What is human resource management?

If you’ve applied to or worked for a business at any point in your life, you’ve likely come into contact with human resources (HR) at some point whether you knew it or not. Even if you’ve just worked retail or restaurant jobs, and even if there wasn’t a whole department dedicated to the practice, HR is the heart of people management at any business.

But beyond hiring, what is human resource management? According to Investopedia, “Human resources is the division of a business that is charged with finding, screening, recruiting, and training job applicants, as well as administering employee-benefit programs.”¹ Keep reading to find out how the field of HR came about, the general responsibilities of an HR department and how it fits into the 21st century of business.

A lot of the historical events that culminated in the Labor Movement can also be considered to spur the creation of human resource management but there were many pioneers of modern management theory that acted largely on their own. For example, industrialist Robert Owen is often considered to be one of the first people to recognize that the workers in his factory were as important to his success in business as the quality of machinery within the building. Beginning in 1799 Owen operated a textile mill in Manchester and began making personnel changes such as raising the minimum age of workers and improving the environmental working conditions of the mill. He’s also considered to be among the establishers of management rather than force as he sought out employees to act as “superintendents” in his absence and workers couldn’t be fired for disagreeing with him. Owen is also on record as an early adopter of a work appraisal system that encouraged top performers with public recognition and therefore holds a distinct role in the history of HR.²

Owen, although arguably kinder than some business owners at the time, didn’t make these adjustments purely from a place of good will. All of his changes to employment conditions could be justified on economic grounds and his business saw larger returns year over year with his new practices in place. In 1815, encouraged by his own evidence of fair treatment of workers leading to profit, Owen attempted to introduce a bill to the legislature to improve working conditions for all. The bill included the following provisions: ban the employment of those under 10, ban night shifts for all children, provide 30 minutes education a day for those under 18 and limit the working day to 10.5 hours. The bill wasn’t successful however, as opponents were concerned it would be bad for business and further, many factory owners already implemented these standards on their own.²

The history of HR is complex and influenced by dozens of factors but Owen’s efforts reflect just how early on theories of human resource management existed. In a paper published by the European Journal of Business and Management, authors Tubey, Rotich and Kurgat explain that the Industrial Revolution and concentration of workers in factories on both sides of the pond served to focus public attention upon conditions of employment, and forced workers to act collectively to achieve better conditions. Later, the Humanitarian, Cooperative and Marxist theories of the early 1900s highlighted the potential conflicts between employee and employer interests in modern industry and governments in both political unions became more involved in legislation of labor including regulating hours for work, minimum wage rates and working conditions. It was at this time that management theorists in the United States and United Kingdom began to examine the nature of work and work systems, and to develop models based upon emerging psychological and sociological research, some of which have become important elements of contemporary human resource management.

As the global economy and demand for labor continued to ebb and flow with events such as the abolition of slavery, the establishment of the US Deprtment of Labor and the first and second World Wars, the passing of the the Equal Pay Act, the Civil Rights Act and the Age Discrimination in Employment Act within five years of one another, spurred individuals of all different backgrounds to fight for their rights as workers. Further societal shifts in education, automation and technology have all led to human resource management as we know it today.^3,4

Human resource management and strategy is a field that will never stop evolving. As you can see from just a brief history of HR, the economy and societal shifts will continue to drive changes in the workforce and the perspective of work. Plus, your experience and understanding of HR can be dependent on the company at which you work. Still, there are several basic aspects of human resource management that remain regardless of popular theory and industry.

• Recruiting and hiring: Assessing company personnel needs, searching for and attracting qualified applicants, screening candidates, coordinating the interview process within departments, and facilitating offers and employment contracts.

• Training and development: Providing continuing education opportunities, access to educational resources and learning opportunities.

• Compensation and benefits: Negotiating salaries, determining bonuses and pay scales, managing available benefits including available insurance options, 401k and retirement plans, commuter options, office perks like gyms and food.

• Employee relations: Addressing internal employee or manager-employee issues, and resolving complaints and issues.

• Performance management: Establishing a performance review structure and schedule for an organization, determining thresholds for performance improvement plans/

• Legal compliance and workplace safety: Ensuring employee certifications or licensure stays up-to-date, office, factory or machinery environment meets safety standards, ensuring organization is in compliance with all labor laws.

Despite the fact that managers in many organizations have long recognized the importance of effective people management, handling a business’s human assets has historically been one of the most neglected functions in organizations.

Now, however, many leaders are becoming aware that a critical source of competitive advantage often comes not from offering the most innovative product or service, the best sales strategy, the most state-of-the-art technology, or the most investors, but from having the appropriate systems for attracting, motivating and managing the organization's people that align with the organization’s strategy. In other words: crafting the culture of an organization. While culture is a tricky thing to pin down and is arguably made by all employees at an organization, human resources strategy will generate opportunities to engage employees to contribute to the overall work experience.

A critical part of building a positive culture is adapting and growing to meet the needs and desires of employees but approaches to culture-building and opinions of what’s appropriate will vary. Spurred in part by the 2019 coronavirus pandemic, work culture began to be inspected closely as many jobs moved remote and others faced distressing conditions forced to work through the most dangerous days of the pandemic. Issues like minimum wage, equal pay and safety of working conditions all remain top concerns of workers just as they were in the 18th century. Now, human resource management leaders are responsible for helping to handle them.

Benefits like assistance with student loan repayment, paid and lengthy parental leave and remote work policies are all increasing in popularity. Adaptable benefits packages that can meet the needs of a workforce with an increasing age gap plus opportunities for flexible schedules in order to take care of children or other family members are also highly sought-after. Mental health coverage is also increasingly expected as a mandatory part of health insurance. According to a Society of Human Resource Management survey, 25% of employers increased their mental health service offerings during the pandemic.⁵

Diversity and inclusion are also top concerns often taken on in the HR strategy, sometimes as a sub-department, committee or several employees on the HR team. Recruiting and hiring strategies should constantly be addressed and evolved to make sure individuals of all types of backgrounds are considered for all types of roles. Building an inclusive environment requires maintaining values that all employees are held to, including a zero-tolerance policy of discrimination from leadership and coworkers and building in processes that also work toward those values. Employees are looking for understanding and empathy from their employers in the form of benefits as well as behavior. In turn, contemporary human resource departments can build trust among and from their workforce— a key ingredient of a positive culture.⁶