Human resource management
Human resource management (HRM, or simply HR) is a function in organizations 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 and units in organizations typically undertake a number of activities, including employee benefits design employee recruitment, "training and development", performance appraisal, and rewarding (e.g., managing pay and benefit systems). HR also concerns itself with industrial relations, that is, the balancing of organizational practices with requirements arising from collective bargaining and from governmental laws. According to R. Buettner, HRM covers the following core areas:
- job design and analysis,
- workforce planning,
- recruitment and selection,
- training and development,
- performance management,
- compensation (remuneration), and
- legal issues.
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. The function 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[update] focuses on strategic initiatives like mergers and acquisitions, talent management, succession planning, industrial and labor relations, and diversity and inclusion.
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 themselves have established programs of study dedicated explicitly to the duties of the function. Academic and practitioner organizations likewise seek to engage and further the field of HR, as evidenced by several 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.
In the current[update] 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.
Antecedent theoretical developments
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 keyed in on one of the principal inputs into the manufacturing process—labor—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, set up a National Institute of Industrial Psychology, setting seeds for the human relations movement, which on both sides of the Atlantic built on the research of Elton Mayo and others to document through the Hawthorne studies (1924-1932) and others how stimuli, unrelated to financial compensation and working conditions, could yield more productive workers. Contemporaneous work by Abraham Maslow (1908-1970), Kurt Lewin (1890-1947), Max Weber (1864-1920), Frederick Herzberg (1923-2000), and David McClelland (1917-1998) formed the basis for studies in industrial and organizational psychology, organizational behavior and organizational theory, giving room for an applied discipline.
Birth and evolution of the discipline
By the time enough theoretical evidence existed to make a business case for strategic workforce management, changes in the business landscape (à la Andrew Carnegie, John Rockefeller) and in public policy (à la Sidney and Beatrice Webb, Franklin D. Roosevelt and the New Deal) had transformed the employer-employee relationship, and the discipline was formalized as "industrial and labor relations". In 1913, one of the oldest known professional HR associations—the Chartered Institute of Personnel and Development—was founded in England as the Welfare Workers' Association, then 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. Likewise in the United States, the world's first institution of higher education dedicated to workplace studies—the School of Industrial and Labor Relations—was formed at Cornell University in 1945. In 1948, what would later become the largest professional HR association—the Society for Human Resource Management (SHRM)—was founded 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.
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 can be traced to 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 rather than as cogs in a machine. "Human resources management" consequently, became the dominant term for the function—the ASPA even changing its name to the Society for Human Resource Management (SHRM) in 1998. "Human capital management" 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.
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.
To look at Human Resource Management more specifically, it 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. Motivation is 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.
The discipline may also engage in mobility management, especially pertaining to 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.
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 and 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. Being an HR manager consistently ranks as one of the best jobs, 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.
Several universities offer programs of study pertaining to 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 continues to offer 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 Michigan State University, Purdue University, University of Minnesota, Xavier Labour Relations Institute at Jamshedpur-India, University of Illinois at Urbana-Champaign, Renmin University of China and the London School of Economics. 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.
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 250,000 members in 140 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
- Organization development
- Organizational theory
- 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.
- Collings, D. G., & Wood, G. (2009). Human resource management: A critical approach. In D. G. Collings & G. Wood (Eds.), Human resource management: A critical approach (pp. 1-16). London: Routledge.
- Paauwe, J., & Boon, C. (2009). Strategic HRM: A critical review. In D. G. Collings, G. Wood (Eds.) & M.A. reid , Human resource management: A critical approach (pp. 38-54). London: Routledge.
- Klerck, G. (2009). "Industrial relations and human resource management". In D. G. Collings & G. Wood (Eds.), Human resource management: A critical approach (pp. 238-259). London: Routledge.
- Buettner, Ricardo (2015). A Systematic Literature Review of Crowdsourcing Research from a Human Resource Management Perspective. 48th Annual Hawaii International Conference on System Sciences. Kauai, Hawaii: IEEE. pp. 4609–4618. doi:10.13140/2.1.2061.1845. ISBN 978-1-4799-7367-5.
- Merkle, Judith A. Management and Ideology. University of California Press. ISBN 0-520-03737-5.
- Mark O'Sullivan, 2014, What Works at Work, The Starbank Press, Bath, page 3.
- Mayo, Elton (1945). "Hawthorne and the Western Electric Company" (PDF). Harvard Business School. Retrieved 28 December 2011.
- "About CIPD". Chartered Institute of Personnel and Development. Retrieved 22 December 2011.
