Functions of Human Resource Management
Human Resource Management
This paper is intended as a high-level review of the functions of Human Resource Management. The functions discussed will be performance management; human resource planning, recruitment, and selection; human resources development; compensation and benefits; employment and labor laws and regulations. I will address HR functions within a performance management system that contribute to effective training and development. Then, I will explain how an effective performance management system along with compensations and benefits can attract, develop, and retain talented employees. Afterwards, analyze employment and labor laws and regulations that impact these areas of HRM listed above and the relationships between employees and employers. Lastly, explain how the functions of HRM work together in order to optimize organizational and employee behavior.
Review of HRM
Human Resource Manager functions such as performance management, planning, recruitment, selection, development, compensation and benefits, employment and labor laws and regulations provide the backbone of companies. Most companies have more HR representative than they understand. Youssef-Morgan in chapter one that the functions of human resources can be seen in every department without notice. Most front-line manager are tasked with hiring, scheduling, employee appraisals, training, development and even firing. All these tasks are working parts in an ecosystem called HRM.
Performance management is an alternative way to say appraisal. The goal is to rate and evaluate the employee based on previously set goals. The result of an appraisal is to reward the employee for meeting the company goals. Performance appraisals can be conducted through a variety of approaches and methodologies. These methods include:
of rating employees (Youssef-Morgan, 2015)
- Employees evaluating themselves
- Supervisors evaluating their employees
- Employees evaluating their supervisors
- Team members evaluating one another
- External specialized organizations or consultants being contracted for the purpose
The appraisal should consist of six rounds. Round one needs to identify the goal of which the employee is expected to obtain. These goals need to harmonize with the company’s strategic plan and the job description. Round two is to communicate the performance goals to the employee. The mood to be set is encouraging and uplifting. “Goal setting is a process of establishing objectives to be achieved over a period. It is the performance criteria an employee will be evaluated against. Performance goals for individual employees should ideally align with organizational goals.” (SHRM, 2019) Round three is measuring the data to compare to the goals set during round one. The comparison will highlight achievements and opportunities for the next appraisal. Round four is communicating the results to each employee at consistent levels. Aligning the employee to the company goals will increase employee engagement and natural performance driven behaviors. Round five provides structure for support to obtain goals set by the company. Give them a path to success by providing necessary resources to resolve issues self-sufficiently. Lastly, round six, based on the extent of their achievements there should be an award. Follow through with pre-determined rewards and be sure to give them a pat on the back.
Federal, state and local laws that prohibit discrimination in terms and conditions of employment all apply to a covered organization’s performance management policies and practices. Accordingly, organizations should take all appropriate steps, based on advice from counsel, to ensure that both the design and the implementation of their performance management systems do not run afoul of equal employment opportunity laws and regulations. (SHRM, 2019)
Human Resources Planning, Recruitment, and Selection
“HR planning is the process of managing an organization’s most asset, its people, so that there are no shortages or surpluses of employees in the organization.”
A strategic plan is usually set by an organization to address its position in relation to its competitors. The strategic plan outlines the steps required for achieving organizational goals and objectives. A strategic plan serves as a foundation for the whole organization so that each person can have a clear understanding of the organizational vision and know what is expected of him or her. (Youssef-Morgan, 2015)
There are six processes to HR planning: environmental scanning; labor market analysis and forecasting; internal analysis and forecasting; gap analysis; developing HR plans and strategies; and HR strategy implementation and assessment.
Environmental Scanning. Examine the external environment to understand positive and negative influences on the organization. Most companies call this SWOT for short. Strength, weakness, opportunity and threats will allow HR to analyze factors other companies are experiencing. The focus is to control the market within legal, economic, geographic and social environments.
Labor Market Analysis and Forecasting. Acquiring and retaining competent employees that execute organizational goals provides competitive edge for all companies. There two ways to forecast: qualitative and quantitative, or a combination for the two. Qualitative focuses on the now, and quantitative uses past trending data to formulate staffing needs. There are six steps to govern a successful analysis:
Internal Analysis and Forecasting. HRM attempts to understand what resources their workforce currently possesses to determine how they can execute future strategic plans. This analysis has two steps:
- HR identifies the right business criteria that directly relate to the size of the labor force.
- A historical graph is created from the influential business criteria versus the size of the labor force, further isolating the relationship.
- The annual average output is calculated for every employee.
- The trend is determined, based on pervious analysis.
- Any required adjustments are incorporated into the trend, taking into consideration past and future factors.
- The final step is to expand the trend to the targeted future year (Youssef-Morgan, chapter 2)
These steps can be seen at my current place of work. We house many different lines of business with one client, Intuit. When we see potential employees that express talent for one of our other lines of business, we will recruit them based on work history and availability of the employee.
