Top 5 HR Practices That Will Boost Your Profits

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SoftwareSuggest

Senior editor

Parul Saxena

Chief editor

Last updated: April 13, 2021

HRMantra

HRMantra : No. 1 In HR Management Software

HR is an important department for every profitable business. Human Resource department forms the backbone of the organization by hiring suitable people. The success of any business enterprise is measured in terms of staff satisfaction and work performance.

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Hiring a person for a particular position isn’t very simple as it seems to be. If a worker turns out to be not productive for the job, the HR is held responsible. This article will help you figure out certain Human Resource practices to enhance the profits but first, let’s review the main functions and goals of HR.

Structure and Functions of Human Resources Department

The structure of HR department depends on the size of the organization. The number of people working in this department should be enough to serve the business completely. The average employee to HR ratio in a small-scale business is about 3.4 to 1.

Having several branches in remote areas and lacking some systems that are absolutely necessary for the expansion of the company, it is a red flag to recruit HR. And as the organization becomes bigger and better, the need for HR workers is increasing quickly:

  • However, with new technologies, if your business includes up to 49 workers, you can also start using automated HR software and outsourcing that can help you do the HR tasks.
  • Once you hit fifty workers, you should hire your first HR personnel.
  • Then, when the number of employees reaches 150, it is time to get another HR person and expand the department.

Therefore, with increasing employees, your HR department becomes bigger. Also, the growth rate of your company influences the human resources department. If the growth rate is high, then lots of processing is required. This is where the human resources department plays a vital role and help in controlling the high number of employees.

Additionally, the human resources department is divided according to functions and positions:

  • First of all, the human resources department is led by the HR team lead. Once your company starts growing and crosses the 100 mark, then you need to have human resource assistant and a full-time recruiter.
  • A recommended structure is having HR manager and a full-time recruiter as this allows better division of work. This will save time and improve the quality of employees that are being recruited.
  • You can just have two people in the human resource department, the HR manager, and the HR assistant. According to reports, the structure increases the efficiency and decreases workload. The HR manager will be responsible for the strategic requirements of the business while the HR assistant will look into the administration.
  • While many support two-person division within the HR department, many established organizations think that a three-person HR department is more suitable for a rapidly growing company. This way the HR manager will look into the internal needs of the company. And the assistance will be held responsible for the administration while the recruiter will look into the recruiting process.
  • You may outsource these functions if you want and if it is not your priority. When you cross 200 or 300 employees, then it will be difficult to handle with a three-person structure of HR department.
  • As an example, for a big company which provides reliable research paper service, we recommend a 6 person HR department structure. This will include the HR manager, full-time recruiter, a person specializing in employee relations, compensation department, and training specialist.
  • A few cases of HR department exist, where the company might include a business consultant apart from the ones mentioned above.

Functions of HR department depends on the structure and its capacity. Their main function is to staffing of the organization. Their functions are listed below:

  • Planning the budget of the company in terms of labor, and their additional needs.
  • Taking decision whether to provide them with promotion and the kind of promotion to be taken.
  • Taking the decision whether to fire an employee or give a second chance also lies in the HR department.
  • Starting recruitment of new people when necessary with complete background and skills check. HR had to make decisions regarding hiring new personnel based on the previous work experience, skills, results of short tests, and reasons for leaving the previous job.
  • Another function of the department is providing a payroll to the employees. It is graded according to the structure of the organization. HR department has to do this without any personal thought and consideration according to business and legal protocol.
  • HR is also responsible for having complete transparency between the employees and the CEO. Therefore, any perks, offers or allowances should be stated to the employees.
  • Experts also provide the plans for employees, training workshops and schedules holidays – these are also under the HR department.
  • It is their duty to come up with an automated system that would evaluate their employees’ performance and prepare reports regarding each one of them.
  • Transferring other benefits of the organization like loan help, housing or car advance, assistance in tuition fee for students.
  • In case of traveling for business, HR defines the rules and regulations to be followed based on budget and business policies.
  • The HR manager has to make sure that the employee who does not follow the rules associated with time and attendance has to pay the penalty.

Moreover, the real professionals have to help the employee who works overtime to get their payment according to organization policies. They also should listen to the problems that an employee has and provide a possible solution.

Goals of the HR Department

A simple question “How to grow your business” will yield an easy answer “improve HR Department.” HR is a small yet a powerful department with the responsibility to control the employees. Job and work relationship satisfaction are the main goals of every HR team.

Other goals of the department are:

  • Increase the employee work efficiency;
  • Develop systems to implement changes;
  • Help the workers when needed;
  • Maintain transparency among the employees;
  • Enhance company’s reputation by keeping employees happy.

