Why is Human Resource Management Important?

Why human resource management is an important function in an organisation?

  Human resource management (HRM) refers to the policies, practices and systems that influence employees’ behaviour, attitudes and performance (Noe., et al 2006). Its role is to contribute to professional development and to lead to organisational goals in a motivating environment for both the group and for each individual party (Bordean, 2011).Talent management in particular is a significant function of HRM. This essay will explore how talent management supports HRM as an important function and why it plays a vital role to the success of an organisation.

  Talent management is used by organisations to ensure the right person is in the right job at the right time (Jackson and Schuler, 1990). Organisations use a variety of methods in the talent management system such as job specification, psychometric tests and interviews to make sure they are hiring and retaining the right person.

   A job specification is comprised of a document that describes the general tasks and responsibilities of an individual. In addition to this, companies may require individuals to meet their criteria with regards to specific skills, qualifications and experience. The job specification is an advantage for both the individual and the employer since the individual will read it to see if they fit the criteria before making the application. The employer would not need to search for candidates as they will self-select (Van Der Westhuizen, 2017).

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   Since the 1980’s, the use of psychometric tests has increased as part of the selection process. Cognitive abilities, personality traits and skills are all under consideration for vacant posts. It is widely used across the world and most prevalent among medium and large sized firms (Jenkins, 2001). The psychometric tests such as the abstract reasoning test require an individual to contextualise information and recognise patterns. This is important because the ability to think in abstract terms is needed for careers like science and mathematics which involves seeing the relationship between things (Shah, 2015). Psychometric tests may have minor drawbacks for example, nervousness, with individuals not being able to perform well under pressure. Nevertheless, tests are partly the reason for employers to see exactly who can perform well under pressure. Additionally, these tests can be used at any stage of the recruitment process; therefore, companies are able to arrange a suitable time after the interview stage, once the candidate is comfortable.

   The employment interview is the most commonly used selection tool in the world (Practica,2010). Businesses may choose to perform structured or unstructured interviews depending on their style of recruitment and their management processes. The structured approach is generally a formal interview with set questions to which the interviewer can compare answers and choose the one who is most suitable for that role. Although this interview type may seem predictive, a study conducted by Mayfield (1964) indicated that structured interviews generally show higher interrater reliabilities than do unstructured interviews and that they are effective at predicting job performance. This is crucial for managers looking to hire the perfect candidate.

Unstructured interviews gather applicant information in a less systematic manner than structured interviews (McDaniel, 1994) and often starts with open ended questions regarding the area of education, with following questions dependent on the candidate’s response (Doody., et al 2013)

A respectable case of an unstructured interview includes a study led by Moyle (2002) where participants who had major depressive illnesses were interviewed informally. The researchers suggested that using this interview should follow the direction of the participants’ storytelling. The study also offered a great example of how to interview in response to the participant’s needs.

   ‘’Talent management plays an important role in the business since it manages one of the important assets of the company—its people’’ (Llamas, 2018). For this specific reason, human resource management is one of the most important functions of an organisation, as it directly deals with the employee. A survey of 418 international executives found eight in ten respondents held the view that putting in place the most effective talent management strategy will be key to competitive success. (KPMG, 2012). Friedman (2017) concluded that the 3 best predictors of job performance were past behaviour, conscientiousness & cognitive ability. Therefore, interviews and psychometric tests remain true to its purpose and are used as a platform to explore these 3 predictors.

Conclusion

HRM demonstrates a very strategic role in managing people and workplace culture. Metaphorically speaking, the complex tree of HRM has several branches attached to it. The branch of talent management bears substantial significance in the eyes of an employer. Discovering talent can generally be the first point of contact with a potential employee, therefore it is important use the correct methods of recruitment to find the best candidate. It is easy to create a job specification to match the employer’s needs, however, organisations should be thorough in creating this document to avoid the wrong hire. This piece of guidance should also be adopted for interviews since it is valid for predicting future job performance. Businesses should follow the most practical and sensible method of interviewing to truly obtain the most useful information as some candidates should be interviewed according to their needs. HRM delves into the human aspect of the organisation and to understand certain problems with the organisation, one would need to communicate with the people who are working within it.  This cannot be said for other departments that focus on intangible or other physical assets. By understanding the branch of talent management, one can justly view the human as a treasured asset to an organisation.

Reference list

• Bordean, I. (2011) ‘The Importance of Communication in Human Resources Management’, EuroEconomica, 30(5), p. 119. Available at:http://search.ebscohost.com/login.aspx?direct=true&db=edo&AN=111890249&site=eds-live&authtype=ip,shib&custid=s9815128 (Accessed 10 November 2018).

• Doody, O. and Noonan, M., 2013. Preparing and conducting interviews to collect data.

• Friedman, E. (2017). The Best Predictor of Job Performance in 2019. [online] Blog.eskill.com. Available at: http://blog.eskill.com/best-worst-predictors/ [Accessed 8 Jan. 2019].

• McDaniel, M.A., Whetzel, D.L., Schmidt, F.L. and Maurer, S.D., 1994. The validity of employment interviews: A comprehensive review and meta-analysis. Journal of applied psychology, 79(4), p.599.

• Moyle, W., 2002. Unstructured interviews: challenges when participants have a major depressive illness. Journal of Advanced Nursing, 39(3), pp.266-273.

• Noe, R., Hollenbeck, J., Gerhart, B. and Wright, P., 2006. Human Resources Management: Gaining a Competitive Advantage, Tenth Global Edition. McGraw-Hill Education.

• Jackson, S.E. and Schuler, R.S., 1990. Human resource planning: Challenges for industrial/organizational psychologists. American psychologist, 45(2), p.223.
• Jenkins, A., 2001. Companies use of psychometric testing and the changing demand for skills: A review of the literature. Centre for the Economics of Education, London School of Economics and Political Science.
• KPMG (2012) Rethinking Human Resources in a Changing World, KPMG, London. Available at: https://home.kpmg.com/content/dam/kpmg/pdf/2016/06/pl-rethinking-human-resources-in-a-changing-world.pdf (Accessed 10 November 2018).
• Llamas, C. (2018). The importance of talent management and why companies should invest in it – FastLane HR. [online] FastLane HR. Available at: http://fastlanehr.hk/2657-2/ [Accessed 8 Jan. 2019].
• Mayfield, E.C., 1964. THE SELECTION INTERVIEW: A RE‐EVALUATION OF PUBLISHED RESEARCH 1. Personnel Psychology, 17(3), pp.239-260.
• Practica, D.P. and Lunenburg, F., 2010. The interview as a selection device: Problems and possibilities.
• Shah, R. (2015). https://www.quora.com/What can a person do in the career if his abstract reasoning percentile is 98. [online] Quora. Available at: https://www.quora.com/What-can-a-person-do-in-the-career-if-his-abstract-reasoning-percentile-is-98 [Accessed 8 Jan. 2019].
• Van Der Westhuizen, G. (2017). How to write a job specification and why it’s important to get it right. [online] Fusionpersonnel.com. Available at: https://www.fusionpersonnel.com/blog/2017/09/how-to-write-a-job-specification-and-why-its-important-to-get-it-right (Accessed 6 January 2019).

Bibliography

• Psychometric Test | Know About the Test Taken in Interview and Job Selection Process | VGYAN Hindi (8 January 2019) YouTube video added by VGYAN [Online]. Available at: https://www.youtube.com/watch?v=uK4u4fffGMs