Major Functions Of Human Resources Management Commerce

Essay add: 19-06-2017, 14:40   /   Views: 13

Due to globalisation, people are going out in different countries to find jobs according to their choice and potential. And, as the government in different countries is bringing amendment in its labour policies, big multi national companies are finding new scope in human resource management by employing diversified workforce. Diverse workforce has both advantages and disadvantages; so in order to filter the benefits of diverse workforce, management needs to adapt some changes such as re-assess the job roles, skills required, employment legislation, etc. Diversity in general enhances performance only when it is treated as a source of innovation and learning (Schuler et al, 1993).

As diverse workforce, management always want competitive employees with unique qualities, strengths, abilities and innovative prospective. The diversity do provides competitive advantages to the business but if not managed, it can result in the state of chaos in the organisation; therefore, managers need to be aware of this fact while dealing with an employee as an individual. Diversity varies from age to ethnicity, race to religion, gender to sexual orientation, etc. (Nortan, 1997).

An organisation can gain a leading edge over its competitors by realising the opportunity of diversified workforce. Diversity invites new talent and new thoughts from people of different backgrounds. It helps recruiting and retention because protected class likes working with people from different places. Diversity also aid in increasing the market share as more customers are drawn towards products and services with varied demographical marketing activities (See Appendix 'D') (Mathis et al, 2006).

The efficiency and effectiveness of an organisation could be enhanced by using diverse work force. Therefore, in order to introduce diversity in an organisation, proper and planned strategy is required to comply with the working environment. Diverse workforce is not a successful idea without the support of top level management. People come from different cultural and demographical backgrounds, and they require time to adapt changes. With the help of supportive environment, they can gradually develop themselves as per the demand and gain required skills to give adequate results. Diverse workforce has even more advantages when the organisation is a multinational company as it is relatively easy to compete in the market with people with different talents and culture. An organisation can easily attain diverse workforce by providing equal opportunities to everyone (Edwards et al, 2006).


It is essential for an organisation to recruit and select right people for right jobs and at the right time. Qualified, motivated, and committed employees prove to be the most productive asset of the organisation and help it to achieve its objectives. Recruitment and selection of employees requires proper planning and structured process because if wrong people are hired, they can adversely affect the productivity of the organisation. Every company wants to choose best suitable employees and wants to retain them because a huge amount is invested on developing their skills and abilities. A proper and well planned recruitment and selection process lessens the number of employees leaving the business organisation. Organisations use different procedures and policies to find the available jobs and requirement for that job. Some of them are described below (Sharma, 2009):

Job Description: A good job description assists new employees in making them understand their duties and responsibilities and realising them how their roles would contribute towards goals and objectives of the organisations. It includes all the explanation of the role which is to be carried out in order to perform in accordance with the job demand. Job description also help organisation by making sure that the tasks performed by employees is complying with the organisations' missions and vision.

Job Analysis: Job analysis includes the systematic collection of information for understanding and describing the duties and responsibilities associated with the position along with the knowledge and expertise required for doing the job. The type of information gathered for job analysis vary from company to company but some typical information collected includes educational requirement, special qualification, experience, working conditions, physical and mental demands of job, summary of duties and responsibilities etc.

Job Evaluation: Job evaluation is a basic label for different types of procedures used for establishing structure of pay scale in an organisation. According to Bratton et al (2000), "process of job evaluation includes four steps including gathering data, selecting compensable factors, evaluating job and assigning pay to the job."

Methods of Recruitment:

Internal Recruitment: New job roles are offered to the existing employees. It motivates employees as it works as a reward and provide career development opportunity to the employees. It helps organisation by saving time and cost incurred in the process of recruitment.

Employee Referrals: New people are recommended by existing employees. Staffs recommend people who they think would be able to fulfil job requirements as they already know the duties and responsibilities associated with that job. However, as a limitation it is seen that staffs generally refer people whom they are closely attached irrespective of the aptitude required for the job.

Print Advertisements: Advertising in newspapers, magazines, and business classifieds can also be an excellent tool to find the right person for particular job. It targets large number of people from particular area and give more options to the organisation. On the other hand could be an expensive process and may also invite high number of unsuitable applications.

Online Recruitment: Posting the available vacancies on the company's website is a modern alternate to the print advertisements and is also cost efficient. It facilitates the users to view job description and apply for the jobs through internet by visiting the company's web page. It is the most popular way of searching jobs now a day.

Internships or Placements: Talented students are recruited after their studies as a part of their placement or internship program. More enthusiasm is seen in the students as they want to apply their knowledge in practical applications. Moreover, they are more flexible in terms of salaries.


Performance appraisal is among the most erstwhile, reliable, and trusted tools used in human resource management used worldwide. It refers to all conventional procedures used in evaluating the skills and potential and effectiveness of personnel as individuals and as teams (See Appendix 'C'). There are many techniques used for measuring performance of employees depending on the sources of traits and qualities to be appraised, structural position of worker in the organisation, cultural differences and specific job requirements. Also, there are several techniques used for performance appraisal such as ranking method, check list method, questionnaires, assessment centres, appraisal interviews etc (Prakash, 2005).

