Ensuring Effective Risk Management Strategies Mitigate Threats

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Organizations need to take steps to mitigate threats and ensure accountability and transparency. In other to achieve this, managers are advised to implement effective risk management strategies.

Human resource management can be explained to be the proactive consideration of human capabilities and limitations. For a corporate body to function properly, risk involved in Human resource must be effectively managed and in other for this to occur, there must be availability of systematic decision frameworks and assessment tools.

Good human resource management is critical to prevent destruction of values in an organization and management of risk.

The management of Human resource based risk is a cornerstone factor for corporate success.

HUMAN RESOURCE PARADIGMS

A manager's outline is the state of mind that reflects the perceptions, assumptions and beliefs concerning the environment in which they function and carry out their activities.

It is a means through which a manager sees people, weighs them and their alertness and strength to contribute to the organization and this directly affects human resource management.

Management has its uniqueness, values, tradition etc. and merges as one to choose and decide on which paradigm to embark on and agree on the effective strategies to implement in the organization in other to handle or reduce the sources of risk.

The human resource management also has to function positively and by so doing, increases the organizations strength to handle any risk that exists.

HUMAN RESOURCE AND RISK MANAGEMENT ' THE INTERPLAY

Decision making is an effective tool in human resource management. Its effectiveness aids financial and marketing influence but its ability to take place depends on the management. When issues are ignored in an organization or when they keep arising, it can frustrate the management's effort to achieve its goals and also create room for irrelevant risk and surprise.

Human resource can be described to be the motivation, staffing and training of employees to assist in carrying out organizational goals.

It entails different activities and procedures which must be adhered to in other to decrease risk occurrence.

Actions that explain the interplay are listed below:

- Job Analysis

- Hiring

- Orientation / Training

- Appraisal and

- Compensation / Discipline

Job Analysis:

This is the initial activity that takes place in human resource management. It emphasis on what the organization requires to function properly. It also determines the duties, responsibility, skills and the kind of person required for the particular job and also their level of commitment to the professional development of the organization.

Hiring:

This is the next step in the human resource management activity. It is a very difficult resource activity because it demands hiring / recruiting the right staff to fit into a particular position.

Hiring must be carefully carried out in other to have a smooth running organization. If this isn't carried out vigilantly, could lead to employing the wrong staffs which can lead to mismanagement of risk when they occur in the organization.

Training:

This is a major source of risk reduction. During this process, employees are introduced into the organizations culture and history. They are supplied with adequate information's that they require before starting off and this aids them with the sufficient knowledge necessary in excelling in the organization.

Lack of training can lead to employing of a wrong staff to fit a particular position and expose the organization to risk so constant interaction and orientation is very essential.

Appraisal:

This is a constant assessment of the employee. It includes checking if the employee is carrying on with his / her duties in the organization and also applying exact corrective actions which can help in advancing their career and aid the firm in countering risk.

Compensation:

Compensation includes the rewards which are given to the employees. It could be monetary and non monetary rewards.

Incentives can also be used as compensation to employees in other to cater for some of their needs and increase their zeal to give in their best to the organization.

HUMAN RESOURCES DRIVERS

Human resource has a double role to play in corporate management and risk management. It is one of the key to success in corporate management systems.

The roles include:

- As a source of risk: this includes fraudulent activities, unethical behaviors, human failures and errors, collusion of two / more people, etc.

- As a manager of risk: this is a person who manages and practices human resource management and corporate management systems. E.g. Dealing with fraudulent risk, organization based risk etc.

The two roles require both human resource and corporate management systems to function effectively and this is due to the fact the human element has unusual, dynamic and unruly characteristics from other corporate sources.

Organizations should be able to capture the mind of their employees in other for them to work together as a team in achieving a common goal. Human resource activity supports the organizations culture and could lead to achieving their common goal.

RISK IDENTIFICATION

Risk as we all are aware is inherent in any activity that takes place in an organization.

Its enormity often determines whether an activity is pursued or not and this is essential to human resource.

Human resource risk can be classified into:

- Legal compliance

Employers stand the risk of getting sued by his employee. This may arise when they go against the rules, laws and regulation guarding their employees, e.g. unlawful activities that may occur. When employers do not comply by the laws governing the organization, employees may react and it would cost the employers some legal expenses, penalties or fines.

- Safety and health

There is huge risk of all kinds of illness and accident in every workplace. This range from operation of huge equipments, fire outbreak e.t.c. Employees, due to their huge workload, excess stress or environment may also get ill and may put the organization at risk.

