Why Do Companies Need a Human Resources Department?
In order to understand the vitality of the Human Resource department in an organization one must first understand what the Human Resource department is about.
Human resource management (HRM), or human resource development, entails planning, implementing, and managing recruitment, as well as selection, training, career, and organizational development initiatives within an organization. The goal of HRM is to maximize the productivity of an organization by optimizing the effectiveness of its employees while simultaneously improving the work life of employees and treating employees as valuable resources. Consequently, HRM ...view middle of the document...
“Owing to the small size of the organisation, the motivation and morale of each employee has a direct and visible influence on the productivity of the organization […] lack of attention by owner-managers in developing and formalising HRM systems may create barriers to organisational growth […] Lack of a formal policy often leads to ad-hoc and uncoordinated management of human resources and loss of valuable time of the owner-manager in resolving similar/routine issues on a case-by-case basis. They also found an inverse relationship between the extent of involvement of the owner-manager in managing human resources and the existence of a formal HRM policy ” (Singh and Vohra).
The Case for HRM
Human Resource Management is one of the key components of many organizations and deals with every company’s most important resource, their people. There is agreement that it can do this by effective talent management, helping with change management, influencing business strategy, and a host of other high-value-added activities that impact organizational effectiveness. “[H]uman resource management policies can represent a significant source of competitive advantage because they allow a firm to locate and develop employees who are more effective than those of competitors. Superior employees create superiority both in primary value chain activities (such as managing inbound logistics) and in support activities (such as development of a high-quality infrastructure). Porter thus posits strong interactions between the quality of a firm’s human resource management practices and its sources of advantage in competitive markets” (Koch and McGrath 1996).
There have also been many studies done on the improvement in productivity, creativity, job satisfaction, etc. of diverse workforces vs homogenous workforces. “We have reviewed six ways in which the presence of cultural diversity and its effective management can yield a competitive advantage. Organizations wishing to maximize the benefits and minimize the drawbacks of diversity, in terms of workgroup cohesiveness, interpersonal conflict, turnover, and coherent action on major organizational goals, must creat "multicultural" organizations. The typical organization of the past has been either monolithic (homogeneous membership with a culture dominated by one cultural group) or plural (obstensively diverse membership but still culturally monolithic and without valuing and using differences to benefit the organization). By contrast, the multicultural organization is one where members of nontraditional backgrounds can contribute and achieve to their fullest potential” (Cox and Blake).
Human resource managers themselves are an important and desirable commodity with a median pay of $99,180 per year and about average expected job growth of 13%.
Human-Resource Management performs 5 key functions:
2) Compensation & Benefits
3) Evaluation and Management (Appraisals / Trainings / Work enhancement...