5 key areas for effective HR management

Written by Ivan Kuzma

Through this article I would like to provide a high-level overview of five key areas, which can help HR to add a great value to the business. Each key area requires a different set of competencies to be managed well. The world of HR can get certainly very multi-dimensional.

Organizational and Employee Development

Organizations have their strategy and business goals. On the other side, there is a constantly changing environment. How to create an environment of development, which aligns these two different worlds, should be part of HR strategy. The HR strategy should empower organizations to set the direction for its human capital, manage changes and monitor the development.

For the start it is important to assess the current status and to establish the desired status of the organizational culture and values. It should be also clear what competencies and skills are critical for the business now and in the future. For example, an employee engagement survey is one of many tools, which can help with assessing the current culture and employee engagement.

Once these key parameters are defined, they should be translated into various systems at the organizational level like talent management, workforce planning, succession planning, knowledge management, team collaboration platforms, continuous improvement management etc. All of these systems can then feed into and guide the specific performance and development plans for leadership, management, teams and employees.


There are many ways how organizations can ensure that they are attracting and bringing in the right people. First of all, organisations should have an employer brand strategy, which helps them to focus their efforts in terms of how they present themselves to the external world. The more known and attractive an employer is, the bigger the pool of candidates from which it can choose.

Organisations can carry out the recruitment through various channels like in-house recruitment, recruitment agencies, temporary staffing agencies, executive search and headhunters. Each of them has its advantages and disadvantages depending on the context and situation of each organization. In addition, recruitment activities can be supported through an employee referral program.

Finally, organizations should always consider the risk and cost of bad hiring decisions. Usually, this is an underestimated area as organisations are often reluctant to invest into candidate assessment and pre-employment checks. At the end, high turnover or low performing employees cost the businesses much more than the due diligence before the hiring would have.

Compensation and Benefits

Providing employees with the right reward for their work requires a complex approach. Firstly, an organization should know its labour market context and how it should position itself on the labour market based on its business strategy.

Usually each labour market offers some free salary data on the internet. There are also providers, who can provide more in-depth and consolidated salary data for a certain fee. However, if organizations don´t have an internal capacity to evaluate their job positions and interpret the salary data in the light of their evaluation, they might want to pay the provider for these additional services as well.

There are different options for how an organization can deal with the administration of compensation and benefits. Organisations usually face a question whether it is better for them to outsource their payroll or manage it in-house. When deciding, it is suggested to consider various factors like cost and quality of output per employee, corporate compliance, financial controlling and reporting requirements, etc.

Legal and Corporate Compliance

HR plays often an important role in enforcing compliance, whether it comes to laws connected with health and safety, employment contracts, social and income tax, equal treatment rights, data protection, etc. or internal company rules connected with benefits consumption, ethical code, employee handbook, etc.

Compliance requirements change constantly. On one side, HR professionals need to keep educating themselves through various online and offline resources and have a point of contact for legal advice, when needed. On the other side, HR needs to establish effective channels to communicate new compliance requirements further within the organization. Good internal communication plan supported with various communication platforms can make an implementation of changes to go more smoothly.


It is amazing how many technological solutions are available to HR nowadays. Many organizations are yet to discover the potential, which technology has, in terms of decreasing the cost for human hours, decreasing the waste of human intellect spent on mundane tasks, increasing the quality of output, enhancing communication, planning and collaboration activities, etc.

The time when HR used to be just about humans and paper is gone. In addition, a lot of HR work is connected with data and information, which are calling for more complex information systems and more use of artificial intelligence in the areas of organizational development, recruitment and compensation. In years to come, we can only expect that mastering and using technology will be one of the top priorities for HR professionals.


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