- In order to forecast future required functions, HR’s initial step is to conduct an audit of the functions and tasks currently preformed within the organization. Ost of the audit information can be obtained from current staff members and company documents.
- The next step is to conduct audits on available employees and their potential capabilities and skills.
Gap Analysis. Gap analysis is to audit the differenced between the status of the organization currently and the future goals set. This analysis is derived from many different forms of data, including environmental scans, labor market analysis and forecasting, internal analysis and forecasting, SWOT, and demographic analysis. After a thorough review of information, the company then develops strategies for succession planning, knowledge transfers, training and professional development.
Developing HR Plans and Strategies. After the analysis reviews are conceded, HR will identify rather the company is in surplus or shortage. HR representatives can easily deal with shortages by hiring more employees or increasing the amount of allowed overtime. Most commonly HR is having to deal with surpluses. These ticketed items can be handled with workforce reduction, downsizing, hiring freezes, voluntary separations, and layoffs.
HR Strategy Implementation and Assessment. After HR processes all data and analytics, there may be a few choices. HR tends to turn to front line managers and others add insight to possibilities. Insight are subject to opinion and can help include factors such as relationships to customers and costs to overall strategic plan.
Recruitment. Organizations needs to obtain as much information about the desired role, to factor in skills, education and knowledge to formulate a desired candidate pool. The leading source of job applicants is employment agencies. They work to help provide unemployed people get jobs to eliminate the cost to government assistance programs. Other forms of recruitments are job ads seen in newspapers. The use of media has improved job searches in the 21st century. Everyone is online with access to smart devices, which makes it easier to use web recruiting. It is the same concept of putting an ad for help wanted in the newspaper, but now with details and links to online applications.
Selection. “Selecting the right employees is one of the most crucial HR processes, but it is also one of the most challenging decision-making processes in an organization.” (Youssef- Morgan, 2015) Companies will need to choose the right person that will help achieve organizational goals quicker and easier. Companies should look for individual differences such as general mental abilities, personality traits, core self-evaluations and good virtues. This is important to note for potential for growth and development. Another selection method is human capital, also known as (KSAOs). Knowledge, skills, abilities and other variables are achievements in more words. These achievements can be licensures, certifications, or physical fitness. “To develop selection criteria, look at each of the knowledge, skills, and abilities on the job description and define the standard for successful performance of the related functions.” (UC Berkeley, 2019)
Human Resources Development
“Development focuses on the future and prepares employees to take on the duties and responsibilities of other positions.” (Youssef- Morgan, 2015) The training process are broken into five steps:
Training needs assessment. In order to detect any knowledge gaps (TNA) is the first step. There are three sources that will help identify what training the employee will need. Organizational analysis, job analysis, and individual analysis.
Training design. After a company has identified what training the employee will need, the next step is to identity how the employee is fitted to learn. “Learner readiness, learning styles, and transfer of learning are three factors that should be addressed during the training design stage to ensure that the training will be effective.” (Youssef-Morgan, 2015)
Training development. Taking into consideration what the employees need to learn, development teams will decide HOW it needs to be trained. These big ticketed items are topics to be covered, skills that need to be practiced, and mastery levels for each based on objective needs.
Training delivery. “Focuses on training methods and logistics. Many critical decisions are made at this stage, and many delivery options are weighed so that trainees can benefit as much as possible from the content.” (Youssef-Morgan, 2015) There are many different way to train an employee, most companies review and compare notes after each session to adapt to a more efficient way. Formal trainings are structured and well organized. Informal on the other had is not goal orientated and is normally noticed between co-workers.
Training evaluation. Once training has taken place, it is important that a company evaluates whether the training achieved its desired results. There are three phases; what, who and when to evaluate.
Compensation and Benefits
“Pay and benefits are critical factors in the attraction, motivation, and retention of talent. The key to a successful pay and benefits package it its power to motivate employees to consistently exhibit attitudes and behaviors that are aligned with the organization’s goals, strategies, and culture.” (Youssef-Morgan, 2015) Before a company can pay an employee, structure needs to be formed. There are two types of pay structures:
Internally Equitable Structures. Equal pay across jobs in the organization. Only increase in pay is seen when an employee is promoted to manager etc.
Market Pricing Structures. Is referred to as “externally equitable structures” meaning, the pay for the job is competitive with others in the area.
After pay structures, grades, and ranges have been established, an organization can choose among many different types of pay. The most frequently used types of pay are hourly, piece-rate, competency-based, outcome-based, salaries and exempt positions, team-based, contractor, executive, ownership rewards.
Hourly. Employees are paid a set rate for each hour worked.
Piece-Rate. Employees are paid based on the number of units or “pieces” produced.
