Human Resource Management

In the field of management, human resource management is considered to be the most important and the most challenging task for organizations by scholars and academics. But within organizations, it is given secondary importance. Why? This is because human resource management does not earn return on investment and top management wants to see returns and profits.

What top management does not seem to realize is that, even though the HR departments in organizations do not earn returns, it is because of this human resource management that other departments are able to earn returns in terms of profits.

If top management thinks carefully, they will see that HR management earn the most important, though intangible, returns, without which, other functional areas in organizations would be very ineffective and inefficient.

These intangible returns are:

Commitment

Involvement

Participation

Motivation

Achievement

Self-development

Knowledge generation and knowledge sharing

Team learning

Interpersonal relations

These components are demonstrated by the employees when HR is management effectively and efficiently. As a result, the overall performance, hence, the overall productivity of the whole organization increases.

These are the invaluable returns that organizations earn through the function of human resource management. These are obtained in the long term, and since top management are mostly interested in seeing the company make profits, they have as tendency to aim at short term profit generation.

Lots of controversies revolve around the term "Human resource management". Lots of academics have put emphasis on the fact that the word resource relates to non living things that humans use and that humans should not 'use humans as resources'. They classified humans as intellectual capitals and humans should be considered as capital and not resources. This is why now the term 'human capital management' is now becoming common and is being used more frequently.

When we talk about human capital management, we should not forget the "human" side of the organization. This has been highlighted by McGregor in his famous book "the human side of the enterprise". The human side should focus much more on the soft HRM thus leading to a more productive workforce. Hard HRM works but not for too long. A time comes when the organization that practice hard HRM start to face high labor turnover, frustrations among employees, burnouts, stress and eventually a decreased organizational performance. Soft HRM should be integrated within the culture of organizations. Since a good culture generates self discipline among the employees through a code of behavior, problems encountered during the implementation of soft HRM will be solved by employees with the help of other employees themselves.

Another thing is that lots of books address the employees as being the 'asset of an organization'. Just what is an asset? It is a resource or, better called, fixed asset that a company uses over more that a financial year and that its value decreases as it is used. A newer asset will be preferred because it would be more efficient.

But humans are not assets. They are not something to be used. Their value increases as years pass by because they gain experience, expertise and learn more and become a professional in their fields. As the years go by, they become more effective and efficient. But they do not last longer than two or three financial years in that one organization since they are on determinate contract. Contracts can be renewed yes but the fact is that they are on contract and assets do not have any contracts to follow with organizations.

It would be better if now employees are classified as investments. This is because companies invest a lot in their employees, and since investments are done to bring returns, similarly employees are expected to bring profits, which is why companies invest in them.