Managing human resources: importance, HRM process and current issues
HRM finds, develops and keeps a competent workforce. Its eight-step process runs from HR planning to career development, shaped by the economy, unions, laws and demographics.
Human resources and why HRM matters
Human resources are the people in an organization: their knowledge, skills, abilities and energy. Human resource management (HRM) is the part of management that finds, develops and keeps them. Efficient use means getting good output per person without waste; effective use means putting the right people in the right jobs so goals are reached. Robbins gives three reasons HRM is important: it can be a source of competitive advantage, it is an important part of organizational strategy, and the way people are treated affects performance.
High-performance work practices
- Self-managed teams.
- Decentralized decision making.
- Training to build knowledge and skills.
- Flexible job assignments.
- Open communication.
- Performance-based pay.
- Staffing based on person-job and person-organization fit.
- Wide employee involvement and access to information.
The HRM process
Steps 1-3 find competent people; steps 4-5 equip them with skills; steps 6-8 keep high performers. External factors affect every step.
Environmental factors affecting HRM
| Factor | Effect on HRM | Sri Lankan example |
|---|---|---|
| Economy | Hiring, pay rises and layoffs follow economic conditions | Hiring freezes and the migration of skilled staff during the 2022 crisis |
| Labour unions | Collective bargaining over pay and working conditions | Plantation trade unions negotiating estate wages |
| Laws and regulations | Rules on hiring, pay, leave, termination and safety | EPF and ETF contributions; the Shop and Office Employees Act; the Industrial Disputes Act |
| Demographic trends | Age, gender, education and migration change the labour pool | An ageing population and young skilled workers moving abroad |
Current issues and challenges in HRM
- Managing downsizing fairly, and supporting both those who leave and those who stay.
- Managing workforce diversity and inclusion.
- Preventing sexual harassment and handling complaints properly.
- Workplace spirituality and employee well-being.
- Controlling HR costs such as medical and retirement benefits.
- Retaining talent against migration and competition.
- Using HR technology: online recruitment, HR analytics and remote-work tools.
MAS Holdings is known for people programmes such as Women Go Beyond for its women employees, along with training and welfare facilities. These high-performance work practices help an export firm keep skilled workers in a competitive labour market.
Short answer: “What are high-performance work practices?” Work practices such as self-managed teams, training, open communication and performance-based pay that lead to high individual and organizational performance.
Structured question: “Explain the environmental factors that affect HRM.” Economy, labour unions, laws and regulations, demographic trends: how each affects hiring, pay and conditions, with a Sri Lankan example.
Essay: “Explain the HRM process and the current issues in HRM.” Define HRM and its importance, draw the eight-step process, explain each step briefly, note external influences, and discuss current issues.
HRM process: 'People Really Should Often Train Properly, Company Colleagues' = Planning, Recruitment, Selection, Orientation, Training, Performance management, Compensation, Career development.