Human resources management is a term used to describe the management system whereby employees are hired, placed suitably in a role in the workplace,and directed through governmental and business policies to meet competitive requirements.Human Resource Management guide employees through what is needed in favour of the vision of the business.Human Resource Management support business goals by supporting employees and therefore recruit and implement conditions within which businesses can flourish.
Human Resource Management are hired to meet expectations to ensure work is flowing and employees are satisfied and developing.Along with answering to staff they also have to comply to governmental rules and regulations, including labour laws,safety laws and in some cases,immigration laws play a part .Each country and region has its own labour laws which businesses must comply with. Human Resource Management are responsible for this compliance.
Training of employees according to role development and demands is another challenge that HRM come across. As businesses develop and markets develop, employees must develop along with it.The Association for Talent Development has stated that companies offering training programs to their staff earn 218% more per employee over companies that don’t offer training. Human Resource Management are responsible for ensuring that the staff are not only capable but up to date with the skills the market demands.
Employee retention (preventing high employee turnover rates)is a challenge all HRM must prioritise and tackle.In today’s competitive market,where there is an abundance of business paths and careers, it is important for Human Resource Management to not only employ staff but keep them. Preventing high employee turnover will be discussed in more detail in this report.
Creating a vision for the workplace is another challenge. Strategic planning combined with a clear vision is vital for employee drive as well as success for the company.Giving employees goals and targets ensures business moves forward.
Developing leaders is a method of ensuring the company moves forward that can be provided via training organised by the HRM. HRM should ensure staff have room for progression.
Providing employees with compensation and promotions is a vital piece of the HRM puzzle. Along with the finance department, the Human Resources Management will often negotiate compensation according to roles within a business, as well as arrange targets to increase compensation (bonuses,etc).Dealing with staff compensation rates will be discussed further in this report.
Upon recruitment to an institution, Human Resources Management will have a set compensation rate, including salary, for each position within the structure according to their roles,responsibilities, and qualifications.Labour laws will also influence compensation. It is not uncommon for employees to agree with the initial compensation rate,which is given monthly for most businesses, however, further into their career with that business, request higher compensation.
This often correlates to time spent working for the business.It could also be due to additional qualifications., and experience. It could also be because the said employee is handling more tasks and responsibility than initially agreed upon with the Human Resources Management, or they are handling more than they expected.It is a vital for Human Resources Management to decide who deserves higher compensation among a department and peers,if not higher compensation for all.
Request for a compensation increase may be considered when cross checked with factors such as:
Compensation should include not just wages, but monetary and non monetary perks as well (Riccucci,2016,p.67). These non monetary compensations may be easier to reward for small businesses.
The strain of demanding higher compensation has a very big effect on businesses.
Due to higher compensation from the business, employees may feel they are getting more of a return on their hard work.This feeling of appreciation can have beneficial impacts such as increasing employee morale. This in turn may increase employee productivity and assist in moving the business or institution forward towards their goals and beyond.
Moreover,due to the increased employee morale this can have a positive domino effect on the employee turnover rates,it may reduce them,which in turn will reduce costs to train new employees.
Some negative aspects to consider regarding higher compensation being granted would be financial strain on a business,especially for a small or start-up business. There should be a balance between satisfying employees to keep morale high and maintain employee retention, and making wise financial choices upon consultation with those responsible of finance.
It is also worth considering that if higher compensation is granted in one department and not the whole business, this may influence other employees to request the same increase. This in turn will cause further strain.
It will also be strenuous to decide how much compensation should be granted,and what the outcome would be if it were not to be granted.This applies especially if employees have requested a specific increase rate.
If higher compensation rates are rejected,it will increase employee turnover.For example,Payscale conducted a study which found up to 69% of employees rejected higher compensation started looking for new jobs.
Finding talent in a candidate driven market is a challenge that all Human Resources Management will experience. Often there are many candidates with similar qualifications,with their defining qualities being down to personal traits more than capability to handle the role.
In today’s age, where education is more widely accessible, it is more common to find people with suitable qualifications and therefore easier for employees to find a candidate,but more difficult to specify the ideal candidate.
