There are 2 types of Human Resources Management (HRM for short). These types are ‘hard’ and ‘soft’. Here are some examples of things which fit into each section:
Support for Employees
Employee and Industrial Relations
Analysing Current Needs of Employees
Predicting Future Demand of Employees
Predicting Future Supply of Employees
Predicting Labour Turnover
The soft side is normally concerned with the way people are managed, whereas the hard side is concerned with deciding how many, what type, and how to get employees in the future.
After all elements have been looked at, an HR plan must be drawn up. It will need accurate information on:
Anticipated future business.
Volume of production and sales.
Allowances for changes such as improving technology.
New products which may increase or decrease the number of employees needed.
The implications if the company structure changes, delayering for example.
The timing of all changes.
Analysis of current workforce.
Some factors that may affect HRM include:
Changing goals of the business
Changes in the consumer’s behaviour
- Total population size
- Population distribution
- Age of the population
There are implications to the business that come about from HRM:
Business must incorporate HRM into their overall strategy.
Must use a structure that sees employees as important to the company.
Motivation and training must be given.
Must be built in to all areas of the business including production, marketing, finance, etc.
Competitive advantage over rivals.
Can solve HR problems in high turnover companies and companies with large absenteeism rates.
More efficient use of workers reduces cost.
Manage change better due to planning.
Long term benefits for the business, rather than fixing a problem quickly by employing lots of part time workers.
Cannot predict people's behaviour so don’t know when they might leave.
Cannot predict external events such as new competition, more demand, etc.
Planning needs to be constantly monitored and changed to suit changing events.
Must be well thought out or may cause problems, such as cuts in the workforce may annoy trade unions.
There are a number of ways for a company to evaluate the effectiveness of their HRM. These are:
Labour turnover (what percentage of employees leave and are replaced each year).
Productivity (often measured in turnover per person).
Industrial relations (a reduction in the number of disputes shows effective HRM).