Human Resource Management

Entrepreneurship
 Human Resource Management
• Involves the productive use of people in achieving:
• The organization's strategic objectives
• The satisfactions of individual employees needs
“ HRM is the management function that deals with
recruitment, placement, training, development,
compensating and firing of employees.”
• Human Resource Management, or HRM, is the practice of
managing people to achieve better performance.
 HRM Examples
• For example, if you hire people into a business, you are
looking for people who fit the company culture as they will
be happier, stay longer, and be more productive than people
who won’t fit into the company culture
• Another example is engagement. Engaged employees are
more productive, deliver higher quality work and make
customers happier. This means that if we can find ways to
make employees more engaged, we help the company
 Importance of HRM
▪ Our world is an organizational world. We are surrounded
by organizations and we participate in them as members,
employees. Most of our life is spent in organization, and
they supply the goods and services on which we depend
to live. Organizations on the other hand depend on
people, and without people, they would disappear
▪ The HR department provides the knowledge, tools,
training, legal advice, administration, and talent
management, which is crucial to sustaining and
advancing a company
 Why HR Management System is
beneficial for an Organization
▪ HR Management can
transform the
environment and
productivity of your office
in an incredible manner
▪ The fact that it directly
handles the most
essential assets of a
company – their
employees, highlights
how important it is to
maintain a prompt and
advanced HR system
 What is a Human Resource?
▪ Human Resources are all the people that in one capacity
or another work for or contribute to an organization
▪ These people make up a company’s workforce. They can
be regular employees, for example, but also contractors
▪ These people include independent contractors, workers
provided by contract firms, on-call workers, and
temporary help agency workers
 5 Human Resource Management
Basics
• Recruitment & selection
• Performance management
• Learning & development
• Succession planning
• Compensation and benefits
• Human Resources
Information Systems
• HR data and analytics
 5 Human Resource Management
Basics
1. Recruitment & selection
• Recruiting candidates and selecting the best ones to come
and work for the company is a key HR responsibility. People
are the lifeblood of the organization and finding the best fits
is a key task
2. Performance management
• Performance management is the second HR basic. It
involves helping people to become their best selves at work,
boosting the company’s bottom line
• Examples are formal one-on-one performance
reviews, 360-degree feedback instruments that also
take into account the evaluation of peers, clients, and
other relations, and more informal feedback
 Cont…….
3. Learning & development
• People are the product of life experiences, the country and
era they grow up in, and a range of cultural influences.
• Within HR, learning and development ensure that employees
adapt to changes in processes, technology, and societal or
legal shifts
4. Succession planning
• Succession planning is the process of planning contingencies
in case of key employees leaving the company.
• If, for example, a crucial senior manager quits his/her job,
having a replacement ready will guarantee continuity and
can save the company significant money
 Cont…..
5. Compensation and benefits
• Fair compensation is key in motivating and retaining
employees. One of the fundamentals of human resource
management concerning pay is ensuring equity and fairness
• Compensation comprises primary compensation and
secondary compensation
• Primary compensation involves directly paid money for
work, which often is a monthly salary and sometimes
performance-based pay
 Tools for Improvement of HR
1. Human Resource Information System
• The last two HR basics are not HR practices but tools to do
HR better
• Human Resource Information System (or HRIS) supports all
the cornerstones discussed above
• For example, for recruitment and selection, HR professionals
often use an Applicant Tracking System, or ATS, to keep track
of applicants and hires
• For performance management, a performance management
system is used to keep track of individual goals and put in
performance ratings
• In L&D, a Learning Management System (LMS) is used for the
distribution of content internally, and other HR systems are
used to keep track of budgets and training approvals
 Cont……
2. HR data and analytics
• The data in these systems can be used to make better and
more informed decisions
• Using HR analytics, HR can also make predictions
• Examples include workforce needs, employee turnover
intention, the impact of the (recruitment) candidate
experience on customer satisfaction, and many others
 The 12 Key Functions of Human
Resources
• HR has many important functions in the organization. These
include recruitment, performance management, learning
and development, and many more
• According to Storey (1995):
“HRM is a distinctive approach to employment management
that seeks to achieve competitive advantage through the
strategic deployment of a highly committed and capable
workforce, using an integrated array of cultural, structural, and
personnel techniques"
 1. Human resource planning
• The first HR function is all about knowing the future needs
of the organization
• What kind of people does the organization need, and how
many?
• Knowing this will shape recruitment, selection, performance
management, learning and development, and all other
human resources functions
• Human resources planning is similar to workforce planning.
Both focus on where the organization is today and what it
needs to be successful in the future
 2. Recruitment and selection
• The second HR function involves attracting people to work
for the organization and selecting the best candidates.
