Human Resource Management (HRM) – Quick Guide

Human Resource Management

Human resource management is the organizational function that manages all issues related to the people in an organization. That includes but is not limited to compensation, recruitment and hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, policy administration, and training.

1. What is the difference between HR and HRM?

HR stands for Human Resource and HRM stands for Human Resource Management. Human Resource or HR is used to define the set of people who manage the resources related to employees in an organization. The term human resources was first coined in the 1960s when the value of labor relations gathered attention and notions such as motivation, organizational behavior, and selection assessments began to take shape.

Human Resource Management, on the other hand, is the entire process of selecting, recruiting and onboarding employees; structuring policies for leaves, compensation and benefits; enabling a positive organizational culture; ensuring the well-being of employees; training them and ensuring all state and central government statutory compliances.

2. What is HR in HRM?

The HR in HRM stands for Human Resources, together known as Human Resources Management. As the name implies, this function in an organization is all about managing the talent, the workforce which is the heart of any company, across all industries and locations. HRs are no more just people who take complaints or conduct fun activities for team bonding, but are crucial in bridging the gap between employees and the top management. They are responsible for enabling change and driving its adoption, manpower planning, improving attrition rates and containing costs to the organization. They are the ones who have to effectively manage the entire lifecycle of an employee, right from hire to retire.

3. What is the HRM function?

The main function of Human Resource Management is to build and maintain the entire employee lifecycle from when they join the organization till their separation. This involves their orientation and induction process, structuring policies, compensation, benefits and perquisites for the employees, managing their leaves and attendance, ensuring their training and development, processing their payrolls and addressing their grievances.

Generally, as a thumb rule, for HR staffing, the requirements state a 1:100 ratio. That is one full-time professional Human Resource person should be hired for every 100 employees. The actual ratio for a business can vary depending upon factors such as the degree of HR centralization, the geographic distribution of the employees, the sophistication level of the employees, and the relative complexity of the organisation.

4. What are the advantages of HRM?

Here are the top 5 benefits of Human Resource Management:

Performance Management

One of the most critical functions of HRM is to track and monitor employee performance. The performance management strategy has to be created such that the employees feel rewarded in their work and feel engaged and aligned with the organization goals.

Conflict Management

Conflicts are inevitable in a workplace. Employees are bound to disagree with each other on matters of work or even otherwise. And sometimes that disagreement can go to the next level of conflict which can be both internal and external. One function of the HRM is to resolve the internal conflicts as effectively as possible.

Improving Workforce Churn

High employee turnover can adversely affect the health of any organization. Businesses not only lose talent but lose money that they would spend on re-hiring and lost costs of training the talent that left. To avoid heavy turnover, the HRM department carefully charts policies, contracts, terms and conditions to improve the overall rate of churn. While hiring they ensure that the employee is not only skilled for the job but also has the best interests of the company.

Building Relationships

Another crucial function of the HRM department is to build and maintain relationships within the organization. A happy work atmosphere leads to happy employees, thus resulting in a productive workforce. By enabling a positive culture and in many cases, leading change management within the company by adopting latest HR practices or by adopting a new HR Technology, this department has the potential to foster long lasting relationships.

Hiring and Training

Last but not the least, this is one of the most obvious and integral functions of the HRM department that offers great value to the organization. This is also a painstaking process that requires a high level of integrity and a properly devised recruitment methodology. Identifying a gap, raising a requisition to fill that position, writing a suitable job description, finding the right match and training the talent to quickly start becoming productive are some of the tasks that come under this function.

5. What is the difference between HRM and HRD?

HRM stands for Human Resource Management while HRD stands for Human Resource Development. While they may seem similar, there are significant differences between the two.

HRM is the principle that governs the activities performed by the HRD, hence making it a sub-function of HRM. The functions of HRM are usually reactive and are used for achieving organisational goals, whereas the functions of HRD are proactive and are a continuous process to enhance employee productivity. The overall aim of HRM is to improve the overall employee performance whereas the objective of HRD is very specific to enhancing the skills, competency levels and knowledge base of employees.

6. What are the challenges of HRM?

There are multiple challenges that the Human Resource Management department faces on a regular basis in different areas. Here are a few of them:

  • Improving Attrition
  • Accurately planning the manpower
  • Continuous training and upskilling
  • Effective change management
  • Keeping up with new technologies

An intelligent, cloud-based HR Technology can often solve all these challenges by seamlessly integrating with all the different systems of HR. An end-to-end HRMS platform can enable HRs to recruit, onboard, engage, train, plan and manage employees in an efficient and easy manner. But care would have to be taken to choose a solution that is technologically advanced, flexible and can swiftly adapt to the changing needs of the organisation and the market.

7. What are the objectives of human resource management

The goals and objectives of HRM are:

  • To recruit and retain the right talent for the right job roles.
  • To improve employee turnover rate and prevent attrition.
  • To ensure continuous employee improvement in terms of their performance, growth and skill development.
  • To create a system to handle the entire employee lifecycle with maximum efficiency and minimum costs.
  • To enable employee engagement and increase productivity.
  • To offer a rich employee experience and keep them motivated.
  • To provide avenues for grievances and assure swift redressals.
  • To enable a system of continuous feedback.
  • To create a culture of positivity and high energy.

8. What are the principles of HRM?

Human Resource Management is built on the basic principle that human resources are an asset and the essential drivers of growth in any organization. A business cannot be successful without effectively managing their human resources. According to Michael Armstrong in his book ‘A Handbook of Human Resource Management’, “business success is most likely to be achieved if the personnel policies and procedures of the enterprise are closely linked with, and make a major contribution to the achievement of corporate objectives and strategic plans.”

Another important guiding principle of HRM is that it is the HR department’s responsibility to search for, select, hire, train and retain the right talent for the right job roles who must be aligned with the organisational goals and have its best interests at all times.

9. What are HRM best practices?

  • Create a safe, engaged and happy workplace
  • Keep bonuses linked to performance
  • Provide a 360 degree and continuous feedback mechanism
  • Hire, train and retain the right people
  • Reward and recognize high performers
  • Offer grievance redressal avenues
  • Provide avenues for reskilling and upskilling
  • Enable a culture of empathy

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