What is human resources?

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).

A company or organization's HR department is usually responsible for

creating, putting into effect and overseeing policies governing workers
and the relationship of the organization with its employees.

What is human resources?

Human resources is the term -- first used in the early 1900s and then
more widely in the 1960s -- for the people who work for the
organization, in aggregate.

HRM is really employee management with an emphasis on those

employees as assets of the business. In this context, employees are
sometimes referred to as human capital. As with other business
assets, the goal is to make effective use of employees, reducing risk
and maximizing return on investment (ROI).

Activities in the Human Resources Department

Human resource departments are responsible for a wide variety of activities

across a number of core organizational functions

LEARNING OBJECTIVES

Understanding the activities of human resource departments

Key Points

 Human resource management is a central pillar of many organizations.

Human resource departments are responsible for activities spanning a wide
variety of core functions.
 In short, human resource activities fall under the following five core
functions: staffing, development, compensation, safety and health, and
employee and labor relations.
 Within each of these core functions, HR conducts a wide variety of
activities.
 These activities are all linked by a concern for employee well-being and
ensuring organizations treat employees in a way that provides mutual
benefit for both the employee and the organization.

Key Terms

Core Functions of HR

Human resources (HR) professionals conduct a wide variety of tasks within an

organizational structure. A brief review of the core functions of human resource
departments will be useful in framing the more common activities a human
resource professional will conduct. The core functions can be summarized as:

Staffing

This includes the activities of hiring new full-time or part-time employees, hiring
contractors, and terminating employee contracts

Staffing activities include:

 Identifying and fulfilling talent needs (through recruitment, primarily)

 Utilizing various recruitment technologies to acquire a high volume of
applicants (and to filter based on experience)
 Terminating contracts when necessary
  Maintaining ethical hiring practices and aligning with the regulatory
environment
 Writing employee contracts and negotiating salary and benefits
Development

On-boarding new employees and providing resources for continued

development is a key investment for organizations, and HR is charged with
maintaining a developmental approach to existing human resources.

Development activities include:

 Training and preparing new employees for their role

 Providing training opportunities (internal training, educational programs,
conferences, etc.) to keep employees up to date in their respective fields
 Preparing management prospects and providing feedback to employees
and managers
Compensation

Salary and benefits are also within the scope of human resource management.
This includes identifying appropriate compensation based on role, performance,
and legal requirements.

Compensation activities include:

 Setting compensation levels to match the market, using benchmarks such

as industry standards for a given job function
 Negotiating group health insurance rates, retirement plans, and other
benefits with third party providers
 Discussing raises and other compensation increases and/or decreases
with employees in the organization
 Ensuring compliance with legal and cultural expectations when it comes to
employee compensation
Safety and Health
Achieving best practices in various industries include careful considering of
safety and health concerns for employees.

Safety and health activities include:

 Ensuring compliance with legal requirements based on job function for

safety measures (i.e. hard hats in construction, available counseling for law
enforcement, appropriate safety equipment for chemists, etc.)
 Implementing new safety measures when laws change in a given industry
 Discussing safety and compliance with relevant government departments
 Discussing safety and compliance with unions
Employee and Labor Relations

Defending employee rights, coordinating with unions, and mediating

disagreements between the organization and its human resources is also a core
HR function.

Employee and labor relations activities include:

 Mediating disagreements between employees and employers

 Mediating disagreements between employees and other employees
 Considering claims of harassment and other workplace abuses
 Discussing employee rights with unions, management, and stakeholders
 Acting as the voice of the organization and/or the voice of the employees
during any broader organizational issues pertaining to employee welfare
HR Competencies: This chart highlights a few of the key competencies expected of human
resource teams in organizations.

Development of Human Resources

Human resource development combines training and career development to
improve the effectiveness of the individual, group, and organization.

