What to Know About Human Resource Management
As recently as the late '80s and early '90s, a company's human resource management (HRM) team was not accorded the same status as those who worked in other departments, such as finance or information technologies. Human resource managers and their teams processed payroll, organized birthday, retirement, baby showers or farewell parties and hung work compliance posters in the company break room.
At least, that was how many fellow employees viewed HRM. That was then. This is now.
Changes in the way we work have pushed HR teams to the forefront of the new way of doing business. Every successful company sees human resource managers and their teams as strategic components. Whether they employ three or four people or hundreds or thousands, companies ignore the core tasks of HRM at their own peril.
What Is Human Resource Management?
At its core, HRM involves managing people to be more productive by providing training that helps them reach their highest potential, find a place in the company's culture and, ultimately, make customers happier.
Human resource managers and their teams provide the tools, training, knowledge, talent acquisition, administration and legal know-how that move a company forward. Through the management of human resources, the HRM team enhances the company's performance.
Defining Human Resources
Previously, defining what a human resource is meant everybody who worked in the office or offices depending upon the size of your company. As work has changed over the past two decades, so has the definition of a human resource.
In 2022, human resources don't only involve people who work in an office. Many companies hire contractors in a gig economy. A person can work for a company for a decade and never fit the description of a traditional employee. On-call workers, temporary help agency workers and workers provided by subcontractors are part of a company's workforce.
The HR department needs to treat each category of worker differently. Investors, shareholders or potential buyers increasingly consider a company's human resources as its most important asset, and the need for strong human resource management becomes evident.
Related Article: Why HR Needs to Be a Change Agent
The Many Roles of Human Resource Managers and Their Teams
The cornerstones of human resource management include a variety of essential tasks:
- Recruiting and staffing
- Workplace policies
- Compensation and benefits
- Learning and development
- Performance management
- Succession planning
Recruiting and Staffing
Recruiting and selecting the best candidates to work for the company tops the list of critical tasks performed by human resource managers and their teams. In the age of software that narrows a pool of applicants to the most appropriate talent, a good HR team still needs to be involved in the entire hiring process to help make the final decisions.
The hiring process involves several steps:
- Staffing Plan: Creating a good staffing plan involves the entire company. Base the plan on budget expectations and the need for each department to hire a certain number of skilled workers. Armed with this information, the HR team begins the hiring process.
- Recruitment: Using the company's website, social media, internet hiring companies such as Indeed, Monster or LinkedIn, email and headhunting, the HR team searches for the right talent. It will use preselection tools that remove unsuitable applicants.
- Selection: The HR team interviews suitable candidates. After selecting an applicant, the team negotiates a proper compensation package and onboards the new employee.
Developed in coordination with other departments and senior management, human resource managers and their teams create necessary workplace policies. It's an ongoing process as the need for new policies or changes in older ones evolves.
An HR team never creates policies on its own. It seeks feedback and opinions from employees, supervisors, managers and department heads. Some policies include:
If an employee makes a serious mistake, sends an inappropriate email or someone discovers pornography on their computers, discipline is necessary. The HR team helps develop a disciplinary action policy.
Paid Time Off
To avoid everybody asking for the same two or three weeks off for vacation, policies regarding time periods for employees to request a vacation are essential.
Deciding on your company's dress code reflects your company's culture. Financial companies might prefer formal business attire, a tech company filled with millennials and Gen Xers want a more relaxed, casual style. Perhaps your company favors a hybrid approach with a Casual Friday dress code. While going through the onboarding process, make sure new employees understand the dress code.
Is it OK to take paper clips home from the office? What about putting that extra drink on the expense account when on a business trip? Should new mothers be allowed to pump milk in appropriate locations during the workday? Are you allowed to date a coworker? Ethics questions are tricky, but a solid ethics policy reduces errors or mistakes.
Not every workplace will have a pet policy, but in 2022 many do, as businesses recognize it as a great retention tool. When creating a pet policy, it's vital for human resource managers to get employee input. If feedback is mixed about having pets in the workplace, try having a pet day once a week or once a month to see how people respond.
Another workplace policy most companies did not need 20 years ago is an internet/social media policy. How often can employees check on their social media accounts during the workday? Is it forbidden? What about taking personal calls on their smartphones? Are they allowed to browse the web if they complete daily work tasks?
As you can see, workplace policies are important but are often underestimated by those not involved in human resource management.
Compensation and Benefits
Often a tricky balancing act, compensation and benefits fall under the human resource management umbrella. However, HR cannot document them without input from other departments and senior management. When determining compensation, HRM teams need to consider what other companies pay, what the industry pays and if the pay is comparable to what other employees receive. HRM teams also need to consider experience, skills and education.
Compensation also includes benefits. Does the company offer gig workers healthcare benefits? Do senior-level hires receive stock options?
Examples of compensation include:
- Healthcare benefits
- Life insurance policies
- Retirement plans like 401(k)s
- Sick leave
- Bereavement leave
- Tuition reimbursement
- Bonuses for excellent performance
Every company wants to retain its most valuable employees. HRM teams think about ways to accomplish this task. For example, the pet policy mentioned above can help. Organizing events such as birthday and retirement celebrations come into play. Team building outings can help employees develop new skills while at the same time creating a culture of teamwork. Establishing a vibrant and exciting workplace culture remains an important task.
Most department heads and senior management officials believe the main reason most employees leave is compensation. Yet this is not true. Employees often leave for lack of training or an inability to advance within the company. An MIT/Sloan school study published in 2022 found a toxic work culture was the biggest reason for employees leaving.
