● Managing the employment relationship.The employment relationship is central to the role of HRM and takes into account the individual’s characteristics, the activities of trade unions, and the needs of the firm and the economy. All of these contribute to the exact form of the employment relationship. The decline in trade union membership and the consequent reduction in the role of collective bargaining has shifted the emphasis more towards the management of individual employment relationships and the managerial prerogative to manage.
● Employee resourcing.This refers to the internal and external resourcing of the organisation which would include manpower planning, recruitment and selection, and performance measurement. The HR manager needs to have information on factors which influence the demand and supply of labour – the organisation’s need for labour, changes in educational patterns, the skill levels of the local workforce, employment protection legislation and local unemployment rates, for example.
● Employee development.Successful HRM is not only about successful recruitment and selection but also about the development of employees through training. The Investors in People initiative, established by the government in 1990 in the UK, is built on the premise that focused training and good communication is good for the organisation.
● Employee reward.An important role of the HRM function lies in the motivation and reward strategy of the organisation. There has been a trend towards individualized pay bargaining through increased use of performance-related pay and the decline in the incidence of collective bargaining. The concept of empowerment is relatively new in this area – where employees are encouraged to have a wider involvement in the running of the organisation.