Human Resource Management or HRM is one of the most crucial aspects of undertaking a business. It enables the HR teams to manage their employees effectively, helping them keep their staff engaged with their organization. Hence, it is essential to understand the basic principles of HRM.
With this blog, we are sharing what is human resource management, its relevance and evolution, as well as the various principles of human resource management observed through the years.
We will also be helping you understand the essential principles of HR management as well as the ones governing HR policy’s effectiveness.
What is Human Resource Management?
Human Resource Management (HRM) is the practice of managing the employees or human resources within an organization for improved performance and enhanced engagement.
By strategizing employee management through HRM, a company can effectively utilize its employees to ensure better performance, while keeping their staff engaged and satisfied.
While HRM used to be strictly an administrative task earlier, it has evolved and transformed into a strategic part of all businesses as it helps manage the most valuable resource of any organization, its employees.
9 Fundamental Principles of Human Resource Management
Since human resources management is a well-known subject, it has been interpreted in various formats by various theorists and scientists. Hence, there are different aspects of HRM which provide different principles put forth by different entities throughout history.
However, we have selected the top 9 fundamental principles of HRM, that enable the HR teams to remain ethical and fair in undertaking their duties effectively.
1. Principle of Individual Growth
Employees stay for longer in an organization when they realize their company values them as individuals and are ready to provide them with opportunities to grow as an individual and professionally.
It will lead to a satisfied workforce who are committed towards their workplace and hence, remain loyal for longer. Hence, the principle of individual growth is one of the most essential principles of HR Management.
2. Principle of Fair Selection
Since recruitment and selection helps the company find the right individuals to undertake the company tasks, the HR teams need to ensure that they find the right candidates who are the ideal fit for their job role.
Similarly, they should ensure that they are shortlisting the candidates based on solely their merits, by providing them with a fair selection process, making the principle of fair recruitment and selection critical for company success. It can be easily accomplished with a dedicated recruitment management system.
3. Principle of Fair Salaries
Since compensation and benefits prove to be the primary motivators for employees to work for an organization, HR teams should enforce the principle of fair pay.
By having fair pay, HR teams can ensure that they find the right individual to undertake the task while providing them with the correct remuneration.
4. Principle of Equal Participation
The principle of equal participation ensures that every employee feels valued to be an active member of the team.
HRs ensure that each employee gets an equal opportunity to share their voice within the company and they are heard irrespective of their designation. It helps boost employee morale and job satisfaction in the organization.
5. Principle of Incentives
Since rewards and bonuses act as incentives to undertake their tasks better, the principle of incentives dictates that HR reward employees for undertaking their jobs well.
It motivates the performers to undertake their tasks in the best manner possible while motivating others to perform better for the rewards.
6. Principle of Dignity of Labour
The principle of dignity of labour ensures that all employees of the organization feel valued and appreciated irrespective of their job role and designation.
By treating employees with dignity and respect, HR teams can ensure increased loyalty from their workforce, improving the overall employee experience within the organization.
7. Principle of Team Spirit
HR teams are also responsible for inculcating the spirit of teamwork among its staff members.
The principle of team spirit dictates that the HR teams create an environment of team-building, promoting mutual trust among the team members. Having such bonding and mutual understanding helps the teams to undertake their tasks efficiently.
8. Principle of Communication
Since businesses run on departmentalized teamwork, it is essential to provide excellent means of communication to ensure that work is undertaken with utmost efficiency.
Utilizing the principle of communication, HR teams ensure that the communication is transparent from the upper management to the employees, leading to better overall management within the organization.
9. Principle of National Prosperity
The principle of national prosperity enables the HR teams to utilize the sense of patriotism among their staff to ensure better productivity.
If all employees start being more productive in their respective organizations, it will lead to the prosperity of the company, and eventually, help usher the country into a better future.
10 Essential Principles of Human Resource Management
While the ‘essential’ principles of human resource management are similar to the fundamental principles we discussed above, the concepts of these principles are vastly different from the other.
As this is a comprehensive guide on HRM, we will also be covering these 10 essential principles to ensure that we have a thorough understanding of the topic.
