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Industrial & Organisational : Introduction : Personnel : Organizational psychology : Occupations: Work environment: Index : Outline


Main article: Personnel management

Human resources has at least two meanings depending on context. The original usage derives from political economy and economics, where it was traditionally called labor, one of three factors of production. The more common usage within corporations and businesses refers to the individuals within the firm, and to the portion of the firm's organization that deals with hiring, firing, training, and other personnel issues. This article addresses both definitions.

Human resource management serves 5 key functions:
1) Hiring
2) Compensation
3) Evaluation and Management (of Performance)
4) Promotions
5) Managing Relations.
It is the responsibility of human resource managers to conduct these activities in an effective, legal, fair, and consistent manner.

The objective of Human Resources (HR's raison d'etre) is to maximize the return on investment from the organization's human capital

"Human resource management aims to improve the productive contribution of individuals while simultaneously attempting to attain other societal and individual employee objectives." Schwind, Das & Wagner (2005)

In reality, human resources deals with two different worlds
1) Non-Unionized - Where management has the control, and
2) Unionized - Where there is shared control through a collective agreement - Management and a union negotiate a collective agreement with respect to terms and conditions of employment. The Union represents employees to management. (That is the Union speaks for employees, both collectively and individually)

Collective Agreements - Can cover any and all terms and conditions of employment. Collective agreements become "the Bible," the code and are binding in law. - Disputes of the collective agreement are resolved by arbitration.


Human resources in political economy and social sciencesEdit

Modern analysis emphasizes that human beings are not "commodities"" or "resources", but are creative and social beings that make contributions beyond 'labor' to a society and to civilization. The broad term human capital has evolved to contain some of this complexity, and in micro-economics the term "firm-specific human capital" has come to represent a meaning of the term "human resources."

Advocating the central role of "human resources" or human capital in enterprises and societies has been a traditional role of socialist parties, who claim that value is primarily created by their activity, and accordingly justify a larger claim of profits or relief from these enterprises or societies. Critics say this is just a bargaining tactic which grew out of various practices of medieval European guilds into the modern trade union and collective bargaining unit.

A contrary view, common to capitalist parties, is that it is the infrastructural capital and (what they call) intellectual capital owned and fused by "management" that provides most value in financial capital terms. This likewise justifies a bargaining position and a general view that "human resources" are interchangeable.

A significant sign of consensus on this latter point is the ISO 9000 series of standards which requires a "job description" of every participant in a productive enterprise. In general, heavily unionized nations such as France and Germany have adopted and encouraged such descriptions especially within trade unions. One view of this trend is that a strong social consensus on political economy and a good social welfare system facilitates labor mobility and tends to make the entire economy more productive, as labor can move from one enterprise to another with little controversy or difficulty in adapting.

An important controversy regarding labor mobility illustrates the broader philosophical issue with usage of the phrase "human resources": governments of developing nations often regard developed nations that encourage immigration or "guest workers" as appropriating human capital that is rightfully part of the developing nation and required to further its growth as a civilization. They argue that this appropriation is similar to colonial commodity fiat wherein a colonizing European power would define an arbitrary price for natural resources, extracting which diminished national natural capital.

The debate regarding "human resources" versus human capital thus in many ways echoes the debate regarding natural resources versus natural capital. Over time the United Nations have come to more generally support the developing nations' point of view, and have requested significant offsetting "foreign aid" contributions so that a developing nation losing human capital does not lose the capacity to continue to train new people in trades, professions, and the arts.

An extreme version of this view is that historical inequities such as African slavery must be compensated by current developed nations, which benefited from stolen "human resources" as they were developing. This is an extremely controversial view, but it echoes the general theme of converting human capital to "human resources" and thus greatly diminishing its value to the host society, i.e. "Africa", as it is put to narrow imitative use as "labor" in the using society.

In a series of reports of the UN Secretary-General to the General Assembly over the last decade [e.g. A/56/162 (2001)], a broad intersectoral approach to developing human resourcefulness has been outlined as a priority for socio-economic development and particularly anti-poverty strategies. This calls for strategic and integrated public policies, for example in education, health, and employment sectors that promote occupational skills, knowledge and performance enhancement.

