Human resource (HR) management is the overall approach to how a company manages its employees to meet strategic objectives and gain a competitive advantage.
Functions of human resource management
Human resource management activities vary depending on a company's size, but almost always includes administrative, operational, and strategic functions – even if one person does them all.
HR functions can be carried out using one or multiple HR systems or manually. Let’s look at some of the tasks carried out by human resource management teams.
EFFECTIVE HUMAN RESOURCE MANAGEMENT HELPS ENSURE THAT EMPLOYEES ARE WORKING TOWARD YOUR COMPANY’S GOALS.
Administrative tasks
The HR department's administrative tasks and skillset are critical for managing your employees. An HR administrator’s role could include:
- Preparing and distributing offer and termination letters
- Organising and maintaining employee records
- Tracking sick and vacation days
- Providing relevant employee information to payroll systems
- Updating company policies
- Answering employee queries about HR-related issues
Many of these HR tasks are business-critical and are required for compliance with state and federal employment law. They can be completed using standard office software, or automated using a human resource information system (HRIS). To choose what works for your company, consider the size of your employee headcount, the volume of employee transactions, and the cost of hiring HR administrators.
For a company of roughly 10 people, employee records can probably be adequately maintained in a spreadsheet. Companies with more than 100 employees, though, will benefit greatly from using specialised HRIS software. If your company falls somewhere in between, the decision will depend on how much manual administration business leaders are willing to handle.
Operational management
HR carries out a range of important day-to-day operational functions that keeps business moving. HR operational activities include:
- Talent management , such as recruiting, hiring, and retaining employees, as well as employee relations and support
- Overseeing compensation and benefits
- Training and development of staff
- Maintaining HR regulatory compliance
These functions quickly become more complex as organisations grow, potentially requiring the need for a HRIS. For instance, if you hire only one or two people per year, you won’t have many candidates to track or interviews to schedule. But if your company is growing and multiple roles are being recruited at one time, an applicant tracking system (ATS) may help keep the process organised and save HR’s and managers’ time.
ATS software is used to support the hiring process by enabling recruiters to track candidate information and resumes to more easily match job openings to suitable candidates.
Add value with strategic activities
If administrative tasks and operational functions are core to HR, strategic activities are the difference between good and great human resource management.
A strong HR management function links HR strategy with the company’s larger mission. Without this connection, your company might not be reaping the full rewards of your employees’ hard work.
Here are strategic people-related questions that HR strategists might consider:
- Are we managing and using our people effectively?
- Can we identify missing competencies needed to enhance individual and company performance?
- Do we tie individual performance appraisals and compensation to key competencies?
- Do we have effective and efficient approaches for designing business processes, succession planning, and career development?
- Does our employee base have the skill sets the business needs to grow?
The best way to answer these questions is to analyse the underlying data. For example, reviewing performance appraisals might help you determine whether employees are aligned with the company’s mission or if they need more support to buy in. This includes assessing if the employee earned a pay rise or bonus, or needs further training to accelerate their career growth.
Get support from HR information systems
For many organisations, HRIS software is an essential contributor to efficient HR management. HRIS drives efficiencies by automating aspects of HR, such as payroll, benefits administration, and compliance. Some may also include a combination of recruiting, performance management, training, and reporting modules.
Perhaps the most important benefit of HRIS software is having everything in one central database. This makes retrieving and managing information easier and more secure than managing records manually, simplifying compliance. It also improves accuracy because it’s faster and easier to search for information.
Many payroll companies provide systems that act as a workforce management tool, enabling you to track and integrate all information that impacts payroll. Some software even covers talent management, simplifying the hiring, retention and development of employees. HRIS software can track and analyse employee performance and compensation, helping business leaders evaluate diversity statistics, or provide self-directed learning.
Key Takeaways on the importance of human resource management
Effective human resource management helps businesses ensure that employees are satisfied, motivated and working towards company goals. Accomplishing this in an efficient manner usually requires some process automation and system support.
The right HRIS software provides leaders with data and information to make important operational and strategic business decisions faster and more efficiently.