Human resources are the people who make up the workforce of an organization, business sector, or economy. "Human capital" is sometimes used synonymously with "human resources", although human capital typically refers to a narrower effect (i.e., the knowledge the individuals embody and economic growth). Likewise, other terms sometimes used include manpower, talent, labour, personnel, "associates" or simply people.
|Management of a business|
A human-resources department (HR department) of an organization performs human resource management, overseeing various aspects of employment, such as compliance with labor law and employment standards, administration of employee benefits, organizing of employees files with the required documents for future reference, some aspects of recruitment.
Human resource managers are in charge of every aspect of employee life cycle in an organization. The duties include planning, recruitment and selection process, posting job ads, evaluating the performance of employees, organizing resumes and job applications, scheduling interviews and assisting in the process and ensuring background checks. Another job is payroll and benefits administration which deals with ensuring vacation and sick time are accounted for, reviewing payroll, and participating in benefits tasks, like claim resolutions, reconciling benefit statements, and approving invoices for payment. HR also coordinates employee relations activities and programs including but not limited to employee counseling. The last job is regular maintenance, this job makes sure that the current HR files and databases are up to date, maintaining employee benefits and employment status and performing payroll/benefit-related reconciliations. In May 2014, the U.S. Department of Labor stated that human resource assistants earn about $38,040 annually and human resource managers earn about $104,440 annually.
A human resources manager has several functions in a company
- Determine needs of the staff.
- Determine to use temporary staff or hire employees to fill these needs.
- Recruit and train the best employees.
- Supervise the work.
- Manage employee relations, unions and collective bargaining.
- Prepare employee records and personal policies.
- Ensure high performance.
- Manage employee payroll, benefits and compensation.
- Ensure equal opportunities.
- Deal with discrimination.
- Deal with performance issues.
- Ensure that human resources practices conform to various regulations.
- Push the employees' motivation.
- Mediate disputes internally.
- Upgrade learning knowledge of employees
- Disseminate information in the organization so as to benefit its growth
Managers need to develop their interpersonal skills to be effective. Organizations behavior focuses on how to improve factors that make organizations more effective.
Human resource management used to be referred to as "personnel administration." In the 1920s, personnel administration focused mostly on the aspects of hiring, evaluating, and compensating employees. However, they did not focus on any employment relationships in an organizational performance level or on the systematic relationships in any parties. This led to a lacked unifying paradigm in the field during this period.
According to an HR Magazine article, the first personnel management department started at the National Cash Register Co. in 1900. The owner, John Henry Patterson, organized a personnel department to deal with grievances, discharges and safety, and information for supervisors on new laws and practices after several strikes and employee lockouts. This action was followed by other companies; for example, Ford had high turnover ratios of 380 percent in 1913, but just one year later, the line workers of the company had doubled their daily salaries from $2.50 to $5, even though $2.50 was a fair wage at that time. This example clearly shows the importance of effective management which leads to a greater outcome of employee satisfaction as well as encouraging employees to work together in order to achieve better business objectives.
During the 1970s, American business began experiencing challenges due to the substantial increase in competitive pressures. Companies experienced globalization, deregulation, and rapid technological change which caused the major companies to enhance their strategic planning - a process of predicting future changes in a particular environment and focus on ways to promote organizational effectiveness. This resulted in developing more jobs and opportunities for people to show their skills which were directed to effective applying employees toward the fulfillment of individual, group, and organizational goals. Many years later the major/minor of human resource management was created at universities and colleges also known as business administration. It consists of all the activities that companies used to ensure more effective utilization of employees.
Now, human resources focus on the people side of management. There are two real definitions of HRM (Human Resource Management); one is that it is the process of managing people in organizations in a structured and thorough manner. This means that it covers the hiring, firing, pay and perks, and performance management. This first definition is the modern and traditional version more like what a personnel manager would have done back in the 1920s. The second definition is that HRM circles the ideas of management of people in organizations from a macromanagement perspective like customers and competitors in a marketplace. This involves the focus on making the “employment relationship” fulfilling for both management and employees.
Some research showed that employees can perform at a much higher rate of productivity when their supervisors and managers paid more attention to them. The Father of Human relations, Elton Mayo, was the first person to reinforce the importance of employee communications, cooperation, and involvement. His studies concluded that sometimes the human factors are more important than physical factors, such as quality of lighting and physical workplace conditions. As a result, individuals often place value more in how they feel. For example, a rewarding system in Human resource management, applied effectively, can further encourage employees to achieve their best performance.
Origins of the terminology
Pioneering economist John R. Commons used the term "human resource" in his 1893 book The Distribution of Wealth but did not further build upon it. The term "human resource" was subsequently in use during the 1910s to 1930s to promote the idea that human beings were an object of worth, that should be promoted to realise human dignity, but this changed in the early 1950s as "human resource management" developed viewing people as a means to an end for employers. Among scholars the first use of "human resources" in its modern form was in a 1958 report by economist E. Wight Bakke. The term began to become more developed in the 19th century due to misunderstandings between employers and employees.
In regard to how individuals respond to the changes in a labor market, the following must be understood:
- Skills and qualifications: as industries move from manual to more managerial professions so does the need for more highly skilled staff. If the market is "tight" (i.e. not enough staff for the jobs), employers must compete for employees by offering financial rewards, community investment, etc.
- Geographical spread: how far is the job from the individual? The distance to travel to work should be in line with remuneration, and the transportation and infrastructure of the area also influence who applies for a position.
- 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 path (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.
Concerns about the terminology
One major concern about considering people as assets or resources is that they will be commoditized, objectified and abused. Some analysis suggests 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 identifying 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 approaches. Also, in 2001, the International Labour Organization decided to revisit and revise its 1975 Recommendation 150 on Human Resources Development, resulting in its "Labour is not a commodity" principle. One view of these trends is that a strong social consensus on political economy and a good social welfare system facilitate labor mobility and tend 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 important controversy regards labor mobility and 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 more rightfully part of the developing nation and required to further its economic growth. 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.
Human resources play an important part of developing and making a company or organization at the beginning or making a success at the end, due to the labor provided by employees. Human resources is intended to show how to have better employment relations in the workforce. Also, to bring out the best work ethic of the employees and therefore making a move to a better working environment.
Administration and operations used to be the two role areas of HR. The strategic planning component came into play as a result of companies recognizing the need to consider HR needs in goals and strategies. HR directors commonly sit on company executive teams because of the HR planning function. Numbers and types of employees and the evolution of compensation systems are among elements in the planning role. Various factors affecting Human Resource planning Organizational Structure, Growth, Business Location, Demographic changes, environmental uncertainties, expansion etc. Additionally, this area encompasses the realm of talent management.
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- E McGaughey, "A Human is not a Resource" (2018) Centre for Business Research, University of Cambridge Working Paper 497
- Kaufman, Bruce E. (2001). "Human resources and industrial relations: Commonalities and differences" (PDF).
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