People are essential to the success of any business. The performance of employees can be a liability or asset to a company.
As an HR professional, you will play a pivotal role in how successful your company is. Good Human Resource Management (HRM) is essential for businesses of all sizes.
In this article, we will break down the fundamentals of Human Resource Management.
Human Resource Management, or HRM, is the practice of managing people to achieve better performance.
For example, if you hire people into a business, you are looking for people who fit the company culture as they will be happier, stay longer, and be more productive than people who won’t fit into the company culture.
The 4 HR basics
When we talk about Human Resource Management, several elements are considered cornerstones for effective HRM policies. These cornerstones are:
1. Recruitment & selection
Recruitment and selection are arguably the most visible elements of HR. We all remember our first interview, right?
Recruiting candidates and selecting the best ones to come and work for the company is a key HR responsibility. People are the lifeblood of the organization and finding the best fit is a key task.
The request for new hires usually starts when a new job is created or an existing job opens up. The direct manager then sends the job description to HR and HR starts recruiting candidates. In this process, HR can use different selection instruments to find the best person to do the work. These include interviews, different assessments, reference checks, and other recruitment methods.
2. Performance management
Once employees are on board, performance management becomes important. Performance management is the second HR basic. It involves helping people to become their best selves at work, boosting the company’s bottom line.
Usually, employees have a defined set of responsibilities that they need to take care of. Performance management is a structure that enables employees to get feedback on their performance – to reach their best performance.
3. Compensation and benefits
Another one of the HR basics is compensation and benefits. Fair compensation is key in motivating and retaining employees. One of the fundamentals of human resource management concerning pay is ensuring equity and fairness.
Making the right offer of pay is a key part of attracting the best talent. This must be balanced with the budget and profit margins of the company. HR should monitor pay increases, and set standards of merit. HR may also carry out a pay audit on occasions.
Compensation comprises primary compensation and secondary compensation. Primary compensation involves directly paid money for work, which often is a monthly salary and sometimes performance-based pay.
Secondary benefits are all non-monetary rewards. This can include extra holidays, flexible working times, day-care, pensions, a company car and laptop, and much more.
The goal here is to reward people in ways that motivate them.
4. Learning & development
Learning and development helps employees to reskill and upskill. Learning & Development (L&D) is led by HR and good policies can be very helpful in advancing the organization towards its long-term goals.
Many organizations have pre-defined budgets for L&D efforts. This budget is then distributed amongst employees, with trainees, future leaders, and other high potentials often receiving more training opportunities than others. Individuals may arrive at a company with vastly different knowledge and experience. L&D provides employees with a way in which to bridge skill gaps and develop into leaders.
In conclusion,
Human resources are the very life force that drives any business or organization. For those with the skills, talents and confidence to oversee HR operations, career prospects can be nothing short of spectacular.
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