Human resource management (HRM) is an area of business that is concerned with a variety of employee-related processes (Cascio 2018). Its main goal is to maximize employee performance and ensure the organization has sufficient workers equipped with everything they need to achieve top results and be satisfied with the job. HRM also includes management over the company’s dynamic development in the aspect of the workforce.
Six Functions of Human Resource Management
HRM has multiple functions, but there are six main ones that characterize it. Among them are:
- Recruitment and selection;
- Maximization of job safety;
- Management of employee relations;
- Management of payments;
- Ensuring labor law compliance;
- Developing human potential.
Recruitment and selection are some of the most significant tasks of the HR department (Cascio 2018). Deciding on a hiring policy and selecting the right team for the task at hand is critical for the performance of the whole company. A skilled HR member needs to assess every candidate’s strengths and weaknesses to ensure only the best work at the organization.
Safety of the work environment, processes, and practices is another area of supervision and management of HR. It is needed to provide a stress-free, injury-free, and secure workflow that has a direct influence on the fail-safe and continuous operation. Ideally, each employee has to be mindful of safety and security, which is one of the main tasks of HR staff in this area.
Employee relations include a whole range of different aspects that influence the performance of the team and organization as a whole (Cascio 2018). Inter-personal, inter-group, employee-management, management-employee, and many more types of relationships are the spheres where HRM is needed to ensure adequate communication. The balance of interests needs to be achieved for every worker and manager.
Benefits, compensations, salaries, wages, and other financial payments for the workforce are one of the most essential parts of the workflow. It often becomes a ground for debates within and outside of the organization. Therefore, proper management in this sphere is paramount.
State and federal laws require organizations to meet certain standards in order to ensure the safety of employees, the adequacy of compensation for their work, non-discrimination, and a range of other issues. Compliance with the variety of standards is a demanding task partly due to the fact that non-compliance is penalized.
The business environment and labor conditions are changing under the influence of a multitude of factors such as automatization, society norms, political priorities of the country, and many others. HR has to continuously overview the ability of the company’s workforce to adapt to new conditions and withstand challenges. In addition, the HR department is responsible for identifying and developing the potential of their employees in order to provide them with new opportunities and have the company yield benefits from them.
Another core function of the HR department and its management tasks is workforce planning (Cascio 2018). This activity is a process that balances the needs of employees and employers within the framework of state and federal policies and legislation for the purpose of achieving the company’s goals. Planning includes the identification of resources, skills, knowledge, and experience that will be required for a company and to what extent the current workforce is satisfying the criteria. The operational workforce planning is usually limited to 12-18 months and proceeds in agreement with the company’s planning timeframe. HR staff has to research every person employed in the organization, assess the individual and cumulative potential for growth and standard compliance, and report the results to the senior management. This process is required for monitoring and adjusting the company’s HRM course in accordance with the company’s goals and priorities.
Workforce planning is affected by many factors, which HR members answerable for this process need to consider. Among them are social, political, economic, technological, legal, and environmental (Bratton & Gold 2017). All of those factors can potentially aid or undermine the process of work planning.
Political will is capable of bringing significant change to the labor sphere. Depending on the domestic and foreign policy successes and failures, the companies might need to introduce change to their structure, goals, or objectives. Therefore, HR needs to be aware of any significant changes in the political course of the country.
Economic changes are one of the most influential in the sphere of business and human resources. The economic recession in one area and upturn in another demand the enterprises to be rather flexible to withstand significant losses of human capital. The global economy as well provides excellent opportunities and great risk that places even more emphasis on adequate human resource management and workforce planning. Predicting rises and falls is a necessary ability for HR managers in order to provide a proper report on workforce planning.
Technology can both create and destroy jobs (Bratton & Gold 2017). Its potential for minimizing labor costs is enormous. However, certain risks and challenges are also present. Automation of factories, modernizing communication processes, equipping staff with advanced tools, and ensuring adequate knowledge and experience is present to wield technologies are the tasks that HR managers need to put on their schedules.
