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Human resources is a term used to describe the individuals who comprise the workforce of an organization, although it is also applied in labor economics to, for example, business sectors or even whole nations. Human resources is also the name of the function within an organization charged with the overall responsibility for implementing strategies and policies relating to the management of individuals (i.e. the human resources). This function title is often abbreviated to the initials 'HR'.

Human resources is a relatively modern management term having been coined in the 1960s.[citation needed] The origins of the function arose in those organisations which introduced 'welfare management' practices and also in those that adopted the principles of 'scientific management'. From these terms emerged a largely administrative management activity, co-ordinating a range of worker related processes and becoming known, in time as the 'personnel function'. Human resources progressively became the more usual name for this function, in the first instance in the United States as well as multinational corporations, reflecting the adoption of a more quantitative as well as strategic approach to workforce management, demanded by corporate management and the greater competitiveness for limited and highly skilled workers.



The use of the term, 'human resources' by organizations to describe the workforce capacity available to devote to the achievement of its strategies has drawn upon concepts developed in Industrial/Organizational Psychology and System Theory. Human resources has at least two related interpretations depending on context. The original usage derives from political economy and economics, where it was traditionally called labor, one of four factors of production although this perspective has shifted as a consequence of further ongoing research into more strategic approaches.[1] This first usage is used more in terms of 'human resources development' of the individuals within an organization, although the approach can also be applied beyond the level of the organization to that of industry sectors and nations [2]


The early development of the function can be traced back to at least two distinct movements. One element has its origins in the late 19th century, where organisations such as Cadburys at its Bournville factory recognised the importance of looking after the welfare of the workforce, and their families. The employment of women in factories in the United Kingdom during the First World War lead to the introduction of "Welfare Officers". Meanwhile, in the United States the concept of human resources developed as a reaction to the efficiency focus of Taylorism or "scientific management" in the early 1900s which was developed as a response to the demand for ever more efficient working practices within highly mechanised factories, such as those of the Ford Motor Company. 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.

During the middle of the last century, larger corporations, typically those in the United States which had emerged after the Second World War recruited personnel from the US Military and were able to apply new selection, training, leadership and management development techniques, originally developed by the Armed Services working with for example, university-based occupational psychologists. Similarly, some leading European multinationals, such as Shell and Phillips had developed new approaches to personnel development and also drew on similar approaches already in use by Civil Service training establishments. Gradually, this resulted in the general spread of more sophisticated policies and processes requiring more centralised management via a Personnel Department comprising a range of both specialists and generalist teams.

The role of what would become more universally know as Human Resources grew throughout the middle of the 20th century. Tensions remained between academics placing emphasis either on what became known as 'Soft' or 'Hard' HR. Those professing so called 'soft HR' stressing the importance of such areas as leadership, cohesion, and loyalty which played important roles in organizational success. Meanwhile those promoting 'hard HR' continued to champion the advantage the more quantitatively rigorous and less "soft" management techniques of the 1960s.

In the later part of the last century, both the title and traditional role of the personnel function was progressively being superseded with the emergence, in larger organizations at least, of so called strategic human resources management and the development of sophisticated human resources departments. Initially this may have involved little more than a renaming of the function, but where a transformation has occurred it has become distinguished by the Human Resources function also having a much more significant influence on the strategic direction of the organisation and becoming positioned in the organization, with designated board level representation.[citation needed]

Human resources purpose and role

In the simplest terms, the objective of an organization's human resource management strategy is to maximize the return on investment from the organization's human capital and minimize financial risk. Human Resources seeks to achieve this by aligning the supply of skilled and qualified individuals, and the capabilities of the current workforce, with the ongoing and future business plans and requirements of the organization in order to maximise return on investment and seeks to secure the future survival and success of the entity. In ensuring such objectives are achieved, the human resource function purpose in this context is to implement the organisation's human resource requirements effectively but also pragmatically, taking account of legal, ethical and as far as is practical in a manner which retains the support and respect of the workforce.[citation needed]


Key functions

The Human Resources function may set strategies and develop policies, standards, systems and processes to implement these strategies in a whole range of areas for which the following would be typical of a wide range of organizations.

