DefinePK

Abstract

Recognizing the strategic alignment between Human Resource Management (HRM) and Finance as part of a well-integrated overarching framework probably leads to better organizational performance in the hyper competitive and uncertain world of business today. HRM relates to leverage human capital to drive innovation, engagement, and performance where finance relates to the committed allocation of monetary resources for value maximization and strategy implementation. This paper consider some of the changing nature of the relationship between HRM and Finance, indicating how the two are beginning to collectively exist as a comprehensive roadmap to organizational sustainability and competitiveness. The author rely on newer theories, case studies, and empirical evidence, to show that HRM functions/expenditures associated with employee recruitment, on boarding, training, performance appraisal and employee engagement investment have a financial impact on organizational performance by reducing turnover costs, raising productivity, and adding value with the added return on investment (ROI) of human capital. Conversely, the financial theory/procedures give the HR manager the means to demonstrate, for example, the value associated with their working costs, i.e., selection costs, on boarding costs, training costs, performance appraisal costs, to best minimize the working costs associated with talent development related to the workforce and corporate alignment with strategy. The paper furthermore proposes a structured pathway towards improving collaborative working between HRM and Finance through data based workforce analytics, a unified report of performance metrics and decision making across areas of expertise. Moreover, it highlights the necessity for organizations to take advantage of technology; specifically, Human Resource Information Systems (HRIS) and financial analytics tools in order to obtain real time insights and data enhanced approaches. The results indicate organizations' management interpretation of the alignment between HRM and Finance allows them to improve employee satisfaction, achieve operational efficiencies, and produce returns on investment and sustainable value for shareholders. Ultimately, this research supports the perspective of HRM and Finance as two interrelated levers of organization success and not alternative silos, reinforcing an understanding of how management can stimulate innovation, value creation, adaptability, and resilience in the contexts of global business.