What is Human Resource Management (HRM)?

HRM is the organizational function that deals with issues related to people such as
compensation, hiring, performance management, organization development, safety, wellness,
benefits, employee motivation, communication, administration, and training.
HRM is also a strategic and comprehensive approach to managing people and the workplace
culture and environment. Effective HRM enables employees to contribute effectively and
productively to the overall company direction and the accomplishment of the organization's
goals and objectives.
Factors Contributing to the Growing Importance of HRM
a. Accommodation to workers needs

Workers are demanding that organizations accommodate their personal needs by instituting
such programs as flexible work schedules, parental leave, child-care and elder-care
assistance, and job sharing. The human resource department plays a central role in
establishing and implementing policies designed to reduce the friction between organizational
demands and family responsibilities.
b. Increased complexity of the Managers job
Management has become an increasingly complex and demanding job for many reasons,
including foreign competition, new technology, expanding scientific information, and rapid
change. Therefore, organizations frequently ask human resource managers for assistance in
making strategic business decisions and in matching the distinctive competencies of the
firms human resources to the mission of the organization. Executives need assistance from
the human resource department in matters of recruitment, performance evaluation,
compensation, and discipline.
c. Legislation and litigation
The enactment of state laws has contributed enormously to the proliferation and importance
of human resource functions. The record keeping and reporting requirements of the laws are
so extensive that to comply with them, many human resource departments must work
countless hours and often must hire additional staff. Four areas that have been influenced
most by legislation include equal employment, Compensation, safety, and labor relations. An
organizations failure to comply with laws regulating these areas can result in extremely
costly back-pay awards, class action suits, and penalties.
d. Consistency

Human resource policies help to maintain consistency and equity within an organization.
Consistency is particularly important in compensation and promotion decisions. When
managers make compensation decisions without consulting the human resource department
the salary structure tends to become very uneven and unfair promotion decisions also may be
handled unfairly when the HR department does not coordinate the decision of individual
manger.
e. Expertise

Now a days there exist sophisticated personnel activities that require special expertise. For
example, researchers have developed complex procedures for making employee-selection
decisions; statistical formulas that combine interviews, test scores, and application-blank
information have replaced the
subjective interviews traditionally used in making selection decisions. Similarly, many
organizations have developed compensation systems with elaborate benefits packages to
replace simple hourly pay or piece rate incentive systems.

f. Cost of Human Resource

Human resource activities have become increasingly important because of the high cost of
personal problem. The largest single expense in most organizations is labor cost, which is
often considerably higher than the necessary because of such problems as absenteeism
tardiness and discrimination.
Why are we concerned with HRM?
1. Helps you get results through others.

Different managerial techniques help mangers to direct the performance of employees in
desirable direction in order to achieve the organizational objectives. Through the efforts of
others working in an organization, managers get things done that require effective human
resource management.

2. Helps you avoid common personnel mistakes

Qualified HR mangers utilize organization resources in such a way that helps to avoid
common personnel mistakes like the following
a. Hiring the wrong person for the job
b. Experiencing high turnover
c. Finding employees not doing their best
d. Having your company taken to court because of your discriminatory actions
e. Having your company cited under federal occupational safety laws for
Unsafe practices
f. Allowing a lack of training to undermine your departments effectiveness
g. Committing any unfair labor practices


3. Helps you to gain Competitive Advantage

Among all the resources possessed by the organizations it is only Manpower or the Human
resources that
create the real difference. Because all organizations can have the same technology, they can
possess same type of financial resources, same sort of raw material can be used to produce
the goods and services but the organizational source that can really create the difference is
work force of the organization.
Therefore they are the main sources of innovation creativity in the organizations that can be
used as a competitive advantage. In todays competitive environment,
these are the people which can create competitive advantageous for the organizations.
The world around us is changing. No longer can we consider our share of the good Life
given. If we are to maintain some semblance of that life, we as
individual, as organizations, as society will have to fight actively for it an increasingly
competitive global environment. If organizations are able to
mange its work force efficiently/effectively this will be beneficial for all stakeholders
(Organization, Employees and Society). Challenges/Issues of Managing Human Resources in
present era Following are the main issues that are faced by the mangers to manage the
workforce of todays organization for achievement of objectives.

