Importance of Human Resource Management - Assignment Example

Human Resource Management Functions Introduction Human resource management, in the simplest sense can be defined as "getting things done through people." This function of management has been in place throughout the history of mankind yet it is irrefutable that this function has evolved to incorporate significant developments. With these revolutions the focus shifted from how "get things done through people" to "getting people do things" for the company's utmost benefit. This signals an alteration of the management perception of the human resource. Nowadays, there is a global recognition of the crucial role played by employees in attaining the goals of an organization as well as responsibility of management to harness the full potential of its workforce. In the next section, this paper will further investigate why human resource management is currently considered so important in attaining superior business performance. After the discussion, it will briefly outline the main functions of human resource management and how these are applied in real world. Importance of Human Resource Management The role of the workforce in the success or even mere survival of a business organization cannot be overstated. The old clich which states that "people is our most valuable asset" will not probably met disagreement with any manager in this competitive business environment. This is further emphasized by Bullinger, president of the Fraunhofer-Gesellschaft1 by stating that employees are a company's best assets together with their knowledge, abilities, creativity and commitment. He further asserted that the competitiveness of a business organization is highly correlated with the company's highly trained, creative, and motivated employees. John Purcell further highlighted the importance of employees in his research which emphasized the huge role played by the company's workforce as "strategic partners." This research strongly supports the highly economist viewpoint of Grant (2002: 219) of "aligning employees with organizational goals." Schuler and Jackson (1987) gave a more precise description on how management should "align" their workforce to support the company crafted strategy. Their conclusion was: If management chooses a competitive strategy of differentiation through product innovation, this would call for high levels of creative, risk-orientated and cooperative behaviour. The company's HR practices would therefore need to emphasise "selecting highly skilled individuals, giving employees more discretion, using minimal controls, making greater investment in human resources, providing more resources for experimentation, allowing and even rewarding failure and appraising performance for its long run implications" - on the other hand if management wants to pursue cost leadership (the model) suggests designing jobs which are fairly repetitive, training workers as little as is practical, cutting staff numbers to the minimum and rewarding high output and predictable behaviour. (Boxall and Purcell 2003:53-4) The importance of human resource management therefore can be traced back on the essential role that the workforce plays in the company. As this paper showed above, current researchers highlight employees as on of the competitive advantages in realizing the objectives of an organization. However, a deeper analysis will also reveal the great function of management to turn employees into "most valuable assets" and "strategic partners" thus, the key purpose of human resource management. So, what activities should be performed by the human resource department to produce highly productive employees Functions of Human Resource Management The Economist (2002) recognizes the changing role of HR leaders due to the rapid change in the business climate and environment faced by industry players. This also implies the changing function of the HRM in shaping their employees-from the "psychological contract, rewarding employee loyalty with personal development, financial progression, and job security" to the "boundary less career, with individuals moving frequently between organizations and across the boundaries within departments, functions, and hierarchies." Amidst these changes in the environment, we can see a definite designation for the human resource department. What was modified was the essentially the way these functions are carried out. There are seven basic functions of the human resource management namely, manpower planning, recruitment and selection of employees, employee motivation, employee evaluation, industrial relations, employee services, and employee training/development and education (Human Resource Management 2006). Manpower planning is one of the starting points in the staffing function of a business organization. In this process, the HR department estimates the needed labor supply to man business operations. Manpower planning lessens the risk of understaffing and overstaffing which can lead to significant losses for the company (Human Resource Management 2006). Recruitment and selection of employees goes beyond advertising the job vacancy and interviewing applicants. This process must be preceded by an analysis of the job to be done to get a clear idea of the physical and mental characteristics must have, what are the significant qualities and attitudes to look for, and what behaviors are disadvantage (Human Resource Management 2006). Employee motivation is one of the most important essential functions of the HR department in ensuring the productivity of its workforce. Traditionally, monetary benefit is considered the largest instrument to motivate employees. However, psychological and even physiological rewards are seen to contribute in retaining good staff and encouraging them to work at their very best (Human Resource Management 2006). The effectiveness of non-monetary rewards in motivating employees is illustrated in the study conducted by Nelson (2005) which, highlighted the efficacy of using positive reinforcement and presence in day-to-day operations. Employee evaluation is a function which involves the assessment of the performance of a workforce. Not only does personnel manager need to be in good terms with his employees, industrial relation functions assert that there should be a good relationship among managers, employees, and the government and legislation agencies. An employer should also seek to give workers services needed to safeguard their mental and physical well-being. Most companies do this by offering non-monetary incentives like medical and dental services to employees. In order top ensure the efficiency of the workforce, trainings and education is also a function of human resource management. Application of Functions: The Case of Container Store The case of the Container Store is one of the best example of how human resource management shapes employees to become "valuable assets" and "strategic partners." As will be shown this is also an illustration of how Behavioral Approaches to management is utilized for a real world business organization. The Container Store's high productivity and employee retention are products of employing Behavioral Approaches to management. The Container Store treats its employee following the motivational approaches laid out by modern thinkers like Maslow, Herzberg, Follett, and Barnard. As asserted by Follett, encouraging employees instead of coercing them has a greater impact in each employee's productivity. In the Container Store case, this is shown by the company's constant support to each employee to achieve higher sales. It was stated in the case that the news of every corporate marketing description are disseminated to the frontline employees, which shows the company's support and encouragement to them. The company also maintained constant communication and relaying the company's goals and objectives with the employees as required by Barnard. Recognizing that money is only one motivational tool for employees, the Container Store does not base monetary compensation on employees' sales. Instead, the employees are rewarded and retained in the organization according to their willingness to adhere to the company's values. Interaction of top management with frontline employees is also one of the key factors in enhancing the company's productivity. This is maintained by Container Store as managers as present in the day to day activities and even help employees in customer service. References Boxall, P. and Purcell, J. (2003) Strategy and Human Resource Management Palgrave Macmillan. Grant, R. (2002) Contemporary Strategy Analysis: Concepts, Techniques, Applications (4th edition) Malden, MA: Blackwell Publishers. Human Resource Management. (2006). Retrieved 22 March 2006, from http://www.accel- team.com/human_resources/hrm_04.html Nelson, B. (2005). The Effectiveness of Non-Monetary Recognition Programs. Retrieved 22 March 2006, from http://www.recognitionrewards.com/non_monetary_programs.htm Schuler, R. & Jackson, S. (1987) 'Linking competitive strategies and human resource management practices', Academy of Management Executive 1(3): 207-219.. The Changing Role of HR. (2002). The Economist. March 31, 2002 Wright, P., Gardner, T. and Moynihan, L. (2003) 'The impact of HR practices on the performance of business units' Human Resource Management Journal 13:3, 21-36. Read More