Particularities of HRM in small companies - application on Pallas Conta SRL

1. INTRODUCTION

Question: What is a Human Resource-

William R. Tracey, in „The Human Resources Glossary” defines Human Resources as: "The people that staff and operate an organization"; as contrasted with the financial and material resources of an organization. Human Resources is also the organizational function that deals with the people and issues related to people such as compensation, hiring, performance management, and training. A Human Resource is a single person or employee within the organization.

Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization.

2. THEORETICAL SECTION

Human resource management is the strategic and coherent approach to the management of an organization's most valued assets - the people working within, who individually and collectively contribute to the achievement of the objectives of the business. The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations. In simple sense, HRM means employing people, developing their resources, utilizing, maintaining and compensating their services in tune with the job and organizational requirement.

The Human Resources Management function includes a variety of activities, and key among them is deciding what staffing needs you have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. Usually small businesses (for-profit or non-profit) have to carry out these activities themselves because they can't yet afford part- or full-time help. However, they should always ensure that employees have - and are aware of - personnel policies which conform to current regulations. These policies are often in the form of employee manuals, which all employees have.

Moreover, some people distinguish a difference between HRM (a major management activity) and HRD (Human Resource Development, a profession). Those people might include HRM in HRD, explaining that HRD includes the broader range of activities to develop personnel inside of organizations, including, career development, training, organization development, etc.

There is a long-standing argument about where HR-related functions should be organized into large organizations, like "should HR be in the Organization Development department or the other way around?"

The HRM function and HRD profession have undergone tremendous change over the past 20–30 years. Many years ago, large organizations looked to the "Personnel Department," mostly to manage the paperwork around hiring and paying people. More recently, organizations consider the "HR Department" as playing a major role in staffing, training and helping to manage people so that people and the organization are performing at maximum capability in a highly fulfilling manner.

3. APPLICATION SECTION

3.1 INSIGHT ON PALLAS CONTA SRL

Pallas Conta SRL was registered at the Registry of Trade in Bucharest on April 6 2006. It was founded by two associates, Calistru Aurora-Marcela and Bizau Cristian, holding 98% and 2% of the 500 RON joint stock, respectively.

The Constitutive Act mentions that the company’s headquarters is in Bucharest, 15 Anastasie Panu Street, and, currently, Pallas Conta SRL activities are developed at its branch in 16A Popa Rusu Street.

Its main activity field is Accounting and Financial Audit Activities; Consultancy in the Fiscal Field, which is registered under the 692 CAEN Code.

Both associates, Calistru Aurora-Marcela and Bizau Cristian are managers of Pallas Conta SRL and are responsible of the current management and administration of the company. They are also responsible for the reality of any instalment, paid dividends and registers required by law.

Currently, Pallas Conta SRL is divided in three large departments: the accounting department, the consultancy department and the administrative department. Since it was started, the company developed at a very high rate, reaching a total of 147 clients and 28 employees. Thus, it found itself in the position of relocating twice, once in 2007 and again in the beginning of 2009.

Pallas’ clients belong mostly to the accounting department; nevertheless, two years ago, the company started providing consultancy services. More and more clients requested these kinds of services (assistance with the Registry of Trade, Regional Labor Office and any other kind of public institution) and as a consequence, the same associates, Calistru Aurora-Marcela and Bizau Cristian decided to set up a second company: Pallas Consulting SRL. Recently, starting with the fall of 2008, consultancy services have boomed in the European Finance area and the company is proud to have submitted 14 financing projects, worth a total of 1,150,000 RON for its clients.

Of the three company’s departments, accounting is the most problematic one. Though simple and ordinary, the job involves a series of disturbance factors, such as clients bringing documents late, extremely solicited accountants having more clients than they can handle, deadlines having to be met, which led to large amounts of fines from the Financial Administration and other consequences. Despite everything, if one may ask an accountant from Pallas how he feels about his job, he will undoubtedly reply that it is a very rewarding experience, though hard and exhausting.

On the other hand, consultants don’t handle this kind of pressure, being more relaxed in the time concern, but they also have large responsibilities on their shoulders. They actually create new commercial enterprises, help them develop, provide answers to any situation it may occur and smoothly guide them through the business world. More importantly, European Fund consultants, often seen as “business angels”, are responsible for granting clients funds for their business projects from the European Union, and once they engage in the matter, they are fully dedicated and involved.

The administrative department is, according to the general opinion, the one that keeps things going. They have very diversified responsibilities, starting from insuring the minimum supply for the company and ending with the management of severe issues, such as finding solutions to the unsolvable problems.

Though still small in comparison to the competition, Pallas Conta SRL made an entrance and has slowly gained its place on the market. The most important competitor, holding the largest market share, is KPMG, which is an international enterprise, activating in 145 countries around the world.