Functions of Human Resource Management: Ultimate Guide

Planning, leading, controlling, and organizing broadly speaking are the functions of human resource management, which include all aspects of human resource management in a company. So what do HR functions entail? The complexities of each HR function are handled by HR departments, which are an essential component of any corporation. The numerous HR functions that can be generically and precisely categorized as human resources functions include classification, planning, execution, and monitoring.

In this article, we will explain the 14 key functions of HRM.

What is Human Resources Management?

According to Storey (1995), HRM is a distinctive approach to employment management that seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural, and personnel techniques.

It is a practice of determining, allocating, and coordinating an organization’s needs for human capital is known as human resources management. It entails obtaining, rewarding, retaining, and developing people for a firm. Recruitment, classification, remuneration, benefits, and performance monitoring are just a few of the tasks that go under the umbrella of human resources management.

Related: Human Resource Management: A Complete Guide

Key Functions of Human Resources Management

1. Planning for human resources

Understanding the organization’s future needs is the first HR function. How many and what kind of individuals are needed by the organization? Understanding this will influence all human resources activities, including learning and development, performance management, and recruitment. A strategic decision-making process that envisions a company’s future planning is human resource planning. Companies invest a lot of time in evaluating, analyzing, and planning the organizational goals, which include the projects that are currently in the works, the projects that are tentatively in the pipeline, the recruitment goals, the optimum use of human resources, the anticipation of market changes in terms of technology and law, and the development of a pipeline of human resources for future projects. While planning, the firm must be aware of market vulnerability.Planning for human resources is akin to planning for the workforce. Both pay attention to the current state of the business and the requirements for its future success.

2. Selection and hiring

The organization’s top candidates are chosen and employees are recruited to work for it as part of the second HR function.

A company’s employee brand is typically where recruitment begins. Numerous benefits come with being a desirable employer, just as it does the other way around. The latter is best exemplified by the tobacco business, which has trouble luring talent because of its tarnished reputation.You’re halfway there with a great employer brand and effective sourcing techniques. After applicants submit their applications, a selection procedure is used by HR to choose the most qualified and promising prospects. There are several sorts of recruitment tools for each stage of your recruitment funnel as a result of the quick technological advancements in recruitment. In order to complete tasks more quickly, businesses use recruitment firms. However, it is crucial for businesses to provide job descriptions that clearly define duties and responsibilities. The suitable individuals are attracted, a talent pool is created, and the organizational recruitment goals are met as a result of clear recruitment procedures and selection processes.

3. Performance administration

Performance management is crucial for maintaining employee productivity and engagement. Effective leadership, precise goal-setting, and honest feedback are all essential components of excellent performance management review, in which the boss evaluates the employee. Additionally, it has facilities for 360-degree feedback, which let colleagues, managers, subordinates, and occasionally even clients evaluate an employee’s work. These tools can be really beneficial for giving feedback.

The gap between the workforce you have today and the workforce you wish to have tomorrow can be filled with the help of performance management. Learning and growth is one of the best strategies to create your future workforce (L&D).

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4. Education and growth

Understanding organizational goals, operations, and expectations through training is strategic and required.

Training is a deliberate and required process to comprehend organizational objectives, processes, and expectations, aligning the workforce with business goals in the process. This is also connected to the first HR duty we mentioned, which is to fill the gap between the current workforce and the one that will be required in the near future.

Organizations often have a predetermined budget for training and development. Then, this budget is divided among the company’s workers. This achievement represents a growth-promising development. Filling a gap is not always the goal of development and training; other goals include skill development and technological adaptation. It is a crucial component of what human resources do. A mature business on a growth trajectory has an organized training department and an annual training calendar that is planned out in advance.

Having a training calendar in place is not sufficient in and of itself, but it is a powerful strategy that encourages workers to train. To effectively drive another HR function, the HR should connect several HR functions and extrapolate data from one HR function.

The HR division is in charge of steering these efforts in the appropriate directions.

5. Career pathing and Career planning

Employee counseling, and development together are referred to as the fifth function of human resource management.

To engage and keep employees, employers should demonstrate how their goals can be compatible with the company’s future. Better succession planning, increased output, and a stronger employer brand all benefit the organization.

6. Function assessment

An effective HR function must change as a firm and society do. A technical facet of HR is the evaluation of functions. The department makes sure the business is successful on a strategic level as well as with service delivery and support by reviewing the HR function. The business must operate strategically while providing the required level of services.

In real life, evaluating a function entails contrasting many aspects of the broader HR process. This can include factors like worker caliber and availability, employment location, working hours, the state of the economy, job duties, and the value a job provides to your company. The concept behind function evaluation is that equivalent jobs ought to receive comparable compensation.

Different methods of internal function ranking exist.

• Rank functions: according to how much they contribute to the organization as a whole using a ranking approach developed by subject matter experts. Raters must choose which of two matched functions is more valuable. This is done for all functions, and a ranking is created based on the results.

