1.1 What Is Human Resources? – Human Resource Management (2022)

Learning Objectives

  1. Explain the role of HRM in organizations.
  2. Define and discuss some of the major HRM activities.

Every organization, large or small, uses a variety of capital to make the business work. Capital includes cash, valuables, or goods used to generate income for a business. For example, a retail store uses registers and inventory, while a consulting firm may have proprietary software or buildings. No matter the industry, all companies have one thing in common: they must have people to make their capital work for them. This will be our focus throughout the text: generation of revenue through the use of people’s skills and abilities.

What Is HRM?

Human resource management (HRM) is the process of employing people, training them, compensating them, developing policies relating to them, and developing strategies to retain them. As a field, HRM has undergone many changes over the last twenty years, giving it an even more important role in today’s organizations. In the past, HRM meant processing payroll, sending birthday gifts to employees, arranging company outings, and making sure forms were filled out correctly—in other words, more of an administrative role rather than a strategic role crucial to the success of the organization. Jack Welch, former CEO of General Electric and management guru, sums up the new role of HRM: “Get out of the parties and birthdays and enrollment forms.… Remember, HR is important in good times, HR is defined in hard times” (Frasch, et. al., 2010).

It’s necessary to point out here, at the very beginning of this text, that every manager has some role relating to human resource management. Just because we do not have the title of HR manager doesn’t mean we won’t perform all or at least some of the HRM tasks. For example, most managers deal with compensation, motivation, and retention of employees—making these aspects not only part of HRM but also part of management. As a result, this book is equally important to someone who wants to be an HR manager and to someone who will manage a business.

Human Resource Recall

Have you ever had to work with a human resource department at your job? What was the interaction like? What was the department’s role in that specific organization?

The Role of HRM

Keep in mind that many functions of HRM are also tasks other department managers perform, which is what makes this information important, despite the career path taken. Most experts agree on seven main roles that HRM plays in organizations. These are described in the following sections.

Staffing

You need people to perform tasks and get work done in the organization. Even with the most sophisticated machines, humans are still needed. Because of this, one of the major tasks in HRM is staffing. Staffing involves the entire hiring process from posting a job to negotiating a salary package. Within the staffing function, there are four main steps:

(Video) INTRODUCTION INTO HUMAN RESOURCES MANAGEMENT - LECTURE 01

  1. Development of a staffing plan. This plan allows HRM to see how many people they should hire based on revenue expectations.
  2. Development of policies to encourage multiculturalism at work. Multiculturalism in the workplace is becoming more and more important, as we have many more people from a variety of backgrounds in the workforce.
  3. Recruitment. This involves finding people to fill the open positions.
  4. Selection. In this stage, people will be interviewed and selected, and a proper compensation package will be negotiated. This step is followed by training, retention, and motivation.

Development of Workplace Policies

Every organization has policies to ensure fairness and continuity within the organization. One of the jobs of HRM is to develop the verbiage surrounding these policies. In the development of policies, HRM, management, and executives are involved in the process. For example, the HRM professional will likely recognize the need for a policy or a change of policy, seek opinions on the policy, write the policy, and then communicate that policy to employees. It is key to note here that HR departments do not and cannot work alone. Everything they do needs to involve all other departments in the organization. Some examples of workplace policies might be the following:

  • Discipline process policy
  • Vacation time policy
  • Dress code
  • Ethics policy
  • Internet usage policy

These topics are addressed further in Chapter 6 “Compensation and Benefits”, Chapter 7 “Retention and Motivation”, Chapter 8 “Training and Development”, and Chapter 9 “Successful Employee Communication”.

Compensation and Benefits Administration

HRM professionals need to determine that compensation is fair, meets industry standards, and is high enough to entice people to work for the organization. Compensation includes anything the employee receives for his or her work. In addition, HRM professionals need to make sure the pay is comparable to what other people performing similar jobs are being paid. This involves setting up pay systems that take into consideration the number of years with the organization, years of experience, education, and similar aspects. Examples of employee compensation include the following:

  • Pay
  • Health benefits
  • 401(k) (retirement plans)
  • Stock purchase plans
  • Vacation time
  • Sick leave
  • Bonuses
  • Tuition reimbursement

Since this is not an exhaustive list, compensation is discussed further in Chapter 6 “Compensation and Benefits”.

