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HRM

Leadership & Human Resource Management

hr-management Graphics courtesy of Beatrice McGrawOpens in new window

One of the most important resources in all organizations is human resources (e.g., human capital)—the people involved in producing and distributing goods and services. Human resources include all members of an organization, ranging from its most senior leaders to entry-level employees.

What Is Human Resource Management?

  • HRM refers to the policies, practices, and systems that influence employees’ behavior, attitudes, and performance.
  • HRM consists of the activities leaders and others in the organization perform to plan for, attract, develop, and retain an effective workforce that performs at a high level and contribute to the accomplishment of organizational goals.

These activities highlighted above make up an organization’s HRM system, which has the following major components: recruitment and selectionOpens in new window, compensation and benefitsOpens in new window, employee orientationOpens in new window, L&DOpens in new window, and performance appraisalOpens in new window (and feedbackOpens in new window).

It is important for organizational leaders to remember that each component of an HRM system influences the others, and all must fit together.

Why HRM Is Important to Leaders

HRM is important to organizational leaders for several reasons. Below are a number of them:

  • Avoid personnel mistakes. First, having a command of HRM knowledge will help a leader avoid personnel mistakes they don’t want to make while leading.
  • Improving profits and performance. More important, it can help a leader ensure that they get results—through people.
  • At some point, a leader will be engaged in all of the HRM components. Given all of the things involved in a leader’s job and responsibilities, knowledge of HRM will increase the likelihood of their being more effective.

There is every indication that the HRM responsibilities of leaders will continue to increase. This increase will be a result of more and more organizations requiring them to identify, assess, and develop the competencies and skills of their employees and align their performance with the organization’s strategy and SHRM goals.

Strategic Human Resource Management

SHRM is the process by which leaders and others design the components of an HRM system to be consistent with each other, with other elements of organizational architecture, and with the organization’s strategy and goals.

The objective of SHRM is the development of an HRM system that enhances an organization’s efficiency, quality, innovation, and responsiveness to customers—the key building blocks of competitive advantage.

Why is SHRM important?

Organizations want to do everything they possibly can to be successful and they are more likely to be successful when all employees are working towards the same objectives.

SHRM carries out analysis of employees and determines the actions required to increase their value to the organization.

SHRM also uses the results of this analysis to develop HRM techniques to address employee weaknesses. The following are benefits of SHRM:

  • increased job satisfaction,
  • better work culture,
  • improved rates of customer satisfaction,
  • efficient resource management,
  • proactive approach to managing employees, and
  • boost productivity.

The Components of HRM

  1.    Recruitment and selection

Organizational leaders use recruitment and selectionOpens in new window, the first component of an HRM system, to attract, and hire new employees who have the knowledge, skills, abilities, and experiences that will help an organization achieve its goals.

An information technology company, for example, might have the goal of becoming one of the top computer software development organizations in the world. To achieve this goal, leaders at the organization must realize the importance of hiring only the best software development engineers: several hundred qualified candidates are interviewed and rigorously assessed during this phase.

The organization has little trouble recruiting top software development engineering talent because candidates know they will be at the forefront of the software development industry if they work at the organization.

  1.     Compensation and benefits

Compensation and benefitsOpens in new window are critical to the recruitment and selection of employees.

  • Compensations include wages or salaries and incentives.
  • Benefits are additional non-monetary forms of compensation, such as health insurance, retirement plans, and family leave.
  1.     Orientation and L&D

Orientation and L&DOpens in new window are important to ensure that organizational members develop the knowledge, skills, and abilities that will enable them to perform their jobs effectively in the present and future.

L&DOpens in new window are ongoing processes as changes in technology and the environment, as well as in an organization’s goals and strategies, often require that organizational members learn new techniques and ways of working.

It is not unusual for newly hired employees to receive on-the-job L&D by joining small teams that include experienced employees who serve as mentors. New recruits learn firsthand from colleagues how to complete various tasks and jobs that are responsive to the organization’s efforts, for example, to be as efficient and effective as possible.

  1.     Performance appraisal and feedback

The final component, performance appraisal and feedbackOpens in new window (performance management), serves two purposes in HRM.

  • First, performance appraisalOpens in new window can give leaders the information they need to make good human resource decisions—decisions about to train, motivate, and reward organizational members.
  • Second, feedbackOpens in new window from performance appraisal serves a developmental purpose for employees of the organization. When leaders regularly evaluate their direct reports’ performance, they can give them valuable information about their strengths and weaknesses and the areas in which they need to concentrate.

Each of the components of HRM influences the others as mentioned earlier. The kinds of people the organization attracts and hires through recruitment and selection, for example, determine:

  • (a)   the kinds of L&D that are necessary,
  • (c)   the way performance is appraised, and
  • (c)   the appropriate levels of compensation (pay) and benefits.

Leaders must ensure that their organizations have highly qualified employees by (a) recruiting and selecting the best candidates; (b) guiding new hires with experienced co-workers or team members; (c) appraising performance in terms of individual contributions and team and department performance; and (d) basing pay, for example, on individual and team performance.

See also:
  1. Bauer, T., Erdogan, B., Caughlin, D., & Truxillo, D. (2020). Human resource management: People, data, and analytics. Los Angeles, CA: SAGE.
  2. McClelland, D. C. (1961). The achieving society. New York, NY: Van Nostrand.
  3. Deci, E. L., & Ryan, R. M. (2000). The “what” and “why” of goal pursuits: Human needs and the self-determination of behavior. Psychological Inquiry, 11 (4). 227–268.
  4. Luthans, F., Stajkovic, A. D. (1999). Reinforce for performance: The need to go beyond pay and even rewards. Academy of Management Perspectives, 13(2), 49 – 57.
  5. Manning, G., & Curtis, K. (2019). The art of leadership. New York, NY: McGraw-Hill.
  6. Ziglar, Z. (2000). See you at the top. New Orleans, LA: Pelican.
  7. McShane, S., & Von Glinow, M. (2014). Organizational behavior (7th ed.). New York, NY: McGraw-Hill.
  8. LeBoeuf, M. (2016). The greatest management principle in the world. New York, NY: Berkeley Books.
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