Human resources

"HR" redirects here. For other uses, see HR (disambiguation).

For the Doctor Who radio play, see Human Resources (Doctor Who audio).

Human resources is a term used to refer to how people are managed by organizations. The field has moved from a traditionally administrative function to a strategic one that recognizes the link between talented and engaged people and organizational success. The field draws upon concepts developed in Industrial/Organizational Psychology and System Theory. Human resources has at least two related interpretations depending on context. The original usage derives from political economy and economics, where it was traditionally called labor, one of four factors of production although this perspective is changing as a function of new and ongoing research into more strategic approaches at national levels. This first usage is used more in terms of 'human resources development', and can go beyond just organizations to the level of nations . The more traditional usage within corporations and businesses refers to the individuals within a firm or agency, and to the portion of the organization that deals with hiring, firing, training, and other personnel issues, typically referred to as 'human resources management'. This article addresses both definitions.

Development

The objective of human resources development is to foster human resourcefulness through enlightened and cohesive policies in education, training, health and employment at all levels, from corporate to national.

Management

Human resource management's objective, on the other hand, is to maximize the return on investment from the organization's human capital and minimize financial risk. It is the responsibility of human resource managers in a corporate context to conduct these activities in an effective, legal, fair, and consistent manner.

Key functions

Human Resource Management serves these key functions:

1. Recruitment & Selection
2. Training and Development (People or Organization)
3. Performance Evaluation and Management
4. Promotions/Transfer
5. Redundancy
6. Industrial and Employee Relations
7. Record keeping of all personal data.
8. Total Rewards: Employee Benefits & Compensation
9. Confidential advice to internal 'customers' in relation to problems at work
10. Career development
11. Competency Mapping (Competency mapping is a process an individual uses to identify and describe competencies that are the most critical to success in a work situation or work role.)
12. Time motion study is related to HR Function
13. Performance Appraisal

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Modern analysis

Modern analysis emphasizes that human beings are not "commodities" or "resources", but are creative and social beings in a productive enterprise. The 2000 revision of ISO 9001 in contrast requires to identify the processes, their sequence and interaction, and to define and communicate responsibilities and authorities. In general, heavily unionized nations such as France and Germany have adopted and encouraged such job descriptions especially within trade unions. The International Labour Organization also in 2001 decided to revisit, and revise its 1975 Recommendation 150 on Human Resources Development . One view of these trends is that a strong social consensus on political economy and a good social welfare system facilitates labor mobility and tends to make the entire economy more productive, as labor can develop skills and experience in various ways, and move from one enterprise to another with little controversy or difficulty in adapting. Another view is that governments should become more aware of their national role in facilitating human resources development across all sectors.

Labour mobility

An important controversy regarding labor mobility illustrates the broader philosophical issue with usage of the phrase "human resources": governments of developing nations often regard developed nations that encourage immigration or "guest workers" as appropriating human capital that is rightfully part of the developing nation and required to further its growth as a civilization. They argue that this appropriation is similar to colonial commodity fiat wherein a colonizing European power would define an arbitrary price for natural resources, extracting which diminished national natural capital.

The debate regarding "human resources" versus human capital thus in many ways echoes the debate regarding natural resources versus natural capital. Over time the United Nations have come to more generally support the developing nations' point of view, and have requested significant offsetting "foreign aid" contributions so that a developing nation losing human capital does not lose the capacity to continue to train new people in trades, professions, and the arts.

An extreme version of this view is that historical inequities such as African slavery must be compensated by current developed nations, which benefited from stolen "human resources" as they were developing. This is an extremely controversial view, but it echoes the general theme of converting human capital to "human resources" and thus greatly diminishing its value to the host society, i.e. "Africa", as it is put to narrow imitative use as "labor" in the using society.

In a series of reports of the UN Secretary-General to the General Assembly [e.g. A/56/162 (2001)], a broad inter-sectoral approach to developing human resourcefulness [see United Nations Expert Meeting on Human Resources Development. `Changing Perspectives on Human Resources Development. ST/TCD/SER.E/25. June 1994] has been outlined as a priority for socio-economic development and particularly anti-poverty strategies. This calls for strategic and integrated public policies, for example in education, health, and employment sectors that promote occupational skills, knowledge and performance enhancement (Lawrence, J.E.S.) .

Perceptions

Terms like "human resources" and "human capital" may be perceived as insulting to people. They create the impression that people are merely commodities, like office machines or vehicles, despite assurances to the contrary.

