The Impact of HRM: Building Sustainable Stakeholder Value Analysis

This report examines the role of human resource management (HRM) in creating long-term, sustainable value for various stakeholders, including employees, employers, investors, and customers. It highlights how strategic HRM practices, such as training and development, performance management, and employee retention, contribute to increased employee skills, improved work conditions, and enhanced motivation. For employers, effective HRM systems foster strong employee relations, attract and retain talent, and optimize organizational performance. Customers benefit from a well-managed and motivated workforce that delivers innovative products and exceptional service, leading to enhanced market reputation. Investors gain from minimized operational costs, increased profitability, and higher share values resulting from efficient HRM practices. The report concludes that organizations should prioritize strategic HRM to outperform competitors and ensure stakeholder satisfaction, emphasizing its importance in achieving business success and building lasting relationships.

HUMAN RESOURCE MANAGEMENT
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Table of Contents
Introduction.......................................................................................................................3
Human resource management in creating a long term value for stakeholders....................3
Conclusion.........................................................................................................................5
References.........................................................................................................................7

Introduction
Human resource management is a concept that has emerged in the past few decades in the
business world and has become one of the most important managerial functions. Management
of human resources is aimed at maximising the performance of individuals by establishing
better relations between employers and employees and by improving the work conditions for
the employees Invalid source specified.. To achieve its objectives, human resource
management uses a number of core and non-core functions, such as recruitment and
selection, performance management, career development, training and development,
motivation, retention and attraction, etc.
With the rapid increase in market competition, the reliability of business organisations on
human resources, in order to achieve market competencies, has increased even further. Where
all other resources and processes can be replicated over a period of time, human resources
cannot be replicated and a talented pool of employees is always a plus point for any business.
Thus, human resource management is considered to be important from a business point of
view and also because of its ability to add value for the stakeholders Invalid source specified..
In this report, we will discuss the way in which human resource management can create a
sustainable value for the stakeholders.
Human resource management in creating a long term value for stakeholders
The recent developments in the field of human resource management has changed the way in
which most business organisations perceive it. Most of the business organisations have
shifted their focus from human resource management to strategic human resource
management, which further aims at aligning the human resource management practices of a
company with its organisational strategies in order to become more efficient and productive.
To understand the way in which human resource management systems can help in creating a
long term value for the stakeholders, it is important to identify the stakeholders involved. The
most important stakeholders involved in the process are employees, employers, investors and
the customers. Human resource management systems can definitely prove to be beneficial for
all stakeholders and can also help in creating a long term value for them in the following
ways:

First of all, for the employees, human resource management systems can add value because
of their ability to shift the focus of an organisation towards the training and development of
its employees. Human resource management systems aim at increasing the skills, knowledge
and competencies of the employees as it helps business organisations in becoming more
competitive and in outperforming their competitors Invalid source specified.. Training and
development programs add value for the employees because of their ability to help the
employees in developing their careers and achieving higher positions in the organisational
hierarchy. Further, human resource management systems also aim at improving the work
conditions for the employees and to keep them motivated, which depicts the importance that
an organisation attaches to its employees.
Secondly, for the employers, human resource management systems are of a great importance
because they add maximum value for them in the long run. Effective human resource
management systems can help employers in maintaining strong and peaceful relations with
the employees, which can help in optimising the overall performance of an organisation.
Human resource management systems also aim at implementing strategies that can help the
employers in retaining their skilled workforce and attracting fresh talent in the market.
Implementing strategies to attract, retain and motivate the employees can help the employers
in establishing a strong image in the market as an employer Invalid source specified., which
is beneficial because the fresh talent in the market is always eager to work with such
organisations Invalid source specified.. Further, human resource management systems can
also add value for the employers by introducing performance management systems in the
organisation. Performance management systems are aimed at setting up performance goals,
measuring the performance, performance appraisals and identifying the gap in performance
levels of individuals, teams and of the organisation on the whole. Performance management
systems can foster a performance oriented environment in the workplace, which can
ultimately help an organisation in outperforming its competitors. Human resource
management systems also aim at dealing with problems that can increase the employee
turnover rate in an organisation, which in turn can prove to be a burden on the resources of a
company. Using human resource management systems to deal with high labour turnover rates
can also help a business organisation in bringing down its attrition rates and reducing its
operational costs. Last, but not the least, human resource management systems help business
organisations in make their recruitment and selection programs more efficient and cost

effective. Having efficient recruitment and selection programs can help employers in
identifying the right fit for a right job at the right point of time, which saves the employers
from wastage of efforts and money that is spend in carrying out recruitment and selection
process over and over again. Thus, human resource management systems add a great deal of
long term value for the employers.
Fourthly, for the customers, effective human resource management systems can add a lot of
value in the long run. A company that uses efficient human resource management practices
will always be able to ensure high job satisfaction levels amongst its employees, which keeps
the employees motivated to serve their customers in the best possible manner Invalid source
specified.. A well-managed workforce will always demonstrate exceptional performance
levels and will be able to develop innovative and creative products that will be able to satisfy
the demand of the customers in the market. Human resource management systems can help
business organisations in establishing a strong market reputation and being associated with
such companies is perceived as a thing of high value by the customers.
Lastly, for the investors or the shareholders, effective human resource management systems
can add value by minimising the operational costs and maximising the share value by
increasing the overall profitability of a company. Effective human resource management
systems can assist business organisations in designing appropriate compensation and benefit
plans for the employees, which do not act as a burden on the resources of a company but are
also able to keep the employees motivated and engaged in their jobs Invalid source specified..
An engaged and motivated workforce can be really helpful in serving the customers in a
better way and developing products and services that are better than those of the competitors.
Thus, the overall profitability of the company is increases, which in turn will result in an
increase in the values of the shares held by the investors. Further, effective human resource
management systems can help business organisations in becoming more efficient and in
preforming better, which establishes a strong reputation of a company in the market.
Stakeholders or the investors attach a high value when they are attached to an organisation
that has a strong market reputation. Thus, effective human resource management systems can
also add a long term sustainable value for the investors or the stakeholders as well.

Conclusion
From the above information, it is evident that human resource management systems are not
just important for achieving better results but can also be helpful in adding long term
sustainable value for all stakeholders that are related with the business of a company.
Therefore, business organisations should shift their focus towards strategic management of
their human resources in order to outperform their competitors and to ensure high satisfaction
levels amongst the stakeholders.

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