The term human resources has two different meanings. It may refer to the people within an organization who are performing the work or it may refer to the human resources (HR) function—a collection of related activities that pertain to the management of personnel within the organization. It is the second reference that is being discussed here. The HR function has developed significantly in recent years. In many organizations today, human resources is considered an essential, strategic business function as well as an integral part of a company’s administrative staff. This arm of the business is involved in ensuring that the employees accept responsibility; perform at high levels of efficiency; and make decisions within their area of responsibility, knowledge, and expertise. Senior MANAGEMENT expects HR to add unique, sustained value to the organization, thus helping the business improve its position over its competitors. Providing this competitive advantage helps the firm increase PROFITs, enhance CUSTOMER RELATIONS / SATISFACTION, and improve market share. Many HR functions work closely with management to help structure jobs so that the work is challenging and satisfying. HR also helps create the culture and shape the organization’s management style. Although HR professionals may place different emphases on core activities in accordance with the organization’s current needs, there are five traditional HR activities: EMPLOYMENT, TRAINING AND DEVELOPMENT, COMPENSATION AND BENEFITS, employee and labor relations, and health and safety. These five activities comprise the HR function, although motivation, communication, and job and organization design are often delegated to HR. Following are brief definitions of the core areas.
1. Employment consists of recruiting and selection. Recruiting ensures a supply of qualified applicants from which the appropriate selection(s) of new hire(s) can be made. Often the process of socializing the new employee into the organization is a part of the employment process. Socializing reduces the potential of psychological shock the new employee may experience during the first few weeks or months of employment.
2. Training and development ensure that the organization has employees with the appropriate knowledge, skills, and abilities to perform the necessary job duties. Training often has the connotation of learning specific job skills necessary to perform the current job. Development, however, has a longer-term focus to educate employees to perform future jobs that require higher knowledge, skills, and abilities.
3. Compensation and benefits comprise the total rewards package that an employee receives for performing the job. Compensation is considered direct pay, since it is the amount of money the employee receives. Benefits are indirect pay, since they are monetary equivalents that can be converted later into cash or cash equivalents. Benefits that are voluntarily offered by employers often include vacations, holidays, group INSURANCE (e.g., health and life insurance) and pension programs. Legally required benefits include SOCIAL SECURITY, UNEMPLOYMENT insurance, WORKERS’ COMPENSATION, and in many cases time off to attend to family medical needs (see FAMILY AND MEDICAL LEAVE ACT). For every dollar paid in compensation, the CHAMBER OF COMMERCE estimates that 39–40 percent is spent for indirect compensation, leaving 60–61 percent for direct compensation. This is a composite average; individual companies and specific situations may vary considerably.
4. Employee relations is concerned with assuring that each employee is treated fairly, and if there is a concern or problem, those issues are addressed quickly. Employees are encouraged to discuss their concerns with either their supervisor or HR representative. The term employee relations is usually used when the organization’s employees are not represented by a UNION. The term labor relations is used when specific employee groups are represented by a union. Individual union members are represented by a union representative called a union steward or committee person, although employees can still discuss issues with their supervisor or HR representative. When a union does represent groups of employees, the wages, hours, terms, and conditions of work are negotiated jointly by union and company representatives in a process called COLLECTIVE BARGAINING.
5. Health and safety standards ensure that employees work in an environment that is free from recognized hazards. Although safety and health activities are usually management-led, safety is everyone’s responsibility. Safety committees are often established within each department to implement safety programs and assist in accident investigations. The Occupational Safety and Health Act (1970), a federal law, has many industryspecific safety regulations, but even when there are no specific guidelines, the act contains the General Duty Clause, which requires employers to conform to the law’s intent of the law—safe and healthful working conditions.
See also OCCUPATIONAL HEALTH AND SAFETY ADMINISTRATION.