Managing Your Workforce
Posted on June 26, 2010
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Introduction
Human Resource Management, or HRM for short, is one of the most important elements in running a prosperous company, although it isn’t always handled with the time and focus that it deserves. To fully understand what HRM is and its impact on the success or failure of a company, we first must know what it means.
The function of Human Resource Management is to recruit, develop and use the workers within an enterprise in the manner in which is most appropriate to accomplishing the aims and objectives of the enterprise.
This essentially translates to “using people in the business in the best way possible” though that would be an over-simplified statement that doesn’t echo the true nature and scope of HRM. HRM describes all of the strategies and processes that are involved in making sure that all members of staff in a company are pulling in the same direction, and much more significantly, in the right direction.
At its center, HRM combines three primary elements that are fundamental to the productive output of the staff. These factors include motivation, management and leadership, and organisational structures. Consequently, HRM can be applied to all levels of management inside your organisation, not just the shop floor staff, and it could even be used to modify the structure of those levels of management at the same time.
Why is it Necessary?
Quite simply, companies don’t work without employees. As a result, some level of human resource management is necessary for any organisation to operate at all, let alone in an efficient and profitable manner. Even if you don’t realise exactly how HRM affects the everyday working of your business you will surely be employing some kind of HRM in order to keep trading.
Human Resource Management has an impact on every level of your business activities with various degrees of visibility. The most evident HRM tasks involve the hiring and firing of staff as well as monetary systems such as payroll. It can also impact on motivation and communication inside your company, which are much more intangible variables but are critical nonetheless. Poor HRM practice in these less visible domains can have a negative impact on your organisation but go unnoticed for long periods of time.
It also goes without saying that every organisation is different and will have a different set of challenges to face and opportunities to take advantage of. HRM can work as a flexible tool that converts workforce potential into financial profits and can adjust to fully utilise the talents of your company. Without it, your competitors may be afforded the chance to prosper where you missed out.
HRM is a universal business approach and can be applied to organisations who will help in setting up a company as well as almost any other type of business as well.
Impact on Business
While this all sounds very interesting and important, how does it actually impact on the daily functions of your business, and more importantly, how will it help to improve the performance and profitability of your firm?
Recruitment & Training
This is most likely the area of a business that is most associated with human resources – recruitment. Almost every business in the world, and especially businesses that are expanding, must recruit people to work for them. Either existing employees have left, or new possibilities have arisen which mean there are jobs that need to be filled.
It is also important to keep your staff training procedures up-to-date to make certain that your workforce is fully capable of doing the job they are there to do. Whether it is a new piece of legislation or a new bit of technology that alters the marketplace, there is an on-going requirement to keep your organisation up-to-date and ready to take advantage of any opportunity.
You may also find that the costly practice of external recruitment can be avoided if your company has sufficient training facilities in place. It is much easier to train an existing employee to a higher level and then use outside recruitment to fill the gap remaining at the lower level than it is to recruit straight to a higher level. This approach can be applied at almost every level of management inside your business.
Employee Relations
When you have the suitable men and women working for you it is necessary to keep them doing work for you, and to be sure they are doing a good job. This can be achieved through good employee relations. The most obvious employee relations exercise is the art of motivation – a wide topic itself – but other worker relations issues may include disciplinary and grievance management. All of these factors are an important part of the overall HRM picture.
Finances
You can’t keep employees at your company by good motivational methods only. They will want to be paid a fair sum and on time. Payroll must be one of the primary systems that is developed when you start a company, but they still need to be maintained and updated when staff join, leave or switch pay grade.
Industrial Relations
Numerous companies will have to deal with trade union or other workers rights establishments which can be incredibly forceful when defending the interests of their own members. When interacting with such bodies it is beneficial to have individuals within your company who can communicate comfortably with them whilst keeping the interests of your own business in mind as well.
Human resource management is needed by each forming company regardless of how big or small your workforce might be.
