Critical Success Factors for Human

Resource Departments
 Small Business
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 Business Planning & Strategy
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 Success Factors
ByJan Simon
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Businesses rely on human resources departments to handle key functions
associated with employee hiring, compensation and relations. To add value and
support the success of the company, HR professionals must understand the
business, develop and execute functional competencies, and serve as internal
consultants to management. Key areas supported by HR departments involve
workforce planning and staffing, managing direct and indirect compensation
schemes, employee relations, performance management, training and legal
compliance.

Sourcing and Consulting

The correct job placement is a big part of any company's success. Hiring talented
individuals is only part of the equation. Placing the right person in the right position
is important as well. Screening and recruiting qualified employees is a core
responsibility of the HR department. To properly identify potential candidates, HR
professionals must understand the needs of the organization. This means your
business should create accurate job descriptions and identify the skills, knowledge
and experience level of the required personnel. The HR department's job is to
maximize company funds by recruiting new hires and assisting line managers in the
evaluation of current staff for promotions and lateral movement.

Competitive and Equitable Compensation

Employee recruitment, retention and overall morale depend on sound
compensation practices. HR departments must create, monitor and maintain
company pay scales that are both competitive and equitable. This begins with job
analysis. HR staff should properly categorize all positions into exempt and non-
exempt status in accordance with the Fair Labor Standards Act. Another key task is
to audit salaries to make sure employees are treated equitably and not
discriminated against in any way. HR staff should also help ensure that managers
and sales people are offered competitive compensation plans to keep them
motivated. The HR department often designs and monitors the administration of
these plans.

Performance Evaluation and Training

A manager's role includes motivating and coaching staff, defining the behaviors
essential to support success, and evaluating employee performance. HR
professionals help support line management by creating and implementing
performance appraisal systems. As internal consultants, HR personnel collaborate
with managers by reviewing performance issues and assisting management with
performance improvement processes. Additionally, some companies have HR staff
design and deliver training programs that accelerate employee development.

Overseeing Compliance
Lawsuits, fines and penalties affect the financial health of a business. Complying
with federal and state labor legislation is mandatory in any successful business. A
prime responsibility of human resources involves creating employee manuals that
communicate appropriate behaviors in the workplace. Educating the workforce on
zero tolerance policies regarding discrimination and harassment enforces the
requirement of fair and equitable treatment of all employees. HR staff must keep
abreast of labor laws and continually monitor and audit the organization’s
employment practices.