Advantages & Importance of HRM
Those organizations that more efficiently and effectively focus on the management of human resources get excellent positive results as in terms of the following:
Human Resources (Human Capital, Employees, Workers, Staff, Managers or Labors)
Non Human Resource (Money, Building, Technology, Machines, Plants, Computers and Equipment.
Those organizations that more efficiently and effectively focus on the management of human resources get excellent positive results as in terms of the following:
- Profit increase,
- Sales increase,
- Revenue increase
- Company achieve employees loyalty
- Low turnover rate
- To retain talented and productive employees
- To Increase effectiveness of organization by hiring talented workers.
- and many more positive changes.
- To fulfill legal obligations
- Knowledge
- Ideas generating
- Creativity
- Innovation
- Skills
- Decision-making
- Experience
- Thinking
The discipline of HRM obtained more importance because of the extensive global competition among business organizations and these organizations believed that by effectively managing their human capital or their workforce they can achieve competitive advantage in their targeted market over their market competitors around the world. Every organization want professional, dedicated and talented employees and HRM fulfill this need very well by guiding the organization and leading them into right direction. The HR department help and enable an organization to hire right people on the right job.
Human Resources (Worker, Staff or Employees, Labour)
The primary resources which is needed to achieve organizational goals and objectives are Employees (Human resource) because these are employees of an organization who make a differences and enable their companies to achieve competitive advantage. Every organization working with two types major resources:
Non Human Resource (Money, Building, Technology, Machines, Plants, Computers and Equipment.
Human resources is the most valuable asset and precious resources in an organization and remain important at first or primary level for the organization to achieve organizational mission, vision and objectives, the reason of given such importance to the Human capital is that with the human knowledge and skills, organizations establish, mold and transform technology, Plants, Machinery, buildings, land, vehicles, computers and equipments to produce valuable goods and services for their customer and achieve sustainability, success and strategic objectives. In simple words it’s the human resource who work and produces other assets and cultivate land to produces agricultural products and without input of human capital even large organizations fails to produces valuable goods or if suppose the large organization produces bundles of products then the next question again arise who will serve now, obviously again human resources will required to come into action and play their role not robots. Therefore Productive, Creative, Experienced, devoted and professional employees play very significant role in the organizational success.
Brief history of HRM
Components of HRM historically started in the end of 19th century as in 1920 the organizations announces jobs like, labour manager or employment manager etc but the specific term ‘HRM’ come into existence in the mid of 1980. The concept in generated from United States of America.
What is HRM?
Management is a popular subject of business administration and there are five major functions of management i.e. Planning, Organizing, Staffing, Leading and Controlling. The middle function which is Staffing is basically HRM. So we can HRM is a sub function of Management and Human Resource Management deals with employee recruiting, screening, training, rewarding and appeasing. The function of HRM usually perform by HR department of a company. From the origin of HRM many experts and HR professional given various definitions of HRM. Some of the popular definitions of HRM are presented here:-
Robert L. Mathis. John H. Jackson defined HRM in the 12th Edition of Human Resource Management. Definition quoted by author is: “HRM is designing management system to ensure that human talent is used effectively and efficiently to accomplish organizational goals.”
(Edwin Flippo) had given the definition of HRM in these words:“HRM is “planning, organizing, directing, controlling of procurement, development, compensation, integration , maintenance and separation of human resources to the end that individual, organizational and social objectives are achieved.”
Gray Dessler, Biju Varkkey explained it 11th edition of HRM that:“The policies and practices involved in carried out the “people” or human resource aspects of a management position, including recruiting, screening, training, rewarding, and apprising.”
In 1995 John Storey defined HRM in one paragraph:“Human resource management is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of Cultural, structural and personal techniques.”
(Torrington and Hall) presented HRM in these lines“A series of activities which: first enable working people and their employing organizations to agree about the objectives and nature of their working relationship and secondly, ensure that the agreement is fulfilled. (Torrington and Hall named HRM as Personnel Management)”
All of the above definitions of HRM are true and keep due weight. The HRM authors presented HRM in their own wording on the basis of their knowledge and experience.
