Six Main Functions of a Human Resource Department

An efficiently run human resources department can provide your organization with structure and the ability to meet business needs
through managing your company's most valuable resources -- its employees. There are several HR disciplines, or areas, but HR
practitioners in each discipline may perform more than one of the more than six essential functions. In small businesses without a
dedicated HR department, it's possible to achieve the same level of efficiency and workforce management through outsourcing
HR functions or joining a professional employer organization.
Recruitment
The success of recruiters and employment specialists generally is measured by the number of positions they fill and the time it
takes to fill those positions. Recruiters who work in-house -- as opposed to companies that provide recruiting and staffing services
-- play a key role in developing the employer's workforce. They advertise job postings, source candidates, screen applicants,
conduct preliminary interviews and coordinate hiring efforts with managers responsible for making the final selection of
candidates.
Safety
Workplace safety is an important factor. Under the Occupational Safety and Health Act of 1970, employers have an obligation to
provide a safe working environment for employees. One of the main functions of HR is to support workplace safety training and
maintain federally mandated logs for workplace injury and fatality reporting. In addition, HR safety and risk specialists often work
closely with HR benefits specialists to manage the company's workers compensation issues.
Employee Relations
In a unionized work environment, the employee and labor relations functions of HR may be combined and handled by one
specialist or be entirely separate functions managed by two HR specialists with specific expertise in each area. Employee relations
is the HR discipline concerned with strengthening the employer-employee relationship through measuring job satisfaction,
employee engagement and resolving workplace conflict. Labor relations functions may include developing management response
to union organizing campaigns, negotiating collective bargaining agreements and rendering interpretations of labor union contract
issues.
Compensation and Benefits
Like employee and labor relations, the compensation and benefits functions of HR often can be handled by one HR specialist with
dual expertise. On the compensation side, the HR functions include setting compensation structures and evaluating competitive
pay practices. A comp and benefits specialist also may negotiate group health coverage rates with insurers and coordinate
activities with the retirement savings fund administrator. Payroll can be a component of the compensation and benefits section of
HR; however, in many cases, employers outsource such administrative functions as payroll.
Compliance
Compliance with labor and employment laws is a critical HR function. Noncompliance can result in workplace complaints based
on unfair employment practices, unsafe working conditions and general dissatisfaction with working conditions that can affect
productivity and ultimately, profitability. HR staff must be aware of federal and state employment laws such as Title VII of the
Civil Rights Act, the Fair Labor Standards Act, the National Labor Relations Act and many other rules and regulations.
Training and Development
Employers must provide employees with the tools necessary for their success which, in many cases, means giving new employees
extensive orientation training to help them transition into a new organizational culture. Many HR departments also provide
leadership training and professional development. Leadership training may be required of newly hired and promoted supervisors
and managers on topics such as performance management and how to handle employee relations matters at the department level.
Professional development opportunities are for employees looking for promotional opportunities or employees who want to
achieve personal goals such as finishing a college degree. Programs such as tuition assistance and tuition reimbursement programs
often are within the purview of the HR training and development area.
5 Major Functions of Human Resource Management
Human resource management is all about increasing employee performance to their highest level corresponding to their role in the
organization. Since every organization is made of people, HRM is all about acquiring services of people, developing their skills,
motivating them to the foremost level and making sure that they continue to maintain their commitment towards the organization.

