The Strategic Importance of Human Resources Management in an Organization - Research Paper Example

 Abstract Business has many functions; but human resource management seems to be the most important one. All the organizational resources need the supervision or control of human element in order to make it useful to the organization. Human resource management has many functions like planning, recruitment, selection, orientation, training, development, compensation, retention etc. However, the growth of cross cultural business added many other areas also to human resource management category. A growing organization should focus more on updating their human resource management policies and strategies time to time in order to sustain the growth of the organization. This paper analyses the strategic importance of human resource management for a growing organization. The Strategic Importance of Human Resources Management in an Organization Even though machines, money and materials are some of the essential resources needed for establishing or sustaining the growth of business, human resources seem to be one place above all. All the organizational resources can be mobilized only with the help of the human element. ‘Human resources’ is the brain of an organization whereas other resources are only the parts of the organization. In other words, human resources control all the other elements in an organization in a particular way to ensure the success of the organization. In short, the success of an organization remains on how well the organization is able to manage its human resources. Human resource management (HRM) is gaining more prominence at present because of the entry of globalization and the development of cross cultural business. Earlier, HRM focused mainly on the internal or domestic matters; however, the increasing interdependence of global economy and trade activities forced HRM to look beyond the boundaries to ensure the safe functioning of the organization. For example, many of the current organizations have extremely diverse workforce. It is the duty of the HRM to manage this diverse workforce effectively to extract the maximum productivity out of each and every worker. The major functions of HRM include: planning, recruitment, selection, orientation, training, development, compensation retention etc. General HRM functions and its importance to an organization Right people at the right place at the right time are always beneficial to an organization. It is not necessary that a manager who excelled in a particular position in the past may continue to do so in future also because of the changing business climate. It is the duty of the HRM to make changes at various levels of the organization time to time in order to ensure that the right people are always at the right place. Recruitment is the method adopted by HRM for identifying and appointing talents at various vacancies arising in the organization time to time. All the organizations may have a well defined Human Resource (HR) policy in the selection of the employees. The criteria for selection of employees could be different for different organizations. In other words, the experience and qualifications prescribed for a particular post in different organizations could be different. The trends in recruitment methods are changing because of the changing needs of the organizations. For example, the recruiters assessed only the clerical skills while recruiting clerks earlier; however, at present they are assessing the communication and management abilities also along with the clerical skills. In other words, the demand for all-rounders is more at present than specialists. Ricky Franklin (2008) has pointed that criminal records checks, employment verification, drug screening, education verification, reference checks, verification of professional licenses and/or certifications, motor vehicle records checks, credit history, and integrity evaluations as the major selection tools adopted by big companies. He has also mentioned about a new selection tool called behavioral analysis is being used in current recruitment strategies as a selection tool (Franklin, 2008). Training and development is as important as recruitment and selection. In the absence of proper training, employees may not be able to deliver their bests. Even experienced employees need training to update their knowledge. Training is the process of making an employee useful for the organization. In other words, it is the conversion of raw material into finished goods. Newly appointed people are only raw materials for an organization. Only after training they will become finished products for the company. Whatever the previous experience an employee may have in his profession, it is difficult for him to excel in a new assignment in another company, without proper training. ‘Training is a learning process that involves the acquisition of knowledge, sharpening of skills, concepts, rules, or changing of attitudes and behaviors to enhance the performance of employees’ (Introduction Of Training, 2007). It helps the newly recruited employee to realize their responsibilities properly. The work culture and business philosophies of different organizations can be different. Training helps employees to adapt with the organizational culture and business philosophies. The do’s and don’ts of an organization may not be the same in another organization. People, who join an organization as a fresher, may not have proper ideas about the organizational environments. The conversion of a student into a professional requires lot of time and effort. HR department accomplish this conversion process with the help of training. Retention is another major function of HRM. The duty of the HRM department is not over after the recruitment and the training of the talents. HR department should ensure that the services of the recruited talents are available to the organization for a longer period. In other words, retention is as important as recruitment. If the HR department fails to retain the employees, the organization will suffer a lot because of the huge expenditure it made for the recruitment and training process of the employees. HRM has two important functions; one with respect to the organizational needs and the other related to the employee needs. HR department acts as the bridge between the organization and the employees. Both the organization and the employees may have contrasting requirements. Organization always wants the maximum out of the employees whereas the employees always need the maximum out of the organization. HR department should act properly to fulfill the needs of both the organization and that of the employees. Only the satisfied employees work for longer periods in the organization. The role of the Human Resource Manager is evolving with the change in competitive market environment and the realization that Human Resource Management must play a more strategic role in the success of an organization. Organizations that do not put their emphasis on attracting and retaining talents may find themselves in dire consequences, as their competitors