People are one of the most crucial assets of any organisation. They form the backbone of business success, as their performance, skills, expertise, talent, and satisfaction directly impact all aspects of an organisation’s productivity. 

In business terminology, the workforce of an organisation is referred to as its human resources. It not only represents the manpower but also the knowledge, creativity, and potential they bring to the table, positioning businesses towards success. 

Unlike other resources in an organisation, human resources deal with people who have emotions, ambitions, skills, and potential for growth. Managing them requires more than just systems and strategies. It demands a deep level of understanding, empathy, motivation, and development approaches to keep them satisfied, safe, and unlock their full potential. 

Most importantly, human resources are strictly regulated by labour laws globally. This makes it essential for businesses to thoughtfully consider how they are managed and to ensure compliance with local laws. 

This blog will give businesses a simple guide to understanding what human resource management (HRM) is, its importance, objectives, and the skills required for HR professionals. 

What is Human Resource Management

Human resource management, also known as HRM, is the process of recruiting, hiring, deploying, and managing the human resources of an organisation, i.e., its employees. 

HRM is sometimes referred to as HR (Human Resources). A company’s HR department is responsible for creating, implementing, overseeing, and managing the policies governing its employees and their relationship with the larger organisation. 

The business term "human resources" was first used in the early 1900s. Then, in the 1960s, it became more widely used to describe the people who work for an organisation, in aggregate.

In simple terms, human resource management is a key organisational function that focuses on employees as assets of the business. In this context, employees are sometimes referred to as human capital. 

As with other organisational assets, the goal of HRM is to utilise employees, reduce potential risks, and maximise return on investment (ROI). 

Today, the term Human Capital Management (HCM) is often used interchangeably with Human Resource Management (HRM) by large and mid-sized companies when discussing HR technologies. 

Importance of Human Resource Management 

The primary goal of human resource management is to manage the human resources or employees of the organisation, leading them to achieve the mission and reinforce corporate culture. 

Only when the HRM is managed effectively in an organisation can HR managers attract more potential employees to add to their talent base. Human resource management is crucial for retaining existing talent, keeping them motivated, and training them for professional development, which can help meet organisational goals. 

You have probably heard the saying, 'A company is only as good as its employees.' The human resources of a company contribute significantly to good word-of-mouth and organic branding, which can make or break corporate image in the labour market. 

Additionally, HRM is crucial for monitoring career trends and market dynamics for a specific job role, thereby keeping a firm competitive. This includes offering compensation packages and benefits that align with industry standards. 

Not to mention, HRM is also important to ensure working environments comply with safety benchmarks, and well-being programmes are planned to prevent employee burnout, and job roles are adapted based on market needs.

• Effective hiring and staffing

• Employee training and development

• Managing performance

• Improving employee satisfaction

• Handling conflicts

• Ensuring legal compliance

• Planning workforce needs

• Building a positive work culture

• Increasing productivity

• Retaining skilled employees

• Supporting business growth

5 Key Parts Of Human Resource Management (HRM)

The human resource management field encompasses various areas of management, including recruiting new hires, evaluating employee performance, ensuring fair compensation and benefits packages, providing training and support for education and professional development, and safeguarding the health and safety of all employees. These functions form the cornerstone of the roles and responsibilities of HR professionals. 

From recruitment to retention, and termination or exit, HRM functions at all stages of an employee’s journey with a company. Here are the key areas of tasks that form the structure for effective human resource management. 

1. Recruitment 

Recruitment is the process of identifying, attracting, and selecting suitable candidates to fill job vacancies within an organisation

A solid and reliable recruitment process is the foundation of a successful HR department. If an organisation can hire the right talent, build on their skills, and retain them, they are halfway set towards success. It also proves beneficial for attracting the right talent in the years to come, as a good reputation adds value to the organisation’s attractiveness in the labour market. 

Recruitment includes maintaining the right company culture. Regardless of the size, organisations want employees who can add to a healthy corporate culture. 

Generally, HR professionals use tools such as Indeed or SimplyHired, video interviewing, or even social media sites like LinkedIn for recruitment. Today, there are many customised HR software that can simplify recruitment, including features to shortlist the best fit for a given position based on preset parameters for candidate selection. 

2. Evaluation and Performance Management  

Evaluation and performance management is the process of assessing employee work performance, providing feedback, and setting goals to improve skills, productivity, and overall contribution to the organisation.

HRM departments use available data, including KPIs (Key Performance Indicators), to track employee performance. This enables them to identify training and development needs and cultivate a capable workforce. 

An effective evaluation and performance management process also includes merit-based systems to assess employees who deserve raises, bonuses, recognitions, and other incentives. 

Some may also opt to conduct interviews or surveys, as well as self- and peer evaluations, to support performance management. 

3. Compensation 

Compensation is an umbrella term that can refer to salary, commission, benefits, time off, or any other non-monetary benefits given to employees. The compensation package has always been a key indicator that potential candidates use as a factor to decide whether they want to join a company. 

