Structure of Human Resource Management
The structure of HRM is broad. The major activities that are part of the lives of the employees
from the time they are hired within the organization till the time they leave the organization
comes under the purview of HRM. The structure of HRM takes into consideration various areas,
which have been stated as follows:
Human Resource Planning
The objective of HR planning is to ensure that the organization has the right types of persons in
the right place at the right time. When there are vacancies within the organizations and they
need to be filled, the candidates should possess the essential qualifications that are suitable for
the job. The HR planning prepares the human resources inventory with the viewpoint to assess
present and future needs, availability and the areas of deficiencies in human resources. The HR
planning forecast the demand and supply and identify the sources of selection. It is essential to
formulate the strategies and approaches that may be both long-term as well as short-term, to
meet the needs and requirements of human resources. In other words, it is necessary to develop
the conditions within the working environment in such a manner that may stimulate the mindsets of the employees and motivate them towards rendering an efficacious job performance.
Design of Organization and Job
Designing of the organization and job is an important task of laying down the organization
structure, authority, relationships and responsibilities. The design of the organization and job
takes into consideration the aspects of job specification, which identifies the attributes of the
individuals, who will be most suitable for the jobs. Within the organization, the members are
employed in various positions. The individuals, who are in leadership positions are vested with
rights and have the authority of controlling the functioning of the organization and managing the
workforce. It is essential for the members of the organization to form good terms and
relationships with each other. As establishment of amiable terms will help them in the
performance of their job duties in a well-organized manner. All the members of the organization
are assigned various job duties; hence, they have certain job responsibilities, which they need to
implement appropriately. Therefore, it can be stated that the designing of the organization and
job helps in recruitment and training of suitable candidates to achieve organizational goals.
Staffing
Staffing is the function of selection of right candidates in the right positions at the right time. It
is regarded as one of the important functions. In order to lead to effective growth and
development of the organization, achieve one’s goals and objectives and incur job satisfaction, it
is necessary to ensure that vacancies are filled with qualified and competent individuals. When
there are vacancies within the organization, advertisements are usually displayed in newspapers
or on the websites. The individuals look at the advertisements and when they feel, they possess
the essential educational qualifications, skills and abilities, they apply for jobs. Through looking
at the applications, the hiring authorities make the decision, which candidates are to be called
for interviews. To carry out the staffing function appropriately, the hiring authorities need to
implement the procedures, such as, written tests, interviews, group discussions and so forth that
are necessary for selection. Therefore, these are the factors that need to be implemented to
carry out the function of staffing in a suitable manner.
Training and Development
Training and development are important aspects that need to be taken into consideration in all
organizations. In various types of organizations, including service and manufacturing and
production, when employees are recruited, they need to go through training and development
programs. The primary objective of training and development programs is to impart knowledge
to the employees, so they are able to carry out their job duties in a well-organized and suitable
manner. In these programs, the trainers need to ensure that they make use of appropriate
instructional methods that would be in accordance to the job requirements and organizational
goals. In various organizations, different kinds of training methods are made use of, such as,
vestibule training, case studies, lecture methods, role playing, field visits and so forth. It depends
upon the organization and job requirements that what types of training and development
methods need to be implemented. The training and development programs render a significant
contribution in augmenting the knowledge, skills and aptitude of human resources. They are
attended by human resources upon joining the organization as well as within the course of
performance of job duties.
Organizational Development
Organizational development is a technique of planned changes. It seeks to change the beliefs,
attitudes, values and structures within the organization. When focusing on organizational
development, there are number of aspects that need to be taken into account. These include,
departments,
personnel,
management,
administrative,
technical,
clerical
functions,
implementation of training and development programs and so forth. The human resources need
to be aware of the changes that may take place in the external environmental conditions and
