Human Resource Management - Managing Human Capital

It's one of the most important success factors for your company: satisfied staff. Human capital plays an increasingly important role and therefore you must handle it carefully. But at the same time you always want to get the highest return from your employees. How you get that as an employer, that's what HRM: Human Resource Management is all about.

What is Human Resource Management
Human Resource Management is, in short, about carefully dealing with 'human capital' in organizations. Personnel are seen as a determining factor for the success of a company. However, you can't sit back passively to see how success is going, but must actively work to keep the staff happy.

You want better business results, permanently healthy, skilled and committed employees, high productivity, satisfied customers, low absenteeism and no unwanted outflow. The employees want, in their turn, something in return. Offering higher wages alone is no longer enough to recruit and retain staff. Employees want a job that suits them, good working conditions, plenty of development opportunities, and the ability to coordinate work and private life. With a good HRM policy you can keep your staff from going 'job-hopping'. The central idea behind HRM is very simple: 'What is good for your employees is good for your company'.

Personnel policy or HRM?
Over time, thinking about personnel policy has fundamentally changed. Whereas in the past it was mainly about responding to environmental incentives (government policy, collective labor agreements, social legislation), nowadays personnel policy is placed within the total management of the company.

A typical task of a PZ department (personnel matters) is, for example, the payroll administration and the checking of the compliance with all company regulations. In addition to these traditional tasks, HRM is highly focused on the development of employees. The HRM concept offers a different view of the organization and what the employees can mean within it.

HR policy becomes HRM when:
- the (quality of the) employee is central as the most important link in the value addition;
- a role is assigned to the personnel policy in the realization of corporate objectives;
- a shift of responsibilities from the 'top' to the workplace;
- there is a sense of the personnel element (thinking in terms of cost revenues, flexibilisation, outsourcing and performance management).

Good HRM
It's an open door: it guarantees loyalty and commitment to those who guarantee job security for their employees. It seems easier than it is. Because in many companies the aim is to keep the staff satisfied in order to achieve optimal deployment and labor productivity. But there are far fewer organizations where it actually works.

A good HRM policy only works if it fits well with you and your organization. It's therefore necessary to think carefully about the implementation of the HRM concept. After all, it also creates expectations among employees. An important prerequisite for success is that permanent efforts are made to offer employees the work that they like to do and that challenges them permanently. Only then there is good HRM. As said before: you can't rest on your laurels.

Investing in staff
How you get more loyalty from your employees is hard to say. Standard solutions don't exist. Yet honest and open communication, appreciation and teamwork remain the key words in finding loyalty among employees. In addition, we can give you the following tip: dare to invest in your employees. Specially if you assume a long-term employment relationship, it pays to invest in the form of development and training. Below are some examples of HRM instruments and elements.

Application procedure: When someone has made a strict selection , it reinforces the feeling that he will work for a special company where staff are very important and where high performance is expected.

Introduction period: Don't throw a new employee into the deep end, but spend time and attention on the introduction period . A good introduction ensures rapid integration within the (culture of the) organization and an accelerated return of the new employee.

Performance and appraisal interviews: Performance and appraisal interviews are among the most important and powerful tools available to an organization. They give you the direct opportunity to influence behavior.

Performance reward: When their efforts make economic good with the company, people appreciate it if they are rewarded for this. Consider the possibility of profit-sharing schemes and performance-related pay .

Information: Provide an 'open culture' in the company. Providing essential information about the ins and outs of the company benefits the employee's involvement. Openness and good communication can be influenced positively by avoiding as far as possible distinctive symbols (separate company restaurant for management, fixed parking spaces). These reinforce the we-versus-them feeling and can form a barrier to an informal atmosphere.

Work consultation: People feel appreciated when they notice that something is being done with their knowledge. The key word in work consultations is therefore: sharing knowledge. Be prepared to be guided by the opinion of employees in your decision making.

Training: Training is the perfect instrument with which you can keep your employees on the course. Providing education and training is generally preferable to replacing existing employees with better educated people. Here too, whoever gives something gets something back. Employees who are given the opportunity to further develop have more to do with the company.

Career guidance: Here the saying goes: change of food makes food. Many people want to try out a number of functions before they settle somewhere. If that's not possible within your company, there is a chance that they will look for something else. Due to periodic job changes (for those who want it) and possible expansion of tasks, the challenge remains. Your advantage? A positive effect on the motivation and employability of employees in several places.

Reward: The idea that everyone within a company pursues the same goal can be strengthened by removing as many differences in incomes as possible. Why should a manager benefit more from a profit-sharing scheme than people from the shop floor? Everyone pursues the same goal and works equally hard, on his own level. It will be considered fairer if such a scheme yields the same nominal amount for everyone. A system of internal promotion also gives a sense of justification and is therefore a motivating form of rewarding. If well-performing employees are always passed by outsiders, this can lead to hostile feelings. Moreover, it also has an advantage for you: people who promote internally know exactly what is happening on the work floor.

Exit interviews
Exit-interviews can provide you with important information about the reason for the departure of your employees. The departing employee has nothing to lose and can freely speak about the advantages and disadvantages he has experienced in the company. By actually doing something with that information, you can increase your attractiveness as an employer.

Small companies usually pay less attention to HRM than large companies, who more often have a personnel officer or HR department that deals with it. This is often not the case in small companies. The practice with regard to personnel policy is therefore somewhat more complicated. Moreover, SME personnel policy appears to be dependent on typical SME characteristics such as small-scale, intensive contacts and informality.

But for small companies, human capital is just as important for business operations. That's why the innovation network Syntens and the Ministry of Economic Affairs support you in investing in Personnel and Organization.

E-HRM, or virtual HRM, makes use of electronic applications and internet technology for personnel policy. The best-known examples are e-learning (the online provision of courses and training courses), the facilitation of telework through the Internet and e-recruitment (online recruitment of staff). Furthermore, it's particularly possible to automate in the area of ​​HRM administration. Think of the personnel information system, but also ordering business cards, requesting leave days, selecting the lease car.

A much requested application is the Employee Self-Service (ESS). The employee thus gains access to an application of the company through the Internet and can adjust his personal details, report sick or request information. A step further is the application where employees can compile their own employment conditions online. As more and more employees can choose flexible terms of employment, this application gains in significance. For a company that has set up the employment conditions according to the cafeteria model , e-HRM technology is almost a must in the implementation.

Many HRM tasks can therefore be automated. But don't go on ice overnight. There is more to it than installing a CD-ROM. Integral e-HRM consists of a jumble of systems and programs that are linked to each other, sometimes even connected to external databases and made accessible through the internet. Companies that want to take advantage of it are wise to have their regular HRM in order first. All hrm processes must be well described and executed properly. Only then is automation justified.

Software for the application of e-HRM is abundant. For example, look at IBS Consist , PiMedia ( Time for talent ) or AFAS . Most personnel information systems that are for sale are very user-friendly.

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