Human resource management (HRM or HR) is the strategic approach to the effective management of people in an organization, so that they help the business gain a competitive advantage. Commonly known as the HR department, it is designed to maximize employee performance in service of an employer’s strategic objectives. HR is primarily concerned with the management of people within organizations, focusing on policies and on systems. HR departments are responsible for overseeing employee-benefits design, employee recruitment, training and development, performance appraisal, and rewarding (e.g., managing pay and benefit systems). HR also concerns itself with organizational change and industrial relations, that is, the balancing of organizational practices with requirements arising from collective bargaining and from governmental laws.
Human resources’ overall purpose is to ensure that the organization is able to achieve success through people. HR professionals manage the human capital of an organization and focus on implementing policies and processes. They can specialize in recruiting, training, employee-relations or benefits, recruiting specialists, find, and hire top talent. Training and development professionals ensure that employees are trained and have continuous development. This is done through training programs, performance evaluations and reward programs. Employee relations deals with concerns of employees when policies are broken, such as in cases involving harassment or discrimination. Someone in benefits develops compensation structures, family-leave programs, discounts and other benefits that employees can get. On the other side of the field are human resources generalists or business partners. These human-resources professionals could work in all areas or be labor-relations representatives working with unionized employees.
HR is a product of the human relations movement of the early 20th century, when researchers began documenting ways of creating business value through the strategic management of the workforce. It was initially dominated by transactional work, such as payroll and benefits administration, but due to globalization, company consolidation, technological advances, and further research, HR as of 2015 focuses on strategic initiatives like mergers and acquisitions, talent management, succession planning, industrial and labor relations, and diversity and inclusion. In the current global work environment, most companies focus on lowering employee turnover and on retaining the talent and knowledge held by their workforce. New hiring not only entails a high cost, but also increases the risk of a newcomer not being able to replace the person who worked in a position before. HR departments strive to offer benefits that will appeal to workers, thus reducing the risk of losing employee commitment and psychological ownership.
Antecedent theoretical developments
The Human Resources field evolved first in 18th century in Europe. It built on a simple idea by Robert Owen (1771-1858) and Charles Babbage (1791-1871) during the industrial revolution. These men concluded that people were crucial to the success of an organization. They expressed the thought that the well-being of employees led to perfect work; without healthy workers, the organization would not survive.
HR emerged as a specific field in the early 20th century, influenced by Frederick Winslow Taylor (1856–1915). Taylor explored what he termed “scientific management” (others later referred to “Taylorism”), striving to improve economic efficiency in manufacturing jobs. He eventually focused on one of the principal inputs into the manufacturing process—labor—sparking inquiry into workforce productivity.
“Human capital management” (HCMis sometimes used synonymously with “HR”, although “human capital” typically refers to a more narrow view of human resources; i.e., the knowledge the individuals embody and can contribute to an organization. Likewise, other terms sometimes used to describe the field include “organizational management”, “manpower management”, “talent management”, “personnel management”, and simply “people management”.
In popular media
Several popular media productions have depicted human resource management in operation. On the U.S. television series of The Office, HR representative Toby Flenderson is sometimes seen as a nag because he constantly reminds coworkers of company policies and government regulations. Long-running American comic strip Dilbert frequently portrays sadistic HR policies through the character Catbert, the “evil director of human resources”. An HR manager is the title character in the 2010 Israeli film The Human Resources Manager, while an HR intern is the protagonist in 1999 French film Ressources humaines. The main character in the BBC sitcom dinnerladies, Philippa, is an HR manager. The protagonist of the Mexican telenovela Mañana Es Para Siempre is a director of human resources.
Dave Ulrich lists the functions of HR as: aligning HR and business strategy, re-engineering organization processes, listening and responding to employees, and managing transformation and change.
Human Resource Management has four basic functions: staffing, training and development, motivation and maintenance. Staffing is the recruitment and selection of potential employees, done through interviewing, applications, networking, etc. There are two main factors to staffing which are attracting talented recruitments, and hiring resources. HR Managers must create detail recruitment strategies and have a plan of action to put forward when looking for recruitments. Next, putting the strategies in to place is hiring resources, which can be done by extending out to find the best possible recruitments for the team. Recruiting is very competitive since all companies want nothing but the best candidates, but by using tactics such as mass media can grab their attention. Training and development is the next step in a continuous process of training and developing competent and adapted employees. Here, motivation is seen as key to keeping employees highly productive. This function can include employee benefits, performance appraisals and rewards. Employee benefits, appraisals and rewards are all encouragements to bring forward the best employees. The last function of maintenance involves keeping the employees’ commitment and loyalty to the organization. Some businesses globalize and form more diverse teams. HR departments have the role of making sure that these teams can function and that people can communicate across cultures and across borders. The discipline may also engage in mobility management, especially for expatriates; and it is frequently involved in the merger and acquisition process. HR is generally viewed as a support function to the business, helping to minimize costs and reduce risk.
In startup companies, trained professionals may perform HR duties. In larger companies, an entire functional group is typically dedicated to the discipline, with staff specializing in various HR tasks and functional leadership engaging in strategic decision-making across the business. To train practitioners for the profession, institutions of higher education, professional associations, and companies have established programs of study dedicated explicitly to the duties of the function. Academic and practitioner organizations may produce field-specific publications. HR is also a field of research study that is popular within the fields of management and industrial/organizational psychology, with research articles appearing in a number of academic journals, including those mentioned later in this article.