- Security

In terms of security if not well managed can lead to a breach in the operations and practices of the organization.

People / individuals can also be a source of risk so adequate security must be made available for the organization, its equipments, data storage, facilities, e.t.c.

- Business Continuity

Environmental disasters, disruption, system failures or several other emergencies can affect the operations of an organization. It is the duty of Human resource to implement strategies to protect assets when such disasters occur and ensure the continuity of the business.

- Workplace privacy

Confidential information / data concerning the employees of the company should be the organizations privacy.

Human resource should be able to maintain utmost privacy as regards all information concerning the organization and its employees as it is improper to disclose them to third parties.

RISK ASSESMENT

As said earlier that risk is inherent in any area of Human resource practice.

It is a process used by human resource professionals to determine the likelihood of an organization being affected by a particular risk. Assessment estimates the cost of the loss if it occurs and its impact on the continuity of the organizations day to day operation. With the human resource knowledge of this, it makes it a lot easier to locate which loss is likely to occur and helps them derive control mechanisms to prevent them from taking place.

ROLES OF HUMAN RESOURCE IN RISK MANAGEMENT

Human resources perform various roles in management or risk. Some of the roles include;

- Broader business agenda

Risk management is a sign of a responsible organization and an important part of corporate governance. Human resource should be able to invent a proactive internal environment of identification of risk and also ensure that he risk management concept is particularly added in the running of the organization.

Management of risk must be the most key of the organizations culture and processes and human resource should ensure that the risk management tools are thoroughly utilized throughout the organization in other to safeguard its stakeholder's capital.

- Balancing Opportunities

Human resource should ensure that unfavorable approaches are not used to hold back the development of the organization business opportunities. This helps the organization understand that Risk management is all about reducing the likelihood of losses either before or after they occur.

Management of risk should be balanced with management of opportunities in other to yield good results.

- Proper Skills

Human resource professionals are advised to consider drawing out different skills to use in contributing to the organizations strategic objectives. They are also advised to build up good relationship and interaction in other to ensure that the mindset of the organization is prone to opportunities.

The organizations culture should not be focused only in a particular area that it feels is most important but be able to create good partnership with all parts of its business.

- Role development

Risk management should be used by human resource professionals to identify and manage risk throughout its entire activities. Efficient mechanisms should be set aside; proactive approaches should be used in other to increase their contribution to the welfare of the organization.

CORPORATE GOVERNANCE, RISK MANAGEMENT AND HUMAN RESOURCE

There is more to corporate governance other than just appointing directors and focusing only on what is stated in the rules of the organization. The organization needs to consider all other strategic risk that is involved.

Internal control and corporate governance are very essential and important in the strategic processes that are being carried out in an organization. This is because they have to ensure that risk associated and its operational activities are properly managed for the stakeholders benefit.

In other for the management of an organization to perform its duties effectively, it must ensure that there is availability of risk awareness, identification and assessment through the activities of Human resource as earlier discussed.

Due to the fact that there is always an atom of risk in all activities that take place in an organization, effective risk management has been a great corner stone and organizations gave bounded themselves with it.

STRATEGIC APPROACH TO RISK MANAGEMENT

The most important risk management strategies to be used by Human resource in managing the identified risk in an organization include;

- Avoidance

Activities which portray themselves to be too risky should be deceased from in other to ensure its smooth running.

- Acceptance

Risk should be accepted and further dealt with when it occurs since risky activities are essential to some organizations job.

- Modification

In modifying, policies and procedures are introduced because they speak what is expected and help in reducing the likelihood of risky event in the organization.

- Transfer

Risk can be transferred or shared by entering a contractual contract with other organization or by buying an insurance policy. That way the organization prepares for the unforeseen.

IMPLICATIONS

It is essential for Human resource to have knowledge of their implications and act positively in carrying out their duties effectively and improve the organization.

- Different mechanisms should be provided for monitoring and supervising to make sure that organization standards are met with.

- Accuracy and consistency must be in place for the tasks to be carried out effectively.

- Human resource systems must be reviewed on a regular basis in other to ensure that they meet up with the needs of the organization as stated in their structure and culture.

- Human resource professionals must possess adequate knowledge in all legislative area s in other to prevent the risk on non-compliance.

CONCLUSION

In conclusion, it is very essential for an organization to employ the services of Human resource since risk is inherent in their daily activities and they can be seen as a resource to manage and do well from the risk.

Human resource duty in an organization is to provide excellent and effective internal and external service and ensure that they are consistently carried out in other to ensure that there are measures to counter risk if and when they occur in an organization.

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