Human Resource Management in SMEs
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Published: Mon, 15 May 2017
Human Resource Management
Human Resource management is the proficient utilization of employees in accomplishing two key objectives within an organization. The intention is to commendably make use of the capacities and capabilities of employees to attain the operational objectives that are the eventual aspire of the organization. Collected with comprehending the goals of the organization, Human Resource management also searches for guaranteeing that the individual employee is gratified with both the working environment and the reimbursement and welfares that he/ she is receiving. (Tatum, n. d)
At all levels managers should connect themselves with the management of human resource. The work is generally get done by the managers with the help of others; that clearly entails effective HRM. Managers handling human resource problems encounters a large number of issues, varying from a continually mutable workforce to current government regulations and most prominently technological upheaval. Competition worldwide is forcing both large and small organizations to be more conscious of cost and productivity. Since human resource issues are critical in nature, these difficulties should obtain leading contemplation from higher management. (Mondy and Noe, 2005)
Envisioned to expedite companies to convoke the desires of their employees whilst boosting company goals is strategic human resource management. Human resource management encompasses numerous aspects of a business that influences employees, such as hiring and firing, pay, benefits, training, and administration. Human resources could also provide work spurs safety system information, and sick or casual leaves. Strategic human resource management is the proactive management of people. It requires thinking forward, and scheduling ways for a corporation to better cover the needs of its employees, and for the employees to better fulfill the demands of the firm. This could impact the system and activities that are done in a company, refining the lot from hiring procedures and employee training packages to assessment methods and discipline. (Upson, 2011).
The assortment of knowledge, skills, ingenious capabilities, flairs and capacities of an organization’s personnel, escorted with individuals’ values, approaches, policies and values intricate in the dealings of an organization is basically human resource management. The entirety of instinctive abilities, accomplished knowledge and capabilities implied by the capacities and talents of the involved personnel in the organization. (Ankur, 2009)
The human resource management is very multi-faceted. Human resources can be demarcated as the knowledge, skills, imaginative abilities, faculties and capacities gained in the inhabitants; while from the perspective of the individual initiative, HRM signifies the entire innate capacities, assimilated awareness and talents as demonstrated in the aptitudes and propensities of its employees. (Ankur, 2009)
The main objective of Human Resource Management is the conservation of heightened human connotations in the association by the progression, application and appraisal of rules, procedures and packages concerning human resources to supplement their engrossment towards the attentiveness of organizational goals. (Ankur, 2009)
Human Resource Management is engaged in procuring improved consequences with the coordination and collaboration of employees. It is an important yet peculiar fragment of management that is involved in individuals at work and their communications within the organization. HRM assists in managing concentrated individual progress, anticipated operational relationship between employees and employers, employees and employees, and operational modeling of human resources as eminent with somatic resources. It is the staffing, selection, enlargement, setup, reimbursement and stimulation of human resources by the company. (Ankur, 2009)
The attainments of organizational and personal goals are probable through the assistance and collaboration of people and organizations. The plentiful features of HRM encompass of the following:
â€¢ Predominant in nature since it presents the whole enterprise.
â€¢ Prominence is on effects somewhat than on guidelines.
â€¢ It attempts to help employees develop their capabilities fully.
â€¢ It stimulates employees to subsidize their greatest to the business.
â€¢ It pertains employees at work, both as persons and collections.
â€¢ It attempts to put people on consigned jobs in order to produce good results.
â€¢ It assists an organization fulfill its goals in the future by giving them proficient and well-inspired employees.
â€¢ It attempts to form and keep amiable relations between workers working at numerous levels in the organization.
â€¢ It is a multi-faceted commotion, that utilizes evidence and assistances haggard from psychology, economics, etc. (Ankur, 2009)
The latitude of HRM is broad:
a) Personnel aspect-It covers manpower scheduling, recruitment, selection, placement, rotation, promotion, training and development, downsizing and economizing, compensation, enticements, efficiency etc.
b) Welfare aspect-this aspect deals with working conditions and services such as canteens, crèches, rest and lunch rooms, housing, transport, medical assistance, education, health and safety, recreation facilities, etc.
c) Industrial relations aspect-It deals with union-management relations, joint consultation, collective bargaining, grievance and disciplinary procedures, settlement of disputes, etc. (Ankur, 2009)
The HRM philosophy is based on the following beliefs:
â€¢ Human resource is the greatest significant strength in the organization and could be advanced and improved to an infinite level.
â€¢ A resilient environment with morals of genuineness, eagerness, faith, empathy and cooperation is vital for evolving human resource.
â€¢ HRM could be envisioned and inspected in customs that are treasured both individually and organizationally.