  1. Recruitment and Selection (Resourcing)
  2. Organizational design and development.
  3. Business transformation and change management
  4. Performance, conduct and behaviour management
  5. Industrial and employee relations
  6. Human resources (or workforce) analysis and the management of workforce personal data
  7. Compensation, rewards and Benefits management
  8. Training & development (Learning management)

Implementation of such policies, processes or standards may be directly managed by the HR function itself, or the function may indirectly supervise the implementation of such activities by managers, other business functions or via third-party external partner organizations.

Human resources management trends and influences

In organizations, it is important to determine both current and future organizational requirements for both core employees and the contingent workforce in terms of their skills/technical abilities, competencies, flexibility etc. The analysis requires consideration of the internal and external factors that can have an effect on the resourcing, development, motivation and retention of employees and other workers. The external factors are those largely out-with the control of the organization and include issues such as the economic climate, 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 broadly within the control of the organization to predict determine and monitor, for example the organizational culture underpinned by management behaviours (or style), environmental climate and the approach to ethical and corporate social responsibilities.

Major trends

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

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.
the variation within the population/workplace. Changes in society now mean that a larger proportion of organizations are made up of "baby-boomers" or older employees in comparison to thirty years ago. Advocates of "workplace diversity" simply advocate an employee base that is a mirror reflection of the make-up of society insofar as race, gender, sexual orientation, etc.
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..

Individual responses

In regard 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 organization.


Human Resources Development is a framework for the expansion of human capital within an organization or (in new approaches) a municipality, region, or nation. Human Resources Development is a combination of training and education, in a broad context of adequate health and employment policies, that ensures the continual improvement and growth of both the individual, the organization, and the national human resourcefulness. Adam Smith states, “The capacities of individuals depended on their access to education”.[3] Human Resources Development is the medium that drives the process between training and learning in a broadly fostering environment. Human Resources Development is not a defined object, but a series of organised processes, “with a specific learning objective” (Nadler,1984)[4] Within a national context, it becomes a strategic approach to intersectoral linkages between health, education and employment.[5]


Human Resources Development is the structure that allows for individual development, potentially satisfying the organization’s, or the nation's goals. The development of the individual will benefit both the individual, the organization, or the nation and its citizens. In the corporate vision, the Human Resources Development framework views employees, as an asset to the enterprise whose value will be enhanced by development, “Its primary focus is on growth and employee development…it emphasises developing individual potential and skills”(Elwood, Olton and Trott 1996)[6] Human Resources Development in this treatment can be in-room group training, tertiary or vocational courses or mentoring and coaching by senior employees with the aim for a desired outcome that will develop the individual’s performance. At the level of a national strategy, it can be a broad intersectoral approach to fostering creative contributions to national productivity [7]


At the organizational level, a successful Human Resources Development program will prepare the individual to undertake a higher level of work, “organized learning over a given period of time, to provide the possibility of performance change” (Nadler 1984). In these settings, Human Resources Development is the framework that focuses on the organizations competencies at the first stage, training, and then developing the employee, through education, to satisfy the organizations long-term needs and the individuals’ career goals and employee value to their present and future employers. Human Resources Development can be defined simply as developing the most important section of any business its human resource by, “attaining or upgrading the skills and attitudes of employees at all levels in order to maximise the effectiveness of the enterprise” (Kelly 2001)[3]. The people within an organization are its human resource. Human Resources Development from a business perspective is not entirely focused on the individual’s growth and development, “development occurs to enhance the organization's value, not solely for individual improvement. Individual education and development is a tool and a means to an end, not the end goal itself”.(Elwood F. Holton II, James W. Trott Jr)[6]. The broader concept of national and more strategic attention to the development of human resources is beginning to emerge as newly independent countries face strong competition for their skilled professionals and the accompanying brain-drain they experience.


Employee recruitment forms a major part of an organization's overall resourcing strategies which seek to identify and secure the people needed for the organization to survive and succeed in the short to medium-term. Recruitment activities need to be responsive to the ever-increasingly competitive market to secure suitably qualified and capable recruits at all levels. To be effective these initiatives need to include how and when to source the best recruits internally or externally. Common to the success of either are; well-defined organizational structures with sound job design, robust task and person specification and versatile selection processes, reward, employment relations and human resource policies, underpinned by a commitment for strong employer branding and employee engagement strategies.

Internal recruitment can provide the most cost-effective source for recruits if the potential of the existing pool of employees has been enhanced through training, development and other performance-enhancing activities such as performance appraisal, succession planning and development centres to review performance and assess employee development needs and promotional potential.

