Managing Your Workforce

Introduction

Human Resource Management, or HRM for short, is one of the most important elements in running a successful business, although it isn’t always treated with the time and focus that it deserves. To completely understand what HRM is and its impact on the success or failure of a business, we first need to know what it means.

The purpose of Human Resource Management is to recruit, develop and utilise the personnel within an enterprise in the manner in which is most appropriate to accomplishing the aims and objectives of the organisation.

This effectively translates to “using individuals in the business in the best way possible” although that would be an over-simplified statement that does not echo the true nature and range of HRM. HRM describes all of the strategies and procedures that are involved in ensuring that all members of staff within a business are pulling in the same direction, and much more importantly, in the right direction. Without good human resource management a company will be expending effort on jobs that it may not directly gain from.

At its center, HRM brings together three primary elements that are essential to the productive output of the workforce. These factors include motivation, management and leadership, and organisational structures. As a result, HRM can be applied to all levels of management within your business, not just the shop floor personnel, and it can even be used to adjust the structure of those levels of management as well. It is a wide-ranging subject that is explained in greater detail in this article.

Why is it Necessary?

Quite simply, businesses don’t work without workers. As such, some level of human resource management is required for any business to operate at all, let alone in an efficient and prosperous manner. Even if you don’t appreciate exactly how HRM affects the day-to-day running of your company you will surely be employing some kind of HRM in order to keep trading.

Human Resource Management has an effect on every level of your corporate activities with varying degrees of visibility. The most obvious HRM tasks include the hiring and firing of employees as well as monetary systems such as payroll. It may also impact on motivation and communication within your company, which are much more intangible variables but are critical nonetheless. Poor HRM practice in these less visible domains can have a damaging impact on your company but go unnoticed for long periods of time.

It also goes without saying that every company is different and will have a different set of challenges to face and opportunities to take advantage of. HRM can work as a flexible tool that translates workforce power into financial gains and can adapt to fully utilise the strengths of your company. Without it, your competitors could be afforded the chance to succeed where you missed out.

Organisations that are established to supply for organisation formats like shelf companies must have a well-trained workforce in place.

Impact on Business

While this all appears very interesting and significant, how does it actually impact on the daily operations of your company, and more importantly, how will it help to enhance the performance and profitability of your company?

Recruitment & Training

This is most likely the area of a business that is most associated with human resources – recruitment. Nearly every business in the world, and particularly businesses that are growing, have to recruit people to work for them. Either existing employees have left, or new opportunities have arisen which mean there are jobs that need to be filled.

It is also important to keep your staff training procedures up-to-date to make sure that your staff is fully capable of doing the job they are there to do. Regardless of whether it is a new piece of legislation or a new bit of technology that changes the market, there is an on-going requirement to keep your company up-to-date and prepared to make use of any opportunity.

You may also find that the expensive process of external recruitment can be averted if your organisation has sufficient training facilities in place. It is much easier to teach an existing worker to a higher level and then use external recruitment to fill the gap left at the lower level than it is to recruit directly to a higher level.

Employee Relations

When you have the suitable men and women working for you it is necessary to keep them working for you, and to make certain they are doing a good job. This can be accomplished by means of good employee relations. The most obvious employee relations exercise is the art of motivation – a broad topic by itself – but other employee relations issues may include disciplinary and grievance management.

Finances

You can’t keep employees at your company by good motivational methods alone. They will want to be paid a fair sum and on time. Payroll should be one of the first systems that is created when you start a business, but they still need to be maintained and updated when staff join, leave or switch pay grade. Incorrect management of your payroll system can rapidly lead to catastrophe in terms of your workforce.

Industrial Relations

Many firms will have to deal with trade union or other workers rights organisations which can be incredibly forceful when defending the interests of their own members. When dealing with such bodies it is beneficial to have individuals within your company who can connect effectively with them whilst keeping the interests of your own business in mind as well. The need for good industrial relations is far more prevalent in public sector organisations.

