How Companies Manage Their Human Resources

The Human Resources department at a business is in charge of everything from hiring and firing employees, organizing and implementing training programs, resolving internal conflicts, determining the pay scales, and everything in between.

Human Resources Role

The Human Resources department is concerned with the specific employees of the company, rather than sales, marketing, or product development. In a nutshell, the Human Resources department of any company works to make sure the employees are the best they can be.

Managerial Roles

From a managerial perspective, the Human Resources department fills five major roles:

1. Executive role – The HR department are specialists in areas that encompass the management of employees.
2. Audit role – HR inspects other departments to make sure health & safety policies, and training are being enforced aligned with the company’s HR policy.
3. Facilitator role – HR helps other departments reach their goals that the company has laid out. This typically means developing training programs, and making sure different departments can work together efficiently.
4. Consultancy role – HR advises managers on how to approach and resolve workplace issues professionally. This often includes helping resolve disputes between managers and employees. HR and managers use clear communication, active listening, and constructive feedback to understand concerns and find appropriate solutions. For more on effective workplace communication from the employee perspective, see Career Readiness.
5. Service role – The HR department is also responsible for raising awareness of the main mission of the company and any new corporate policies. This means they are usually responsible for most mass internal communications.

Day-To-Day Roles

There are also major HR activities that managers face in the day-to-day activity at work.  These activities may vary in different organizations and may be responsibilities of not only HR managers, but other managers as well.  Most of the day-to-day actions revolve around hiring, training, compensation, and employee reviews. The most common activities are:

1. Choosing and hiring employees – Businesses hire employees to carry out the day-to-day work needed to operate, including producing goods or services, marketing, sales, customer service, and managing finances. HR helps determine job qualifications, review résumés, conduct interviews, and select qualified candidates. Because different jobs require different skills, businesses need employees with a variety of competencies, experience, and backgrounds. When certain work requires specialized skills outside the company’s core competencies or operating activities, the business may choose to outsource that work instead.
2. Paperwork & orientation – HR makes sure that the newly hired employees fill out several forms to get them ready to start the job such as the W-4 and I-9, and introduces the new employees to the other workers in the organization.
3. Training & development – HR helps ensure that new employees receive the training they need to perform their jobs effectively. Training may include hands-on instruction, manuals, online courses, or guidance from the employee’s manager. HR is also responsible for maintaining best practices, providing training on company policies and procedures, and creating development opportunities for existing employees. Hiring and developing skilled employees is essential to the long-term viability of a business. Under-skilled employees can negatively affect product or service quality, customer service, the company’s reputation, and ultimately its revenue. Some specialized skills may also be difficult to find or require significant time and training to develop.
4. Compensation – HR helps determine compensation packages that meet employee needs while remaining sustainable for the organization. Compensation can include salary or wages, retirement plans such as a 401(k), vacation and personal time, bonuses, and other benefits. Businesses may also use a combination of full-time, part-time, temporary, and contract workers depending on the role and their operational needs. For a closer look at compensation and employee benefits, see What’s in Your Compensation Package and What Benefits to Look for in a Job Offer.
5. Performance appraisals – HR managers develop these forms to determine the percentage amounts of raises each employee should receive. This paperwork serves as a review for the employee and allows them to know their strengths and weaknesses.
6. Safety & health – Workplace health and safety rules exist to protect employees from injuries, illnesses, and other workplace hazards. HR helps ensure that the organization follows applicable health and safety regulations, communicates and posts required procedures, provides appropriate training, and supports a safe work environment. These responsibilities can vary depending on the type of workplace. For example, an HR manager at a manufacturing or welding business may have more extensive safety responsibilities than one at an accounting firm. For more information about safe-work practices from the employee perspective, see Workplace Success, Safety, and Employee Rights.
7. Managing legal issues – HR helps ensure that the organization follows applicable employment laws and anti-discrimination requirements. In the United States, Equal Employment Opportunity (EEO) laws prohibit workplace discrimination based on protected characteristics such as race, color, religion, sex, national origin, age, disability, and other characteristics protected by law. See the section below for more information.

Managing Legal Issues and Workplace Discrimination

HR plays an important role in enforcing anti-discrimination policies and helping organizations comply with applicable employment laws. Businesses can help identify, prevent, and manage workplace discrimination by:

• Establishing clear anti-discrimination and harassment policies
• Training employees and managers on appropriate workplace conduct
• Providing clear and confidential ways to report concerns
• Investigating complaints promptly and fairly
• Applying policies consistently across employees
• Documenting complaints, investigations, and corrective actions

These practices can help organizations foster a more inclusive and equitable work environment.

