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People are a company’s most valuable resource. They’re also one of the hardest resources to manage successfully. Every employee comes to work with a unique set of abilities, needs, and expectations, yet they all need to pull together to drive success.
The role of human resource (HR) management is to assess the work required to achieve a company’s goals, put the right people in the right positions to do the work, and empower them to perform at the highest possible levels.
As anyone who has worked in HR will tell you, that’s as much an art as a science.
Human resource management is the recruitment, management, and development of employees to serve an organization’s goals. In most businesses, this function is overseen by an HR manager or director.
Larger organizations may employ a department of specialists in specific human resource functions such as recruitment, benefits administration, and training. Many organizations manage one or more of these tasks with HR software. Others may outsource HR functions, such as recruiting or payroll, to a vendor.
The science of employee management involves using people analytics to evaluate how well your company is leveraging its talent. By tracking key HR metrics such as job applications and acceptance rates, quality of work, attendance, and employee turnover, people analytics provide objective data to guide HR strategy.
The art of HR involves relational aspects of a company’s culture such as team dynamics, communication styles, autonomy, and transparency. HR managers are often called on to provide a sounding board for employees, resolve conflicts between co-workers, and help employees navigate change.
Human resource management encompasses eight key functions.
Recruiting and hiring talent is one of the most important HR functions, and it goes far beyond attending job fairs and going through resumes. Workforce planning, writing job descriptions, advertising openings, screening and interviewing applicants, and helping managers make the best hiring decisions are all part of this critical HR function. HR managers need to do this while accomplishing the company’s wider goals of attracting a diverse, multigenerational workforce.
HR managers generally also provide support through the hiring and onboarding process, including making job offers, negotiating salary, and enrolling new hires in benefit programs.
To get the right people in the right positions, observe the following best practices:
Compensation management includes establishing salary ranges for positions, placing employees within the ranges based on their qualifications, and adjusting pay to recognize milestones and accomplishments. It also includes managing performance incentives such as year-end bonuses and sales commissions. The HR manager may be responsible for setting corporate strategy and working with front-line supervisors and managers to ensure competitive, equitable compensation practices across the organization.
Follow these steps to create an equitable compensation program:
Performance management is a continual process of evaluating how individual employees are performing, identifying areas of improvement, and recognizing achievement. Many organizations conduct performance reviews on a regular schedule, often annually, with additional reviews as desired by the employee or manager.
If an employee is underperforming or violating policy, employers may impose discipline or create a performance improvement plan with goals to achieve within a specific time period. For serious infractions, employees may be fired or placed on probation subject to firing. All disciplinary policies should be spelled out in the handbook, and managers should be trained to implement them accordingly.
A performance management plan helps all employees work to the best of their abilities. These practices will help:
According to the BLS, benefits make up approximately 30 percent of total employee compensation. Benefits that are provided as part of an employee’s compensation are known as fringe benefits. Fringe benefits have monetary value and are generally subject to taxation. Some examples include education benefits, child care assistance, and use of a company car. Administering employee benefits is a substantial part of the HR management function.
When evaluating your benefits package, it’s important to understand small business health insurance requirements and other mandates for employers.
The following tips will help you cut benefits management down to size:
It’s human nature to want to grow and learn new things, and employers who capitalize on that desire can reap substantial benefits. On-the-job training may include orientation training to introduce employees to company policies, procedures, and resources; training in job-specific skills and tools; safety training; company strategy meetings; and compliance training. Some companies provide education benefits to fund learning opportunities outside of work. These can range from conventions and seminars to college courses.
Developing employees requires an investment of employee time or benefit dollars. Yet education and training can pay off in higher quality, productivity, engagement, and retention. Deloitte recently identified the need to improve learning and development as the top-rated challenge among its 2019 Global Human Capital Trends, thanks to a tightening job market and the transformation of jobs due to technology.
To provide development opportunities that deliver results, consider these HR best practices:
Employee relations are all the activities that influence a company’s relationships with its employees. Positive employee relations create a happy workforce, which can provide a major competitive edge. A recent study by the World Economic Forum found that happy employees were 13% more productive than unhappy ones.
So what makes employees happy? The best way to find out what your employees want is to ask.
These practices lay the foundation for a positive employee relations program:
Providing a safe, healthy work environment is a critical function of human resource management. It includes tasks such as creating safety guidelines, providing employee wellness programs, and conducting emergency planning. Many insurers provide discounts on workers’ compensation and other business coverage to employers who implement safety programs. Wellness programs may reduce your healthcare premiums. Be sure to talk to your agent and take advantage of these benefits.
The U.S. Occupational Safety and Health Administration (OSHA) regulates workplace safety. They provide resources for small businesses such as an online hazard identification tool, safety program guides, and free on-site consultations.
To enhance safety in your workplace, consider the following:
Finally, ensuring that your practices comply with state and federal regulations is critical to safeguarding your employees and your company. Your compliance program should include policies to prevent harassment or discrimination based on race, religion, sex, pregnancy, national origin, age, disability, and genetic information. These characteristics are protected under federal law. Many states also protect employees from discrimination based on sexual orientation and gender identity.
Harassment and discrimination complaints often center on hiring and firing decisions, pay equity, promotions, employee conduct, employee leave administration, relationships among staff, and retaliation for complaints.
In addition, there are laws requiring employers to provide leave for needs such as jury duty, military duty, pregnancy, illness, and disability, as well as laws governing employee breaks. The laws that apply to your business will vary based on its size and location. Check with your legal team to ensure that you’ve covered all of the requirements.
Employers are required to keep certain records and post information about discrimination laws. The EEOC provides compliance resources and assistance for small businesses in its Small Business Resource Center.
The best protection against labor law complaints is to approach the laws systematically and diligently. These best practices are a good start:
A positive, systematic approach to HR management starts with sound policies, runs on communication, and measures results through workforce analytics. And it is lived out through shared values such as sincerity and transparency. Get all of those things right, and your company will be able to tap the full power of its people.
Our Small Business Expert
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