In today’s world, the global competition is the fundamental element to describe business organization’s strategies; as a result the industrial economy has to pass towards a knowledge based economy. Thus, operating in a market where there is presence of fierce market competition, to sustain the growth and productivity of the organization the management needs to have an effective Human Resource management to drive the organizational performance. In this regard, it is worth mentioning that, HRM has a significant role for the supply of the human being the chief resources for the business organizations. As disclosed by Cooke, Saini and Wang (2014),the basic role of HRM is to recruit employees, doing performance appraisal and make appropriate compensation strategies for the business organizations.This report highlights the basic responsibilities of Human resource departments and further shades light on their role in sustaining the growth of the business organizations.
It can be said that already HRM function has been repeatedly facing major issues in justifying their existence in the business organizations as when the business organizations are in good shape financially, the HR managers are provided with adequate budget to spend on the training, recruiting and arranging developmental programs for the employees of the organizations. On the other hand,as opined by Brewster and Hegewisch (2017), when the business organizations face major financial crisis, it is the HR department that gets the initial cutbacks. The emergence of strategic human resource management is dedicated to explore the role of the HR managers to support the strategies of the business organizations. Over the years HRM discipline has experienced a huge change and these changes brought in two major transformations. The first change that can be seen is the transformation from being the field of personnel management to being the field of human resource management. As stated by Al Ariss, Cascio and Paauwe (2014),the second major change is the transformation from being the human resource management to the field of strategic human resource management. The initial change helps the recognition that individuals are a major asset in the organizations and can surely be managed systematically. The second major change has been built on the previous knowledge base of the discipline. These changes are dependent on the recognition that apart from coordinating the policies and practices of HRM, they should be synchronized with the requirements of the business organizations. These needs or requirements should be reflected in the basic strategies of the business organizations.
The strategic human resource management is dependent upon the identification that the business organizations can be more effective if the general employees are managed with strategic policies set by the management of the business organizations that can deliver the exact number of individuals with appropriate behaviors, the required competencies and the required level of loyalty and motivation to the business organizations(Vomberg, Homburg and Bornemann 2015). On the other hand, strategic human resource management is the creation of the synchronization between the general strategic aims of the organization and the HRM strategy and implementation of those strategies.
As per recruitment, selection and retention theory, recruitment process under the strategic HR managers ensures the fact that right employees are available timely within the workplace. As disclosed by Cooke, Saini and Wang (2014), this procedure involves locating the nature of the task and implementing the selection and recruitment process to make sure a synchronized match. The objective of the recruitment must make it sure that once the individuals are recruited they should be retained either by offering a package of reward or an impactful development process. There is no doubt in this regard as it can be perceived from a rough view of the history of human resource management. Even the founder of the Ford Company, Henry Ford had to provide an incentive of five dollars a day as an attempt to cut short the employee turnover(Vomberg, Homburg and Bornemann 2015). Even nowadays the majority of the employees in the financial sector wait for the bonuses that they get end of the economic year. As opined by Brewster and Hegewisch (2017), the human resource flow refers to the various aspects of the process of the recruitment; like the selection of the candidates, their development and ending their contracts with the business organizations. It should be the duty of the HR managers to make sure that always in the organization right individuals are at the right place and of course at the right time.
Compensation strategies are used by organisation for the purpose of defining how it managers and views employee benefits and pay. The strategy act as guiding principles for the organisation and has to be documented in such a way that it is able to clearly demonstrate the approach of the organisation towards managing employee compensation.As stated by Al Ariss, Cascio and Paauwe (2014), an appropriate and effective strategy in relation to compensation provides motivation to the existing employees of the organisation and is also utilised for the purpose of attracting new employees. Compensation is often thought by people as only salary; however the cost of total employee compensation consists of all aspects in relation to employee benefits. This cost consist of retirement benefits, health benefits, bonuses, tuition reimbursement and those non-salary benefits which are the part of the overall compensation package. There are 7 key elements in relation to an effective compensation policy or strategy.
