Human Resource Management: Key Pillars and How to Choose an HRM Solution
When we consider what makes a business successful, we might think of its strong financial backing, impressive market position, or cutting-edge technology. While all of these are important, your business will only survive and thrive if your organization has the right people in place and the processes to manage them.
This guide explores human resource management as an essential cog in your business operations. We'll explore the main pillars and objectives of HRM and how to choose a human resource management platform that aligns with your organizational goals.
What is human resource management?
Human resource management is a series of processes and practices involved in managing an organization's human assets—its people. This investment focuses on employee recruitment, development, and people management, enabling everyone to achieve their full potential and contribute to the company's success. Let's take a look at the core elements of HRM:
Recruitment and selection
Recruitment is a critical component of the human resources management process that involves finding the right candidates with the necessary skills and competencies to join your team. The process typically includes:
- Creating job descriptions
- Crafting job ads and publishing them on a diverse range of job boards
- Screening job applications
- Running skills tests and collecting work samples
- Shortlisting and interviewing applicants
The moment a job candidate applies for a role with your company is the start of your people management cycle. Your applicants' interactions with your hiring team shape their perception of your employer brand and can ultimately determine whether they accept an offer of employment.
This stage is also an opportunity to prioritize your recruitment diversity initiatives, ensuring every candidate is treated fairly and given equal consideration for the role. Unfortunately, research determines that 50.73% of people have experienced negative bias when applying for a role due to their age, race, gender, or other discriminatory factors. As a result, 67% of job seekers would prefer the application process to be anonymous to stifle any biases.
Training and development
Upskilling your employees and preparing them for the road ahead supports their individual careers while bolstering overall organizational performance. This aspect of human resource management ties in with employee retention, which 90% of organizations are concerned about. These organizations also believe that learning opportunities are their top retention strategy.
According to LinkedIn, 7 in 10 people report that learning improves their sense of connection to the organization, and 8 in 10 believe it adds purpose to their work. With this in mind, L&D leaders must:
- Evaluate the skills and knowledge your company needs
- Create a culture of continuous learning and development within the organization
- Develop individual training plans that align with business objectives
- Invest in relevant resources, such as training programs, online courses, and conferences
- Encourage employees to take ownership of their learning journey, with the support of their manager and personnel department
- Provide mentoring and shadowing opportunities
- Measure the ROI of your training initiatives
Performance management
Employee performance management is a continuous process that aims to maintain an open dialogue with employees and steer their performance to benefit professional and organizational growth.
Traditional performance management focused on top-down annual performance reviews, where managers talked and employees listened. Culture strategist Kelly MacCallum explains why this method doesn't resonate for many companies:
“No one likes them since they are grossly ineffective. It feels like a summons to the principal’s office for employees. Leaders suffer a false sense of urgency having to meet everyone at the same time. HR admins hate chasing leaders to get it done and the whole administrative process. Two weeks later, no one remembers what goals were set and they're outdated before the quarter ends. This tick-box exercise is kept because companies don’t know how to re-imagine compensation increases without it.”
Instead, companies like Netflix now use 360-degree performance management cycles by collecting multisource feedback from peers, managers, organizational leadership, direct reports, and self-appraisals to provide a well-rounded overview of how an individual has performed in a given cycle. To run a successful performance management cycle, HR professionals must:
- Set clear and measurable goals for employees
- Track progress and provide regular feedback consistently
- Conduct performance evaluations at predetermined intervals
- Identify areas for improvement
- Create customizable development programs
- Recognize and reward employees for their achievements
Compensation and benefits
Compensation is still a top way for your Human Resources teams to attract and retain top talent. Achievers' Engagement and Retention Report highlights that "compensation" is the number one reason to job-hunt in 2024, thanks to almost three-quarters of employees struggling to make ends meet in the challenging economic climate.
Besides offering a healthy salary, employers can stand out by providing an attractive mix of employee benefits. From health coverage and retirement planning to childcare and wellness stipends, there are limitless ways to support your employees with their personal and professional lives. Human resources departments must complete the following tasks to deliver compelling compensation packages in the current market:
- Benchmark salaries and adapt according to market trends
- Offer comprehensive benefits packages that align with employee needs and values
- Pay your employees on time and in full every pay cycle
- Provide employees with information on how their salary and benefits are taxed
- Communicate benefits enrollment details to employees and assist with any questions or issues
- Continuously review and update compensation and benefits packages to attract and retain top talent
Employee relations
Keeping your workforce happy and satisfied in their roles is one of the most important aspects of human resource management. When your employees are thriving, they’re productive, creative, and spread positivity about your employer brand. Unfortunately, we know from Gallup research that only 23% of the global workforce feels engaged in their work. This makes it all the more important for HR teams to find ways to inspire and connect with their employees through initiatives such as:
- Regular check-ins with managers and HR teams to address any concerns or issues
- Providing opportunities for career growth and development
- Encouraging work-life balance through flexible scheduling and remote-work options
- Celebrating employee achievements and milestones
- Promoting a positive and inclusive organizational culture
- Offering support and resources for mental health and well-being
- Conducting employee satisfaction surveys to gather feedback and address areas of improvement
What are the objectives of human resource management?
