What is HR Management?

There are three primary types of resources a business needs to withstand in the market. The first is physical resources, including every piece of material and equipment used to get things done. The second is cash, which is the lifeblood of any business. A company needs to generate enough money to cover its expenses and have leftovers to repay the investors and grow the business. And the third one is people; they are the essential asset to a company as they determine the success or failure of running a business through customer experience.

Regardless of the type of business and industry, people are crucial to running an organisation's processes to success. People are responsible for everything; developing business strategies, marketing, analysing, development, selling and much more.

It's safe to say the success of any organisation boils down to how well its people perform. And that's where HR comes into play.

What does HRM mean?

Human resource management (HRM) is the hiring, deploying and managing the people in an organisation. It includes all the processes linked to the workforce, including searching and onboarding suitable candidates, managing their day-to-day needs, giving them benefits, handling their payrolls, and much more.

An organisation's HR department is also responsible for taking every decision tied to people.

Why is HRM important?

As pointed out earlier, an organisation can't succeed if it's not getting the most out of its human resource, arguably the most valuable type of resource. For an organisation to reach its goals, its employees must be collectively focused on the single target and should be working collaboratively to get there. And of course, if the human resource isn't managed in an ideal way, reaching the goals is not possible.

Many medium and large organisations have their in-house HR departments. However, small organisations often don't have the resources to set up their in-house HRM. in such cases; these smaller organisations might also partner with a PEO (professional employer organisation) to fulfil their HR needs.

What does an HR department do?

HR departments handle all the functions associated with employees. Here's a list of the most important of those functions.

Onboarding new candidates

No matter how automated a company's processes are, human force is still needed to drive them. One of HR's primary jobs is to find new, ideal talent for the organisation and bring them in.

This includes planning the hiring process, posting job postings on various recruitment board platforms, managing candidate interview dates, and help identify the right recruits that fit the needs of the organisation.

Throughout the interview process, HR also ensures that the organisation does not exhibit bias when selecting a candidate and that each applicant be given an equal opportunity.

Developing and deploying policies

There have to be specific workplace policies that keep the employees in line. Although HR isn't solely responsible for developing such policies from scratch, it collaborates with other managers and executives to do this task.

Some examples of such policies are dress code, ethics, vacation time, and internet usage.

Training the workforce

Employees tend to stay with organizations where they think their skills are flourishing. And HR must identify the weak points of the workforce and arrange sessions, so it's always progressing in terms of skillset.

Alongside professional training, HR could also provide personal development programs.

Employee retention Strategy

Retention strategies are practices that an organisation follows to maintain its workforce. An organisation’s main reasons for those strategies are to reduce the number of turnover or in other words the amount of employees that leave the company during a certain period.

While a low turnover rate may be healthy depending on the nature of each industry, higher amount of leave can be costly both in terms of money and time. The loss of high performing employees also has the potential to affect team productivity and employee morale, because it requires adjustments to the workflows of the department or team - in particular if the departing employee is a manager or higher.

Compensation management

Retaining an employee is impossible if the compensation package isn't appealing. The HR department has to develop a suitable compensation package for each employee that keeps them happy, plus it isn't too expensive for the organisation to handle. It must be noted that compensation doesn't only include payroll; it also ties in other things like benefits, sick leaves, insurances, bonuses, retirement plans, and others. .

Dealing with legal matters

To avoid any legal issues, every organisation has to comply with specific laws put together by authorities. HR must keep track of those laws and enforce them in the organisation. Some of these may include minimum wage law, worker safety law, and healthcare law.

Appraisal System

An Appraisal is an analysis of a person's performance, which usually includes an evaluation of the individual's current and previous work performance. In terms of legislation, there are two primary reasons for the assessment process. The first is the goal of control, which is to make decisions on compensation, promotion and careers. The second is the determination of an individual's development needs.

Disciplinary procedure

A disciplinary proceeding is an official means by which an employer can deal with an employee's unacceptable or improper behaviour or performance.

Before initiating the disciplinary procedure, the employer should first determine whether the matter can be resolved informally. In many cases, this is the fastest and easiest solution.

There are different ways the employer could solve the issue with their employee, and here are the most common ways;

• Have a private discussion with them and any other relevant staff.
• Taking the time to listen to their point of view
• Agreeing to make any improvements
• Implementation and monitoring of performance improvement plan (PIP) if the issue is performance related.

Formal Grievance procedure

When an employee has attempted to resolve an issue or concern informally with their employer but is not satisfied, they may file a formal complaint in writing. The employer should have a written grievance procedure that states what their employees should do and what will happen at each process stage. After raising the grievance, you'll have a meeting to discuss the issue.

Some workplaces have their grievance procedure which, in that case, they should follow the Acas code and be in writing while also making it easy to find for their employees.

Final takeaways

To achieve the desired levels of success, an organisation has to manage its human resource in the best way possible; HRM helps the organisation achieve that goal by taking care of various aspects of hiring and managing people.

This article gives you an insight into how important HRM is and what a standard HR department does for its home organisation.