CHAPTER 1

HUMAN RESOURCE MANAGEMENT

Human resource management (HRM or HR) is essentially the management of human
resources. It is a function in organizations designed to maximize employee performance in
service of an employer’s strategic objectives. HR is primarily concerned with the
management of people within organizations, focusing on policies and on systems. HR
departments in organizations typically undertake several activities, including employee
benefits design, employee recruitment, training and development, performance appraisal, and
rewarding (e.g., managing pay and benefit systems). HR also concerns itself with
organizational change and industrial relations, that is, the balancing of organizational
practices with requirements arising from collective bargaining and from governmental laws.
OBJECTIVES OF HRM
1. Define an Organizational Structure which Drives Productivity
Hiring the right talent for the task is only a small part of the challenge. Once an organization
has captured the talent it then needs organizational structures and practices in place to nurture
staff skills and maximize the return on investment in human capital. The kind of structures
required for a highly technical manufacturing unit will necessarily be very different from the
structure of an academic institution, or a hospital, or retail consumer-facing unit. It’s thus the
job of HR to recognize the optimal structures that need to be in place for a wide range of
work environments.
2. Developing Effective Coordination and Communication within the Organization
The 16th-century poet John Donne is possibly best known today for the phrase ‘No Man is an
Island’. It alludes to the idea that people do pretty badly when isolated from others. They
need to be part of a community in order to survive. We are, after all, the most social of
animals.
Thus, in isolation from fellow staff, it is fairly obvious that many people would struggle. It,
therefore, falls to Human Resources to ensure that staff hired for their skills to aid in
achieving wider corporate objectives, must be given a framework that helps them succeed.
HR must foster a hierarchy which achieves the best communication within and between
the departments that make up any business.
3. Dedicate Time to Finding the Right Staff and Developing Their Skills Base
We live in some of the most fluid and dynamic times for employers and employees. People
increasingly expect to acquire new skills to remain relevant in the employment market, whilst
employers are constantly looking to staff as a key part of the business’s competitive
advantage.
HR,  then, must not only find the right staff to mesh with the strategic course the business is
taking, but then ensure that these employees are given the skills to remain valued and
valuable to companies seeking to compete in an ever-more competitive landscape.
Employees find themselves operating in ‘knowledge economies’ where lifelong learning has
become the norm and HR, to be effective, must be matching, if not exceeding, their
competitive counterparts.
4. Embracing Wider Societal and Ethical Developments
HR, more so than at any time in the evolution of employment practices, should not only be
inward-looking at the structure, communication, and training of staff but also be conscious of
the rapid cultural and societal changes affecting the work environment.
HR needs to understand how demographic, technological and other important societal
changes, including a potential workforce living longer than ever before, affect business. It
means a constant state of disruption and reinvention as HR explores new ways of working.
For example, the rise of expert systems and AI may mean a radical change in employment
practices, both releasing human capital to focus on tasks that smart systems cannot perform,
whilst rationalizing roles and potentially reducing headcount.
Such changes inevitably hit on important ethical and societal questions which will
increasingly require strategic thought and practical implementation as technologies
revolutionize the world of work.
Core Functions of HR
Human resources (HR) professionals conduct a wide variety of tasks within an organizational
structure. A brief rundown on the core functions of human resource departments will be
useful in framing the more common activities a human resource professional will conduct.
The core functions can be summarized as follows:
Staffing
This includes the activities of hiring new full-time or part-time employees, hiring contractors,
and terminating employee contracts.
Staffing activities include:
 Identifying and fulfilling talent needs (through recruitment, primarily)
 Utilizing various recruitment technologies to acquire a high volume and diverse pool
of candidates (and to filter them based on experience)
  Protecting the company from lawsuits by satisfying legal requirements and
maintaining ethical hiring practices
 Writing employee contracts and negotiating salary and benefits
 Terminating employee contracts when necessary
Training and Professional Development
On-boarding new employees and providing professional development opportunities is a key
investment for organizations, and HR is charged with seeing that those efforts and resources
are well spent and utilized.
Development activities include:
 Training and preparing new employees for their roles
 Providing training opportunities (internal training, educational programs, conferences,
etc.) to keep employees up to date in their respective fields
 Preparing management prospects and providing feedback to employees and managers
Compensation
Salary and benefits are also within the scope of human resource management. This includes
identifying appropriate compensation based on role, performance, and legal requirements.
Compensation activities include:
 Setting compensation levels to be competitive and appropriate within the market,
using benchmarks such as industry standards for a given job function
 Negotiating group health insurance rates, retirement plans, and other benefits with
third-party providers
 Discussing raises and other compensation increases and/or decreases with employees
in the organization
 Ensuring compliance with legal and cultural expectations when it comes to employee
compensation
Safety and Health
HR managers are also responsible for understanding and implementing the best safety and
health practices in their industry and addressing any relevant employee concerns.
Safety and health activities include the following:
 Ensuring compliance with legal requirements based on job function for safety
measures (i.e., hard hats in construction, available counseling for law enforcement,
appropriate safety equipment for chemists, etc.). Many of these requirements are
specified by the Occupational Safety and Health Administration (OSHA).
  Implementing new safety measures when laws change in a given industry
 Discussing safety and compliance with relevant government departments
 Discussing safety and compliance with unions
Employee and Labor Relations
Defending employee rights, coordinating with unions, and mediating disagreements between
the organization and its human resources are also core HR functions.
