Why HR?

Among various resources required in the production process, human resource is an important one. For
success of any industry and company it is essential that human resource is utilized in the best possible
way. Companies match employees to jobs for which they are best cut out for. This task is done by
human resource professionals. These HR professionals deal with recruitment of new employees,
conducting tests and interviews, managing employees’ benefits and listen to minor grievances of
employees. Besides, they also assist workers to boost their morals and give training and coaching to
maximize their abilities and hence the company’s profits by maximizing employee utilization.

Flavors of HR

 Recruitment
 Training and development
 Performance management
 Compensation and benefits
 Organizational development interventions
 Industrial relations

Why suitable for HR?

 Good communication skills

 Time and resource management – examples from past work ex
 Interest towards the subject – talk about the paper u have written.

HR as profit centre – v.imp

The perception that HR is not a strategic business unit has resulted in many critical initiatives becoming
delayed or losing funding altogether. The perception that HR does not significantly affect bottom-line
profitability has also resulted in a lack of momentum on initiatives that could provide competitive
advantage and significant shareholder returns.

The HR organization is typically the most under-funded division within the corporate enterprise.
Furthermore, when cost cutting initiatives begin, companies typically look first to HR as a source of
budget cutting. Why? Because investing in HR is not perceived as having the same return on investment
(ROI) as investments in R+D, new physical assets, or marketing and advertising.

 Scale of economies.
 Companies investing in talent management have a higher yield than its competitors.
 Increasing employee engagement by 5 percent can add 2.4 percent to a business' operating
margin.
 Shareholder returns are 3 times higher at companies with superior human-capital practices than
at companies with weak human-capital practices.

Most HR budgets end up being curtailed because the ROI on initiatives, such as recruitment, selection,
and training and development are not perceived as impacting sales and profitability. However, if the
cost savings and increased revenues generated by HR initiatives were allocated back to HR financial
reports, most CEO's and CFO's would be astounded by the ROI. The employees of an organization are an
asset for the company. Proper allocation and hence asset management can lead to higher results for the
organization as a whole. Set the expectations of HR in quantifiable terms like reduce recruitment costs
to Rs X, increase productivity by Y% etc. Restructure salary of HR professionals and incorporate
performance pay.

HR Matrix

Tools for making HR Matrix :

1. First u frame important functions of HR as a pillars

2. Define role of each and every pillar

3. Find out Thirst area of improvement in the said pillars

4. Use DMAIC (Define, Measure, Analysis, Improvement. conclusion) formula for the same.