• Classification method: Employing classification methods, jobs can be divided into many categories. In this instance, jobs are classified, and then within these categories, they are sorted to get a ranking. Education, experience, the level of specific skills required for the profession, how in-demand these skills are, and other factors can all be categorized.

• The points system classifies occupations in accordance with the elements that the company feels are most important to its success. Following that, points are given to each category for each job. Key competencies including problem-solving, technical knowledge, communication and persuasion skills, inventiveness, business savvy, and others may fall under these categories. These skills will vary depending on the organization.

• Personal way: in this method, the person performing the job is evaluated rather than the job itself. Employees are compensated here based on their talents and skills

7. Praise

The necessity of rewarding employees for their efforts cannot be overstated. In order to find the ideal individual for the position and organization, pay and benefits are essential. These will differ across various industries, nations, and cultures. In some nations, like the USA, a job offer frequently includes health insurance. This is not the situation in nations like the UK, where a public health system provides the majority of healthcare to most people. But the entire rewards framework demonstrates that rewards go beyond monetary compensation. They may also have psychological and relational effects.

In addition to pay, rewards may also include possibilities for advancement, status, and recognition, a positive work environment, and a healthy work-life balance.

For instance, great coworkers and fulfilling jobs are rewarding to employees. Financial awards and additional (secondary) benefits make up the job’s financial compensation.

All of these elements are summed up in the Employee Value Proposition (EVP). Your company’s EVP is different from its exterior appearance and brand. It is the impression a business gives to its staff. Rewards therefore go much beyond money. Here is a brief summary of total rewards:

• Base wage 
• Performance-based compensation
• Bonuses
• Status
• Alternating Work
• Autonomy
• Growth Opportunities
• Feedback
• Formal and Informal Development Opportunities
• Social Environment
• Job Security

Related: Employee insurance benefits: Everything you need to know

Functions 1 through 7 are all included in what is referred to as talent management; they work to recruit, train, inspire, and keep (high-performing) workers.

8. Workplace relations

Relationship building and maintenance with labor unions, other collectives, and their members is another duty of HR.

Industrial units are governed by unions for reasons that collectively speak to the employees’ goodwill. For instance, to maintain a cordial environment, a company in the industrial and manufacturing sector needs to have well-established Industrial Relations practices.

The goal of industrial relations is to maintain a continuous flow of production while minimizing resource and time waste, preventing significant conflicts like strikes and protests, improving and securing working conditions, and satisfying wage norms and expectations. Inappropriate handling of industrial relations can lead to lawsuits, protests, walkouts, and financial and production losses.

Maintaining positive relationships with unions will make it easier to identify and settle possible issues promptly and will be helpful in times of more challenging economic conditions when layoffs or other steps are necessary.

9. Communication and employee involvement

Over the past few years, employee engagement has grown significantly in importance as an HR function, positively impacting employee turnover to a big extent. Exciting employee engagement programs can also attract fresh, talented candidates to the firm. Companies are spending a lot of money on employee engagement to show their workers that they are valued.

The challenge for committed employee engagement teams within an organization is to develop newer, better programs that could retain their employees rather than losing them to the competitors.

The goal of employee engagement is to:

 1. Align employees with organizational objectives.

2. Increasing labor force output.

3. Improving the office atmosphere and communication.

4. Staff inspiration

10. Safety and health

In the development and implementation of health and safety legislation, HR is crucial. One of the key responsibilities of HR is to make these rules a part of the corporate culture.

The majority of an employee’s time is spent at work, so it is the responsibility of the organization to provide a secure, friendly, and guarded workplace.

Organizations ought to think about:

1. Policies for safety and health based on industry standards.
2. Occasionally, safety and health training is provided.
3. The anti-sexual harassment law for female workers.
4. Health programs on the property of the business.

Companies must pay attention to more than just a comfortable workplace. Numerous health-related campaigns, seminars, and workshops are unquestionably necessary for the benefit of the workforce. Some of the steps businesses can do for the health and safety of their employees include providing free health camps and paid medical insurance coverage for employees and their families.

In the headquarters of the oil company Shell, for instance, it is prohibited to climb the stairs without holding onto the handrail. This is a component of Shell’s “Goal Zero,” or zero accidents. On an oil platform, clutching the railing is significantly more crucial, yet safety is such a significant element of the corporate culture that safety roles are applied everywhere.

11. Individual health

In order to help and care for employees when they have personal issues, HR has a role to play. Supporting employees when things don’t go as planned is a key component of personal wellbeing. Employee performance, engagement, and productivity can be negatively impacted by issues both inside and outside of the workplace. This ultimately hurts a business’s financial line.

Personal well-being initiatives run by your HR department must focus on one-on-one interactions with staff members as well as communication across teams and organizations. For instance, a business might provide a mental health aid program through which anyone in need of therapy can do so. The business could observe a day dedicated to mental health awareness on an enterprise-wide basis.

