culture. When done effectively, HR managers can help recruit new professionals who have the skills necessary to further the company’s goals as well as aid with the training and development of current employees to meet objectives.
A company is only as good as its employees, making HRM a crucial part of maintaining or improving the health of the business. Additionally, HR managers can monitor the state of the job market to help the organization stay competitive. This could include making sure compensation and benefits are fair, events are planned to keep employees from burning out and job roles are adapted based on the market.
How does HRM work?
Human resources management works through dedicated HR professionals, who are responsible for the day-to-day execution of HR-related functions. Typically, human resources will comprise an entire department within each organization.
HR departments across different organizations can vary in size, structure, and nature of their individual positions. For smaller organizations, it is not uncommon to have a handful of HR generalists, who each perform a broad array of HR functions. Larger organizations may have more specialized roles, with individual employees dedicated to functions such as recruiting, immigration and visa handling, talent management, benefits, compensation, and more. Though these HR positions are differentiated and specialized, job functions may still overlap with each other.
Functions of HRM:
- Recruitment: This is the most challenging task for any HR manager. A lot of attention and resources are required to draw, employ and hold the prospective employees. A lot of elements go into this function of recruitment, like developing a job description, publishing the job posting, sourcing the prospective candidates, interviewing, salary negotiations and making the job offer.
- Training and Development: On the job training is the responsibility of the HR department. Fresher training may also be provided by some companies for both new hires and existing employees. This Fresher training is mainly done to make the employees up to date in their respective areas as required by the company. This function makes the employees understand the process and makes it easy for them to get on their jobs with much ease. During the process of the training and development, the results are monitored and measured to find out if the employees require any new skills in addition to what he/she has.
- Professional Development: This is a very important function of Human Resource Management. This function helps the employees with opportunity for growth, education, and management training. The organization undertakes to sponsor their employees for various seminars, trade shows, and corporal responsibilities. This, in turn, makes the employees feel that they have been taken care of by their superiors and also the organization.
- Compensation and Benefits: A company can attain its goals and objectives if it can acclimatize to new ways of providing benefits to the employees. Some of the benefits given by companies are listed below for our understanding:
- Working hour flexibility
- Extended vacation
- Dental/Medical Insurance
- Maternal/Paternal Leave
- Education Reimbursement for children
- Performance Appraisal: The employees of any organization will be evaluated by the HR department as per the performance. This function of Human Resource Management is to help the organization in finding out if the employee they have hired is moving towards the goals and objectives of the organization. On the other hand, it also helps the company to evaluate whether the employees need improvement in other areas. It also helps the HR team in drawing certain development plans for those employees who have not met the minimal requirements of the job.
- Ensuring Legal Compliance: To protect the organization this function plays a crucial role. The HR department of every organization should be aware of all the laws and policies that relate to employment, working conditions, working hours, overtime, minimum wage, tax allowances etc. Compliance with such laws is very much required for the existence of an organization.
- Planning: This function is very vital to set goals and objectives of an organization. The policies and procedures are laid down to achieve these goals. When it comes to planning the first thing is to foresee vacancies, set the job requirements and decide the recruitment sources. For every job group, a demand and supply forecast is to be made, this requires an HR manager to be aware of both job market and strategic goals of the company. Shortage versus the excess of employees for that given job category is determined for a given period. In the end, a plan is ascertained to eliminate this shortage of employees.
- Organizing: The next major managerial function is to develop and design the structure of the organization. It fundamentally includes the following:
- Employees are grouped into positions or activities they will be performing.
- Allocate different functions to different persons.
- Delegate authority as per the tasks and responsibilities that are assigned.
- Directing: This function is preordained to inspire and direct the employees to achieve the goals. This can be attained by having in place a proper planning of career of employees, various motivational methods and having friendly relations with the manpower. This is a great challenge to any HR manager of an organization; he/she should have the capability of finding employee needs and ways to satisfy them. Motivation will be a continuous process here as new needs may come forward as the old ones get fulfilled.
- Controlling: This is concerned with the apprehension of activities as per plans, which was formulated on the basis of goals of the company. The controlling function ends the cycle and again prompts for planning. Here the HR Manager makes an examination of the outcome achieved with the standards that were set in the planning stage to see if there are any deviations from the set standards. Hence any deviation can be corrected on the next cycle.
- Top Management Advice: HR Manager is a specialist in Human Resource Management functions. She/he can advise the top management in formulating policies and procedures. He/she can also recommend the top management for the appraisal of manpower which they feel apt. This function also involves advice regarding maintaining high-quality human relations and far above the ground employee morale.
- Departmental Head advice: Under this function, he/she advises the heads of various departments on policies related to job design, job description, recruitment, selection, appraisals.