New labor laws and regulations complement, contradict or replace the old ones, which poses an additional challenge for planning the workforce. Compliance with the existing and future legislation requires a great deal of flexibility in the assessment, evaluation, and prediction of standards, which the company’s workforce must meet. It is important to stress one more that HR plans are extremely susceptible to change under the weight of emerging laws and a proper state of knowledgeability is required.
The environmental factor is also paramount to consider in workforce planning. Weather conditions and company location might affect the number of necessary employees or impose additional costs for maintaining their performance level. If relocation of company’s facilities or opening new outlets, for instance, is mentioned in the company’s nearest objectives, new environmental factors need to be properly assessed also in workforce plans.
Recruitment and Selection
As it was mentioned above, recruitment and selection are essential tasks of the HR department that aim to provide the company with suitable people for the job openings it has. Despite these two tasks being often perceived as one continuous process, they are in fact two different stages of it with their distinct goals and objectives (Bratton & Gold 2017).
Thus, recruitment usually means a process when HR creates a pool of potential candidates that the company might want to hire. Changing labor market and company’s priorities often require HR to edit the criteria for search and inclusion. Recruitment may be assigned to the company’s own HR department or be managed by certain agencies or people called ‘headhunters.’ Those people are usually well informed of the labor market situation, equipped with proper tools and skills to find the best candidate or form a pool of potential employees tailored to every company’s needs.
Having such a ‘reserve’ of available candidates is very beneficial for the company as it allows for greater flexibility at all times. Especially, when organizational changes are at hand, and certain workforce losses are often imminent. The list of potential replacements becomes handy when such situations occur. They help mitigate the financial problems connected with the temporary absence of employees by speeding the process of appointing a new one (Bratton & Gold 2017).
Selection is a logical continuation of the recruitment process. It presupposes narrowing down the choice of potential candidates to one or several people from a pool of potential ones. This process is rather labor-intensive as it requires matching the personal and professional data to the company’s criteria and comparing them to other candidates as well. The result of this process is a shortlist of people who are contacted and invited to an interview or tested otherwise.
The goal of the selection process is to ensure that from all the potential candidates the one with the best-matching skills, experience, and personal qualities is appointed to the position. Although many criteria are rather objective such as the amount of suitable experience, the presence of required skills, and knowledge, there is also a subjective side to the selection where personal bias may undermine the whole process (Bratton & Gold 2017). This practice appears to be obsolete on a systemic level in the present-day U.S. However, in certain companies, it is still an issue, and frequent scandals about discrimination in the media confirm that fact.
Selection is also sensitive to information correctness. It might be the case when the data the candidate provides himself or the data that HR selection specialists managed to find differ from reality. This is why interviews and tests are applied as a part of the selection process. During these stages, skills and competencies are being verified against those the candidate mentioned. In addition, selection allows evaluating the level of personal adequacy and stability required in the company as jobs often require teamwork.
Legislation in Recruitment and Selection
In the U.S. the process of appointment of a person to a position is regulated by several federal and state laws. Since it became paramount to establish equal rights and the absence of discrimination in the process of candidate selection, a number of laws have been issued to protect the civil and employment rights of different population categories. As such, the Civil Rights Act of 1964 prohibits discrimination on the basis of race, sex, religion, or nationality. In addition to that, the Age Discrimination in Employment act of 1967 and the Americans with Disabilities Act of 1990 prohibit the non-inclusion of disabled and aged people on the list of potential candidates. Since recruitment and selection are often accompanied by the process of reducing the current staff, the Worker Adjustment and Retraining Notification Act of 1988 protects the rights of those made redundant.
Also, the Fair Labor Standards Act of 1938 regulates the rights and obligations of companies to hire children of 16 and older. Under this act, children younger than 18 years are not allowed to work full-time and need reduced hours. One of the more recent legislation in the sphere of recruitment and selection is the Equality Act 2010. It unites under one banner a number of previously issued acts. It is a compound document that targets all known kinds of discrimination (both direct and indirect ones) and prohibits them. The Equity Act also covers sexual harassment, victimization, discrimination by association, and a number of other inappropriate practices.