A factor that comes into play in today’s market is that the process of applying is also a lot faster and easier because candidates can apply online.Therefore,although the likelihood for the number of applications to be more via online applications is higher, this does not necessarily result in a higher number of suitable or qualified candidates.For example,according to the Society for Human Resource Management, the number of online job searching in the United States has doubled since 2005.They found from research by the Pew Research Centre that 54% of Americans have searched for jobs via the internet.
The use of employment agencies may narrow down searches,but as they may not be experts in the field related to each business they work with, their candidate suggestions will still need to be filtered. The commision they charge is also worth taking into consideration.
Due to the volume of candidates that may be competing for jobs,this may have a positive effect on staff productivity. Harvard’s Michael Porter states, “The only meaningful concept of competitiveness at the national level is productivity.”
This can increase morale, and in turn help progress faster towards business goals.
High employee turnover is the rate at which employees leave their current workplace over a period of time.It is a concept that needs to be understood thoroughly in order to tackle and overcome it.
There could be several reasons behind high employee turnover levels.One of the top reasons employee turnover levels may be high is simply due to bad management and organization.
According to trends,it is understood that employees are more likely to stay under a work environment that is predictable (Zuber, 2001).
Communication between management and employees may cause frustration and result in low morale. This may cause the employee to resign themselves. However it could also cause the employee to be fired,as productivity may in turn be effected.
Other reasons are related to topics discussed previously on this report,such as a demand for higher compensation. Under the circumstances that higher compensation is not granted,this may force the employee to seek jobs with a higher salary.
Misaligning an employee to fit a job role is another reason which increases turnover rates.This is where it is critical that the Human Resource Management themselves fully comprehend the roles of each position.This could result in resignation of firing of employees who are unfit to fulfil their duties.
When employees see little room for growth and development,this may result in resignation, decreasing employee retention.The same drive that is the quality that encourages companies to hire a candidate is the same drive which will want them to progress.
According to the U.S. Bureau of Labor Statistics,turnover can cost an organization 33 percent of an employee’s total compensation. High turnover rates are expensive, and in addition to attrition rates, it will in turn cost money to employ people in place of previous employees.
Possible training of new employees and agency costs if they are hired through an employment agency or commission based employment website add on top of those costs.
Productivity may also be affected. It may take time to find replacements and they might need to be trained.
It is also worth noting that companies with high turnover rates may have a bad reputation in their community.Their employability rates will be bad which will prevent possible candidates from applying to said businesses.
When it comes to a sensitive subject like compensation demands, it is vital for Human Resources Management to take all requests seriously. Regardless of whether the request will be accepted or not, the attitude and rationale with which the Human Resources Management uses to address the subject has a big impact on the outcome.PayScale conducted a study on 160,000 workers regarding requesting higher compensation.72 percent of workers who hadn’t believed the rationale along with the 71 percent of workers who were given no rationale stated that they intended on seeking new jobs outside of their company in the next six months (vs. 50 percent of workers who asked for and received a raise.
If compensation increases are not possible according to the current market and financial situation of the company, it is worth coordinating with those responsible of finance.They may be able to alert when the market is in the favour of the business,therefore allowing the compensation increase.Inflation will play a role in compensation.
If the request has been reviewed and rejected, compensation in other ways other than via salary may be implemented. For example, offering further training. This may be an acceptable substitute and compromise.
Other employee perks may be suggested in place of the compensation in the form of salary compensation, such as flexible hours,insurance, as well as retirement benefits and bonuses.
In order to shortlist candidates in a market driven by quantity and not always suitably qualified candidates,its important to be thorough during selection so that the correct candidates are in the correct positions for them to prevent high employee turnover rates.A recruitment strategy is important to follow to ensure the high employment standards, and give Human Resource staff clear guidelines.
Human Resource Management should know exactly what is required of the vacant job posts regardless of whether it is technical or not.These requirements can be noted in the recruitment strategy plan along with a timeline,to make the process efficient.
Requirements of the potential candidates can be tweaked according to previous employees (for example if Human Resource Management finds that they should have more experience prior to taking the job, or more qualifications than the last employee, this can be adjusted).