Setting HRM objectives involves plenty of nuance. Each organization must identify its own priorities and tailor its objectives to fit the unique needs of its business and workforce. But grouping objectives into the following four categories helps clarify the different levels at which HRM operates and the diverse impacts it can have.
Organizational objectives
Your HRM strategies and practices must align with the organization's overall mission and goals to drive business success. These goals may vary depending on the size of your business and its HR function. For example, small- to mid-sized businesses may be concerned with improving time-to-fill rates to recruit much-needed personnel for their scaling teams. Alternatively, larger organizations may prioritize enhancing workplace culture to improve employee engagement and retention rates.
Functional objectives
Every business wants its operations to run smoothly every day to be both efficient and cost-effective. For example, your objective might be to optimize your workforce management practices as a way to ensure you're fully staffed during peak periods. Typically, this involves using technology solutions, such as human resource management systems, to automate routine people processes, gain accurate data insights, and make informed decisions quickly.
Societal objectives
Your company must meet numerous HR compliance laws and regulations to avoid expensive lawsuits and reputational damage. These legal and ethical considerations include:
- Labor laws and employment standards: Includes regulatory compliance with the Fair Standards Labor Act, Equal Employment Opportunity Laws, and the Family and Medical Leave Act
- Health and safety regulations: Adhering to Occupational Safety and Health Administration (OSHA) standards
- Benefits and compensation: Compliance with federal laws such as the Employee Retirement Income Security Act (ERISA) and Affordable Care Act (ACA)
- Privacy and data protection: Ensuring the confidentiality of your employees’ protected health information by complying with the Health Insurance Portability and Accountability Act (HIPAA)
- Anti-discrimination and harassment laws: Includes compliance with Title VII of the Civil Rights Act and the Americans with Disabilities Act. Many employers will create customized DEI initiatives to meet these legal requirements and accelerate diversity progress in their respective organizations.
- Record keeping and reporting: Companies must file regular reports such as employee data, payroll records, and tax information with federal and state agencies.
Personal objective
Personal HRM objectives consider your employees as individuals. They focus on enhancing the workforce experience by ensuring that each person is recognized for their contributions, is fully engaged in their roles, and has access to professional development opportunities that excite them. HRM objectives also cover strengthening relationships between team members and managers and their direct reports. This includes setting goals to resolve workplace conflict quickly and effectively when disagreements or grievances arise.
HRM vs. HCM: What are the differences?
The term human resource management is often used interchangeably with human capital management. While both refer to the practices and processes involved in managing your organization’s people, there are some differences and overlaps between them.
Human resource management focuses on traditional HR functions such as recruitment, training, compensation, and performance management. It zooms in on the operations and admin side of managing employees to meet the organization's immediate needs in terms of compliance and staffing.
Human capital management is more strategic in scope. Although it includes all aspects of HRM, it also incorporates talent management, workforce planning, and analytics to optimize the overall value that employees bring to the organization's table.
HCM vs. HRM
Human resource management and human capital management overlap in multiple areas. Consider employee training, for example.
In human capital management, training and development is viewed as a strategic investment that companies cycle back into the organization to add value and reach key business goals.
Human resource management also focuses on career development but through a different lens. HRM provides access to specific courses or growth opportunities so employees can develop their technical and soft skills and progress along their chosen career path. The organization still receives value, but the focus is on providing the mechanics to achieve employee growth and development.
What to look for in an HRM solution
A human resource management platform is a prerequisite for any organization committed to improving its HR operations. The latest technology automates and streamlines the day-to-day management of your people, all while keeping pace with legal and regulatory changes. When evaluating a human resource management system, here are some key aspects to consider before you invest in a specific platform:
Features and functionality
Each HRM solution comes with its own set of bells and whistles, so make sure you select one that meets your organization’s specific needs. Here are some key features to look for:
- Payroll: Calculating and managing payroll accurately, quickly, and efficiently. Look out for additional features such as direct deposit options and tax forms.