Retention

Retention involves keeping and motivating employees to stay with the organization. Compensation is a major factor in employee retention, but there are other factors as well. Ninety percent of employees leave a company for the following reasons:

  1. Issues around the job they are performing
  2. Challenges with their manager
  3. Poor fit with organizational culture
  4. Poor workplace environment

Despite this, 90 percent of managers think employees leave as a result of pay (Rivenbark, 2010). As a result, managers often try to change their compensation packages to keep people from leaving, when compensation isn’t the reason they are leaving at all. Chapter 7 “Retention and Motivation” and Chapter 11 “Employee Assessment” discuss some strategies to retain the best employees based on these four factors.

Training and Development

Once we have spent the time to hire new employees, we want to make sure they not only are trained to do the job but also continue to grow and develop new skills in their job. This results in higher productivity for the organization. Training is also a key component in employee motivation. Employees who feel they are developing their skills tend to be happier in their jobs, which results in increased employee retention. Examples of training programs might include the following:

(Video) Unit 1 HRM Managing Human Resources

  • Job skills training, such as how to run a particular computer program
  • Training on communication
  • Team-building activities
  • Policy and legal training, such as sexual harassment training and ethics training

We address each of these types of training and more in detail in Chapter 8 “Training and Development”.

Dealing with Laws Affecting Employment

Human resource people must be aware of all the laws that affect the workplace. An HRM professional might work with some of these laws:

  • Discrimination laws
  • Health-care requirements
  • Compensation requirements such as the minimum wage
  • Worker safety laws
  • Labor laws

The legal environment of HRM is always changing, so HRM must always be aware of changes taking place and then communicate those changes to the entire management organization. Rather than presenting a chapter focused on HRM laws, we will address these laws in each relevant chapter.

Worker Protection

Safety is a major consideration in all organizations. Oftentimes new laws are created with the goal of setting federal or state standards to ensure worker safety. Unions and union contracts can also impact the requirements for worker safety in a workplace. It is up to the human resource manager to be aware of worker protection requirements and ensure the workplace is meeting both federal and union standards. Worker protection issues might include the following:

  • Chemical hazards
  • Heating and ventilation requirements
  • Use of “no fragrance” zones
  • Protection of private employee information

We take a closer look at these issues in Chapter 12 “Working with Labor Unions” and Chapter 13 “Safety and Health at Work”.

Figure 1.1


Caption: Knowing the law regarding worker protection is generally the job of human resources. In some industries it is extremely important; in fact, it can mean life or death.

(Video) Human Resources - A Quick Introduction To Employee Benefits

ReSurge International – Tom Davenport Operating On A Patient – CC BY-NC-ND 2.0.

Communication

Besides these major roles, good communication skills and excellent management skills are key to successful human resource management as well as general management. We discuss these issues in Chapter 9 “Successful Employee Communication”.

Awareness of External Factors

In addition to managing internal factors, the HR manager needs to consider the outside forces at play that may affect the organization. Outside forces, or external factors, are those things the company has no direct control over; however, they may be things that could positively or negatively impact human resources. External factors might include the following:

  1. Globalization and offshoring
  2. Changes to employment law
  3. Health-care costs
  4. Employee expectations
  5. Diversity of the workforce
  6. Changing demographics of the workforce
  7. A more highly educated workforce
  8. Layoffs and downsizing
  9. Technology used, such as HR databases
  10. Increased use of social networking to distribute information to employees

