Managing Your Workforce
Introduction
Human Resource Management, or HRM for short, is one of the most important factors in running a prosperous business, although it isn’t always handled with the time and emphasis that it deserves. To completely understand what HRM is and its impact on the success or failure of a company, we first need to know what it means. The following is a satisfactory definition:
The purpose of Human Resource Management is to recruit, develop and utilise the personnel within an enterprise in the manner in which is most appropriate to achieving the aims and objectives of the organisation.
This effectively translates to “using people in the company in the best way possible” though that would be an over-simplified statement that does not echo the real nature and scope of HRM. HRM describes all of the strategies and processes that are involved in ensuring that all members of staff in a business are pulling in the same direction, and more significantly, in the right direction.
At its center, HRM brings together three major elements that are fundamental to the productive output of the staff. These elements include motivation, management and leadership, and organisational structures. Consequently, HRM can be employed on all levels of management within your organisation, not just the shop floor workers, and it may even be used to modify the framework of those levels of management at the same time.
Why is it Necessary?
Put simply, companies don’t operate without employees. As a result, some level of human resource management is necessary for any organisation to operate at all, let alone in an effective and prosperous manner. Even if you don’t appreciate exactly how HRM affects the every day working of your company you will certainly be using some sort 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 apparent HRM tasks involve the hiring and firing of staff as well as monetary systems such as payroll. It may also impact on motivation and communication within your business, which are much more intangible variables but are important nonetheless. Inadequate HRM practice in these less visible domains can have a negative impact on your company but go unnoticed for long periods of time.
It also goes without saying that every company is unique and will have a different set of issues to face and opportunities to take advantage of. HRM can act as a versatile tool that translates workforce potential into financial gains and can adjust to fully utilise the talents of your company.
We utilise Human Resource Management to ensure the staff delivers offshore company formation efficiently for the highest level of prosperity.
Impact on Business
While this all sounds very interesting and significant, how does it actually influence the daily operations of your business, and more importantly, how will it help to boost the performance and success of your company? The effect of HRM can be broken down into the following areas.
Recruitment & Training
This is most likely the part of a business that is most associated with human resources – recruitment. Almost every company in the world, and particularly companies that are growing, need to recruit people to work for them. Either existing employees have left, or new opportunities have arisen which mean there are jobs that need to be filled. HRM can make sure your recruitment process gets the right people into the right roles at a cost-effective price.
It’s also important to keep your staff training procedures up-to-date to make sure that your staff is fully capable of doing the job they are there to do. Regardless of whether it is a new piece of legislation or a new piece of technology that changes the marketplace, there is an on-going requirement to keep your organisation up-to-date and ready to make use of any opportunity. There is an expression that states that “if you are not moving forward you are going backwards” which can be applied to business.
You may also find that the costly process of external recruitment can be averted if your organisation 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 left at the lower level than it is to recruit directly to a higher level.
Employee Relations
Once you have the suitable men and women working for you it is necessary to keep them doing work for you, and to make certain they are doing a decent job. This can be accomplished through good employee relations. The most evident employee relations exercise is the art of motivation – a wide topic itself – but other worker relations issues can include disciplinary and grievance management.
Finances
You can’t keep employees at your company by good motivational techniques only. They’ll want to be paid a fair amount and on time. Payroll ought to be one of the very first systems that is developed when you launch a company, but they still need to be maintained and updated when personnel join, leave or switch pay grade. Poor management of your payroll system can quickly lead to catastrophe in terms of your workforce.
Industrial Relations
Many companies will have to work with trade union or other workers rights organisations which can be very forceful when defending the interests of their members. When interacting with such bodies it is beneficial to have people within your organisation who can communicate effectively with them whilst keeping the interests of your own company in mind at the same time.
One of the easiest ways to tell if private limited companies have excellent worker interaction is to ask present staff if they are content in their jobs.
Workforce Planning
We have seen the impact that human resource management can have on a business and generally it seems like good HRM will have a beneficial effect on any organisation. As a rule, this is the case, but good HRM does not just occur overnight.
One way to apply HRM ideas to your company is through workforce planning – a process that has the goal of making sure your staff can finish the upcoming tasks needed for your business to be successful. It can be defined as:
Definition
Workforce planning is the process of anticipating in advance the human resource requirements of any organisation, both in terms of the number of employees needed and the appropriate skill mix. Recruitment and training procedures are devised with a long term focus in order to ensure that the organisation is able to operate without being limited by a lack of appropriate labour. It is a bit of a balancing act, but when done properly can produce many benefits.Workforce planning can be broken down into four main areas; requirements, recruitment, selection, and training and development.
Requirements
Evaluating your workforce requirements is vital to the proper planning of your staff in the short-term and long-term future. If your company is subject to seasonal shifts in demand, such as in the tourism industry, or suffers from seasonal fluctuations in staff levels then your workforce planning needs to take these factors into consideration. Also bear in mind any future retirements or intervals of maternity/paternity leave or you could suffer from a shortage of qualified employees.
Recruitment
Whether you are hiring people externally or from inside 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 describes the function that will be carried out as well as a person specification which will give an indication of the sort of person that would be a good fit for the job and your company.
Selection
The selection process can be as involved or as simple as you deem necessary. Beyond standard job interviews there are several ways you can learn about about candidates for your jobs, including aptitude tests, group interviews or even psychometric testing.
Training & Development
The primary goal of staff training and development is to develop a much better quality of worker within your company. Workforce planning can use training to fill upcoming gaps in the skill set of your staff which is generally quicker and more cost effective than external recruitment. Training and development may also go some way towards motivating your employees.
Ranking well on search engines for phrases for example offshore company services will practically ensure a raise in sales and profits.
Workforce Motivation
It almost goes without saying that properly motivated employees are going to produce a better standard of output and have a higher quantity of output than unsatisfied workers. This improved work rate will undoubtedly lead to a rise in the profitability of a business.
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 hit from a stick!
Whether you use the carrot approach or the stick approach will generally depend on your own management style, as well as the industry you work in and the type of people that you hire. Irrespective of your approach, motivational factors can be broken down into a further two sets; financial and non-financial motivators.
Financial
The most typical financial motivators are payment plans. You can pay workers in numerous different ways, either a set amount for a fixed service, by an hourly or daily fee, or a rate related to production, such as a commission scheme.
Another financial motivation technique involves what are called incentive schemes, where additional financial rewards are handed out for good overall performance. This may include commission above a fixed salary, performance-related pay grades or even offering a share of company profits. Once again, the motivating aspect here is the money alone.
Non-financial
Several human resource advocates have their own thoughts about the other factors that motivate people to work, although these are often seen as an added bonus to an employee. It is broadly acknowledged that money is the key motivational factor for the majority of people. If you want to learn more about these ideas I would recommend looking up the work of Elton Mayo, Abraham Maslow as well as Fredrick Herzberg.
The Changing Face of HRM
As previously stated, HRM is a versatile application that is there to match up 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.
Maybe there is a new piece of government legislation that may have an effect of how your business can carry out its trading, or maybe a fresh manufacturing technology will come along that can revolutionise your industry. Either way, if you want to make certain that your staff is performing to its optimum level then your HRM system should be adaptive enough to cope with an ever-changing world. After all, what may seem like a threat to most will often appear as an opportunity to a shrewd entrepreneur.
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