The Functions and Goals of HR

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 Takeaways

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

  • unions: Legal groups of professionals in a given field who collectively address common issues within that discipline.
  • On-boarding: A series of activities designed to train new employees and prepare them for integration with the organization and their responsibilities.

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
This image is a small chart which highlights a few of the key competencies expected of human resource teams in organizations.

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.

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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.

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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.