Human resources

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"HR" redirects here. For other uses, see HR (disambiguation).
This article is about Human resources. For other uses, see Human resource (disambiguation).

Human resources is a term used to describe the individuals who comprise the workforce of an
organization, although it is also applied in labor economics to, for example, business sectors or
even whole nations. Human resources is also the name of the function within an organization
charged with the overall responsibility for implementing strategies and policies relating to the
management of individuals (i.e. the human resources). This function title is often abbreviated to
the initials 'HR'.

Human resources is a relatively modern management term, coined in the 1960s.[citation needed] The
origins of the function arose in organizations that introduced 'welfare management' practices and
also in those that adopted the principles of 'scientific management'. From these terms emerged a
largely administrative management activity, co-ordinating a range of worker related processes
and becoming known, in time as the 'personnel function'. Human resources progressively became
the more usual name for this function, in the first instance in the United States as well as
multinational corporations, reflecting the adoption of a more quantitative as well as strategic
approach to workforce management, demanded by corporate management and the greater
competitiveness for limited and highly skilled workers.

Contents
[hide]

 1 Background
 2 History
 3 Human resources purpose and role
o 3.1 Key functions
 4 Human resources management trends and influences
o 4.1 Major trends
o 4.2 Individual responses
o 4.3 Framework
o 4.4 Structure
o 4.5 Training
o 4.6 Recruitment
 5 Other considerations
o 5.1 Trans-national labor mobility
o 5.2 Ethical management
 6 See also
  7 References

[edit] Background
The use of the term 'human resources' by organizations to describe the workforce capacity
available to devote to the achievement of its strategies has drawn 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 has shifted as a consequence of further ongoing research into more
strategic approaches.[1] This first usage is used more in terms of 'human resources development'
of the individuals within an organization, although the approach can also be applied beyond the
level of the organization to that of industry sectors and nations.[2]

[edit] History
The early development of the function can be traced back to at least two distinct movements.
One element has its origins in the late 19th century, where organizations such as Cadburys at its
Bournville factory recognised the importance of looking after the welfare of the workforce, and
their families. The employment of women in factories in the United Kingdom during the First
World War lead to the introduction of "Welfare Officers". Meanwhile, in the United States the
concept of human resources developed as a reaction to the efficiency focus of Taylorism or
"scientific management" in the early 1900s, which developed in response to the demand for ever
more efficient working practices within highly mechanised factories, such as in the Ford Motor
Company. 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.

During the middle of the last century, larger corporations, typically those in the United States
that emerged after the Second World War, recruited personnel from the US Military and were
able to apply new selection, training, leadership, and management development techniques,
originally developed by the Armed Services, working with, for example, university-based
occupational psychologists. Similarly, some leading European multinationals, such as Shell and
Phillips developed new approaches to personnel development and drew on similar approaches
already used in Civil Service training. Gradually, this spread more sophisticated policies and
processes that required more central management via a personnel department composed of
specialists and generalist teams.

The role of what became known as Human Resources grew throughout the middle of the 20th
century. Tensions remained between academics who emphasized either 'soft' or 'hard' HR. Those
professing so-called 'soft HR' stressed areas like leadership, cohesion, and loyalty that play
important roles in organizational success. Those promoting 'hard HR' championed more
quantitatively rigorous management techniques in the 1960s.
In the later part of the last century, both the title and traditional role of the personnel function
was progressively superseded by the emergence, at least in larger organizations, of strategic
human resources management and sophisticated human resources departments. Initially, this may
have involved little more than renaming the function, but where transformation occurred, it
became distinguished by the human resources having a more significant influence on the
organizations strategic direction and gaining board-level representation.[citation needed]

