September 20, 2022
Capital and people are the two main resources that the organization requires to function. The microfinance company is especially attentive to operational financial hardship. Finance is important, but it is merely a tool in people’s hands. Individuals manage money; it does not handle itself. Recruiting, training, maintaining, encouraging, and nurturing a team of employees that will successfully carry out the MFIs goal depends on the tools and procedures used in human resource management. Enterprise will be prepared for expansion, equipped to handle the difficulties of a changing environment, and responsive to the requirements of customers if you develop solid, effective human resource processes and tools.
What role is served by human resource management in microfinance companies?
Every institution is made up of a group of interconnected individuals. The MFIs personnel must be competent, professional, and productive in order for it to be successful. The management of these people can not only increase their performance as individuals but also foster teamwork that can do more than any one person could on their own.
No matter their designation within the MFI, every employee needs the very same elements to succeed.
1. Adhere to the goals of MFI
2. Recognize their contribution to the objective and how their function fits it.
3. Clearly understand what is required of them.
4. Possess the ability, resources, and environment required to succeed
5. Get motivation.
Human resource management’s job is to put in place the tools and mechanisms that will give to MFIs employees these essential components so they can succeed and be energetic. The MFI will be prosperous when individuals perform well.
What elements influence human resource management?
Society, the microfinance company, and the employees are the three key variables that have an impact on the tasks and objectives of human resource management. Each of these constituencies should be taken into account while handling the human resources at MFI.
Society: HRM might be impacted by the setting in which you work. MFIs positions of authority, by necessity, address some of society’s demands and problems. These may include problems in the area including poverty, high illiteracy rates, environmental concerns, and violence. The competitiveness in the microfinance industry and even the relationship with funders are some additional external elements that will impact HRM. The MFI must manage these difficulties as well as be aware of and obedient to local legal regulations and labour laws. Human resource management practices will be impacted by this. The challenges that MFI must deal with in employee management may also be influenced by a variety of unwritten social norms or standards.
The Microfinance Company: The performance of MFI is the primary goal of human resource management. Consequently, the foundation of how you tackle human constraints will be the goal, plan, and aspirations of the MFI. The HRM structure and operations must be in line with the MFIs size and requirements. If the HRM tools and procedures are more or less advanced than what the organization requires or can fund, you could be squandering valuable resources.
The Staff: Successful human resource management will support each employee’s participation in order to achieve success for MFI. As was already mentioned, the success of each member of the team is crucial to the success of the organization. There are numerous HRM systems and solutions available to boost each employee’s productivity, which in turn helps MFI thrive.
Who is accountable for HRM?
Each manager is ultimately accountable for the actions related to human resource management. HRM tasks will only be partially completed if management refuses to take this obligation. The capacity of a manager to manage personnel immediately affects the capabilities of the human resources available
within the MFI. Giving staff what they need to succeed requires strong leadership and effective employee management. Although they might offer a solid framework, HRM systems and technologies cannot ensure success. Each manager’s capacity to lead and connect with staff is essential for successful staff management.
At MFI, the HRM team’s job is to provide every manager with the tactics, frameworks, and resources they need to manage their personnel effectively. Human Resource Management is a support service having “internal clients”—staff and managers—just like the Finance Department. This idea can seem to go against what you would anticipate. Many employees at the MFI might believe that the dedicated HRM employee should handle all HRM tasks. This is true for the creation, management, evaluation, and monitoring of HRM systems; but, for such systems to work well, the managers must be aware of their responsibilities and roles while utilizing those systems and tools for efficient staff management.
How does HRM change as MFI expands?
Setting up HRM systems early on will help the MFI be prepared to handle the growing administrative demands brought on by hiring more staff. As the firm grows, institutionalizing these frameworks will help to make sure that efficient HRM procedures are embedded in corporate culture. These HRM structures would comprise, but not be limited to, performance appraisal, management tools, recruitment policy, orientation and training programs for new hires, and hiring and selection processes. These systems and processes don’t have to be difficult or elaborate at first. As the MFI expands, it could change. No matter the size, establishing HRM processes from the start will enable Human Resource Management to develop alongside the MFI.
Policies are being implemented and HR is becoming more vital. By establishing specialized Human resources that concentrate on all facets of HR, medium MFIs are moving on to the next tier. Larger MFIs are setting the standard for others to follow when it comes to benchmarking with other industries. The smaller businesses could likewise really pursue HR initiatives with a little assistance. A great method to increase the staff’s devotion to the company and strengthen the value for consumers the institution stands for is to treat them with the same consideration and openness that the organization demands of its clients.