Functions of HRM
Human Resource Management (HRM) is a strategic approach to managing an organization's employees, from recruitment to deployment and beyond. The primary functions of HRM are to ensure that the organization runs smoothly, effectively, and efficiently. HRM plays a critical role in enhancing employee performance and reducing attrition rates, which in turn helps the organization achieve its goals.
HRM functions encompass a wide range of activities, including recruitment, selection, training and development, performance management, compensation and benefits, and employee relations. The process begins with developing appropriate job descriptions and specifications, followed by recruiting suitable candidates, and deploying them to their respective roles. The functions of Human Resource Management also involve managing employee relations and providing guidance on company policies and procedures.
14 Key HRM Functions used by the organization
Today's organizations are more focused on the needs of their employees than ever before, and HRM functions help achieve these goals faster and make useful work culture and build a profitable business. There are many functions of HRM which are highly recommended, here we are detailing 15 most useful HRM Fuctions:
- Formulation of HR Policies & Procedures
- Human Resource Planning
- Job Design
- Recruitment and Selection
- Employee On boarding
- Compensation & Benefits
- Payroll Management
- Training and Development
- Reward and Recognition
- Industrial Relations
- Employee Engagement
- Health and Safety
- Compliance Management
- Succession Planning
1. Formulation of HR Policies & Procedures
One of the critical functions of HRM is to design and develop HR policies and procedures. Human Resource Management (HRM) is a vital function in any organization that deals with the management of the workforce. HR policies and procedures provide a framework for managing employee behavior and performance and ensure that the organization complies with legal and regulatory requirements. A well-defined policy covers all the aspects of a company and its operations. HR Policies can control activities like better participation and communication in an organization. The Formulation of HR policies and procedures involves several steps such as:
- Identify the areas where policies and procedures are required
- Research and gather information such as legal requirements, best practices in the industry, and the organization's culture and values.
- Draft the policies and procedures that are clear, concise, and easy to understand.
- Communicate the policies and procedures to employees through training programs, employee handbooks, and other communication channels.
- Regular monitoring and evaluating the policies and procedures ensure that they are up-to-date and effective.
As per Wikipedia “Human resource policies are continuing guidelines on the approach of which an organization intends to adopt in managing its people. They represent specific guidelines to HR managers on various matters concerning employment and state the intent of the organization on different aspects of Human Resource management such as recruitment, promotion, compensation, training, selections etc.”
HRM functions ensure that all the HR policies and procedures to be in place for people management and also ensure to play a crucial role in shaping the organizational culture, ensuring compliance with legal requirements, and creating a positive work environment within the organization.
2.Human Resource Planning
Effective human resource planning is very important therefore Human Resource Management functions play a crucial role in Human Resource Planning (HRP) within an organization. HRP is the process of forecasting an organization's future demand for human resources and developing plans to meet those needs. Human resource planning is an important function of HRM as it allows the company to realize its goals, increase productivity and competitiveness of enterprises. The following are the key roles of HRM Function in Human Resource Planning:
- Gathering and analyzing information: HRM collects and analyzes information on the organization's current and future business objectives, workforce demographics, and job requirements.
- Forecasting demand and supply: HRM uses the information gathered to forecast future demand for employees in terms of quantity, quality, and skills.
- Developing and implementing strategies: HRM develops and implements strategies for recruitment, retention, and succession planning to meet the future demand for human resources.
- Monitoring and evaluating outcomes: HRM monitors and evaluates the outcomes of HRP activities, such as recruitment, training and development.
Overall, HRM plays a pivotal role in HRP by aligning human resources with the organization's strategic goals and objectives. It ensures that the organization has the necessary workforce to meet the demands of the future, while also fostering a positive work environment and culture.
3. Job Design
Job Design is one of the important functions of Human Resource Management. HRM plays a crucial role in job design, which involves the process of creating or redesigning jobs to ensure that they meet the organizational objectives and employees' needs. HRM is responsible for designing jobs that are challenging and rewarding, leading to employee satisfaction and engagement. The following are the roles of HRM in job design:
- Job Analysis: HRM conducts a job analysis to identify the necessary skills, knowledge, and abilities required to perform a job effectively. HRM uses the information to create or redesign jobs that are well-suited to employees' skills and abilities.
- Job Enrichment: HRM designs jobs that provide opportunities for growth and development, making employees feel valued and motivated. Job enrichment involves adding more responsibility, autonomy, and decision-making authority to a job, creating a sense of ownership and accomplishment.
