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The Human Resource Management (HRM) function within a business deals with recruitment, management and development of the human resource that is employed in the organization. Although it is incorporated in responsibilities of every manager in the an organization, but nowadays most organizations consider it more beneficial to set up their own specialist department that contain expert people in the field devoted to ensure the efficient performance of human resource function. (http://www.accel-team.com/human_resources/hrm_00.html)
Although the value of people in an organization is getting more importance by the day but still the in many businesses people remain
poorly motivated, and as a result
Organizations of any size need right people who are capable of formulating the appropriate strategy to cater for the increasing rate of changing environment. Regular staff turnover can be disruptive to the operations of an organization as it takes time to build up 'cultural awareness', knowledge and experience about the product, process and organization for new staff members.
Analysis of the scope
HRM helps human resource to connect strategically with organization's goals and objectives and deals with improving communication between the employer and employees. The importance of manpower makes the existence of HRM plan crucial for planning, controlling and maintaining the select and recruitment, training and performance appraisal of that manpower.
HR managers need a good understanding of the work being performed and work that is to be performed in the future along with how it is organised. To provide this understanding, organizations develop procedures such as job analysis to enhance and facilitate the process of recruitment, selection and training and performance management. The HR managers require details on the skills and abilities needed to perform a job, along with information on how a job is organised and carried out. This is also needed to be able to develop policies regarding the employee benefits, compensation and employee safety.
HRM has the following key parts:
When recruiting, HRM managers must begin with a job analysis. This is done to identify the nature of the tasks to be performed on the job, for instance, the kind of physical activities that the employees will perform at work and the responsibilities they will be given. These tasks will then be written into a job description. This information then allows employers to understand what physical and mental characteristics, skills, abilities and qualifications the candidates must possess in order to be the right match for the job. A job analysis also helps identify what characteristics in an applicant will be a decided disadvantage; hence it will prevent the selectors from making a wrong decision. (http://www.accel-team.com/human_resources/hrm_02.html)
Recruitment can be done through various channels which are available for HR managers. Some of the main sources of recruitment include:
Advertising (commonly via agents for specialist posts) or the use of other local media (e.g. commercial radio)
University notice boards
Internal promotion and internal introductions
Careers Representatives (and careers masters at schools)
Agencies for the unemployed
When promoting its recruitment plans, an organization tends to use its own printed advertising; however, it is helpful if the company uses some recognizable logo as its trade mark to draw more candidates quickly. Nonetheless, the organization must take into consideration that the advertisement and logo do not violate the antidiscrimination legislation in anyway. This is also a concern when designing application forms as the questions must not offend an applicant's race, sex etc. The forms, however, will differ depending on the type of job and the number of employees to be recruited.
When screening application forms, it is important for HR managers to thoroughly check the applicants' claims about their experience and qualifications. In the case of jobs which require certain physical strengths and capabilities, managers should also check whether candidates have completed a health questionnaire or not. The health questionnaire is a common tool in most jobs although it may not necessarily be harmful to the applicant's probability of being selected because in some usually, companies are asked to hire a certain percentage of disabled people.
Once the candidates have been screened through application forms, they are interviewed to identify their eligibility more accurately before selecting them for the job. Interviews can be carried out in the form of sequential interviews by a group of experts, or by a panel of interviewers or simply by individuals such as the managers or supervisors. Several selection techniques are available to aid judgment while interviewing; these include testing for:
Aptitudes (particularly useful for school leavers)
In order to make the recruitment process a complete success, it is essential to incorporate training into the interviews and appraisals. This means that it is necessary to teach the interviewers how to draw out the interviewee and how to rank or give scores to potential employees during the appraisal.
Diversity is not just diversity of ethnicity, race or gender but is defined as "otherness or those human qualities that are different from our own and outside the groups to which we belong, yet present in other individuals and groups." Dimensions of diversity include ethnicity, age, gender, ancestry, race, physical abilities, sexual orientation, educational background, geographic location, income, religious beliefs, marital status, military experience, parental status, and work experience (Loden and Rosener 1991, 18-19).
All these dimensions of diversity effect motivation, performance and interaction of people within an organization in some way and this should be taken in consideration to remove any barriers created by institutional structures and practices.