Importance of HR Department

Nowadays, HR is not limited to handling paychecks at the end of every month and recruiting new people every year, there is more. It is one of the toughest jobs available. Whether it is a profitable small business or a vast enterprise, HR plays a significant role.

On the other hand, human capital is difficult to manage. A human being is never satisfied with the given resources. Since the organization has a limited budget, all wishes cannot be fulfilled. In such cases, the HR department has to manipulate the situation swiftly.

The core HR application market is the highest which adds up to 3588 million US dollars from 2016 to 2021. So you see, it is not that easy. Some important facts concerning HR are:

  • Managing the human capital – because in some smaller businesses if one person fails to do his/her duty properly, the whole business might be on the brim of collapsing.
  • Supervising the budget is another important role – they help to cut off extra expenditure and make sure the money which is being spent is worth it.
  • People with different mindset will most definitely have conflicts – therefore, in a business, it’s quintessential supporting each side. The HR supervisor helps in resolving the conflict and makes sure everyone is working peacefully.
  • They are also responsible for rectifying harassment cases – in some countries with male domination, women find it difficult to work due to annoying comments made by the male colleagues. HR gives a strict warning at first but later on takes a harsh decision of firing them. Basically, an expert makes sure there is no form of discrimination, and the working environment is acceptable.
  • They help in the growth of the employees professionally – they should help with growth by holding workshops, pieces of training, online seminars, etc.

Also, HR practices help in maintaining the sustainability of the company by making sure there are enough employees willing to perform hard work. Finally, the corporate image of the company is another thing which is under HR’s duty. Therefore, the policies and procedures of the company are maintained by the HR. They make sure nobody works against any kind of deviation from the rules laid down in the protocol.

HR practices

So, What Are Top 5 HR Practices?

To become a part of the HR team, for example, individuals have to undergo an extensive course in human resource management. Like any other course, you need to read books, write tests and pass the course within 2 or 3 years.

But unlike other fields, Human Resource management is tricky. It includes the study of:

  • Human behavior,
  • Human psychology,
  • The principles of business,
  • Studying the policies and
  • Finally, legal procedure.

Of course, the study is not in depth, but this combination is difficult to digest. Many practices exist in the field of the HR management, but here we are going to mention the ones which are absolutely necessary. These principles will help you work efficiently, avoid any problems and enhance the performance of others.

Principle #1: Always with the employee

Whether it’s recruitment or retirement, HR practices stay with the employees and work for the betterment of their future. According to this principle, the HR department should look after all the needs of the employee – throughout the time period for which the employee is working.

Controlling and handling the staff is a major issue which is always raised in the office. Many employees complain that they are not provided with basic amenities. Some employees might bring their personal relationship problems in the office. This will affect the professional relationship and in turn, will decrease the work performance. These are only a few problems encountered by HR on a daily basis.

Although they work for the employees, HR is not allowed to bring any emotion to work. All the decision taken should be according to the protocol of the organization. If you see a problem which you cannot solve, you should take it to higher authorities.

One of the major complaints by employees is that their problems are not heeded to. Or preference is given to the staff belonging to a higher position. What employees do not understand is that it’s not the position but the urgency of the problem.

There could be a problem affecting the high-profit business at an international level and has to be dealt with first – employees should get a clear picture. Also, afterward their problem should be heard. The basic parts of this HR practices principle are:

  • Provide job allowances and solve the problems;
  • Non-tolerance to annoying or cheap comments made inside the office;
  • Selection of appropriate workers;
  • Online workshops for motivation and training;
  • Administering salary and penalties;
  • Evaluation of the employees;
  • Assessing the condition of work and satisfaction of work;
  • Giving pre-job training;
  • A clear description of retirement plans before hiring;
  • Keeping all signed documents in soft-copy and hardcopy in case of a problem later on.

Principle #2: Prefers humans to machines

Nowadays, Artificial Intelligence development is at its peak. Still, human intelligence has no comparison because there are many parts of the human brain which have not been coded yet. Therefore, machines cannot do jobs that require the use of logic.

After several years of mining for the best resources for work, it has been found that humans are the best. Human beings evolve with each and every mistake which will not happen in a machine. The main problem with a machine is the occurrence of a technical fault. Once the system is hacked, the whole system will shut down. Human beings are the only ones who cannot be hacked like machines because they have a heart and not a chip inside.

Machines were built to support and enhance the performance of humans and not to replace them. Even for analysis of tons of data, a human brain and eye can do wonders when the computer shows “system fail.” The company might collapse just because of a system crash or power loss. Competitors can take unfair advantage of the heavy use of computers by hacking into the system and stealing the information.

human over machines

Also, a number of distractions are there because of the whole new world of internet and social media. Instead of working on a project, workers might be tempted to check their Facebook or Instagram account.