In short, HRM is concerned with the management of employees from recruitment to retirement. Although there are many
functions of human resource management, following is the list of five major functions.
1. Recruitment and selection
Recruitment is the process of captivating, screening, and selecting potential and qualified candidates based on objective criteria
for a particular job. The goal of this process is to attract the qualified applicants and to encourage the unqualified applicants to opt
themselves out.
Before starting the process of recruitment, the companies must execute proper staffing plans and should grade the number of
employees they are going to need. Forecasting of the employees should depend upon the annual budget of the organization and
short-term and long-term goals of the organization.
Recruitment and selection process is very important to every organization because it reduces the costs of mistakes such as
engaging incompetent, unmotivated, and underqualified employees. Firing the unqualified candidate and hiring the new employee
is again an expensive process.
2. Orientation
Many organizations do not provide a thorough orientation to the new employees. This is the fundamental step to help a new
employee to adjust himself with the employer and with his new job. Employee orientation program should include the objectives
and goals of the organization and how the employee can help to achieve the long-term and short-term goals of the organization.
Giving intensive orientation to the employee is one of the major functions of human resource management. The program should
help the employee to know his assigned duties and his exact job description, job role, and the relationship of position to other
positions in the organization. It gives clarification to the employee to take an active role in the organization.
3. Maintaining good working conditions
It is the responsibility of the human resource management to provide good working conditions to the employee so that they may
like the workplace and the work environment. It is the fundamental duty of the HR department to motivate the employees. The
study has been found that employees dont contribute to the goals of the organization as much as they can. This is because of the
lack of motivation.
Human resource management should come up with a system to provide financial and non-financial benefits to the employee from
the various departments. Employee welfare is another concept which should be managed by HR team. Employee welfare
promotes job satisfaction.
4. Managing Employee relations
Employees are the pillars of any organization. Employee relationship is a very broad concept and it is one of the crucial functions
of human resource management. It also helps to foster good employee relations. They have the ability to influence behaviors and
work outputs.
Management should Organize activities which will help to know an employee at the personal and professional level. Well-planned
employee relations will promote a healthy and balanced relation between the employee and the employer. It is the key for the
organization to be successful.
5. Training and development
Training and development are the indispensable functions of human resource management. It is the attempt to improve the current
or future performance of an employee by increasing the ability of an employee through educating and increasing ones skills or
knowledge in the particular subject.

Performance Management - Meaning,

System and Process
The role of HR in the present scenario has undergone a sea change and its focus is on evolving such functional
strategies which enable successful implementation of the major corporate strategies. In a way, HR and corporate
strategies function in alignment. Today, HR works towards facilitating and improving the performance of the
employees by building a conducive work environment and providing maximum opportunities to the employees
for participating in organizational planning and decision making process.

Today, all the major activities of HR are driven towards development of high performance leaders and fostering
employee motivation. So, it can be interpreted that the role of HR has evolved from merely an appraiser to a
facilitator and an enabler.
Performance management is the current buzzword and is the need in the current times of cut throat competition
and the organizational battle for leadership. Performance management is a much broader and a
complicated function of HR, as it encompasses activities such as joint goal setting, continuous progress
review and frequent communication, feedback and coaching for improved performance, implementation
of employee development programmes and rewarding achievements.
The process of performance management starts with the joining of a new incumbent in a system and ends when
an employee quits the organization.
Performance management can be regarded as a systematic process by which the overall performance of an
organization can be improved by improving the performance of individuals within a team framework. It is a
means for promoting superior performance by communicating expectations, defining roles within a required
competence framework and establishing achievable benchmarks.
According to Armstrong and Baron (1998), Performance Management is both a strategic and an integrated
approach to delivering successful results in organizations by improving the performance and developing the
capabilities of teams and individuals.
The term performance management gained its popularity in early 1980s when total quality management
programs received utmost importance for achievement of superior standards and quality performance. Tools
such as job design, leadership development, training and reward system received an equal impetus along with
the traditional performance appraisal process in the new comprehensive and a much wider framework.
Performance management is an ongoing communication process which is carried between the supervisors and
the employees through out the year. The process is very much cyclical and continuous in nature.
A performance management system includes the following actions.

Developing clear job descriptions and employee performance plans which includes the key result areas
(KRA') and performance indicators.

Selection of right set of people by implementing an appropriate selection process.

Negotiating requirements and performance standards for measuring the outcome and overall productivity
against the predefined benchmarks.

Providing continuous coaching and feedback during the period of delivery of performance.

Identifying the training and development needs by measuring the outcomes achieved against the set
standards and implementing effective development programs for improvement.

Holding quarterly performance development discussions and evaluating employee performance on the
basis of performance plans.

Designing effective compensation and reward systems for recognizing those employees who excel in
their jobs by achieving the set standards in accordance with the performance plans or rather exceed the
performance benchmarks.

Providing promotional/career development support and guidance to the employees.

Performing exit interviews for understanding the cause of employee discontentment and thereafter exit
from an organization.

