Human Resources Methods

Human Resources

With today's workforce becoming increasingly diverse and organizations doing more to maximize the benefits of the differences in employees, Human Resource managers are evolving from the "old school" sideline player to the front-line fighters. Organizations are relying on managers to get the people who get the job done, and of course, make the company money. People have always been central to organizations, but their strategic importance is growing in today's knowledge-based business world like never before. An organization's success increasingly depends on the knowledge, skills, and abilities of its employees, particularly as they help establish a set of core competencies which distinguish one organization from its competitors.

When employees' talents are valuable, rare, difficult to imitate and organize, an organization can achieve a sustained competitive advantage. In order to "compete through people", an organization has to be able to do a good job of managing their human capital: the knowledge, skills, and capabilities that add value to the organizations. Managers must develop strategies for identifying, recruiting, and hiring the best talent available. Develop these individuals in ways that are specific to the needs of their individual firms, encourage them to generate new ideas while familiarizing them with the company strategies, invite information sharing, and rewarding collaboration and team work. The basis on which compensation payments are determined, and the way they are administered, can significantly affect employee productivity and the achievement of organizational goals. Establishing compensation programs require both large and small organizations to consider specific goals. Employee retention, compensation distribution and adherence to the budget must be carefully weighted against the overall organizational goals and expectations. Compensation must reward employees for past performance while serving as a motivation tool for future performances. Internal and external equity of the pay program will affect employees' concepts of fairness. Organizations must balance each of the concerns while still remaining competitive.

For internal equity an organization can use one of the basic job evaluation techniques to determine relative worth of job. The most common are the ranking and classification methods. The job ranking system arranges jobs in numerical order on the basis of the importance of the job's duties and responsibilities to the organization. Job classification slots jobs into preestablished grades with higher rated grades requiring more responsibilities, working conditions, and job duties. External equity can be determined by a wage survey. Data obtained from the surveys will facilitate establishing the organization's wage policy while ensuring that the employer does not pay more, or less, than needed for jobs in the relevant labor market. Base salary is only one aspect of a retention plan for important employees. Benefits and incentive plans are valuable perks in recruiting and retaining essential employees. Benefits are an established and integral part of the total compensation package. In order to have a sound benefits package there are certain basic considerations. It is essential that a program be based on specific objectives that are compatible with the organizational philosophy and policies as well as affordable to the company. By utilizing a flexible benefits package, employees are able to choose those benefits that are best suited to their individual needs. Incentive pay plans can be advantageous to both the employer as well as the employee. The success of an incentive pay plan depends on the organizational climate in which it must operate, employee confidence in it, and its suitability to employee and organizational needs. Importantly, employees must view the incentive plan to be equitable and related to their performance.

Performance measures should be quantifiable, easily understood, and bear a demonstrated relationship to organizational performance. Performance appraisal programs serve many purposes, but in general those purposes can be clustered into two categories: administrative and developmental. The administrative purposes include decisions about who will be promoted, transferred, or laid-off. They can also include compensation decisions and the like. Developmental decisions include those related to improving and enhancing an individual's capabilities. These include identifying a person's strength and weaknesses, eliminating external performance obstacles, and establishing training needs. Within many organizations, performance appraisals are seen as a necessary evil. Managers frequently avoid conducting appraisals because they dislike playing the role of judge. As a result appraisals are conduct annually, for good or