The Hindu Business Line : Understanding HR management

The Human Resources (HR) team has a critical role to play in every organisation. It is often responsible for hiring, compensation, training, performance management and a host of other employee-related issues. In this article, we highlight the importance and common functions of HR departments and where HR needs to improve in order to engage employees.

Human Resources is the business unit responsible for processes affecting the “people resources” in organisations from recruitment through performance management and personal development through to termination or retirement.

Importantly, we see dependencies between specific areas of responsibility — which is why we believe that when you change one item in a specific process, you must look at every HR sub-process to determine the impact.

The following points show that within each HR function there are overlaps in almost every function.

Let’s begin by considering the main Human Resources function. As an overall description, Human Resources Management (HRM) covers all aspects of people, policies, procedures and systems supporting the organisation’s HR strategy.

Human Resources policies encompass functions such as hiring policies and procedures, audit processes and ties into corporate strategic direction. Employee surveys can be considered an information gathering methodology that has the potential to impact policies and procedures.

Hiring and retention strategies tie in directly to HR issues such as succession planning, employee retention issues, job descriptions, job evolutions or enrichment, pay structure and career planning. This impacts training and development programmes and interventions.

Of, perhaps, even greater significance is the requirement to strengthen or acquire new or different leadership skills and styles. This has a major impact on promotional opportunities and training. Often times those who are subject matter experts find that they lack in interpersonal skills …something that they have to learn through training.

Layered on top are the information technology systems and operating practices. This is invaluable information tracked to determine where time and effort and financial resources need to be focused.

As a final operating process, every organisation has to conduct a human resources audit to ensure compliance with legislative requirements, the development of competencies for the future and to ensure that steps to support the human resources strategic direction are being followed.

Though there are many sub-processes within these functions, this gives you a general view of the major areas included under the umbrella of HRM.

Core responsibilities

We need to understand the core responsibility of human resources. Let’s begin with human resources policies as they relate to job analysis. Quite likely, you will see policies which identify the frequency with which job analysis must be completed.

Each time a job function is changed, the competencies have the potential to change. This, in turn, impacts skills required for new hires. It also impacts the training that is required in addition to how these competencies will be rewarded and recognised within the organisation. This ultimately ties into performance management and that, in turn, impacts organisational analysis i.e. what skills knowledge and competencies are required for a specific job.

So, while we look at the category of job analysis, the impact with one simple change has a domino effect on many sub-processes within HRM.

Let’s also take a look at employee pay. Broadly speaking, this refers to benefits and remuneration for competencies required for individuals and job accountabilities. The compensation philosophy and strategies tie back to the HRM strategic direction. It is not unusual to see customised salary surveys administered to gather data on employee views. This again helps to determine HRM strategic direction. In addition, the complete evaluation process impacts employee pay; this ties back into job analysis where employees are paid based on the skills knowledge or behaviours identified in the job analysis. This shows the dependencies in these two sub-processes of HRM. Following that, the linkage between pay administration guidelines and processes are evident and tie back into HRM.

Similalrly, employee pay finds its way into incentive compensation. There are many methodologies used to reward an excellent performance such as annual performance bonus plans for performance accomplishments over and above the set goals which could be awarded to an individual or a team/group. Compensation by way of a sales quota is also common. More recently, stock option plans have been welcomed as they engage employees in a sense of ownership in the company.

Over and above salary compensation many organisations have employee reward and recognition policies that recognise a performance over and above expectations. These policies and procedures also relate back to HRM strategic direction.

Often, organisations implement both short- and long-term incentive plans. Short-term incentives may be a bonus for project completion and could be awarded to a group. A long-term incentive plan may be for an organisational-level achievement and could be applied to all employees.

Every organisation has some way of directing and assuring the delivery of objectives as well as identifying competencies, whether skills, knowledge, or behaviour, and there is always some element of technical ability. This is referred to as performance management.

One area of HRM that is often under-developed is organisational development or OD. This branch of HR looks at future strategies and ensures that the organisation has the capabilities to take it into the future or the global market place. This could involve restructuring to meet new client groups or lines of business or, in fact, mergers and acquisitions. This impacts job definition methodologies and documentation. Specific areas that OD concentrates on are staffing strategies to meet succession planning and skills utilisation, among others. All of this information impacts the decision-making process and communication methodologies. Everything that OD is involved with is in support of and ties in directly with the vision and values of the organisation and impacts management and supervisory practices and includes leadership, coaching and mentoring.

This is a broad brush look at HRM.Inherent overall in this list is customer service — whether the HR group is servicing the front-line employee, the executive team or the external client.They are the keepers of information impacting every operational area of the business.

HR as a strategic partner

In recent years there has been an effort to change the image of HR to that of a strategic partner in setting and supporting the business focus. In reality, there is evidence to suggest that the base or core skill of service to employees is faltering and when faced with a report card from their clients, Human Resources appears not to be meeting at least one of their customer’s needs. Unless and until, members of the HRM team understand the intricacies of their role, and the importance of their input in the board room, HRM will continue to play a secondary role in the management of the business.

The intent of this article is to lead to some reflection on the dependencies and inter-dependencies of all of the processes which make up or contribute to HRM.

It is critical for all human resources professionals to understand that if one single change takes place in the sub-process, that every single process within HRM must be reviewed to ensure that decisions made reflect the overall strategic direction.

When one considers all of the varying factors impacting employee retention, it all fits together. All companies paying due diligence to their HRM are well prepared with the strength of their HRM umbrella to serve and protect both employees and the organisation against the thunder storms of legislative changes, attrition rates and changes in customer needs.

(The writer is a Managing Partner at WCH Training Solutions, a New Delhi-based training and consulting firm.)

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