a. To Attract People

People will be interested to join any organization if it is providing them quality working
environment, attractive benefit and opportunities to excel in future. Keeping in view the
opportunities in the market, the first issues will be to attract good people for your
organization.


b. To Develop People

Development is related to provide the opportunities for training and development to match
the skills to job in particular areas. It requires careful need assessment for training and
selecting effective training methods and tools. After attracting/selecting, Continuous
development of workforce of the organization leads towards development of the organization.
So that they will start playing their important role in the organization.

c. To Motivate

Motivation means to influence performance of others and to redirect the efforts in desirable
direction by using different motivational tools that can help in fulfilling the mission of
organization. Third important issues/concern will be to keep your workforce motivated so
that they should keep on delivering effectively.

d. To Keep Talented People

This is related to retention of workforce in organization and to take steps that can prevent
undesirable detachments of talented and motivated workers from the organization.

HRM Trends in Global Market
Here it is, folks. HRIQ readers and industry practitioners weigh in on the top trends in HR
today, in the categories of analytics and metrics; technology; outsourcing; compliance;
compensation; benefits and employee incentives; training and development; and a growingly
contingent and mobile workforce. Find out what these industry trends mean for your
business, and how to hop on before you miss the bandwagon.
1. Analytics and Metrics
After nearly 20 years of work developing and helping clients apply evidenced based
decision making to workforce management, we are seeing a swift maturing of this market,
says Haig R. Nalbantian, Senior Partner at Mercer and co-author of Making Mobility Matter
and Play to Your Strengths: Managing your Internal Labor Markets for Lasting Competitive
Advantage. More and more organizations are building in-house workforce analytics
capabilities and trying to respond to pressures to establish the expected economic return to
programs and practices they propose to senior leadership.
In other words, companies are forking over their own time and resources in order to analyze
whats working and demonstrating ROI for their companynot necessarily just following so-
called tried and true industry standards that may have worked in the past.
Best practice benchmarking is no longer an adequate basis for policy determination. The
fallacies of that approach are clear to most organizations in the private sector; developing
one's own data to ascertain the impact of policies and practices is becoming more the norm.
This is a major change and is aligned with developments in other fields like Finance,
Marketing, Logistics, etc. that are pushing the boundaries and tapping the benefits of what the
Economist has called the Era of Big Data, says Nalbantian.
2. Technology
Another trend, according to James W. Robertson, HR Transformation Management
Consultant for PwC, is HR wanting to own their technology and making a move to cloud
based solutions that they can maintain cheaply without having to be dependent upon IT or a
big ERP system.In addition, many organizations are automating processes through either
technology or vendors.
Most organizations are moving away from handling the labor intensive areas in human
resources and managing them through trusted vendors who learn their company culture, says
Charles Little, JR. SPHR, President & CEO at Strategic HR Partners.
These areas include payroll, recruiting, benefits administration, training & development, and
organizational development, says Little.
But why automate the processes that are seemingly an integral part of the HR function? The
rationale is simple: it frees up time to devote to strategic initiatives driven by the senior
management team, and gives human resources the time to concentrate on defining processes,
creating measurements, and affecting the bottom line, says Little.
I think the one unifying trend is segmentation, says Kaushik Mitter, Senior Director HR at
Dr. Reddys Laboratories. There are parallels between what is happening in HR and
Marketing-Consumer behavior.
But will this shift be guaranteed to streamline and ease HR functionalities? The challenge
will be to offer a common and consistent employer experience while leveraging technology
and touch to understand each person better and build flexibility in to each of these processes,
says Mitter.
3. Outsourcing
The customer expectations have changed as have HR functions, says John H. Williamson,
SPHR, GPHR, CCP, Certified Human Resources & Total Rewards Professional. Functions
are being outsourced including recruitment, labor relations and total rewards.
The workforce is working more non-traditionally. This includes flexible work schedules,
virtual workplaces and greater reliance on contingent staffing, according to Williamson.
The outsourcing of HR functions has increased dramatically, says Barry Savage, VP of
Resource Management, Inc. Owners understand the necessity to strategically market their
products/services in an economic environment like we are in, while empowering their
management teams to develop and implement processes critical to the company's success,
and this is reflected in the decision to outsource many of a company's non-core functions
including, in many cases, much of its HR.
4. Compliance
Compliance is key, says Renee Larsen, Human Resources Compliance Manager at Preload
Inc. Whether it be EEO Compliance/Banking series 7 HRMs or Regulatory Managers. All
appear to be in demand depending on the industry. Across the board, I see an increase in
diversity job opportunities and promotion of education in diversity in various industries.
Savage also points out an increase in employment-related claims, including EEO, wage and
hour claims, wrongful termination, age discrimination, sexual and general harassment claims
and others.
When the economy sucks wind, employers are seen as the deep pocket solution to many
employee-related woes, and if an employer does not have the policies, procedures and proper
documentation in place when a claim is lodged, it could cost them a pretty penny, Savage
says.
Combine that with the rapidly changing landscape of employment law under the current
administration and budget shortfalls at both the state and federal levels, and you have the
perfect environment for compliance audits, generating millions of dollars in fines for states
and the feds. Employers also recognize this fact, and apparently they are happy to hand over