A performance management process sets the platform for rewarding excellence by aligning individual
employee accomplishments with the organizations mission and objectives and making the employee and the
organization understand the importance of a specific job in realizing outcomes. By establishing clear
performance expectations which includes results, actions and behaviors, it helps the employees in
understanding what exactly is expected out of their jobs and setting of standards help in eliminating those jobs

which are of no use any longer. Through regular feedback and coaching, it provides an advantage of diagnosing
the problems at an early stage and taking corrective actions.
To conclude, performance management can be regarded as a proactive system of managing employee
performance for driving the individuals and the organizations towards desired performance and results. Its about
striking a harmonious alignment between individual and organizational objectives for accomplishment of
excellence in performance.

Objectives of Performance Management

According to Lockett (1992), performance management aims at developing individuals with the required
commitment and competencies for working towards the shared meaningful objectives within an organizational
framework.
Performance management frameworks are designed with the objective of improving both individual and
organizational performance by identifying performance requirements, providing regular feedback and assisting
the employees in their career development.
Performance management aims at building a high performance culture for both the individuals and the
teams so that they jointly take the responsibility of improving the business processes on a continuous
basis and at the same time raise the competence bar by upgrading their own skills within a leadership
framework. Its focus is on enabling goal clarity for making people do the right things in the right time. It may be
said that the main objective of a performance management system is to achieve the capacity of the employees
to the full potential in favor of both the employee and the organization, by defining the expectations in terms of
roles, responsibilities and accountabilities, required competencies and the expected behaviors.
The main goal of performance management is to ensure that the organization as a system and its subsystems
work together in an integrated fashion for accomplishing optimum results or outcomes.
The major objectives of performance management are discussed below:

To enable the employees towards achievement of superior standards of work performance.

To help the employees in identifying the knowledge and skills required for performing the job efficiently
as this would drive their focus towards performing the right task in the right way.

Boosting the performance of the employees by encouraging employee empowerment, motivation and
implementation of an effective reward mechanism.

Promoting a two way system of communication between the supervisors and the employees for clarifying
expectations about the roles and accountabilities, communicating the functional and organizational
goals, providing a regular and a transparent feedback for improving employee performance and
continuous coaching.

Identifying the barriers to effective performance and resolving those barriers through constant
monitoring, coaching and development interventions.

Creating a basis for several administrative decisions strategic planning, succession planning, promotions
and performance based payment.

Promoting personal growth and advancement in the career of the employees by helping them in
acquiring the desired knowledge and skills.

Some of the key concerns of a performance management system in an organization are:

Concerned with the output (the results achieved), outcomes, processes required for reaching the results
and also the inputs (knowledge, skills and attitudes).

Concerned with measurement of results and review of progress in the achievement of set targets.

Concerned with defining business plans in advance for shaping a successful future.

Striving for continuous improvement and continuous development by creating a learning culture and an
open system.

Concerned with establishing a culture of trust and mutual understanding that fosters free flow of
communication at all levels in matters such as clarification of expectations and sharing of information on
the core values of an organization which binds the team together.

Concerned with the provision of procedural fairness and transparency in the process of decision making.

The performance management approach has become an indispensable tool in the hands of the corporates as it
ensures that the people uphold the corporate values and tread in the path of accomplishment of the ultimate
corporate vision and mission. It is a forward looking process as it involves both the supervisor and also the
employee in a process of joint planning and goal setting in the beginning of the year.

Key Result Area(KRA)

Key Result Area(KRA) and Key Performance Area(KPA) , though the terms hold different meaning but are often used
interchangeably and more or less assumed to have same applicability . The purpose of this post is to underline the
basic differences between the concept of KRA and KPA.
In relation to a job role, KRA defines the outcome or end result expected to be delivered while KPA defines all the
activities, not always result oriented, an individual has to perform being on job.
Key Result Area
Key = crucial/main
Result = outcome/end/consequence
Area = space/range
KEY RESULT AREA = crucial outcome space
Point to note
-KRA is not the result.
-KRA is the area identified as important or crucial where a result will assist in the achievement of the set objectives or
goal.
-KRA defines what a job is expected to accomplish.
-KRAs might fall within the scope of Key Performance Areas (KPA)
Key Result Area
Example :
Role Product Manager
Goal Ensuring delivery of quality product within schedule.
1.

Customer Satisfaction.