Consequently, the HR practices should make sure that certain websites or social media pages are blocked. This computer is for the sole purpose of business. But it is a good idea to have all the accounts and computers linked to the HR department.

Of course, high-speed computers are necessary to assess the data and give results based on software. However, it’s better to say that investing in human beings more than in machines will give much more profit. And you should believe your employees because they are better. Also, belief is the first step of trust.

Principle #3: Effective skills and a background check

People constantly argue whether the attitude is more important or skills. Well according to business leaders, it is a balance of both that will lead you to success. Since HR department has the responsibility of hiring people, they should definitely check the following things in an interview:

  • Confidence while speaking and body language;
  • The answer they get to the questions;
  • Level of comprehension to questions;
  • Effective communication skills with clear language;
  • Use of professional language;
  • Their priorities at work;
  • Enthusiasm towards work;
  • Problem-solving skills.

The CV or the filled form should be checked thoroughly. It should be matched with the original documents submitted. Also, they have to make sure that the documents submitted are not fake. If previous work experience is added, they have to perform a background check in that company.

They may want to know how the employee was working, the reason for resignation and the attitude towards other employees. Doing this is important because there are many cases of fraudulent employees. Some people are even sent as spies from a rival company to keep a check and send valuable information. The responsibility will fall on the HR department because of improper checking.

Also, they should find out whether the employee they are going to hire is clean (no police cases in the past). Of course, if you ask the person, he/she will not say anything, but just a quick check in the nearby police station will save your job.

The skills mentioned in the CV or the application form are relatable to the company or not. Also, they should ask for some kind of proof to assess the skill either:

  • A certificate from previous offices, or
  • Online pre-employment test (prepared by the organization) and its results.

This will help in analyzing the skills. As for attitude, a 20-30 minute interview should be enough. It’s better to check if the hired employee is perfect for the job requirement and matches the skills and level of attitude. Also, overconfidence and too much attitude can be harmful to the company.

Principle #4: Don’t hire too many people

As stated earlier, whenever you recruit a person the above-mentioned qualities must be looked out for. Such deep research and analysis take time. And this principle actually gives you time. If you do not find the right candidate, then wait for the right one. But do not hire a person who is inefficient.

In any organization, each and every employee has a particular task. Therefore, take the time you need to find the right candidate and improve reputation. One wrong choice could lead the company into debt and losses. Afterward, you will end up losing your job as HR manager.

Another point of this principle is that once you see the person is not working properly, he or she is lazy, harassing other employees, cannot deliver projects on time and cannot keep proper records you should definitely fire them. You should try to warn the person 3 times. Let the employee know the things which will not be tolerated inside the office before hiring.

Also, tell them that after 3 warnings the person will be fired without any further notice whose proof should a signed document. Firing many people is better for the company because unskillful people takes the company’s reputation down. What else?

  • You can have motivational workshops and training sessions to support the employees.
  • Office life is a monotonous and a boring one. You can uplift their mood by some motivators like job perks, future opportunities, chances of getting a promotion.
  • But if they do not work, it is time to remove them. There are many candidates who are willing to be a part of the company with skills and eagerness.

Therefore, take time in hiring but do not waste a lot of time in firing. You will feel bad because you are ruining the person’s career for a while but look at the bigger side. You saved the company from future loss and shame. It is better to take precaution than to wait for the company to collapse. The HR will still be held responsible for the collapse because an employee was the reason for this collapse.

Principle #5: Transparency is the key

The HR department should be like a clear stream of water. Unless and until you are told to hide certain aspects of the business, you should tell the employees everything that they need to know.

Trust comes when you are open and friendly with the people you work. Detailed mention of any allowances and bonuses that the employee deserves is important to prevent future dispute. It reveals that the employee wishes and philosophy is respected. And HR is considered as the mirror of the higher authorities here.

Whenever a change has to be assigned, the HR must be absolutely honest about what exactly is going to happen. You should also mention the way this change will be implemented and about the following consequences.

The small business idea in addition to the current ones, new marketing ideas or entering an entirely new market should be announced to employees as soon as possible. There are some announcements which are only made to a particular person but other than that, all other decision must be clear among the employees. Such transparency is a reflection of simplicity and authority in the company.

Bottom Line

The foundation of Human Resource management is based on the above five principles in practice. Moreover, HR plays a crucial role in maintaining relationships with the leaders of the company, handling the human capital and developing their skills. Nevertheless, the HR practices, policies and procedures depend on the organization and country, but the principles remain the same. These principles are not easy to follow, but they will totally boost your profit and success.

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