For example, the recent trend in flexible work schedules (allowing employees to set their own schedules) and telecommuting (allowing employees to work from home or a remote location for a specified period of time, such as one day per week) are external factors that have affected HR. HRM has to be aware of these outside issues, so they can develop policies that meet not only the needs of the company but also the needs of the individuals. Another example is the Patient Protection and Affordable Care Act, signed into law in 2010. Compliance with this bill has huge implications for HR. For example, a company with more than fifty employees must provide health-care coverage or pay a penalty. Currently, it is estimated that 60 percent of employers offer health-care insurance to their employees (Cappelli, 2010). Because health-care insurance will be mandatory, cost concerns as well as using health benefits as a recruitment strategy are big external challenges. Any manager operating without considering outside forces will likely alienate employees, resulting in unmotivated, unhappy workers. Not understanding the external factors can also mean breaking the law, which has a concerning set of implications as well.

Figure 1.2

An understanding of key external factors is important to the successful HR professional. This allows him or her to be able to make strategic decisions based on changes in the external environment. To develop this understanding, reading various publications is necessary.

(Video) CHAPTER 1.1 - INTRODUCTION TO HUMAN RESOURCE MANAGEMENT IN HOSPITALITY INDUSTRY

One way managers can be aware of the outside forces is to attend conferences and read various articles on the web. For example, the website of the Society for Human Resource Management, SHRM Online1, not only has job postings in the field but discusses many contemporary human resource issues that may help the manager make better decisions when it comes to people management. In Section 1.3 “Today’s HRM Challenges”, we go into more depth about some recent external issues that are affecting human resource management roles. In Section 1.1.2 “The Role of HRM”, we discuss some of the skills needed to be successful in HRM.

Figure 1.3

Most professionals agree that there are seven main tasks HRM professionals perform. All these need to be considered in relation to external and outside forces.

Key Takeaways

  • Capital includes all resources a company uses to generate revenue. Human resources or the people working in the organization are the most important resource.
  • Human resource management is the process of employing people, training them, compensating them, developing policies relating to the workplace, and developing strategies to retain employees.
  • There are seven main responsibilities of HRM managers: staffing, setting policies, compensation and benefits, retention, training, employment laws, and worker protection. In this book, each of these major areas will be included in a chapter or two.
  • In addition to being concerned with the seven internal aspects, HRM managers must keep up to date with changes in the external environment that may impact their employees. The trends toward flexible schedules and telecommuting are examples of external aspects.
  • To effectively understand how the external forces might affect human resources, it is important for the HR manager to read the HR literature, attend conferences, and utilize other ways to stay up to date with new laws, trends, and policies.

Exercises

  1. State arguments for and against the following statement: there are other things more valuable in an organization besides the people who work there.
  2. Of the seven tasks an HR manager does, which do you think is the most challenging? Why?

1Society for Human Resource Management, accessed August 18, 2011, http://www.shrm.org/Pages/default.aspx.

References

Cappelli, P., “HR Implications of Healthcare Reform,” Human Resource Executive Online, March 29, 2010, accessed August 18, 2011, http://www.hreonline.com/HRE/story.jsp?storyId=379096509.

Frasch, K. B., David Shadovitz, and Jared Shelly, “There’s No Whining in HR,” Human Resource Executive Online, June 30, 2009, accessed September 24, 2010, http://www.hreonline.com/HRE/story.jsp?storyId=227738167.

(Video) The Development of Human Resource Management Part 1

Rivenbark, L., “The 7 Hidden Reasons Why Employees Leave,” HR Magazine, May 2005, accessed October 10, 2010, http://findarticles.com/p/articles/mi_m3495/is_5_50/ai_n13721406.

FAQs

What is human in human resource management? ›

Human: refers to the skilled workforce in an organization. Resource: refers to limited availability or scarce. Management: refers how to optimize and make best use of such limited or scarce resource so as to meet the organization goals and objectives.

What is human resource defined? ›

Human resources (HR) is the department within a business that is responsible for all things worker-related. That includes recruiting, vetting, selecting, hiring, onboarding, training, promoting, paying, and firing employees and independent contractors.

What is human resource and its types? ›

Human resources is the set of people who make up the workforce of an organization, business sector, industry, or economy. A narrower concept is human capital, the knowledge and skills which the individuals command. Similar terms include manpower, labor, personnel, associates or simply: people.