Workforce Planning
We have seen the influence that human resource management can have on a company and on the whole it looks like good HRM will have a positive effect on any organisation. As a rule, this is the case, but effective HRM does not just occur overnight.
One way to implement HRM concepts to your business is via workforce planning – a process that has the aim of making sure your workforce can finish the upcoming tasks required for your business to be successful. It can be defined as:
Definition
Workforce planning is the process of anticipating in advance the human resource needs of any enterprise, both in terms of the number of employees necessary and the proper skill mix. Recruitment and training policies are devised with a long term emphasis in order to ensure that the company is able to function without being limited by a lack of appropriate labour. It is a bit of a balancing act, but when done correctly can produce many benefits.Workforce planning can be broken down into four main parts; requirements, recruitment, selection, and training and development.
Requirements
Analysing your workforce requirements is essential to the proper planning of your workforce in the short-term and long-term future. If your company is subject to seasonal shifts in demand, for example in the tourism industry, or suffers from seasonal fluctuations in staff levels then your workforce planning must take these variables into consideration. Also bear in mind any approaching retirements or periods of maternity/paternity leave or you could suffer from a shortage of qualified workers.
Recruitment
Whether you are recruiting externally or from within your existing workforce you still want to find the right individual to fill the position. As part of your workforce planning you should draw up a job description that details the role that will be carried out as well as a person specification which will give an indication of the sort of individual that would be a good fit for the job and your organisation. By mixing and prioritising the elements of these two documents you will be able to identify the ideal job candidate.
Selection
The selection process can be as involved or as simple as you deem necessary. Outside of regular job interviews there are several ways you can learn about about candidates for your jobs, including aptitude tests, group interviews and even psychometric testing.
Training & Development
The primary goal of staff training and development is to produce a better standard of worker within your business. Workforce planning can use training to plug upcoming gaps in the skill set of your workforce and is generally quicker and more cost effective than external recruitment.
An on-line marketing strategy should focus on certain key phrases, such as off the shelf company, which concentrate the efforts of all your marketing workers.
Workforce Motivation
It practically goes without saying that properly motivated employees are going to produce a better standard of output and have a greater quantity of output than unsatisfied workers. This improved work rate will inevitably lead to a rise in the profitability of a company. Yet motivation is still a bit of taboo subject among some managers.
Essentially, all motivational practices can be separated into two models that are often referred to as the “carrot and stick” approach to motivation. The analogy refers to the two ways to make a donkey carry your belongings, either by tempting it with a carrot, or threatening it with a strike from a stick!
Whether you use the carrot approach or the stick strategy will largely depend on your own management approach, as well as the business you work in and the type of individuals that you employ. Regardless of your method, motivational factors can be broken down into a further two sets; financial and non-financial motivators.
Financial
The most common financial motivators are payment schemes. You can pay staff in many different ways, either a fixed amount for a fixed service, by an hourly or daily rate, or a rate related to production, such as a commission structure.
Another financial motivation technique involves what are called incentive schemes, where additional financial rewards are handed out for good performance. This may include commission above a fixed salary, performance-related pay grades or even providing a share of company profits.
Non-financial
Many human resource theorists have their own ideas about the other factors that motivate people to do the job, although these are often seen as a bonus to a worker. It is widely acknowledged that money is the critical motivational factor for the majority of people.
The Changing Face of HRM
As previously mentioned, HRM is a versatile tool that is there to match the features of your workforce to the objectives of your organisation. As such, it has had to keep changing to a business climate that is continuously changing for one reason or another. Furthermore, it is a good idea to continuously evaluate your own HRM procedures and not to rest on your laurels.
Perhaps there is a new piece of government legislation that will have an impact of how your business can carry out its operations, or maybe a fresh manufacturing technology will come along that can revolutionise your industry. Either way, if you want to make sure that your workforce is performing to its optimum level then your HRM strategy should be adaptive enough to cope with an ever-changing world. After all, what might seem like a danger to most will often appear as an opportunity to a shrewd entrepreneur.
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