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Strategic aspects of human resource management

Companies featuring well-trained HRM departments that engage in making strategic decisions together with the management, bring unpredictable situations under control and resume their operations without any serious stress.

Strategic aspects of human resource management

Source: iStock

The phrase Human Resource Management may be quite a mouthful and strike like being complicated, but it nevertheless has a very straightforward meaning and defines things that are part of any company that has some employees. Even a self-employed individual may have at least one external associate and needs to select such associate, and then provide guidance. In more common words, Human Resource Management department is the personnel department, the human resources and organizational sector, the human resources and legal department or the human resource department. English language has a well-established acronym for this field of activity: HRM (Human Resource Management).

Strategic aspects of Human resource management

Judging from a number of different names for such activities, HRM plays a variety of different roles in a company. HRM department invites, selects, onboards, trains and assigns people to jobs in appropriate way. Moreover, it is involved in the organization of all work processes in an organization, starting from the procurement all the way to sales, and from the onboarding of people all the way to employment termination. HRM must ensure compliance with applicable laws and regulations in working with people, and is therefore one of the most important areas and services in any organization. The quality of relationships, work culture and work performance depend on the overall quality of employees and their appropriate assignment in the work process.

Head of the HRM team needs to work with the management and set clear goals for the company, and must therefore be involved in the managing activities, and often requires internal assistants and consultants or needs to find professional associates outside the company. HRM department is like a government to the company, making sure that everything runs smoothly, to the satisfaction and benefit of the entire team and everybody who is connected with the company in one way or another.

HRM professionals must excel in their competence

First of all, professional excellence is expected of them. The human resource department must have a good understanding of all facets of products and services. They must be familiar with marketing methods and performance as well as organization's strategic and financial objectives, industry and field of activity. Moreover, they must recognize when similar organizations present a competitive risk or a synergistic opportunity for a joint venture and market entry.

Members of the HRM department must also possess personal credibility. As they are exposed and work exclusively with people, HRM professionals must have a high degree of ethics and morality. They must work with an altruistic drive for the good of the organization. Company's common interests must be put before personal desires for fame, material goods and perks. Moreover, they need to be fair and honest in their relationships. The HRM department must be extremely efficient and responsive. They have to work as long as required for the work to be done with high quality, regardless of the time of day and personal interests. We can say that the organization's success and work culture depend on the ethical values, morality and reliability of the HRM department and the management. The ability to connect and lead a tolerant discussion are qualities that, in contrast to conflict, create harmonious relationships. It is imperative for members of the HRM department to master Human Resource Management skills.

The role of HRM department

A common notion in companies is that the task of the HRM department is to provide personnel administration. Such a mindset must be overcome in modern companies. The HRM must actively participate in the coordination of human resources, research the market trends, and analyze material resources in the business and work processes. The HRM department participates in the formulation of company's goals and strategy and in making business and strategic decisions. These are its key roles. There is a huge difference between this and administrative work, which is why the HRM department needs to be well educated and strengthened. The mindset of HRM staff needs to be reshaped so that all members will be aware of this new role. As long as their thinking remains within the framework of administrative work, they lack qualification and competence to be part of the strategic decision-making body of the company.

At the same time, the owners and founders of the company must accept qualified HRM professionals as dependable partakers in setting goals and strategic decisions. All managers in the company are HR managers at the same time.

Mutual and respectful cooperation can bring good results

For instance, if the artistic and program director of the opera do not know the abilities and mutual relations of the orchestra and the choir, they will not be able to choose an appropriate program and conductor. They may either leave some good talent behind or put too much on their plate with an overly ambitious program. Unfortunately, this synergy is still not paid enough attention to. Way too few HRM professionals are involved in strategic decision-making. HRM have a comprehensive overview over the employees. The company's management should be more aware that the company is represented by people and that their abilities, performance, knowledge and personal traits are part of the overall culture of the company and are as such key to the success and competitive advantage. Of course, this does not mean that HRM department takes over the overall management of the company. They can work with top management and together excellently guide organization's strategic development.

