Internet Business Ideas

Introduction

Human Resource Management, or HRM for short, is one of the most important factors in running a prosperous business, although it is not always treated with the time and focus that it deserves. To fully understand what HRM is and its influence on the success or failing of a business, we first must know what it means.

The purpose of Human Resource Management is to recruit, develop and utilise the workers within an organisation in the manner in which is most suitable to accomplishing the aims and objectives of the organisation.

This essentially translates to “using individuals in the business in the best way possible” though that would be an over-simplified assertion that doesn’t reflect the real nature and scope of HRM. HRM describes all of the methods and processes that are involved in ensuring that all members of staff in a business are pulling in the same direction, and more importantly, in the right direction.

At its center, HRM brings together three major elements that are essential to the productive output of the workforce. These factors include motivation, management and leadership, and organisational structures. Consequently, HRM can be employed on all levels of management in your organisation, not just the shop floor workers, and it may even be used to modify the structure of those levels of management at the same time.

Why is it Necessary?

Put simply, businesses don’t run without workers. As such, some level of human resource management is necessary for any business to operate at all, let alone in an effective and profitable manner.

Human Resource Management has an effect on every level of your corporate activities with various degrees of visibility. The most obvious HRM tasks include the hiring and firing of employees as well as monetary systems such as payroll. It may also impact on motivation and communication inside your business, which are far more intangible variables but are important nonetheless. Inadequate HRM practice in these less visible arenas can have a negative impact on your organisation but go unnoticed for long intervals.

It also goes without saying that each company is unique and will have a unique set of challenges to face and opportunities to take advantage of. HRM can act as a versatile tool that translates workforce potential into financial gains and can adapt to fully utilise the talents of your firm.

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Impact on Business

Whilst this all appears very interesting and significant, how does it actually impact on the daily functions of your company, and more importantly, how will it help to boost the performance and success of your firm?

Recruitment & Training

This is probably the area of a company that is most associated with human resources – recruitment. Almost every company in the world, and especially companies that are expanding, need to recruit people to work for them. Either current employees have left, or new opportunities have arisen which mean there are jobs that have to be filled.

It is also important to keep your staff training procedures up-to-date to make sure that your workforce is fully capable of doing the job they are there to do. Regardless of whether it is a fresh piece of legislation or a new bit of technology that alters the industry, there is an on-going requirement to keep your business up-to-date and ready to make use of any opportunity.

You may also find that the costly practice of external recruitment can be averted if your organisation has sufficient training facilities in place. It is far easier to teach 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 hire directly to a higher level.

Employee Relations

When you have the right men and women working for you it is important to keep them doing work for you, and to ensure they are doing a good job. This can be achieved by means of good employee relations. The most obvious employee relations practice is the art of motivation – a broad topic by itself – but other employee relations issues can include disciplinary and grievance management.

Finances

You cannot keep employees at your company by good motivational methods only. They’ll want to be paid a fair amount and on time. Payroll must be one of the very first systems that is created when you start a company, but they still need to be taken care of and updated when personnel join, leave or change pay grade.

Industrial Relations

Several firms will have to deal with trade union or other workers rights organisations which can be very forceful when defending the interests of their own members. When dealing with such bodies it is beneficial to have people within your organisation who can connect comfortably with them whilst keeping the interests of your own business in mind as well.

Human resource management is actually required by each forming company no matter how big or small your workforce may be.

Workforce Planning

We have seen the impact that human resource management may have on a company and overall it looks like good HRM will have a good effect on any company. As a rule, this is the case, but good HRM does not just occur overnight.

One way to apply HRM ideas to your business is via workforce planning – a system that has the goal of making sure your workforce can finish the upcoming tasks needed for your company to be successful.

Definition

Workforce planning is the process of anticipating ahead of time the human resource needs of any enterprise, both in terms of the quantity 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 shortage of appropriate labour.

Requirements

Analysing your workforce demands is vital to the proper planning of your staff in the short-term and long-term future. If your company is subject to seasonal changes in demand, such as in the tourism industry, or suffers from seasonal fluctuations in staff levels then your workforce planning needs to take these variables into consideration. Also bear in mind any approaching retirements or intervals of maternity/paternity leave or you could experience a shortage of qualified employees.

Recruitment

Whether you are hiring people externally or from inside your existing workforce you still want to find the correct person to fill the role. As part of your workforce planning you ought to draw up a job description that details the role that will be undertaken as well as a person specification which will give an indication of the kind of person that would be a good fit for the job and your organisation. By mixing and prioritising the components of these two descriptions you will be able to recognise the ideal job candidate.

Selection

The selection procedure can be as involved or as easy as you deem necessary. Beyond regular job interviews there are several ways you can learn about applicants for your jobs, including aptitude tests, group interviews and even psychometric testing.

Training & Development

The principal goal of staff training and development is to develop a much better quality of worker within your business. Workforce planning can use training to fill upcoming gaps in the skill set of your staff which is generally faster and more economical than external recruitment. Training and development can also go some way towards motivating your employees.

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Workforce Motivation

It almost goes without saying that properly motivated workers are going to deliver a better standard of work and have a higher quantity of output than unhappy workers. This improved work rate will undoubtedly lead to a rise in the profitability of a business. Yet motivation is still a bit of taboo subject among some managers.

Essentially, all motivational tactics can be separated into two models that are often called the “carrot and stick” approach to motivation. The analogy relates to the two approaches to make a donkey carry your possessions, either by tempting it with a carrot, or threatening it with a strike from a stick!

Whether you use the carrot strategy or the stick approach will largely depend on your own management style, as well as the business you work in and the type of people that you employ. Regardless of your method, motivational factors can be separated into a further two groups; financial and non-financial motivators.

Financial

The most typical financial motivators are payment plans. You can pay workers in a number of 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 by additional financial rewards are handed out for good overall performance. This may include commission beyond a fixed salary, performance-related pay grades or even offering a share of company profits. Again, the motivating aspect here is the money alone.

Non-financial

Many human resource theorists have their own ideas about the other elements that motivate people to do the job, although these are often seen as a bonus to a worker. It is widely acknowledged that income is the key motivational factor for the majority of people.

The Changing Face of HRM

As previously stated, HRM is a flexible application that is there to match up the characteristics of your workforce to the objectives of your organisation. As such, it has had to keep adapting to a business climate that is constantly changing for one reason or another. Moreover, it is a good idea to constantly evaluate your own HRM policies and not to rest on your laurels.

Maybe there is a new piece of government law that will have an effect of how your business can carry out its trading, or maybe a new manufacturing technology will come along that will revolutionise your industry. Either way, if you want to ensure that your staff is performing to its highest level then your HRM system should be flexible enough to cope with an ever-changing economy. After all, what might seem like a threat to many will often appear as an opportunity to a good entrepreneur.

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