General Understanding of the Human Resource Management as a Subject
The evolution of human resource management dates back to the ancient times. Just like any other organizational resource, human resource affects the performance of the organization. The people employed by the organization contribute to its success. Their talents, experience, reliability, expertise, and relationships affect the job they do and whether the organization succeeds or not. Human Resource Management (HRM) is designing management systems to ensure well use of human talent in order to accomplish organizational goals and objectives (Storey, 2002).
Features (Distinctive) with HRM
Top management: Top managers set direction, and they must be involved.
Performance and delivery of HRM: Line managers are responsible for the implementation of HRM. They do not carry out specialized instructions but manage within the context of the organization’s HRM strategy.
Strategic Fit: The Right People in Every Respect Must be Chosen
Cultures and values: HRM must inculcate the organizations values into its employees.
Employee behavior and commitment: HRM seeks to win the heart and minds rather than mere consent to management decisions (Sumita & Sett, 2009).
Reward systems that recognize good performances e.g. Performance related pay.
Employees and assets people are a resource to be deployed. Assets need to be maintained through training. Degradation of human assets will harm competitiveness.
Human Resource Management (HRM) and Its Importance
The development and implementation of specific organizational strategies must be based on areas of strength in an organization (Storey, 2002). These core competencies form the foundation for creating a competitive advantage for an organization. This is a strategic and coherent approach to the management of an organization’s most valued assets.
The people working in an organization individually and collectively contribute to the achievement of its objectives for sustainable competitive advantage. It aims at integrating personnel issues with the company’s strategy. It is the process of managing people to contribute to organizational performance and change (Sims, 2007).
HRM is important as it aims at serving the interests of management, as opposed to employees. It sets out suggest a strategic approach that aid in understanding personnel issues. In addition, the subject is important in linking an organization’s missions to HR strategies. This enables human resource development to add value to the organization’s products and services. It also aims at gaining employees commitment to the organizations value and goals (Mathis and Jackson, 2011).
Human Resource Management and Its Effects Modern Day Business Management
Human resource management plays a critical role in modern business management. The task of managing people remains one of the most difficult tasks performed by businesses and organization. HRM is managing people for results. It is the responsibility of every manager. It involves every person who is responsible for the work of others. It is about building a highly competitive organization around highly committed employees (Storey, 2002).
Applications of Human Resource Management for Positive Results
Gaining a Competitive Advantage
Armstrong and Baron (2002) assert that organizations gain competitive advantage under effective human resource management. It is said that HR plays a vital role in enabling communication of emerging strategies between the levels of hierarchy in organizations. The strategies in these organizations evolve from the grass roots. Thus, planning is necessary in enhancing effective strategies that can keep the competitiveness of the company.
Similarly, the development of a rich pool of human resource talent can assure the firm’s capacity to adapt to a changing environment (Storey, 2002). This enhances the firm’s competitiveness thus providing a competitive advantage.
Enhancing Strategic Management
This is the pattern of carefully planned human resource deployments and activities intended to ensure that the organization meets its objectives. Strategic management stems from strategy formulation and implementation and HRM plays a role in both formulation and implementation. This process occurs through the linkage between the administrative functions that intend to deploy and allocate human resources in an efficient manner in order to enhance the competitiveness of the organization. Strategic human resource management ensues that the organization follows and adheres to organization structure, allocates resources and ensures that the company has the relevant pool of human resource that aligns to its objectives. It also identifies the threats, strengths and weaknesses under the existing human resource pool (Sumita & Sett, 2009).
The Legal Environment: Equal Employment Opportunity and Safety
Compliance with the equal employment opportunity (EEO) laws and regulations affects HR functions. Human resource management lays an emphasis on the welfare aspect of employees (Storey, 2002). This focuses on the working conditions set in place and the legal frameworks at the country in which the employees work. These companies discourage gender disparity, and they have developed a gender policy on employment based on equity perspectives.
Acquisition and Preparation of Human Resources
The composition of an organization's work force changes over time. The personnel management process is a continuing procedure that aims at keeping the organization supplied with the human resource in the right positions at the right time. The steps or activities in this process include human resource (manpower) planning, recruitment, selection, placement/orientation, training and development. This precedes performance appraisal, compensation, and termination / separation. (Sims, 2007)
Manpower planning is the long term planning of the manpower requirements of an organization taking into accounts both internal activities and factors in the external environment. This aims at getting and retaining the quantity and quality of people an organization needs, efficient use of human resources, plan for and anticipate the future in terms of potential surplus or deficit of manpower.
Under manpower planning, the organization must job analysis should undertake a systematic collection and recording of information about jobs in an organization. This must provide information on knowledge, skills, experience and any personal qualities and potentials developed within that job. In general, job analysis takes into consideration job description and job specification. Job description points out the duties encompassed by the job, working conditions, tools and required materials, and equipment used on the job while job specification gives the minimum requirements in order to perform the job satisfactorily (Sims, 2007).
