photo: Stanislava Luptáková
As simple as this relationship may sound, firms often work differently in reality. Trying to cope with business downturns or competition, companies may cut training budgets, introduce pay freezes, slash employee benefits or even lay off workers on a large scale.
These quick and often short-term solutions can have a devastating impact on employee morale, and consequently on the culture of each organization. Few people remain motivated if they work under constant pressure to increase productivity, but at the same time have low job security, no performance-linked rewards, and no clue as to who gets promoted and why. Instead, random and ad hoc changes often cause lower job satisfaction, absenteeism, decreased productivity and increased voluntary turnover.
Firms constantly claim that people are their most valuable assets, and that people create competitive advantages for their companies. This is quite true, since employees have the power not only to make the company excel, but also to harm its reputation, and actually to behave as its least valuable asset if not properly managed. The way companies work with the human resources they have - how they use, explore and handle the talent they temporarily possess - can create immense added value. The importance of these tasks makes human resource management an indispensable part of corporate life.
The significance of the positions, influence and activities of human resource managers lies in the role that employees play in each firm. Human resource activities, which range from job analysis to recruitment, selection, training and development, performance appraisal and discipline, have to be synchronized in order to be effective. As a system, human resource management should give a clear and consistent message to people; only then will companies and their managers be perceived as fair.
If human resources managers are given a significant role in a firm's structure, they can provoke that vital reciprocal response from employees which adds value and creates competitive advantages for the company. Research has shown that the way companies manage their employees bears a strong relation to their chances of survival.
If managers wish to succeed, they must create systems that send consistent and understandable messages to people, which when reciprocated enhance the overall performance of the organization.
Stanislava Luptáková is a lecturer at Comenius University's Faculty of Management. Her column appears monthly. Send comments or questions to Stanislava.Luptakova@fm.uniba.sk.