➔ Comprehensiveness
The principle of comprehensiveness dictates that the HR strategies consider all factors of employee management. These strategies should not provide undue advantage to any specific team member or designation and should be equally relevant to all employees working in that organization. Having such fair strategies helps develop trust and loyalty among the staff.
➔ Communication
The principle of communication dictates that the HR personnel remain transparent in their communication with their staff members. Utilizing this principle, HR teams should communicate the HR policies with their employees and ensure compliance with them.
By developing transparent communication channels, HR teams can develop a workplace free from communication barriers, leading to increased productivity and loyalty.
➔ Credibility
The principle of creditability dictates that the HR teams develop a hierarchy within the organization that is based on mutual trust. By creating a sense of trust and credibility among the employees, the HR teams can also accelerate the acceptance of HR and company policies among their staff members.
➔ Cost-effectiveness
The principle of cost-effectiveness dictates that the HR teams remain budget-conscious in their efforts to manage their employees. However, they should ensure that their employees feel valued, which can be accomplished by valuing their opinions as well as compensating them adequately for their time and effort.
➔ Commitment
The principle of commitment dictates that HR teams motivate their employees to ensure that they stay committed to their organization. To ensure such kind of loyalty, HR personnel should go above and beyond simple employee management tactics and focus on employee engagement strategies.
By ensuring employee engagement, the HR teams can develop a highly productive workforce who are also willing to stay longer with their companies.
➔ Coherence
The principle of coherence dictates that the HR strategies should be coherent enough to justify to time and effort put into implementing these plans. With the right kind of HR policies, the company can not only ensure adherence but also develop a loyal workforce that is actively engaged with the organization.
➔ Competence
The principle of competence dictates that the employees of an organization be competent enough to carry on the duties of the company without any issues. Hence, it is the responsibility of the HR teams to ensure that their hires are the right fit for the role and the organization.
➔ Creativity
The principle of creativity dictates that the HR policies should be creative enough to warrant engagement from the employees. Since employee engagement plays a major role in boosting productivity and morale, HR personnel should share creative options to actively engage their employees.
➔ Control
The principle of control dictates that the HR team exercise restraint in implementing HR policies and engaging their staff members.
While it can be tempting to go overboard with employee engagement initiatives, since it is undertaken for the benefit of a business, it is essential to have control over the time and budget spent on it to ensure that the HR policies remain consistent with the organizational objectives.
➔ Change
The principle of change dictates that constant change is essential for progressing a business. Hence, the HR team should ensure that there is continuous improvement in the company’s workforce, which enables them to become more productive. HR personnel usually enforce this principle by actively monitoring employee performance and providing upskilling options whenever required.
Principles Governing HR Policy’s Effectiveness
Since we have discussed the fundamental principles of HRM as well as the essential principles of HRM, let us check out the principles governing the effectiveness of HR policies.
These principles ensure that the HR policies are effective for the organization, while also remaining beneficial for the employees.
The principles governing HR policy’s effectiveness include:
1. Equal Pay for Equal Work
By ensuring equal pay for equal work, the HR team can ensure that the employees are paid according to the work they are undertaking. It helps keep them motivated as they understand that their company values them and is paying them the right compensation and benefits for their work, making them stay loyal to their organization.
2. Practise what You Preach
By practising what you preach, you set an example for your staff to undertake their work to the best of their abilities. Similarly, it also lets them understand the work ethic expected of them. Hence, it is essential to put into practice the HR and company policies that govern the employees.
3. Individualistic Approach
When we talk about ‘human resources’, we often forget the ‘human’ aspect and concentrate more on the ‘resource’ side of things. However, it is essential to understand that everyone is different and hence, they should be appreciated and understood accordingly. Hence, HR needs to understand them and treat them accordingly.
4. Fair and Just Company Policies
Everyone should be treated fairly within an organization as it helps create an environment of mutual trust and understanding, leading to engaged employees. By providing equal opportunities to everyone, the HR teams can motivate their staff to undertake their work well. Hence, it is essential to have fair and just policies within the company.
5. Make Employees Feel Valued
HR teams have the power to either make an employee feel valued and appreciated or worthless. Hence, it is essential to utilize this power to ensure that everyone in the company feels valued and is a contributing member of their team. Having this understanding will vastly improve their engagement with their company, ensuring a productive work environment.
