What Is Human Resource Management? What Does HRM Include?

1. What Is Human Resource Management? What Does HRM Include?

Human Resource Management (HRM) is the strategic and comprehensive approach to managing an organization’s most valuable asset – its employees. It encompasses all aspects of people management, from recruitment and hiring to training, performance evaluation, compensation, and employee relations. HRM aims to maximize employee performance to achieve the organization’s strategic objectives while fostering a positive work environment.

The concept of HRM has evolved significantly over time. Its roots can be traced back to the Industrial Revolution when the need for systematic workforce management became apparent. Initially known as personnel management, it primarily focused on administrative tasks and compliance. The shift towards modern HRM began in the 1960s and 1970s, recognizing employees as valuable resources rather than just cost factors. This evolution led to a more strategic approach, aligning human resource practices with organizational goals.

Key features of modern HRM include its strategic focus, integrated approach, and emphasis on human capital development. HRM functions now go beyond basic administrative tasks to include workforce planning, talent management, performance optimization, and organizational development. It plays a crucial role in shaping organizational culture, driving employee engagement, and ensuring legal compliance in increasingly complex regulatory environments.

HRM also leverages technology and data analytics to improve decision-making and streamline processes. Human Resource Information Systems (HRIS) and analytics tools help HR professionals manage employee data more effectively and derive insights to inform strategic decisions. Additionally, HRM is increasingly focusing on employee well-being, work-life balance, and diversity and inclusion initiatives, reflecting broader societal changes and expectations.

1.1. What Are the Key Objectives of Human Resource Management?

Human Resource Management (HRM) focuses on four primary objective categories: societal, organizational, functional, and personal. Each category plays a crucial role in ensuring effective people management within an organization.

1. Societal Objectives: HRM’s societal objectives center around responding to ethical and social needs of both the company and its employees. This includes ensuring compliance with legal standards, such as equal employment opportunities and fair pay practices. Additionally, HRM promotes corporate social responsibility initiatives, helping the organization contribute positively to society while maintaining ethical business practices.
2. Organizational Objectives: The organizational objectives of HRM aim to enhance overall efficiency and effectiveness. Key focus areas include:
   • Talent acquisition and retention
   • Employee training and development
   • Workforce planning and management
   • Performance optimization
3. Functional Objectives: Functional objectives ensure that HR operates effectively within the organization. This involves aligning HR strategies with overall business objectives, optimizing resource allocation, and streamlining HR processes. HRM also provides valuable analytics and insights to leadership, enabling data-driven decision-making in people management.

Personal Objectives: HRM’s personal objectives focus on supporting individual employee goals and well-being. This includes facilitating career development opportunities, enhancing job satisfaction, and promoting work-life balance. By addressing personal objectives, HRM helps create a positive work environment that fosters employee engagement and loyalty.

1.2. What Are the Core Functions of Human Resource Management?

The core functions of HRM represent the primary responsibilities and day-to-day activities that HR professionals manage. While the specific structure may vary, most HR departments encompass these core functional areas:

1. Talent Acquisition and Management 
2. Learning and Development 
3. Performance and Reward Management 
4. Employee Relations and Engagement 
5. HR Operations and Information Systems 
6. Organizational Development and Change Management 
7. Compliance and Risk Management 
8. Workforce Analytics and Planning

1.3. What Are Scope of Human Resource Management

The role of Human Resource Management (HRM) is covering the entire employee lifecycle within an organization. Its scope is broad and multifaceted, touching on various aspects of people management and organizational development.

1. Manage and set policies related to human resources: HR is the core for any business to support its development and be strong. And to improve the quality of human resources and ensure the regulations and policies of the state government, enterprises need to have specific guidelines related to different human resource departments.
2. Providing internal services for businesses – Recruiting employees: When receiving additional staffing notices, HR managers need to develop plans to attract more potential candidates. At the same time, organize interviews effectively, optimizing recruitment costs. Or human resource managers will actively give opinions and propose additional personnel, issues related to human resources of the enterprise.
3. Work performance management, job security: The employee-manager will be responsible for monitoring and checking other departments on implementing policies related to personnel. From there, we can evaluate the performance and the strengths or weaknesses of employees to come up with policies and plans to help manage human resources more smoothly. Simultaneously, measures are proposed to help employees maximize their capacity and potential at work.
4. Timekeeping, salary, and benefits for employees: To attract and retain employees, the human resource management department needs to ensure the regimes and benefits for the employees. Besides being between the legs, they will motivate employees to devote more to the business, with the ultimate aim of helping the firms grow more and more.
5. Training and developing human resources: The growth of a company is the growth of each individual in it. Therefore, developing and improving skills for employees is indispensable. Human resource managers will be responsible for orienting, proposing, and organizing training courses on employees’ knowledge, professional skills, and soft skills.