Competency-Based. There are two types of competency-based pays, first is knowledge-based pay, and the second is skill-based pay.
Outcome-Based. Sometimes referred to as “merit” pay. Incentives are usually offered in addition to wages and are linked to predetermined, quantifiable outcomes.
Salaries and Exempt Positions. Salary is fixed pay that is stated in terms of rate per week, month, or year. Exempt positions do not receive overtime pay according to the Fair Labor Standards Acts (FLSA) regulations.
Team-Based. Effective to motivating teams by compensating them based on overall team performance instead of individual performance.
Contractors. Contractors are not employees of the organization. Contractors are usually individuals or businesses that provide a service to a company, such as janitorial staff or paper company.
Executive. Executives are paid salaries just like any other employee, but they also receive bonus and stock as forms of compensations.
Ownership Rewards. Some organizations offer employees rewards to encourage them to think and act like part owners. These rewards are stock options, stock ownership plans and other stakeholder incentives.
The Fair Labor Standards Act (FSLA) is a federal act from the U.S. Department of Labor, administered by the Wage and Hour Division. This act protects workers from unfair treatment regarding wages. As of 2011, this act covers over 130 million workers, in the U.S. Regulations that fall under the FSLA include minimum wage amount, payment of overtime wages, record keeping requirements and child labor laws. Some employees are exempt from these provisions and you can call the Wage and Hour Division to confirm what applies to you. (Francine Richards, 2019)
Addition to regular pay, employees can also receive a benefits package to include time off paid, sick time, vacation, further education programs, tuition assistance etc. Benefits help attract the right talent and retains currently employed staff. Organizations provide a variety of benefits to their employees. Some are mandatory. Others are provided at the employer’s choice.
Mandatory Benefits. Such as workers compensation which is a form of insurance that covers when a person is injured in the course of employment. Social security which offers retirement benefits. Employer provided healthcare benefits, FMLA, unemployment insurance and military leave are also included in mandatory benefits.
Voluntary Benefits. Some examples are severance pay, pension plan, health, dental and vision insurance, PTO, STD, and LTD. Severance pay is offered to employees upon termination of employment. The amount is agreed upon between the employer and the employee, there is not set amount. A pension plan is a retirement plan for the employee and its growth is adjusted by employer and employee. Health, dental and vision insurance covers if the employee needs to go to the doctor and cannot afford it out of pocket. PTO (paid time off) provided employee money if they need to take time off for personal reasons. This can be good for employee retainment, allowing paid time off to de-stress will increase employee engagement. STD, and LTD are short-term and long-term disability insurance. Usually purchased together. STD provides employees money if they need to be out of work for a short amount of time 3-6 weeks usually, while long-term is outside the six weeks. (Youssef-Morgan, 2015)
Employment and Labor Laws and Regulations
“Employment law governs the rights and duties between employers and workers. Also referred to as labor law, these rules are primarily designed to keep workers safe and make sure they are treated fairly, although laws are in place to protect employers’ interests as well.” (HG Legal, 2019) Employment law was put in to practice ending child labor and compensate the injured employees and set ground for a minimum wage. Later, they established anti-discrimination laws and practices for unsafe work conditions. Employment law governs over protected classes such as race, religion, sex, orientation, nationality, age etc. The Civil Rights Act of 1964 banned discrimination in the workplace. The EEOC investigates discrimination claims and follows processes for fair treatment. When applicable, the EEOC will try to settle any allegations. If they are not able to settle, they will proceed with court hearing where each party can rest their cases in the court of law. The EEOC will be the moderator between parties to ensure equality is represented.
Human Resources directly impacts performance management by setting up a structure for coaching and development. Performance management aligns with employee growth and allows companies to plan succession. Performance Management is a standard most companies use as a foundation for compensation and will help attract new talent while retaining employees all the same. Employee labor laws and regulations protect both the employee and the employer keeping the workplace safe and discrimination free. EEOC protects classes of certain criteria and provides them with employment and advancement opportunities.
Francine Richards. (February 04, 2019) What Are the Three Methods an Employer May Use to Pay His or Her Employees? Retrieved from https://smallbusiness.chron.com/three-methods-employer-may-use-pay-his-her-employees-14244.html
Berkeley Human Resources. (2019) Selection Criteria
Retrieved from https://hr.berkeley.edu/hr-network/central-guide-managing-hr/managing-hr/recruiting-staff/employment/recruitment/selection
Youssef, C. (2015). Human resource management (2nd ed.).
Retrieved from https://ashford.content.edu
HG Legal. (2019) Employment Law
Retrieved from https://www.hg.org/employ.html
SHRM. (2019) Managing Employee Performance
Retrieved from https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/managingemployeeperformance.aspx