Having an attractive compensation package that matches industry standards is crucial for maintaining a competitive position within the workforce. 

It also promotes a fair working environment and allows for maintaining a consistent company standard. Some companies also use performance reviews as a basis to decide on how to adjust compensation packages and benefits for existing employees. 

4. Employee Development and Learning 

Engaged employees are productive employees. Another key task of HRM is to understand the challenges faced by a workforce and provide the necessary support so they can perform at their full potential. They also play a key role in helping employees adapt to structural changes, system upgrades, technology shifts, and new policies. 

Most employees join a company looking for opportunities to grow their skills, expertise, and climb up the career ladder with room for advancement. This is why it is essential for HR departments to offer learning opportunities to employees. 

Employee development and learning can be facilitated through tuition reimbursement programs, on-the-job training options, conferences, conventions, or certification programs. 

5. Employee Health and Safety

The safety of an employee is not only compulsory from an ethical standard but also to be legally compliant. The safety and well-being of employees are becoming increasingly regulated, depending on job sectors. It covers both mental and physical safety. 

For example, physical safety involves building fire code compliance, whereas general safety encompasses adherence to labour laws to protect employee rights in the workplace. 

Employee health and safety protects employees from many aspects, including harassment, discrimination, or bullying in the workplace. It also includes cybersecurity or safeguarding an employee’s personal information. 

It is the complete responsibility of an HR department to ensure that the employees working in their organisation are given the due protection and safety to ensure their well-being during working hours. 

Some of the common ways HR departments address employee health and safety is by installing 

security cameras, enforcing internet usage rules, implementing a zero-tolerance policy, or creating restricted access areas.

Objectives of Human Resource Management 

The key objectives of human resource management can be broken down as follows: 

1. Societal Objectives

These are measures, functions, or standards established within HRM to address the ethical and social needs, as well as the general challenges faced by the company and its employees. This often covers legal frameworks such as equal opportunity and equal pay.  

2. Organisational Objectives

These are benchmarks or practices implemented by the HRM department of an organisation to ensure overall productivity. It focuses on efficiency, providing the right training, hiring the correct number of employees for a specific job role, and ensuring the company's retention rate remains high. 

3. Functional Objectives

These guidelines are thoroughly assessed and established to ensure the human resource management department of an organisation operates effectively. The key objective here is to ensure that all the company's HR resources are utilised to their full potential. 

4. Personal Objectives

The personal goals of each employee in an organisation fall into this category of HRM objectives. It encompasses opportunities for learning, career growth, and fostering overall employee satisfaction within the workplace. 

Skills and Responsibilities of an HR Manager 

Human resource management is a comprehensive organisational function that is typically broken into pre-employment and employment phases. Each phase has an HR manager, who will require different skill sets for the responsibilities assigned to them. 

These are the key set of responsibilities assigned for an HR manager (Which can be handled by a single HR manager, or split among the HR team) and the skills required to perform the specific HR task:

• Employee Recruitment: Sourcing, interviewing, candidate assessment, communication, decision-making

• Onboarding and Retention: Orientation planning, empathy, relationship building, organizational knowledge, feedback collection

• Training and Development: Instructional design, coaching, presentation, needs analysis, program evaluation

• Career Development: Mentoring, career counseling, succession planning, goal setting, listening

• Compensation and Benefits: Analytical thinking, negotiation, market research, benefits administration, attention to detail

• Labor Law Compliance: Legal knowledge, policy development, risk management, documentation, ethical judgment

• Talent and Workforce Management: Workforce planning, talent mapping, data analysis, adaptability, strategic thinking

• Employee Engagement and Recognition: Motivation, creativity, event planning, communication, cultural awareness

• Team Building: Facilitation, conflict resolution, leadership, collaboration, interpersonal skills

• Job Role Assignment: Job analysis, decision-making, organizational structuring, problem-solving, and clarity in communication

• Performance Management: Goal setting, feedback delivery, appraisal systems, coaching, observation skills

• Succession Planning: Long-term planning, assessment, forecasting, leadership development, confidentiality

While no skills are too many for human resource management, the most essential ones include, 

communication, recruitment and talent acquisition, employee relations, legal compliance, conflict management, performance management, strategic thinking, data analysis, adaptability, ethics, and confidentiality.

Simplify Human Resource Management With BSH 

It is evident that human resource management is a sensitive and complex task, yet one of the most crucial, as it involves employees, the most valuable asset of any organisation. 

Unlike other organisational functions, HRM demands a deep learning curve as it directly deals with people and their unique characteristics. It is also accompanied by strict regulatory frameworks, especially in the Middle East, which serves as the central hub for expatriate workers. 

At BSH, we understand that every business is unique, which is why we offer customised human capital management solutions designed to meet your specific needs. 

Whether you require support with recruitment, payroll, compliance, or performance management, our flexible and tailored services ensure your HR processes run smoothly, efficiently, and in alignment with your business goals.