Human
resources
The human resources (HR) department is responsible for all policies and processes
relating to the people employed by a business. To help the business achieve its
goals, HR has to make sure that it employs the right people with the right skills,
treats them consistently and fairly, and has a supporting framework to drive and
deliver the required level of performance.
Selection
and
retention
See pp.82–83.
HR helps to determine principles, conduct,
and how tasks are done in a business.
HR formulates the structure and formal reporting
relationships that define a company’s shape.
HR is responsible for employees’ welfare
and their contribution to business goals.
Performance
management
See pp.84–85.
learning
and
develoPment
See pp.82–83.
Business goals
Business goals are the
driver for every business
decision, and HR
polices support them.
Values and culture
Organization design
People and performance
SucceSSion
and talent
Planning
See pp.82–83.
HR framework
The starting point for any
decision in an organization is
its business goals. HR supports
the delivery of these goals by
ensuring that there is a staffing
strategy to support the business
plan. Typically, an HR framework
sets out a people strategy
including the competencies
of the people who best suit
the organization. This is then
implemented in a range of areas,
from recruitment and selection
to learning and development.
HR professionals work closely
with business leaders and
line managers to design and
implement HR systems that
back up strategic business goals.
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78 79
how companies work
Human resources
3.2 billion
people were in recorded
employment globally in 2014
As well as recruiting effectively and
ensuring that employees deliver, HR
plays a role in nurturing essential
people skills across the organization.
Relating to others
Some people are natural leaders,
but most leaders can benefit
from objective thinking about
the leadership strategy they wish
to follow. See pp.88–89.
Even in flattened, team-based
hierarchies, team leaders need to
develop leadership skills to guide
and support their teams.
See pp.90–91.
Despite the revolution in technology,
people remain vital to organizations,
as skills and knowledge are central
to success. As a result, HR has an
expanding role. One example is
Google, which calls its HR function
People Operations (POPS) and treats
its staff as a valuable asset, offering
a range of attractive perks to “find
them, grow them, and keep them.”
See pp.92–93.
Managing projects
Project management is an essential
skill for managers at all levels,
whether they are running regular
day-to-day activities or special
projects. See pp.94–95.
Negotiating
The ability to negotiate successfully
is an essential skill. Awareness of
strategies and styles is key to success.
See pp.96–97.
essential people
skills
REWARDS AND
BENEFITS
See pp.86–87.
EMPLOYEE
ENGAGEMENT
See pp.92–93.
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78 79
how companies work
Human resources
3.2 billion
people were in recorded
employment globally in 2014
As well as recruiting effectively and
ensuring that employees deliver, HR
plays a role in nurturing essential
people skills across the organization.
Relating to others
Some people are natural leaders,
but most leaders can benefit
from objective thinking about
the leadership strategy they wish
to follow. See pp.88–89.
Even in flattened, team-based
hierarchies, team leaders need to
develop leadership skills to guide
and support their teams.
See pp.90–91.
Despite the revolution in technology,
people remain vital to organizations,
as skills and knowledge are central
to success. As a result, HR has an
expanding role. One example is
Google, which calls its HR function
People Operations (POPS) and treats
its staff as a valuable asset, offering
a range of attractive perks to “find
them, grow them, and keep them.”
See pp.92–93.
Managing projects
Project management is an essential
skill for managers at all levels,
whether they are running regular
day-to-day activities or special
projects. See pp.94–95.
Negotiating
The ability to negotiate successfully
is an essential skill. Awareness of
strategies and styles is key to success.
See pp.96–97.
essential people
skills
REWARDS AND
BENEFITS
See pp.86–87.
EMPLOYEE
ENGAGEMENT
See pp.92–93.
US_078-079_Human_Resources_Overview.indd 79 21/11/2014 16:21
How it works
People are a significant cost to any organization—and
of great value. Many CEOs talk about staff as their
most important asset, and US industrialist Henry Ford
famously said: “You can take my factories, burn up
my buildings, but give me my people and I’ll build the
From the moment a company starts the process of recruiting an
employee to the time that person leaves the company, the individual
is in a cycle that is managed by the human resources (HR) department.
The human
resources cycle
Employ
business right back again.” The HR department is
there to ensure that the right people are in the right
roles so that the company can deliver the business
strategy and maintain its competitive edge. The
complexity of the business influences the stages in
the HR cycle, but the basic elements are the same.
Once terms are
agreed and a
contract signed,
the candidate
becomes the
company’s
employee.
A business identifies
the need to fill a role,
and attracts applicants.
CVs are assessed and
interviews held to find
the best candidate.
