Human Resource Management and Business Growth

As business organisations move further into the twenty-first century, Sims (2002: 13) asserted that it is becoming absolutely clear that the effective management of an organisation’s human resources (HR) is a major source of competitive advantage and may even be the single most important determinant of an organisation’s performance over the long term. With the integration of HR issues with business issues and of human resource processes with management processes, it is only logical that the HR staff function should be integrated with the business organisation, rather than being a separate entity.

Companies are radically restructuring the HR function and redefining its roles. According to Gunnigle, Heraty and Morley (2002: 2), the objectives of integrating it with business strategies include reducing overhead expenses, focusing time and resources on activities that add the greatest value to the business; reducing attention given lower value activities, aligning staff more closely with the business, as part of the management team at each level and addressing important people-related business issues more effectively.

For a sole trader who wishes to grow the business through engaging the services of additional people, it is of foremost importance that the business owner review his or her recruitment and selection policy and all the associated documentation including job descriptions and personnel specifications, application forms etc. as any changes in a step in the process will have a knock on effect in the next stage, if he or she desires to comply with the existing laws on human resource management especially in the area of selection and recruitment.

Compliance with law of human resources organisational procedures is vital because there can be considerable risk of making mistakes, pursuing risky strategies, and putting the enterprise at considerable potential liability for not understanding adequately what these laws, standards, and codes require of the business (Briscoe and Schuler 2004: 192). At its most basic, organisations have different recruitment and selection procedures, depending on their need of personnel and their available resources.

For a sole proprietorship, the employer must find individuals with the requisite knowledge, skills, and abilities to perform adequately the activities required, as there are only a few people to contribute to the success of the organisation as a whole, therefore each and every individual’s contribution to the business can make or break the venture. Sisson and Storey (2000: 12) argue that it is only through effective human resource management (HRM) planning at this stage that adjustments and refinements are made, transforming an organisation’s workforce to meet the projected future needs of the organisation.

According to Hitt, Miller and Colella (2006: 31), the selection process is concerned with identifying the best candidate or candidates for jobs from the pool of qualified applicants developed during the recruitment process. Kaplan and Norton (2001: 42) concurred that at the heart of any effective selection system is an understanding of what characteristics are essential for high performance. With regards to screening the applicant’s educational background, it will be advisable to use educational accomplishment as a surrogate for or summary of the measures of an individual’s abilities.

As for the skill qualification, as the organisation will move inevitably towards more teamwork and team-based operating systems as a result of additional people, it is desirable to put more emphasis on hiring individuals with the skills necessary to function effectively in a group situation. The rationale for this practice is that current team members are well placed to assess a given individual’s ability to fit in and become an effective member of the team.