Key Functions of an HR Department

1. Ensure Compliance with Labor Laws

2. Recruitment and Training
3. Record Keeping and Tax Compliance
4. Payroll and Benefits
5. Employer-Employee Relations
6. Employee Performance Improvement Plans

1. Hiring and Recruiting

2.Training and Development

3. Handling Compensation

4. Employee Benefits

5. Employee Relations

6. Legal Responsibilities
Boundless Business

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
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.
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.

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.