What is Human Resources?
At a basic level, human resources is a set of functions within an organization that include managing compensation, benefits, employee relations, performance management, learning and development, recruiting and hiring, workforce planning, strategic consultation, and all other needs that relate to the people who work for an organization. If there is no human resources department or leader, these essential requirements for the workforce must be handled by management with or without assistance from third-party vendors. So what, really, is HR? And what does HR do?
In small businesses and organizations where HR isn’t a need or is outsourced, there are many employees who have never encountered HR as a separate function from management. Those of us who have worked in a larger, more corporate setting learned about HR because there was a big team, with a structure, and designated roles for that group. We were told, “Go talk to HR about it,” or sent into a black hole of a shared services line. We know HR as a place that might solve problems for employees, or even advocate for us and mediate conflict that arises in the workplace. We also know HR as the person who shows up when someone is in trouble, or is getting fired. HR is the keeper of the rules and the arbiter of fairness, but is also working in the best interest of the organization, while balancing the needs of employees. Unfortunately, human resources is often the department of “no,” as in, no, that new plan to hire only family members of your current employees probably isn’t legal or effective, and no, your moonlighting gig for our competitor isn’t allowed because it’s against the conflicts of interest policy.
Some see HR as very powerful in the hiring process, but frankly, human resources and recruiters don’t make hiring decisions. While it’s true that HR often has (and should have) a huge role in recruiting job seekers, vetting candidates and presenting them to hiring managers, as well as delivering the news when an applicant doesn’t get the job, it’s always the hiring leader who makes that decision. And some managers subvert the efficiency of the process and the expertise of HR by demanding to see every resume anyway.
The employee value proposition and creation/maintenance of the employer brand requires an essential partnership between HR and marketing. In smaller organizations, human resources functions as the marketing department in this area. HR may even have a hand in designing the company’s careers page, and help create content, including blog entries, videos and photos that are shared on social media.
Pay and benefits is another area where HR is front and center. Payroll doesn’t always sit in the HR area-sometimes it is part of the finance team. But the elements that play into proper administration of timekeeping and payroll is always a concern for HR. Human resources professionals ensure that employees are paid correctly and according to wage and hour requirements. We also handle the interaction of benefits and payroll, as well as partnering with the finance and accounting departments to administer retirement benefits and accounts according to fiduciary and regulatory obligations. Leaves and absences also can affect payroll and benefits, so interaction with HR is necessary for that reason too.
Benefit plan design, implementation and vendor management sits in the HR area. Employee benefits are a very important part of the total rewards package, and getting the most for a company’s benefit dollar, while designing a package that meets the needs and wants of the employee population, is a way for human resources to support attraction of top candidates and retention of employees as well. Preparation of an annual total rewards statement that helps employees understand the true value of their compensation is usually part of HR’s duties.
Related to payroll is the overall issue of compensation, including the organization’s compensation philosophy, total rewards package, evaluating compensation against market data to ensure competitiveness, and designing career paths for roles to ensure that there is growth potential for employees. Succession planning and assessing ongoing workforce needs is also something HR has a strong hand in. Leadership development, training and identifying high potential employees is a specialty area of human resources. We use tools and technology to assist executive leaders with this planning, and find ways to implement, gather data, and assess results.
Another critical area of HR is the employee relations (and, in bargaining populations, labor relations) piece. When there is conflict, allegations of wrongdoing, unfairness, or activity that is potentially counter to company policy, bargaining agreements or legal requirements, human resources takes on an investigatory role. We ask questions, gather facts, make recommendations, and document everything. Tough conversations are often part of this process, and HR professionals exercise their discretion, judgment and communication skills to be successful in this area. With union work groups, HR participates in responding to business agent inquiries, grievance proceedings, and even union contract negotiations.
Performance management, employee reviews and goalsetting are important parts of the HR toolkit. Human resources professionals help design employee reviews, choose technology to support that critical function, and ensure the review cycle is carried out in an effective and timely manner. HR also provides resources and consultation with regard to goalsetting, ensuring that goals are specific, measurable, attainable, realistic, timely and aligned with business strategy. Performance management, including training and development in effective coaching, is a critical piece of what HR can offer to leadership. Tools that help with employee discipline and formal improvement plans are part of what human resources brings to the performance management process.
Employee engagement, productivity and retention are also in the human resources bucket. HR designs, administers, analyzes and reports on employee engagement surveys, termination patterns, and other issues related to employees’ decision to “stay or go.” We evaluate presenteeism, motivation and happiness at work, and how these things may be related to wellness, work conditions and management expertise, with the ultimate goal of maintaining an engaged, productive workforce whose efforts are aligned with the strategic goals of the organization.
Compliance with all legal requirements that affect employees is usually a responsibility for HR, in conjunction with the organization’s legal counsel. Required postings, employee handbook creation and maintenance, and company policy training, explanation and recommendations is a human resources function. HR often serves as a consultant to the business on upcoming changes, requirements and needs in the compliance area as well.
When employees are in crisis, HR is a “go to” department for support. For instance, if an employee’s parent is out of state and suddenly seriously ill, human resources might sit down with the staff member who is in shock and emotional, to help him book a flight, arrange for a backup staff member during his absence, and give him a cell phone number to call if he needs anything. When an employee has a serious car accident and is unable to speak, HR can help family members file for short term disability through the company’s provider. If an employee shows up exhibiting behaviors like slurred speech, uneven gait, and red eyes, HR may assist management in assessment of reasonable suspicion and arrange for drug and alcohol testing if appropriate.
Finally, and most importantly, human resources is a rich resource for executive leadership on all initiatives and planning related to people in the organization. HR leaders effectively handle human capital management, change management, resource planning, addressing business risks and opportunities, and evaluating major organizational decisions such as mergers and acquisitions. Including HR at the executive level provides expert strategic direction and collaboration on every matter related to employees, whose buy-in, commitment, productivity and talent make initiatives successful.