The Background Of The Human Resource Management Business Essay

Teanna Payne

HRM 301

Dr. Glenn

It is in fact, difficult for an owner of a large business or corporation to effectively recruit workers who fit in with the company, compensate, retain, and provide employee benefits, develop employees’ skills and train when necessary, have knowledge of employment laws, establish a healthy work environment, finding the appropriate solutions to issues, concerns or disputes, and other tasks as it pertains to his or her employees, in addition to operating the business, all by themselves. Many organizations considers their human capital as their most valuable and important asset. In order to for any organization to reach its strategic business goals, sustain competitive advantages, and assists its employees, there must be a productive human resources management. "Human Resources Management (HRM) is the strategic management of the employees, who individually and collectively contribute to the achievement of the strategic objectives of the organization" (Pomoni). Conveying a strategic impact requires human resources to establish and implement strategies that will support business objectives and prioritizing and aligning various activities that will assist and reinforce achieving these objectives.

Human Resource Management also known as HRM or HR, is one of the most relevant and important departments within a firm, mainly because it is responsible for the management of the organization’s workforce. Yet, in today's rapidly changing business environment, it is the component of an organization that is often underestimated, misunderstood, and taken for granted as owners and employees fail to recognize its value. The Human Resource Management department is responsible for multiple tasks that are extremely critical in a company. Human Resource Management includes a wide range of activities. "Initially, human resources or personnel, as it was referred, primarily performed an administrative role of keeping records, developing reports, and paying employees" (Phillips 101). Today, however, these responsibilities have two main functions; managing the entire department and managing its employees. For these reasons, HRM must have strong communication, decision-making, and analytical skills, as well as experience in employee disciplines- "recruitment and selection, compensation and benefits, labor and employee relations, training and development, and health and safety processes" (Strayer et al. 21).

Since HRM is actively involved in almost every aspect of a company, it is an essential part of its overall health. It is imperative for this section to keep the organization functional, durable, and advantageous. "In recent years, recognition of the importance of human resources management to a company's overall health has grown dramatically" (Hillstrom and Hillstrom 575). Human Resource Management performs an extensive role in any organization, as it allows managers and employees to work both, individually and collectively, to contribute to the company’s objectives. The importance that HRM brings to the strategic part of planning is prevalent in achieving organization goals, which is extremely hard to do without involving human resources and employees’ input. By appreciating its value, HRM is the major component in developing business strategies, due to its keen perception and comprehension to put a plan into action.

As the role of HRM continues to evolve and the environment changes, it is important for individual organizations to become aware of, and understand the advantages and disadvantages of establishing a productive department. It makes great sense as to why it is a benefit to have a HRM on staff. However, there are a few reasons that may convince a company otherwise. Either way, whether an organization invests in HRM or not, can drastically affect the business. Therefore, this decision should be based on the needs, objectives, and what is best suited for the company.

In some corporations, the human resource department usually does not receive or lack recognition, in which these organizations fail to realize their importance in the operation of the firm. The most important task for human resource management is to gather and allocate resources (human capital). "Of all the tasks of management, managing the human component is the central and most important task, because all else depends on how well it is done, and should be regarded as such" (Swanepoel, et al.8). Another point is that HRMs creates a safe work environment. A safe and healthy environment will result in employees to work at their best, which will in turn increase the efficiency of the firm. Since this department is linked with the management of the organization’s workforce it also helps in bridging the gap between the employer, management, and the employees, and leading all in a productive relationship.

Absence of Human Resource Management may lead to a poor environment for employees to work, and discourages prospective employees to join. This department further assists the organization’s public relations by marketing its image to attract for skillful workers that fits the company objectives. "The responsibility of establishing good public relations lies with the HRM to a great extent. They organize business meetings, seminars and various official gatherings on behalf of the company in order to build up relationships with other business sectors" (Mukherjee). A major advantage is that HRMs are responsible for those assignments that take time away from operations. For instance, HRM simplifies the hiring process. This takes the pressure off of owners and senior executives so that they may focus their attention more on the core aspects of the business. Another important function of HRM is to make resources available to all employees. For example, providing information about company policies and procedures, benefits, promotions, training and education, and other issues such as discrimination and sexual harassment. If such information is conveyed appropriately to employees, it helps to prevent any unseen undesirable events that may risk the reputation of the company.

Although human resource management may prove to be a very important department in any firm or organizations, it is not always a perfect system, and has a few downsides. One of the main disadvantages of Human Resource Management is compromised security. In particular, when companies outsource its HR functions to third-party vendors, as it increases a security risk. This raises the capacity of breaches in the private information of owners, executives, business officials, management, and employees. Secondly, adding HRM as part of the staff requires owners to relinquish some control of company operations. These individuals come with the risk that they may not adapt to what is the interest for the company. HRMs have the authority to make important business decisions such as recruiting, and employee and business relations. An article by written by Dr. John Sullivan, a HR leader, focuses on automobile manufacturer, Toyota, and how he believes that the company’s HR is in part responsible for the recall of defective cars. "Since the root cause of the problems that Toyota is facing, are failure by employees to make good decisions, confront negative news, and make a convincing business case for immediate action, then the HR processes that may have influenced those decisions must be examined, which includes rewards, training, performance management, and the hiring process". Furthermore, this article talks about how the company had a loss of $30 billion in stock valuation due to weak HR practices.

Perhaps the biggest concern with having a human resources department is the cost. Every company’s goal is to generate revenue and profits, and any expenses will reduce a business’ proceeds. In an article reported by the Houston Chronicle, "The development of a human resources department will generally start with two people, the business owner and your human resources expert. Strategic human resources planning will depend on the size of your business, the industry you’re in and the breadth of knowledge possessed by candidates you select to staff the department" (Mayhew). The costs related to creating HRM leaves the organization bearing high expenditures that include labor costs and/or other capital investments. It takes a substantial amount of time and money to successfully implement a human resources department due to locating and hiring skilled workers in the competitive market, or finding the right firm if the option is to outsource HR functions. According to the U.S. Bureau of Labor Statistics, the cost of employing a human resource worker and specialist are estimated at $59,890 and $60,660, respectively, for 2012. In reality, this is a valuable investment, however, utilizing HRM too soon or while the business is just in the beginning stages and has not shown growth, will cause a substantial amount of unnecessary expenses than profits.

There is also likely to be a learning curve while the new department gets up to speed with training and company objectives, as well as a lengthy adjustment period for you and your employees. Depending on how large of an HR department considered, could represent a significant cost to the business. "Human resources management is a difficult task for business of all sizes, and can prove to be extremely costly. There is also a great risk for very expensive lawsuits if the human resources department is not managed properly" (Melendez 3). "Human resources is not a revenue-producing department. Consequently, budgeting for human resources functions should be carefully considered given other start-up costs and expenses for your business" (Mayhew).

Any organization that lacks Human Resource Management is bound to suffer a great deal in managing regular activities. Despite all the pitfalls that are connected to HRM, the advantages an organization faces when it establishes this department can have great value. This tends to overshadow all disadvantages that may be connected to Human Resource Management. Simply put, the HR department proves to be an enormous asset to the company. It is because of this, that companies, firms, and organizations are spending a significant amount of money to invest in this portion of the company. "The return on investment for a human resources department may not be measurable for quite some time; however, as a business matures and the human resources department contributes to the dynamics of the workforce, it will soon be realized the return on investment" (Mayhew). Senior leaders and management are becoming well aware that HRM is the key that will help their organization to flourish and become successful. The advantage an organization gets from the Human Resource Management covers the initial startup cost leaving the owners with a huge advantage on their side.