Human Resource Management

Introduction

Human resource management (HRM) has to change as the business environment changes. It has to do this as a mixture of responding to changes in that environment and if predicting such changes and making proactive decisions about the nature of HRM. The future is unpredictable and it is hard to determine what it will bring. It is important to be flexible and to acquire as much knowledge as possible to help cope with these uncertainties. Human resource (HR) managers need to synthesize issues relating to their core personnel functions with the general economic and business issues, whilst remaining in touch with technological development. Successful HR managers and departments have a significant strategic impact on their organizations.

Of course, the core personnel functions relate to that most important of organizational resources - the workforce. Handling core personnel functions of recruitment, selection, appointment, induction, training, development, etc. directly impacts on shareholder return and productivity. Successful companies invariably attract and retain productive employees.

Personnel issues in human resources

The first "personnel" role is that of hiring suitable employees. How easy this is depends on a number of factors, perhaps chief of which is the state of the local labor market. In the late 1990s, in the USA, the declining unemployment rate was a key factor. Competition for talent was high. Managers needed to hire quickly or risk losing a potential employee. In the current environment, this has changed. A company may receive a large number of reÒ'sumeÒ's. Of course, this gives different problems. Selection becomes a much more important issue, since there is a bigger pool to select from. It is important to have structures and processes in place to carefully evaluate each candidate's skills and experience to ensure that the right applicant is selected from among the many qualified people (Messmer, 2002). This presumes, of course, that the organization has first undertaken a structured and disciplined process to identify the skills and attributes they do need for the job under discussion. Notice that in both these situations, we refer to structured processes. Many managers feel that they have personal skills which allow them to select the right person for the job based on their "experience" or "wisdom" or just plain "gut feelings". It is unwise - if not foolish - to allow such managers to behave in such ill-disciplined ways. The role of the HR department is to impose discipline on the selection process - both to offer "a fair deal" to all candidates and to ensure that the organization really does get the best person for the job.

It is important to forecast needs and plan accordingly. The hiring process can take a significant time and decisions made in a panic situation can be disastrous (Mulling, 2001).

As the economy has moved more to a service and information economy, competition for the really talented individuals has become fiercer; recruitment and retention may be the most pressing challenge facing US business today (Marriott, 2001).

Successful companies or organizations will be those that are able to attract and retain highly skilled employees. In order to do so, they must be able to match what the employee wants with what the employer is willing to give. This "partnership" approach to HR comes from a realization among HR directors and executives that if you take care of your people, they will take care of you. Many companies are "taking care" by offering innovative and flexible benefits.

The changing expectations of employees pose several different challenges for HRM professionals. In order to retain good employees and keep them happy and productive, these challenges must be successfully met (Sims and Sims, 1994). Companies need to first identify what their employees need. This is not necessarily simple. For example, companies with more than one location should not assume that all employees at all sites have the same needs. This is particularly true for global organizations since employee needs may be a reflection of socio-economical or cultural influences.

After needs have been determined, the next stage is to establish a cost-effective plan to provide for these employees' needs. In doing so, HR professionals need to be aware that employee needs are not static; they are constantly evolving and changing. Many companies recognize this fact in their compensation and benefit packages. They provide benefits based upon the best particular "fit" for the employee. For example, one location may offer childcare benefits, while another may offer flexible hours or working from home. Of course, all may be offered within the same location to meet the different needs of different individuals.

Organizations need to constantly strive to build a better benefits package. They need to look at their total reward package as an important means of attracting, rewarding and retaining skilled workers, and need to constantly monitor to ensure that these programs really add value. Within the overall package, they should then where possible avoid being too rigid and try to customize benefits to the individual employee.

This is a major performance and productivity issue for an organization. Retaining a current employee is almost always a cheaper option than recruiting and training a new employee. There is a series of major expenses associated with a "new hire" (in addition to the obvious salary and add-on costs):

* HR "admin" costs associated with advertising, record keeping, job sizing, etc.;

* travel expenses and other costs associated with the recruitment process;

* relocation costs for the successful candidate, etc.

There may also be additional costs associated with office location, furniture, support facilities, etc.

Major costs are associated with bringing the new employee "up to speed" - induction, training, mentoring, etc. During such a period, there may be significant disruption to production processes, schedules, etc. - especially where the new employee is part of an inter-related team. It is very important to ensure that such disruption is recognized as being a "system issue" associated with the personnel changeover. For example, if it affects bonus payments of employees, they should be compensated since, otherwise, they may resent the new employee and that may cause performance problems in the medium to longer term. It is also counter-productive to issue incentives for speedy performance to