- Job Rotation: HRM designs jobs that allow employees to rotate from one job to another, gaining experience and exposure to different roles and responsibilities. Job rotation helps employees to develop new skills and knowledge and reduces boredom and monotony in their work.
- Job Simplification: HRM simplifies complex jobs, breaking them down into smaller tasks that are easier to perform. Job simplification reduces the cognitive load of employees, leading to improved productivity and quality of work.
- Job Flexibility: HRM designs jobs that offer flexibility in terms of work hours, work location, and work arrangements. Job flexibility helps employees to balance their work and personal life, reducing stress and burnout.
4. Recruitment and Selection
Recruitment and selection are two key functions of Human Resource Management (HRM). The purpose of recruitment is to attract potential employees to apply for job openings within an organization, while selection involves the process of assessing and evaluating candidates to determine their suitability for the job.
Recruitment involves a range of activities, including identifying job vacancies, advertising job openings, screening resumes, conducting interviews, and making job offers. The HR department is responsible for developing recruitment strategies and sourcing channels, such as job boards, social media, and employee referrals. They must ensure that the recruitment process is fair and transparent, and that all applicants are considered based on their qualifications and merit.
Selection is the process of evaluating candidates based on their skills, experience, and other relevant criteria, to determine their suitability for a particular job. It involves various stages, including screening, interviewing, and conducting assessments, such as psychometric tests, to determine a candidate's strengths and weaknesses. Releasing job offer letter or appointment letter and joining confirmation are also comes in the functions of HRM. The HR department must ensure that the selection process is objective, consistent, and based on job-related criteria.
Effective recruitment and selection are critical for the success of an organization. By attracting and selecting the right candidates, organizations can improve their productivity, efficiency, and overall performance. The HR Functions play a critical role in ensuring that the recruitment and selection process is fair, transparent, and effective, and that the best candidates are selected for the job.
5. Employee On boarding
It comes amongst the other critical functions of human resource management (HRM). It is the process of integrating new employees into an organization and helping them to become productive members of the team as quickly and efficiently as possible. A successful on boarding program can have significant positive impacts on an organization, including increased employee retention, improved job satisfaction, and enhanced productivity and also helps to boost positive work environment and culture.
The HRM function of employee on boarding involves several steps.
- HR professionals must ensure that all necessary paperwork and documentation is completed and submitted on time. This may include employment contracts, tax forms, and benefit enrollment forms. Additionally, new employees must be introduced to the organization's culture, values, and policies.
- Another important aspect of the HRM function of employee onboarding is providing new employees with the necessary tools and resources to succeed in their new roles. This may include access to software systems, training materials, or job-specific equipment.
- HRM function of employee onboarding involves ongoing support and feedback. The role of HR is to regularly check in with new employees to ensure that they are adjusting well and have everything they need to be successful. They should also provide constructive feedback and coaching to help new employees improve their skills and performance.
6. Compensation & Benefits
The function of compensation and benefits is an essential part of HRM functions. It is responsible for ensuring that employees are rewarded fairly and equitably for their work, and that their compensation and benefits packages are aligned with the organization's strategic goals and objectives.
Compensation refers to the payment and rewards that employees receive for their work, while benefits refer to the non-wage benefits that employees receive, such as health insurance, retirement plans, and paid time off. Together, compensation and benefits packages form a critical part of the overall employee value proposition, which plays a significant role in attracting, retaining, and engaging employees.
The compensation and benefits function of HRM involves several key activities, including job analysis, salary surveys, job evaluation, and the development of pay and benefits structures. The function is also responsible for ensuring compliance with legal requirements and regulations related to compensation and benefits, such as minimum wage laws, overtime regulations, and benefits reporting requirements.
Overall, the function of compensation and benefits is a critical component of HRM, as it plays a crucial role in attracting, retaining, and engaging employees, and in supporting the achievement of organizational goals and objectives.
7. Payroll Management
Payroll management is a crucial function of human resource management (HRM). It involves the administration of employee compensation, which includes salary, wages, bonuses, and benefits. The primary objective of payroll management is to ensure that employees are paid accurately and on time, in compliance with legal and regulatory requirements.
HRM oversees payroll management by designing and implementing policies and procedures that govern employee compensation. This includes determining pay rates, calculating employee benefits and deductions, maintaining accurate payroll records, and ensuring compliance with tax laws and other financial regulations. Additionally, HRM is responsible for managing payroll-related information systems, such as payroll software and databases.