What is human resource PDF? ›

The process of employing people, developing their resources, utilising, maintaining & compensating their service in tune with the job & organisational requirements with a view to contribute to the goals of the organisation, individual & the society.

What is human resource management and its importance? ›

Human Resource Management deals with issues related to compensation, performance management, organisation development, safety, wellness, benefits, employee motivation, training and others. HRM plays a strategic role in managing people and the workplace culture and environment.

Why is human resources important? ›

Employees are the foundation of every successful business. This is why human resource (HR) management is so important. The HR department performs a wide variety of duties and is responsible for helping employees feel safe, valued and properly supported.

Why is it called HR? ›

Manage those human resources in a way they can thrive

But if you think about it, the name is about the “humans” who happen to be employees.

What is true of human resources? ›

What is true of human resources? They help in achieving sustainable competitive advantage. For a hospital to be successful, it needs nurses, pharmacists, and a variety of technicians. A hospital that attracts and keeps the best of these human resources has an advantage over other hospitals.

What is HR called now? ›

A new title has gained popularity: People Operations Leaders. More than rebranding the HR function, People Operations Leadership demonstrates a shift in how to manage the department, where focus should lie, and what the mission of the team has become.

What are the 4 types of human resources? ›

Types of Human Resources Management Jobs
  • Recruitment and Selection. Human resource management jobs include professional recruiters who filll vacancies within an organization. ...
  • Compensation and Benefits. ...
  • Health and Safety. ...
  • Labor and Employee Relations. ...
  • Training and Development. ...
  • Risk Management. ...
  • Managers and Directors.

What are the 5 types of human resources? ›

Depending on the organization, its industry and size, there may be five, six, seven or more separate human resources functions. For our purposes, we'll look at the five core areas: recruiting and staffing, compensation and benefits, training and development, talent management, safety and compliance.

What is the introduction of HRM? ›

Human resource management (HRM or HR) is the strategic approach to the effective and efficient management of people in a company or organization such that they help their business gain a competitive advantage. It is designed to maximize employee performance in service of an employer's strategic objectives.

What is human resource management essay? ›

Human resource management may be defined as a set of policies, practices and programmes designed to maximise both personal and organisational goals. It is a process by which the people and organisations are bound together in such a way that both of them are able to achieve their objectives.

What is the importance of human resource management in education? ›

The study of human resources management in education will provide you with a theoretical and practical knowledge about the processes of acquiring employees, establishing good relationships with them, training and developing them, retaining and compensating them for their services are important because effective school ...

What is the most important function of human resource management? ›

The role of human resource (HR) management is to assess the work required to achieve a company's goals, put the right people in the right positions to do the work, and empower them to perform at the highest possible levels.

What is the most important resources in management? ›

These are just a few questions that management and leadership have to face in today's work environment. The answer to these questions… “people.” Indeed, a company's greatest asset and resource is its human resource.

What is human resource in Brainly? ›

Answer. Answer: Human resources is the set of the people who make up the workforce of an organization, business sector, industry, or economy.

What was HR originally called? ›

Early names for human resources-like initiatives in the workplace in the 19th and early 20th century included “industrial welfare,” “personnel management” and “scientific management.” Fields including organization management and industrial psychology contributed to building the practice of human resources as it is ...

What is human resources planning? ›

Human resource planning (HRP) is the continuous process of systematic planning ahead to achieve optimum use of an organization's most valuable asset—quality employees. Human resources planning ensures the best fit between employees and jobs while avoiding manpower shortages or surpluses.

What is a better name for human resources? ›

Human Resources departments are variously called (with help from Charles Coy at Cornerstone's Rework): Human Capital Management. People Operations (Popular title among tech firms such as Google and Uber) People Resource Centre. Talent Management.

What is the history of HRM? ›

The history of Human Resource Management (HRM) begins around the end of the 19th century, when welfare officers (sometimes called 'welfare secretaries') came into being. They were women and involved with the protection of women and girls. Their creation was a reaction to the: Harshness of industrial conditions.