conduct an analysis of the needs and requirements of the clients. Organizational development is
a comprehensive strategy for making improvements within the organization. It is a long-range
effort to lead to transformations, which would be worthwhile, and enhance the organization’s
problem solving and renewal process, particularly through a more efficient and integrative
working environment. In order to bring about organizational development, it is essential for the
human resources to inculcate the traits of diligence, resourcefulness and conscientiousness.
Compensation and Benefits
Compensation and benefits refer to the compensation, salary or other monetary and nonmonetary benefits passed on by the organization to the employees. Compensation and benefits
are an important aspect of HRM as it helps in motivating the workforce towards the performance
of their job duties. Compensation refers to the pay or the exchange in monetary terms of the
work performed by the employees and paid by the employers. This can be in the form of salary,
wages and incentives. When the employees suffer from injuries or experience accidents at the
workplace, then too compensation is paid to them by their employers. The four types of
compensation for the employees are hourly compensation, salaries, commissions and bonuses.
On the other hand, benefits refer to the exchange in value to the employees as part of their
packages for the performance of job duties. Compensation and benefits are tangible, but there
are intangible rewards, such as, recognition, work-life and development.
Employee Assistance
An Employee Assistance Program (EAP) is a work site focused program that contributes in
providing assistance in the identification and resolution of employee concerns, which may or may
not have an effect upon their performance. The major concerns of the employees are in terms of
various areas, such as, job expectations, other members of the organization, workload, stress,
working hours, rules and policies and the overall working environmental conditions. Personal
matters are also taken into consideration, including health, well-being, personal relationships,
financial and legal matters, alcohol and drug dependency and anxiety. The primary objective of
EAP is to make provision of strategies and methods for counselling and guidance. Counselling and
guidance are regarded as indispensable aspects that make provision of information to the
employees that would facilitate in providing solutions to their problems. Advice and information
should be providedto the employees on a systematic and uniform basis (Newton, Hayday, &
Barkworth, 2005).
Union-Management Relations
In order to lead to effective growth and development of the organization, it is of utmost
significance for the union and management to maintain amiable terms and relationships with
each other. The management is vested with the authority and power to make decisions, direct
and guide the employees in the right direction, implement leadership skills, formulate measures
and programs and control the functioning of the organization. When they are carrying out these
functions, they need to ensure their decisions, programs, measures and laws are beneficial to the
employees and organization as a whole. On the other hand, on the part of the union, it is
necessary to inculcate the traits of diligence, resourcefulness and conscientiousness. They need
to develop interest and enthusiasm towards the performance of job duties to achieve
professional and personal goals. In order to reinforce union-management relations, they need to
inculcate the traits of morality and ethics and depict honesty, righteousness and truthfulness.
The reinforcement of union-management relations renders a significant contribution in the
achievement of organizational goals.
Personnel Research
Personnel are an integral part of the organization. Research conducted on personnel helps in
identifying the aspects, which need to be improved. These include, job performance, knowledge
and competencies, providing solutions to problems and challenges and so forth. The knowledge
on behavioral science and industrial psychology puts emphasis upon the expectations of workers,
aspirations and behavior. The workforce has some expectations from the employers in return for
the performance of their job duties. One of the most common expectations is, increase in pay
and promotional opportunities. In order to acquire promotional opportunities and enrich their
career prospects, it is apparent that they not only are required to carry out their job duties in
accordance to the desired expectations, but they are also required to maintain sociable terms
and relationships with their employers as well as other members. On the other hand, it is
indispensable for the personnel to maintain good health, physically as well as psychologically. In
organizations, there are provision of counselling and guidance facilities provided by expert
counsellors, which help the workforce in providing solutions to their problems. Therefore,
research is indispensable in leading to progression and well-being of the personnel and
organization.
Usage of Technologies
With the advent of modernization and globalization, it is necessary to make use of technologies
and modern and innovative methods in the implementation of tasks and activities.
Advancements taking place in the technology of products and production methods have led to