Employee Conduct and Company Interests

Employees also have responsibilities to their employers. These can include a duty of discretion, which means protecting confidential or sensitive business information, and a duty of loyalty, which generally means acting in the employer’s legitimate interests while employed.

HR helps establish expectations for employee conduct through workplace policies and procedures. When employees violate these expectations, HR may investigate misconduct and recommend appropriate disciplinary action. These practices help protect the organization, its employees, and its business interests.

For more information about employee rights, responsibilities, and workplace equity from the worker perspective, see Workplace Success, Safety, and Employee Rights.

These Human Resource activities help organizations operate effectively while recruiting, developing, and retaining a strong workforce. Employee motivation and retention are important parts of this process. Businesses may motivate employees through financial incentives such as raises, promotions, and bonuses, as well as non-cash factors such as greater autonomy, flexible work schedules or locations, recognition, professional development opportunities, and a positive workplace culture. Retaining strong employees is often less costly than recruiting, hiring, and training replacements.

Building Human Resource Requirements

Human Resource Planning is a process that identifies current and future HR needs for an organization to reach its goals.  HR Planning serves as a link between HR management and the overall business plan of the company while developing a strategy that assists in the organization’s goals.  The major responsibility for Human Resource Planning (HPR) is to ensure the best fit between employees and jobs while being able to meet short-term challenges.

Needs Analysis

To determine Human Resource requirements, there is something called a Needs Analysis.

A Needs analysis is a valuable technique that focuses on how a product addresses the needs of a human consumer.  In Human Resources, this needs analysis is used to determine training needs for an employee to not only help them grow as a worker, but to also help the company grow.  By determining these training needs, an organization can decide what specific knowledge and skills are needed to improve the employee’s performance in the company.  The 4 main methods are:

1. Surveys – Surveys focus on specific areas of performance deficiency and can be given by management or an outside party. A written questionnaire allows an employee to answer anonymously, freely and truthfully, while the questions are targeted to specific tasks.
2. Observations – This is when employees are watched at work, which can give HR enough information on how the employee works and how well they work.
3. Interviews – Interviews involve talking to each employee an evaluating their work and how well they do the work that it assigned to them. This is a decentralized and democratic approach in training because it allows the employee to give their opinions.
4. Customer comment cards – This is when customers serve as a major source of information as to how well the employee does their job. Secret shoppers may partake in this method and can indicate to management what each employee needs to work on.

The needs analysis is a crucial activity in the training and evaluation process, as it allows HR to separate the strong employees from the weak ones. This, in turn, is used to compensate the best employees, and identify how to improve training and best practices to improve overall efficiency.

Internal Vs External

Human Resources are usually internal, which means they operate inside the company for the employees that work within the organization. For example, Apple headquarters has its set of Human Resources, and each individual apple store within the country (and world) usually has its own smaller HR department.

However, some companies, usually smaller businesses, will outsource some or all of their Human Resources to an outside company. This is known as “Outsourcing”.

Outsourcing

Outsourcing occurs when a business hires an outside company or specialist to perform certain functions rather than completing them entirely in-house. Businesses may outsource activities when doing so can increase efficiency or reduce costs, particularly when they lack employees with specialized skills or when performing the work internally would require higher labor or training costs.

Human Resources is one function that businesses may choose to outsource. There are two common reasons for doing so:

• Smaller businesses may not have enough employees to justify a full-time HR department, making an outside HR provider more cost-effective.
• Specialized HR firms may have expertise that the business does not have internally and can help the organization stay current with changes to employment laws, regulations, and HR practices.

Outsourcing can allow a business to focus its internal employees and resources on its core competencies and operating activities while gaining access to specialized expertise.

On the other hand, the impact on the actual employee relationships can be murkier. As an advantage, it can help businesses manage employee performance because the outsourcing firm is a truly unbiased source of information, which can help cut through entrenched management attitudes and practices.

As a disadvantage, it becomes more difficult for the HR department to have a direct personal relationship with any employees. This is problematic because outsourced HR firms will be less effective with employee recruitment and training than in-house HR departments, since the outsourced HR is less familiar with the overall business strategy and corporate vision. Because of this, very small companies tend to outsource their Human Resources, while more companies bring the HR department in house as they grow.

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