Employee and labor relations activities include:
 Mediating disagreements between employees and employers
 Mediating disagreements between employees and other employees
 Investigating claims of harassment and other workplace abuses
 Discussing employee rights with unions, management, and stakeholders
 Acting as the voice of the organization and/or the voice of the employees during any
broader organizational issues pertaining to employee welfare
 CHAPTER 4
STRATEGIC HUMAN RESOURCE PLANNING
To improve the strategic alignment of staff and other resources, it is essential to understand
how a strategic HR planning process works. At its most basic level, strategic human
resource planning ensures adequate staffing to meet your organization’s operational goals,
matching the right people with the right skills at the right time.
It is important to ask where your organization stands currently and where it is going to remain
flexible. Each company’s plan will look slightly different depending on its current and future
needs, but there is a basic structure that you can follow to ensure you are on the right track.
The strategic human resource planning process begins with an assessment of current staffing,
including whether it fits the organization’s needs, and then moves on to forecasting future
staffing needs based on business goals. From there, you’ll need to align your organization’s
strategy with employment planning and implement the plan not only to hire new employees
but also to retain and properly train the new hires—and your current employees—based on
business changes.
Read on to learn more about each of the steps of the process in detail to understand the
strategic human resource management planning process in its entirety.
1. Assess Current HR Capacity
The first step in the human resource planning process is to assess your current staff. Before
making any moves to hire new employees for your organization, it is important to understand
the talent you already have at your disposal. Develop a skills inventory for each of your
current employees. You can do this in several ways, such as asking employees to self-
evaluate with a questionnaire, looking over past performance reviews, or using an approach
that combines the two.
2. Forecast HR Requirements
Once you have a full inventory of the resources you already have at your disposal, it is time
to begin forecasting future needs. Will your company need to grow its human resources in
number? Will you need to stick to your current staff but improve their productivity through
efficiency or new skills training? Are there potential employees available in the marketplace?
It is important to assess both your company’s demand for qualified employees and the supply
of those employees either within the organization or outside of it. You’ll need to carefully
manage that supply and demand.
Demand Forecasting
Demand forecasting is the detailed process of determining future human resources needs in
terms of quantity—the number of employees needed—and quality—the caliber of talent
required to meet the company's current and future needs.
Supply Forecasting
Supply forecasting determines the current resources available to meet the demands. With
your previous skills inventory, you will know which employees in your organization are
available to meet your current demand. You will also want to look outside of the organization
for potential hires that can meet the needs not fulfilled by employees already present in the
organization.
Matching Demand and Supply
Matching the demand and supply is where the hiring process gets tricky—and where the rest
of the human resources management planning process comes into place. You’ll develop a
plan to link your organization’s demand for quality staff with the supply available in the
market. You can achieve this by training current employees, hiring new employees, or
combining the two approaches.
3. Develop Talent Strategies
After determining your company’s staffing needs by assessing your current HR capacity and
forecasting supply and demand, it is time to begin the process of developing and adding
talent. Talent development is a crucial part of the strategic human resources management
process.
Recruitment
In the recruitment phase of the talent development process, you begin the search for
applicants that match the skills your company needs. This phase can involve posting on job
websites, searching social networks like LinkedIn for qualified potential employees, and
encouraging current employees to recommend people they know who a good fit might be.
Selection
Once you have connected with a pool of qualified applicants, conduct interviews and skills
evaluations to determine the best fit for your organization. If you have properly forecasted
supply and demand, you should have no trouble finding the right people for the right roles.
Hiring
Decide the final candidates for the open positions and extend offers.
Training and Development
After hiring your new employees, bring them on board. Organize training to get them up to
speed on your company’s procedures. Encourage them to continue to develop their skills to
fit your company’s needs as they change. Find more ideas on how to develop your
own employee onboarding process, and then get started with this onboarding timeline
template. 
Employee Remuneration and Benefits Administration
Keep your current employees and new hires happy by offering competitive salary and benefit
packages and by properly rewarding employees who go above and beyond. Retaining good
employees will save your company a lot of time and money in the long run.
Performance Management
Institute regular performance reviews for all employees. Identify successes and areas of
improvement. Keep employees performing well with incentives for good performance.
Employee Relations
A strong company culture is integral in attracting top talent. Beyond that, make sure your
company is maintaining a safe work environment for all, focusing on employee health, safety,
and quality of work life.
4. Review and Evaluate
Once your human resource management process plan has been in place for a set amount of
time, you can evaluate whether the plan has helped the company to achieve its goals in
factors like production, profit, employee retention, and employee satisfaction. If everything is
running smoothly, continue with the plan, but if there are roadblocks along the way, you can
always change up different aspects to better suit your company’s needs.
Document Your Strategic HR Plan
Now that you know the steps to strategic human resource planning, it is time to adapt those
steps to your own organization and determine how to execute.
There are a number of reasons to document your strategic human resources plan, particularly
in a visual format like a flowchart. Through documentation, you standardize the process,
enabling repeated success. Documentation also allows for better evaluation, so you know
what parts of your plan need work. In addition, a properly documented plan allows you to
better communicate the plan throughout the organization, including how everyone, from the
top down, can contribute to make sure the plan works. 
Document every step of the process, from beginning to end, and find room for improvement
in your human resources process along the way.