• With a strong employer brand and the right sourcing
strategies, you’re already halfway there. Once candidates
apply, the selection process is an HR instrument to pick the
best qualified and highest-potential candidates
• Technological developments in recruitment have gone very
fast and as a result, there are different types of recruitment
tools for each part of your recruitment funnel
 Recruitment
SOURCES
• Using appropriate media
• Local or national newspapers
• Employment agency
• Specialist recruitment media
• Job centers
METHODS
• Internal Advertisement
• External Advertisement
 Tools Of Selection Process
1. Announcement of the job position
2. Acceptance of the application forms
3. Screening tests of the candidates ( minimum requirement)
4. Screening of the application
5. Written tests / Process of examination
6. Employment face to face interview
7. Medical process
8. Letter of appointment
 3. Performance management
• Performance management is essential in ensuring that
workers stay productive and engaged
• Good performance management involves good leadership,
clear goal-setting, and open feedback
• Performance management tools include the (bi)annual
performance review, in which the employee is reviewed by
his/her manager
• It also includes 360-degree feedback tools in which peers,
managers, subordinates, and sometimes even customers
review the employee’s performance. These kinds of tools can
be very helpful in providing feedback
 4. Learning and development
• Enabling employees to develop the skills they need for the
future is an essential responsibility for HR
• Traditionally, organizations have a set budget for learning
and development. This budget is then distributed among its
employees
• In the UK, for example, companies with an annual pay bill of
more than £3 million pay a mandatory rate of
0.5% designated for the professional education of their
employees
• Despite the differences in regulation, almost all employers
understand the value of investing in the (future) skills of
their employees
 5. Career planning
• Career planning, guidance, and development for employees,
together also referred to as career pathing
• Showing employees how their ambition can align with the
future of the company helps to engage and retain them
• For the organization, there are the benefits of better
succession planning, higher productivity, and a stronger
employer brand
 6. Function evaluation
• Function evaluation is a technical aspect of HR
• By evaluating the HR function, the department ensures that
the company is successful at both a strategic level and with
service delivery and support.
• This can include the quality, and availability of workers, job
location, working times, the economic situation, job
responsibilities, and how much value a job adds to your
organization
• The idea behind function evaluation is that similar jobs
should be rewarded similarly.
 Internally ranking functions
• Ranking method in which functions are paired and raters
have to decide which one is more valuable. This is done with
all functions and based on the outcome
• Classification method classifies jobs different
categories based on education, experience, degree of
specialized skills to do a job and demand for these skills
• Points method classifies jobs according to the factors the
organization believes contribute most to its success like key
competencies, like problem-solving, technical knowledge,
communication and innovative capability, business acumen
• Personal method- the job itself is not evaluated but the
person doing the job is
 7. Rewards
• Compensation and benefits are integral to attracting the
right kind of candidate for the role, and company. These will
vary across different fields, countries, and cultures
• Rewards include salary but also growth and career
opportunities, status, recognition, a good organizational
culture, and a satisfying work-life balance
• For example, fantastic colleagues and meaningful work are
also rewarding to employees. The monetary reward of the job
consists of financial rewards and other (secondary) benefits
 Why are rewards important?
• Motivation and
performance levels
• Commitment to the
organization
• Job satisfaction and
engagement
 8. Industrial relations
• Maintaining and cultivating relationships with labor unions
and other collectives, and their members
• Maintaining good relations with unions will help to spot
and resolve potential conflicts quickly
• It will also be beneficial in more difficult economic times
when layoffs or other actions are required
 9. Employee participation and
communication
• One of the key roles of HR is to be a credible activist for the
employees
• Employees need to be informed and heard on different
topics that are relevant to them
• Communication relates to spreading information relevant to
employees
 10. Health and safety
• HR plays an important role in creating and implementing
health and safety regulations
• Making these regulations part of the company culture is one
of the main functions of HR.
• A famous example is oil company Shell where it is forbidden
to walk the stairs without holding the railing – also in the
company’s HQ. This is part of Shell’s ‘Goal Zero’, which
stands for zero accidents
 11. Personal wellbeing
• HR has a function in assisting and taking care of employees
when they run into personal problems
• Personal wellbeing is about supporting employees when
things don’t go as planned. Problems in the workplace and
outside can negatively impact employee performance,
engagement, and productivity. This, in turn, harms a
company’s bottom line
• For example, a company may offer an employee assistance
program by which anyone with mental health issues, can
access counseling
 12. Administrative responsibilities
• These include personnel procedures and Human Resource
Information Systems
• Personnel procedures involve the handling of promotions,
relocations, discipline, performance improvement, illness,
regulations, cultural and racial diversity, unwanted
intimacies, bullying, and so on
• For each of these situations, policies and procedures need to
be developed and followed to successfully comply with the
requests, or overcome these challenges