2. Employee Management Process

For any business, the human resource management problem is not easy. Each organization or business model group will have its methods and processes for managing employees differently. However, they will all have a basic framework from which to build. And that process will follow the following steps in order:

2.1. Human resource planning

A reasonable process and human resource management plan will help businesses manage their critical human resources more effectively. And Workforce Planning is the first step in the process.

Human resource planning is an activity to identify and manage the human resource needs of an organization or enterprise shortly (near or far). In particular, this plan includes calculating the company’s human resource supply and demand, forecasting current and future human resource trends, and finally developing and implementing an appropriate strategy. Given the complexities involved, partnering with experienced HR consulting professionals can be invaluable in ensuring that human resource planning remains effective and aligned with organizational goals.

2.2. Personnel recruitment

Recruitment is an essential step in the employee management process. It is an activity to find and attract potential candidates to interview. Depending on the recruitment requirements or the size of the business, the recruitment process will change flexibly. In general, the recruitment steps that most companies are using are: 

• Identify recruitment needs and the skills and experience required of candidates.
• Interviewing and recruiting candidates
• Determine the salary and the candidate’s policies and regimes following the salary bracket
• Announcement of regulations, corporate culture

2.3. Develop job descriptions for each position and personnel

A specific working process will help employees determine the direction of work faster. Work will not duplicate, overlapping between groups and departments on a larger scale. In addition, a specific, transparent process will make it easier for managers to track progress and evaluate employee results.

In addition to building a clear job description, human resource managers need to understand employees’ capabilities, strengths, and weaknesses to allocate the system to the appropriate positions to help them maximize their potential power.

2.4. Reward and punishment policy

Clear reward and punishment policies will be a top vital factor to attract many talents and retain them to stay at the company. These policies will take care of employees’ mental and physical well-being.

For effective employees, worthy rewards will help them feel recognized and appreciated for their efforts and abilities. It is encouraged to increase productivity and promote potential and work quality.

On the contrary, for underperforming employees, appropriately reprimanding will help them realize their mistakes, thereby adjusting their behavior and the way they work.

2.5. Document system applied in the company

Public documents regulate many enterprises, such as regulations on functions and tasks of departments and units, labor rules, limitations on punishment, rewards. The rules, regulations, and processes will be different depending on the business. Therefore, it is necessary to rely on practice to develop appropriate internal normative documents.

2.6. Building and developing company culture

Last but not least, corporate culture is an indispensable element in human resource management. The core of corporate culture lies in the spirit and values ​​of the enterprise. A strong corporate culture is a foundation to maintain employee engagement and dedication to the business, thereby helping the business to stand firm. And the human resources department is the one to shape and nurture this culture through the company’s regular training sessions and meetings.

3. Top 5 Golden Rules of Effective Employee Management

3.1. Advanced skills

Professional skills are necessary skills for any job, including human resource management. Some of the professional skills that an HR manager should have are:

• Anticipate staffing needs.
• Planning human resources, sketching potential candidates.
• Hold an impressive interview with many questions that capture the candidate’s personality.
• Building a two-way internal information system.
• Help new employees integrate into the company

3.2. HR skills

Of course, as an HR manager, you need to master HR skills such as:

• Planning and organizing human resource recruitment
• Employee management strategy
• Orientation for training and human resource development
• Organizational design
• Salary and benefits for employees

3.3. Work skills

The ability to calculate salary and bonus, understand the labor law, and organize the personnel apparatus are skills that an employee-manager needs to know. In addition, to do this job well, human resource managers must have good analytical, evaluation, and organizational skills. If there is uncertainty about handling the complexities involved, outsourcing can help develop a salary structure that properly aligns with the company’s needs.

3.4. Communication skills

Good communication and teamwork skills are crucial in a natural working environment with many people. It is necessary to be skillful, flexible in behavior and communication, grasp human psychology quickly, and always be ready to help and give appropriate advice.

3.5. Negotiation skills

Not only need good communication, but the HR profession also needs to have remarkable persuasion skills. Human resource managers need to face issues between employees and employers, solve problems between people, and mediate internal conflict.