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Human Resource Management’s Link to Effective Leadership

October 25, 2022 Talent Management
Michelle Hawley Freelance Editor and Writer
By Michelle Hawley LinkedIn

Human resource management (HRM) is a dynamic business practice that’s transforming fast.

It began as a compliance-led means of defining policies, ensuring workers had the skills and traits necessary to perform their jobs. Today, HRM is more about change management, and tracking and maximizing employee productivity. It involves instilling company culture in the workforce, delivering knowledge through training and providing career progression opportunities to capable employees.

With the growing role of data and technology in workplace recruitment, management, strategy and planning, HRM is more relevant than ever.

Let’s dig into the history of human resource management and the structure of a standard HR department.

The History of Human Resources

Historians believe the National Cash Register Company created the first human resources department in 1901, after disastrous strikes and quality control problems. The department, called personnel, handled hiring and firing, employee grievances, workplace safety, wage management and compliance.

John Henry Patterson, the company’s owner, was one of the first business leaders to see employee wellbeing as a requirement for success, believing efficiency was connected to more than means of production. He gave his personnel team five key principles to follow:

  1. Treat people well and they will treat you well. Be square with them.
  2. Do not try to take advantage of employees, and do not try to get the last cent’s worth of energy out of them.
  3. It pays to do good; it pays to help employees help themselves in every moral and physical way and to give them every possible opportunity of advancing.
  4. The basis of good product is labor, or workers who go forward willingly and enthusiastically as a team.
  5. Let every worker have the opportunity to make complaints and suggestions for betterments, reward them adequately and make it impossible for a man to be fired on account of a personal dispute with the foreman or other subordinate.

In 1913, one of the oldest HR associations, the Welfare Workers’ Association, came into existence due to concerns around women’s working conditions in UK factories. It had 34 members, 29 of which were women. By 1918, the organization had established 1,000 welfare workers in companies throughout the UK. After going through numerous name changes, the association is today known as the Chartered Institute of Personnel and Development.

Eventually, what companies called personnel management became known as human resources, and in 1948, the Society for Human Resource Management was born. SHRM is one of the most well-known HR organizations today.

The importance of human resources has become clearer and better defined over the years. Yet even now, with the evolving digital landscape and new ideas on what the workplace should look like, the concept is continuously evolving.

Related Article: What to Know About Human Resource Management

Human Resource Management Defined

Edwin B. Flippo, a former professor of management at the University of Arizona and author of “Principles of Personnel Management,” defined human resource management as the “planning, organizing, directing and controlling of the procurement, development, compensation, integration and maintenance and separation of human resources to the end that individual and societal objectives are accomplished.”

To put it simply: HRM utilizes procedures and policies to cover all aspects of employment — including helping workers understand their roles and workplace standards.

In recent years, organizations have focused more on the human element of HR, and with great success. Investing in worker development is an impactful way to demonstrate commitment to employees and, in turn, increase productivity.

Consider Google’s HR department, which they call "People Operations.” The company doesn't see people as resources. Instead, they’re viewed as the driving force within the organization.

Google’s People Operations outlined five dynamics that distinguish its teams:

  1. Psychological safety: Can we take risks on this team without feeling insecure or embarrassed?
  2. Dependability: Can we count on each other to do high quality work on time?
  3. Structure and clarity: Are goals, roles and execution plans on our team clear?
  4. Meaning of work: Are we working on something that is personally important for each of us?
  5. Impact of work: Do we fundamentally believe that the work we’re doing matters?

Related Article: Simplicity Sprint or Simple Stunt? What Leaders Can Learn From Google

Personnel Management vs. Human Resource Management

When the idea of human resource management first came about, organizations referred to it as personnel management. While we see them as a natural evolution over time, the concepts aren't quite the same. There are significant differences between personnel management and human resource management.

For instance, personnel management:

  • Ensured employees performed according to their defined roles and pay scales
  • Did not offer employees the opportunity to contribute to decision-making
  • Focused heavily on labor laws and compliance — and less so on morale
  • Looked at the cost and expenditure of hiring and maintaining a workforce
  • Used disciplinary action as a means of driving change

In contrast, human resource management:

  • Looks at perks and benefits to offer employees in return for work
  • Encourages participation from employees in decision-making
  • Prioritizes work-life balance, flexibility and employee welfare
  • Aims to support the company and its workforce simultaneously
  • Implements data-driven insights to eliminate bias and human error

Overall, human resource management is people-centric, delivering more for both the employer and the employee. With an empowered workforce, leaders hear more good ideas, discover upcoming talent sooner and retain great team members.

Related Article: What Traits Make a Human Resource Leader Effective?

Human Resource Management Roles and Responsibilities

There can be a wide variety of HR roles within a company, depending on the size of the operation. However, the positions tend to fall into the following categories:

Chief Human Resources Officer

This corporate-level role is responsible for defining and executing the human resource strategy. They're accountable for:

  • Strategic direction
  • Succession planning
  • Change management
  • Talent management
  • Executive compensation
  • Policies, practices and industrial relations

Human Resources Director

This high-level manager is in charge of the administration of HR policies and activities. They oversee:

  • Recruitment and onboarding
  • Employee pay structure
  • Benefits
  • Health and safety
  • Employee relations
  • Training and development
  • The human resource department

Human Resources Manager

The HR manager manages the development and productivity of all workers within an organization. They:

  • Train managers
  • Shape standards for appraisals
  • Establish review techniques
  • Help identify upcoming talent
  • Approve the hiring manager’s decisions

Often, these senior managers also administer appraisals alongside department managers, continually examine the effectiveness of review techniques, weave incentive strategies into compensation and benefits packages, and ensure compliance with state and federal regulations.

