HR Management

Human Resource (HR) management is the process of managing people and includes hiring, developing, assigning, motivating, and retaining employees to achieve organizational objectives. The contributions of HR management will vary depending upon the organization's size, objectives, functions, construction pattern, complexity, nature of production, and employers. In large organizations, the human resource management also acts as a strategic business partner to meet challenging business needs.

Globalization, corporate strategies, labor market changes, etc. led to the emergence of HR management. The main functions of human resource management are manpower planning; recruitment and selection of employees; employee motivation; employee evaluation and selection; industrial relations; employee services; and employee training, development, and education. Their functions will also include managing culture, facilitating change, strategic decision making, and creating responsive market driven organizations. The key characteristics of HR management are commitment, flexibility, quality, and integration. The "high-commitment-high-performance" HR management will improve quality of working life, quality of production, customer service quality, and organizational effectiveness.

The HR management's role is to encourage people to go beyond contract, to put business needs before rules, to develop skills, and to reduce conflicts by emphasizing common goals. HR management's contribution to corporate strategy is central. They focus on customers and they implement integrated change initiatives by fast decision making. It can directly communicate with the line management. Their leadership role is transformational and they do not emphasize standardization. HR management is valued for facilitation skills. They focus on culture change, to eliminate conflict, and develop the learning organization. The human resource management can also be answerable for an incredibly extensive list of responsibilities such as labor law compliance, health and safety guidelines, telecommuting administration, etc.

The human resource management handles a wide variety of concerns and issue areas within any company. With rapidly evolving economy, increasing technological beehives and incredibly unstable labor pool across a wide range of industries in today's world economy, human resource management play a vital role in the success of any business. It is in this context the human resource management plays the dual role of a manager and a mediator.

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Anatomy of a Financial Statement - Property Management

Robert Kiyosaki likes real estate investing is because real estate touches each part of his financial statement. Starting with his best-selling book Rich Dad Poor Dad and continued in many of his subsequent books, Robert explains how real estate gives cash flow to his income statement and on the expense side of the income statement he's able to deduct the property's depreciation as an expense.

When seen from the balance sheet, he's able to gain appreciation on the asset side and the leverage provided by the bank rounds out the liability side of the balance sheet.

Through a property management company you can also access the four parts of the financial statement. Here's how:

Balance Sheet: Asset Column

Every property producing monthly rent is an asset. It is possible to sell the rights to manage the property to another property manager for a lump sum of money.

Balance Sheet: Liability Column

Robert uses his banker's money aka leverage in order to purchase a large property with only a small percentage as a down payment. When the property goes up in value he is able to keep the entire appreciation amount without having to share it with the bank. He can use leverage and still get the benefit of 100% of the appreciation.

In the property management business, leverage is achieved through controlling the income of a property. A property that is producing $500/month in rent gives a property manager $50 in income. If the manager feels that $500 is too low for the area, then her or she can increase the rents by 10% to $550 and the management company's income will go up 10% accordingly. How many companies can increase their income by 10% without a causing uproar among its clients?

Income Statement: Income Column

As a property management company, you take your 10% management fee directly off the top after the rents have been collected. Here again, if the manager feels that rents are too low, the manager simply raises the rent and increases the income to both the manager and the property owner. It's win-win!

Income Statement: Expense Column

While Robert Kiyosaki is able to depreciate the building as an expense, a property management company cannot take this tax advantage because a property manager doesn't own the building-the owner does, however, a manager is able to make money off the expenses incurred by the owner of the property.

Let's say that a tenant calls to say that the plumbing underneath the sink is leaking. The manager sends out his repairman to fix the leak. The repairman sends a bill to the property management company for the $12.00 plumbing parts plus $30.00 for his hourly rate.

The property manager now marks up the bill by lets say $10.00 and now charges the property owner $12.00 for the parts and $40.00 for the repair time. The $10.00 is for the manager's orchestration of taking the call from the tenant and sending out the repairman.

Now multiply this scenario by the management of 200 properties and you'll find that expense mark-up is a significant source of a manager's income.

As you can see real estate allows an investor to utilize all four parts of a financial statement. As a property manager, you can piggyback on the owner's shoulders and receive some of the same benefits of cash flow and leverage and you can actually profit from the property in ways an investor cannot i.e. expense mark-up.

And here's the best part -and the prime example of a property management's ultimate leverage: the manager isn't responsible to the bank for making the payments on the mortgage. The owner is responsible! The property manager is able to make money off the property without being personally responsible to the bank for the asset that creates all the money in the first place.

What a concept!

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