transformations in the working environment to a major extent. Hence, it can be stated that
human resources need to be well-equipped with the usage of technologies to carry out their tasks
and activities appropriately. Globalization of the economy has led to an increase in the
competition manifold. Science of ergonomics gives better ideas of rendering a job performance
in an efficient manner. Therefore, the research conducted on human resources is an unavoidable
requirement. It needs to take special care by leading to improvements in the exchange of
information through effective communication systems on a continuous basis, especially on
morality, ethics and motivation. When the employees experience setbacks in making use of
technologies, they attend training programs to augment their knowledge and skills. Therefore, it
can be stated that usage of technologies is regarded as indispensable factors in enhancing
productivity and profitability.
1. Job design and job analysis
One of the foremost functions of HRM is job design and job analysis. Job design involves the
process of describing duties, responsibilities and operations of the job. To hire the right
employees based on rationality and research, it is imperative to identify the traits of an ideal
candidate who would be suitable for the job. This can be accomplished by describing the skills
and character traits of your top-performing employee. Doing so will help you determine the kind
of candidate you want for the job. You will be able to identify your key minimum requirements
in the candidate to qualify for the job.
Job analysis involves describing the job requirements, such as skills, qualification and work
experience. The vital day-to-day functions need to be identified and described in detail, as they
will decide the future course of action while recruiting.
2. Employee hiring and selection
Recruitment is one of the primary functions of human resource management. HRM aims to
obtain and retain qualified and efficient employees to achieve the goals and objectives of the
company. All this starts with hiring the right employees out of the list of applicants and favorable
candidates.
An HRM helps to source and identify the ideal candidates for interview and selection. The
candidates are then subjected to a comprehensive screening process to filter out the most
suitable candidates from the pool of applicants. The screened candidates are then taken through
different interview rounds to test and analyze their skills, knowledge and work experience
required for the job position.
Once the primary functions of HRM in recruitment are completed, and the candidate gets
selected after rounds of interviews, they are then provided with the job offer in the respective
job positions. This process is important because these selected employees will, after all, help the
company realize its goals and objectives.
3. Employee training & development
Imparting proper training and ensuring the right development of the selected candidates is a
crucial function of HR. After all, the success of the organization depends on how well the
employees are trained for the job and what are their growth and development opportunities
within the organization.
The role of HR should be to ensure that the new employees acquire the company-specific
knowledge and skills to perform their task efficiently. It boosts the overall efficiency and
productivity of the workforce, which ultimately results in better business for the company.
HRM plays a very crucial role in preparing employees for bigger tasks and responsibilities, which
leads to the holistic development of employees at work. And an organization which provides
ample growth and development opportunities to its employees is considered to be a healthy
organization.
4. Compensation and Benefits
Benefits and compensation form the major crux of the total cost expenditure of an organization.
It is a must to plug the expenses, and at the same time, it is also necessary to pay the employees
well. Therefore, the role of human resource management is to formulate attractive yet efficient
benefits and compensation packages to attract more employees into the workplace without
disturbing the finances of the company.
The primary objective of the benefits and compensation is to establish equitable and fair
remuneration for everyone. Plus, HR can use benefits and compensation as a leverage to boost
employee productivity as well as establish a good public image of the business.
Therefore, one of the core HR department functions is to lay down clear policies and guidelines
about employee compensation and their available benefits. One of the functions of HR manager
is to ensure the effective implementation of these policies and guidelines. This creates equality
and builds transparency among the employees and the management within the organization.
After all, the level of employee satisfaction at work is directly proportional to the compensation
and benefits they receive.
5. Employee performance management
The next activity on HR functions list is effective employee performance management. Effective
performance management ensures that the output of the employees meets the goals and
objective of the organization. Performance management doesn’t just focus on the performance
of the employee. It also focuses on the performance of the team, the department, and the
organization as a whole.
The list of HR functions for performance management includes:

Developing a proper job description

Initiating an appropriate selection process to hire the right candidates for the job
positions

Providing the right training and education needed to enhance the performance of the
employees

Enabling real-time feedback and coaching employees to boost efficiency among them

Conducting performance reviews monthly or quarterly to discuss the positives and the
improvement areas of employees

Formulating a proper exit interview process to understand why experienced employees
choose to leave the company

Designing a proper appraisal and compensation system that recognizes and rewards the
workforce for their effort and hard work
6. Managerial relations
Relationships in employment are normally divided into two parts — managerial relations and
labor relations. While labor relations is mainly about the relationship between the workforce and
the company, managerial relations deals with the relationship between the various processes in
an organization.
Managerial relations determine the amount of work that needs to be done in a given day and
how to mobilize the workforce to accomplish the objective. It is about giving the appropriate
project to the right group of employees to ensure efficient completion of the project. At the same
time, it also entails managing the work schedules of employees to ensure continued productivity.
It is essential that HR handles such relations effectively to maintain the efficiency and productivity
of the company.
7. Labour relations
Cordial Labour relations are essential to maintain harmonious relationships between employees
at the workplace. At the workplace, many employees work together towards a single objective.
However, individually, everyone is different from the other in characteristics. Hence, it is natural
to observe a communication gap between two employees. If left unattended, such behaviors can
spoil labor relations in the company.
Therefore, it is crucial for an HR to provide proper rules, regulations and policies about labor
relations. This way, the employees have a proper framework within which they need to operate.
Therefore, every employee will be aware of the policies which will create a cordial and
harmonious work environment.
Such a structured and calm work atmosphere also helps with improving performance and aching
higher targets.
8. Employee engagement and communication
Employee engagement is a crucial part of every organization. Higher levels of engagement
guarantee better productivity and greater employee satisfaction. Efficiently managing employee
engagement activities will help in improving the employee retention rates too. HRM is the right
agent who can manage the employee engagement seamlessly. Proper communication and
engagement will do wonders for the employees as well as the organization. The more engaged
the employees are, more committed and motivated they will be.
Human resource teams know the ‘humans’ of the organization better than anyone else. This gives
them an upper hand in planning engagement activities. Although such activities might not fall
under the direct functions of HRM, they are indeed required for the organizational welfare and
employer branding.
9. Health and safety regulations
Every employer should mandatorily follow the health and safety regulations laid out by the
authorities. Our Labour laws insist every employer to provide whatever training, supplies, PPE,
and essential information to ensure the safety and health of the employees. Integrating the
health and safety regulations with company procedures or culture is the right way to ensure the
safety of the employees. Making these safety regulations part of the company activities is one of
the important functions of HRM.
10. Personal support for employees
HRM assists employees when they run into personal problems which may interfere with the
workflow. Along with discharging administrative responsibilities, HR departments also help
employees in need. Since the pandemic, the need for employee support and assistance has
substantially increased. For example, many employees needed extra time off and medical
assistance during the peak period of the pandemic. For those who reached out for help, whether
it may be in the form of insurance assistance or extra leaves, companies provided help through
HR teams.
11. Succession Planning
Succession planning is a core function of HRMs. It aims at planning, monitoring, and managing
the growth path of the employees from within the organizations.
What usually happens is that promising and bright employees within the organization who have
excelled in their roles are handpicked by their supervisors and HRs, and their growth paths are
developed.
This, of course, becomes quintessential as those employees who recognize the fact that the
company is investing in their growth and development, and therefore, will stay loyal in the long
run. However, while developing such employees towards a higher role, companies must keep in
mind several aspects, such as improving employee engagement, assigning challenging tasks and
activities.
An employee leaving the organization can prove to be disruptive and expensive. Therefore,
succession planning is a savior of some sorts, as it helps identify the next person who is just right
to replace the outgoing individual.
12. Industrial Relations
It’s usually the production lines and manufacturing units where this HR function is mostly used.
You see, Unions exist in factories and manufacturing units. And their responsibility is towards the
goodwill about the workers — in fact, they’re always vocal and upfront about.
Now, for a company, especially into manufacturing and production, the HRs must have ongoing
Industrial Relations practices. They must also continuously engage with the Unions in a friendly
and positive manner to maintain amicable relations.
The true motive of Industrial Relation touches on a lot of issues within the company. For instance,
Industrial Relations may be in place to meet wage standards, reduce instances that call for strikes
and protests, improve working and safety conditions for employees, reduce resource wastage
and production time and so on.
Industrial Relations is extremely important because, if handled properly, it can circumvent
protests, violence, walkouts, lawsuits, loss of funds and production time. IR is a sensitive yet
critical function of the HR department, naturally, it requires personnel with vast experience.
HRM plays a major role in the smooth functioning of the organization. The process starts with
formulating the right policies for the job requirements and ends with ensuring a successful
business growth of the company. Therefore, HRM works as an invisible agent that binds together
all the aspects of the organization to ensure smooth progress.
Strategic human resource management (strategic HRM)
Strategic human resource management (strategic HRM) provides a framework linking people
management and development practices to long-term business goals and outcomes. It focuses
on longer-term resourcing issues within the context of an organization's goals and the evolving
nature of work. It also informs other HR strategies, such as reward or performance, determining
how they are integrated into the overall business strategy.
Strategic HRM refers to HR that is coordinated and consistent with the overall business objectives
in order to improve business performance. According to Purcell (1999), SHRM focuses on actions
that differentiate the business from its competitors.
Strategic HRM emphasizes the importance of HR – and the people in the business – to the success
of an organization. Businesses with an emphasis on strategic HRM may have an HR representative
in the boardroom or advising/feeding back to senior executives, and may also make use of HR
business partners.
Critics of strategic human resource management say that it is a good idea in theory but often
hard to implement at the organizational level. Translating the organization's objectives and
values into tangible initiatives that can be driven by the HR department is a complex problem
underlying strategic HRM.
What is Strategic Human Resource Management? A definition
Strategic Human Resource Management is a combination of Strategy and Human Resource
Management (HRM). According to Storey (1995), HRM is a distinctive approach to employment
management which 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.
This is a complex and descriptive definition. It states that Human Resource Management involves
the use of different techniques. These include:

Personnel techniques, like the hiring, promoting and rewarding of employees;