Hiring Manager

The hiring manager is the top-level recruiter in a company. This person's primary responsibilities include:

  • Filling job vacancies
  • Attending networking and headhunting events

Hiring managers must understand company culture inside out and be able to "sell" open positions to the most attractive applicants for a role. They report directly to the HR manager.

Training Manager

A training manager is most active during the onboarding process, which is a critical time to instill company culture into employees. They also:

  • Deliver ongoing training
  • Identify top performers
  • Seek out in-house candidates for promotions
  • Continually update training methods and techniques

Welfare Officer

Many companies with a large number of employees are required to have a welfare officer. This human resource practitioner is tasked with handling day-to-day health and safety issues, and ensuring employees’ wellbeing. The welfare officer is responsible for:

  • Tackling employee grievances
  • Handling sick pay and holidays
  • Tracking overall worker welfare

Payroll Officer

In some places, the payroll officer is the financial officer. With either title, duties include:

  • Taking care of statutory payments
  • Paying salaries and benefits
  • Managing taxes and deductions

Medical Officer

In large businesses, a medical officer is a qualified medical professional responsible for:

  • Healthcare
  • First aid
  • Managing leave
  • Assessing employees’ ability to work

Human Resources Auditor

The HR auditor supports the business by ensuring employee files and records are accurate. They:

  • Manage employment records
  • Verify HR policies and procedures are up to date and compliant with the law
  • Keep track of changing laws and regulations

Objectives of Human Resource Management

Whether human resources is a standalone department or positions are woven into other management roles (a common practice in startups and small businesses), the goals tend to look the same. Here are the six objectives shared by most HRM departments.

1. Establish Company Culture

Human resource management is crucial to creating, assessing, advancing and guiding company culture within an organization. While the business owner is often the author of the organization's core values and mission, HR is the safekeeper.

Human resource teams also make sure the culture remains relevant and timely, ensuring increasingly important values like diversity, equity and inclusion are established and maintained.

Today, employees play a more active role in defining company culture. HR leaders should think of employee contributions as user-generated content. No one knows a business like its workforce, and getting feedback from employees at all levels is an effective way to drive growth.

2. Procure, Recruit and Retain Employees

Hiring is one of the most important functions within every organization, and getting it right is often the differentiator between a successful company and a floundering one. When considering the cost of recruiting, training and paying employees, it’s easy to see why.

As a business or HR leader, the most strategically crucial decisions often involve putting the right people in the right roles. But the job isn’t finished there. Once you find the right employees, HR’s aim is to determine the steps they need to take to keep those employees and make sure they’re happy.

Related Article: Learning and Development’s Time to Shine

3. Support Performance and Career Development

Employees don’t want to stagnate in their roles. They want the ability to learn, develop and move ahead within an organization. Companies that can offer that will find they have more productive and satisfied workers.

According to a 2022 LinkedIn study, companies that offer learning and development opportunities and focus on internal mobility retain employees twice as long as companies that struggle with it.

Employees want three things when it comes to learning and development initiatives:

  • Information that helps them stay up-to-date in their field
  • Education opportunities specific to their interests and career goals
  • Development opportunities that lead to internal promotions

4. Align Compensation and Benefits

Despite the attention given to wellbeing in the workplace, pay remains a key factor in whether a worker stays or leaves. It’s therefore vital that human resource departments take steps to guarantee alignment between roles, pay and benefits.

One practice that has been gaining traction over the past decade has been using anonymous surveys to gather feedback about sensitive issues. Workers are more honest when feedback is requested in anonymity. In return, this enables leadership to uncover insights into their teams’ thoughts, concerns, wellbeing and more.

Related Article: Are Employee Surveys Masking Flaws in Your DEI Efforts?

5. Handle Discipline, Grievances and Disputes

While punishment and discipline are not primary factors for HR, they still play an important role. For example, a worker who's experiencing difficulties or performing poorly can benefit from a concrete improvement plan.

When it comes to workplace disputes and grievances, HR is also the best department to take action. Keeping direct managers out of these issues will help reduce the risk of bias, both positive and negative.

6. Maintain Employee Rights, Motivation and Wellbeing

Wellbeing and empowerment are two hot topics in today’s workforce. Employees expect to be treated fairly and within the confines of the law. On top of that, younger generations tend to seek out organizations that can prioritize work-life balance, and mental and physical health.

One goal for human resource professionals is to develop policies that make employees feel cared for, nurtured and inspired. There's a need for a mutually beneficial, individualized relationship between workers and employers. What's more, departments are more commingled than ever, and fostering positive collaboration is largely the responsibility of HR.

Related Article: How Companies Are Incorporating Wellness Into the Flow of Work

Human Resources Is the Captain of Employee Experience

When it comes down to it, the function of human resource management in the modern age is to sell a company's ethos to employees. And HR can do that by tapping into the employee experience — much like organizations do with customer experience.

To put it simply: Treating employees like customers is a recipe for success. It drives loyalty and creates a compassionate workforce.

As Tim Vaughan, head of content at Poppulo, wrote in a piece for Forbes: "Employees today don’t always stick around if their workplace experience doesn’t match what they want. In my experience, culture and values are priorities. How a company communicates, listens to and connects with its people goes a long way toward defining the employee experience."

HR is at the helm of the employee experience ship. Investing in this crucial department is an investment in ongoing success.

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