The key importance of human resources

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HRM is the interface between employees and the organisation that helps the organisation abide by employment and safety laws as well as follow practices that the employer authorises. Every organisation tries to search for ways to provide better goods and services. HR department plays a vital role in the growth of any organisation.

It is the HR department that is responsible for hiring the right people with the right knowledge to give an organisation competitive edge that will take them towards success. To be successful companies need workforce that is skilled, flexible and committed, an innovative and flexible management, the ability to retain skills and talent developed and a strong bond between labour unions and the management.

All the above mentioned goals can be achieved in an organisation if they have a talented HR department. The HR managers work to build up loyalty and commitment among the workforce besides hiring the right person to perform and manage specific jobs. They keep the employees up to date with company plans and lay out the implications for working conditions and job security. Therefore, human resources tend to add value, helps manage the business and contributes in strategy and decision making.

HNT needs to understand the significance of human resource management and work in accordance for their employees so that they can work much better than now. They need to take care of their health and security and provide them facilities that will encourage them to work better. The needs of the doctors, nurses and other staff must be kept in mind when devising a strategy and all should be entertained in such a way that they are all satisfied. For any company these days their human resources are the key element for their success.

The human resources audit

A human resources audit is an all embracing method to review the current HR policies, procedures, documents and system to identify gaps for enhancement and improvements of the HR functions as well as to make sure that they are coherent with the ever changing rules and regulations.

The purpose of human resources audit

There are many reasons for conducting an HR audit. However, their purpose is to recognise identify the strengths and point out any need of improvement in the HR functions. If an audit is properly exercised it will reveal the problem areas and give recommendations and suggestions to remedy these problems. Here are some reasons to conduct an audit:

Ensure effective utilisation of human resources in an organisation.

Review compliance matters with a number of administrative regulations

Develop a sense of confidence in management and HR function

Maintain or enhance the reputation of the organisation in the community

Establish benchmark for further improvement for the function

Human resources and culture

Organisational culture refers to the personality of a firm that is what makes a company unique in the eyes of outsiders and insiders. Culture can be defined as the presence of shared beliefs, values, assumptions and pattern of behaviour. There is a parallel connection between an organisation's culture and its HR policies as both have an effect on each other. Human resource policy areas like staffing, training and evaluation of employee have vital effects on organisational culture.

Those organisations which do not consider human resources as a vital aspect and asset to them are at great loss. When the HR audit is complete the management is able to answer key questions like whether the human resources are having enough strength to be built on or are they having some weaknesses that need to be rectified. The information gathered from the audit provides important input into the prospective strategy's evaluation in terms of its feasibility and identifying the gaps that needs to be taken care of.

Human resources gaps

A major part of managing budget of an organisation is through managing the employees effectively. Employees tend to be the largest overheads for many organisations. Different processes and techniques are there that can be used to manage the employees well. One significant aspect is to accurately determine the current and future supply of human resources and the demand for them respectively. If a company is able to do that they can avoid ant resourcing gap that can appear due to oversupply or undersupply of employees in comparison to jobs available.

A simple calculation for HR gap can be:

Human resources gap= human resources necessary for the proposed strategy minus current state of the human resources.

There can be either a surplus of human resources or a deficit and in both ways it will create a gap. The human resources gap is not just concerned about the gap in the number of employees required but is also about if the particular skills are available in the organisation or not. If the number of employees required is less the organisation will be having problems in doing their work properly and will be unable to provide their product and services on time. If the number of employees is more than required then they will have to pay extra money and will increase the expenditures and still not provide productivity. On the other hand if the numbers of employee are there but they don't have the required skills and experience then again they won't be able to do their jobs effectively and efficiently.

Gaps can be minimised by different things like retaining the skilled resources, by recruiting more skilled and efficient labour, by training the staff, by redeployment etc. However, all of these factors above will have implications in terms of finance and time.

The contents of a human resource audit

Human resources audit's content varies for all organisations depending on their size or their geographic coverage that is how much is it scattered. A usual audit checklist is something like this

The number of employees by a number of accounting methods. The employees in the organisation are segmented in different ways like for example getting the total number of employees and then dividing them by location (how many employees are working at a certain location), by skill type (how many workers have a certain skill), by grade or place in hierarchy (how many employees are working a certain grade in the organisation), by age or length of service (how many employees of a certain age are working in the organisation or for how long have the employees been working), by gender (how many males and females etc are there in the company) and by ethic group (what ethnic groups does the workforce belong to).