much of this to professionals whose only job is to keep them compliant.
5. Compensation, Benefits and Employee Incentives
I observe a trend in new/upgraded wellness programs and safety programs designed to
manage healthcare costs, says Karen Womack, Risk Manager at Allegheny County. "When
our wellness program began a couple of years ago, the course offrerings were limited and
employees had to attend the class. Nowadays, there are a number of online courses that are
offered in additon to resource modules. Two of the resource modules are related to costs. One
allows the employee to look up the costs of medical procedures, and another allows us to
look up the generic name of medications and compare prices among a number of vendors that
have a link on the website."
This focus on upgraded wellness programs could also be in part to upcoming changes in
healthcare, set to occur over the next few years.
We're seeing a number of organizations beginning to ramp up in preparation for 2014
healthcare reform, says Robert Ruotolo, Vice President, Employee Benefits and Risk
Management at Lockton. The year 2014 will bring mandates that require employers with 50
or more full-timers to provide health insurance to each of themor face a fine of $2k per
employee. Ruotolo explains in a recent blog post that many organizations are preparing by
calculating their exposure to 2014 health care reform.
I see that the retail industry is still struggling, but trying to continue to push forward through
this economic downturn, Larsen adds. Compensation and employee incentives are at an all
time low, but employers should look into other ways to reward their employees if bonuses are
not an option due to cutting/limiting costs. Remember it costs more to re-recruit then it
does to invest in your current staff.
6. Training and Development
How learning functions are changing is one indication of a pendulum shift, but the role
employees place on learning and development may be even more notable. A hefty paycheck
and great benefits are always top of mind for most desirable candidates but another major
change thats occurring in the HR and recruiting space is that employees are looking for
companies that will provide them the skills necessary to prepare them for their long-term
career goals.
One of the trends I have observed [amongst employees] is the desire to be trained and
developed, says Steven McCorry Sr., PHR., a strategic HR executive. Most employees
today are putting a stronger satisfaction rating on whether their employer is developing them.
This is clearly stemming from the challenging and competitive employment landscape.
Attribute it to generational differences or simply a survival mechanism due to high layoff
rates (thanks to outsourcing and budget cuts), but employer loyalty seems to be a sentiment
that will fizzle out once the last Boomer retires from the workforce. The death of such
antiquated concepts as tenure and pension plans leave Millennials responsible for their own
retirement thus, their interest is vested in their own future and career, not necessarily in the
growth of the company that happens to be paying the this months rent. Few employees
develop their career anymore by growing vertically within the same company, instead
building resumes and skill sets by taking a slight promotion or even a lateral jump to a better
paying, more prestigious organization.
This may seem a bit opportunistic, but its the reality of the new generation. What can you
offer to get these employees in the door and make the most of their time at your company?
Think about revamping and repackaging your L&D function as a selling point to attract top
talent.
"We need to focus on practical, real life training that gives participants tips and strategies
they can use right away," says Judy Lindenberger, MBA, who has worked with companies
such as AstraZeneca, BMS and American Express. "Personally, I love this. It makes me think
harder about what to keep and what to delete from my training programs and how to create
impact in shorter amounts of time and for human resource professionals, it means the same."
This seems to be a global consensus. "Learning is becoming more individualized, informal,
and location independent, says Professor Eric Y.H. Tsui, VP of Hong Kongs Knowledge
Management Society, researcher and practitioner in cloud-based knowledge service, blended
learning & uni-industry collaboration.Major reasons contributing to this trend are the
advancement of the Web technologies especially Web 2.0. Transformation into the new
economy gave birth to knowledge work, and we are facing an increasingly complex and far
changing world."
7. Contingent Workforce
The rise of the consultant and contingent workforce at multiple levels throughout Fortune
500 organizations has lead to short-term assignments, harder to understand resumes, and
increased specialization, says John LaFay, HRIS Professional. This has also led to an
explosion of pimp services global, using Skype and storefront websites.
Says LaFay, Long term is now considered 12 monthsif you make it that far, you might
just be a fit for more responsibility. Only then are people eligible for ancillary benefits of
training, coaching, and career planning.
8. A Growingly Mobile Workforce
Thanks to tablets and the growing availability of wireless technology, more and more
companies are reducing overhead costs by letting their constantly wired workforce
telecommute.
Statistics show that allowing employees to work from home at least part of the time can
increase productivity by 15 percent and save the company an average of $10k per year per
employee, according to a study by the Telework Research Coalition. Additionally, this saves
the employee about $7k annually, reduces turnover and improves company loyalty.
In most cases, the arrangement is to the mutual benefit of both employer and employee,
says Brijendra Chaudhary, HR Executive at Permasteelisa Spain United Arab Emirates. An
IDS study on teleworking dated May 2002 examined home working at Abbey National,
where it was thought that home working would be a good motivational tool and would
consequently improve productivity in the workforce. In another organization, Fleetway
Travel, the business case for home working was seen as particularly strong; the idea that
more staff could be brought in to enhance sales without the need for increased office space
held great appeal.
The Telework Research Coalition provided additional supporting insights: 89 of the top 100
US companies offer telecommuting; 58 percent of companies consider themselves a virtual
workplace; only nine percent of employees worked at headquarters; and 67 percent of all
workers used mobile and wireless computing.