Purposes and Significance of Performance Appraisal:

Performance Appraisal is widely popular because it identifies the strengths and weaknesses of the employees and reflects what they are doing and how they can improve their performance. It also helps the managers by giving them prospect to observe their subordinates more closely and make decisions regarding promotions, and other financial and non financial rewards. The researches also say that under the observation of mangers, subordinates tend to perform better and thus performance appraisal provides better control. Performance Appraisal also establish psychological contract between organisations and their employees. Performance appraisal also work as the base of the information for taking the decisions regarding manpower planning depending on the skills and potential of the workforce available and scope of further development.

Barriers of Performance Appraisal:

Psychological barriers are the biggest obstacles as some employees treat performance appraisal techniques as organisations' strategy to sack employees or cut down wages; and subsequently it results in insecurity, disliking, unwillingness and resentment among the employees. The other barrier is the interdependency of employees on each other because they operate in a particular organisational structure. It becomes very hard to measure the accurate performance of each employee as their duties are interlinked with other employees.


The most basic form of reward for employment is pay but in broader aspect, a reward or incentive is something that draws the attention of workers and motivates them to work. Rewards not only encourage the individuals' performance but also help the organisation in retaining the skilled and committed workforce. Reward can be financial as well as non financial. Financial rewards includes salaries, wages, commissions, profit shares, facilities like transportation allowance, club membership, holiday package etc. and non financial rewards consists of job security, recognition, empowerment etc. Reward whether financial or non financial should always be distributed using the fair and ethical approach. Following are some of the major functions of reward system:

Attracting and Retaining Good Employees:

Attaining an efficient and highly skilled workforce is one of the major factors to win the competition against the rivals. As the potential employees are always in demand, every organisation should keep its reward policies fair to attract the talented workforce and to retain the existing skilled employees.

Enhancing Performance through Motivation:

Organisational effectiveness could be improved with the help of employee's performance as a result of motivation that comes from proper rewards and incentives. Fair incentives influence the interest of employees towards the duties assigned and therefore keeps the employees motivated enough to perform their work at their best to improve the overall productivity of the organisation.

Developing Employees' Skills:

A good management always try to invest in the rewards by developing skills and proficiency in employees that are the requirement for growth and expansion of the business. These rewards can be in the form of trainings for upgrades and promotions, empowerment, freedom of innovation etc.

Reducing Absenteeism:

Sometimes rewards are given to encourage the employees to maintain proper attendance, for instance, there are certain reward fixed for the employees who attains particular level of attendance. Similarly, most of the large organisations also pay rewards for not utilising sick leaves and other permissible leaves.


Human resource development means identifying and developing necessary skills among the employees that would be essential so as to fulfil the requirements of the long term future strategies formulated by business management. It refers to process of learning by self, as a team, and at organisational level to improve the efficacy of human resources to achieve set objectives and goals of the business. In most organisations, employee development has an extremely short time horizon, involves minimal corporate resources, and has little impact on the organisation.

Human resource development is used for workforce to attain new skills or raise their potential needed to carry out various responsibilities related with their current or expected future position. HRD also develops the general capabilities of employees individually and also ascertain and make the most of their own inner talent for themselves and for the benefits of the organisation. HRD brings behavioural change to improve learning experiences. For instance, training could be one of the means used to achieve such improvements through the use of learning resources (see appendix 'A').

The organisational environment normally consists of approximately six main departments, namely: distribution, finance, human resources, marketing, production, and research and development. They are all related to each other though some organisations have outsourced some elements such as distribution e.g. News International, and others do not involve themselves with production e.g. Nike. According to the wider approach, an organisation does not function in vacuum. There are many factors of external environment that has an impact on its operations (Wilson, 2005) (see Appendix 'A').


To sustain healthy relations with employees, every organisation needs not only the grievance procedures but also the discipline procedures regardless of whether the employees are represented by a union, a professional association, or no organisation at all.

Grievance procedures offer an orderly process for hearing and investigating the complaints of employees (see Appendix 'B'). Grievances procedures are more common in unionized companies and less popular in non-unionized organisations as their grievances procedures are already specified in the labour contract. Grievances procedures are useful as they take care of the rights of employees and keep the employees away from activities like strikes or walk outs. Lack of proper grievances procedures, sometimes, could have adverse affect on the business like on British Airways.

Discipline procedures present a systematised mechanism to handle the problems created by workers. The aim of an efficient disciplinary system is to create a healthy work environment encouraging the employees to perform better; but if the employees are again found guilty, a procedure is required to dismiss their employment contract as a last option (Corpuz, 2006).


Skills and performances of the employees have a marked influence on the productivity and profitability of the organisation. If managed properly diverse workforce culture could prove to be a competitive advantage for the organisation. The most difficult function of human resource management is to recruit and select the most excellent personnel whose performance can go in direction with the organisational objectives. Analysing and appraising the performance of employees is also a key function of human resource management which is then followed by reward system leading to committed and motivated workforce.


Human resource management should critically analyse all the strengths and weaknesses of the employees in order to get maximum advantage of their skills and avoid any incompetency. More of teamwork should be encourage capitalising the opportunity of diversity in workforce. Reward systems should be improved in order to motivate and retain the productive workforce. Proper training and development for the employees should be introduced in from time to time to keep the pace with the competitors and gain competitive advantage. Discipline policies should be followed more strictly to improve the ambience of the work environment.

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