The success of businesses depends a lot on the workforce. A motivated and skilled workforce can do wonders to the growth of the company. However, there are many things that play a part in hiring people, keeping the employees happy and satisfied within the company. That is where HR plays an important role.
Organizations today have to be quick on their toes to adapt to the changing business environment; having a talented pool of workers is definitely a big advantage. Organizations are always looking for ways to improve the efficiency of the employees in order to develop their skills which would help the company become more competitive.
For that organisations need to have an efficient hiring process, structured performance evaluation system in place, invest in employee education and training, and create a framework for growth within the organizational. Employees who like the atmosphere in which they work are more likely to remain employed with their company for a longer period. For this, a company needs to create a positive work environment and strengthen the employee’s commitment towards the organization.
This is where Human Resource Management (HRM) plays an important part.
What is Human Resource Management (HRM)?
Human resource is a group of individuals that forms the workforce of an organisation. It is responsible for executing various operations and functions of the organisation. Inefficient management of human resource may create a number of difficulties for an organisation like employee dissatisfaction, unclear organisational goals and objectives.
Human Resource Management can be defined as a comprehensive process that involves acquiring, recruiting, and maintaining an efficient pool of employees in an organisation. It focuses on employees issues related to recruitment, selection, compensation, benefits, training and development. HRM focused on how to efficiently manage people at the workplace, how to motivate them, how to resolve conflicts, and more.
Scope of HRM includes:
- Human Resources Planning
- Job Design
- Selection and Staffing
- Training & Development
- Organisational Development
- Compensation and benefits
- Employee assistance
- Union-labour relations
- Personal research and information system
Recruitment and Selection
Recruitment is the process/strategy used for searching candidates for employment and encouraging them to apply for jobs in the organization whereas selection is the series of steps used for screening/interviewing candidates to see if they are suitable for the vacant posts.
Job Design and Job Analysis
Job analysis is the process that identifies tasks, duties, responsibilities, required qualifications, skill and knowledge etc. for a certain job profile. It is about effective and appropriate selection of candidates. It is needed before the recruitment efforts begin in order to hire the best possible candidates.
Job design, on the other hand, is about aligning the content of a job with the company goals, to improve the job satisfaction of the employee, and to provide a more productive environment. Job design mainly focuses on effective performance of tasks and job completion. Job design is needed after an employee is recruited.
Vague job analysis may result in the hiring of a wrong person, which can further make the job design process complex.
So, good knowledge of Job Analysis and Job Design is important to hire the right candidate/employee and then to help them achieve maximum efficiency in order to achieve organization goals.
Salary and Wage administration process
Wage and salary administration basically refers to a collection of practices and procedures used for planning effective compensation programs for employees, usually handled by the HR/accounting department of a company.
An effective Salary Administration Program allows a company to meet the basic objectives of compensation: focus, attract, retain, and motivate. In addition, the Program should be flexible to allow for changing conditions and fluctuations within the company and marketplace. Often, Salary Administration Programs are often tied the performance of an employee, and may be further influenced by the employee’s placement within his/her salary range.
The pay strategy of the top firms is designed to attract and motivate the best people, regardless of their gender, ethnicity, age, or other factors unrelated to performance or experience. The aim is to get the best people who are committed to maintaining a long-term career with the firm and to perform their role in the long-term interests of stakeholders.
Remuneration decisions are usually guided by the following principles:
- Focus on total compensation with strong link between pay and performance
- Use a thorough performance management process
- Recognise and reward outstanding employees
- Align compensation with long-term stakeholder interests
Executive compensation contracts provide efficient incentives for CEOs to maximise shareholder value. More firms are using concepts such as, malus and clawback, greater use of debt and deferred compensation, and long-term incentives for Executive compensation.
Several firms are also considering setting quotas for female participation on boards either by introducing new legislation or as part of best practices in corporate governance.
Living wage refers to a subsistence wage that is enough to provide necessities and comforts essentials to a standard of life in a locality. Living wage depends on place and locality because the daily expenses vary from countries to countries.