HRM teams pay attention to issues that can drive away valued employees, such as:
- Not fitting into the organizational culture
- Problems with a manager
- Toxic work culture
- Lack of training and development
- Few opportunities to provide feedback
- No follow-through by management
HRM teams can't fix all these problems, but they can alert senior management to developing issues that may be costing them employees.
Learning and Development
According to LinkedIn, 94% of employees say they would remain with a company longer if it offered learning opportunities. Learning and development (L&D) help employees sharpen older skills and establish new ones. L&D activities help identify and train a company's future leaders. They allow employees to bridge skill gaps.
Activities can include team-building exercises, attendance at seminars or workshops, video presentations and working one-on-one with a mentor.
The Evolution of Employee Recognition
Leveraging the power of appreciation to improve the employee experience
How to Build a More Innovative and Resilient Workplace Culture
What would happen if every member of your team came to work focused on finding solutions and creating better results?
3 Secrets to Accelerating Transformation to Improve CX + EX
Learn about force multipliers that will reduce technical debt and grow revenue while reducing costs
Why Knowledge Management Is Critical to Business Resiliency
How Organizations are Future-Proofing Business by Harnessing Company and Employee Knowledge
Another important HRM task, performance management works hand-in-hand with L&D. The goal is to help employees become their best selves in the workplace. Employees value feedback — they want to know how they're doing. When they go long stretches without hearing from company officials about their job performance, they can become nervous and insecure, thinking something is wrong.
Human resource managers and their teams develop fundamental feedback mechanisms, working with department heads and supervisors. These include quarterly or monthly one-on-one performance reviews, 360-degree reviews that include evaluations from peers, clients, supervisors and direct reports and annual performance reviews. In all these processes, the relevant manager leads, and the HRM team supports.
Performance maintenance helps identify employees who consistently go beyond their job descriptions to help the company. They also identify employees who underperform, may not be suitable for the company and need to be let go.
Another area where several HRM team's skills come together is succession planning. Every business needs to consider what happens if a valuable employee leaves, becomes sick and unable to work or dies. Developing a talent pipeline ready to fill these vacancies is crucial. Establishing this pipeline includes performance management reviews and how an employee performs in L&D activities.
A good HRM team builds and nurtures this pipeline. The moment the need arises, they have a pool of qualified and ready candidates to assume a position, especially slots for senior managers and executives.
Maintaining up-to-date laws dealing with employment and worker protection is another crucial HRM task. HRM teams must keep employees informed about current discrimination laws, healthcare requirements, minimum wage rules and labor laws.
Employees also need to be aware of workplace safety rules, such as:
- Dealing with chemical hazards.
- What to do if they get sick on the job.
- What to do if there is a workplace injury.
- How to apply for workman's compensation.
- The application of "no fragrance" areas.
- How to protect their private information.
Related Article: How Data Is Changing HR Practices
Importance of HRM for Small Business
A small business's HRM needs won't be the same as those of a much larger company. However, the stakes remain high for employee recruitment and management. Hiring the wrong employee makes an enormous difference when you only have four or five staff members than it will if you have dozens or hundreds. One bad employee can undermine a small business.
According to Jill A. Rossiter in her book, "Human Resources: Mastering Your Small Business," "Most small business employers have no formal training in how to make hiring decisions. Most have no real sense of the time it takes nor the costs involved. All they know is they need help in the form of a 'good' sales manager, a 'good' secretary, a 'good' welder' and so on. And they know they need someone they can work with, who is willing to put in the time to learn the business and do the job. It sounds simple, but it isn't."
A small business owner should weigh several factors before hiring a new employee:
Assess the Status of Business
They need to be blunt. Do they need another employee? Are their current employees being utilized to their full potential? Would it be better to hire an outside contractor?
Match the Applicant's Talents with What the Company Needs
The owner needs to define the job and be part of the recruitment process. In some small businesses, they are the recruitment process.
Implement and Document Human Resource Policies
Often, busy employers feel they don't have time to document human resource policies. However, an employee handbook or personnel manual can solve many problems and ensure that the business owner and their employees are on the same page. It also offers protection if a legal question arises.
Consider Learning and Development Activities for Your Employees
Some employers may not need to improve their employees' skills. For instance, a chef at a top restaurant will not need learning and development. Some companies, such as plumbing or electrical services, need to keep up to date with recent changes in their industry and government regulations. Continuing education for employees is a valuable tool.
Maintain a Positive Workplace
Employees at a small company are as liable to leave because of a toxic work environment as those who work in a big firm. Creating a positive work atmosphere is essential. Clearly communicate expectations and company goals, pay people fairly, provide learning and development where necessary and offer opportunities for advancement if possible. These things will help you retain valuable employees.
Related Article: Do You Need an HR Generalist or HR Business Partner?
Final Thoughts: The Changing Field of Human Resource Management
Recently, several prominent business trends have affected human resource management, new technologies chief among them. Modern developments in communication, information storage and retrieval and video tools used for meetings and training, to name a few, have changed the workplace and how HRM team members must respond.
For instance, the spread of telecommuting because of the pandemic drove many HRM teams to develop new guidelines. The decline of hierarchical organizations in favor of flatter ones also poses unique challenges.
The need to reassess job descriptions, recruit and hire the best talent and reimagine the many tasks performed by an HRM team will continue to evolve into the future.