[edit] Human resources purpose and role

In simple terms, an organization's human resource management strategy should maximize return
on investment in the organization's human capital and minimize financial risk. Human Resources
seeks to achieve this by aligning the supply of skilled and qualified individuals and the
capabilities of the current workforce, with the organization's ongoing and future business plans
and requirements to maximize return on investment and secure future survival and success. In
ensuring such objectives are achieved, the human resource function purpose in this context is to
implement the organization's human resource requirements effectively but also pragmatically,
taking account of legal, ethical and as far as is practical in a manner that retains the support and
respect of the workforce.[citation needed]

[edit] Key functions

Human Resources may set strategies and develop policies, standards, systems, and processes that
implement these strategies in a whole range of areas. The following are typical of a wide range
of organizations:

 Recruitment, selection, and onboarding (resourcing)

 Organizational design and development
 Business transformation and change management
 Performance, conduct and behavior management
 Industrial and employee relations
 Human resources (workforce) analysis and workforce personnel data management
 Compensation, rewards, and benefits management
 Training and development (learning management)

Implementation of such policies, processes or standards may be directly managed by the HR

function itself, or the function may indirectly supervise the implementation of such activities by
managers, other business functions or via third-party external partner organizations.

[edit] Human resources management trends and influences

This section may require cleanup to meet Wikipedia's quality standards. Please
improve this section if you can. (March 2010)
In organizations, it is important to determine both current and future organizational 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.

External factors are those largely out-with the control of the organization. These include issues
such as economic climate and current and future labor market trends (e.g., skills, education level,
government investment into industries etc.). On the other hand, internal influences are broadly
controlled by the organization to predict, determine, and monitor—for example—the
organizational culture, underpinned by management style, environmental climate, and the
approach to ethical and corporate social responsibilities.

[edit] Major trends

To know the business environment an organization operates in, three major trends must be
considered:

1. 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.
2. 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. 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.
3. Skills and qualifications: as industries move from manual to 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 must compete for employees by offering financial
rewards, community investment, etc..

[edit] Individual responses

In regard to how individuals respond to the changes in a labour market, the following must 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, and the transportation and infrastructure of
the area also influence who applies 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 behaviour and their expectations of the organization.
[edit] 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 organization, and the national human resourcefulness. Adam Smith states, “The
capacities of individuals depended on their access to education”.[3] 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)[4] Within a national
context, it becomes a strategic approach to intersectoral linkages between health, education and
employment.[5]

[edit] Structure

Human Resources Development is the structure that allows for individual development,
potentially satisfying the organization's, or the nation's goals. Development of the individual
benefits the individual, the organization—and the nation and its citizens. In the corporate vision,
the Human Resources Development framework views employees as an asset to the enterprise,
whose value is enhanced by development, "Its primary focus is on growth and employee
development…it emphasises developing individual potential and skills" (Elwood, Olton and
Trott 1996)[6] 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 develops 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.
[7]

[edit] Training

At the organizational level, a successful Human Resources Development program prepares 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 employee skills and attitudes at all levels to maximise enterprise effectiveness.[3] 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).[6] 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.

[edit] Recruitment

Employee recruitment forms a major part of an organization's overall resourcing strategies,

which identify and secure people needed for the organization 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 organizational 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 and onboarding 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 relies, at least
occasionally if not substantially, on external recruitment methods. Rapidly changing business
models demand skill and experience that cannot be sourced or rapidly enough developed from
the existing employee base. It would be unusual for an organization 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 organizations may not have in-house resources or,
in common with larger organizations, may not possess the particular skill-set required to
undertake a specific recruitment assignment. Where requirements arise, these are referred on an
ad hoc basis to government job centres or commercially run employment agencies.