Firms should provide wage sufficient to get quality of life so that employees could sustain and work well. UN, ILO and OAS have declarations and conventions stating minimum wage as fundamental rights. Most activist argue wage is not limited to compensation and labor but securing future and social stand is what to be achieved.
Performance Management & Appraisal
Performance Appraisal: Objectives and Advantages
Every employee goes through performance appraisal once in a year (in some companies twice a year. Performance Appraisal is the systematic evaluation of the performance of employees (throughout the year) and to understand the abilities of a person for further growth and development.
Every employee would like to know if his/her work is appreciated or not?
They would want to know what are the skills required of him to move to the next level. Every manager would like to know how how their team members are performing. Conducting regular Performance Appraisals can provide answers to these questions.
Performance Appraisal is a tool that companies use to evaluate the performance of employees and to gauge the abilities for further growth and development.
In most companies, goal setting is done at the beginning of the year and then as part of the appraisal process, performance is reviewed 6-month (or quarterly in some case). It’s done to track the performance against the various goals and also to address any training and development needs.
The Benefits of Appraisals
- Provide feedback to the staff regarding their strengths and weaknesses at work.
- Compensation Adjustments: Depending on their performance, employees can be given bonuses, increments of promotions
- Placement Decisions: Employees can be recommended for promotion, demotion or transfer based on their performance.
- Training: Appraisals can also help identify training needs for employees and help them get better at their work
- Evaluate Job Description: At times, poor performance can also be because the employee is not the right fit for that specific job. Performance appraisals can also help make amendments to job descriptions.
Companies use performance management system (also known as PMS) to do appraisals of its employees.
The most important benefit of using a PMS is that it allows you to conduct appraisals in a structured manner. Performance management system includes all organizational processes which determine how well employees, and teams perform, which ultimately determines how well the organization performs.
The aim of such a system is to ensure that employee’s performance is supporting the company’s strategic aim.
Other advantages of using a performance management system include: ability to set goals, with clear priorities and direction, management and coaching through consistent feedback, identify skill gaps and allow employees to develop, and rewards and recognition.
With organizations fighting to attract the best talents, HR departments are constantly trying to improve systems and processes to help increase employee engagement, retain talent, and operate efficiently. Performance management software gives companies the ability to simplify and quicken the performance review and appraisal process.
There are several PMS available out there in the market, the more popular ones being Zoho People, AssessTEAm. Having said that, none of the products complete dominates the market space in this category. So a company may choose one depending on the price and features. Alternatively, it could also consider making a custom designed PMs for their organization.
A PMS include the following components:
- Setting Goals & Planning: This is where you mention employee responsibilities and performance indicators, which should be in line with the goals of the organization. All performance management software solutions should include clear and easy-to-understand measurements of objectives.
As far as possible, measurements of performance should be SMART, allowing easier tracking of results. Most PMS allow employers to create job-specific assessments for their employees.
- Monitoring and Evaluating Performance: This is done quarterly or six-monthly. In monitoring and evaluating stage, regular feedback is provided to the employees. There’s discussion on employee’s progress and suggestions for improvements. Regular monitoring also helps in keeping employees on their toes and stops them from getting complacent, or stops them from resting on their laurels.
Of late, most organizations are also using Performance management solutions for succession planning within the organization, where employees moving to the next phase of their career within the company. It’s suggested that both mentoring and career development tools are included in the performance management solution to ensure seamless and proactive succession planning.
- Rewarding Superlative Performance: Employees who do well should be rewarded, wither through better compensation, bonuses or through promotions. Recognition motivates people, decreases turnover and increases retention of the best employees.
In today’s competitive business environment, retaining a positive and motivated staff is important for any organization’s success. High employee turnover increases expenses and more importantly has a negative effect on the company’s morale. Career path, good working environment and rewards for efforts will ensure key workers remain employed while maintaining high performance and productivity.
Competitive pay, benefits, employee recognition and employee assistance programs are all part of a company’s attempt to maintain employee satisfaction and should be linked with an employee’s performance.
