The 8 Basics of Human Resource Management Every Company Needs to Know

human resource management fundamentals

Table of Contents

Human resource management centers on managing an organization’s most valuable resource: The employees. Employees are no doubt important business assets. Individually and as a whole, they work to carry out your goals. When managed effectively, your employees will reward you with loyalty and great results. 

To ensure you are covering all the basics of employee management, make sure you have the following HR foundations covered:

  1. HR Strategy and Planning
  2. Compliance
  3. Workforce Planning 
  4. Reward Management
  5. Performance Management
  6. Learning and Development
  7. Employee-Employer Relationships
  8. Human Resource Information System (HRIS)

We’ll delve into each factor in this article and explain how you can start implementing them for your company.

Human Resource Basics Every HR Professional Should Know

1. HR Strategy & Planning

The Human Resources Department isn’t just there to fill jobs and plan year-end parties. As an HR team, you’re in charge of maximizing the potential of your workforce.  You’re also there to study trends and analyze employee demographics.

Given that today’s workforce has undergone drastic changes (remote work, Gen Z entering the workforce, etc.), HR strategy and planning have become more essential than ever.

If you’re just starting to put together an HR strategy or are looking to refine your current plans, consider the following:

a. Your Business Goals

Ensure that your HR strategy centers around what your business wants to achieve as a whole. Note that HR strategies are unique for every company. In the BPO industry, for example, your HR strategies are typically tied to workforce performance. So your HR teams need to focus on attracting and retaining the right talent, complying with international labor laws, performance management, and the like.

If you’re not quite sure what your business goals look like, conduct a SWOT (strengths, weaknesses, opportunities, and threats) analysis. A SWOT analysis will help you understand the internal and external factors impacting your workforce.

b. Employee Skills

Employee skills play a critical role in your HR strategy. Understanding what skillsets you currently have in your roster helps you understand what type of training you need to administer throughout the year and what roles you need to fill. Work with line managers to understand what’s lacking with each team.

Employee skills are also an important factor when it comes to performance management. More skilled employees are obvious frontrunners for performance appraisals and can be up for promotions. You can tie all these into your HR strategy.

c. Employee Turnover

Is turnover a big problem for your company? Then you might want to start drilling into the root cause for people leaving. A good HR team puts in the effort to understand their people. There could be a problem with management, job dissatisfaction, or unhealthy work-life balance. Either way, it’s important to enforce retention into your strategy.

With the job market more expensive and competitive than ever, the last thing you’d want is to lose top employees.

d. Mission, Vision, and Values

If your employees are responsible for stirring the ship, your company’s mission, vision, and values are lighthouses guiding them. Use these as a basis when creating your HR strategy, especially when crafting employee branding initiatives and company policies.

2. Compliance

a. Legal compliance

The Human Resources department fulfills legal requirements, including wage and work hour regulations, and governing laws on employee leaves.

Compliance with safety work regulations also falls under HR’s purview. This doesn’t just mean physical workplace safety, but HR also needs to take measures to protect employees against harassment and discrimination.

b. Policy Development and Enforcement:

HR develops and enforces company policies to govern employee conduct and behavior. This often includes, but isn’t limited to, the employee code of conduct, data privacy, and social media usage.

c. Recordkeeping and Documentation:

HR and accounting teams (sometimes integrated into one department) maintain updated employee records, including employment contracts, tax records, performance evaluations, and disciplinary actions for audits and legal reasons.

3. Workforce Planning

Workforce planning

With effective workforce planning, you ensure that you’re hiring the right talent with the right skills at the right time. To get started, regard the following criteria:

a. Employee count

Understanding your workforce size and workload prevents overstaffing.

b. Budget

You pay more than just an employee’s salary per month. Consider factors like operational costs, hiring costs, and benefits before opening a new job post.

c. Skills

Assess if your current roster has the right amount of skills, knowledge, and experience to achieve a business goal. If you find gaps and if the budget allows, it might be high time to open a new role.

After understanding these steps, then you need to determine the type of recruitment that will be carried out. In general, there are two types of recruitment processes, internal recruitment (through promotions and transfers) or external recruitment. Both types offer a variety of advantages, depending on the situation.

  1. Internal Recruitment: One major benefit is that they can fill the position more quickly than they could if they were hired externally. Onboarding, training, and other resources are typically not as needed for employees as they would be for external parties.
  2. External Recruitment: Businesses that actively seek external candidates are creating chances for their teams to be revitalized by new perspectives, ideas, and cultures.