People may share similar values like need for recognition or respect, but how they demonstrate these values in their behaviour may differ in different cultures. To deal with this issue, the rule "treat others as they want to be treated" is the best option. A culturally relative perspective is more helpful to manage diverse environment more effectively than an ethnocentric view.
Paying no attention to issues relating to diversity may cost time, money, and efficiency. Consequences may include:
Tensions between people of differing dimensions
Increased staff turnover and less retention of talented people
Loss of investments in training, recruitment and development
Excellence in reward system requires an effective performance management process. Relating organization's mission with individual employee performance and understanding how individual jobs add value to the organization is important. Also, clear performance objectives should be set and communicated at both the department and individual employee level, so that everyone is clear about what needs to be done. Defining career development goals as part of the process makes it understandable that how the present job supports employee development creation of new opportunities. Providing and improving discussion and feedback platforms will help promote flexibility allowing organizations to identify and resolve problems at early stage. Performance management should be taken as an on-going process rather than an "annual event".
Both time and energy are saved by planning and implementing a successful performance management process and this can be an effective motivator as it motivates employees to achieve the best possible performance.
Increased competitiveness in businesses in today's world demands that workforce should be diverse workforce and it skills up-to-date. Even in times of high unemployment, the beliefs of free market that organizations can 'buying-in' skills has been inadequate. Human Resource Development (HRD), on the other hand, allows human resource managers to be proactive and focus on employee development as an investment for the organization. The need for skill availability can be met by planning in advance the adequate development programs so as to improve the skills of existing workforce. Development programs do not only deal with training but may also be focused on competences, gender and role. Constant and accurate counselling, assessment and personal challenge is required in a successful development plan as well as improved socialization of people to fit the culture of the company.
The literature on management suggests various opinions and definitions with reference to employment relations (ER) and human resource management (HRM). According to The Harvard Group, HRM is one of the employment systems and is a "high commitment work system" (Lawrence, 1985). HRM may be applicable to a major group of employees while the secondary or peripheral groups work in accordance with other ER (or IR - industrial relations) practices. This is supported by Bain and Clegg's (1974, p. 98) who suggest IR as "the study of the rules governing employment and the way rules are changed, interpreted and administered".
HRM may be considered as a division of ER as ER encircles a wide range of actions and issues. However, strategic HRM is cannot be considered as a part of ER since it involves much more. It can also be seen as evolving from ER/IR. According to Kochan et al. (1986), one of the crucial aspects of management is to correct the formal structure and the HR systems in an effort to make them the strategic objective of the organisation (Fombrun et al. 1984, p. 37). The Harvard approach suggests that it is the responsibility of the managers to finalize their decisions regarding employee and organization relations so that outcomes for the stake holders may be enhanced. Accordingly, this involves a range of actions that encompass the IR/ER as suggested by definitions above. Hence managers have responsibility to manage four SHRM policy areas: employee influence (participation); human resource flow; reward system; and work systems (work organisation)" (Mabey et al., 1998, p. 61).
In short, there is a substantial overlap between IR/ER and HRM. Both have similarities in geography, industry, size, politics and ethics (Baker, 1999). ER focuses on the conflict between employer and employee while HRM emphasizes a single source of authority as opined by Alan Fox (Donovan, 1968).
