The Role of HRM in Managing People and Gaining Competitive Advantage

Human Resource Management (HRM) refers to strategic approach that helps in effectively managing people within an organization. The human resources in an organization helps a business in gaining competitive advantage. The job analysis in an organisation involves the collection of job related data that can help in creating right fit in between the job and the employee. The HRM with the help of job analysis assesses the performance of the employees that can help them in analysing the training along with development needs within an organisation (Milkovich, Newman & Gerhart, 2014).  Job analysis is instrumental in playing a crucial role pertaining to job evaluation along with deciding of compensation in an organisation. Human resource plays a crucial role in the implementation of performance appraisals. The team of Human Resources plays the role of mediator in between functional heads and employees in an organisation. This report elaborates in detail about the steps that are involved in job analysis along with job evaluation. The report also elaborates on the importance of outcome of compensation system that can help in building up of an effective pay program. The report also talks about how the external influence on that of pay structure is different from that of internal system that can help in ensuring pay equity throughout that of the organization. The report also states how human resources of an organization develops compensation programs that can help in ensuring more competitiveness.

The human resources in an organization have to think about the skills along with knowledge that can help an individual in performing job in a successful manner. The employers and the managers within an organisation has to decide whether the present position needs more amount of hard work or that of higher pay scale (Siop.org., 2018). This paves the way for the analysis of jobs that can help in the determination of duties along with responsibilities. The human resources in an organisation should collect the important information pertaining to different jobs within the organization. Questionnaires can be used by the human resources of a company for the purpose of data collection. Questionnaires is a method that is less costly that can help an individual in collection of information (Tenhiälä & Vuori, 2012).  The job performers are put under observation at the time of working. The information collected can be used for the preparation of job description form. It acts as a document that can help in showing complete information that describes activities which are involved in job.

Steps Involved in Job Analysis and Job Evaluation

The steps that are involved in that of job evaluation are gathering of data, selection of the compensable factors, evaluation of job and assigning the pay to job. The information should be collected with the help of job analysis that can help in capturing the similarities and the differences among the jobs (Gupta & Shaw, 2014).  The compensable factors should be selected by the human resources of an organisation that can be rewarded with the help of differential pay. The last step that is involved in job evaluation is the hierarchy of the jobs that should be in relation to value of the organization.

Compensation plays an important role in aligning the employee behaviour with that of the business objectives. Compensation in an organisation is generally provided in form of the monetary rewards that can be direct or that of indirect. Compensation attributes refer to all the forms of pay along with rewards that are received by employees in relation to their performance in the organisation in the form of benefit, park along with cash rewards (Bryant, 2017).  There should be comparable along with competitive compensation rate in industry that can help in building up an effective pay program. The compensation needs in an organisation should be unbiased and there should be logical increase pertaining to pay in terms of length of the service along with the job title. There should be an established pay program in the organization that can help in attracting appropriate skill set in the organization (Long, Ajagbe  & Kowang, 2014).  There should be pay matrix in the organization that rewards the employees who perform highly and there should be annual merit increase in the organization. There should be pay for performance system in the organization that would tie the compensation directly to the business goals along with the business objectives. The significance of the compensation system lie in the fact that it can help in matching the controllable performance target to that of the company objectives.

The external influences that have an effect on the pay structure is the labour market that has an effect on the aspect of salary differences in an organization. The other external factors that has an effect on that of pay structure is collective bargaining along with government legislation. In the event of the employment rates being high, there would be many people who would be on the lookout for a job. The employers in this case lower starting wages as they get a feeling that the job seekers would settle down for the lower wages (Brown, Colville & Pye, 2015).  The internal systems that influences the pay structure are the qualifications of the employees of an organization. For ensuring the aspect of pay equity in an organisation, external influence on that of pay structure is designed in a different manner from the internal structures. The external pay structure is designed in a manner that can help in fostering external equity within an organization (Aslam et al., 2015).  The external pay structure in an organisation should be designed in a manner that can allow the organization in recruiting and retaining the employees.

Compensation Programs and Ensuring Pay Equity Throughout the Organization

The HRM of an organization develops the total compensation programs by the utilization of market data that can help in effectively recruiting and motivating the employees. The human resource management in an organization. The human resources in an organization should gather background information from the market that can help in ensuring success of a project. The HR professionals in an organisation should be able to decide on the market clearing price for the various job functions that can help in communication of compensation scheme (Elkins, 2018).  The legal landscape is undergoing changes on constant basis and the HR should make note of the changes that can ensure the survival of an organization. The human resources of an organisation should decide about the pay program by taking into consideration the skills that will be required pertaining to each designation in organization.

The demand and the supply of the labour has an effect on the aspect of employee compensation in an organisation. Low wage is given at the time when demand is less as compared to that of supply of the labour. The total compensation program in an organisation is dependent on the factor of unemployment prevailing in the society that is responsible for decreasing the wages owing to the large number of workers in the society (Gupta & Shaw, 2014).  Globalization also paves the way for the creation of a large number of displaced workers who do not possess the skills that can help them in competing for that of higher-wage jobs. In the event of the compensation program being designed on the conditions of the labour market, the employees would be able to get a remuneration that makes them happy and contribute effectively to the organization (Darma  & Supriyanto, 2017).

Conclusion

Human Resources Management is indicative of strategic approach that proves to be crucial for the management of people in an organization. Human resources within an organization can be useful in helping a business gain competitive advantage. The human resources should collect information in relation to the various jobs in an organization. Questionnaires should be collected by human resources in an organization that can help an organization in relation to the collection of data. Compensation plays a crucial role in aligning behaviour of employees with business objectives in an organization. The employees in an organisation can be provided with the monetary rewards that can help in improving their performance in the organization. The labour market has a great influence on the salary that would be paid to the employees in an organisation. Collective bargaining and government legislation also influences the compensation programs in an organisation.

References

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Milkovich, G. T., & Newman, J. M. Gerhart. B.(2014). Compensation.

Siop.org. (2018). Do we need job analysis anymore?. Retrieved from https://www.siop.org/tip/backissues/tipapr96/may.aspx

Tenhiälä, A., & Vuori, T. (2012). Decoupling compensation practices from human resource management. International Studies of Management & Organization, 42(1), 7-23.