â€¢ Employees are committed to their job and the company, if the organization proliferates to a sense of belongingness.
â€¢ Workers feel tremendously exhilarated if the association delivers gratification of their elementary and higher level needs.
â€¢ Operative commitment is augmented with the prospect to realize and consume one’s proficiencies and capabilities in one’s work.
â€¢ It is every manager’s obligation to safeguard the advancement and utilization of the competencies of juniors. (Ankur, 2009)
Some of the Objectives of Human Resource Management are
To assist the organizations fulfill its objectives.
To guarantee operative consumption and concentrated growth of human resources.
To warrant reverence for social beings.
To recognize and gratify the requirements of employees.
To certify reconciliation of employee objectives with those of the association.
To attain and preserve great optimism amongst employees.
To deliver the organization skilled and well-enthused workers.
To upturn to the completest the worker’s job contentment and self-awareness.
To progress and sustain an eminence of professional life.
To be morally and communally receptive to the requirements of culture.
To develop overall personality of each employee in its multidimensional aspect.
To enhance employee’s capabilities to perform the present job.
To equip the employees with precision and clarity in transaction of business.
To inculcate the sense of team spirit, team work and inter-team collaboration. (Ankur, 2009)
Human Resource Management brings out the consequent happenings with the intention of achieving the above objectives
1. Human resource or manpower scheduling.
2. Recruitment, selection and employment of employees.
3. Training and progression of employees.
4. Assessment of enactment of employees.
5. Enchanting curative strides such as transferal from a job to an alternative.
6. Compensation of workers.
7. Societal safety and well-being of employees.
8. Setting common and explicit administration program for managerial affiliation.
9. Collective negotiating, agreement bargaining and grumble dealing.
10. Employment for the association.
11. Supporting the self-progression of workers at all ranks.
12. Emerging and conserving inspiration for workers by giving incentives.
13. Monitoring and examining manpower administration in the organization.
14. Probable Review and Counseling on Criticism.
15. Examination of job roles for job inhabitants.
16. Job Replacement.
17. Excellence, Association progress and Eminence of Operational Existence. (Ankur, 2009)
HRM will be susceptible to subsequent dynamics, which will graft as altered apprehensions swaying its approach
Size of the workforce.
Rising employees’ opportunities.
Extreme vagaries in the technology as well as social changes.
Conformation of labor force.
Innovative assistances needed.
Auxiliary and despicable organizations.
Effect of new monetary strategy.
Governmental belief of the Administration.
Economizing and rightsizing of the companies.
Philosophy predominant in the association. (Ankur, 2009)
Taking into consideration the various problems and encounters the successive commendations will be of substantial assistance to the attitude of HRM with respect to its inventive vision
ƒ There should be a suitably certain recruitment approach in the association that must share its emphasis on focused facet and merit grounded choice.
ƒ In all the decision-making practice there should be given suitable weightage to the fact that employees are intricate wherever conceivable. It will sooner or later lead to feeling of team spirit, team-work and inter-team cooperation.
ƒ Visions and ample circumstances should be given for full countenance of employees’ aptitudes and apparent potentialities.
ƒ Networking abilities of the establishments ought to be established internally and externally as well as parallel and perpendicularly.
ƒ For performance evaluation of the employees, contemplation ought to be laid to 360 degree feedback which is based on the appraisal by superiors, peers, subordinates as well as self-review.
ƒ 360 degree feedback will additionally lead to increased emphasis on customer services, generating highly involved workforce, reduced hierarchies, eluding discrimination and prejudices and distinguishing performance inception.
ƒ More weightage should be given to Total Quality Management. TQM would cover all workers at all levels; it will adjust to customer’s needs and forecasts; it will warranty operative utilization of resources and will lead to uninterrupted enhancement in all scopes and happenings of the organization.
ƒ There ought to be emphasis on job rotation so that the vision and understanding of the workers are broadened as well as potentialities of the workers are augmented for forthcoming job scenarios.
ƒ The capabilities of the workers must be appraised through probable assessment for carrying out innovative roles and errands. It should not be tapering to administrative aspects only but the ecological variations of political, economic and social deliberations must also be taken into account.
ƒ The livelihood of the workers must be manipulated in such a way that engraving process and entertaining exercise come systematized for amalgamation process and career scheduling should establish the section of human resource forecasting.
To sum up, Human Resource Management need to be associated with strategic goals and objectives in order to advance business performance and advance structural philosophies that cultivate innovation and suppleness. All the above progressive visions coupled with strategic aims and goals ought to be grounded on 3 H’s of Heart, Head and Hand that means one should sense by Heart, consider by Head and apply by Hand. (Ankur, 2009)
Significance of Human Resource Management
There are four main principles of dealing human resources that are
Human resource is the greatest imperative strength of an organization and its effectual administration is the strategy to its progression.