Interview processes should be in stages,in order to eliminate and shortlist.
Keeping track of reviews with job seeking websites may give an insight on the applicants views of the company and the interview process which might be worth taking into consideration.
Online job posts should be detailed and specific to reduce the possibility of confused applicants.
High employee turnover goes hand in hand with the Human Resources Management challenges mentioned above;higher compensation rates and finding suitable talent in the market.
Several studies have found that organisational commitment is key to maintaining employee retention.
By following the solutions to those challenges,the high employee turnover rate will be reduced.
In addition to those steps, analysing the gaps in communication and employee requirements will also help the turnover rate.Feedback within the work environment can be aided in several ways,from conducting meetings,to conducting workshops. Staff bonding events are also an option.
Implementation of solutions
In order to decide fairly whether an employee or employees should have an increase in compensation, the first task is to think about the employees value to the business, the responsibility they hold, and the competition in the market.
If an employee is a vital component to the business, it may be more cost effective to increase compensation rather than train someone else to take their place.Competition also needs to be taken into consideration in terms of the pay rate of similar positions in other companies to ensure fairness within the workplace.
If the request for compensation is denied, it is important to convey the reasoning in a sensitive but thorough manner. Walking employees through the explanation by comparing and explaining inflation may help. Compensation in terms of other perks such as all risk policies,training,insurance and any other relevant substitutes can be discussed.
A timeline estimating when a higher compensation will be possible may also be encouraging to staff.
As mentioned above, when deciding to hire a new employee, a recruitment strategy should be implemented.This strategy should include a detailed description of the type of candidate needed, the timeline to fill the position,the job requirements and qualifications, labour laws which apply to said position,the salary and structure (timing),and the method by which the company will advertise the vacancy.
If the advertising of the vacancy is via a job finding site or agency, it may then be listed with a clear and precise detailed description of what is asked of the interested candidates.
Once suitable applicants are shortlisted for interviews, the recruitment strategy should be referred to in order to determine the interview process.
Some companies may want to also use online tests before the interview stage to test critical thinking,such as aptitude tests.
In order to assure picking the correct candidate, several interview stages should be conducted.This may include group interviews to narrow down ideal applicants.The more interview stages there are,the more time there will be in order to confirm if the candidate is ideal or not.
Another method is to give the applicant a task to solve during their interview,or to do a short presentation regarding related subjects.This is a effective technique to understand their thought process and range of knowledge,as well as ask technical questions if necessary.
If the rates of employee turnover are high, Human Resources Management need to analyse exactly why this is happening. Whether it is due to insufficient salary or benefits,bad management,or lack of progression and organisation.
Depending on the cause they can reduce turnover and have good staff retention.
Active listening with employees to truly understand their concerns is the first step.Active
listening is an important skill that managers need to have, and there are studies to prove that through training it can be improved in one day.
For example,in Japanese study conducted by the University of Occupational and Environmental Health, they found that AL rates (Active Listening) could be increased in one day (Kubota et al).Employee feedback should be taken seriously.This can happen during workshops,and meetings.
Commitment to organisation is an affective attitude to the organisation overall and the degree of attachment or loyalty employees feel towards the organisation.
It is also worth checking how employees and previous employees have reviewed working for the company online.This may provide constructive criticism.
Ensuring the environment is healthy and positive is also another way to keep morale high.
Overworking staff or having lack of staff needs to be avoided. Ensuring there are enough staff members to perform individual tasks in order to move towards the overall company goals benefits all and may reduce turnover.
To summarize; all of the challenges discussed above are vital to be tackled together to keep a business intact.Choosing the correct candidate,high employee turnover,and higher compensation requests have a domino like effect on each other.
A common solution between all three problems is communication and organisation.
Starting from hiring the correct talent,if communication is effective, the employee will be aware of their role and salary which may prevent requesting higher compensation rates.
If communication during higher compensation requests is optimum, employees can come to an understanding with their employer and HRM.This understanding and respect will create more loyal employees, reducing turnover and saving the business money.
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