People and organization - THE IMPORTANCE OF HUMAN RESOURCES DEPARTMENT

 THE IMPORTANCE OF HUMAN RESOURCES DEPARTMENT

 

Why is a Human Resources Department Important?

The question of whether a company needs a Human Resources (HR) department is not a simple one to answer. If we ask the question to a variety of entrepreneurs, CEOs, and HR professionals and we are likely to get a variety of answers. For instance, many experts will tell us that the number of employees in a company is the determining factor. A lot of companies with total employees under 20 assume that they don‘t need an HR department. But size isn‘t the only issue to think about. Other considerations include:

 The scope of HR services needed

 Whether requirements are limited to transactional services
 Are strategic services mandatory

 Will the department operate as a cost or profit center In reality, HR functions must be conducted for every company—no matter how small or large. So properly framed, the question to ask is: ―What is the most effective way that HR services can be delivered by a Company?‖ Is it better to have an in-house HR department doing the job or is it better to partner with outside HR experts, using a variety of vendors or even to a single source? For example , many organizations find that it‘s more convenient, and more cost effective, to outsource transactional services such as payroll, tax, and benefits administration, while partnering with a strategic HR partner to deliver high value consultation. If it is a small- to mid-sized company with an employee base of blue-collar or unskilled workers and it only requires transactional services, outsourcing coordinated by a single in-house employee may work best. When a growing professional services business like the one mentioned earlier needs both transactional and strategic HR services, a single-source professional employer organization (PEO) may be the way to go. A PEO can provide a comprehensive menu of HR services, including robust benefits packages that will allow it to attract top talent. On the other hand, if it is a large manufacturing company with over 300 workers, its size gives the  clout to negotiate competitive rates with benefits providers—therefore an in-house HR department may work
for it.

 Importance of HRM:

 
Ten Reasons Why the Human Resources Department Is Important:
1. Human Capital Value : Having an in-house human resources function is important. An in-house human resources staff or a human resources expert on staff can increase the understanding of how important human capital is to the company's bottom line. For small businesses, in particular, human capital is critical because so many smaller firms have employees who perform cross-functional duties. With a smaller workforce, if just one person leaves, it leaves the company with a huge gap to fill and a potential threat to the company's profitability.
2. Conflict Resolution: Workplace conflict is inevitable, given the diversity of personalities, work styles, backgrounds and levels of experience among employees. A human resources manager or a staff person specially trained to handle employee relations matters can identify and resolve conflict between two employees or a manager and employee and restore positive working relationships.
3. Budget Control: Human resources curbs excessive spending through developing methods for trimming workforce management costs, which includes negotiating better rates for benefits such as health care coverage. In addition, human resources ensures competitive and realistic wage-setting based on studying the labor market, employment trends and salary analysis based on job functions. As some small businesses have budget constraints , this human resources function is especially helpful.
4. Training and Development: Human resources conducts needs assessments for the organization's current workforce to determine the type of skills training and employee development necessary for improving skills and qualifications. Companies in the beginning or growth phases can benefit from identifying training needs for existing staff. It's much less expensive than the cost to hire additional staff or more qualified candidates. In addition, it's a strategy that also can reduce turnover and improve employee retention.
5. Employee Satisfaction: Human resources specialists usually are charged with the responsibility of determining the level of employee satisfaction -- often an ambiguous measurement at best. With carefully designed employee surveys, focus groups and an exit interview strategy, human resources determines what underlies employee dissatisfaction and addresses those issues to motivate employees.
6. Performance Improvement: Human resources develops performance management systems. Without a human resources staff person to construct a plan that measures performance, employees can wind in jobs that aren't suitable for their skills and expertise. Additionally, employees whose performance falls be low the employer's expectations can continue on the payroll, thereby creating wasted money on low-performing employees.
7. Cost Savings : The cost to hire new or replacement workers, including training and ramp-up time, can be exorbitant for employers, especially small businesses. With a we ll-constructed recruitment and selection process, the human resources function can minimize expenses regarding advertising job postings , training new employees and enrolling new employees in benefits plans.
8. Sustaining Business : Through succession planning that human resources develops, the company identifies employees with the promise and requisite capabilities to eventually transition into leadership roles with the company. This is an important function as it can guarantee the organization's stability and future success.
9. Corporate Image: Businesses want to be known as the "employer of choice." Employers of choice are the companies that receive recognition for the way they treat employees; they are the companies for whom people want to work. Becoming an employer of choice means human resources balances recruiting the most qualified applicants, selecting the most suitable candidates and retaining the most talented employees.
10. Reliability: Human resources ensures the workforce embraces the company's philosophy and business principles. From the perspective of a small business, creating a cohesive work environment is imperative. The first opportunity human resources has to accomplish this is through wise hiring decisions that identify desirable professional traits, as well as orientation and on-boarding programs.

Significance of HRM:

 
The significance of HRM can be discussed under the following headings.  

Organization Significance: HRM is of vital importance to the individual organization as a means for achieving their objectives. It contributes to the achievement of organizational objectives in the following ways:
 Good human resource practice can help in attracting and retaining the best people in the organization.
 Developing the necessary skills and right attitudes among the employees through training, development, performance appraisal, etc.
 Securing willing cooperation of employees through motivation, participation, grievance handling, etc.
 Effective utilization of available human resources.
 Ensuring that enterprise will have in future a team of competent and dedicated employees.

 
Social Significance : Social significance of HRM lies in the need satisfaction of personnel in the organization. Since these personnel are drawn from the society, their effectiveness contributes to the welfare of the society. Society, as a whole, is the major beneficiary of good human resource practice.  

 i. Employment opportunities multiply.
ii. Eliminating waste of human resources through conservation of physical and mental health.
iii. Scare talents are put to best use. Companies that pay and treat people well always race ahead of others and deliver excellent results.

Professional Significance : Professional significance of HRM lies in developing people and providing healthy environment for effective utilization of the ir capabilities. This can be done by:    

1. Developing people on continuous basis to meet challenge of their job.
2. Promoting team-work and team-spirit among employees.
3. Offering excellent growth opportunities to people who have the potential to rise.
4. Providing environment and incentives for developing and utilizing creativity. 

 References:

 Kleiman, Lawrence S. Human Resource Management: A Managerial Tool for Competitive Advantage.
Cincinnati: South-Western College Publishing, 2000.
 Shyamkant Gokha le Personnel Management, Everest ,2012
 Hiltrop, J.-M. (1996),The Impact of Human Resource Management on organizational
 Performance: Theory and Research‘, European Management Journal