Methodological considerations and literature relating to some issues in HRM
According to recent research published in the International Journal of Human Resource Management, "Perceptions of the business culture of different countries are important factors in international human resource management (IHRM); affecting the development of human resource management (HRM) and impacting on existing and potential expatriate managers sent to those countries. This paper analysed such perceptions as a contribution to the discussions about whether the central and eastern European (CEE) states form a separate variety of capitalism and IHRM." (Brewster et al, 2010) A large data sample of expatriate and local managers of the CEE countries is used in this paper and to contrast the findings, two peripheral western European states data is also used. It is found that generally, "local managers are rather more positive than expatriates but otherwise share the same perceptions". The researchers drew out the theoretical and practical implications for multinational companies (MNCs') international HRM policies and practices. (Economics week, 2011)
Another paper by written by A.G. Psychogios and colleagues of City College seeks to understand the effects of application of human resource management (HRM) in Greece. It reviews different approaches to institutions and how they conceptualize environments such as Greece, and the relevance of such approaches in the light of empirical evidence," (Economics week, 2011)
This literature suggested that similar to other Mediterranean economies, Greece has been experiencing a long progression, "marked by reforms both towards greater liberalization and greater coordination." (Psychogios et al, 2010) However, the decisive objectives remains ambiguous and fixed ways of doing things continue. Greek economy is found to be dualistic one as the other Mediterranean economies i.e. it is divided between large established organizations and the SME sector while SME's importance has increased in recent years (Psychogios et al, 2010). Psychogios and colleagues concluded that "empirical research evidence would underscore the importance of conceptualizing institutions as subject to both continuity, and uneven, contested, yet constant change, and the extent to which internal diversity persists within national institutional frameworks." (Economics week, 2011)
According to CareerBuilder's 2011 Job Forecast, employers will continue to cautiously monitor the economic recovery in the New Year and thus watchful hiring trends are expected to carry on. "While the majority of UK employers (73 per cent) described their organisation's financial performance as steady or growing, 28 per cent reported it is declining or uncertain. Thirty-nine per cent of UK employers plan to add new employees in 2011 with a mix of full-time, part-time, contract or temporary workers and interns. One-in-five (20 per cent) plan to add full-time, permanent staff." (PR Newswire, 2011).
"Employers are hiring again, albeit at a guarded pace," said Tony Roy, President of CareerBuilder EMEA. "Our survey and job posting activity on CareerBuilder.co.uk point to gradual, moderate improvements in the UK job market in 2011. We'll see more jobs added across a variety of industries, but it will still be a highly competitive job market."
Literature suggests that those functional areas having direct impact on revenue are favourite hiring areas among UK employers. (PR Newswire, 2011) Using innovation, new efficiencies are being created to create new revenue streams and extending customer reach and loyalty are among top priorities within organisations.
UK employers also reported the need for workers to fill what they consider emerging positions within their organisations. Green jobs, or environmentally-focused positions, were cited most often in terms of new opportunities followed by positions centered around global relations, social media, the use of mobile technology and cyber security. Businesses will be relying on interim solutions to help shoulder growing workloads. Eighteen percent of UK employers plan to hire temporary or contract workers to help supplement leaner staffs. In addition to seasoned workers, employers will be investing in the next generation of talent for their organisations. Thirty-one per cent of those hiring plan to recruit recent college graduates in 2011. Twenty-seven per cent of UK employers are concerned that best talent will leave their organisations once the economy improves, as heftier workloads and longer hours take their toll on worker morale. Thirty per cent said they will increase compensation for their existing staff in 2011 with the majority estimating the raise will be three per cent or less. Twenty-two per cent of those hiring will provide higher initial job offers to job candidates with most increases likely falling within the same 1 to 3 per cent range.
The underlining aim of the HRM is to: "ensure that at all times the business is correctly staffed by the right number of people with the skills relevant to the business needs". (http://www.accel-team.com/human_resources/hrm_00.html)
Overall, a strong human resource management system which manages the manpower and matches right people with the right jobs is very essential to every business process. Not having a well-structured HRM strategy can result in huge losses for a company. This is because HRM helps identify and clarify details about the jobs present within the organization, the skills needed for those jobs, and then helps recruit and select the right people for those jobs. Furthermore, it also helps manage diversity at work along with performance management which ensures consistent improvement in the business process and leads to success.
Brewster et al, 2010, Perceptions of business cultures in Eastern Europe and their implications for international HRM, International Journal of Human Resource Management
Economics Week, 2011, Human Resource Management; Research from University of Reading Yields New Data on Human Resource Management, JanuaryÂ 21,Â 1126.Â http://www.proquest.com.ezproxy.uow.edu.au/Â (accessed January 23, 2011).
Economics week, 2011, Human Resource Management; Reports Outline Human Resource Management Research from City College,Â JanuaryÂ 21,Â 1090.Â http://www.proquest.com.ezproxy.uow.edu.au/Â (accessed January 23, 2011).
PR Newswire Europe Including UK Disclose , 2011, U.K. Employment Trends to Hold Steady in the New Year, According to CareerBuilder's 2011 Job ForecastÂ JanuaryÂ 12 http://www.proquest.com.ezproxy.uow.edu.au/Â (accessed January 23, 2011).