2.

Product Management.

3.

Operational Cost Control.

4.

Quality Check.

5.

. Record keeping.
KRA (Key Result Area) is the output of an individual or section or department that will serve as an
input for another or contributes toward organization success. It is a task or activity that must be done
to ensure success (primary job responsibilities).

Performance Appraisal
Performance Appraisal is the systematic evaluation of the performance of employees and to understand the
abilities of a person for further growth and development. Performance appraisal is generally done in systematic
ways which are as follows:
1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.

Objectives of Performance Appraisal

Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right job.
3. To maintain and assess the potential present in a person for further growth and development.
4. To provide a feedback to employees regarding their performance and related status.
5. To provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.

Advantages of Performance Appraisal

It is said that performance appraisal is an investment for the company which can be justified by following
advantages:
1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmes for
efficient employees. In this regards, inefficient workers can be dismissed or demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation packages for employees.
Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to a
performance. Compensation packages which includes bonus, high salary rates, extra benefits,
allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit
rather than seniority.
3. Employees Development: The systematic procedure of performance appraisal helps the supervisors to
frame training policies and programmes. It helps to analyse strengths and weaknesses of employees so
that new jobs can be designed for efficient employees. It also helps in framing future development
programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity and
importance of the selection procedure. The supervisors come to know the validity and thereby the

strengths and weaknesses of selection procedure. Future changes in selection methods can be made in
this regard.
5. Communication: For an organization, effective communication between employees and employers is
very important. Through performance appraisal, communication can be sought for in the following ways:
a. Through performance appraisal, the employers can understand and accept skills of
subordinates.
b. The subordinates can also understand and create a trust and confidence in superiors.
c. It also helps in maintaining cordial and congenial labour management relationship.
d. It develops the spirit of work and boosts the morale of employees.
All the above factors ensure effective communication.
6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of
employees, a persons efficiency can be determined if the targets are achieved. This very well motivates
a person for better job and helps him to improve his performance in the future.

Performance Appraisal Tools and

Techniques
Following are the tools used by the organizations for Performance Appraisals of their employees.
1. Ranking
2. Paired Comparison
3. Forced Distribution
4. Confidential Report
5. Essay Evaluation
6. Critical Incident
7. Checklists
8. Graphic Rating Scale
9. BARS
10. Forced Choice Method
11. MBO
12. Field Review Technique
13. Performance Test
We will be discussing the important performance appraisal tools and techniques in detail.

1. Ranking Method

The ranking system requires the rater to rank his subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method, the ranking of an employee in a work group is
done against that of another employee. The relative position of each employee is tested in terms of his
numerical rank. It may also be done by ranking a person on his job performance against another
member of the competitive group.

Advantages of Ranking Method

i.

Employees are ranked according to their performance levels.

ii.

It is easier to rank the best and the worst employee.

Limitations of Ranking Method

iii.

The whole man is compared with another whole man in this method. In practice, it is very
difficult to compare individuals possessing various individual traits.

iv.

This method speaks only of the position where an employee stands in his group. It does not test
anything about how much better or how much worse an employee is when compared to another
employee.

v.

When a large number of employees are working, ranking of individuals become a difficult issue.

vi.

There is no systematic procedure for ranking individuals in the organization. The ranking system
does not eliminate the possibility of snap judgements.

2. Forced Distribution method

This is a ranking technique where raters are required to allocate a certain percentage of rates to certain
categories (eg: superior, above average, average) or percentiles (eg: top 10 percent, bottom 20 percent
etc). Both the number of categories and percentage of employees to be allotted to each category are a
function of performance appraisal design and format. The workers of outstanding merit may be placed at
top 10 percent of the scale, the rest may be placed as 20 % good, 40 % outstanding, 20 % fair and 10 %
fair.

Advantages of Forced Distribution

i.

This method tends to eliminate raters bias

ii.

By forcing the distribution according to pre-determined percentages, the problem of making use
of different raters with different scales is avoided.

Limitations of Forced Distribution

iii.

The limitation of using this method in salary administration, however, is that it may lead low
morale, low productivity and high absenteeism.
Employees who feel that they are productive, but find themselves in lower grade(than expected)
feel frustrated and exhibit over a period of time reluctance to work.

