What is 'Human Resources (HR)'
Human resources (HR) is the company department in charged with finding, screening, recruiting and training job applicants, as well as administering employee-benefit programs. As companies re-organize to gain competitive edge, human resources plays a key role in helping companies deal with a fast-changing environment and the greater demand for quality employees.
BREAKING DOWN 'Human Resources (HR)'
A human resources department is an essential, if not critical, component of any business regardless of the organization's size. It is primarily focused on maximizing employee productivity and protecting the company from any issues that may arise from the workforce. HR responsibilities include compensation and benefits, recruitment, firing and keeping up to date with any laws that may affect the company and its employees.
Essential Functions of HR
Research conducted by The Conference Board has found six key people-related activities that human resources must effectively do to add value to a company. These are:
1. Effectively managing and utilizing people.
2. Tying performance appraisal and compensation to competencies.
3. Developing competencies that enhance individual and organizational performance.
4. Increasing the innovation, creativity and flexibility necessary to enhance competitiveness.
5. Applying new approaches to work process design, succession planning, career development and interorganizational mobility.
6. Managing the implementation and integration of technology through improved staffing, training and communication with employees.
HR departments are expected to perform human resource management (HRM) strategies. HRM is a strategic and comprehensive approach to managing employees and the organizational culture and environment. It focuses on the recruitment, management and general direction of the people who work in an organization. HR is also more involved in improving the organization’s workforce by recommending processes, approaches and business solutions to management. For example, in IKEA, HR shifted its focus on values and cultural fit rather than skills and experience in recruiting employees.