HRM

Human Resource Management

Human Resource Management

The HR function and its contribution to improving a business competition

Human resource management consists of the attraction, selection, retention, utilisation, motivation, rewarding, and disciplining of employees in organisations in short, the management of people at work. During the last century or so, profound shifts have occurred in the industrial mix of the economy, the nature and extent of competition, and the types of work that employees perform. In particular, economic activity has shifted from agriculture to manufacturing and from manufacturing to services, with more and more employees performing relatively higher level analytical, professional, and technical work, and fewer employees performing relatively low-level, low-skill, and manual work. In the wake of these shifts, it has become common for businesses to claim that they (increasingly) compete based on intellectual or human capital rather than physical capital or “hard” assets (Pfeffer 1994, 11-17).

The phrase “human resource management,” which supplanted the earlier “personnel management,” conveys a sense of these shifts in that employees—people—are viewed as resources whose active management can positively contribute to organisational success (Ulrich, Losey & Lake 1997, 16-26). In this sense, human resources are akin to customers, financial resources, operating systems, and technology, each of which constitutes a main input into organisations, which then mix and transform these inputs for the purpose of producing major outputs—generically, goods and services and combinations thereof. The quantity and quality of such goods and services are constrained by (operate within the context of) an organisation's strategic objectives. In companies, these objectives typically include rate of return on invested capital, revenue growth, market share and, if publicly traded, share price. As with other inputs or assets, therefore, human resources must be managed strategically for the longer term and not just operationally for the short term or on a day-to-day basis.

Human resource planning is an activity undertaken by the human resource function within an organisation to assure that human resource actions and activities are properly aligned with the overall business or organisation strategy. Traditionally, the term human resource planning referred solely to the practice of examining the number of anticipated openings, comparing that with the labour market trends and ensuring that the appropriate actions were taken to fill those positions. Human resource planning in the 21st century is a much more comprehensive set of analyses and examinations to ensure that the human resource function optimally contributes to the organisation's overall business success.

As the human resource function transitions away from a primarily transactional or administrative function and strives toward creating stronger business partnerships within the organisation, the need for thorough and accurate human resource planning increases. The process of human resource planning is likely to be unique to each organisation; however, the most common steps to human resource planning are as follows:

Thorough analysis of both the internal and external environment, which includes an analysis of the current state and the anticipated future state

Examination of the internal and external analysis and determination of the human resource implications

Creation and implementation of a human resource strategy to support ...