Depending on the organization, HR professionals can wear a lot of hats,
from event planner to all-round problem solver. But no matter the company,
effective HRM policies all have the same seven cornerstones. Let's take a closer look.
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With that said, let’s dive into the 7 cornerstones of Human Resources Management.
Recruitment and selection
This is a key HR responsibility, as people are the lifeblood of an organization. HR can
use different selection instruments to find the right talent, such as
interviews, assessments, or reference checks.
Technology also plays an important role in the recruitment and selection process.
For example, when there are a lot of candidates,
HR can use preselection tools to narrow down and find the best match for the job.
And if you're able to make your hiring practices inclusive,
you'll see a host of organizational benefits, such as improved employee retention and
higher productivity. For more information, check out the Learning Bite on this topic.
Performance management
This HR practice provides a structure that enables employees to get feedback on their work to reach
peak performance. There are many performance management methods that you can use, such as
one-on-one reviews, 360-degree feedback, peer evaluation, or more informal feedback.
Usually, the direct manager will take the lead on performance management,
while HR will provide support. Many companies work with an annual performance management cycle,
which involves planning, monitoring, reviewing, and rewarding employee performance.
Learning and Development
Investing in L&D can help the organization advance towards its long-term goals and achieve success.
Research from IBM shows that 84% of employees in the best-performing organizations are getting
the training they need, as opposed to just 16% in the worst-performing organizations.
L&D helps employees reach their full potential by bridging skill gaps,
adapting to changes in processes and technology, developing into leaders, and more.
Many organizations have pre-defined budgets for L&D. This budget is divided amongst employees.
Trainees, future leaders, and other high potentials typically receive
more training opportunities. Development plans can also be based on performance,
using a framework such as the 9-box grid.
Succession planning
This is the process of planning contingencies in case key employees leave the organization.
Using performance ratings and L&D efforts, you can create a talent pipeline.
This is a pool of candidates who are qualified and ready to fill positions,
including senior positions, in case someone leaves. Having a replacement ready
guarantees continuity and can save the company significant money.
Compensation and Benefits
Fair compensation is key in motivating and retaining employees.
This includes direct and indirect compensation. Direct compensation
is paid money for work, such as a monthly salary or performance bonus.
Indirect compensation includes all non-monetary rewards, like extra holidays and flexible work.
Want to know more about what a compensation package is?
Check out our Learning Bite on this topic.
Offering the right compensation is a key part of attracting the best talent.
Make sure to balance this with the budget and profit margins of the company. You’ll
need to monitor pay increases, set standards of merit, and occasionally carry out a pay audit.
The final two cornerstones aren't practices, but essential tools to do HR better.
Human Resource information system (or HRIS)
This supports all the activities we have discussed so far.
For example, you can use an Applicant Tracking System (or ATS) to manage
applicants and hires during the recruitment process. Or you can utilize the performance
management system to keep track of individual goals and record performance ratings.
All these functionalities can be found in a single system: the HRIS. However,
sometimes management of these functionalities is split into different HR systems.
HR data and analytics
Our second tool and the final cornerstone revolves around data and analytics. The HRIS
we just discussed is essentially a data-entry system. The data in
these systems can be used to make better and more informed decisions.
Using HR metrics, you can create HR reports on the current and past state of the organization.
You can also use it to make predictions about workforce needs, employee turnover, and more.
By actively measuring and analyzing this data, HR can make more data-driven
decisions that are more objective and more likely to get support from management.
So there you have it: the 7 cornerstones of HRM. Remember that none of these
cornerstones are isolated. They all interact and affect each other. Strong management of
each fundamental element contributes to the strength of the next. Together,
these HRM cornerstones enable a workforce to not only perform better, but to perform at its best.
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