Professional managers have a comprehensive overview over work processes. A variety of experts monitor new scientific achievements and industry development, and the marketing explores industry trends. But everybody working together can select the right strategic direction and create great results. The people who drive the development and steer strategic decisions shall not be focused only on their own company and their customers. On the contrary; they should closely watch their competitors and follow their clients' interests and tendencies.

HRM must monitor and shape the company's culture

A variety of activities is available for this. Company culture strongly affects the sentiment that in turn may boost or inhibit work processes and performance. Poor company culture may cause a lot of fluctuation. Positive culture leads to a pleasant excitement of workers at the thought of work and their workplace. The overall work mood is highly dependent on the quality of approaches implemented by the HRM department. HRM:

  • is strongly involved in the preparation and systematization of jobs,
  • publishes job vacancies and recruits new employees,
  • onboards new employees,
  • organizes continuing education for employees,
  • uses a variety of methods, such as teambuilding, to foster harmonious interpersonal relationships,
  • plans working hours and fills up vacancies,
  • assesses employee performance and consequently influences wages,
  • defines incentives and promotes commitment to the company,
  • assists in solving personal problems.

As the HRM department is so closely interconnected with workforce management, it is natural for it to be engaged in defining company objectives as a strong strategic partner.

The importance of HRM in managing COVID-19 risks arising in the spring of 2020

In the first half of March 2020, Slovenia also encountered a situation that brought much surprise and confusion. This is when the important role of the HRM department was demonstrated. Companies where HRM is only an administrative entity for employees, were quite paralyzed or reacted completely inadequately. The media reported quite many cases of inappropriate action. Companies featuring well-trained HRM departments that engaged in making strategic decisions together with the management, quickly brought the situation under control and resumed their operations without any serious stress:

  • The HRM department, together with other executives, focused on monitoring the situation and formulated specific instructions for the company.
  • Work processes needed to be adapted very quickly to the changes in the legislation, instructions by the National Institute of Public Health and measures adopted by the government.
  • Work and work processes have been adapted to company's technical possibilities and personnel availability in the new situation.
  • Adequate quantity of appropriate protective equipment was provided.
  • Who should work from home and who should come to work at certain times was decided on time.
  • Appropriately updated IT solutions were acquired in a timely manner, as such solutions are very helpful in managing the human resources. Good software providers quickly adapted their applications to the new legislation during the COVID-19 epidemic.
  • HRM departments promptly prepared the required documents for crossing borders between municipalities to employees who needed them during the coronavirus lock-down.
  • Payroll accounting changed significantly as many workers were temporarily laid off.
  • Payroll was modified to apply the crisis supplement in appropriate way, as it differs depending on employee category.
  • Work from home was implemented: good IT solutions greatly support work time tracking when working from home.
  • Changes occurred in the calculation of commuting expenses, public transport was halted, some workers worked under a radically different schedule, to name just a few changes in the new situation.
  • In addition to the changes in payroll calculation, there were also changes in submission of the required salary related forms to governmental authorities.

Contributing to the strategic orientation and search for new possibilities for action has borne fruit

It was in this changed situation that the great advantage of well-equipped and professionally trained HRM departments became evident. The importance of connection was shown, together with good cooperation and mutual trust between business owners, managers and the HRM department. It's impossible to imagine how companies that do not have the appropriate IT solutions managed to arrange everything correctly and in time. Companies having poor technical equipment and/or inadequate professional training experienced even longer-lasting, unnecessary and graver consequences. Times of crisis expose the difference between cheap populist solutions and professional quality implementation enhanced with appropriate user support. Četrta pot offers an excellent IT solution to support Human Resource Management. To all users of our application we immediately offered solutions that make it easier for them to work in the changed situation and comply with the changed legislation. 

While hoping that restrictions to prevent the spread of COVID-19 will not be necessary again, no one knows for sure what the future holds for us. To sum up, it is wise to ensure appropriate equipment, training and emergency planning as soon as possible.

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Author

Nataša Centa, BSc in Education, Mathematics and Physics, expert in HRM digitization by means of modern IT-solutions, Product Manager at Četrta pot, d.o.o., Kranj


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