6. Justified Rewarding
Rewards and recognition are appreciated by all employees; however, it should be earned and not shared as a ‘privilege’. Hence, the HR teams should ensure that their rewards and recognition programs recognize only the best and share appropriate rewards to appreciate their time and effort.
7. Right to Information
Each employee has the right to organizational information. Hence, the HR teams should ensure that their staff is provided with the right information to empower them to undertake their tasks successfully. However, it is also essential to compartmentalize the information, especially in cases where sensitivity and confidentiality are important.
8. Judgement of Strength
HR teams should also be good judges of employee strengths as it helps them understand whether an employee will be able to handle the work pressures associated with their designation. They will be able to provide the right tools and associated benefits, once they understand the work pressure, supporting the employee to undertake their work better.
Evolution of HR Management
Human resource management used to be administrative during the initial phase of the industrial revolution. HR teams would undertake clerical duties related to employee management and well-being to ensure that their staff remained healthy and productive. As a result, HRM was the sole responsibility of the HR teams.
Eventually, the role of HRM in an organization started evolving and transforming into a more strategic one. With the rise of industrialization, the realization that employees are the most important resource for any organization enabled businesses to undertake major changes.
These changes aligned the business goals with HRM objectives, paving the way for the rise of ‘strategic HRM’. For example, the HR manager started being an active part of board meetings to help the management understand the employees and ensure their well-being and engagement.
HRM is currently being digitalized using innovative technologies like Artificial Intelligence (AI), Machine Learning (ML), etc. to support the HR teams in undertaking their tasks with enhanced efficiency. For instance, HR teams can utilize predictive analytics to estimate whether an employee is planning to leave their organization and make positive changes to ensure they stay with their company.
Modern companies are using HRMS and other dedicated systems to actively engage their staff to provide an overall better employee experience to their staff, further cementing the importance of HRM for businesses.
Relevance of Human Resource Management
The relevance of HRM for an organization lies in the fact that employees are the most valuable resource for any company.
Hence, managing it effectively leads to multiple advantages for the organization, both in terms of monetary and non-monetary benefits.
Hence, let us check out the relevance of HR management:
➔ Attracting Talent
Through effective HRM initiatives, businesses can attract and retain talent effectively. HRM dictates the kind of candidates required for various positions, as well as the provisions for attracting the right candidates.
It also helps the recruiters in the organization find the most suited individual for a job role. Similarly, HRM helps keep them warm for the creation of a talent pool for the organization.
➔ Strategic Planning
HRM also involves strategic planning on how the organizational goals and objectives can be achieved within a pre-defined timeframe.
HRM dictates that an HR representative such as the HR manager be present at the board meetings to ensure that the employee’s voice is heard by the management. It helps the HR team to put forth their demands and develop a better workplace for the staff members.
➔ Facilitating Managers
It is said that employees leave organizations due to bad managers rather than bad organizations. Hence, we can deduce that good managers are extremely vital for the success of any company. Through an effective HRM strategy, companies can empower their managers with the right tools to manage their teams effectively.
➔ Culture Establishment
HRM also plays a significant role in cultivating the work culture of an organization. HR teams can develop a robust work environment by cultivating the values and norms while establishing the behaviour to be followed in their organization through effective human resource management strategies.
➔ Work Environment Development
A robust HRM strategy also helps develop the work environment as it improves the productivity of the workforce. A clear HRM strategy will involve multiple aspects related to employee performance such as performance evaluation, rewards and recognition, goal-setting, feedback sessions, etc. which proves to be instrumental in enhancing the overall organizational performance. HRs can also utilize a dedicated performance management system to ensure optimal performance.
Conclusion
So, that was a comprehensive guide on the human resource management principles. We have explained the concept of HRM, its evolution throughout the years, as well as its relevance in organizations.
We have also discussed the 9 Fundamental Principles of HRM, as well as the 10 Essential Principles of HRM. Finally, we checked out the various principles governing the effectiveness of HR Policies. We hope this guide helped you understand everything about these principles.