LEARNING OBJECTIVES

Explain the function of Human Resource development (HRD)

KEY TAKEAWAYS

Key Points

 Human resources is the set of individuals who make up the workforce of an

organization, business sector, or an economy.
 As a process, human resource development takes place within
organizations and includes both training and development and organization
development.
  Human resources development (HRD) as a theory is a framework for the
expansion of human capital within an organization through the development
of both the organization and the individual to achieve performance
improvement.

Key Terms

 human capital: Human capital is the stock of competencies, knowledge,

and social and personality attributes, including creativity, embodied in the
ability to perform labor so as to produce economic value. It is an aggregate
economic view of the human being acting within economies, which is an
attempt to capture the social, biological, cultural, and psychological
complexity as they interact in explicit and/or economic transactions.

Human resources is the set of individuals who make up the workforce of an

organization, business sector, or an economy. “Human capital” is sometimes
used synonymously with human resources, although human capital typically
refers to a more narrow view (i.e., the knowledge the individuals embody and
can contribute to an organization). Likewise, other terms sometimes used
include “manpower,” “talent,” “labor,” or simply “people. ”

Human resources development (HRD) as a theory is a framework for the

expansion of human capital within an organization through the development of
both the organization and the individual to achieve performance improvement.
Adam Smith states, “The capacities of individuals depended on their access to
education. ” The same statement applies to organizations themselves, but it
requires a much broader field to cover both areas.

Human resource development is the integrated use of training, organization, and

career development efforts to improve individual, group, and organizational
effectiveness. HRD develops the key competencies that enable individuals in
organizations to perform current and future jobs through planned learning
activities. Groups within organizations use HRD to initiate and manage change.
Also, HRD ensures a match between individual and organizational needs.

HRD as a process occurs within organizations and encapsulates:

 1. Training and development (TD), the development of human expertise for
the purpose of improving performance
2. Organization development (OD), empowering the organization to take
advantage of its human resource capital.

TD alone can leave an organization unable to tap into the increase in human,
knowledge, or talent capital. OD alone can result in an oppressed, under-
realized workforce. HRD practicitioners find the interstices of win/win solutions
that develop the employee and the organization in a mutually beneficial manner.
HRD does not occur without the organization, so the practice of HRD within an
organization is inhibited or promoted upon the platform of the organization’s
mission, vision, and values.

Human Resource: Human resource development combines training and career development to
improve the effectiveness of the individual, group, and organization.

The Mission of Human Resource Management

Human resource management is responsible for the attraction, selection,
training, assessment, and rewarding of employees.

LEARNING OBJECTIVES

Break down human resource management (HRM) to Attraction, Selection, Training,

Assessment, Rewarding
KEY TAKEAWAYS
Key Points

 HR also oversees organizational leadership and culture, and ensures

compliance with employment and labor laws.
 Employer brand was first used in the early 1990s to denote an
organization’s reputation as an employer. Since then, it has become widely
adopted by the global management community. Employer branding is “the
image of your organization as a ‘great place to work'”.
 Just as a customer brand proposition is used to define a product or service
offer, an employee value proposition (EVP) is used to define an
organization’s employment offer.
 A performance appraisal (PA) or performance evaluation is a systematic
and periodic process that assesses an individual employee’s job
performance and productivity in relation to certain pre-established criteria
and organizational objectives.
 Remuneration is the total compensation that employees receive in
exchange for the service that they perform for their employer.
 A performance appraisal (PA) or performance evaluation is a systematic
and periodic process that assesses an individual employee’s job
performance and productivity in relation to certain pre-established criteria
and organizational objectives. To collect PA data, there are three main
methods: objective production, personnel, and judgmental evaluation.
 Remuneration is the total compensation that an employee receives in
exchange for the service they perform for their employer. Typically, this
consists of monetary rewards, also referred to as wage or salary, and
complementary benefits including healthcare, pension plans, and stock
options. The HR department plays a critical role in determining raises or
bonuses based on employee performance.