The achievement and attainment of the organizational goals can be made if the administration measures of the company are related with the organizational goals.
To attain brilliance, organizational culture and standards should be instilled within the employees with the energy of top management and senior managers.
Human Resource Management is all about taking people together, and by an assortment of diligence of teamwork, conjoint goals can be reached within an organization. (HRM Function, n.d.).
HRM is a thoughtful scheme to the attainment, enthusiasm, advancement and administration of the organization’s human resources. It is a precise field that endeavors to establish an appropriate company culture, and presenting programs which divulge and stand the core values of the enterprise and safeguard its success. HRM is an active somewhat than responsive, like incessantly advancing to what should be done and then doing it, rather than waiting to be conversed in relevance to staffing,
paying or training people, or dealing with employee association concerns as they ascend. The practices for the application of HRM will encompass numerous acquainted purposes of personnel managers, such as manpower scheduling, staffing, performance evaluation, salary administration, training and management enhancement. (HRM Function, n.d.).
There are three connotations linked to the notion of HRM. Primarily employees working in an organization are deliberated as a precious source, demonstrating there is a prerequisite to benefit from time and scrap in their development. Then, they are human resources which suggest that they have their own idiosyncratic features and, subsequently, cannot be preserved like corporal resources. The procedure emphasizes on the need to nurture organizational existence and familiarize human values in the organization. Then, human resources do not only accentuate on workers as individuals, but likewise on additional social realities, units and follows in the organization. These comprise the role or the job a worker has in the organization. (HRM Function, n.d.).
In a nutshell, HRM is the qualitative augmentation of human beings who are reflected as the most treasured possessions of an organization-the foundations, assets, and end-users of all produces and amenities. HRM is, surely an allowance of the elder procedure and method. Further HRM is inclusive and deep-seated than training and development. Its style is multi-faceted from the foundation to the accomplishment. It is a methodical process of uninterruptedly permitting the employees to advance their capability and proficiency to execute their contemporaneous as well as upcoming anticipated roles so that the goals of the organization are attained more proficiently and the wants of the employees are fulfilled to an ample degree. (HRM Function, n.d.).
Objectives of HRM
The main objective of HRM is to safeguard the accessibility of skilled and eager
labor force to a company. Apart from this, there are other resolutions too. Explicitly, HRM commitments are: societal, organizational, functional, and personal. (HRM Function, n.d.).
These objectives are publicly and ethically accountable for the wants and encounters of society. Conversely doing so, they have to curtail the adverse influence of such hassles on the organization. The discouragement of organizations to utilize their assets for society’s revenue in just ways may pertain to limitations. For instance, the society could limit human resource tenacities to mandates that implement arrangement in engaging and verdicts that address refinement, fortification or other such extents of societal concern. (HRM Function, n.d.).
The organizational objectives distinguish the role of human resource management in taking about organizational usefulness. Human resource management is not expiration in itself; it is merely a means to promote the organization with its principal objectives. Basically identified the human resource division occurs to assist the rest of the organization. (HRM Function, n.d.).
These objectives endeavor to sustain the department’s participation at a level appropriate to the organization’s needs. Human resources are to be accustomed to collaborate to the organizational demands. The department’s level of amenity must be custom-made to fit the organization it attends. (HRM Function, n.d.).
These objectives subsidize personnel in conquering their personal goals, as a minimum as these goals augment the individual’s participation to the organization. Personal objectives of workers must be met if they are to be sustained, engaged and stimulated. Or else, employee performance and serenity may depreciate leading intensify employee turnover. (HRM Function, n.d.).
Functions of Human resource management
The role of human resource management is to enterprise, progress, and governs policies and programs envisioned to make effective use of an organization’s human capitals. The part of administration which deals with the workforces at work and with their collaboration in an organization is human resource management. Its tenacities are: the operative consumption of human resources, necessary working associations among all members of the organization; and full individual growth.
The topmost practical areas in human resource management are forecasting, employment, and employee training & growth, and employee preservation. The mentioned areas and their accompanying tasks share the conjoint aim of an ample number of skilled employees with the skills, capacities, awareness, and knowledge required for auxiliary organizational goals. However each human resource function could be allocated to one of the four areas of employees’ obligation, certain careers support a variability of commitments. For instance, performance appraisal processes function to encourage and escort employee development along with income management determinations. The reimbursement purpose permits maintenance of workers and also supports to entice impending employees to the business. (HRM Function, n.d.).