One of the frequent challenges of HRM is dealing with the notion of unitarism (seeing a company like a cohesive whole, in which both employers and employees should work together for a common good) and securing a long-term partnership of employees and employers with common interests.
There are half a million HR practitioners in the United States and millions more worldwide. The Chief HR Officer or HR Director is the highest ranking HR executive in most companies. He or she typically reports directly to the Chief Executive Officer and works with the Board of Directors on CEO succession.
Within companies, HR positions generally fall into one of two categories: generalist and specialist. Generalists support employees directly with their questions, grievances, and work on a range of projects within the organization. They “may handle all aspects of human resources work, and thus require an extensive range of knowledge. The responsibilities of human resources generalists can vary widely, depending on their employer’s needs.” Specialists, conversely, work in a specific HR function. Some practitioners will spend an entire career as either a generalist or a specialist while others will obtain experiences from each and choose a path later. The position of HR manager has been chosen as one of the best jobs in the US, with a #4 ranking by CNN Money in 2006 and a #20 ranking by the same organization in 2009, due to its pay, personal satisfaction, job security, future growth, and benefit to society.
Human resource consulting is a related career path where individuals may work as advisers to companies and complete tasks outsourced from companies. In 2007, there were 950 HR consultancies globally, constituting a US$18.4 billion market. The top five revenue generating firms were Mercer, Ernst & Young, Deloitte, Watson Wyatt (now part of Towers Watson), Aon (now merged with Hewitt), and PwC consulting. For 2010, HR consulting was ranked the #43 best job in America by CNN Money.
Some individuals with PhDs in HR and related fields, such as industrial and organizational psychology and management, are professors who teach HR principles at colleges and universities. They are most often found in Colleges of Business in departments of HR or Management. Many professors conduct research on topics that fall within the HR domain, such as financial compensation, recruitment, and training.
Virtual human resources
Technology has a significant impact on human resources practices. Human resources is transitioning to a more technology-based profession because utilizing technology makes information more accessible to the whole organization, eliminates time doing administrative tasks, allows businesses to function globally and cuts costs. Information technology has improved HR practices in the following areas:
Recruiting has mostly been influenced by information technology. In the past, recruiters had relied on printing in publications and word of mouth to fill open positions. HR professionals were not able to post a job in more than one location and did not have access to millions of people, causing the lead time of new hires to be drawn out and tiresome. With the use of e-recruiting tools, HR professionals can post jobs and track applicants for thousands of jobs in various locations all in one place. Interview feedback, background and drug tests, and onboarding can all be viewed online. This helps the HR professionals keep track of all of their open jobs and applicants in a way that is faster and easier than before. E-recruiting also helps eliminate limitations of geographic location. Jobs can be posted and seen by anyone with internet access. In addition to recruiting portals, HR professionals have a social media presence that allows them to attract employees through the internet. On social media they can build the company’s brand by posting news about the company and photos of company events.
- Human Resources Information Systems (HRIS)
Human resources professionals generally handle large amounts of paperwork on a daily basis. This paperwork could be anything from a department transfer request to an employee’s confidential tax form. Forms must be on file for a considerable period of time. The use of Human Resources Information Systems (HRIS) has made it possible for companies to store and retrieve files in an electronic format for people within the organization to access when needed. This eliminates thousands of files and frees up space within the office. Another benefit of HRIS is that it allows for information to be accessed in a timelier manner. Files are accessible within seconds via the HRIS. Having all of the information in one place also allows for professionals to analyze data quicker and across multiple locations because the information is in a centralized location. Examples of some Human Resources Information Systems are PeopleSoft, MyTime, SAP, Timeco, and JobsNavigator.
Technology makes it possible for human resources professionals to train new staff members in a more efficient manner. This gives employees the ability to access onboarding and training programs from anywhere. This eliminates the need for trainers to meet with new hires face to face when completing necessary paperwork to start. Training in virtual classrooms makes it possible for the HR professionals to train a large number of employees quickly and to assess their progress through computerized testing programs. Some employers choose to incorporate an instructor with virtual training so that new hires are receiving training considered vital to the role. Employees can take control of their own learning and development by engaging in training at a time and place of their choosing, which can help them manage their work-life balance. Managers are able to track the training through the internet as well, which can help to reduce redundancy in training as well as training costs. Skype, virtual chat rooms, and interactive training sites are all resources that enable a technological approach to training.
There are a number of professional associations, some of which offer training and certification. The Society for Human Resource Management, which is based in the United States, is the largest professional association dedicated to HR, with over 285,000 members in 165 countries. It offers a suite of Professional in Human Resources (PHR) certifications through its HR Certification Institute. The Chartered Institute of Personnel and Development, based in England, is the oldest professional HR association, with its predecessor institution being founded in 1918.
Several associations also serve niches within HR. The Institute of Recruiters (IOR) is a recruitment professional association, offering members education, support and training. WorldatWork focuses on “total rewards” (i.e., compensation, benefits, work life, performance, recognition, and career development), offering several certifications and training programs dealing with remuneration and work-life balance. Other niche associations include the American Society for Training & Development and Recognition Professionals International.
A largely academic organization that is relevant to HR is the Academy of Management that has an HR division. This division is concerned with finding ways to improve the effectiveness of HR. The Academy publishes several journals devoted in part to research on HR, including Academy of Management Journal and Academy of Management Review, and it hosts an annual meeting.