Functions of Human Resource Management (HRM)

The Functions of Human Resource Management (HRM) have become essential in day-to-day business operations, with a focus on regulatory compliance and employee welfare. Human capital remains the driving force behind business success, even as companies adapt to changing environments and new technologies.

HR Executives aim to develop strong leaders, but many lack a clear approach to Leadership Development. If you’re an aspiring HR professional, understanding the key Functions of Human Resource Management is crucial to driving organisational success. Read on to learn more!

Table of Contents

1) What is HRM?

2) What are the Functions of Human Resource Management?

      a) Human Resource Planning

      b) Recruitment and Hiring

      c) Compensation & Benefits

      d) Employee Training and Development

      e) Employee Performance Management 

3) Why is Human Resource Management Important?

4) Conclusion

What is HRM? 

Human Resource Managment plays an important role within organisations. HR Managers assist various departments with personnel matters, including the following:

a) Recruitment: The recruiting process incorporates job advertising, vacancy screening, and interviewing employees to discover the best candidates among all applicants. The Human Resource Managers fill out the necessary documents and accomplish the process of employee onboarding.

b) Employee Management: Employee Management includes overseeing performance, providing feedback, and addressing issues. HR Managers also organise training courses to enhance skills and foster growth. Furthermore, formulating policies ensures consistency and legal compliance.

c) Policy Formulation: HR Managers also collaborate to establish guidelines for attendance, leave, and code of conduct.

d) Compensation Determination: Determining compensation involves analysing market trends, job roles, and performance to set competitive salaries. HR Managers also administer benefits sessions to promote employee satisfaction.
 

What are the Functions of Human Resource Management? 

The Functions of Human Resource Management are various activities that make sure that the organisation’s Human Resources are managed efficiently. HRM is crucial for the development of a productive workforce which is actively engaged and driven. Let’s explore the key Functions of HRM:

1) Human Resource Planning

The initial task of HR is to see the company's requirements regarding future. What number of employees and what kind of competencies should the company have? This will ultimately impact every facet of Human Resource Management i.e., Recruitment, detection, performance evaluation as well as training and development.

2) Recruitment and Hiring 

Recruitment functions as a basic element of Human Resource Management. The main purpose of HRM is to recruit and retain a group of qualified, capable and productive employees who jointly work towards achieving the organisational objectives and dreams.

Human Resource professionals play a critical role in the first stage of locating and sourcing the candidates who are most likely to succeed in the interview and assessment stages. They act as the link connecting the organisational needs to the available workforce. The next stage is an activity defined by the incessant process of screening an enormous number of applicants and identifying the most suitable people.

The finalists are called for various rounds of interviews. Each stage is crafted to assess and analyse candidates' skillsets, knowledge, and relevant job experience in relation to the job opening. This interview is the testing ground where candidates' capabilities are sharpened and tested to appraise their relevance to the company's requirements.

After the candidates overcome the challenges of the interview phases, they receive the job offers according to their respective positions. This phase represents a major milestone as these selected individuals stand on the verge of becoming the pillars on which the company's consolidation of its key goals will be built.

3) Compensation & Benefits

Benefits and compensation make up a substantial proportion of an organisation’s total costs. The balancing act of keeping costs under control to offer competitive compensation packages to employees becomes a core HR responsibility. HRM further involves creating a compensation and benefits plan. This attracts the best talent and allows the company to grow financially.

The management creates the structure through which fair and equal remuneration is made available to all Employees. This fairness encompasses financial concerns as well as other components of worker well-being and contentment. HR’s employ benefit and compensation packages are one of the most powerful instruments for boosting employee performance and improving the company’s public image.

One of the basic roles of the HR department is the development and propagation of laws and regulations relating to the retaining employees and the benefits they are given access to. These regulations are vital for crafting an equal and transparent workplace where there is trust and confidence between the workers and the management. The level of employee satisfaction at work is often associated with the remuneration and benefits that they accrue.

Additionally, it acts as a tool to enhance fairness, increase productivity, and mould a favourable workplace culture that is in line with the company's main value statements and targets. Through Benefit and Compensation Management, HRM makes tremendous contribution to a company’s capacity of attracting, retaining and motivating a strong and devoted workforce.

These policies are crucial for creating a work environment marked by equality and transparency, fostering trust and confidence among employees and management alike. It is well understood that the level of employee satisfaction at work is intricately linked to the compensation and benefits they receive. 

HRM's role in managing benefits and compensation goes beyond just cost control. It involves delicately attractive remuneration, while safeguarding the company's financial stability.