Effective payroll management has several benefits for organizations. It helps to attract and retain talented employees by offering competitive compensation packages. It also helps to maintain employee morale and motivation by ensuring that they are paid fairly and on time. Furthermore, payroll management can improve financial planning and budgeting by providing accurate and timely data on labor costs.
In summary, payroll management is an important function of HRM that plays a critical role in ensuring that employees are compensated accurately and fairly. By implementing effective payroll management practices, organizations can improve their financial performance, attract and retain talented employees, and maintain a motivated and productive workforce.
8. Training and Development
Training and development is again one of the most essential functions of HRM that aims to enhance the skills, knowledge, and abilities of employees. It involves providing learning opportunities that align with the organization's objectives and individual employees' career goals. The primary goal of training and development is to improve the performance and productivity of employees, ultimately benefiting the organization.
HRM plays a critical role in conducting training need analysis to identifying and assessing employee development needs, designing and delivering training programs, and evaluating the effectiveness of training initiatives. This process involves identifying the skills gaps, analyzing training needs, and creating development plans and choosing right training methods to bridge those gaps.
Training and development programs can take various forms, including on-the-job training, coaching, mentoring, classroom training, e-learning, workshops, and seminars. HRM must ensure that the training programs are well-designed, engaging, and effective in achieving the desired outcomes. Effective training and development programs can lead to several benefits for the organization and employees, such as improved job satisfaction, employee retention, increased productivity, and better customer service. It can also lead to a more skilled and adaptable workforce, which is essential in a rapidly changing business environment.
In short, training and development is an integral function of HRM that helps organizations enhance the skills, knowledge, and abilities of employees to achieve their objectives. Effective training and development programs can lead to a more productive, engaged, and adaptable workforce, ultimately benefiting the organization's bottom line.
9. Performance Management
Performance management is one the critical but much needed HRM functions. It involves the process of assessing and improving employee productivity, effectiveness, and overall contribution to the organization's goals. The primary goal of performance management is to ensure that employees are working to their fullest potential and contributing to the success of the organization.
Effective performance management involves a systematic and objective approach for performance appraisal to measure and evaluate employee performance. This includes establishing clear performance standards, providing regular feedback on performance, and setting goals and objectives that are aligned with the organization's strategic objectives.
Performance management also involves providing employees with opportunities for development and growth, such as training and career development programs. This helps to motivate and engage employees, as well as enhance their skills and competencies.
Overall, performance management function in HRM help organizations to optimize their human capital by ensuring that employees are working to their full potential and contributing to the organization's success.
10. Reward and Recognition
Recognition and rewards are critical tools that help organizations achieve their goals and objectives by motivating and retaining employees thus become one of most useful HRM functions. Recognition refers to acknowledging and appreciating an employee's performance, while reward refers to offering something of value to an employee in return for their efforts.
Reward and Recognition programs play a vital role in creating a positive work culture, increasing employee engagement, and improving performance. There are various forms of recognition and reward that an organization can offer to its employees. Some examples include bonuses, promotions, salary increases, flexible work schedules, paid time off, and employee recognition programs. The type of recognition and reward program implemented by an organization depends on its budget, culture, and employee needs. When employees are recognized and rewarded for their hard work, they feel valued, appreciated, and motivated to perform better. This, in turn, leads to higher productivity, better quality of work, and increased job satisfaction.
As per Wikipedia “Employee recognition is the timely, informal or formal acknowledgement of a person's behavior, effort, or business result that supports the organization's goals and values, and exceeds their superior's normal expectations”
Implementing a reward and recognition policy is crucial and important functions of HRM that requires planning, communication, and measurement. HR managers must identify the behaviors and outcomes that warrant recognition and reward, communicate the about the various kind of incentives program to employees, and regularly evaluate its effectiveness.
Creating a positive work environment and fostering a culture of loyalty, commitment, and productivity among employees is a fundamental functions of Human Resource Management. The aim of employee engagement function is to develop an emotional connect of employees towards their work, organization, and colleagues.
HRM is responsible for developing strategies and implementing practices within the organization that promote employee engagement, such as offering career growth opportunities, providing a fair and competitive compensation package, recognizing and rewarding employees for their contributions, and also developing a supportive and inclusive work culture. Taking an effective employee engagement initiatives is considered to be an important task of HRM functions which can lead to increased job satisfaction, improved employee morale, and reduced employee turnover rates. Engaged employees are also more likely to be committed to the company's vision and goals, resulting in higher productivity, improved customer service, and ultimately, increased profitability for the organization.