Key Terms

 candidate: A person who applies to a job position.

 recruiter: One who recruits, particularly one employed to recruit others.
Human resource management (HRM, or simply HR) is the management of an
organization’s workforce, or human resources. It is responsible for the attraction,
selection, training, assessment, and rewarding of employees. HR also oversees
organizational leadership and culture, and ensures compliance with employment
and labor laws.

Human Resource Management: Human resource management is the management of an

organization’s workforce, or human resources.

Attraction

Employer brand was first used in the early 1990s to denote an organization’s
reputation as an employer. Since then, it has become widely adopted by the
global management community. Employer branding is “the image of your
organization as a ‘great place to work.'” Just as a customer brand proposition is
used to define a product or service offer, an employee value proposition (EVP) is
used to define an organization’s employment offer. Likewise, the marketing
disciplines associated with branding and brand management have been
increasingly applied by the human resources and talent management community
to attract, engage, and retain talented candidates and employees.

Selection
The stages in selection include sourcing candidates by networking, advertising,
or other methods. The HR recruiter utilizes professional interviewing techniques
to understand the candidate’s skills, motivations to make a move, and to screen
potential candidates using testing (skills or personality). The process is meant to
evaluate the candidate and also evaluate how the candidate will fit into the
organization. The recruiter will meet with the hiring manager to obtain specific
position and type information before beginning the process. After recruiters
understand the type of person the company needs, they begin the process of
informing their network of the opportunity. Recruiters play an important role by
preparing the candidate and company for the interview, providing feedback to
both parties, and handling salary and benefits negotiations.

Training

Training and development (T&D) encompasses three main activities: training,

education, and development. Garavan, Costine, and Heraty, of the Irish Institute
of Training and Development, note that these ideas are often considered to be
synonymous. However, to practitioners, they encompass three separate,
although interrelated, activities:

Training: This activity is both focused upon, and evaluated against, the job that
an individual currently holds.

Education: This activity focuses upon the jobs that an individual may potentially
hold in the future, and is evaluated against those jobs.

Development: This activity focuses upon the activities that the organization
employing the individual, or that the individual is part of, may partake in the
future, and is almost impossible to evaluate.

Assessment

A performance appraisal (PA) or performance evaluation is a systematic and

periodic process that assesses an individual employee’s job performance and
productivity in relation to certain pre-established criteria and organizational
objectives. Other aspects of individual employees are considered as well, such
as organizational citizenship behavior, accomplishments, potential for future
improvement, and strengths and weaknesses.
To collect PA data, there are three main methods: objective production,
personnel, and judgmental evaluation. Judgmental evaluations are the most
commonly used with a large variety of evaluation methods. A PA is typically
conducted annually. The interview could function as “providing feedback to
employees, counseling and developing employees, and conveying and
discussing compensation, job status, or disciplinary decisions.”

Rewarding

Remuneration is the total compensation that employees receive in exchange for

the service that they perform for their employer. Typically, this consists of
monetary rewards, also referred to as wage or salary, and complementary
benefits including healthcare, pension plans, and stock options. The HR
department plays a critical role in determining raises or bonuses based on
employee performance.

Demand Planning
HR forecasting is the process of ascertaining the net requirements for staff by
determining present and future HR needs.