Impact of Economic and technological change on HRM
When an economic and technological change happened it normally change employment and work-related blueprint in the job market. In case of Pakistan a major shift is noticed from agriculture to telecommunication and cellular phone industry, because of rapid increase in sale of mobile phones and increasing use of technology and low rate of crop production, lack of use of modern agriculture machinery in Pakistan influence people to switch from agricultural industry to the other industries. Due to advancement of technology PTCL (Pakistan Telecommunication Company Limited) practice downsizing and reduced the number of its employees where 3 people were required now 1 person is working in the company because of the technological change obviously this technological change affect on the economic factors also. If we analyze in Case of PTCL that employees who lose their job in the downsizing get other private sector jobs in new mobile, telephone, TV or Internet services provider companies on the basis of their experience and technical knowledge of PTCL. So other companies get right persons on right job and the economic problem of people who lose their job also resolved. When PTCL privatized, its management faces pressure to practice affective management, increase productivity and innovation, cut labour costs to survive and compete in the challenging world. These variables influenced PTCL management to take downsizing decision and PTCL introduced VSS (Voluntary Separation Scheme), to implement their decisions. Occupational shifts emerge due to technological and economic changes extra ordinary changes in occupations and employment noticed in the year 1996. The most of the job created in the IT sector and Media sector industries.
Global competition also affect this shift in jobs and occupations due to globalization of economic resources. In United states about 25% of manufacturing jobs based on exporting goods to other countries. This percentage will decrease if those countries or some of them strengthen and build up their capacity of manufacturing of those goods which are exporting from US. So economic change for other countries create more manufacturing jobs for their nationals and US national affect by these economic changes negatively and they US manufacturing workers will lose their jobs. These occupational shifts affected by the global competition. United States economy is basically shifted from manufacturing economy to service economy after United States extensive involvement in different services like, Financial services, Health care and Retail services, Information Technology, Education and Research services. This impact on jobs in US. Result 80% jobs in services sector increases as compare to other sectors in the United States. This shift occurred basically due to the economic and technology factors which are rapidly changing worldwide.
Shortage of Suitable Workforce and quality concerns
Workforce shortage is also a major issue and challenges that HR management face and try to overcome this issue. Commonly observed that against a single vacant post twenty applicants, fifty applicants, or even more than hundred applicants apply. Here the question arises if such a large number of applicants apply against a single position then why we are talking about shortage of workforce. Its answer is very simple that obviously, there are many people who apply for a single job but the company needed only suitable, experienced, educated workers with related qualification and skills needed to perform the job. If we analyze closely we shall soon realized that there is acute shortages of specialized designations in the marketplace for example if we talk about shortage in Pakistani IT Sector there is a huge shortages of certified IT professional like SEOs (Search Engine optimizer), Software Engineers, Software Architects, Hardware Experts, experienced Project Mangers (PMP). Health sector of Pakistan also passing through development stage that is why often-serious patients of Heart or liver transplant refer to India, America, London or other foreign countries. One reason is shortage of specialists’ doctors and its other reason of non- availability of modern medical laboratories, machinery, and equipment. As population growth rate is very high and health, education, IT, Engineering and other experts are not sufficient to fulfill the demand of population. This shortage of experts is increasing very rapidly due to immigration of these experts to foreign countries, low salary rates in Pakistan, Security, Law and order situation and many other variables.
It is also notable that due to lack of quality education some students do not posses basic reasoning, mathematical, writing, communication and statistical skills and such students have to face difficulties in hunting good jobs. So quality is big concern for companies, those who like to hire new employees carefully screen applicants and shortlist only the best people from the pool of suitable candidates. If a company does not find a suitable employee then they re-advertise the post through different sources to generate suitable pool of candidates. Some companies arrange training and development programmes after hiring new employees to fill the gap of knowledge and skills so that their new employees become sufficient skilled and trained to fully perform the quality work.