12. Tasks related to administration

HR’s administrative role is its final duty. These include HR information systems and personnel policies.

Promotions, transfers, discipline, performance enhancement, illness, rules, cultural and racial diversity, unwelcome intimacy, bullying, and other issues are handled through personnel procedures.

To properly comply with the requests or overcome these difficulties, policies and procedures must be created and followed for each of these circumstances.

Employee information is kept in human resource information systems (HRIS). So that the data may be used for better decision-making, these systems must be purchased, put into place, and managed.

13. Legal labor laws and compliance

One of your organization’s primary responsibilities in terms of human resources is labor law compliance. Labor laws or other regulations that specify the employment relationship. To guarantee that both employees and the business are protected, the HR management team is knowledgeable about these legal issues. This could involve things like calculating leave, approving payroll, reporting to the government and paying taxes, etc.

14. Human resource administration

Aligning the current workforce with the organization’s objectives and vision is what human resource management entails. Globalization, technical advancements, alterations in the law, voluntary job terminations, diversification of the company’s product and service offering, and mass hiring are all factors that can be effectively managed with careful planning.

Importance of Human Resources Management

Management of human resources plays a crucial role in every organization. Without competent human resources management, businesses would not be able to attract and retain top talent, grow and improve their operations, or preserve a positive, accepting workplace culture. The administration of human resources is so crucial to businesses that many refer to this division as the lifeblood of an enterprise.

Value of Human Capital

It’s crucial to have a human resources department on staff. The value of human capital to a company’s bottom line can be better understood if there is an internal human resources team or human resources specialist on staff. Human capital is crucial for small organizations in particular because so many employees in these companies conduct cross-functional tasks. A smaller workforce means that if even one employee leaves, the company will have a significant hole to fill and its profitability may be in jeopardy.

Commercial Budget Control

Human resources establish strategies for reducing labor management costs, which includes negotiating lower rates for benefits like health insurance. This helps to rein in expenditure that is out of control. Human resources also ensures that wages are set competitively and realistically by researching the labor market, employment patterns, and conducting salary analyses based on job responsibilities. This human resources function is very useful for small enterprises because some of them have limited financial resources.

Resolution of workplace disputes

Given the range of personalities, working styles, backgrounds, and levels of experience among employees, workplace conflict is unavoidable. Conflict between two employees, a manager and employee, or between a manager and employee can be identified and resolved, and good working relationships can be restored, by a human resources manager or a staff member professionally trained to handle employee relations issues.

Educating and Developing

Human resources conducts requirements analyses of the organization’s current workforce to identify the kinds of employee development and skill training that are required to enhance skills and qualifications. Determining the training requirements for current employees can be helpful for businesses in the startup or development periods. Compared to the expense of hiring more competent individuals or more personnel, it is significantly less expensive. Additionally, it is a tactic that can enhance staff retention and lower turnover.

Increasing Staff Satisfaction

Determining the amount of employee happiness is often the duty of human resources personnel and is at best a hazy measurement. Human resources ascertains the root causes of employee dissatisfaction and resolves those issues to motivate employees through carefully crafted employee surveys, focus groups, and an exit interview plan.

Savings on human resources

For employers, especially small enterprises, the expense of hiring new or replacement employees, including training and ramp-up time, can be prohibitive. The human resources department can cut costs associated with posting job openings, providing new hires with training, and signing them up for benefits programs by using a well-designed recruitment and selection process.

Improvement of Personnel Performance

Systems for performance management are created by human resources. Employees risk landing in positions that aren’t a good fit for their abilities and knowledge if human resources staff doesn’t create a plan that monitors performance. Additionally, workers whose performance falls short of the employer’s standards can stay on the payroll, wasting money on underperforming workers.

Maintaining Commercial Success

The business finds individuals with the potential and necessary skills to someday transition into leadership roles with the company through succession planning that human resources develops. This job is crucial since it can ensure the stability and success of the company in the long run.

Enhancing the Company Image

Companies aspire to be recognized as “employers of choice.” Employers of choice are the businesses that are praised for their treatment of workers; these are the businesses where people want to work. Human resources must strike a balance between hiring the best prospects, choosing the best candidates, and keeping the best workers in order to become an employer of choice.

Consistent Business Practices

Human resources makes sure that the workforce adheres to the company’s guiding ideas and philosophy. The creation of a unified workplace is crucial from the viewpoint of a small firm. Human resources’ first chance to achieve this is through judicious hiring selections that pinpoint ideal professional attributes as well as orientation and on-boarding initiatives.

Conclusion

Management of human resources is crucial, especially in contemporary organizations. Along with new laws and compliance concerns, there are an increasing number of HR processes and functions to oversee. Only through good human resource management can an organization be able to strategically manage its human resources, achieve its business objectives, and preserve its competitive advantage.