Introduction to HRM and its Importance Session One

Introduction to HRM and its Importance

What is HR management?

Human resource management is an umbrella term that is used to describe activities that take place in business around the management and development of its employees. The function oversees all aspects of its people, from when they are recruited to when they leave the organization, otherwise known as the entire employee lifecycle.

Five (5) key operative functions of HR management

Because HR management covers many stages of the employee lifecycle, there are various functions within an HR department. The majority are firmly linked to each other and overlap in many respects. How the functions of an HR department are split very much depends on the size and culture of the business, and many varieties exists, but here are some of the most common areas:

1. Recruitment and onboarding
This area of HR management deals with the many activities in hiring a new employee. The first step is scoping out a job description. Marketing the vacancy to source candidates may involve direct advertising online, with other media outlets, or working with a recruitment or headhunting agency.

Applicants are then screened and shortlisted against the job specification before interviews are carried out, and an offer of employment is made to the successful candidate. Once a candidate has been made an offer, a contract of employment and other offer documents are generated and sent to the new employee. Next, the HR team works with the new employee’s line manager to arrange their induction and training program.

2. Compensation and benefits

This includes administering and running payroll, calculating and paying bonuses, and administering the company's benefits schemes, such as private medical insurance, pensions, etc. Some of these tasks involve detailed and ongoing liaison with third-party partners.

3. Performance management
Performance management involves creating simple yet effective performance management processes, template forms, and scoring systems. Managers must track performance levels across their teams and implement initiatives to improve poor work and drive good progress across the business.

4. Learning & Development (L&D)
The L&D function of HR management includes sourcing or designing training courses to meet
learning needs, organizing coaching and mentoring programs, and other initiatives to improve job performance across employees and teams.

5. Workforce management and succession planning
Strategic HR management involves working with the senior leadership team to identify future
opportunities and challenges that may affect the business. The HR function can then implement an effective strategy to ensure that the people aspect of the company can meet these future changes.

Importance of HRM for Organizational Success

Here are five reasons HR is essential to organizational success and how leveraging its full potential can positively impact your business.

1. Attracting and Retaining Top Talent

Attracting and retaining top talent is essential for the growth and success of any business. Building a diverse and skilled workforce is crucial for meeting the challenges of a rapidly changing business environment. A motivated and highly skilled team can lead to increased productivity, improved customer satisfaction, and a competitive edge in the marketplace. Reducing turnover is another key benefit of effective recruitment and retention strategies. Investing in effective recruitment and retention strategies can help businesses attract and retain the best talent, which is essential for long-term success. The HR function plays a vital role in this process by finding candidates with the right skills, experience, and those who align with the company's culture and values. By building a strong and diverse workforce, organizations can better equip themselves to meet the challenges of a rapidly changing business environment and retain top talent.

2. Building a Positive Workplace Culture
Building a positive workplace culture is essential for the success of any business. This aspect of growing your organization is truly the sweet spot of effective HR. No one is thinking about the entire organization except the HR function. A positive culture improves employee morale and has also been shown to increase productivity, reduce absenteeism and turnover, and improve customer satisfaction. By fostering a culture of trust, respect, and inclusivity, businesses can create an environment where employees feel valued, respected, and motivated to contribute their best efforts. This benefits the employees and makes the company an attractive destination for top talent, essential for long-term success. HR is crucial in creating and maintaining a positive and engaging workplace culture.

3. Managing and Mitigating Risk
Managing and mitigating risk is critical for thriving businesses as it protects the organization's reputation, stability, and long-term success. Sadly, not every organization relies on risk management procedures, and while the data is older, one survey gives a glimpse into what the practice of these procedures can look like. The HR function plays a vital role in this process by ensuring compliance with labor laws and regulations, identifying potential areas of liability, and implementing procedures to mitigate them. This helps protect the organization from costly fines and lawsuits but also helps maintain trust with customers, shareholders, and other stakeholders. Organizations can ensure long-term stability and success by effectively managing and mitigating risk.

4. Driving Business Strategy
Driving business strategy is critical for thriving businesses as it helps align the organization's human capital with its overall business goals. The HR function plays a crucial role in this process by identifying the skills and capabilities that the organization needs to achieve its goals and developing and implementing programs to acquire and develop those skills. By aligning HR initiatives with the business strategy, organizations can ensure they have the right people and skills in the right roles to achieve their goals. This helps organizations stay competitive in a rapidly changing business environment and creates a clear direction and vision for the organization that all employees can work toward.

5. Improving Organizational Performance
Improving organizational performance is essential for achieving goals, increasing efficiency, and directly impacting the bottom line.

HR is critical in driving this performance by managing and motivating employees, creating systems and processes to measure and improve performance, and providing development opportunities. By implementing effective performance management systems and providing development opportunities, organizations can improve the performance of individual employees, teams, and the organization. This can ultimately lead to improved productivity, increased revenue, and tremendous success in achieving organizational goals. Effective performance management can also help organizations identify areas for improvement and make necessary changes, allowing them to stay competitive in the long term.