How can effective HRM contribute to the profitability of an organization

How can effective HRM contribute to the profitability of an organization

CONTENTS


Introduction 2

Strategic Staffing: Selection and Recruitment 4
Strategic Staffing : Are you hiring right? 4
Recruitment :   Is outsourcing a better solution? 6
Staff Retention : Turnover Rate of an Organization 9
Talent Management : Succession Planning 11

Training and Development 12
Increased Productivity 14
Increased Efficiency 15
Reduced Employee Turnover 15

Compensation and Benefits 15
Good Compensation Structure 16
Flexible Wages 17
Employee Benefits 18
Flexible Benefits   Scheme 19

Employee   Health and Safety 20
Workplace Health Program 21
Flexible Work Schedules 22
Safety 23

Employee and Labour Relations 24

Human Resources Information Systems 24

Conclusion 28

References 29





Introduction
In every organization Human Resource Management (HRM) is one of the core functions to sustain productivity. Employees are the key assets in most organizations and in order to maintain the organization’s goals and missions, a good management for all employees is a key to success. The question we face is “how can effective HRM contribute to profits of an organization?” According to “Watson Wyatt’s Human Capital Index (HCI) emphatically states that a fully functioning HR department does make a difference. The HCI continuing study in North American and European companies indicates that good-quality HRM services improved both the financial well-being of an organization and shareholder value.” (DeCenzo & Robbins, 2007:47) This illustrates that effective HRM is vital to contributing to the profit of an organization.

The basis of an effective HRM is through a strategic approach. By planning for the various functions dealt in HRM it will enable the organization to plan and project the necessary steps to forecast the needs of the company. Armstrong explains that, “Strategic HRM is an approach to making decisions on the intention and plans of the organization concerning the employment relationship and its...