7 Human Resource Management Basics You Should Know:
What is Human Resource Management Basics?
Human Resource Management Basics is the process of recruiting, selecting, inducting employees, providing orientation, imparting training and development, appraising the performance of employees, deciding compensation and providing benefits, motivating employees, maintaining proper relations with employees and their trade unions, ensuring employees safety, welfare and health measures in compliance with labor laws of the land and finally following the Orders / Judgments of the concern High Court and Supreme Court, if any.
Why do we call it as Human Resource Management?
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Human: refers to the skilled workforce in an organization.
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Resource: refers to limited availability or scarce.
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Management: refers how to optimize and make best use of such limited or scarce resource so as to meet the organization goals and objectives.
The seven Human Resource Management Basics
- Recruitment & selection
- Performance management
- Learning & development
- Succession planning
- Compensation and benefits
- Human Resources Information Systems
- HR data and analytics
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Recruitment & selection it is the first between the seven Human Resource Management Basics
Recruitment and selection are arguably the most visible elements of HR. We all remember our first interview, right?
Recruiting candidates and selecting the best ones to come and work for the company is a key HR responsibility. People are the lifeblood of the organization and finding the best fits is a key task.
The request for new hires usually starts when a new job is created or an existing job opens up. The direct manager then sends the job description to HR and HR starts recruiting candidates. In this process, HR can use different selection instruments to find the best person to do the work. These include interviews, different assessments, reference checks, and other recruitment methods.
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Performance management
Once employees are on board, performance management becomes important. Performance management is the second HR basic. It involves helping people to perform better in their jobs.
Usually, employees have a defined set of responsibilities that they need to take care of. Performance management is a structure that enables employees to get feedback on their performance – with the goal to reach a better performance.
Examples are formal one-on-one performance reviews, 360-degree feedback instruments that also takes into account the evaluation of peers, clients, and other relations, and more informal feedback.
Usually, companies work with an annual performance management cycle, which involves planning, monitoring, reviewing, and rewarding employee performance. The outcome of this process enables the categorization of employees in high vs. low performers and high vs. low potentials.
Successful performance management is very much a shared responsibility between HR and management, where usually the direct manager is in the lead and HR supports. Good performance management is crucial, as employees who consistently under-perform may not be a good fit with the company and/or culture and may have to be let go.
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Learning & development
If employees struggle to perform well in certain areas, learning and development can help to improve their performance. Learning & development (L&D) is led by HR and good policies can be very helpful in advancing the organization towards its long-term goals.
Many organizations have pre-defined budgets for L&D efforts. This budget is then distributed among-st employees, with trainees, future leaders, and other high potentials often receiving more training opportunities than others.
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Succession planning
Succession planning is the process of planning contingencies in case of key employees leaving the company. If, for example, a crucial senior manager quits his/her job, having a replacement ready will guarantee continuity and can save the company significant money.
Succession planning is often based on performance ratings and L&D efforts. This results in the creation of a talent pipeline. This is a pool of candidates who are qualified and ready to fill (senior) positions in case of someone leaving. Building and nurturing this pipeline is key to good people management.
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Compensation and benefits
Another one of the HR basics is compensation and benefits. Fair compensation is key in motivating and retaining employees.
Compensation can be split up in primary compensation and secondary compensation. Primary compensation involves directly paid money for work, which often is a monthly salary and sometimes performance-based pay.
Secondary benefits are all non-monetary rewards. This can include extra holidays, flexible working times, day-care, pensions, a company car and laptop, and much more.
The goal here is to reward people in ways that motivate them.
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Human Resource Information System
The last two HR basics are not HR practices but tools to do HR better. The first is the Human Resource Information System, or HRIS. An HRIS supports all the cornerstones we discussed above. For example, for recruitment and selection an Applicant Tracking System, or ATS, is often used to keep track of applicants and hires.
For performance management, a performance management system is used to keep track of individual goals and put in performance ratings.
For L&D, a Learning Management System (LMS) is used for the distribution of content internally, and other HR systems are used to keep track of budgets and training approvals.
For compensation, a payroll system is often used, and there are also digital tools that enable effective succession planning.
All these functionalities can often be done in one single system – the HRIS. Sometimes, however, the management of these functionalities is split up into different HR systems.
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HR data and analytics
The last of the HR basics revolves around data and analytics. The last half decade, HR has made a major leap towards becoming more data-driven.
The Human Resource Information Systems we just discussed is essentially a data-entry system. The data in these systems can be used to make better and more informed decisions.
An easy way to keep track of critical data is through HR metrics or HR KPIs. These are specific measurements that answer how a company is doing on a given measurement. This is referred to as HR reporting.
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