Human resource management (HRM or HR) is the strategic approach to the effective management of organization workers so that they help the business gain a competitive advantage, Commonly referred to 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 specialise 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 corporate knowledge.
What is Human Resource Management (HRM)? - What is Human Resource Management (HRM)?
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 (1856â"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 processâ"laborâ"sparking inquiry into workforce productivity.
Meanwhile, in England, C S Myers, inspired by unexpected problems among soldiers which had alarmed generals and politicians in the First World War of 1914-1918, co-founded the National Institute of Industrial Psychology (NIIP) in 1921. In doing so, he set seeds for the human relations movement. This movement, on both sides of the Atlantic, built on the research of Elton Mayo (1880-1949) and others to document through the Hawthorne studies (1924â"1932) and other studies how stimuli, unrelated to financial compensation and working conditions, could yield more productive workers. Work by Abraham Maslow (1908â"1970), Kurt Lewin (1890â"1947), Max Weber (1864â"1920), Frederick Herzberg (1923â"2000), and David McClelland (1917â"1998), forming the basis for studies in industrial and organizational psychology, organizational behavior and organizational theory, was interpreted in such a way as to further claims of legitimacy for an applied discipline.
Birth and development of the discipline
By the time enough theoretical evidence existed to make a business case for strategic workforce management, changes in the business landscape (Ã la Andrew Carnegie, John Rockefeller) and in public policy (Ã la Sidney and Beatrice Webb, Franklin D. Roosevelt and the New Deal) had transformed the employer-employee relationship, and the discipline became formalized as "industrial and labor relations". In 1913 one of the oldest known professional HR associationsâ"the Chartered Institute of Personnel and Development (CIPD)â"started in England as the Welfare Workers' Association; it changed its name a decade later to the Institute of Industrial Welfare Workers, and again the next decade to Institute of Labour Management before settling upon its current name in 2000. Likewise in the United States, the world's first institution of higher education dedicated to workplace studiesâ"the School of Industrial and Labor Relationsâ"formed at Cornell University in 1945. In 1948 what would later become the largest professional HR associationâ"the Society for Human Resource Management (SHRM)â"formed as the American Society for Personnel Administration (ASPA).
In the Soviet Union, meanwhile, Stalin's use of patronage exercised through the "HR Department" equivalent in the Bolshevik Party, its Orgburo, demonstrated the effectiveness and influence of human-resource policies and practices, and Stalin himself acknowledged the importance of the human resource, such as in his mass deployment of it in the Gulag system.
During the latter half of the 20th century, union membership declined significantly, while workforce management continued to expand its influence within organizations. In the USA, the phrase "industrial and labor relations" came into use to refer specifically to issues concerning collective representation, and many companies began referring to the proto-HR profession as "personnel administration". Many current HR practices originated with the needs of companies in the 1950s to develop and retain talent.
In the late 20th century, advances in transportation and communications greatly facilitated workforce mobility and collaboration. Corporations began viewing employees as assets. "Human resources management" consequently, became the dominant term for the functionâ"the ASPA even changing its name to the Society for Human Resource Management (SHRM) in 1998.
"Human capital management" (HCM) is 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 HR. 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 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. Additionally, the main character in the BBC sitcom dinnerladies, Philippa, is an HR manager. The protagonist of the Mexican telenovela MaÃ±ana 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.
At the macro-level, HR is in charge of overseeing organizational leadership and culture. HR also ensures compliance with employment and labor laws, which differ by geography, and often oversees health, safety, and security. In circumstances where employees desire and are legally authorized to hold a collective bargaining agreement, HR will typically also serve as the company's primary liaison with the employee's representatives (usually a labor union). Consequently, HR, usually through representatives, engages in lobbying efforts with governmental agencies (e.g., in the United States, the United States Department of Labor and the National Labor Relations Board) to further its priorities.
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. 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. 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.
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 USA, 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 USD $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.
Universities offer programs of study for HR and related fields. The School of Industrial and Labor Relations at Cornell University was the world's first school for college-level study in HR. It currently offers education at the undergraduate, graduate, and professional levels, and it operates a joint degree program with the Samuel Curtis Johnson Graduate School of Management. Other universities with entire colleges dedicated to the study of HR include Pennsylvania State University, Rutgers, The State University of New Jersey School of Management and Labor Relations, Michigan State University, Indiana University, Purdue University, University of Minnesota, Xavier Labour Relations Institute at Jamshedpur-India, University of Illinois at Urbana-Champaign, York University, Renmin University of China, London School of Economics, etc. Many colleges and universities house departments and institutes related to the field, either within a business school or in another college. Most business schools offer courses in HR, often in their departments of management. In general, the Schools of Human Resources Management offers education and research in the HRM field from diplomas to doctorate level opportunities. The Masters level courses include MBA (HR), MM (HR), MHRM, MIR, etc. Various universities all over the world have taken up the responsibility of training human resource managers and equipping them with interpersonal and intrapersonal skills so as to relate properly at the places of work.
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.
Academic and practitioner publications dealing exclusively with HR:
- Cornell HR Review
- HR Magazine (SHRM)
- Human Resource Management
- Human Resource Management Review
- International Journal of Human Resource Management
- Perspectives on Work (LERA)
- Academy of Management Journal
- Academy of Management Review
- Administrative Science Quarterly
- International Journal of Selection and Assessment
- Journal of Applied Psychology
- Journal of Management
- Journal of Occupational and Organizational Psychology
- Journal of Personnel Psychology
- Organization Science
- Personnel Psychology
- Human resource management system
- Aspiration Management
- Domestic inquiry
- Employment agency
- Occupational Health Science
- Organization development
- Organizational theory
- Realistic job preview
- Johnason, P. (2009). HRM in changing organizational contexts. In D. G. Collings & G. Wood (Eds.), Human resource management: A critical approach (pp. 19-37). London: Routledge.
- E McGaughey, âA Human is not a Resourceâ (2018) Centre for Business Research, University of Cambridge Working Paper 497
- Media related to Human resources management at Wikimedia Commons
- Quotations related to Human resource management at Wikiquote
- Directory of HR Templates for Professionals