How can HR do more to manage these trends?

First, Wallack says, as an HR professional, you must make sure your organization
understands what globalization means to you, your company and your business sector you
must be the the one to advocate full understanding of what the drivers are. Its important; too,
to keep in mind that globalization means different things to different people across the
world. Ernst & Young describes globalization in The New Mindset as the level of a
countrys integration with the world economy through the exchange of goods and services,
movement of capital and finance, movement of labor, exchange of technology and ideas, and
cultural integration. Martin Wolf, in why Globalization Works, sums it up more simply as,
economic integration across borders through markets. And every person you ask will
probably define it a bit differently.
A global mindset is often defined as a way of seeing the world and the globalization of
markets, organizations and individuals. Developing a more global mindset enables your
organization to be more effectively tackle functional, organizational, and cross-cultural
boundaries and move forward.
Wallack offered some ideas to help organizations adopt a more global mindset:
Global mobility: Deepen your employees knowledge pool by offering short-term,
focused opportunities for individuals to work in new markets and geographies.
Develop global leadership pipelines: There is a growing expectation for leaders to have
work experience outside ones country of origin; simply having an education that includes
global topics is no longer enough. Travel is a strategic management development tool.
Get involved in efforts to create global HR standards.
As there is a higher demand on the global HR function to demonstrate greater
adaptability, provide HR managers more exposure to and rotations in global business that
they need to be effective internationally. Make HR the link between corporate
headquarters and overseas operations.
As far as talent management: Include nationalities and experience in your efforts to
diversify talent in other functions and other industries. Increase the span of responsibilities
and decision-making of employees.