How important is human resource in organisations?

With the rapid change in a company's growth, the management style and structure change simultaneously. Certainly there is a need to carryout the human resource functions -- the most important asset of any enterprise. But does that only justify the necessity of an independent HR Department?

Are there needs for a standard compensation system based on competitive market value of each position? Is compensation tied to competence and responsibilities? Are pay and benefits tied to contributions to the company? Although it is very difficult to determine but it would be ideal to say that an HR department or at least an HR Manager may be right for companies with higher than 30 employees to set up systems.

The role of an HR Department is very different. In most cases, functions and responsibilities that no other person either wants to do or is capable of doing are taken care of by this department. From determining job specification of a new hiring to recruitment, from orienting new employees to preparing their job descriptions, from tracking attendance to annual leave, from developing policies to continuously monitoring their uses, from setting compensation system to monitoring comparative benefit packages, there has been a vital need for an HR Department. In fact its role is very important and that is to assist the senior management team in establishing a sound working environment.

Recruiting is always a major function in smaller to bigger enterprises. Some small companies are very stable, hiring perhaps as few as one new employee in a 12-month period. Others may be very competitive industries where recruiting can be an ongoing HR function. Advertising, short listing, interviewing, selecting and placing are part and parcel of an HR manager. Hiring the wrong people is extremely expensive and painful as well. Since recruiting is a major function, it may be in the company's best interest to have a professional recruiter in the HR Department. The recruiter must have knowledge of benefits and policies and procedures but his or her primary function would be to attract the "best" person at the "best" negotiation acceptable to the applicant and affordable to the company as well.

Maintaining all employee information in personnel files is a vital function of HR Department. This should at least, contain an application for employment, resume, photo, information about nominees, emergency contact list, personal/professional reference, employee manual receipt form, job description with job standard for each task, transfer history from location to location, signed code of ethics and business conduct form, separation of employment papers, exit interview record monitoring form for measuring training effectiveness, performance appraisals reviews, promotions and changes in wages or salary. With the availability of many standard HR software, HR Manager can rely significantly on computerised filing system to ease these tasks.

There is an ongoing fight between HR and accounting as to who should take care of payroll. It seems cost-effective to shift this responsibility onto accounting department as it does belong to accounting more than HR. HR will be the source for answering questions about wages, insurance, leave and all kinds of benefits. One of the ways that HR can contribute to the company is by keeping the costs of benefits down by reviewing the policies periodically with similar organisations to be certain that they are not increasing the overhead cost unjustifiably. HR manager will very simply have to be the expert in handling the benefit and policy issues.

The flexibility of any organisation is heavily dependent on the adaptability and skills of the employees. Incrementally enhancing their performance is dependent on the development of knowledge, skills and other competencies. Continual career development and learning are increasingly important. HR Department achieves this through the provision of training in areas to be specifically identified by training need assessment and thus developing the concept of life-long learning. The HR Section develops, promotes and implements a comprehensive employee relations policy that secures positive and progressive relations within the organisation. This is achieved through developing the partnership approach between the top management and employee unions/associations, fostering good industrial relations at corporate level, promoting resolution of issues at local level and through developing and implementing agreed human resources policies in line with best human resources practices, HR has a communication function too. Changes in policies, changes in benefits, even changes in labour or income tax laws must be communicated to all employees. Major changes may call for training such as anti-harassment and equal opportunity policy. Thus HR becomes a kind of pass-through in the information cycle.

Certainly there are other responsibilities, but they should be considered as secondary though may appear to be very important. Many years ago, large organisations looked to the Personnel Department mostly to manage the paperwork around hiring and paying employees. Now-a-days, high performing organisations consider the HR Department as playing a major role to manage people so that the people and the organisation perform at maximum capability in a highly fulfilling manner. This is a new reality and to be picked up by all entrepreneurs. The management must look at their organisation from a new global perspective. Although each and every department is essential but, probably, HR is more important than any other. While effective executive leadership from the very top is imperative in creating the new vision and strategy for the organisation, HR is the group that should actually lead the way in implementing the company culture. HR should mentor all other departments to define and identify the new human competence needed to achieve the organisation's global company status. HR Manager must leverage operational and financial information available throughout the organisation to increase their strategic profiles.

A R Raihan, an HR specialist, is Director of Human Resources, Dhaka Ahsania Mission, and a founder of Bangladesh Society for Human Resource Management.