may be outplaying them in the strategic employment of their human resources (Dr. Chan, 2009) So far we have discussed the importance of human resource management to an organization based on the traditional concepts about human resources management. However, HRM is undergoing major changes at present because of the changing business climate and the introduction of revolutionary concepts like globalization, liberalization, privatization outsourcing, offshoring etc. A growing organization should fine tune the HRM strategies in accordance with the above changes in order to sustain its growth. Importance of Human Resource Management in a growing organization Business grows on strategies and planning. Without proper planning and the development of strategies, no business can prosper in the market. The strategies, policies and the business philosophies developed by the HR department are important in the development of an organization. Business climate is changing rapidly because of the rapid changes happening in the business world as a result of the development of science and technologies. For example, the introduction of computers and internet revolutionized the whole business world. Outsourcing and offshoring like new business terms entered the business world recently as a result of the revolutions happening in the business world. Moreover, cross cultural business started to grow because of globalization. No organization can develop properly if its HRM fails to respond positively to these huge changes taking place around them. As mentioned earlier, cross cultural business is growing day by day because of globalization. The exchange of workforce between countries and the establishment of business units in overseas countries increased the duties and responsibilities of HRM. Many of the current employees are forced to work in overseas countries on deputation as part of the business expansion. For example, Microsoft has established their business units in China in order to exploit the opportunities in China. The work culture in America and China are entirely different and hence the American employee deputized to work in China may face immense problems Americans like to work under a stress free environment because of the immense freedom they are enjoying in their country because of democracy. However, Chinese may not enjoy such freedom in the work places of their country because of the tight communist administration. Moreover the culture, language, environment, verbal and nonverbal communication channels, life styles, food habits etc of China and America are entirely different. Microsoft’s HR department should give ample training on above areas to their employees before sending them to work in China. “'Flexibility' in variable pay systems or in the contract of employment and 'high commitment' work practices raises ethical questions about practices as varied as `presenteeism' and long working hours” (Winstanley & Woodall, 2000, p.4). One of the major complaints we hear from organizational world at present is the about lack of flexibility in working hours. The current employees quite often complain about the work-life imbalances. Organizations are generally increasing the number of working hours because of manpower shortage and over burden of works. Employees may get overtime allowances; but many of them dislike working overtime. It is the duty of the HRM to make necessary changes in the work schedule so that the employees get enough flexibility in their works. Lengthy working hours often create problems for the employees in finding enough leisure time to spend with their families. Only a satisfied employee would be able to deliver more than an unsatisfied employee. Krishnan (2005) has pointed out that “performance measurement takes place on many more dimensions and it is therefore more challenging to align individual and business interests” (Krishnan, 2005, p.3). The interests of the workers and that of the organization should go hand in hand so that both the workers and the organization will benefit from it. HRM should take necessary steps to avoid the clashes between the interests of the employees and that of the organization. From an HR practitioner’s perspective, multiple values present in the practice of HRM, namely, efficiency, competitiveness, care and justice. As long as HR managers are concerned with both the management of systems and the management of people, it is difficult to see how they could give up any one of these values (Marshal, 2007) Manpower shortage is a major problem faced by region like America and Europe. Many of the organizations in these countries have overseas workers. Moreover, these regions are outsourcing many of their works because of the lack of skilled workers. Under such circumstances, an organization in these regions needs to improve the efficiency of the existing employees without giving more headaches to the employees. Human resource department has a major role to play in these regions in raising the efficiency of the workers. Olaniyan & Okemakinde (2008) have stressed the importance of Human capital theory to increase the productivity and efficiency of workers. In their opinion, efficiency of workers can be raised “by increasing the level of cognitive stock of economically productive human capability which is a product of innate abilities and investment in human beings (Olaniyan & Okemakinde, 2008, p. 158). Conclusions Human Resources Management plays an important role in the growth and development of an organization. Recruitment, training and retention were the major responsibilities of HRM earlier; however at present, the responsibilities of HRM changed a lot because of the changing business climates and the introduction of revolutionary concepts such as globalization, liberalization privatization etc. Cross cultural business is growing day by day and HRM principles and strategies should focus more on international aspects of human resources management in order to sustain the development of an organization. References 1. Dr. Chan, A (2009). The Challenges of Human Resource Management Retrieved from http://www.zeromillion.com/business/hrm.html 2. Franklin R(2008), Employee Selection Tools Used by Today's Human Resource Personnel, Retrieved from http://www.associatedcontent.com/article/782463/employee_selection_tools_used_by_todays.html 3. Introduction Of Training, (2007), Retrieved from http://traininganddevelopment.naukrihub.com/training.html 4. Krishnan, R.T. (2005). Linking Corporate Strategy and HR Strategy: Implications for HR Professionals. Emerging Asia: An HR Agenda, New Delhi: Tata McGraw-Hill, 2005. 5. Marshal P. (2007). Business ethics and the future - The Fifth Paradigm? Retrieved from http://www.hrinz.org.nz/system/knowledge_base/Articles.asp?RD=1&Id=216&Type=Article 6. Olaniyan. D.A & Okemakinde. T (2008), Human Capital Theory: Implications for Educational Development, European Journal of Scientific Research. Vol.24 No.2 (2008), pp.157-162, 7. Winstanley D. & Woodall J. (2000). The ethical dimension of human resource management. Human Resource Management Journal. London 2000.Volume:10, Issue:2 Read More