Corporate management

In the very narrow context of corporate "human resources" management, there is a contrasting pull to reflect and require workplace diversity that echoes the diversity of a global customer base. Foreign language and culture skills, ingenuity, humor, and careful listening, are examples of traits that such programs typically require. It would appear that these evidence a general shift through the human capital point of view to an acknowledgment that human beings do contribute much more to a productive enterprise than "work": they bring their character, their ethics, their creativity, their social connections, and in some cases even their pets and children, and alter the character of a workplace. The term corporate culture is used to characterize such processes at the organizational level.

The traditional but extremely narrow context of hiring, firing, and job description is considered a 20th century anachronism. Most corporate organizations that compete in the modern global economy have adopted a view of human capital that mirrors the modern consensus as above. Some of these, in turn, deprecate the term "human resources" as useless. Yet the term survives, and if related to `resourcefulness', has continued and emerging relevance to public policy.

In general the abstractions of macro-economics treat it this way - as it characterizes no mechanisms to represent choice or ingenuity. So one interpretation is that "firm-specific human capital" as defined in macro-economics is the modern and correct definition of "human resources" - and that this is inadequate to represent the contributions of "human resources" in any modern theory of political economy.

Human resources management trends and influences

In organizations, it is important to determine both current and future organisational requirements for both core employees and the contingent workforce in terms of their skills/technical abilities, competencies, flexibility etc. The analysis requires consideration of the internal and external factors that can have an effect on the resourcing, development, motivation and retention of employees and other workers. The external factors are those largely out-with the control of the organization and include issues such as the economic climate, current and future trends of the labor market e.g. skills, education level, government investment into industries etc. On the other hand internal influences are broadly within the control of the organization to predict determine and monitor, for example the organizational culture underpinned by management behaviours (or style), environmental climate and the approach to ethical and corporate social responsibilities.

Major trends

In order to know the business environment in which any organization operates, three major trends should be considered:

Demographics

the characteristics of a population/workforce, for example, age, gender or social class. This type of trend may have an effect in relation to pension offerings, insurance packages etc.

Diversity

the variation within the population/workplace. Changes in society now mean that a larger proportion of organizations are made up of "baby-boomers" or older employees in comparison to thirty years ago. stankein advocates of "workplace diversity" simply advocate an employee base that is a mirror reflection of the make-up of society insofar as race, gender, sexual orientation, etc.

Skills and qualifications

as industries move from manual to a more managerial professions so does the need for more highly skilled graduates. If the market is "tight" (i.e. not enough staff for the jobs), employers will have to compete for employees by offering financial rewards, community investment, etc.

Individual responses

In regard to how individuals respond to the changes in a labour market the following should be understood:

Geographical spread

how far is the job from the individual? The distance to travel to work should be in line with the pay offered by the organization and the transportation and infrastructure of the area will also be an influencing factor in deciding who will apply for a post.

Occupational structure

the norms and values of the different careers within an organization. Mahoney 1989 developed 3 different types of occupational structure namely craft (loyalty to the profession), organization career (promotion through the firm) and unstructured (lower/unskilled workers who work when needed).

Generational difference

different age categories of employees have certain characteristics, for example their behavior and their expectations of the organization.

Framework

Human Resources Development is a framework for the expansion of human capital within an organization or (in new approaches) a municipality, region, or nation. Human Resources Development is a combination of training and education, in a broad context of adequate health and employment policies, that ensures the continual improvement and growth of both the individual, the organisation, and the national human resourcefulnes. Adam Smith states, “The capacities of individuals depended on their access to education”. Human Resources Development is the medium that drives the process between training and learning in a broadly fostering environment. Human Resources Development is not a defined object, but a series of organised processes, “with a specific learning objective” (Nadler,1984) Within a national context, it becoms a strategic approach to intersectoral linkages between health, education and employment.

