Introduction

The Basics of Human Resource Management

What is Human Resource Management (HRM)?

HRM is the management of employees in a way that enables them to help a firm reach its strategic objectives. It covers all aspects of the employee lifecycle, from recruitment to retirement.

Learning Outcomes

  • Explain the importance of employee recruitment and sources of applicants.
  • Identify the steps in evaluating job applicants.
  • Describe the roles of training and development for employees.
  • Explain the various types of compensation and incentive plans.
  • Discuss HR issues such as co-employment and labor unions.

Recruiting Goals

The primary goal of recruitment is to obtain a pool of potential employees that is large enough to contain a number of talented prospects.

Sources of Employees

  • Walk-ins
  • Help-wanted Advertising
  • Public Employment Offices
  • Private Employment Agencies
  • Temporary Help Agencies
  • Internet Recruiting
  • Employee Referrals
  • Executive Search Firms (Headhunters)

Job Descriptions & Specifications

Job Description: An outline or summary of the work to be performed for a particular position.

Job Specification: A list of the knowledge, skills, abilities, and other characteristics needed to perform a specific job.

Steps in the Selection Process

  1. Using Application Forms: To gather standardized information from all applicants.
  2. Interviewing the Applicant: For an in-depth assessment of skills, experience, and cultural fit.
  3. Checking References and Other Background Information: To verify the information provided by the applicant.
  4. Testing the Applicant: To measure job-relevant skills, abilities, or personality traits.
  5. Requiring Physical Examinations: To ensure the candidate is physically capable of performing job tasks (if relevant).

Basic Components

  • Orientation for new personnel
  • Training to improve quality
  • On-the-job training
  • Managerial and professional development

Steps in Job Instruction Training

  1. Preparation: Put employees at ease and get them interested.
  2. Presentation: Tell, show, and illustrate the task.
  3. Try Out Performance: Have employees perform the task and provide corrections.
  4. Follow Up: Check on progress and encourage questions.

Forms of Compensation

A well-designed compensation system can attract, retain, and motivate employees.

Wage and Salary Levels

The basic compensation paid to employees.

Financial Incentives

Bonuses or commissions based on performance.

Stock Incentives

Providing ownership in the company (e.g., ESOPs).

Employee Benefits

Health insurance, retirement plans, paid time off, etc.

Important Topics in Modern HRM

  • Co-employment Agreements: Sharing employer responsibilities with a professional employer organization (PEO).
  • Legal Protection of Employees: Complying with labor laws to avoid legal issues.
  • Labor Unions: Interacting with organizations that represent the collective interests of employees.
  • Formalizing Employer-Employee Relationships: Creating clear policies and procedures via an employee handbook.
  • The Need for a Human Resource Manager: Required when employee numbers are substantial, a union is present, or turnover is high.