A justification of classic human resource functions is following:
Human Resource Planning: the human resource scheduling function embraces the amount and kind of employees needed accomplishing organizational goals. Research is an essential part of this role as scheduling entails the assortment and exploration of evidence so as to forecast human resources provisions and to envisage forthcoming human resources requirements. The elementary human resource planning tactic is staffing and employee development. (HRM Function, n.d.).
The procedure of describing the nature of a job and specifying the person’s requirements, like skills, and contribution required to accomplish it is acknowledged as job analysis. The culmination of the job analysis practice is the job description. A job description entails work errands and endeavors of workers. Job descriptions are a vibrant foundation of information to workers, managers, and personnel individuals as job content has an extreme sway on employees’ techniques and performs. (HRM Function, n.d.).
Staffing: this concentrates on the recruitment and selection of the human resources for an organization. Human resources scheduling and employing lead the actual selection of employees for posts in an organization. Employing is the personnel job that entices competent candidates to fill job posts. In the selection function, the best qualified candidates are chosen for hiring from amid those enticed to the organization by the recruiting task. Human resource reps are intricate in emerging and handling approaches that expedites managers to espouse which contenders to select and which to castoff for the specified jobs in selection. (HRM Function, n.d.).
Orientation: It is regulated for supporting a new employee adapts himself to the fresh job and the employer. By this the employee can be acquainted by new employees with specific features of their new job, encompassing pay and benefit programs, working periods, and company procedures and prospects. (HRM Function, n.d.).
Training and Development: The training and development task provides employees the skills and considerate to do their jobs competently. Furthermore it offers training for new or less trained workers; establishments habitually offer training programs for skilled employees whose jobs are commissioning change. Big organizations recurrently have upgrading programs which teaches employees for higher level accountabilities within the organization. Training and development packages offer beneficial ways of guaranteeing that employees have potentialities of carrying out their jobs at adequate levels. (HRM Function, n.d.).
Performance Appraisal: This task of the human resource displays employee performance to guarantee that it is at agreeable stages. Human resource consultants are normally accountable for developing and dealing performance appraisal systems, whereas the actual valuation of worker’s performance is the accountability of managers. Furthermore providing a base for pay, promotion, and penalizing action, performance appraisal evidence is vivacious for worker progress since consideration of results feedback is crucial to reassure and monitor performance improvements. (HRM Function, n.d.).
Career Planning: Career planning has recognized ascetically as a significance of the longing of many employees to progress in their jobs and to develop in their career. These planning undertakings encompass evaluating an individual employee’s forthcoming for development and evolution in the organization. (HRM Function, n.d.).
Compensation: labor force of HR delivers a comprehensible process for defining how much workers should be remunerated for implementing certain jobs. Pay is noticeably accompanying to the management of human resources. In the interim compensation is a main cost to every organization; it is a major deliberation in human resource planning. Compensation affects staffing in that people are generally enticed to organizations contribution a higher level of pay in exchange for the work performed. It is related to employee development in that it provides an important incentive in motivating employees to higher levels of job performance and to higher paying jobs in the organization. (HRM Function, n.d.).
Benefits: Reimbursements are substitute form of disbursement to employees other than direct pay for work done. The human resource feature of managing employee benefits has many characters of the compensation facet. Welfares encompass both the justifiably coveted matters and those accessible at employer’s fondness. The budget of benefits has mounted so much that they have turned into leading deliberation in human resources development. Yet, benefits are primarily associated to the safeguarding feature, as they are accountable for many elementary operative needs. (HRM Function, n.d.).
Labor Relations: It entails collaboration of workforces who are embodied by a trade union. Unions are gatherings of employees who tie organized to attain more manifestation in decrees influencing salaries, welfares, working conditions, and other facets of employment. Pertaining to labor relations, the laborers obligation largely comprehends negotiating with the unions vis-à-vis wages, service conditions, and solving disputes and grievances. (HRM Function, n.d.).
Record-keeping: The primeval and most unpretentious personnel chore is underling record-keeping. It embroils recording, conserving, and recovering employee-related information for various organizational purposes. Chronicles which ought to be sustained contain application forms, health and medical histories, employment history (jobs held, promotions, transfers, and lay-offs), seniority lists, remunerations and time period of work, nonattendances, turnover, belatedness, and employee record. Ample and up-to-date employee records are decisive for most employees’ roles. In certain, employees currently have a profuse curiosity in their personnel records. They anticipate knowing what comprises it, and how does specific proclamations have been made, and why records may or may not have been streamlined.
Personnel archives entail
An increase of current and particular evidence about the company’s employees.
A supervisor to the endeavor to be acted upon connecting an employee, predominantly by corresponding him with other employees.
