by Wayne Forster          July 2020

The answer seems obvious. Human Resource Management is the management of your human resources – your people. Every business has three principal types of resources it utilizes in order to achieve its goals. It has financial resources (money), it has physical resources (buildings, equipment, materials), and it has human resources (people).

For most businesses, its human resources are the most important of its three principal resources. An IT start-up can raise lots of capital based on a great idea, but if it doesn’t hire the right people with the right skills, it will not succeed. A manufacturer can build a state-of-the-art factory with the most up-to-date equipment, but if its production workers don’t know how to properly operate the equipment, its products will be inferior. A restaurant can have great food, but if the wait staff are discourteous, customers will go to other restaurants that also have great food.

So, the better question might be, “What is effective Human Resource Management?

When attempting to answer that question, I always come back to something I picked up at a seminar many years ago; something called the 5 Rs of Human Resource Management. According to the 5 Rs, the key to effective human resource management is to ensure you have,

The RIGHT people

With the RIGHT skills

In the RIGHT place

Doing the RIGHT things

In the RIGHT way

The reason I like the 5 Rs concept so much is, firstly, it’s easy to remember; but secondly, and more importantly, it encapsulates all the elements of HR Management. Let me demonstrate.

The right PEOPLE: That’s your recruiting and hiring process, ensuring you hire the right people to achieve your goals. In also involves your compensation strategy and plan, ensuring you provide competitive wages and benefits to attract the right people.

With the right SKILLS: That’s your training and development activities, developing a learning culture that provides your people with the skills they need to do their jobs effectively. It’s also part of recruiting and hiring, ensuring you hire people with the skills you require, or the potential to develop those skills.

In the right PLACE: This is your Organizational Chart. Do you have the right people in the right positions? Have you matched skills to job requirements? Do you have the right leadership team?

Doing the right THINGS: This is your job design and description. Have you identified the job positions required to achieve your goals? Have you identified the tasks required within those jobs? Have you communicated these tasks clearly to the people you’ve asked to perform them? Have you also identified and communicated the standards of performance you require for these tasks?

In the right WAY: This is the big one – performance management. Are your people performing the way you need them to perform in order to achieve your business goals? If not, why not? Is there anything, or anyone, preventing them from performing at their best? What can you do to ensure they meet your requirements?

Virtually every aspect of Human Resource Management falls within one of the 5 Rs. If you have the right people with the right skills in the right place doing the right things in the right way, you’ve done everything you can do to ensure you are managing your human resources effectively.