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Managing Your Human Resources

Managing Your Human Resources

Human Resources Management is what every Human Resource (HR) department should do to enhance productivity. Human Resources Management is beyond managing staff welfare. How is the human capital in an organisation contributing to bottom line? What is the rate of investment on staff? The HR department needs to emphasize that contribution to bottom line is not a function of people in sales alone. The Front Desk Officer treating customers with respect and courtesy is contributing to bottom line.

Human Resources Management starts with having an HR strategy; here you draw up your organisational  chart to enable you see where you want to go in the short, medium and long term and the people you want to fill the positions that will be vacant for this plan to succeed. You picture in your mind and put on paper the attitude, characteristics, aptitude of the people who will fill these positions. You also decide on their qualification and experience. Then come up with job analysis and job descriptions for each position. With this you can decide on the first set of employees to higher and follow your plan as articulated.

Asking the right questions during the interviewing process can help to ensure the right candidates are hired. So is listening more than talking during the interviewing process.

What will be the cost of hiring and retaining these staff members to your organisation? This will take you to the HR Metrics, which is looking at and recognizing the relationship between human resources and finance.

  • Revenue Factor = Revenue / Total Full Time Employees
  • Voluntary Separation Rate = Voluntary Separations / Headcount
  • Human Capital Value Added = (Revenue – Operating Expense – Compensation & Benefit Cost) / Total Full Time Employees
  • Human Capital Return on Investment = (Revenue – Operating Expenses – Compensation & Benefit Cost) / Compensation & Benefit Cost
  • Total Compensation Revenue Ratio = Compensation & Benefit Cost / Revenue
  • Labor Cost Revenue Ratio = (Compensation & Benefit Cost + Other Personnel Cost) / Revenue
  • Training Investment Factor = Total Training Cost / Headcount
  • Cost per Hire = (Advertising + Agency Fees + Recruiter’s Salary/Benefits + Relocation + Other Expenses) / Operating Expenses
  • Health Care Costs per Employee = Total Health Care Costs / Total Employees
  • Turnover Costs = Termination Costs + Hiring Costs + Training Costs + Other Costs

There is a need to look at the cost management of each employee in its totality. How much will it cost to hire, train, pay the salary, pay pension, health care, leave allowance etc for each employee, what is the total cost of all these as compared to the benefit of having the employee work for you?

HRM strategy should also involve, training of employees to empower them and in effect have a crop of people that can be promoted to fit higher positions as the Company grows.

The Employee Manual is an extremely import aspect of HRM; if it is very detailed, it can make the work of the HR department easier as all aspects of the daily running of the Company should be clearly spelt out.

Compensation and Benefits should be commensurate with experience and qualification. It should also be in line with your industry’s standards. Compensation includes salaries, leave allowance and the payment of 13th month salary or allowance. Benefits are employers’ pension contribution, payment health bills or health insurance, vacation allowance, children education allowance, car allowance or loan, housing loan etc.

A Company’s HRM must be dynamic and up to date. It must ask itself these questions

Strategic Perspective

  • Do we have the talent we need to be successful in the future?
  • Are we investing in growing our HR capabilities?

Customer Perspective

  • Are we viewed as a great place to work?
  • Are we creating an environment that engages our people?

Operational Perspective

  • Are our HR management processes and transactions efficient and effective?
  • Are we using technology to improve HR efficiency?

Financial Perspective

  • Is our return on investment in people competitive?
  • Are we managing our cost of turnover?

Outcomes of Human Resources Management:

  • Improved organizational competitiveness
  • Increased productivity
  • Improved employee satisfaction
  • Reduction of risks associated with employment decisions
  • Improved ROI