A guide while staffing a new employee, for example by bestowing the extents of pay received by equitable employees.
Sequential record of foregoing achievement taken regarding employees.
The crude data for indicators to monitor and direct workers policies.
The means to conform to specific constitutional requirements. (HRM Function, n.d.).
All HR workers some way or the other involves in some form of research undertakings.
In order to establish a course of action, there must be an efficient way of doing research about the employees’ information and record. Survey methods are used as these are the most practical and efficient way of collecting data about employees and organizations. Starting from recruitment, performance, training, to employee turnover and terminations all necessitate data collection. Research is not merely piloted to put out concentrations but to thwart them. Research is not the self-contained accountability of any one explicit assemblage or department in an organization. It is the obligation of the human resource department, which should be maintained by line managers and administrators at all levels of management. The backing that could be extracted by trade unions and other organizations must not be overlooked. (HRM Function, n.d.).
Human Resource Management in Small and Medium sized enterprises
Some review of the literature
There is a prerequisite to manage the HR function, but that doesn’t dictate an HR Department. Researches have shown that till the company has at least 50 employees, that department can be handled by one person, frequent to the disappointment of that one person. Amid subcontracting such things as payroll and the preliminary writing of an employee handbook, and with the surplus of software for HR today, an employee must be capable to improve and manage the function. In some companies where staffing has been a major activity, there may well be a requirement to have an HR manager or “Benefits Clerk” and a recruiter. But in most small companies an Office Manager may suffice. Traditionally, what require an HR Department are the roles and responsibilities which no one else wants or is capable of doing. From staffing to familiarizing new employees, from writing job descriptions to pursuing attendance, and from inaugurating and observing policies to checking benefits, there has been a prerequisite for an HR generalist to subsidize senior management in both generating a structure to holding down costs of administration. (Winning, 2009).
A research was steered on the escalating importance of strategic human resource management for small and medium-sized enterprises (SMEs). Sundry small firms come across serious human resource problems, although at the same time these human resources execute a vital role in evolving and maintaining their competitive advantages. Strategic Human Resource Management literature detailed issues vis-à-vis small companies are barely talked. This exploration revealed it in advance. It can be concluded that the reachable understanding on HRM in small firms is tremendously vivid and patchy. Intention was to smear tactical labor provision procedure – model (SLAP) as a mechanism to address HR issues in SMEs. The model accentuates on the equilibrium between the resource of and the requirement for labor on a firm’s level. (Brand and Bax, 2002).
One more paper examines prevailing research on handling people within small and evolving endeavors and focuses many other aspects. The investigation proposed that as people comprehend how such firms must hire, reward, and possibly inspire their employees, people lack most of the hypothetical aspect and statistics essential to apprehend how small and developing firms train their employees, manage their performance, validate and contract with legislative change and react to forthcoming labor relatives and union administrative problems. Keeping in mind the potential HR decisions, they ought to affect the organization’s success, it is vivacious that we apprehend how these useful areas of HR affect small and evolving firms, and how the HR resolutions prepared through the developmental segments of firm development inspiration the firm’s long-standing goals. (Cardon and Stevens, 2004).
A research showed on an SME and the managers were interrogated about their human resource duties in the company and they were also probed about the person who allocates such duties to them. The managers appealed that they proficiently fulfill their human resource duties. Keeping in mind this specific SME had prescribed employment relations, but the line managers were acting their HR roles in an unplanned way. They depended on direction through peers and contemporaries and their morals in the association. (Hunter, n.d.).
This research entails a comparative case-study method with sixteen organizations to study the degree to which HRM has been known in small and medium-sized UK manufacturing organizations. There is an association of HRM practices through the sixteen organizations. It is discussed that the most joint HRM practices in firms under study seemed to associate more to a accustomed small business approach than to any concrete effort to espouse HRM. The examination validated that very scarcer organizations executed a strategic style towards HRM with a collective set of procedures linked to collective method being put forward. Unconventionally, the prevailing tactic seemed to be one of unstable, malleable reasonableness, exhibiting unimportant progress from the typical contemporary technique recognized as most shared in the early 1980s. On the opposite, three companies are shown too predictable rather meticulously to the model of strategic HRM and conditional examination is inaugurated to attempt to discriminate these from the other establishments. (Walley and Duberley, 1995).
One Research proposes that SMEs that continuously examine their business environment and chase to comprehend their competitors and competitive situations and then embrace the most suitable set of human resource management strategies will be more esteemed as business partners as compared to the establishments who do not do so and, SMEs that anticipate their competitive and human resources strategies concomitantly will be more probable to be pondered as valuable strategic p
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