1.1 Introduction to the Role of HRM

The purpose of this course is to help you better understand the role of human resource management, also known as HRM, or simply HR. Human resource management is responsible for the recruitment, selection, training, and motivation of an organization’s employees. Human resource management is therefore concerned with the fundamental task of defining and analyzing jobs in organizations. Other HR tasks include:

• Planning human resource needs within the organization

• Staffing the organization’s needs (once those needs have been identified)

• Compensating and motivating employees

• Appraising employee behavior and providing effective and constructive feedback

• Enhancing the human potential within the firm

• Improving the workplace environment and using the human resource capital within the organization to reach strategic goals

• Maintaining effective work relationships

• Globalizing the human resource management function within the firm

Although the HRM department in many organizations does not perform all of these functions, the last three decades have seen a trend moving in this direction. We will now discuss each of these functions in greater detail.

Strategic human resource management describes the process of aligning human resources with business strategy. By so doing, HR becomes a key player in defining the organization’s strategy. In today’s global and chaotic work environment, integrating human resources and strategy is more important than ever, as employees have the ability to provide the organization a nonreplicable, competitive, strategic advantage.

HR Planning

The planning function of human resource management involves two major activities: strategic planning and short- and medium-range planning. These two activities include the process of planning and synchronizing HR needs with the strategic mission of the firm. Such strategic objectives may include increasing market share, revenue growth, product or service diversity, and profit margins, as well as planning for financial obligations. Planning activities are also essential for effectively performing numerous other critical HR activities. For example, HR planning will help the organization better understand how many and what type of employees the organization will need in the future. HR planning also addresses how the firm obtains and trains future human capital.

HR Staffing

Once the organization’s human resource needs have been linked to the organization’s strategy, positions must be filled. Staffing involves recruiting job applicants (also known as candidates), and then selecting the most appropriate applicants for the available jobs. It should be noted that staffing applies both to external candidates (those not currently employed by the firm) and internal candidates (those currently employed by the firm).

While engaging in the process of recruitment, it is important that the organization cast a wide net to ensure a full and fair search for potential job candidates. Recruiting is an extremely important HR function, because if organizations don’t attract a wide range of candidates, they will be less likely to successfully fill organizational needs. Once candidates have been identified, they must be selected for the job. Common selection techniques include obtaining completed application forms, interviewing candidates, reviewing education and formal training verifications, and administering various formal and informal tests to determine fit and potential with the organization. All selection procedures must comply with various pieces of federal and state human rights legislation. The goal of the selection process should be to create a match between a candidate’s ability and the requirements of the job.

Compensation and Benefits

Once employees are on the job, it becomes necessary to determine how well they are doing and to reward them accordingly. There are several important aspects of compensation. For example, employees are generally rewarded on the basis of the value of the job, their personal contributions, and their performance. Although rewards based on performance can increase an employee’s motivation to perform, other forms of compensation are given simply for being a member of the organization. Those rewards that are directly linked to performance on the job are often referred to as direct compensation. On the other hand, compensation that is given simply for being a member of the organization is often referred to as indirect compensation.

Performance Appraisal

A performance appraisal (also known as a performance review, performance evaluation, or career/development discussion) is a method by which an employee’s job performance is evaluated. Although many managers and employees avoid performance appraisals, they are critically important for both measuring and monitoring an employee’s contribution. Performance appraisals are frequently the basis for promotions, trainings, and raises, as well as terminating employees. As such, it is critically important that they accurately reflect the performance of employees. For example, if an employee is chronically absent, can’t get along with coworkers, or is consistently late to work, the employee’s performance appraisal should reflect those things.

Enhancing Human Potential

Over the last several decades, the HRM field has seen a substantial interest in both formal and informal training and development. A number of studies even suggest that many millennials entering the workforce today are more concerned with the ability to grow and develop personally than they are with their direct compensation. In today’s global and chaotic environment, many firms use training and development activities to remain competitive.

Improving the Workplace Environment

Many organizations today strive to improve the quality of work life, implementing productivity improvement programs as well as improving health and safety at work. While in the past, the primary health and safety focus was on the physical work environment, there is now a growing concern about the psychological work environment. Many firms realize that their strategic and competitive advantage is directly impacted when the employees’ work environment is poor. Similarly, many organizations, such as Google, are doing all they can to build a creative and open workplace.

Maintaining Effective Work Relationships

After an organization has hired the employees it needs, it must take good care of them. In addition to providing compensation and a healthy and safe environment, firms must provide conditions that will make it attractive for employees to stay. As part of this function, organizations must establish and maintain effective working relationships with employees. Over the last several decades, employees have gained substantial rights within the workplace. As a result, employment decisions such as discharges, layoffs, and demotions must be made with care and good reasons. It is absolutely critical that management be aware of employee rights and not violate them. The HR manager is in an excellent position to inform managers about these rights.

Globalizing HRM

As the world becomes more interdependent and the easy exchange of information becomes commonplace, it is of paramount importance that HR managers learn from the HR practices, policies, and activities of other countries. Furthermore, as organizations become more global, it is essential that organizations develop and implement HRM policies with international applicability, also making them relevant to employees from diverse cultures and backgrounds.

In analyzing these eight separate HR functions and activities (planning, staffing, compensation/motivation, performance appraisal, training and development, improving the workplace, relationship building, and globalization), it is important to view them both independently and together, as many HR functions directly influence one other. In other words, the performance of one activity often depends on the performance of another. It should be noted that in most work environments, all HR functions and activities operate within the constraints of the internal and external environments (discussed in section 12.4). As such, all eight functions should be viewed as a unit, as necessarily interrelated, and as being subject to a multitude of forces and events that help shape an organization’s HR policies. Finally, in order to help the firm achieve its organizational and strategic goals, human human resource policies and practices must be congruent with the organization’s overall strategy.