What is modern human resource management? ›

Human resource management (HRM) is the practice of recruiting, hiring, deploying and managing an organization's employees. HRM is often referred to simply as human resources (HR).

What are the 2 types of human resources? ›

The two types of human resources are- The business centered and strategical focused HR leader. ...

What are the 7 roles of human resource management? ›

What Does an HR Manager Do? 7 Functions of the Human Resources Department
  • Recruitment and Hiring.
  • Training and Development.
  • Employer-Employee Relations.
  • Maintain Company Culture.
  • Manage Employee Benefits.
  • Create a Safe Work Environment.
  • Handle Disciplinary Actions.

What are the 10 examples of human resources? ›

What are the functional areas of human resources?
  • Recruiting and staffing employees.
  • Employee benefits.
  • Employee compensation.
  • Employee and labor relations.
  • Human resources compliance.
  • Organizational structure.
  • Human resources information and payroll.
  • Employee training and development.

What are three types of human resources? ›

The three major roles in human resources are; administrative, change management, and people management.

What are the 5 functions of human resource management? ›

5 functions of human resource management
  • Recruitment and hiring. One of the most well-known functions of human resource management is recruitment and hiring. ...
  • Onboarding and ongoing training and development. ...
  • Managing employee and employer relationships. ...
  • Creating a rewarding company culture. ...
  • Overseeing disciplinary action.
11 Jun 2021

What is the conclusion of HRM? ›

In conclusion, the practice of HRM needs to be integrated with the overall strategy to ensure effective use of people and provide better returns to the organizations in terms of ROI (Return on Investment) for every dollar or rupee spent on them.

Why is it called HR? ›

Manage those human resources in a way they can thrive

But if you think about it, the name is about the “humans” who happen to be employees.

What are the 4 types of HR? ›

recruitment. labor relations. training and development. human resources information systems (HRIS) professionals.

What is human resource job? ›

Key Takeaways. Human resources (HR) is the division of a business responsible for finding, screening, recruiting, and training job applicants. HR also administers employee-benefit programs. A human resources department also handles compensation and benefits, and employee terminations.

What are the 7 functions of HR? ›

On this page, you'll find the main functions of an HR department, and what each entails:
  • Recruitment and Hiring.
  • Training and Development.
  • Employer-Employee Relations.
  • Maintain Company Culture.
  • Manage Employee Benefits.
  • Create a Safe Work Environment.
  • Handle Disciplinary Actions.

What is HR called now? ›

A new title has gained popularity: People Operations Leaders. More than rebranding the HR function, People Operations Leadership demonstrates a shift in how to manage the department, where focus should lie, and what the mission of the team has become.

What is another name for HR? ›

Human Capital Management. People Operations (Popular title among tech firms such as Google and Uber) People Resource Centre. Talent Management.

What is another word for human resources? ›

What is another word for human resources?
manpowerstaff
HRhuman capital
staff membersworkforce
workersemployees
labor forcehelp
42 more rows

What are the 5 types of human resources? ›

Depending on the organization, its industry and size, there may be five, six, seven or more separate human resources functions. For our purposes, we'll look at the five core areas: recruiting and staffing, compensation and benefits, training and development, talent management, safety and compliance.

What are the 2 types of human resources? ›

The two types of human resources are- The business centered and strategical focused HR leader. ...

What are the 10 examples of human resources? ›

What are the functional areas of human resources?
  • Recruiting and staffing employees.
  • Employee benefits.
  • Employee compensation.
  • Employee and labor relations.
  • Human resources compliance.
  • Organizational structure.
  • Human resources information and payroll.
  • Employee training and development.

What are three types of human resources? ›

The three major roles in human resources are; administrative, change management, and people management.

What are features of HRM? ›

It includes HR planning, recruitment, selection, placement, training and development, career development, job design, motivation, performance appraisal and reward management, labour relations, employee discipline, grievance handling, welfare, termination and also handling of affairs outside the organisation.

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