Moreover, it serves as a mechanism for reinforcing fairness, boosting productivity, and shaping a positive organisational culture that resonates with the company's core values and objectives. By effectively managing benefits and compensation, HRM contributes significantly to an organisation's ability to attract, retain, and motivate a skilled and dedicated workforce.

4) Employee Training and Development

Development and employee training are some of the essential Functions of Human Resource Management, contributing to organisational success and employee satisfaction. In Human Resources, training refers to imparting specific skills and knowledge to employees, enhancing their capabilities to perform their roles effectively. Alternatively, development focuses on preparing employees for future responsibilities and career progression within the organisation.

HR professionals ensure that employees receive relevant training sessions that align with organisational goals, which involves identifying skill gaps, designing training modules, and implementing initiatives that foster continuous learning. By investing in employee development, HR contributes to talent retention and promotes a culture of growth within the organisation.

Along with practical training and development initiatives, individuals’ performance becomes more effective, resulting in the company’s overall productivity and competitiveness. HRs strategically align training sessions with the organisation's objectives, making sure that the employees acquire the skills needed for current and future challenges. A comprehensive training and development system denotes the HR Manager’s dedication to building capacity, engaging employees, and enhancing the company's strength

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5) Employee Performance Management

Successful Employee Performance Management is a key part of HR functions that enable employee achievements to align with and move organisation goals. Performance Management does not refer to the performance of just individuals but also involves the performance of teams, departments, and the entire organisation. HR's role in Performance Management encompasses several vital functions, including the following:

a) Developing Comprehensive Job Descriptions: HR is in charge of drafting comprehensive job descriptions that encompass role descriptions, responsibilities, and expectations of performance.

b) Selection Process: The process of selection is to make sure that the candidates you choose fit the required position because of their natural suitability.

c) Training and Development: HR organises training and informative sessions that look to improve employees' skills and capabilities. 

d) Feedback and Coaching: Effective Performance Management requires on-going feedback and coaching as well as open communication between the bosses and the workers.  

e) Performance reviews: Regular performance reviews, be it monthly or quarterly, are an indispensable HR function. This helps the employees keep track of their progress since they joined the company. 

f) Exit Interviews: HR performs exit interviews, through which the organisation can get to know why the experienced workers leave.

g) Appraisal and Compensation Systems: HR plays a role in designing and administering performance appraisal and compensation systems which attribute and reward employees for their contributions.

6) Employee Engagement 

Employee engagement relies on improving the work environment and instilling bonds within the employees. Initiatives such as recognition sessions, wellness sessions, as well as feedback systems, are crucial in this regard. Employee recognition sessions are about recognising and rewarding employees for their contributions, which in turn, raise the morale and sense of belonging.

Wellness sessions prioritising physical and mental health increase employees' engagement. Feedback channels such as surveys and suggestion boxes are a way of employees to be heard and feel appreciated. 

Engagement activities that work optimise the levels of satisfaction, decrease employee turnover rate, and enhance organisational performance. On another note, fostering their input externally is a viable option, too. Employees can write blog posts which cover their expertise, that is very beneficial for the company's blog, and they are also more engaged. Additionally, employee knowledge sharing will not only enrich the content but also build a sense of loyalty and commitment in employees, leading to a deeper level of engagement.

7) Personal Support for Employees

With the outbreak of COVID-19 pandemic, HRM evolved its functional scope to the point where it became a huge help to staff facing non-work-related problems. In addition to their typical daily functions, HR departments carried on with assisting employees to deal with the new environment they found themselves plunging into.

One significant area of support was managing requests for extended time off. With the pandemic's uncertainties, many employees needed extended leave for health concerns, caregiving duties, or quarantine requirements. HR teams handled these requests, ensuring that employees received necessary accommodations without added stress. 

HR professionals also facilitated access to essential medical assistance. This involved guiding employees through healthcare benefits, aiding with insurance claims, and connecting them with telehealth and mental health resources. HRs became a valuable resource for employees seeking guidance on healthcare and health-related concerns during these challenging times. 

