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Dave Ulrich (Management Educator, Author): “HR must give value or give notice.”
The functions of human resource management are as diverse as the array of job roles and their responsibilities. Each role of an HR manager ensures that organizations not only attract and retain top talent but also foster a productive and positive workplace culture.
By leveraging advanced technologies and innovative practices, HR professionals are now better equipped than ever to contribute to their organizations’ strategic goals and overall growth. In this blog, we will explore the importance of human resources and 14 key functions of HR to achieve strategic goals of the organization.
Importance of Human Resource Management HRM
Effective Human Resource Management (HRM) is essential for organizational success. According to a study by the Harvard Business Review, companies with strong HRM practices are 1.4 times more likely to outperform their peers. Familiarity with human resource tools and technologies are an important aspect of screening HR in 2024. From leveraging online assessment for screening to assessing KPI and planning succession, HR roles require adaptability and an openness to constant learning.
What are the Functions of Human Resource Management?
Studies by Forbes claim that there should be at least 1 HR staff for every 100 employees. However, many companies often prefer 3 HR staff per 100 employees, just to be extra sure. You see, accountability, initiatives, and innovation are the core HR roles and functions.
Moreover, as the workplace holds a variety of roles for an HR Manager, diverse skills are often expected from the professionals aspiring for HR jobs. Some of the key roles of the HR industry are linked to the 14 following functions:
Strategic Human Resource Planning
The function of Human Resource Management includes Strategic Human Resource Planning (SHRP) which ensures that an organization has the right number of people with the right skills at the right time. According to a survey by Deloitte, 86% of companies cite SHRP as a top priority, yet only 14% believe they do it well. Effective SHRP can lead to a 20% increase in organizational performance. This is done by right selection of assessment platforms and tools that manage talent data.
Talent Recruitment and Selection
Leveraging HRtech (such as, psychometric tests, behavioral assessments, and other talent assessments) to effectively hire team members is the next crucial function of human resource management that contributes to organizational success. According to LinkedIn, 70% of the global workforce is made up of passive talent who aren’t actively job searching. Companies with a strong talent acquisition strategy improve their hiring quality by 70%. This leads to a proportionate workforce with high productive potential.
Performance Management
Performance management systems are essential for aligning employee performance with organizational goals. HR managers often use post hire metrics obtained via tools like 360 degree feedback, managerial assessments, satisfaction surveys, etc. for gauging the employee performances. Research by Gallup shows that companies with effective talent management systems are 21% more profitable. Additionally, organizations with continuous feedback processes (such as 360 degree feedback) see at least 14.9% lower turnover rate.
Training and Development
Investing in employee training and development leads to higher productivity and retention. Hence, it makes for an important HR role. According to the Association for Talent Development, companies that offer comprehensive training programs have 218% higher income per employee than those without formalized training. This also supports the cause for retaining talents as 94% of employees often stay longer at a company that invests in their career development.
Rewards and Recognition
Recognition programs significantly impact employee engagement and retention. Identifying the high potentials and high performers can help in appraising the workforce fairly. A study by Bersin & Associates found that companies with effective recognition programs have 31% lower voluntary turnover. Additionally, organizations with strong recognition practices are 12 times more likely to have strong business outcomes!
Career Planning
Career planning helps employees align their personal goals with organizational objectives. According to a survey by Right Management, 82% of employees who have a career development plan are more engaged in their work. Companies that support career development see a 34% higher retention rate along with higher engagement and productivity. Career planning for individual employees is often done by providing the right training that focuses on enhancing the employees’ weaker competencies.
Function Evaluation
Regular evaluation of HR functions covers all the functions of human resource management with organizational goals. According to a study by the Society for Human Resource Management (SHRM), organizations that regularly evaluate their HR functions are 29% more likely to outperform their competitors. The HR function is usually evaluated with the metrics of successful and qualitative hiring, training, and retaining top employees for the organization.
Industrial Relations
Effective industrial relations contribute to a harmonious work environment. This is also a remote role of HR in an organization. According to the International Labour Organization (ILO), companies with strong industrial relations practices see a 25% reduction in labor disputes.
Employee Participation and Communication
Employee participation and communication are vital for engagement and satisfaction. To check the engagement and satisfaction of the workforce, HR managers rely on survey tools of engagement, happiness, motivation, and satisfaction. Gallup reports that companies with high employee engagement see a 21% increase in profitability. Additionally, organizations with effective communication practices are 4.5 times more likely to retain the best employees.
Information Sharing
Transparent information sharing fosters trust and collaboration within teams. HR professionals are the bridge between management and employees throughout the employment cycles. According to a study by McKinsey, companies with effective information sharing practices are 20% more likely to have high employee engagement.
Health and Safety
Human resource executives are also responsible for health and safety programs as they are crucial for employee well-being. The Occupational Safety and Health Administration (OSHA) reports that effective health and safety programs can reduce workplace injuries by 20-40%, elevating workplace experience and employee satisfaction.
Personal Well-being
If HR executives are effectively promoting personal well-being, it leads to higher job satisfaction and productivity. According to the American Psychological Association, companies that support employee well-being see a 10% increase in productivity.
Administrative Responsibilities
Efficient administrative processes ensure smooth HR operations. According to a study by PwC, companies with streamlined HR administrative processes see a 15% reduction in operational costs. Therefore, skills such as leadership, accountability, and managerial competencies are an essential indicator of a good HR member.
Policy Formulation
Clear HR policies provide a framework for consistent practices. According to SHRM, organizations with well-defined HR policies are 35% more likely to have high employee satisfaction. Employee job satisfaction leads to longer tenure periods saving a lot of new hire costs to the human resource department.
Compensation and Benefits
Competitive compensation and benefits packages are crucial for attracting and retaining talent. According to Glassdoor, 57% of job seekers consider benefits and perks among their top considerations before accepting a job. Companies with comprehensive benefits packages see a 41% reduction in turnover.
Conclusion
Effectively managing 14 core HR functions can bring an organization to new heights. It not only enhances their operational efficiency, but also fosters a positive workplace culture that attracts and retains top talent. As HR continues to adapt to new challenges and opportunities, leveraging innovative tools such as PMaps Assessments into their strategies will be key to driving sustainable growth and achieving long-term business objectives.
Here's your chance to level up your best HR practices, call us on +918591320212 or mail us at assessment@pmaps.in. Let's transform HR functions together!
