Profits is a very important concept for businesses, it is a mission to achieve to reflect the risk that they take. Profit is also an important source of finance for business on going operating. The word ‘profit’ has been talked by every company for hundreds years. However, the profit is not an only mission that every company focuses on. Especially in recession, there are other things that every company should consider, such as human resource. During last thirty years, there are five major global recessions, what considered more beneficial to the survived companies is, to focus on their Human Resources. There are many Human resources practices. Efficiency and cost control, communication and information disclosure, fairness and trust, human resource development, managing working time are the most effective in helping to manage the recession. In following essay, we will discuss the importance of Human resources management, and explain how these Human resources practises are used to achieve cost reductions and productivity improvements.
The National Bureau of Economic Research cites "a significant decline in economic activity spread across the economy, lasting more than a few months" as the hallmark of a recession (Foxx, 2009, p.50). A recession could results in a slowdown in industrial production, manufacturing, a loss of jobs, a loss of income and a slump in consumer spending (Foxx, 2009, p.89). For example, in 2007 the unemployment rate was 4.4 per cent in Ireland. However, by 2009 it had increased to 12.5 per cent. Then it rise up to 13.6 per cent. In 2009, approximately 450 construction companies and 280 services companies claimed insolvency (Roche, Teague, Coughlan & Fahy, 2011, p.59).
Some managers said, in times of economic recession, companies should emphasis on profits. Companies need to use all resources to maximize profit in order to stand on a good position. However, human resources management plays a more important role in today. Human resource is “The process of systematically reviewing human resource requirements to ensure that the required number of employees with the appropriate knowledge, skills and abilities are available when needed” (Stone, 2011, p.104). In general, it is a function within an organization which focuses on hiring, compensation, development, culture, safety, communication, training and employee motivation etc. A good human resource management could encourage employees to contribute productively and effectively to the overall company’s goals. Using only one word to define human resource is about – people. People is the most important and valuable assets of companies. The Lincoln Electric Company is a large manufacture which founded over 100 years ago. It always consider that employees are its most valuable assets. Good piecework rates, annual multi-million dollar bonus program, and a guaranteed employment policy are a few of the reasons it can boast of superb quality products, and a healthy pool of job applicants (Renckly & Renckly, 2004, p.20).
One of the main roles of human resource management is managing current employees. Which involves employees’ benefits, such as pension plans, paid leave for illnesses, insurance plans etc. it also deal with concerns such as pay, policy, training and conflicts between employees or between employees and their managers. Human resource management also involves the acquisition of new employees, to ensure that company has a reasonable continuously supply of talented persons in order to improving operating of the company and the diversity of the company’s workforce (Galic & Plecas, 2012, p.34).
During recession, companies are in a brutal competition, rather than struggling in profit, optimizing the internal human resource structure seems a modern way to help companies survive. There are many human resource management practices in a recession, which include efficiency and cost control, communication and information disclosure, fairness and trust,...
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