HRM practices do not need to be limited to training staff and devising strategies for recruitment and retention. It is a holistic approach where the overall well-being of staff ends up determining the success of a business. HRM practices can be focussed on organizational change and development as well as employee and employer relations and policies. This article will give you an overview of some HRM practices.
HR has considerably evolved in the past decades and continues to do. Yet, core human resource best practices have persisted, serving as guidelines for HR professionals over the years. But what do they entail, and why are they so important? In this article, we’ll go over the 7 best practices for HR. These are crucial to effective human resource management.
Human Resource best practices
The first question is: what are Human resource best practices?
Best practices are a set of Human Resources Management processes and actions that work universally. In HRM research, there are two schools of thought on how to manage people. The first one is the best fit, the second is best practices.
- The best fit school states that to add value, human resource policies should align with business strategy. This means that HR should focus on both the needs of the organization and the ones of its employees.
- The best practice school argues that there is a set of universal HR processes that lead to superior business performance. According to its proponents, there are certain bundles of HR activities that support companies in reaching a competitive advantage regardless of the organizational setting or industry (Redman & Wilkinson, 2009).
We’ll skip the extensive scientific debate on the merits and flaws of each approach. With these kinds of discussions, the truth often lies somewhere in the middle.
This means that the HR strategy and subsequent HR activities should be aligned with the organization’s strategy for optimum efficiency (a.k.a. strive for best fit). In literature, this alignment has also been referred to as Strategic Human Resource Management.
1. Providing security to employees
The first Human Resource best practice is employment security. Life is unpredictable and work is a stable factor that is very important to most people. Having an employer who enables the employee to provide for themselves and their family is, in essence, the number one reason why people come to work.
There is both a formal contract (labor for money) and an informal contract (you put in some extra effort, we take good care of you) between the employee and the employer. Employment security enables employees to go home after work and provide for themselves and their families. This concept of security is essential and underpins almost everything HR does.
When this employment security is threatened, for example when there is a restructuring or a layoff, you see this immediately ripple through the organization.
Employment security also benefits organizations because it helps them retain their people. When employees are laid off, for example, it’s usually the organization that pays the price. They are the ones who have invested in the selection, training, and development of these employees. This is a costly process. If the organization doesn’t work on retaining its people, they are more likely to leave and work for the competition.
In 2020, a survey found that job security is the third most important factor for employees. 28% of 1,100 professionals surveyed in the UK listed job security as an important factor. Job security is important across global HRM practices.
2. Selective hiring: Hiring the right people
The second HR best practice is selective hiring. This enables an organization to bring in employees who add value.
You can’t just hire anyone; you want people who are fit for the job. Companies do their utmost best to hire exceptional people because they add the most value to the business. There also needs to be a prioritization of building a structured and fair selection process. This reflects legal requirements, internal diversity goals, and that a more diverse workforce, better reflects society. This can be hugely beneficial for understanding wider consumer behavior and the needs of different customers.
Research shows that the difference in performance between an average performer and a high performer can be as high as 400%! This holds for different industries and job types, including researchers, entertainers, and athletes.
Bringing in the right people is, therefore, a key to building a competitive advantage.
In today’s digital world, there are a lot of different recruitment tools we can use to make the right selection. More and more companies vigorously keep track of their recruitment metrics to see how well they are doing in this regard.
Commonly used selection instruments are structured and unstructured interviews, IQ tests, personality assessments, work tests, peer assessments, and reference checks. These (pre-employment) assessments are used to uncover three key candidate characteristics.
- Ability: Is the person able to do the job? Does the person have the right technical and soft skills? Is the person smart enough to do the job well?
- Trainability: Can we train this person to improve his/her skills? Has the person the aptitude to learn and keep developing?
- Commitment: Will the person commit to his/her work and to the organization? Will we be able to retain this person once he/she is up to speed and fully productive?
3. Compensation and Benefits.
Compensation and benefits are also important in HR practices. Before hiring people, a manager has to research the market pay rates for the appropriate position and offer an employee the salary that is suitable for corporate budgeting. An employee has to be informed of the salary for probation and after probation periods. Probation can be determined as a trial period for new workers, normally it lasts for three months. Probation for the employees is needed to develop the required skills and qualities to fulfill their professional tasks and targets. After having successfully completed a trial period, an employee has to get a higher salary and there must be certain KPIs confirmed with the employee that they can strive after to get bonuses.
4. Onboarding process.
The first impression during an employee’s first days is extremely important for the onboarding period. Managers should first inform their colleagues about a new employee coming and tell them shortly about him or her. Another important thing is to provide a new team member with access to all corporate programs, CRM, and any internal policies and instructions. Finally, it would be perfect to organize a small team building to get the team acquainted with their new colleague. You’ll see that the next day your new employee will feel much comfortable and will become a true team member. When the team works as one, they listen to each other, brainstorm new thoughts, and come to brilliant ideas.
5. Access to knowledge and tools.
Access to all necessary materials and working tools is a very important part of HRM practices. Providing employees with basic information about the instruments used within the company, as well as some basic training on their use will speed up the process of their onboarding and newbies will bring start bringing results much faster. Discover and consider the best set of proficient instruments that can amplify the capacity of your employees. The most popular tools that help to build seamless cooperation among all your team members are JUST3thing, ScreenCloud, and Geckoboard. Check them out to see how your team can be even more productive.
6. Employee retention.
Many big corporations boast of cool retention packages provided to their employees. And it is now more a necessity and a part of best hr practices rather than a perk. If you want to keep up with other companies on the market, think of organizing quarterly team buildings, providing health insurance and foreign language classes. You can also add sports and food reimbursement.
7. Coaching and development.
Professional skills and personal qualities of the personnel are an irreplaceable component of any organization. And hiring qualified and experienced employees for a company is not enough for their progress nowadays. Upskilling employees, giving them a chance to grow professionally helps to increase income and business rates, and is definitely considered of the best practice HRM. Coaching and development help to accomplish two goals at once: the image of a company will be represented with the experts in relevant fields and their new ideas, non-standard strategies of business development can boost income more quickly. Creating an IDP (Individual Development Plan) for and together with your employees helps to improve their professional skills and create a framework for
Conclusion
Human resources management is a practice that can be applied to any organisation or business that employs human resources. HRM involves recruiting qualified candidates with the right skills, abilities and attitudes with an aim of meeting operational needs.