Deloitte research said, 2021 had one of the highest attrition rates in two decades at 21% compared to 12.8% in 2020. So, that raised a critical question – are we doing what needs to be done to retain employees beyond just providing compensation and benefits? 

“You must treat your employees with respect and dignity because, in the most automated factory in the world, you need the power of the human mind. That is what brings innovation. If you want high-quality minds to work for you, then you must protect respect and dignity. “  Mr N.R. Narayana Murthy

We often hear that people are an organization’s greatest resource. Until recently, human resource management wasn’t given as much importance as other functions of an organization like operation, marketing, finance etc. With changing times and business dynamics, Business leaders have come to understand that hiring and retaining the right employees marks the success of their organization. 

Human Resource Management Definition

Human resource management is the process of managing an organization by taking care of functions like recruitment, selection, deployment and the end-to-end management of employees. HRM aims at fostering a culture that reflects core values and empowers employees to increase the productivity of the organisation.  

Every manager in an organization has some role related to Human Resource Management. For example, almost all managers have to deal with motivating, compensating and retaining employees which are a part of human resource management.  

Role of the Human Resource Management

Major roles of human resource management: 

• Role of an administrator- responsible for payroll management, Job description profiles, workplace policy creation and providing benefits packages. 

• As a change manager- they monitor regulations and procedural changes with employees to help maintain the compliance system. 

• The HRM team’s responsibility is to manage people and help resolve conflicts as well as oversee training and development and foster employee engagement.

Objectives of Human Resource Management

Human resource management has 4 main objectives and plays a significant role in an organization.  

Societal objective – HRM consists of different kinds of programs to motivate and encourage employees to work more efficiently. There are programs related to equity, compensation and benefits disability programs etc to encourage better societal relations with each other.  

Functional objective – This varies from one department to the other. It focuses on encouraging employees to work functionally in each department. 

Organizational objectives – Focussed on maximizing the overall growth and increasing profits for the organization while applauding employee performances. 

Personal objectives – The objective is to enhance employee growth with required training and development programs to fulfil the overall goal of the organization.  

Features of Human Resource Management

HRM (Human Resource Management) is important to any fully functional organization. Take a look at some of the key features that make it an essential part of the organization.  

• HRM is employee-oriented. The focus of HRM solely lies on ensuring employee management, engagement and satisfaction. The quicker an HR professional understands that the key to a successful business lies in the happiness of the employees. Happy employees’ equal better productivity.  

• Human resource management encourages employee career growth. A good HRM team will help you find opportunities to leverage your skills and use them to help with the growth of the company.

• A crucial feature of HRM involves crunching data and provide a wealth of accurate, crucial information.  

• HRM not only ensures the development of employees on an individual and organizational level but develops HRM strategies to meet the demands of competitors, management and employees. 

• HRM is universal. As a function, it applies to every type of organization and its needs. That means, whether it’s a two-person operation or a 500-employee operation, HRM is an essential function.  

• A business can be safeguarded from any unexpected fails if there is a fool proof HRM in place guided by the right tools and agile plans.  

Importance of Human Resource Management

There is various reasons why human resource management is important for an organization.  

• Employee satisfaction – With carefully articulated employee surveys, focus groups, and an exit interview strategy, an HRM team helps determine the reasons for employee dissatisfaction and addresses those issues.

• Conflict resolution –  

• Cost saving- HRM ensures that there is a well-thought-out recruitment and selection process, in place which can help in minimizing expenses regarding advertising job postings/ training new employees or onboarding them with benefit plans. 

• Maintaining and heightening the corporate image- To become an employer of choice means human resources responsible for balancing the recruitment, selection and retaining candidates.  

• Runs a sustainable business-HRM is most important to keep a business afloat and running regardless of the size of the organization. 

• Maintaining a better work atmosphere- With HRM in place it’s easier to maintain a healthy company culture that’s agreeable to all employees.

Functions of Human Resource Management

• Job design and analysis  

Job analysis entails assigning and explaining the job duties and responsibilities to an employee and specifying the requirements such as qualifications, skills and work experience needed for the job. Job design is the process of educating them about the organisation, tasks, duties and responsibilities to help them achieve certain objectives.  

• Recruitment and planning

One of the primary functions of the HR department is hiring or recruitment. A full-scale employee recruitment cycle includes an end-to-end recruitment process from start to finish including- identifying, sourcing, selection, screening, conducting interviews, onboarding and post-hiring ongoing support.  

HR planning determines the number of employees required to accomplish organizational goals. After careful research, information is collected and current and future human resources trends are analysed to assess the values, attitudes, and behaviour of employees and how they can impact the organization.  

• Performance management 

Setting clear employee expectations, robust KRA’s to ensure productivity, as well as review employees’ overall performance and contribution to the organization. The inclusion of performance management software with a set of tools that provides 360-degree feedback on employee performance mitigates conflicts and ensures consistent performance leading to lower attrition rates. 

• Learning & Development focus

Help identify the training needs of an employee in the early stages and promote learning and development, to empower and enhance their skills for better career growth at an individual level while encouraging innovation, and creativity and improving risk management capabilities at an organizational level.  

• Compliance, security and safety

Provide a safe working environment for their mental and physical well-being and a healthy work-life balance. It consists of handling compliance management that complies a set of security requirements for data protection which is used for storing, processing and transmitting data. 

• Talent management and succession planning

Engage employees to produce high-quality work, reduce attrition rate, and foster collaboration, leading to the growth of the organization. Identifying high-performing employees and charting out a growth/succession plan. Figuring out the right employee to fill in a senior position when one leaves the organization.   

• Compensation and benefits

Compensation and benefits are one of the key functions of HR management. Compensation is key to motivating employees. Ensuring equity and fairness play a vital role in boosting organisational productivity. An HR needs to balance the compensation with the budget and profit margins as well as monitor pay increases and set merit standards. Benefits include those extra variables like extra holidays, flexible work options, pensions, medical insurance etc. The goal is to motivate people and foster loyalty by rewarding them.  

• Data and analytics

The human resource information system is a data management system that keeps track of critical data using HR metrics. HRMS (Human Resource Management Software) software is generally used to keep a digital record of workforce needs, candidate experience feedback, and employee turnover intention. This database is used to track employees’ performance as well as manage human resource functions. This helps HR in taking more accurate, data-driven decisions.  

Conclusion

Human resource management is the backbone of an organization that ensures employee satisfaction and organizational growth. The absence of a proper HRM setup can give rise to many serious problems in an organization due to the mismanagement of regular activities, which is why setting up a strong and effective HRM is vital for any business to thrive.   

Frequently Asked Questions (FAQ)

Q. What is human resource management?

It is the process of managing an organization by taking care of functions like recruitment, selection, deployment and the end-to-end management of employees. It helps people manage and achieve better results. HRM involves optimizing company performance through better management of human resources. 

Q. What is human resource?

Human resource in an organization refers to the department that is in-charge of all employee and employee-related operations. It is the integral part of a business responsible for identifying, screening, recruiting, selecting and training job applicants. The HR of an organization is also burdened with administering employee-benefit programs and handles other variables given to employees such as compensation and benefits, rewards and employee terminations.  

Q. What comprises the basics of human resources management?

The functions of HRM consists of Recruitment & selection learning & development, succession planning, performance management, compensation and benefits, Human Resources management software that manages all data and analytics of an organization are considered as the cornerstones of an efficient HRM.

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