Therefore, HRM must prioritize employee engagement to create a healthy work environment that fosters growth, collaboration, and success for both the employees and the organization.
12. Industrial Relation
Managing industrial relations within an organization is very critical and Human Resource Management Department plays a vital role in this. HRM functions are just not limited to managing the relationship between the organization and its employees, but it is also responsible for managing the relationship between different employee groups.
One of the main roles of HRM in industrial relations is to create and maintain a positive and healty work environment. This includes promoting communication and collaboration between management and employees, as well as addressing any conflicts that arise. HRM also contributes in managing employee grievances and ensuring that the organization adheres to labor laws and regulations.
Developing and implementing policies and procedures that govern employee behavior and conduct is also a part of HRM functions. This can include policies related to workplace safety, performance management, and disciplinary procedures. By promoting positive relationships between management and employees, managing conflicts, and ensuring compliance with labor laws and regulations, all the functions of HRM ultimately help to create a workplace that is productive, positive, and supportive for all employees.
Overall, the role of HRM in industrial relations is critical to ensure that an organization operates smoothly and efficiently.
13. Health & Safety
Human Resource Management (HRM) plays a critical role in ensuring health and safety in an organization. HRM is responsible for implementing policies and procedures that promote workplace safety and reduce the risk of accidents and injuries.
HRM can support health and safety initiatives by developing and implementing safety training programs for employees, ensuring that safety protocols are communicated effectively and enforced, and conducting regular safety inspections and risk assessments to identify potential hazards.
HRM can also facilitate the reporting of incidents and accidents and ensure that they are investigated thoroughly and promptly. They can work with management to address any safety concerns and take appropriate measures to prevent future incidents.
Additionally, HRM can collaborate with external organizations, such as health and safety regulators, to ensure compliance with applicable laws and regulations. They can also stay up-to-date with industry trends and best practices to continuously improve the organization's health and safety programs.
Overall, HRM plays a critical role in promoting and maintaining a safe and healthy work environment, which is essential for the mental health and well-being of employees so that it leads to the success of the organization
14. Compliance Management
Compliance management involves ensuring that an organization's policies and procedures align with regulatory requirements and industry standards. Compliance management is a procedure of formulating labour laws, data protection, workplace safety, and anti-discrimination policies and variety of other factors. It is a crucial and ongoing process of monitoring and evaluating systems to make sure they comply with corporate and regulatory rules and operating legally and ethically.
HR managers must stay up-to-date with changing laws and regulations to ensure that the organization's policies remain compliant. HRM Function for compliance management is required to manage various types of compliance such as:
- Statutory compliance
- Regulatory compliance
- Contractual compliance
- Union law compliance
- HR technology compliance
The HR managers must also conduct audits and assessments to identify areas of non-compliance and take corrective action. This may involve investigating and addressing complaints, ensuring that the organization's hiring and promotion policy and processes are fair, and ensuring that the workplace is safe and free from harassment or discrimination. By ensuring compliance, HR managers can help prevent legal and reputational risks, and maintain a positive workplace culture that supports employee well-being and productivity.
15. Succession Planning
Succession planning is the process of identifying and developing internal employees who have the potential to fill key leadership positions within an organization. The functions of Human Resource Management ensure that the succession planning must be in place and the organization must have a pipeline of talented employees who can step into leadership roles when the need arises.
It is an important function of HRM and play a realistic role in identifying key positions in the organization that require succession planning. This involves analyzing the skills, competencies, and qualifications required for each position, and identifying the employees who have the potential to fill these positions in the future. HRM also helps to create development plans for these employees, which may include coaching, mentoring, training, and job rotations, to prepare them for future leadership roles.
As per Wikipedia “Succession planning is a process and strategy for replacement planning or passing on leadership roles. It is used to identify and develop new, potential leaders who can move into leadership roles when they become vacant. Succession planning in dictatorships, monarchies, politics, and international relations is used to ensure continuity and prevention of power struggle.”
HRM functions also ensure that the succession planning process is integrated into the overall talent management strategy of the organization. This involves creating a culture of talent development, where employees are encouraged to learn, grow, and develop their skills to their fullest potential.
Overall, HRM plays a critical role in ensuring the long-term success of the organization through effective succession planning. By identifying and developing internal talent, the organization can ensure that it has a strong leadership pipeline, which is essential for sustainable growth and success.
To conclude, all the functions of HRM are essential an play critical and important role in the expansion and overall development of an organization. HRM functions ensure that an organization's workforce is properly trained, motivated, and compensated well.