In the very narrow context of corporate "human resources", there is a contrasting pull to reflect and require workplace diversity that echoes the diversity of a global customer base. Foreign language and culture skills, ingenuity, humor, and careful listening, are examples of traits that such programs typically require. It would appear that these evidence a general shift to the human capital point of view, and an acknowledgment that human beings do contribute much more to a productive enterprise than "work": they bring their character, their ethics, their creativity, their social connections, and in some cases even their pets and children, and alter the character of a workplace. The term corporate culture is used to characterize such processes.

The traditional but extremely narrow context of hiring, firing, and job description is considered a 20th century anachronism. Most corporate organizations that compete in the modern global economy have adopted a view of human capital that mirrors the modern consensus as above. Some of these, in turn, deprecate the term "human resources" as useless.

As the term refers to predictable exploitations of human capital in one context or another, it can still be said to apply to manual labor, mass agriculture, low skill "McJobs" in service industries, military and other work that has clear job descriptions, and which generally do not encourage creative or social contributions.

In general the abstractions of macro-economics treat it this way - as it characterizes no mechanisms to represent choice or ingenuity. So one interpretation is that "firm-specific human capital" as defined in macro-economics is the modern and correct definition of "human resources" - and that this is inadequate to represent the contributions of "human resources" in any modern theory of political economy.

Human resource development in relation to recruitment and selectionEdit

In terms of recruitment and selection it is important to consider carrying out a thorough job analysis to determine the level of skills/technical abilities, competencies, flexibility of the employee required etc. At this point it is important to consider both the internal and external factors that can have an impact on the recruitment of employees. The external factors are those out-with the powers of the organization and include issues such as current and future trends of the labor market e.g. skills, education level, government investment into industries etc. On the other hand internal influences are easier to control, predict and monitor, for example management styles or even the organizational culture.

In order to know the business environment in which any organization operates, three major trends should be considered:

  • Demographics – the characteristics of a population/workforce, for example, age, gender or social class. This type of trend may have an effect in relation to pension offerings, insurance packages etc.
  • Diversity – the variation within the population/workplace. Changes in society now mean that a larger proportion of organizations are made up of female employees in comparison to thirty years ago. Also over recent years organizations have become more culturally diverse and have increased the number of working patterns (part-time, casual, seasonal positions) to cope with the changes in both society and the global market. It is important to note here that an organisation must consider the ethical and legal implications of their decisions in relation to the HRM policies they enact to protect employees. Employers have to be acutely aware of the rise in discrimination, unfair dismissal and sexual/racial harassment cases in recent years and the detrimental effects this can have on the employees and the organisation. Anti-discrimination legislation over the past 30 years has provided a foundation for an increasing interest in diversity at work which is “about creating a working culture that seeks, respects and values difference.”
  • Skills and qualifications – as industries move from manual to a more managerial professions so does the need for more highly skilled graduates. If the market is ‘tight’ i.e. not enough staff for the jobs, employers will have to compete for employees by offering financial rewards, community investment etc.also the political issues


In regards to how individuals respond to the changes in a labour market the following should be understood:

  • Geographical spread – how far is the job from the individual? The distance to travel to work should be in line with the pay offered by the organization and the transportation and infrastructure of the area will also be an influencing factor in deciding who will apply for a post.
  • Occupational structure – the norms and values of the different careers within an organization. Mahoney 1989 developed 3 different types of occupational structure namely craft (loyalty to the profession), organization career (promotion through the firm) and unstructured (lower/unskilled workers who work when needed).
  • Generational difference –different age categories of employees have certain characteristics, for example their behaviour and their expectations of the organisation.

Recruitment methods are wide and varied, it is important that the job is described correctly and any personal specifications stated. Job recruitment methods can be through job centres, employment agencies/consultants, headhunting, and local/national newspapers. It is important that the correct media is chosen to ensure an appropriate response to the advertised post.

Human resources within firmsEdit

Though human resources have been part of business and organizations since the first days of agriculture, the modern concept of human resources began in reaction to the efficiency focus of Taylorism in the early 1900s. By 1920, psychologists and employment experts in the United States started the human relations movement, which viewed workers in terms of their psychology and fit with companies, rather than as interchangeable parts. This movement grew throughout the middle of the 20th century, placing emphasis on how leadership, cohesion, and loyalty played important roles in organizational success. Although this view was increasingly challenged by more quantitatively rigorous and less "soft" management techniques in the 1960s and beyond, human resources had gained a permanent role within the firm.


See alsoEdit

External linksEdit

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