LEARNING OBJECTIVES

Explain the benefits of HR forecasting

KEY TAKEAWAYS

Key Points

 HR forecasting can be categorized into transaction-based forecasting,

event-based forecasting, and process -based forecasting.
 Transaction-based forecasting focuses on tracking internal change by the
organization’s managers. Event-based forecasting is concerned with
changes in the external environment. Process-based forecasting is focused
on the flow or sequencing of several work activities.
 HR forecasting can reduce HR costs, increase organizational flexibility,
ensure a close linkage to the Macro Business Forecasting Process, and
 ensure that organizational requirements take precedence over issues of
resource constraint and scarcity.
 The five stages of the HR forecasting process are: identifying
organizational goals, objectives and plans, determining overall demand
requirements for personnel, assessing in-house skills and other internal
supply characteristics, determining the net demand requirements that must
be met from external, environmental supply sources and developing HR
plans and programs to ensure that the right people are in the right place.
 The HR process may be affected by environmental factors including the
economy, labor markets and unions, governmental laws and regulations,
industry product life cycles, technology changes, demographic changes,
etc. The HR process may also be affected by organizational factors such as
restructuring, strategic goals, corporate missions, job satisfaction, workforce
coverage, job analysis, organizational culture, etc.
 HR forecasting can be categorized into current, short-run, medium-run and
long-run forecasting. Current forecasting can be used to meet the
immediate operational needs of the organization (up to the end of the
current operating cycle, or a maximum of one year into the future). On the
other hand, long-run forecasting typically extends five or more years ahead
of the current operational period. Due to the number of changes that could
affect an organization’s operations, the long-run forecast is extremely
flexible.

Key Terms

 forecast: An estimation of a future condition.

 restructuring: A reorganization; an alteration of structure.
 mission: A set of tasks that fulfills a purpose or duty; an assignment set by
an employer.

Demand Planning

HR Forecasting and Planning

HR forecasting is the heart of the HR planning process. The purpose of HR
forecasting is to ascertain the net requirements for staff by determining the
levels of demand for, and supply of, human resources now and in the future.

Forecasting Activity Categories

 Transaction-based forecasting focuses on tracking internal change
instituted by the organization’s managers.
 Event-based forecasting is concerned with changes in the external
environment.
 Process-based forecasting is not focused on a specific internal
organizational event but on the flow or sequencing of several work activities.
Benefits of HR Forecasting
 Reduces HR costs.
 Increases organizational flexibility.
 Ensures a close linkage to the Macro Business Forecasting Process.
 Ensures that organizational requirements take precedence over issues of
resource constraint and scarcity.

HR Demand is the organization’s projected requirement for human resources,

whereas HR Supply is defined as the source of workers to meet demand
requirements, obtained either internally (current members of the organization’s
workforce) or from external agencies.

Key Personnel Analyses Conducted by HR Forecasters

 Specialist/Technical/Professional Personnel: These employees tend to be
in high demand due to trade qualifications that are essential.
 Employment Equity-Designated Group Membership: Should be a
proportional representation of each grouping. Examples of these groups
include African Americans, women, and those with disabilities.
5 Stages of the Forecasting Process
 Identify organizational goals, objectives, and plans.
 Determine overall demand requirements for personnel.
 Assess in-house skills and other internal supply characteristics.
  Determine the net demand requirements that must be met from external,
environmental supply sources.
 Develop HR plans and programs to ensure that the right people are in the
right place.

Environmental factors affecting the HR process include the following:

 economy,
 labor markets and unions,
 governmental laws and regulations,
 industry and product life cycles,
 technological changes,
 competitor labor usage,
 global market for skilled labor,
 demographic changes.

The following are the organizational factors affecting HR forecasting:

 Corporate mission, strategic goals;

 Operational goals, production budgets;
 HR Policies;
 Organizational structure, restructuring;
 Worker KSA’s, competencies, expectations;
 HRMS level of development;
 Organizational culture, climate, job satisfaction, communications;
 Job analysis, workforce coverage, current data.

HR Forecasting Time Horizons

Current Forecast
The current forecast is the one being used to meet the immediate operational
needs of the organization (up to the end of the current operating cycle, or a
maximum of one year into the future).

Short-Run Forecast

The short-run forecast extends forward from the current forecast and states the
HR requirements for the next one-to-two year period beyond the current
operational requirements.

Medium-Run Forecast

Typically, the medium-run forecast identifies requirements for two to five years
into the future.

Long-Run Forecast

The long-run forecast extends five or more years ahead of the current
operational period. Due to the number of changes that could affect an
organization’s operations, the long-run forecast is extremely flexible.

LICENSES AND ATTRIBUTIONS