4. Rewards Management

Rewards management in HR involves strategies that fairly recognize and compensate employees based on their contributions to the business.

One of the fundamental aspects of reward management is done through performance evaluation. Whether it’s done annually, or quarterly — employee evaluations address issues related to equal pay for work of equal value that were otherwise overlooked during the hiring process.

To drill into pay structures more, HR teams may assist businesses with developing a logically designed employee package, comprising of:

  • Wages that match industry standards;
  • Bonuses and incentives;
  • Paid Time Off (PTO);
  • Benefits such as health insurance, retirement plans, etc.;
  • Workplace perks.

 These benefits will help you ease employee concerns and boost their morale to meet your strategic objectives.

5. Performance Management

Performance management enhances organizational performance through developing team and individual performances. By aligning performance with a set of predetermined goals, standards, and competencies, you give employees a sense of ownership and responsibility. This isn’t just helpful for the organization but also for employees as it gives their work more meaning and purpose.

The performance cycle typically follows these steps:

Step 1: Goal Setting

Develop measurable and clear goals that not only tie into business objectives but also with their specific roles. For more efficient goal setting, have line managers and key stakeholders state their team goals. You can break these down further into group and individual metrics that you can evaluate at a given period.

Step 2: Monitoring Performance

Regularly track and assess employee performance against their goals. Encourage direct supervisors to do this via check-ins and ongoing feedback. HR can also monitor if employees are getting the support they need by randomly checking in with each employee.

Step 3: Performance Evaluation

Evaluate progress and accomplishments to create and agree upon action plans and, in many schemes, score performance to assess for any appraisals.

6. Employee-Employer Relationships

Do you see your company falling short of its goals? A big factor that comes into play is poor employee-employer relationships.

Unhappy employees often exhibit poor productivity, higher turnover rates, and a greater chance of workplace conflict. HR is central to enhancing these relationships by providing clarity to employees and acting as a bridge between upper management and employees.

Ensure that you’re fostering a positive workplace culture by leading with empathy. Encourage leaders to implement open-door policies so their team members feel valued as well.

7. Learning & Development

workplace training

Learning and development, while they have different meanings, correlate with each other. Learning is a continuous process that leads to the development of new skills, knowledge, and attitudes that prepare employees for higher-level responsibilities.

Human Resources play a crucial role in fostering a workplace that encourages continuous learning and development by:

a. Assembling an L&D Team

Most HR teams branch out by developing a Learning and Development department. L&D teams are typically assigned to address skill gaps and identify the best type of training to administer. From compliance training to building team capabilities, it’s on these professionals to ensure that employees are receiving the training they need to support career growth and see a long-term commitment to the company.

c. Implementing a Learning Management System (LMS)

HR employs, implements, and manages the use of Learning Management Systems. A good LMS platform should be able to provide various means for training, such as video content, gamification, and printed learning materials.

c. Establishing a Leadership Development Program

Leadership development initiatives shouldn’t just focus on nurturing managers and team leads. It should also provide opportunities such as training programs and workshops for aspiring leaders.

d. Succession Planning

Employees leave, retire, or get promoted to higher roles on the regular. This gives you even more reasons to have a solid succession plan in place. Succession planning is all about identifying top performers and developing them so they’re ready to advance in their careers within the organization.

8. Human Resource Information System

Technology is everywhere! Even “people” processes rely on tech to become more efficient. The most basic HR tech for growing companies and enterprises is an HRIS system.

A Human Resource Information System (HRIS) is an integrated platform that streamlines employee data management. These days, a modern HRIS covers various HR processes including payroll administration, employee benefits, expenses, performance management, and even self-service options. It’s an essential tool for companies facing a rising number of employees and complex regulations.

To establish effective people management, HR teams need to leverage these systems. They not only automate otherwise repetitive tasks but also provide the data you need to plan for a future-ready workforce.

Is Your HR Team Well-Equipped to Handle Workforce Demands?

Effective human resource management is the backbone of any well-rounded organization. It should oversee the recruitment of new employees, the entire employee lifecycle, as well as the company’s goals, objectives, and policies. 

With so many on their plate, HR teams need all the support to remain efficient. Ensure that your HR members have adequate experience and training to function as people managers.

Also, invest in the right technology to streamline their jobs and improve efficiency. Platforms like KAMI Workforce can be your next best HR partner. With hyperflexible features, KAMI easily adjusts to changing regulations and employee needs.

Get an innovative HR solution for your business today. Talk to a KAMI expert to learn more.