Human Resource Management (HRM) is the term used to describe as the part of management process which develops and manages the human elements of enterprise considering individuals in terms of total knowledge, skills, creative abilities, talents and potentialities. In this chapter, there are overviews of nine topics: Human Resource Management Functions, Human Resource Management in Small Business, Performers of Human Resource Management activities, Human Resources as Strategic Business Partner, Dynamic Human Resource Management Environment, Corporate Culture and Human Resource Management, Employer Building and Country Culture and Global Business.
Functions of HRM describe the scope of HR department. There are interrelated six functions which affect the dynamic HRM environment (Internal Environment): staffing, performance management, human resource development, compensation, employee and labor relations, safety and health. Staffing is the function of job analysis, employee recruitment, screening and selection performed within an organization or business to fill job openings. Performance management is the process of reviewing employee performance during the previous year or cycle and maximizing employee productivity and effectiveness. The third function, Human resource development is the framework for helping employees to develop their personal and organizational skills, knowledge and abilities. Human Resource Development includes such opportunities as employee training, career development, coaching, mentoring and organization development. The fourth functions, compensation includes direct compensation, indirect compensation, and nonfinancial compensation which are the results or rewards that the employee receive in return of their work.
The fifth function, employee and labor relation is commonly associated with the movement of employees within the organization such as promotions, demotion, termination, and resignation. The last function, safety and health, safety is protection of employees from injuries caused by work-related accidents, and health is employees’ freedom from physical or emotional illness. Nowadays, most of the company invests in health and safety programs to prevent loss-times injuries and keep productivity at a premium, and achieve overall goals and objectives. External Environmental Factors comprised of eleven factors that influence the company’s human resources from outside boundaries of the organization. These factors include legal considerations, labor market, society, political parties, unions, shareholders, competition, customers, technology, the economy and unanticipated events. Firstly, legal considerations are a significant external force and each country has their own laws which can affect a company’s human resource issues such as illegal discrimination, protect privacy, leave protections, wage and hour laws etc. At present, labor market is also considered as an important environmental factor because most of the new and potential employees are hired from outside the firm.
Society and Political parties and power in developing human resource is a product of the changing nature of the global society and workplace and the role of power and politics in transformation. Individuals and special interest groups have found that they effect changes through their voices, votes and other actions. Unions: a third party reflects decisions of employees’ wage levels, benefits and working conditions. Shareholders: the owners of a corporation are able to influence a company’s human resource policies because they have invested in firm. Competition: Human resource management is changing under pressures from an increasingly intense competitive environment.
Therefore, firms must maintain a supply of competent employees, in order to succeed, grow and prosper. Customer: In modern competitive organization, customer is a key factor contributing to the success of the organization. Therefore, organization must adopt the HRM policies which ensure both customer and employees’ satisfaction. Workplace motivation, satisfaction, organizational commitment, leadership style, incentive, evaluations are key parameters of human resources management and these parameters can affect customers. HR technology: HR technology improves the management efficiency and responsiveness of HR management for internal customers, employees, and administrators. Web-based technology is widely used for almost all important HR activities. Among them are the creation of employment applications, registration of employee benefits, and training using e-learning based resources. Nowadays, the person who performs the HRM task has dramatically changed and there is no typical HR department.
Many of these changes are made so that HR experts can play a more strategic role. In competitive global environment, most of the companies and organizations operate under a lean budget. As a result, many HR departments get smaller and other HR departments perform, and assist certain HR functions such as: HR outsourcing, HR shared service centers, professional employer organizations, and line managers.Line Manager: In most organizations today, the line manager plays a central role in the practice of HRM.
Line managers are deeply involved in shaping the outcomes of HRM practices for their team members such as: interviewing candidates, conducting and communicating performance appraisals, determining increase of wages and job training.Human Resources Outsourcing (HRO): HRO is the process of hiring external HR professionals to manage HR functions. The HRO includes management of health benefit plans, retirement plans, workers’ accident compensation insurance, employment, training, legal expertise.