- "About Cornell ILR". Cornell University School of Industrial and Labor Relations. Retrieved 2010-01-29.
- "About SHRM". Society for Human Resource Management. Retrieved 22 December 2011.
- Hale, Henry E. (2014). Patronal Politics. Problems of International Politics. Cambridge University Press. p. 49. ISBN 9781107073517. Retrieved 2015-08-24.
Not seen as having the right stuff for high-profile posts such as the one held by Trotsky, Stalin thus occupied a series of relatively low-level positions in the Communist leadership after the revolution. One of these, which he acquired in 1919, was the de facto head of the Communist Party's Organizational Bureau (Orgburo), seen then as a technical body in much the same way a human resources department is seen in a modern institution. [...] Stalin's genius was to recognize that [...] this was precisely the position to occupy. Using his position to influence who was appointed to lower-level party posts, each relatively unimportant in its own right, Stalin systematically advanced people he believed would support him in the future, thereby constructing a large network of political clients within the party and the state which it dominated. [...] This patronalistic mechanism constituted what Robert V. Daniels later called the great 'circular flow of power' that essentially decided Communist Party leadership disputes and solved succession crises from Stalin straight through to Gorbachev. The power to influence lower-level appointments was concentrated, though still largely seen as a technical matter, with the creation of the post of general secretary in 1922, a post Stalin was in a perfect position to occupy, and he did.
- Pipko, Simona (2002). Baltic Winds: Testimony of a Soviet Attorney. Xlibris Corporation. p. 451. ISBN 9781401070960. Retrieved 2015-08-24.
The Secretariat personified the Stalinist system. [...] It runs the day-to-day affairs of the State as well as the Party. Can you imagine that huge body of bureaucratic anachronism, which was also responsible for the selection and promotion of 'cadres'? The model invented by Stalin to consolidate his power existed up to contemporary time. [...] Stalin had both the time and the ability to shape human resources to his own ends, teaching secrecy, brutality and duplicity.
- Quoted in: Stalin, Joseph (1936). Против фашистского мракобесия и демагогии [Against Fascist Obscuritanism and Demagoguery]. Directmedia (published 2013). p. 81. ISBN 9785446087181. Retrieved 2015-08-24.
Надо, наконец, понять, что из всех ценных капиталов, имеющихся в мире, самым ценным и самым решающим капиталом являются люди, кадры. [Finally, one must understand that of all the valued forms of capital existing in the world, the most precious and the most decisive capital is people, cadres.]
- Cappelli, Peter. "Why We Love to Hate HR … and What HR Can Do About It". Harvard Business Review (July–August 2015). Retrieved 25 July 2015.
- O'Brien, Michael (October 8, 2009). "HR's Take on The Office". Human Resource Executive Online. Archived from the original on 18 December 2011. Retrieved 28 December 2011.
- "Catbert shows tougher side to human resources". Personnel Today. August 30, 2007. Retrieved 28 December 2011.
- Ulrich, Dave (1996). Human Resource Champions. The next agenda for adding value and delivering results. Boston, Mass.: Harvard Business School Press. ISBN 0-87584-719-6. OCLC 34704904.
- Towers, David. "Human Resource Management essays". Retrieved 2007-10-17.
- Jonathan E. DeGraff (21 February 2010). "The Changing Environment of Professional HR Associations". Cornell HR Review. Retrieved 21 December 2011.
- Wright, Patrick. "The 2011 CHRO Challenge: Building Organizational, Functional, and Personal Talent" (PDF). Cornell Center for Advanced Human Resource Studies (CAHRS). Retrieved 3 September 2011.
- Conaty, Bill, and Ram Charan (2011). The Talent Masters: Why Smart Leaders Put People Before Numbers. Crown Publishing Group. ISBN 978-0-307-46026-4.
- "Human Resources, Training, and Labor Relations Managers and Specialists". U.S. Bureau of Labor Statistics. 2011. Retrieved 23 December 2011.
- "Human Resources Manager". CNN Money. 2006. Retrieved 23 December 2011.
- "Human Resources Manager". CNN Money. 2009. Retrieved 23 December 2011.
- "Towers Watson Executives See Growth Ahead For Merged Firms" (PDF). Workforce Management. 2007. Retrieved January 13, 2010.
- "HR consultant". CNN Money. Retrieved 23 December 2011.
- "About Cornell ILR". Cornell University School of Industrial and Labor Relations. Retrieved 23 August 2009.
- SHRM Website: About SHRM
- "About IOR". Institute of Recruiters (IOR). Retrieved 22 December 2011.
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