How HR adds value to the Business?

Updated: Jan 23, 2019 UTC
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Human Resources management is considered to be the cost centre rather than the revenue centre. Of course, the HR professionals don’t directly impact on the business of an organization, however, there are a number of ways in which human resources policies help the company to get better employee performance and hence better results for the organizations. If HR department is looked upon as not contributing to the business, then they need to stop expecting the best tool that we give to them – the art & science of employee performance improvement. Here, we are not talking about the system of performance management system where reporting managers sit with their subordinates for few hours in a year; we work exactly on improving the performance of employees.

For the organizations that consider employees as their most cherished and valuable possessions, human resources management has got tremendous value. In a general way, human resources policies help the organization to motivate employees to get the top employee performance and hence maintain a better and desired organizational culture with high morale. At the beginning of the 21st century, the new concept of strategic HR has surfaced as an important view of the position HR functional area plays in developing and building a stronger organization.

Human resources management has various aspects with the help of which it adds real value to the business, though it may not be valued in terms of money or revenue generated.

People and their Performance: Of course, the result-oriented organization is run by the people that are hired and trained by the trained HR professionals. The success of an organization is directly impacted by the people working with them and the employee performance. There are a number of human resources policies set by the department to make sure that the employees keep moving towards achieving their personal as well as business goals.

Talent Retention: Talent acquisition and talent retention are equally important aspects of the company that directly ensures the target achievements. Good people are hard and extremely imperative to retain n the organization because you have invested a lot in them in terms of financial resources as well as a knowledge base in the form of training. Hiring the right employee and formulating great job designs help to maintain the employee performance and hence become very crucial in formulating the human resources policies.

Legal Protection: An organization can go achieving various goals and earn great revenues; however it is very crucial to be legally strong and adhere to all the legal requirements according to the corporate laws of the country. HR professionals need to keep themselves updated with the recent corporate and employment laws and also educate the reporting managers and other executives in the organization. They also need to design human resources policies in order to promote equality and fairness within the system. The best is to set the interview questions in a way that can align specifically with the particular job, like minimizing the risks of a favoritism claim. This component of human resources management becomes increasingly important as the workplaces are becoming more diverse.

Planning: The most important aspect of the HR department is shifting towards the formulation of proactive HR strategies that can overtake reactive responses to the service conditions. In today’s time, HR professionals are playing a stronger role in overall organizational strategic planning. The directors of the HR department are commonly served on the management teams and contribute to business strategic planning. This planning process includes company assessments with regards to its strengths and weaknesses and also projecting the potential threats and opportunities.          

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