Except in sectors where high-volume recruitment is the norm, an organization faced with sudden,
unexpected requirements for an unusually large number of new recruits often delegates the task
to a specialist external recruiter. 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) in the client
organization's offices, but work in tandem with the senior human resource management team in
developing the longer-term HR resourcing strategy and plan.
[edit] Other considerations
Despite its more everyday use terms such as "human resources" and similarly "human capital"
continue to be perceived negatively and maybe considered an insulting of people. They create
the impression that people are merely commodities, like office machines or vehicles, despite
assurances to the contrary

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 identifying the processes, their sequence and interaction, and to define and communicate
responsibilities and authorities. In general, heavily unionised nations such as France and
Germany have adopted and encouraged such approaches. The International Labour Organization
also in 2001 decided to revisit, and revise its 1975 Recommendation 150 on Human Resources
Development.[8] 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.[citation needed]

[edit] Trans-national labor 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 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.[9]

[edit] Ethical 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.
Such programs require foreign language and culture skills, ingenuity, humour, and careful
listening. These indicate a general shift through the human capital point of view to an
acknowledgment that human beings contribute more to a productive enterprise than just "work":
they bring their character, ethics, creativity, social connections, and in some cases pets and
children, and alter the character of a workplace. The term corporate culture is used to
characterize such processes at the organizational level.[citation needed]

[edit] See also

  Human resource management

[edit] References
1. ^ Advances in Developing Human Resources Vol 6 (#3) August 2004 and Vol 8, #3,
2006.
2. ^ McLean G. N. National Human Resource Development: A Focused Study in
Transitioning Societies in the Developing World. In Advances in Developing Human
Resources; 8; 3, 2006.
3. ^ a b Kelly D, 2001, Dual Perceptions of HRD: Issues for Policy: SME’s, Other
Constituencies, and the Contested Definitions of Human Resource Development,
http://ro.uow.edu.au/artspapers/26
4. ^ Nadler L Ed., 1984, The Handbook of Human resources Development, John Wiley and
Sons, New York.
5. ^ McLean, G. N., Osman-Gani, A. M.,& Cho, E. (Eds.). Human resource development as
national policy. Advances in Developing Human Resources, August (2004). 6 (3).
6. ^ a b Elwood F. Holton II, James W. Trott, Jr., 1996, Trends Toward a Closer Integration
of Vocational Education and Human Resources Development, Journal of Vocational and
Technical Education, Vol. 12, No. 2, p7
7. ^ http://www.ilo.org/public/english/employment/skills/hrdr/init/cze_8.htm
8. ^ http://www-ilo-
mirror.cornell.edu/public/english/employment/skills/recomm/quest/qr_1b.htm
9. ^ [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
http://ann.sagepub.com/cgi/content/abstract/520/1/42]

Personnel Management
This guide is based on Human Resource Management in a Business Context, and includes links
to extra articles, notes, tips and exercises.

From personnel to human resource management

HRM-type themes, including 'human capital theory' (discussed in Part 2) and 'human asset
accounting' can be found in literature dating as far back as the 1970s. But the modern view of
human resource management first gained prominence in 1981 with its introduction on the
prestigious MBA course at Harvard Business School. The Harvard MBA provided a blueprint for
many other courses throughout North America and the rest of the world, making its
interpretation of HRM particularly influential (Beer et al, 1984; Guest, 1987; Poole, 1990).
Simultaneously, other interpretations were being developed in Michigan and New York.

These ideas spread to other countries in the 1980s and 1990s, particularly Australia, New
Zealand, parts of northern Europe - especially the UK, Ireland and Scandinavia - and also South
and South-East Asia and South Africa. Today, the HRM approach is influential in many parts of
the world.

Human Resource Management in a Business Context, provides a discussion on why HRM

seemed to be different - and preferable - to personnel management but also examine some
common prejudices against the notion of HRM.

Points to consider
* At face value, HRM is strategic, involving top management, etc. - but only if we accept the
rhetoric of HRM without debate. The question of whether or not there is a real difference
between 'personnel management' and HRM is dealt with in more depth in the next section.

* Certainly, personnel management had an image problem - and for some people, HRM is no
different. Why has personnel/HR had such a bad press? Why change the label from 'personnel' to
HRM? Is there a substantive difference in philosophy, theory or practice? What are the motives
of practitioners in adopting (or resisting) the change of label?