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8) Succession Planning 

Succession planning is the basic Human Resource Management function that deals with the strategic development and grooming of talent from within the organisation. This forward-looking approach involves pinpointing top talent within the company who have shown exceptional performance in their current position and preparing them for future leadership roles. A few key rules to be followed during succession planning include the following: 

a) Identification of Talent: Managers and HR personnel working together help identify those who are capable of doing bigger things that the organisation requires. Such talented employees are commonly considered as "high potentials."

b) Customised Growth Paths: Once they are identified, high-potential employees are enrolled in individual development plans. These sessions include training, mentoring, and doings that are meant to strengthen the skills and capacities.

c) Employee Engagement: Funding staff growth and advancement contributes to their involvement and commitment to the organisation. They respect the organisation's commitment to the career development of their employees and tend to be long-term ones.

d) Challenging Assignments: For growth, the most promising employees are assigned difficult tasks and projects. These grants give them a chance to grow and get ready for future supervisory positions.

e) Cost Savings: Succession planning is the best way to avoid the destructive and costly implications when the most important employees quit. One of the ways through which organisations counter the effect of departing influential individuals is by selecting their replacements ahead of time.

9) Industrial Relations 

Industrial relations are primarily applicable in production lines and manufacturing units where unions actively advocate for worker welfare. For companies operating in these sectors, fostering positive and ongoing relations with unions is essential for maintaining a harmonious workplace. The core objectives of industrial relations encompass various critical aspects within the organisation, some of which are as follows: 

a) Compliance with Wage Standards: Industry relations practices ensure that the company adheres to wage standards set by labour laws. This helps prevent disputes related to compensation. 

b) Conflict Resolution: By promoting open communication and negotiation, industry relations aim to reduce the likelihood of strikes, protests, and labour disputes. 

c) Enhanced Working Conditions: Improving workplace safety and conditions is a key goal of industry relations. This not only benefits employees but also reduces the risk of accidents and related legal issues. 

d) Resource Efficiency: Industry relations practices strive to optimise resource allocation as well as minimise wastage and production downtime. 

10) Compliance Management

HRM plays a key role in ensuring the organisation follows labour laws, rules, and policies. HR Managers are responsible for keeping accurate records, monitoring compliance, and resolving any issues that arise.

11) Diversity and Inclusion 

This HR function focuses on promoting a diverse and inclusive workplace. HR Managers create and implement policies like employee resource groups and diversity training to foster inclusion. They ensure the work environment is welcoming and employees feel valued and included.

12) Exit Management

Exit Management deals with the process of employees leaving the company. HR Managers handle exit interviews, oversee offboarding, and ensure legal and ethical procedures are followed. Effective Exit Management benefits both the company and departing employees.

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Why is Human Resource Management important? 

Modern-day organisations cannot do without effective Human Resource Management – a key bridge between the management and the staff. It comprises a multitude of functions that make a significant contribution to the general well-being of the enterprise. Here are some key reasons why HRM is of paramount importance: 

a) Talent Acquisition and Retention: A good recruitment process aligns the right kind of talent into the organisation. The elements like retention strategies, such as competitive compensation packages and growth opportunities, help keep employees involved and attached to the organisation.

b) Employee Development and Training: Through different training courses and workshops, employees will become more competent and knowledgeable. Moreover, this makes HRM consider having a more competent and resilient workforce that can effectively meet any new challenges or opportunities.

c) Performance Management: A performance evaluation system serves to measure employee performance against set objectives. This is the process through which the top performers are identified, and feedback is given. This process helps accomplishing the alignment of individual goals with the organisation’s goals, hence improving the total productivity of the organisation.

d) Employee Relations and Well-being: Maintaining a positive work environment is crucial for employee satisfaction and well-being. Human Resource professionals further ensure that employees’ concerns are addressed promptly, fostering a culture of open communication and support. Engaged and satisfied employees are more likely to be committed and productive in the organisation. 

e) Compliance and Legal Matters: Creating and maintaining a conducive work environment is essential to the morale and welfare of employees. Human Resource experts make sure that employee's problems are reflected promptly to ensure that open communication and emotional support are created in the workplace. Enthusiastic and satisfied employees are most probably committed and productive in the workplace. 

f) Organisational Culture and Values: It encourages diversity, inclusion, and ethical standards. The workplace becomes a place of respect and celebration of individual differences, which also encourages a sense of belonging for employees.

g) Change Management: During times of organisational change, HRM assists employees who are going through the transition. Through the effective Change Management, they can reduce resistance and make sure that the implementation of new strategies and routines is smooth and successful.

h) Strategic Alignment: It defines workforce's strengths and weaknesses. Alongside, it contributes to the company's competitive ability and long-term success.

Conclusion 

Human Resource Management functions are the fundamentals of a vibrant and thriving organisation and business. Placing Human Capital Management at the forefront of their plans, organisations can acquire a culture that is resilient, agile, and people centric. This is to steer them on the right path of continued success in a market that is dynamic in nature. This blog explored the different Functions of Human Resource Management and their importance.

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