Increasingly, securing the best quality candidates for almost all organizations will rely, at least occasionally if not substantially, on external recruitment methods. Rapid changing business models demand skills of experiences which cannot be sourced or rapidly enough developed from the existing employee base. It would be unusual for an organization today to undertake all aspects of the recruitment process without support from third-party dedicated recruitment firms. This may involve a range of support services, such as; provision of CVs or resumes, identifying recruitment media, advertisement design and media placement for job vacancies, candidate response handling, shortlisting, conducting aptitude testing, preliminary interviews or reference and qualification verification. Typically, small organizations may not have in-house resources or, in common with larger organizations, may not possess the particular skill-set required to undertake a specific recruitment assignment. Where requirements arise these will be referred on an ad hoc basis to government job centres or commercially run employment agencies.

Except in sectors where high-volume recruitment is the norm, an organization faced with an unexpected requirement for an unusually large number of new recruits at short notice will often hand over the task to a specialist external recruiter to manage the end-to-end resourcing programme. Sourcing executive-level and senior management as well as the acquisition of scarce or ‘high-potential’ recruits has been a long-established market serviced by a wide range of ‘search and selection’ or ‘headhunting’ consultancies which typically form long-standing relationships with their client organizations. Finally, certain organizations with sophisticated HR practices have identified there is a strategic advantage in outsourcing complete responsibility for all workforce procurement to one or more third-party recruitment agencies or consultancies. In the most sophisticated of these arrangements the external recruitment services provider may not only physically locate, or ‘embed’, their resourcing team(s) within the client organization's offices but will work in tandem with the senior human resource management team in developing the longer-term HR resourcing strategy and plan.

Other considerations

Despite its more everyday use terms such as "human resources" and similarly "human capital" continue to be perceived negatively and maybe considered an insulting of people. They create the impression that people are merely commodities, like office machines or vehicles, despite assurances to the contrary

Modern analysis emphasizes that human beings are not "commodities" or "resources", but are creative and social beings in a productive enterprise. The 2000 revision of ISO 9001 in contrast requires identifying the processes, their sequence and interaction, and to define and communicate responsibilities and authorities. In general, heavily unionised nations such as France and Germany have adopted and encouraged such approaches. The International Labour Organization also in 2001 decided to revisit, and revise its 1975 Recommendation 150 on Human Resources Development [8]. One view of these trends 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 develop skills and experience in various ways, and move from one enterprise to another with little controversy or difficulty in adapting. Another view is that governments should become more aware of their national role in facilitating human resources development across all sectors.[citation needed]

Trans-national labor mobility

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 more rightfully part of the developing nation and required to further its economic growth.

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.[9].

Ethical management

In the very narrow context of corporate "human resources" management, 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, humour, and careful listening, are examples of traits that such programs typically require. It would appear that these evidence a general shift through the human capital point of view to 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 at the organizational level.[citation needed] Peace Yo!!! Cayley says peace!!

See also


  1. ^ Advances in Developing Human Resources Vol 6 (#3) August 2004 and Vol 8, #3, 2006.
  2. ^ McLean G. N. National Human Resource Development: A Focused Study in Transitioning Societies in the Developing World. In Advances in Developing Human Resources; 8; 3, 2006.
  3. ^ a b Kelly D, 2001, Dual Perceptions of HRD: Issues for Policy: SME’s, Other Constituencies, and the Contested Definitions of Human Resource Development,
  4. ^ Nadler L Ed., 1984, The Handbook of Human resources Development, John Wiley and Sons, New York.
  5. ^ McLean, G. N., Osman-Gani, A. M.,& Cho, E. (Eds.). Human resource development as national policy. Advances in Developing Human Resources, August (2004). 6 (3).
  6. ^ a b Elwood F. Holton II, James W. Trott, Jr., 1996, Trends Toward a Closer Integration of Vocational Education and Human Resources Development, Journal of Vocational and Technical Education, Vol. 12, No. 2, p7
  7. ^
  8. ^
  9. ^ [a broad inter-sectoral approach to developing human resourcefulness see United Nations Expert Meeting on Human Resources Development. `Changing Perspectives on Human Resources Development. ST/TCD/SER.E/25. June 1994]]


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