What is People Management? Complete Process with Best Practices

Over 90% of managers reveal how their organisation’s growth and revenue generation is directly influenced by the attitude and productivity of its team, implying how people management is a potent tool to ensure a well-rounded workforce. 

People management refers to the process of overseeing and coordinating the activities and performance of employees within an organisation. It involves managing relationships between individuals and teams to achieve business objectives. Effective people management requires a combination of skills, tools, and best practices. 

In this article, we will discuss people management meaning and the complete process of people management with the best practices.

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What is People Management?

People management is a crucial aspect of business operations that involves effectively managing and developing the workforce to achieve the organisation’s goals. It involves creating a productive and positive work environment that motivates employees to contribute their best efforts towards the company’s success.

People management encompasses various functions such as recruitment, selection, training, development, performance management, compensation and benefits, and employee relations. 

Effective people management requires a thorough understanding of each employee’s strengths, weaknesses, and motivations, as well as the ability to provide the necessary resources and support to help employees perform at their best.

Key Components of People Management

People management is vital to any successful organisation, as it calls for managing and developing a company’s most valuable asset – its people. 

Effective people management can help to boost employee engagement, increase productivity, and drive business success. 

Let’s look at its key components!

  • Recruitment And Selection

The recruitment and selection process is a critical component of people management. It involves identifying the right talent to fit the organisation’s culture and needs. 

Effective recruitment and selection strategies involve attracting high-quality candidates, screening and selecting the best candidates, and ensuring that the candidate’s values, skills, and experience align with the organisation’s objectives.

  • Onboarding

Onboarding is the process of integrating new hires into the organisation. It requires providing them with the necessary tools, training, and support to help them adjust to their new roles and responsibilities. 

Effective onboarding programs can help improve employee retention and reduce the time it takes for new hires to become productive team members.

  • Training And Development

Training and development are essential components of people management. It involves providing employees with the necessary skills and knowledge to perform their jobs effectively and develop their careers. 

Effective training and development programs can help to improve employee satisfaction, increase retention, and boost productivity.

  • Performance Management

Performance management demands setting expectations and providing employee performance feedback. It comprises establishing clear goals, providing regular feedback, and conducting performance reviews. 

Effective performance management can help to improve employee engagement, identify areas for improvement, and recognise high-performing employees.

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  • Compensation And Benefits

Compensation and benefits are important components of people management. It comprises providing employees with fair and competitive salaries and benefits that align with their skills and experience. 

Effective compensation and benefits strategies can help to improve employee satisfaction, reduce turnover, and attract top talent.

  • Employee Engagement

Employee engagement is critical to effective people management. It involves creating a positive work environment that fosters collaboration, open communication, and respect for diversity. 

Smart employee engagement strategies can help to boost productivity, reduce absenteeism, and improve overall job satisfaction.

people management


Importance of People Management

People within any organisation work as its building blocks to establish and reach greater heights through consistent hard work and dedication. The practice of people management serves great importance in ensuring the overall well-being of employees to keep the system running effectively. 

Let’s decode how people management is crucial within an organisation.

  • Boosts Employee Engagement

Constructive people management can help to boost employee engagement. Engaged employees are motivated, committed, and passionate about their work. They are likelier to take ownership of their work and contribute to the organisation’s success. 

People management practices such as providing opportunities for professional growth and development, recognising employee achievements, and offering fair compensation and benefits can all help to improve employee engagement.

  • Improves Productivity

People management practices can also improve productivity. Employees who feel supported, valued, and motivated are more likely to be productive. 

People management practices such as setting clear expectations, providing regular feedback, and offering training and development opportunities can help to improve employee performance and productivity.

  • Fosters Innovation

Effectual people management practices can also foster innovation. When employees feel supported and encouraged to share their ideas and take risks, they are more likely to innovate solutions for business challenges. 

People management practices such as creating a culture of innovation, encouraging collaboration, and providing opportunities for learning and development can all help to foster innovation within an organisation.