Career planning involves coming up with detailed career guidance for employees, and it requires organizational commitment. Career planning encourages individuals to gain competencies, set goals, explore and take action. Companies should also take care to understand the people that work for them, their skills, aspirations, and also understand the generation to which they belong. However, the benefit is that there’s reduced employee turnover in the organization and staff tend to become more loyal to the organization.
Career planning helps companies design career paths for employees, who in turn get a road map to achieve their career goals. It’s also useful for employees. The days of being promoted at work solely based on tenure in the company are long gone. If you allow yourself to grow comfortable performing only the tasks you were trained to do when you were hired, then you’re not likely to progress much further in your career and are likely to be overworked and underpaid in future. A clear career plan will help you take action and take up challenging work which will help you grow in your career.
Today, lot of companies look at internal options to fill a vacancy; this helps provide internal employees with an opportunity to apply for their positions if that particular role excites them. Such moves help companies retain best and qualified employees.
Objectives and Purposes of Career Planning
Career planning involves setting up career goals, and devising plans and strategies to achieve those career goals. The need of career planning and development is felt in every organization as they vie for retaining the top talents.
The major objectives of career planning are as follows:
- Help employees identify positive characteristics.
- Help employee’s become aware of their strengths and weaknesses
- Understand the organizational structure
- Retain talented employees in the organization
- Make employees work in teams, help them deal with conflicts, emotions, and stress.
Career planning helps employees to plan their careers considering their competencies in mind, within the context of organisational needs. It provides opportunities for an individual to grow within the organization and involves harmonizing the needs of the organisation with the aspirations of the employees, so that the employee gets job satisfaction and the employers’ effectiveness is improved.
Merits of Career Planning
Career planning helps both the employees as well as the employer. Here are some more advantages of Career Planning:
Advantages to Employees
- Career planning helps employees in developing career goals and also to accomplish those goals in a time-bound manner.
- Helps employees in identifying the career opportunities available within the organization
- Helps the employees determine their training and development requirements based on self-assessment.
- Increases job satisfaction, efficiency and commitment in the employees.
Advantages to Employers
- Helps organizations to close existing job requirements from the pool of existing employees based on their knowledge, skill and abilities.
- Helps the organization identify the strengths and weaknesses of its workforce.
- Assists the organization in HR policy formulation, helps HR manager to choose from internal and external sources for recruitment.
- Helps the organization manage/control attrition and related hiring costs.
- Helps in developing succession plans for critical positions in the organization. Allows organization make long-term investments on employees based on succession plans.
- Makes the organization commit to look after the interest and future of its employees.
- It helps organizations building competitive edge in the labour market and thereby attracts the best talents.
In most organizations, career planning is done using the following steps: Analyse individual skills, knowledge, abilities, aptitudes etc. Analyse career opportunities within and outside the organization. Relate specific jobs to different career opportunities. Prepare and implementing action plan including acquiring resources for achieving goals.
It’s also important to regularly review your career plan. After establishing your goals and how to achieve them, it’s equally important to monitor the progress of your career plan (experts recommend at least every six months), to ensure you are on track to meet your goals. At times, you may also have to re-evaluate your career plan and goals, and make adjustments depending on the economic and personal circumstances.
Career planning continues throughout one’s professional life. Planning carefully prepares you to cope with changes both in your work and in yourself. Managing your career effectively involves taking risks, learning new skills, and adapting to changes in both work environment (and technology). Learn to plan strategically can help you make effective career choices throughout your professional life.
Career Planning vs Succession Planning
Career Planning is about planning the career of an individual – what are his/her goals and how to go about achieving those goals. Succession Planning is about developing & grooming employees to enable them to occupy key positions in the organization, in the future.
Lepak, D. & Gowan, M. (2010). Human resource management: Managing employees for competitive advantage. Upper Saddle River, NJ: Pearson/Prentice HallWhy Living Wages are Important for My Workers, Business & the Community. U.S. Department of Labor Blog The International Labour Organization and the Living Wage
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