No matter the industry or product, every company needs to operate something, and that is people.
Just as there are professionals dedicated to managing products and services, there is also a need for human resource management.
Learn what it is and the key functions every HRM needs to function.
What is Human Resource Management?
Human resource management refers to the process of dealing with employee-related matters in the workplace, from recruitment and performance to compensation and career development.
Lately, we’ve heard that the term “people operations” is used much more often than HR. Are they the same? not completely. People operations are technically considered a subset under HR. However, in many companies they are used interchangeably.
While HR focuses on structural and legal pillars such as recruiting, compliance, compensation and benefits, HR focuses on cultural impact and focuses on issues such as employee satisfaction, productivity, diversity and inclusion.
5 Main functions of human resource management
1. Recruitment and Staffing
When you think of human resources, recruiting and staffing are probably the first things that come to your mind.
Human resource management requires working hand-in-hand with recruiters to identify top talent, set budgets, conduct background checks, and negotiate compensation and benefits.
Additionally, they must be proficient in employment law to understand how to comply with federal and state legislation on worker rights, discrimination, and more.
HRM also oversees onboarding, the process of integrating new employees into the company. This includes setup training, provision of equipment and access to necessary software, and team introductions.
Knowing how new employees respond to them helps ensure the employee’s long-term success with the company.
In fact, Microsoft’s 2021 data shows that new hires are 3.5 times more likely to be satisfied with their onboarding experience if managers take an active role.
Armed with this information, they can adjust processes to increase managerial involvement in onboarding.
2. Employee Relations
A 2021 study by Harvard Business Review found that 89% of workers are dissatisfied with their jobs — 85% say their well-being has declined and 56% say their job demands have increased.
For HR, this is a major problem as it directly leads to high churn. HR professionals are tasked with identifying these issues through internal NPS surveys, meetings, and other methods, and then building systems to address them.
In addition to these responsibilities, conflict resolution is another major aspect of the employer-employee relationship in the workplace. This can be anything from friction between two employees who don’t get along to claims of sexual harassment.
Human resource management is tasked with investigating these claims and taking appropriate action to maintain a safe workplace for all.
In addition to conflict, HR can develop communication standards to increase transparency and encourage openness. This might look like mandatory weekly one-on-one meetings between managers and direct reports, monthly skip-level meetings, quarterly AMAs, etc.
3. Learning and Development
Opportunities to learn and grow are now considered the number one factor defining a great work environment, according to 2021 Glint.
The survey also found that employees who spoke highly of their culture were 25% more likely to feel happy at work and 31% more likely to be recommended to work in their organization.
That’s why investing in employee development can directly impact a company’s bottom line.
This looks like assigning stipends to role-related courses, providing access to third-party providers, and hosting management training. Having options for individual contributors and managers is critical to ensuring the growth of all employees.
Once these programs are up and running, HR must evaluate their effectiveness and make changes as needed.
4. Performance Management
Performance management is another key HR function and involves setting performance metrics, reviewing plans, codes of conduct, and more.
For example, what if an employee underperformed during the quarter? What steps can they and their managers take? This process should be decided by HR.
From probation to termination and everything in between, Human Resource Management covers it.
5. Corporate Culture
A company’s culture is the set of values, beliefs, and behaviors that define how it operates.
Culture is important because it affects every aspect of a company, from the way employees interact with each other to the way they serve customers. Unhappy employees lead to unhappy customers.
Human resource management requires figuring out what employees want and cares about and balancing them with company resources. For example, since the start of the pandemic in 2020, people have turned to remote work.
While this may seem unrelated to company culture, the ease with which companies adapt to this shift is representative of their culture.
In 2020, a Glint report found that belonging was the second biggest driver of work culture, after opportunities to learn and grow. How do you create this sense of belonging?
That’s where HRM comes in – creating this environment and making sure it’s scalable and flexible.
Human resource management is an essential part of every organization, ensuring that their most important asset – people – has everything they need to succeed.