  • Increases Customer Satisfaction

Effective people management practices can also increase customer satisfaction. Engaged and productive employees are more likely to provide excellent customer service, increasing customer satisfaction and loyalty. 

People management practices such as providing training and development opportunities, recognising and rewarding employee achievements, and creating a positive work environment can all help to improve customer satisfaction.

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Top People Management Skills

In today’s rapidly changing business landscape, efficient people management skills are more important than ever. Successful organisations understand that their employees are their greatest asset and invest in developing the skills and capabilities of their people managers.

people management skills


  • Communication Skills

Effective communication is the foundation of successful people management. It involves listening actively, providing clear and concise instructions, and communicating expectations and feedback. 

Good communicators can articulate their thoughts and ideas in an easily understood way, which helps foster collaboration and teamwork.

  • Emotional Intelligence

Emotional intelligence involves the capability to acknowledge, understand, and manage one’s own emotions, as well as the emotions of others. 

People managers with high emotional intelligence are better equipped to manage conflict, build strong relationships, and motivate their teams. They also communicate more effectively, adapt to change, and provide constructive feedback.

  • Coaching and Development

Effective people managers understand the importance of coaching and developing their employees. They take an active interest in their team members’ career development, identify their strengths and weaknesses, and provide opportunities for growth and learning. 

  • Conflict Resolution

Conflict is inevitable in any workplace, but successful people managers are skilled at resolving conflicts and finding solutions that benefit all parties involved. They are able to remain calm and objective during the conflict, listen to different perspectives, and find common ground to resolve issues.

How To Develop People Management Skills

Developing people management skills is critical to becoming an effective leader. People management skills enable leaders to communicate, motivate and inspire team members, and achieve business objectives. Here’s how you can do it too!

  • Identify Your Strengths and Weaknesses

The first step in developing people management skills is identifying your strengths and weaknesses. Take the time to reflect on your current skill set and assess areas that require improvement. 

Seek feedback from your team members, colleagues, and mentors to gain insight into your management style.

  • Attend Training and Development Programs

Participating in training and development programs is an effective way to develop people management skills. Look for courses, workshops, or seminars focusing on communication, leadership, and team management. 

These programs can help you gain new insights and develop practical skills to apply in your work.

  • Read Books and Articles

Reading books and articles can help you stay up-to-date on the latest trends and best practices in people management. 

Look for books and articles that focus on topics such as leadership, communication, and employee engagement. Take notes on key takeaways and apply them in your work.

  • Communicate Effectively

Effective communication is essential in people management. Leaders must communicate their vision, goals, and expectations clearly and concisely. Practice communicating with your team members regularly and in a way that is easy to understand. 

Use different communication channels such as email, video conferencing, or in-person meetings to ensure everyone is on the same page.

  • Give Feedback

Providing regular feedback is another important people management skill. Effective feedback helps team members understand their strengths and areas for improvement. 

Practice giving feedback in a way that is constructive and actionable. Provide specific examples and suggest ways to improve.

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The importance of people management in any organisation is imperative since it involves the end-to-end process of talent acquisition and management. Obtaining the right people management skills can significantly boost an organisation’s growth and the satisfaction level of its employees, leading to a positive work environment. 

Honing the right skills for people management can be daunting, but not under upGrad!

With upGrad’s MBA with Specialisation program, learners can advance their careers as capable people managers! Offered under the expertise of Liverpool Business School, the course extends specialisation such as Leadership and HR, enabling you to advance and develop world-class business acumen with people management skills.

Apply now and get ready to explore global opportunities with upGrad!

What does people management involve?

People management involves overseeing and coordinating the activities and performance of employees within an organisation, managing relationships between individuals and teams, and aligning their efforts towards achieving business objectives.

What are the best practices for recruitment and onboarding in people management?

Best practices for recruitment and onboarding include developing a clear job description, using multiple channels to attract a diverse pool of candidates, conducting structured interviews, and providing a comprehensive onboarding program.

What are the key components of performance management in people management?

The key components of performance management include setting clear and measurable goals, monitoring progress, providing feedback, and evaluating performance to identify areas for improvement.

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