The current legislation protects the rights of all layers and groups within the U.S. society (Bratton & Gold 2017). However, it does not specify directly the requirements for the companies to hire less privileged or less-skilled workers. There seem to be no quotas for hiring disabled or gay people. The employer is eligible to choose candidates according to the requirements he or she chooses. The law only states that these requirements are not explicitly or implicitly discriminative towards any group of people.
Approaches to Recruitment and Selection
Two major approaches related to recruitment and selection include internal and external sourcing. Internal sourcing is the practice of encouraging vertical and horizontal mobility of the workforce within the organization. Should a position open in the company, existing workers based on their skills and eagerness are welcomed to apply first. External sourcing is the approach that targets people from outside the organization to appoint on the vacant position.
Strengths and Weaknesses of Internal and External Approach
As for the internal and external approaches, they both have their own tactical and strategic differences that may be utilized depending on the situation. One of the main strengths of the external approach is the variety of potential candidates. In addition, external sourcing allows hiring people that may provide a fresh look at the company’s problems and become a valuable addition to the team during periods of stagnation or crisis. Hiring professionals from outside let the company assess the strengths and weaknesses of other employers where candidates might have worked. It also provides a better outlook on the job market situation in the sphere of the company’s interests. Diversity is nowadays an essential criterion for success, and, with the variety of candidates external recruitment provides, it becomes easier to meet it.
As for the weaknesses of this approach, one can name the time-consuming procedure (Cascio 2018). Additionally, appointing a person from outside to a position in a company requires him or her to pass several stages of recruitment selection, receive training and education on the company’s values, and other details. It could take rather a significant amount of time and other resources before an applicant could become a high-performing and valuable asset. Existing employees could be left at a disadvantage if a person from outside becomes their manager as such an approach denies them a promotion opportunity. Finally, there is always a risk that a new employee will not be able to fit in the team or his personal goals will conflict with the company’s ones.
The internal approach, on the other hand, provides an opportunity to promote an experienced employee to a higher position that works both as a retention strategy and as a security measure. Besides satisfying the need of certain employees to grow and develop professionally, others may also note that the company provides such an opportunity and will be motivated to perform better. Among other advantages, the internal approach generates less paperwork and consumes less time to find, approve, and assign the person to a position.
Disadvantages of the internal approach include potential antipathy and unhealthy competition among colleagues, which may undermine the work process. Above that, new ideas and out-of-the-box thinking may become lacking in the organization due to the absence of new faces. Diversity policy may also suffer as a result of the internal approach.
Onboarding and Induction
Induction is an event where a newcomer acquaintance himself or herself with the job and the company. Other staff also gets to know the new employee. The fresh worker learns about the vision, goals, and practices of the company and what his or her place within the organization and the team will be. In addition, a few days are allocated on orientation when the employee gets to know the surroundings and colleagues. It is a part of a bigger process called onboarding, which is an ‘acclimatization’ with the company that may take up to several days.
Recruitment and Selection and Company Goals
Recruitment and selection are essential processes that directly influence a company’s capacity to achieve its goals. Each goal requires careful planning and careful allocation of resources including human ones. Employers usually consider the fact that a large portion of success is dependent on how well workers are performing. Recruitment and selection of the right people for the job is, therefore, critical for planning goals and reaching them. HR department’s policy should also be adjusted to satisfy the appetites of the company leaders. It is their duty to shape a body of employees and managers into a united team that strives towards a common goal. By employing various strategies and techniques HR professionals implement a policy that allows higher management to be certain about their future. It is no less important than the hired personnel is retained as frequent substitutes may undermine team performance and slow down a company’s goal achievement. To prevent such outcomes recruitment and selection strategies need to be accurate.
Internal and external approaches may both be used depending on the situation. If the company suffers from a lack of ideas, the external approach may be a perfect choice. If the problem is motivation and high employee turnover, then an internal method might be used. For companies that are oriented towards innovation and continuous change, an external approach might be more suitable. Organizations that target consistency and stability of their position on the market perhaps need more reliable and permanent solutions provided by the internal approach.