- Time and attendance: Tracking employee hours worked, managing time off requests, and generating reports for labor compliance purposes
- Benefits administration: Enrolling employees in benefits plans, managing open enrollment periods, tracking employee eligibility, and generating relevant reports. Advanced features might include automated benefit deductions and integrations with insurance carriers.
- Scheduling: Creating and managing employee schedules, tracking attendance, and optimizing shift coverage to meet business needs. Self-service functionality allows employees to select the shifts that fit in with their work-life balance.
- Compliance: Prioritizing risk management and ensuring compliance with all applicable laws and regulations to avoid legal issues
- Talent management: Features like applicant tracking systems and performance evaluation tools enable smooth recruiting, onboarding, performance management, and succession planning processes
Cost
Budget will undoubtedly be a determining factor in your HRM selection. Different solutions use different pricing models, for example:
- Fixed fee per employee: As your organization grows, the cost of using an HRM solution will increase proportional to the number of users.
- Per module: If you only need certain features, such as payroll or benefits administration, many providers offer subscription-based pricing for each individual feature.
- Flat fee: Some solutions charge a flat fee for unlimited access to the entire HRM platform, regardless of your organization’s size. This may be a cost-effective option if you have a large number of employees.
Some vendors offer volume-based discounts or money off if you commit to annual rather than monthly pricing. Remember to ask about integration costs and additional ongoing support or implementation-assistance fees.
Integrations
Some HRM solutions offer all-in-one functionality, enabling HR professionals to handle the full spectrum of daily or one-off tasks. However, most people teams need their HRM systems to sync up with other key platforms in their tech stack, such as accounting or learning management systems. Ensure you know which tools the HRM can integrate with and how easy it is to connect and sync the data.
Scalability
There are many reasons your headcount may scale, such as opening a new branch, going through a merger and acquisition, or organically expanding your business. Make sure your HCM can grow with your changing employee numbers and manage the subsequent changes in processes. Ideally, your HRM provider will offer tiered packages to accommodate your growth without downtime, data loss, or increased pricing.
Accessibility
Mobile compatibility enables HR teams to access the HRM system from any device, anytime. Choose an HRM solution that either has a mobile app or is compatible with all devices, so your team can handle tasks remotely and on-the-go.
Employee self-service
Just as modern consumers expect to make purchases from the palm of their hands, modern employees also want the flexibility to receive HR support, access their compensation records, and complete tasks online at the touch of a button. Employee self-service lets employees view crucial information from any connected device and complete key actions without HR intervention. This feature helps increase workforce autonomy while reducing the burden of repetitive administrative tasks for your HR team.
Security
Employers are responsible for keeping employee data secure and confidential. Ensure the HRM solution you choose has robust security measures, such as data encryption and role-based access control, to keep your employee data safe from cyber threats.
How to choose your HRM software
As you narrow down your list of vendors and HRM products, consider the following questions to progress your research and select the right solution for your business:
- Which other companies like yours are using this HRM? Ask to view case studies and success stories from similar organizations to yours to understand the results you might expect.
- How does the HRM score on popular software user community sites like G2 or TrustRadius? What clues do individual reviews provide about their experience of using the platform?
- How easily can the HRM adapt to change? If your company is growing quickly, you’ll need an HRM that can scale with you. If you’re in a highly regulated industry, ensure the platform prioritizes compliance.
- Does the HRM vendor offer a free trial before you buy? Some platforms offer a stripped-back version of the product for an unlimited period while others will provide a fully functional advanced version of the product for 14 days or similar. Understand what is available and how you plan to test the product during your trial duration.
- What type of customer service does the vendor offer? Some vendors offer 24/7 support or access to a dedicated customer success manager. Others provide community support forums encouraging its user base to collectively resolve common issues.
- Does the HRM meet your organizational goals? Consider what your company wants to achieve in the next year, three years, and five years, and determine if this platform will help you get there.
Streamline human resource management with UKG
Human resource management is made easy with UKG’s versatile solutions, which are designed to help any size of organization propel its people to success. Choose from:
- UKG Ready, an all-in-one HR solution aimed at helping leaner teams achieve growth and making a difference to your SME's people. With built-in features for talent management, payroll, and time tracking, it's easy to achieve operational excellence.
- UKG Pro, a culture-driven suite that supports your enterprise organization's needs. You'll manage personnel data, complex payroll tasks, scheduling, and strategic workforce planning from a single platform.
Take a UKG product tour today, or connect with one of our HRM specialists if you have any questions.
