Important Terminology

Human Resources

Human resources is a term used to describe the individuals who make up 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 Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers.

Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.

Human Resource Management is also a strategic and comprehensive approach to managing people and the workplace culture and environment. Effective HRM enables employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization’s goals and objectives.

Human Resource Management is moving away from traditional personnel, administration, and transactional roles, which are increasingly outsourced. HRM is now expected to add value to the strategic utilization of employees and that employee programs impact the business in measurable ways. The new role of HR Minvolves strategic direction and HRM metrics and measurements to demonstrate value.

Human Resources may set strategies and develop policies, standards, systems, and processes that implement these strategies in a whole range of areas. The following are typical of a wide range of organizations:

• Maintaining awareness of and compliance with local, state and federal labor laws
• Recruitment, selection, and on boarding (resourcing) Employee record-keeping and confidentiality
• Organizational design and development
• Business transformation and change management
• Performance, conduct and behavior management
• Industrial and employee relations
• Human resources (workforce) analysis and workforce personnel data management
• Compensation and employee benefit management
• Training and development (learning management)
• Employee motivation and morale-building (employee retention and loyalty)

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. Applicable legal issues, such as the potential for disparate treatment and disparate impact, are also extremely important to HR managers.

Employer

An employer is a person or organization that hires people to perform work in exchange for compensation, which is usually money in the form of wages or a salary. Most countries have legislation governing relationships between employers and the people they hire, setting out the rights and responsibilities of each.

An employer can be any entity from an individual hiring a babysitter to a government body or business hiring thousands of specialized professionals. In most developed nations, governments are the largest single employers although most workers are employed in small and medium businesses in the private sector.

Employers, whether individuals or organisations, maintain control over the productive base of capital and of any intellectual property created by their workers as part of their job based on the concept of “works for hire”.

Employee

An employee may be defined as:

“A person in the service of another under any contract of hire, express or implied, oral or written, where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed.”

An employee contributes labor and expertise to an endeavor of an employer and is usually hired to perform specific duties which are packaged into a job. In most modern economies, the term “employee” refers to a specific defined relationship between an individual and a corporation, which differs from those of customer or client.

Other types of employment are arrangements such as indenturing which is now highly unusual in developed nations but still happens elsewhere.

The employer-worker relationship

An employer’s level of power over its workers is dependent upon numerous factors, the most influential being the nature of the contractual relationship between the two. This relationship is affected by three significant factors: interests, control and motivation. It is generally considered the employers’ responsibility to manage and balance these factors in a way that enables a harmonious and productive working relationship.

Employer and managerial control within an organization rests at many levels and has important implications for staff and productivity alike, with control forming the fundamental link between desired outcomes and actual processes. Employers must balance interests such as decreasing wage constraints with a maximization of labour productivity in order to achieve a profitable and productive employment relationship.

Value of labor

The value of work is also informed by the economic system in which it functions.

Capitalism allows the marketplace to determine the value of a good or service based on demand, rather than impose a value on a good or service. In a communist environment, the state determines the value a job may have, and may also open or close avenues to those jobs, creating less of a sense of freedom as to who may occupy those jobs.

Socio-psychological concepts of freedom, self-actualization, motivation and aspiration are thus tested in a society where a person is not taught the value of contributing to enterprise. The capitalist system suggests that success is unlimited or directly proportional to how much an individual wants to work at it, while opponents of communism suggest that imposing value takes away the motivation for someone to be better at their job than the next guy who isn’t working as hard but the value in what they do is fixed regardless of performance.

While different countries subscribe to and build their societies on different approaches, clearly “work” plays a great role in the definition of a society and its culture.

The Surrealists and the Situationists were among the few groups to actually oppose work, and during the partially surrealist-influenced events of May 1968 the walls of the Sorbonne were covered with anti-work graffiti. Bob Black is an anarchist author who is well known for exploring the ideas of opposition to work in the essay The Abolition of Work, published in 1985.

Globalization and employment relations

The balance of economic efficiency and social equity is the ultimate debate in the field of employment relations. By meeting the needs of the employer; generating profits to establish and maintain economic efficiency; whilst maintaining a balance with the employee and creating social equity that benefits the worker so that he/she can fund and enjoy healthy living; proves to be a continuous revolving issue in westernized societies.

Globalization has effected these issues by creating certain economic factors that disallow or allow various employment issues. Economist Edward Lee (1996) studies the effects of globalization and summarizes the four major points of concern that affect employment relations:

• International competition, from the newly industrialized countries, will cause unemployment growth and increased wage disparity for unskilled workers in industrialized countries. Imports from low-wage countries exert pressure on the manufacturing sector in industrialized countries and foreign direct investment (FDI) is attracted away from the industrialized nations, towards low-waged countries. 
• Economic liberalization will result in unemployment and wage inequality in developing countries. This happens as job losses in un-competitive industries outstrip job opportunities in new industries. 
• Workers will be forced to accept worsening wages and conditions, as a global labour market results in a “race to the bottom”. Increased international competition creates a pressure to reduce the wages and conditions of workers. 
• Globalization reduces the autonomy of the nation state. Capital is increasingly mobile and the ability of the state to regulate economic activity is reduced. 

What also results from Lee’s (1996) findings is that in industrialized countries an average of almost 70 per cent of workers are employed in the service sector, most of which consists of non-tradable activities. As a result, workers are forced to become more skilled and develop sought after trades, or find other means of survival. Ultimately this is a result of changes and trends of employment, an evolving workforce, and globalization that is represented by a more skilled and increasing highly diverse labour force, that are growing in non standard forms of employment (Markey, R. et al. 2006).