Having a solid system of human capital management (HCM) in place is an essential first step for the success of any organization in any industry. To drive growth, maximize revenue, and minimize costs, you first must understand the functions of your technology and resources that ensure organizational efficiency. Here we’ll help you understand some of the key terms you'll come across in discussing human capital management. These definitions will enable you to better coordinate within your organization for optimal results.
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Human Capital Management (HCM)
The administrative management of an organization's people. HCM practices are related to all aspects of human resources, payroll, and talent management and are responsible for the attraction, selection, performance, development, and rewarding of employees. HCM also oversees organizational leadership and culture and ensuring compliance with employment and labor laws.
Also called Strategic Human Capital Management, HCM, HCRM, Human Capital Management Solution, and Human Capital Management System.
Human Resource Management System (HRMS)
Refers to software solutions designed to automate Human Resource business processes, transactions, payroll, and compliance. Optimally, the HRMS also provides a single, centralized view of an organization’s people. HRMS applications can include talent acquisition, benefits administration, compensation management, payroll and compliance, performance management, succession planning, and career development. Frequently used interchangeably (though inaccurately) with HCM.
Human Resource Management (HRM)
The strategic approach to managing people and recruitment, and the developed approach for handling training, personnel policies, and employee benefits and records. HRM oversees the organizing of corporate culture, corporate communication and compliance with employment and labor law. Put simply, HRM is the management of an organization’s workforce. The HR/HRM department has many roles that may include but are not limited to: recruitment, training, assessment, employee benefits and rewards, labor law compliance, and change management.
Human Resources System
A designed application database that analyzes data that assists HR Management in making precise decisions that support the goals of a company while improving functionality.
Synonyms are HR Systems, Human Resource System, Human Resource Systems, and Human Resources Systems. Similar to HRIS and HRMS.
Human Resources Information System (HRIS)
A software or cloud-based management information system used to organize the Human Resource (HR) data for employee information. Examples include payroll, accounting, benefits, reporting, time and attendance, recruiting and scheduling.
Synonyms are HRIS and HRIS Software.
HR & Payroll Services
Resources that leverage an all-inclusive database to manage workforce data and calculate the appropriate payroll. Online, paperless HR and payroll systems can effectively help a company stay organized and keep employees engaged.