3. Critical Incident techniques

Under this method, the manager prepares lists of statements of very effective and ineffective behaviour
of an employee. These critical incidents or events represent the outstanding or poor behaviour of
employees or the job. The manager maintains logs of each employee, whereby he periodically records
critical incidents of the workers behaviour. At the end of the rating period, these recorded critical
incidents are used in the evaluation of the workers performance. Example of a good critical incident of a

Customer Relations Officer is : March 12 - The Officer patiently attended to a customers complaint. He
was very polite and prompt in attending the customers problem.

Advantages of Critical Incident techniques

i.

This method provides an objective basis for conducting a thorough discussion of an employees
performance.

ii.

This method avoids recency bias (most recent incidents are too much emphasized)

Limitations of Critical Incident techniques

iii.

Negative incidents may be more noticeable than positive incidents.

iv.

The supervisors have a tendency to unload a series of complaints about the incidents during an
annual performance review sessions.

v.

It results in very close supervision which may not be liked by an employee.

vi.

The recording of incidents may be a chore for the manager concerned, who may be too busy or
may forget to do it.

4. Checklists and Weighted Checklists

In this system, a large number of statements that describe a specific job are given. Each statement has a
weight or scale value attached to it. While rating an employee the supervisor checks all those statements
that most closely describe the behaviour of the individual under assessment. The rating sheet is then
scored by averaging the weights of all the statements checked by the rater. A checklist is constructed for
each job by having persons who are quite familiar with the jobs. These statements are then categorized
by the judges and weights are assigned to the statements in accordance with the value attached by the
judges.

Advantages of Checklists and Weighted Checklists

i.

Most frequently used method in evaluation of the employees performance.

Limitations of Checklists and Weighted Checklists

ii.

This method is very expensive and time consuming

iii.

Rater may be biased in distinguishing the positive and negative questions.

iv.

It becomes difficult for the manager to assemble, analyze and weigh a number of statements
about the employees characteristics, contributions and behaviours.

Performance Appraisal Biases

Managers commit mistakes while evaluating employees and their performance. Biases and judgment errors of
various kinds may spoil the performance appraisal process. Bias here refers to inaccurate distortion of a
measurement. These are:
1. First Impression (primacy effect): Raters form an overall impression about the ratee on the basis of
some particluar characteristics of the ratee identified by them. The identified qualities and features may
not provide adequate base for appraisal.

2. Halo Effect: The individuals performance is completely appraised on the basis of a perceived positive
quality, feature or trait. In other words this is the tendency to rate a man uniformly high or low in other
traits if he is extra-ordinarily high or low in one particular trait. If a worker has few absences, his
supervisor might give him a high rating in all other areas of work.
3. Horn Effect: The individuals performance is completely appraised on the basis of a negative quality or
feature perceived. This results in an overall lower rating than may be warranted. He is not formally
dressed up in the office. He may be casual at work too!.
4. Excessive Stiffness or Lenience: Depending upon the raters own standards, values and physical and
mental makeup at the time of appraisal, ratees may be rated very strictly or leniently. Some of the
managers are likely to take the line of least resistance and rate people high, whereas others, by nature,
believe in the tyranny of exact assessment, considering more particularly the drawbacks of the individual
and thus making the assessment excessively severe. The leniency error can render a system ineffective.
If everyone is to be rated high, the system has not done anything to differentiate among the employees.
5. Central Tendency: Appraisers rate all employees as average performers. That is, it is an attitude to rate
people as neither high nor low and follow the middle path. For example, a professor, with a view to play it
safe, might give a class grade near the equal to B, regardless of the differences in individual
performances.
6. Personal Biases: The way a supervisor feels about each of the individuals working under him - whether
he likes or dislikes them - as a tremendous effect on the rating of their performances. Personal Bias can
stem from various sources as a result of information obtained from colleagues, considerations of faith
and thinking, social and family background and so on.
7. Spillover Effect: The present performance is evaluated much on the basis of past performance. The
person who was a good performer in distant past is assured to be okay at present also.
8. Recency Effect: Rating is influenced by the most recent behaviour ignoring the commonly
demonstrated behaviours during the entire appraisal period.
Therefore while appraising performances, all the above biases should be avoidd.