CV
National employment laws
Employment practice is regulated
by a raft of laws— for example, in
the US federal Equal Employment
Opportunity laws prohibit any
discrimination on the grounds of
sex, race, disability, age, sexual
orientation, or religion at any
stage of the employment cycle.
NEED TO KNOW
Recruit
Contract
“Hire people
smarter than
you and get out
of their way.”
Howard Schultz
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80 81
…or to leave the
company, which
may be through
resignation,
redundancy,
or retirement.
The company
helps its employee
to move into a
new role, which
may be in another
business it owns…
how companies work
Human resources
Develop
Manage
performance
The company sets targets
and helps individuals to
improve performance
so they contribute to
business results and get
the most out of their job.
An induction program
explains the new role and
introduces the team. HR
gives a briefing on pay, tax,
and benefits such as leave,
insurance, and pensions.
The business has processes
to help people improve their
skills, competencies, and
knowledge, through formal
or informal learning, both on
and off the job.
Transition
Exit
Reward
$
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80 81
…or to leave the
company, which
may be through
resignation,
redundancy,
or retirement.
The company
helps its employee
to move into a
new role, which
may be in another
business it owns…
how companies work
Human resources
Develop
Manage
performance
The company sets targets
and helps individuals to
improve performance
so they contribute to
business results and get
the most out of their job.
An induction program
explains the new role and
introduces the team. HR
gives a briefing on pay, tax,
and benefits such as leave,
insurance, and pensions.
The business has processes
to help people improve their
skills, competencies, and
knowledge, through formal
or informal learning, both on
and off the job.
Transition
Exit
Reward
$
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How it works
The human resources function
manages the process. Increasingly,
line managers are involved as
well because the tools are often
accessible via company intranet.
Recruitment starts with the
company identifying a vacancy—
the need for someone to do a job,
and pulling together information
about the exact nature of the role.
Aspects to consider include the
job’s purpose, tasks required, and
the outputs or deliverables of the
job holder, as well as how the role
fits into the organization’s structure.
This information forms the basis
of a job description and person
specification. The search can then
begin. The company’s own website,
recruitment agencies, commercial
job boards, and advertisements in
the press are traditional ways of
attracting the attention of people
outside the organization. Internet-
based routes are now common too.
Today, application forms are often
directly submitted online, triggering
automatic responses and sorting
of candidate details.
Placing the right person in the right job is vital for the success of
the organization—this is the process of recruitment and selection.
Technology is changing traditional hiring pathways.
Recruitment and
selection
STAYING PUT
People tend to stay in a job during
a recession. Nine million workers
were hired in the second quarter
of 2009 (mid-recession) in the US,
down from 12.8 million in the last
quarter of 2007 (pre-recession), a
fall of about 30 percent. According
to the Bureau of Labor Statistics,
80 percent of this decline came from
a fall in “churn”, when workers in
developed economies change jobs,
rather than a dip in job creation.
94%
of recruiters
in the US used,
or planned
to use, social
media for
recruiting
in 2013
Job description and
person specification
Clear written statement
of the role, including job
title, purpose, duties,
responsibilities, scope,
and reporting structure,
as well as competencies
and qualities required. It
is used in the recruitment
process to provide a clear
guide for both applicants
and interviewers.
Person specification
Summarizes the necessary
or desired criteria for
candidate selection,
including required skills
and/or competencies for
the role, experience, and
educational qualifications.
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how companies work
Human resources
Applications
The curriculum vitae (CV) or résumé is
the essential document, often with
a cover letter. Companies
may use an application
form instead.
Internal search
Looking at internal
resources first creates
opportunities for career
development and
progression, improving
employee engagement
and retention.
External search
Increasingly, companies and
candidates use professional
networking sites such as
LinkedIn and social media
such as Facebook or Twitter.
External candidates diversify
the workforce but cost more
to attract.
Selection
After HR has
drawn up
a shortlist,
candidates are
assessed by
individual face-
to-face interviews,
group assesssment,
and psychometric
testing.
Appointment
Companies may ask for
references and/or request
a medical examination for
the chosen candidate. The
employment offer is a legally
binding contract that sets
out the terms and conditions
of the job.
Personal
recommendation
Some companies
encourage existing
employees to introduce
friends as candidates.
CONTRACT
Psychometric tests Often used
as an initial screening method,
these aim to assess attributes such
as intelligence, aptitude, and type
of personality, using verbal and
non-verbal reasoning tests and
behavior questionnaires.
NEED TO KNOW
US_082-083_Recruitment_and_Selection.indd 83 21/11/2014 16:38
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