Manpower planning must also focus on demand and supply of labor. This must estimate the future quantity and quality of labor. Supply forecasting also measures the likely manpower that is available. In addition, manpower planning must match the demand and supply of labor. Thus, under excess supply of labor, then the management must plan for layoffs, termination, and early retirements. If demand exceeds supply, management must plan to recruit, select, and train new employees. Finally, if supply and demand is almost equal no immediate action is necessary, but it calls for monitoring of supply or demand changes (Sims, 2007).
This is the second step in the staffing process, and it starts when a company needs to hire more employees. It is the process through which firms seeks employees. Recruitment concerns the set of activities that an organization uses to draw applicants who have the abilities and skills needed to assist the organization in the achievement of its goals. Recruitment can be either general or specific. General recruitment focuses on filling positions that frequently open up in most organizations e.g. clerical, non-skilled, or semiskilled workers. Specific recruitment is mainly for managerial positions and professional positions such as engineers and other skilled workers (Sims, 2002).
Sources of Recruitment
Recruitment sources are either internal or external. Internal recruitment involves recruitment from within the organization through job postings or promotions. Internal recruitment has several advantages: It reduces excessive recruitment and placement costs, promotes improved morale and loyalty among employees because they believe their promotions are performance rewards. It generates internal competition for the higher level positions which leads to increased performance, ensures that managers promoted from within easily deal with people whose qualities they already know.
However, recruitment from within also has several disadvantages. Internal candidates may lack sufficient experience, knowledge, management ability, intelligence or skill in dealing with people. In addition, promotions from within may lead to in-breeding—an enterprise may tend to stagnate if all managers share the same views and experience. Thus, bringing in new managers with different backgrounds can result in new ideas and new approaches.
This recruitment process may create internal disharmony. This happens where there are many internal managers qualified for the job, but in the end only one has to be selected. This may lead to the Peter Principle in which the management promotes managers until they reach their level of incompetence. If a manager proves successful in one level, their promotions to higher levels continue until they cannot perform well.
External Recruitment is useful in highly specialized positions for which personnel in the organization lack the necessary qualification. This is where an organization may be expanding too rapidly and needs to develop an adequate supply of managerial talent. It also occurs when the management wants to give the enterprise a new vigorous orientation. The sources of external recruitment may include walk-ins and unsolicited resumes from individuals, agencies and placement firms, newspaper advertisements, schools and colleges, unions and professional associations.
Advantages of outside recruitment include: The selection can be made from a much greater number of people. This selection brings individuals into the organization who have different backgrounds and who can perhaps help the enterprise maintain vitality. Outside recruitment may give an organization a very new direction.
Outside recruitment has its disadvantages that may include: The individual selected will lack experience in how the organizations functions and how the various departments interrelate. Higher costs as it costs more in terms of both money and time, for instance fees may have to be paid for advertisements and professional recruitment firms and besides it may take weeks to locate the truly qualified manager. In addition, some adverse qualities of a person recruited from outside may go undetected despite a thorough investigation.
Selection and Placement
After recruitment, the actual selection process begins. Selection process focuses on choosing qualified individuals to fill those jobs. This process usually begins with an initial screening interview (short-listing), which precedes the completion of application forms. This initial screening and completion of application forms allows the employer to get basic information about the candidates, determine the level of interest of the candidate and determine whether the selection process will continue after this screening interview.
Orientation or socialization aims at providing a new employee with the information needed in order to function comfortably and effectively. Socialization gives general information about daily work routines and a review of the organization's history, purpose, operations and products and services. It also points out detailed presentation of the organization's policies, work rules, and employee benefits. The process of orientation is concerned with placement and induction.
The levels of induction in an organization include overall level of induction, department induction, sectional induction, job level induction and induction by other appropriate groups, for example, the safety committee, professional groups like economists, social/recreational groups, trade unions, and co-operative societies. Information supplied to the employee during induction must cover history and nature of organization, policies, goals and objectives of the firm, structure and functional differentiation. This also includes the code of conduct, regulations terms, and conditions of service, specific departmental responsibilities, the organizations policies and any significant environmental factors. Placement mainly involves assessing the employees, supplying employees with job descriptions, and briefing on the job requirements.
Training and Development
Training constitutes the planned efforts that facilitate learning of job related skills, knowledge and behavior. Training programs focuses on enhancing and maintaining current job performance while development programs seek to develop skills for future jobs. Training programs focus on technical aspects of the job hence directed at employees.
On the other hand, development involves the process of acquiring knowledge, skills and behavior that intend to improve the capacity of employees to meet future challenges (Sims, 2007). Development programs are mainly for managers.
Training varies in the organization due to the differences in the levels of employees thus calling for different approaches that are either internal or external.
Internal Approaches to Training
These are programs carried out within the environs of the organization and conducted for the organization. The examples include the following.
