Human resource management involves practices used by managers and HR workers and automated systems to manage people. Examples of HRM practices include performance management, hiring, firing, training, payroll and employee benefits administration. Without organizational coordination through HRM practices, managing personnel is cumbersome, which can leave employees feeling dissatisfied and wanting to work for a more organized firm.
For many, HR can be a boring topic, but the scenarios HR departments and business owners can face in their day-to-day operations can be the stuff of daytime dramas. However perception is often a reality, and so thoughts of HR policies and procedures are often left to the wayside when setting up a new small business.
Significance and Impact of HRM
Of all the assets an organization has, it is the human asset which can never depreciate in value in the balance sheet, amongst other assets such as land, plant, building and equipments that fetch less value upon usage.
As an employee gains knowledge and experience over the years, he or she becomes more valuable to the organization. Today, the Human Resource department merely focuses more on the transactions, but the manpower. Yes, strategic human resource management today looks much beyond the regular data entries, filing and such other monotonous job activities. It is largely focused on cross cultural issues, corporate cultural change, and on the rise of developing countries. Multinational corporations, for instance, may have their payroll systems in India and their IT services in developed countries, such as China. It is imperative for employees to work together, from various parts of the world. In such cases, cross cultural issues like the management of expatriates and that of their families arise. Talking about corporate culture change, the strategic human resource management is the pillar strength for corporate culture change. Where an organization needs to be as cost effective as it could by cutting down on business expenditure and manufacturing products at lowest possible cost, and yet offering the consumers the best products at affordable rates, it also need to compete with other companies in different parts of the world in order to survive in this highly intensive competitive environment. The change of consumer mindset influences the corporate culture change. The purchasing power of the consumer can never be ignored, whether the consumer lives in India, China or any other developing country. This is why the organization tends to change its business plan and become multinational. Such development poses a challenge to strategic human resource management.
Where HR brings considerable benefits to the organizations, the latter still fail to create an association of the HR strategies with the business strategies and this is where the real challenge arises. In the absence of such linkage, the organizational goals are at stake.
Strategic human resource management plays a pivotal role when it comes to managing employees in developing as well as developed countries the most tactfully. It has been designed such that companies can cater to the needs of their existing employees the best possible way, whilst also fostering the company objectives. It is indeed the fact that human resource management deals with multifaceted business aspects that have a direct bearing on the employees, such as compensation, benefits, administration, hiring and firing, and training / orientation. Human resources include provision of pay incentives, vacation or sick days and safety procedure details.
Strategic human resource management proactively directs and manages people, and therefore, it seeks planning different ways to better act on the needs of the employees and vice-versa. This may influence the way activities are conducted at work, improvising many things from recruiting policies and training courses through to performance appraisals and evaluation techniques.
Organizations that put in greater efforts in meeting the needs of their employees promote favourable work environment that eventually leads to productivity. Strategic human resource management is the ultimate solution to achieve organizational productivity. Planning ahead for the betterment of employees helps in enriching the retention rate of skilled employees and hence, reducing the expenditure incurred on recruiting and training of new employees.
