The human resources (“HR”) function is at the forefront of a company’s efforts with respect to two of the key elements of organizational design—people and organizational structure. While HR practices differ around the world, it would seem to be universally true that in order for companies to successfully achieve their strategic goals and objectives they must strive to attract, motivate, and retain those employees who are best qualified to carry out the necessary activities of the company and make sure that they are placed into the right spots in the most effective organizational structure.
The traditional role of HR was perceived as being largely administrative—recruiting and interviewing prospective employees, administering benefit plans and writing policies—and is often referred to as the “personnel administration” approach; however, forward thinking companies now realize that the HR function must be part of the company’s strategic planning activities and that HR leaders must engage in what is common referred to as “human resources management”, or “HRM”, strategy, and proactively suggest new policies and initiatives to the senior executives of the company to ensure that the company has access to appropriate knowledge and talent in each of the markets where it is active.
The personality profile for HR managers and specialists has also changed radically in recent years due to the fact that the HR function now provides a wide array of services to persons throughout the company’s organizational structure including training and development, job analysis, oversight of workplace conditions and mediation of disputes between employees and the company.
A new chapter recently added to Business Transactions Solution (§§ 165:1 et seq.) provides an introduction to the issues that confront a business counselor providing guidance to the HR function. One of the most importance subjects covered in the chapter is the activities of the HR function. HRM strategy is executed through the careful selection of appropriate activities for the HR function. Many lists of HRM activities have been developed and different labels have been used; however, it is reasonable to assume that HR managers will need to be involved in recruiting, hiring and placement (“personnel marketing and selection”; job analysis and organizational and space planning; compensation and benefits; training and development (“personnel development”); performance management and evaluation employee relations, including relations and communications with trade unions and development of labor policies; dispute resolution; development and maintenance of information systems; management of employees working in foreign countries; designing and implementing strategies for motivating and incentivizing employees; employee safety, welfare, wellness and health; employee services and counseling; and, of course, compliance applicable laws and regulations.
When companies are first launched there may be little attention paid to the formal aspects of HR apart from the activities necessary to comply with the basic legal and regulatory requirements and reliance may be placed on outsourcing to handle payroll processing and benefits issues. The first full-time HR manager usually takes a generalist approach and therefore should have an extensive range of knowledge in order to adequately address all the needs of the company in the HR area as it grows rapidly. For example, the manager may be the only person working on recruiting at the same time that he or she is administering benefit plans, writing new policies and procedures and coordinating training programs. When the company reaches the point where it has hundreds, even thousands, of employees spread across multiple business units and geographies the HR function will become much larger, formal and specialized with an executive-level leader who supervises several departments that each specialize in certain activities such as employment and placement, compensation and benefits and training and development. Each department would have its own manager and would be staffed by personnel with appropriate training and background in required specialties.
Other topics covered in the chapter include HR documents, practices and systems; the scope and importance of HRM; the processes that companies follow when developing and implementing HRM strategies; and guidelines for organizing and managing the HR function. The chapter also includes a slide deck presentation on counseling the HR function to be used for law firm and department training purposes and a chapter on counseling the HR function to be included training materials for new business counselors.