Budget allocation
This element helps to analyse how the total compensation budget would be divided between the salary and other incentives of the employees
Developing salary range
This element helps the organisation to benchmark similar jobs within the same industry and to create an appropriate payment structure
Salary audits
As market is subjected to change it is compulsory for the organisation to undertake regular salary audits to ensure that the salary range is in compliance with contemporary trends in the industry
Benefit package
This is used by various organisations additional to the salary for the purpose of retaining and attracting employees
Performance management system
This element helps the organisation to ensure that the employees are motivated towards achieving the goal and objective of the company.
Legal compliance
As opined by Woodrow and Guest(2014), an appropriate compensation strategy is always in compliance with contemporary legal regulations.
Structured administration
The development of salary audits, annual review process and Raise process timeline has to be provided under some responsibility so that proper administration of the issues is conducted.
A performance appraisal is the process through which the performance of an employee is evaluated and documented. According to behavioral management theory, this process is a part of career development and includes regularly reviewing the performance of an employee within the organisation. In this process the employees are evaluated based on organisational objectives and pre-established criteria. As opined by Brewster and Hegewisch (2017), other aspects which are considered by the process include potential for future improvement of the employee, accomplishments, extra initiatives taken and the strength and weakness of the employees. The process leads to a positive implication of the organisation in relation to the Employees. The process is also said to benefit the effectiveness of the organisation. Moreover the employees of the company are able to get valuable feedback in relation to their performance through the process of performance appraisal. As stated by Al Ariss, Cascio and Paauwe(2014), this helps the employees to interact effectively with the management. The focus of the employee is also developed through the process in relation to the organisation and also helps to promote trust and positive work behaviour within the employee. However the process of performance appraisal is not an easy task for the organisation. It involves collection of data in relation to the employee which is a time consuming process. In addition a dispute may arise between the organisation and the employee in relation to the result of the process.
Conclusion
Thus to conclude it can be said that a human resource manager should identify the fact that human resource management is an continuous state of changes and the changes needs to be identified quickly to ensure the best interests of the business organizations. The basic functions of the HR managers involves resourcing and planning, training and development, selection and recruitment and of course influencing them to enhance loyalty and motivation among the employees to increase the overall productivity with an objective to attain the most profitability. Thus to conclude, it can be said that within a business organization, to ensure better profitability along with the productivity, the management of the organizations should consider the significant role of the Human resource department to ensure the organizational performance and to make it sure that the business organization sustain their rate of development in the ever-changing market.
References
Al Ariss, A., Cascio, W.F. and Paauwe, J., 2014. Talent management: Current theories and future research directions. Journal of World Business, 49(2), pp.173-179.
Brewster, C. and Hegewisch, A. eds., 2017. Policy and Practice in European Human Resource Management: The Price Waterhouse Cranfield Survey. Taylor & Francis.
Cohen, E., 2017. CSR for HR: A necessary partnership for advancing responsible business practices. Routledge.
Cooke, F.L., Saini, D.S. and Wang, J., 2014. Talent management in China and India: A comparison of management perceptions and human resource practices. Journal of World Business, 49(2), pp.225-235.
DeNisi, A.S., Wilson, M.S. and Biteman, J., 2014. Research and practice in HRM: A historical perspective. Human Resource Management Review, 24(3), pp.219-231.
Jamali, D.R., El Dirani, A.M. and Harwood, I.A., 2015.Exploring human resource management roles in corporate social responsibility: the CSR?HRM co?creation model. Business Ethics: A European Review, 24(2), pp.125-143.
Krausert, A., 2014. HRM systems for knowledge workers: Differences among top managers, middle managers, and professional employees. Human Resource Management, 53(1), pp.67-87.
Pollock, R.V., Wick, C.W. and Jefferson, A., 2015. The six disciplines of breakthrough learning: How to turn training and development into business results. John Wiley & Sons.
Tracey, W.R., 2016. The human resources glossary: The complete desk reference for HR executives, managers, and practitioners. CRC Press.
Vomberg, A., Homburg, C. and Bornemann, T., 2015. Talented people and strong brands: The contribution of human capital and brand equity to firm value. Strategic Management Journal, 36(13), pp.2122-2131.
Woodrow, C. and Guest, D.E., 2014. When good HR gets bad results: Exploring the challenge of HR implementation in the case of workplace bullying. Human Resource Management Journal, 24(1), pp.38-56
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