Human Resources

Human resource management

In order to truly understand the importance of human resource objectives, we first have to define what human resource management is.

Setting HR objectives

Setting goals allows the organisation to plan and assign resources. Making certain business decisions can a lot of time and require many resources.

The benefits of having good HRM are:

• Reduced costs due to higher productivity, greater efficiency, and higher quality products.

• Increased value-added, hence increased profits. This can be due to higher quality products, better service to customers, and innovation built on the performance and determination of the workforce. A workforce that is determined and motivated will be willing to do its work in the best possible way, and hence, provide good quality products.

• More employee engagement and involvement

• Talent development

• Improved employee turnover

• Good conflict management

Decision-making to improve human resource performance

Let's take a look at the role HRM has in business decision-making.

Human resource management

When we talk about decision-making in HR, it refers to a process that involves everyone. The decisions made by this function cover the whole employee lifecycle, from the period of talent identification, hiring, performance supervision, and compensation, to contract end. HR relies on market data and also internal responses, to allow better and quicker decision making.

The link between HRM and organisational goals

All HRM decisions have a direct connection to company goals.

The function of HR, however, is becoming more complicated, as well as more crucial. Companies understand the significance of recruiting and retaining highly skilled workers. Retaining employees and preventing turnover can be one way of reducing costs. Productivity is also subject to its employees. Human resource managers are responsible for keeping employees satisfied and ensuring they comply with regulations.

How can human resources be improved?

Now, let's take a look at how effective HRM can improve a business.

Improving organisational design

Businesses are organised so they function effectively and efficiently. Businesses may contemplate improving and changing their design when:

• There is a need for a formal structure to prevent confusion and disorder.

• The old organisational design is not engaging and motivating enough for the employees.

• The product/service quality of the organisation needs improvements.

Improving motivation and engagement

Employee engagement is the degree to which employees feel determined to work for the organisation and contribute to its success.

The advantages of a motivated and engaged workforce are:

• High-quality products with added value and less waste.

• Lowers costs via efficient productivity and innovation.

• Increased employee retention and thus decreased recruitment costs.

Improving employer-employee relations

Employer-employee relations refers to the relationship that exists between the two parties. The quality of the relationship will determine how well work-related problems are resolved. The benefits of good employer-employee relations are:

• Employee loyalty

• Employee retention

• Preventing conflicts

• Increased productivity

Measuring the effectiveness of HR management in improving performance

HRM can affect business performance in a variety of ways. This is why it is important to analyse HR performance and examine its overall impact on the organisation.

Measuring HR performance

In HR, performance analysis can provide assistance in reviewing an employee’s contribution to an assignment/project.

In order to analyse performance, an organisation should be able to interpret the following:

• labour turnover and retention rates

• labour productivity

• employee costs as a percentage of turnover

• labour cost per unit.

Recognising the strong influence that HR has in a company is an essential sign of how successful the company will be in the future. The following considerations explain how HR performance can be measured and interpreted.

Efficiency

It is important to measure the efficiency of the HR department at applying policies, programmes, and schemes to effectively engage and manage employees. For instance, a company should examine the level of regularity, responsiveness, quality, and efficiency with which HR delivers services. Specific measures may include the type of problems the HR department is able to solve on average or the cost ratio of HR to the entire business costs.

Output

Output needs to be measured if HR is applying policies and strategies to maximise the recruitment, development, engagement, output, productivity, and retention of employees. This measure may comprise the percentage of newly hired employees, promotions, retention of employees, whether employees accomplished their learning goals, and the way performance is influenced.

Management of teams

It is important to consider how effective management strategies are at promoting positive morale, active engagement, the contribution of employees and teams, and overall productivity. The development of the team can be measured by tracking employee absenteeism and personal development plans.

Human resource management activities to improve employee performance

There are multiple ways in which human resource managers can ensure that they increase employee performance.

Conduct a survey

Try to find out what barriers are getting in the way of productivity with the help of an employee survey. If there are no systems in place for this, then there are several online platforms that permit the creation of surveys.

Incorporate flexible work

With the change of circumstances as a result of the pandemic, several employees might want to have the opportunity to work from home for the long term. Based on the role, flexible work programmes may increase employee productivity and reduce environmental stress, enabling better focus, decreasing unplanned meetings, and improving employee performance.

Modernise technology and tools

If the company has hired the best talent but uses outdated technology and tools it might obstruct productivity and create a sense of irritation among employees. While technology is expanding and improving all the time, it is essential to constantly update the tools needed so that processes run efficiently.

Constraint budgets make it difficult for employees to do well and innovate. Therefore, even with the best workforce, it will be harder for the company to improve employee performance, retain employees, and entice the best candidates in the future.

As a result, over time organisations have realised the increasing importance of human resource management and the advantages it brings for the organisation in terms of a satisfied workforce, lower employee turnover, greater employee involvement and engagement. All these factors will benefit the organisation in the long term if tackled with the right strategies.