Structural techniques, like organizational design; and

Cultural techniques, like building and maintaining high-performance work cultures.
According to Storey, the goal of this all is to achieve a competitive advantage. A competitive
advantage is what distinguishes an organization from its competitors.
The second part of the definition is about “strategic deployment”. Let’s zoom in on strategy.
Strategic Human Resource Management became increasingly popular in the 2000s. This was
triggered by Dave Ulrich’s challenge for the HR profession. HR had become “often ineffective,
incompetent, and costly; in a phrase, it is value sapping”.
According to Ulrich, HR needed to become value adding – and thus more strategic. This means
that HR needed to become a better fit with the business strategy in order to provide value.
Strategic HRM is the result of this call to action. It aims to align the focus of HRM with the focus
of the business. As such, strategic HRM is all about achieving business objectives through smarter
Human Resource Management.
5 Steps to Make Impact with Strategic Human Resource Management
The question is now how to make an impact using Strategic Human Resources Management. In
this section, we will list five tips to make an impact with truly Strategic HRM.
1. Creating a Human Resource strategic plan that follows the business
The first step towards making a strategic impact with Strategic HRM is to create an HR strategic
plan. Remember, Strategic HRM follows the business. This means that the HR strategy should
follow the broader business strategy.
We can write an entire article on how to create an HR Strategy – and that’s exactly what we did,
you can find it by clicking the link. It boils down to a few steps.
First, you need to understand the broader business strategy. Then, you need to align what we’re
doing in HR with this business strategy. The HR strategy should aim to build the capabilities that
are defined in the business strategy. If the business strategy is one of cost leadership, where the
aim is to minimize costs, the HR strategic plan will be different then when the business strategy
is one of differentiation, where the product is unique and more expensive. In these cases, the HR
strategy and subsequent policies will be very different.
2. Aligning HR activities
Once the HR strategy is set, the real work starts. All HR activities should be aligned with the HR
strategy. These include recruitment, selection, performance management, compensation and
benefits, organization and function design, and more.
All these activities should be aligned with each other. For example, the qualities that you evaluate
someone’s performance on should also be the criteria you use to hire people. In addition, these
should also be the qualities you look to develop in your workforce. This way hiring, performance
evaluation, rewards, and learning and development all align with what the business strategy is
trying to achieve.
In research, these groups of HR practices are referred to as bundles. An example of such a bundle
is employee retention, which is associated with several HR practices, including good job design,
employee involvement, and equal opportunities (Guest et al., 2006).
Another bundle is innovation. Innovation is associated with performance appraisal, employee
involvement, teamworking, job design, training and development, and provision of information
lining these HR practices with each other will create a compound effect and help in achieving the
business strategy. This is what makes HRM truly strategic.
3. More emphasis on data
One of the key requirements of making an impact with HR is being able to show that impact.
This is where data comes in. An emphasis on data is key in measuring the impact of HR policies.
It is very common for the business to track its success using Key Performance Indicators (KPIs).
KPIs are metrics that are aligned with the strategy of the organization.
Finance has a large set of financial KPIs, and so has Marketing. If the company is public, an
important KPI for the board of directors is the stock price. Decisions are influenced based on their
impact on these strategic KPIs.
HR departments, however, are often not data-driven. Metrics are ill-defined and are scarcely
tracked. HR KPIs are even rarer. These are the HR metrics that will have a direct impact on the
Key Performance Drivers (KPD) of the business. KPDs are the drivers of business KPIs, like
customer satisfaction, product quality, innovation, and so on.
In addition to tracking progress, people analytics can be used to measure which people policies
contribute to business goals. This can make the contribution that HR makes very tangible. For
example, Best Buy, an American consumer electronics retailer, found that a 0.1% increase in
engagement leads to an increase in revenue of $100,000 per store.
People analytics thus helps to make a very concrete business case for HR investments.
4. Don’t forget HR’s other responsibilities
We started off pointing out that the push for Strategic HRM originated with Ulrich’s critique of
the lack of strategic contributions of HR. This doesn’t mean that HR should only focus on its
strategy, there are other elements to focus on.
Ulrich defined 4 HR roles. These include HR strategy, enabling change, efficient administration,
and developing and engaging employees. The risk of Strategic HRM is that we focus too much on
the HR strategy while forgetting other tasks. Tom Haak points this out beautifully in the following
clip. As Haak points out, the focus of HR shouldn’t be too much on strategy. Once the strategy is
set, the power lies in its execution. HR should not forget to focus on flawless employee operations
and employee intimacy.
5. Taking an outside-in approach
A critical next step to being strategical is taking an outside-in HR approach. Who are the
customers of HR? These are sometimes employees. However, they are also other stakeholders,
including shareholders and customers.
According to Ulrich, it is HR’s task, to not only look at strategy as a mirror for what HR has to do.
It has to look at it as a window that shows how we can do our jobs better for outside stakeholders.
These outside stakeholders include customers, investors, key suppliers, government agencies,
and communities. HR can become a lever for those external factors. This requires further
integration. Not only are different HR practices aligned with strategy, but the strategy is also
aligned with these outside stakeholders. The best way to do this is by focusing on value creation.
HR shouldn’t focus on what it does but on what it creates.