Employee costs. It is calculated with the amount of money spent on an employee by the organisation. It is usually measured by salary that is given to them and add-on facilities and services provided to them like medical insurance or travel allowance etc.

The organisational structure and the position of employees within the structure. The way the organisation structure is designed is an important factor for any organisation's success. Is it a hierarchy structure or a flat structure will show if the employees have a senior-subordinate relationship or as peer? Therefore, it is vital that in order to conduct the HR audit one should know about the structure of the organisation and should also know the position of each employee in the structure that will let the organisation know who is under who and what authorities is a certain person in the organisation possessing.

Recruitment and selection procedures and their effectiveness. Another important thing that needs to be considered is that the recruitment and selection being used by the organisation is the best according to the use and benefit of the organisation. If the right people with the right skills are being hired by the organisation it will be sure that the company will show progress as the human resources will be providing the effectiveness that is required for better performance. On the other hand if the recruitment and selection is not done properly the whole organisation can be at stake.

The quality and effectiveness of training and development programmes used. In the HR audit it is necessary to check the quality and effectiveness of the training and development programmes that are being used in the organisation. The right type of training will give the employees the confidents and skills to work better and will also give them the feel that their company is concerned about their development. The people that need to be retained for the benefit of the company can be entered into development programmes and can be trained with long term planning in mind.

The level of employee motivation and morale. The HR audit also checks the motivation and level of morale of the employees in an organisation. How much are they eager to work? Are they satisfied with their working conditions or not? Are they getting the right incentives to work? Its these things that let the organisation know what the employees are feeling and what needs to be done to increase their level of satisfaction.

The level of skills and capabilities present. HR audit also helps to check the current skills and capabilities of the workforce in the organisation. This will enable the company to assess the employees and see if they have the right skills to do their respective jobs properly or not. These capabilities are essential for the employees to work better and do their jobs efficiently.

The quality of employee or industrial relations between management and employees. The relationship between the management of an organisation and the employees is ever so important and is like a building block of and firm. The audit also checks the relationship of the management with the workforce and external parties. If there is no coordination between the two then the performance of the company will go down and everyone including the management and employees will suffer.

The internal and external networks that employees in the organisation have developed (and their effectiveness for various purposes). Contacts in the organisation are very significant. There are different networks that are formed formal and informal and also the networks formed by the employees and the organisation. All of these networks are assessed in the audit to have an understanding of how effective they are and how are they benefiting the business.

The monitoring of the effectiveness of existing human resources polices and control procedures. Another purpose of the audit is to monitor the existing policies and procedures related to HR and check if they are being implemented effectively and are in favour of the employees and helping them in the right way or not.

HNT will have to be careful in order the carry an audit in their organisation. They will have to go through all the points mentioned above and check them one at a time and evaluating their resource and skills.

The outcomes of a human resources audit

The problem of measurement

When conducting the HR audit there are some issues of measurement. There are certain things in the audit that can be measured in a quantitative manner like entries that is employee cost, shortage or surplus of skills in numerical form. However, there are certain things that cannot be measured in that manner like the motivation of staff or their morale. Such things cannot be measured in a quantitative manner and need some qualitative analysis. Like for example a staff can either have a high morale or low morale but if there is something in between the two then it cannot be expressed which on the other hand can be done for employee cost. There are a lot of disparities found in the employees of an organisation regarding the motivation and level of satisfaction. Some employees are highly motivated and they tend to work better and enjoy good morale where as some employees wont. Therefore everyone cannot be measured with the same yard stick in such a situation. There is a need to contain some subjective assessments of some parts of the audit.

In order to carry out the human resource audit in HNT the management should also keep note of such aspects that cannot be measured and are of great significance for the organisation.

Identifying human resources as success factors

Human resource audit can be used to identify gaps in an organisation like HNT but that is not the only thing that it is used for. HR audit can also be used to establish which employees or group of employees are vital to strategic success. These sort of people are the ones that the organisation's success may have been dependent upon in the past and are the centre of attention in the existing structure as well.

These critical resources can be found at different level in the organisation. In HNT they can be found in the board of directors that are giving strategic direction to the whole organisation. Some can be found in the research and development like some doctors who are working on new research in the hospital that can be a big success factor for them. Same goes with people from other departments like marketing etc they all are very important for HNT to do well in their present and future and they should be protected and retained in the organisation with a comprehensive HR strategy.