Recruitment and Selection in Tesla
Tesla as an innovation-oriented company requires bright minds and teams which can unlock their potential. Therefore, the hiring process has to be carefully planned and orchestrated. In Tesla, the recruitment and selection process may differ depending on the department to which one applies. For instance, in Software development, one has to undergo three rounds of interviews: one with HR, the next with a senior developer, and the third with the potential team leader. The interviews are conducted either face-to-face or via electronic means of communication such as Skype. The whole process may take up to four weeks.
Such procedure is standard for many companies, however, two-step or even one-step selection processes are also common. Tesla has chosen such a long procedure to ensure not only that a person has the necessary skills and has the capacity to implement them but also is capable of working in a team. The first step tests the general adequacy of the person and identifies whether he or she fits with the company and its goals. The interview with a same-field professional aims to put the candidate’s self-reported skills, competencies, and experience to test within the framework of his alleged tasks in the company. The interview with a team manager ensures the applicant’s desire and ability to work as a part of a group that is either newly built or already fitted.
Internal or External Approach
An external approach is better because it allows the company to find the employee it needs. The required skills and experience could be chosen from a variety of applicants, and there is a significant chance that such a perfect employee is found. It also negates a risk of internal approach that a promotion will be ill-advised as managerial skills of the promoted are somewhat worse than his or her professional skills. Despite the fact that the external hiring strategy requires more resources, it delivers more accurate results due to a broader pool of applicants. Under the external strategy, a company has the ability to set and change recruitment and selection criteria and adjust its hiring policy in accordance with current priorities. Google, for instance, hires mostly externally as it values the influx of new ideas and non-standard thinking. For a 21-st century company in almost any sphere, it is also important. Walmart also utilizes this approach because it is an established and well-known brand that does not fear personnel turnover.
Internal or External Approach in Tesla
Tesla is an innovation-driven company that produces electric vehicles and solar roofs and batteries for houses. The brand is world-famous and attracts many people with its philosophy and ideas. It promotes alternative energy and aims to replace all energy sources with renewables. By setting such ambitious goals, the company practically announced its orientation towards evolution and growth that attracts many young and idealistic people. External recruitment and selection fit in perfectly with such a paradigm as long as the salary remains competitive. The external approach provides an opportunity to hire the best specialists in almost any field, which is crucial for Tesla’s priorities. In addition, an external approach lets a company assess the job market, which is crucial, as the IT sphere is extremely competitive and skilled workers are always in demand. Being a rather successful and well-known company, Tesla can handle the high resource cost of the external approach and utilize the advantages enumerated above to their fullest potential.
Internal hiring policy for Tesla would not be as effective. It possesses one critical weakness that makes it inferior in comparison with the external approach. Promoting a skilled and talented employee to a managerial position, for example, leaves the company vulnerable because such action is both a risk and a loss of a specialist. In the sphere of new technologies, bright IT workers seem to be in higher demand than managers. The internal approach will likely create a lack of this valuable human resource. For companies where an influx of new people could disrupt the process of stable operation, internal hiring could be the primary choice, but for Tesla, it will be a deterring factor. The company could handle the flow of managers, but it has to have a good grip on its innovation-driving force in the face of its IT professionals.
By using this approach, the company achieved rather good diversity and ensured the influx of fresh ideas. Replacement of certain people in management in relation to recent scandals also was not a problem. Thus, Tesla responded to the allegations of improper practices rather quickly and hired a new HR head that has 10 years of experience in the field (Tesla 2017). The internal approach would not have helped in this case, while the benefits of the external are obvious. Therefore, Tesla’s experience of using it appears to be positive.
Bratton, J & Gold, J 2017, Human resource management: Theory and practice, 6th edn, Palgrave, New York, NY.
Cascio, W 2018, Managing human resources, 9th edn, McGraw-Hill Education, New York, NY.
Tesla 2017, Tesla welcomes Gaby Toledano. Web.