Structure

Human Resources Development is the structure that allows for individual development, potentially satisfying the organization’s, or the nation's goals. The development of the individual will benefit both the individual, the organization, or the nation and its citizens. In the corporate vision, the Human Resources Development framework views employees, as an asset to the enterprise whose value will be enhanced by development, “Its primary focus is on growth and employee development…it emphasises developing individual potential and skills” (Elwood, olton and Trott 1996) Human Resources Development in this treatment can be in-room group training, tertiary or vocational courses or mentoring and coaching by senior employees with the aim for a desired outcome that will develop the individual’s performance. At the level of a national strategy, it can be a broad intersectoral approach to fostering creative contributions to national productivity

Training

At the organizational level, a successful Human Resources Development program will prepare the individual to undertake a higher level of work, “organized learning over a given period of time, to provide the possibility of performance change” (Nadler 1984). In these settings, Human Resources Development is the framework that focuses on the organizations competencies at the first stage, training, and then developing the employee, through education, to satisfy the organizations long-term needs and the individuals’ career goals and employee value to their present and future employers. Human Resources Development can be defined simply as developing the most important section of any business its human resource by, “attaining or upgrading the skills and attitudes of employees at all levels in order to maximise the effectiveness of the enterprise” (Kelly 2001). The people within an organization are its human resource. Human Resources Development from a business perspective is not entirely focused on the individual’s growth and development, “development occurs to enhance the organization's value, not solely for individual improvement. Individual education and development is a tool and a means to an end, not the end goal itself”. (Elwood F. Holton II, James W. Trott Jr). The broader concept of national and more strategic attention to the development of human resources is beginning to emerge as newly independent countries face strong competition for their skilled professionals and the accompanying brain-drain they experience.

Recruitment

Employee recruitment forms a major part of an organization's overall resourcing strategies which seek to identify and secure the people needed for the organisation to survive and succeed in the short to medium-term. Recruitment activities need to be responsive to the ever-increasingly competitive market to secure suitably qualified and capable recruits at all levels. To be effective these initiatives need to include how and when to source the best recruits internally or externally. Common to the success of either are; well-defined organisational structures with sound job design, robust task and person specification and versatile selection processes, reward, employment relations and human resource policies, underpinned by a commitment for strong employer branding and employee engagement strategies.

Internal recruitment can provide the most cost-effective source for recruits if the potential of the existing pool of employees has been enhanced through training, development and other performance-enhancing activities such as performance appraisal, succession planning and development centres to review performance and assess employee development needs and promotional potential.

Increasingly, securing the best quality candidates for almost all organizations will rely, at least occasionally if not substantially, on external recruitment methods. Rapid changing business models demand skills of experiences which cannot be sourced or rapidly enough developed from the existing employee base. It would be unusual for an organisation today to undertake all aspects of the recruitment process without support from third-party dedicated recruitment firms. This may involve a range of support services, such as; provision of CVs or resumes, identifying recruitment media, advertisement design and media placement for job vacancies, candidate response handling, shortlisting, conducting aptitude testing, preliminary interviews or reference and qualification verification. Typically, small organisations may not have in-house resources or, in common with larger organisations, may not possess the particular skill-set required to undertake a specific recruitment assignment. Where requirements arise these will be referred on an adhoc basis to government job centres or commercially run employment agencies.

Except in sectors where high-volume recruitment is the norm, an organization faced with an unexpected requirement for an unusually large number of new recruits at short notice will often hand over the task to a specialist external recruiter to manage the end-to-end resourcing programme. Sourcing executive-level and senior management as well as the acquisition of scarce or ‘high-potential’ recruits has been a long-established market serviced by a wide range of ‘search and selection’ or ‘headhunting’ consultancies which typically form long-standing relationships with their client organizations. Finally, certain organizations with sophisticated HR practices have identified there is a strategic advantage in outsourcing complete responsibility for all workforce procurement to one or more third-party recruitment agencies or consultancies. In the most sophisticated of these arrangements the external recruitment services provider may not only physically locate, or ‘embed’, their resourcing team(s) within the client organization's offices but will work in tandem with the senior human resource management team in developing the longer-term HR resourcing strategy and plan.

Modern concept of human resources

Though human resources have been part of business and organizations since the first days of agriculture, the modern concept of human resources began in reaction to the efficiency focus of Taylorism in the early 1900s. By 1920, psychologists and employment experts in the United States started the human relations movement, which viewed workers in terms of their psychology and fit with companies, rather than as interchangeable parts. This movement grew throughout the middle of the 20th century, placing emphasis on how leadership, cohesion, and loyalty played important roles in organizational success. Although this view was increasingly challenged by more quantitatively rigorous and less "soft" management techniques in the 1960s and beyond, human resources development had gained a permanent role within organizations, agencies and nations, increasingly as not only an academic discipline, but as a central theme in development policy.