Among the simplest ways to identify whether private limited companies have very good worker relations is to ask current staff if they are satisfied in their jobs.

Workforce Planning

We have seen the effect that human resource management may have on a company and overall it seems like good HRM will have a beneficial effect on any company. As a rule, this is the case, but effective HRM doesn’t just happen overnight. It should be planned according to the objectives of the company and then carried out thoroughly.

One way to apply HRM ideas to your business is through workforce planning – a system that has the aim of making sure your workforce can finish the upcoming tasks required for your business to be successful.

Definition

Workforce planning is the process of anticipating in advance the human resource needs of any organisation, both in terms of the number of employees necessary and the appropriate skill mix. Recruitment and training procedures are devised with a long term focus in order to ensure that the company is able to operate without being limited by a shortage of appropriate labour. Workforce planning can be broken down into four main parts; requirements, recruitment, selection, and training and development.

Requirements

Analysing your workforce requirements is vital to the proper planning of your workforce in the short-term and long-term future. If your business is subject to seasonal shifts in demand, for example in the tourism industry, or is prone to seasonal fluctuations in staff levels then your workforce planning must take these factors into consideration.

Recruitment

Whether you are recruiting externally or from inside your existing workforce you still need to find the right person to fill the role. As part of your workforce planning you should draw up a job description that describes the role that will be undertaken as well as a person specification which will give an indication of the kind of individual that would be a good fit for the job and your business.

Selection

The selection procedure can be as involved or as easy as you deem necessary. Over and above regular job selection interviews there are a number of ways you can learn about candidates for your jobs, including aptitude tests, group interviews or even psychometric testing. These advanced techniques may not be applicable to all workforce planning projects but are an option to organisations.

Training & Development

The primary goal of staff training and development is to produce a better quality of worker in your organisation. Workforce planning can use training to plug upcoming gaps in the skill set of your staff and is generally faster and more economical than external recruitment.

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Workforce Motivation

It practically goes without saying that well motivated employees are going to produce a better standard of work and have a higher quantity of output than unsatisfied workers. This improved work rate will undoubtedly lead to a rise in the profitability of a company.

Essentially, all motivational practices can be separated into two models that are often called the “carrot and stick” approach to motivation. The analogy refers to the two approaches to make a donkey carry your possessions, either by tempting it with a carrot, or threatening it with a strike from a stick! It is a relatively old idea but the principle remains relevant to companies today.

Whether you use the carrot approach or the stick strategy will largely depend on your own management style, as well as the business you work in and the type of people that you employ. Irrespective of your approach, motivational factors can be separated into a further two groupings; financial and non-financial motivators.

Financial

The most typical financial motivators are payment schemes. You can pay workers in many different ways, either a fixed amount for a fixed service, by an hourly or daily rate, or a rate related to production, such as a commission structure. Whichever method is employed, the workforce is motivated to work because they will receive money for doing so.

Another financial motivation technique involves what are called incentive schemes, where additional financial rewards are handed out for good overall performance. This may include commission beyond a fixed salary, performance-related pay grades or even providing a share of company profits.

Non-financial

Several human resource advocates have their own thoughts about the other elements that motivate people to work, although these are often seen as an added bonus to a worker. It is widely acknowledged that income is the critical motivational factor for the vast majority of people. If you would like to learn more about these theories I would recommend looking up the work of Elton Mayo, Abraham Maslow as well as Fredrick Herzberg.

The Changing Face of HRM

As previously stated, HRM is a versatile application that is there to match the characteristics of your staff to the objectives of your organisation. As a result, it has had to keep adapting to a corporate climate that is continuously changing for one reason or another.

Perhaps there is a new piece of government law that may have an effect of how your company can carry out its trading, or maybe a new manufacturing technology will come along that can revolutionise your industry. Either way, if you want to ensure that your workforce is performing to its maximum level then your HRM strategy should be flexible enough to cope with an ever-changing world. After all, what might seem like a risk to most will often appear as an opportunity to a good entrepreneur.