This involves the introduction of new employees to the organization and to their jobs.
ii. Development by Level
As an individual rises from level to a level, he receives training that suits each position. It follows the promotional path and becomes more and more oriented towards development of managerial rather than technical skills.
iii. Job Rotation
The management rotates the employees across various departments in order to show what each department does and how it relates to the organization as a whole.
iv. Apprentice Training
This method involves making the learner work as an understudy of an experienced worker for a fixed period after which they work independently.
This informal person-to-person counseling cannot have standardized. For it to work the subordinate, must have confidence and trust in the coach.
vi. Acting Capacity
The trainee temporarily works in a senior position mainly when the superior is on vacation or absent due to other reasons.
vii. Assistant to Positions
The trainee works under close supervision of an experienced employee who may assign him some duties. It is an excellent method only if the superior is an outstanding teacher and has the skill to counsel the employee.
External Approaches to Training
These approaches supplement internal programs. Consultants, universities, colleges and other professional bodies normally conduct them. The company conducts these programs through traditional classroom lectures, seminars, workshops, conferences, etc. These are useful when skill or knowledge needed is highly specialized, and organizations may have no one with in-depth knowledge of the subjects. For successful external programs, then they must include all personnel, senior, subordinate, and evaluated regularly to justify their usefulness. This must also get the support of top management, lay emphasis on results, not on the training activities, and integrate both theory and practice. Above all, rewarding the training is essential.
It is the process of identifying, measuring and developing human performance in the organization. It is not always easy to judge subordinates performance accurately, and it is even more difficult to convey the judgment to the subordinates in an amicable manner. Performance appraisal may be either formal or informal. Informal appraisal is the continuous process of feeding back to subordinates information about how well they carry out duties. This is usually on a day-to-day basis. Formal (systematic) appraisal occurs after given times e.g. yearly or half yearly and it aims to rate the employees' performance, to identify those employees that deserve a raise or promotion and those who require further training (Sims, 2002).
Remuneration and Compensation
This relates to the compensation of employees in exchange for the services they have rendered for the company. This is in the form of monetary rewards in wages and salaries. Remuneration can take the form of commissions, compensations, fringe benefits, salaries, and wages (Sims,2007).
Compensation (remuneration) refers to any payment or reward that an individual receives in return for performing organizational tasks. The basic types of compensation include the following (Sims, 2007).
i. Direct financial compensation (salaries/wages).
ii. Indirect financial compensation—other financial rewards other than wages and salaries e.g. medical cover, insurance cover, paid leave, etc.
iii. Non-financial compensation—most are intangible and they relate to the satisfaction that an individual derives in performing his duties. They can be as a result of meaningful jobs, social environment. The remuneration system should be able to attract and retain the right caliber of people, and gives rewards that will increase the workers motivation.
Employee Separation and Retention
Employee separation takes place in the form of retirement that is either mandatory or voluntary, death, layoffs, redundancy, retrenchment, discharge and dismissal, and Voluntary quits or resignation. The company can also come up with voluntary separation programs that can reduce the organization's work force while also minimizing legal risks. This is in from of asking the employees to volunteer to leave, entice the employees to volunteer by offering additional severance, training and benefit payments (Sims, 2002).
This falls under the industrial relations aspect of human resource management. Collective bargaining is the process whereby representatives of management and workers negotiate over such items as wages, working hours, and conditions of employment. Collective bargaining is an ongoing concern. Collective bargaining is also a private process of negotiation between unions and management. This aims at settling disputes before they turn into conflicts and industrial and labor unrest. Negotiations here have to result into a solution. However, when solutions fail to come out, management and trade unions should submit disputes to mediation or arbitration. Mediation is an attempt to settle disputes through a neutral third party, where a mediator may be a professional acceptable by both the unions and management (Storey, 2002).
An arbitrator for the negotiation is different from a mediator in that an arbitrator has the power to make binding decisions. Arbitration is the process of solving grievances or disputes by a respected third party. Arbitration takes two kinds i.e. conciliatory, where both the management and the union agree to call the third party and compulsory where the law provides for a third party to intervene.
The settlement of collective bargaining ends in a labor contract. Provisions in labor law suggest that employees' and employers' bargaining representatives should be obliged to bargain in good faith. Good faith means that the parties agree to bargain and that they send negotiators who are in a position to make decisions. This means not someone who does not have the mandate to commit either group to a decision.
Managing Human Resources Globally
This specifically falls under International Human Resource Management (IHRM). IHRM is HRM that cuts across national boundaries. IHRM is immensely complex, and globalization has created an array of employment scenarios based on variables such as citizenship, location, to whom the person reports, and the term of the assignment (Storey, 2007).
The international aspects of HRM in the global arena require global approach. This approach must recognize the differences between the domestic HRM and IHRM hence it creates a complex situation. Thus, this complexity affects major HRM processes as management and employees relationships (Sims, 2002). The development and implementation of specific organizational strategies must be based on areas of strength in an organization. If a manager proves successful in one level, their promotions to higher levels continue until they cannot perform well.