Labor Relations and Human Resource Management

Labor Relations and Human Resource Management (HRM) encompass a range of activities aimed at managing an organization's workforce effectively. HRM has evolved from its historical roots in labor relations, which focused on managing interactions between management and labor unions, to a more integrated approach that plays a critical role across various business functions. Today, HRM involves recruitment, training and development, legal compliance, and the creation of organizational policies that promote a positive work environment.

Core competencies, such as communication, ethics, and strategic planning, are essential for HR professionals to add value to their organizations and support overall business objectives. HRM also plays a vital role in developing fair grievance procedures, ensuring legal compliance, and fostering employee morale through various initiatives, including wellness programs and training opportunities. Furthermore, HRM is increasingly involved in strategic planning, helping organizations adapt to global market challenges and cultural dynamics.

In a modern context, effective HRM practices contribute significantly to employee retention, motivation, and overall corporate success, making it a critical component of any organization’s strategy in today's complex business landscape.

Published in: 2021

By: Westmark, Fred

Subject Terms

Labor Relations and Human Resource Management

Abstract

This article examines the different business activities Human Resources participates in. These areas cover employment activities, training and development, and legal compliance. Human Resources should have core competencies which contribute to the overall growth and profitability of the company. Core competencies include ethics, communication, and strategic planning. By combining Human Resources experience and knowledge with the above areas and core competencies, Human Resources can be a valuable asset for a company.

Overview

This article explains the evolution and growth of Human Resource Management (herein referred to as HR) from simple labor relations functions (or complicated as the case may be) to modern HR functions in all areas of a company's activities. HR, in addition, provides an important resource to address areas where job responsibilities are ill defined or muddied. In today's business world, HR also provides much needed expertise in company newsletter publishing, website maintenance, morale boosting and wellness programs.

In addition, and most importantly, HR has core competencies which add value to the company's bottom line. These competencies are discussed because they are the heart and soul of any company's success. HR's involvement in business is limited only to HR's imagination, ability, expertise, and competency. Anca-Ioana (2013) demonstrates the key role of HR in finding and exploiting competitive advantages that underpin a company's success against rivals who also seek to recruit the best talent and establish lean and purposeful organizational structures.

The core competencies of HR are: Communication, ethics, training, conflict resolution, motivation, record keeping, recruitment, negotiation, strategic planning, morale building, and legal knowledge.

Of the many core competencies listed above, few are extremely critical to the success of HR. Communication is the most important competency. Communication includes both the spoken and written word. Whether it is writing a company newsletter, a mission statement, or employee handbook, every employee must clearly understand what the company expects and what the company stands for. Well written documents allow for better understanding and a more effective work environment.

Legal competency requires the HR department to thoroughly know the rules and laws for equal treatment of employees. No company can afford to be labeled as discriminatory towards employees; the company's reputation is at stake. Bad press or bad public relations will make recruiting and retention difficult, and is financially damaging.

Strategic planning is a newer area for HR. In the past, most companies left strategic planning to upper management. Today, however, with globalization and complicated work environments, HR is asked to assist management and give input on many aspects of planning for the future in areas such as: future training needs, recruitment requirements, and work environments. HR must have the tools and knowledge to help develop these long range plans. The twenty-first century company is likely multinational in at least some respects. Marler (2012) explores and compares HR strategies from the United States, China, and Germany—three large economies with strongly cultural based business practices. Edwards et al. (2013) suggest that rather than attempting to impose a single monoculture on a multinational company, or even apply a primarily socioeconomic model based on national economic systems, HR practices should strive to harmonize local cultures with overall company strategies.

With employee contact on a day to day basis, ethics is endemic to all areas of the company's operations and this is especially true for HR. Every organization must have a value system to operate under. HR must insure that every employee knows and understands the business ethics of the company. If employees know the company follows and acts within sound and moral business practices, the employees will aspire to these ideals. HR must act in the same manner as the company. Where HR provides leadership, others will follow.

In the last century and before, HR, also known as the personnel department, grew out of the need for businesses to manage and work with labor unions. Labor unions grew in response to capitalism and the industrial revolution.

On a day to day basis, businesses needed a department to manage the ever present issues and difficulties between management and labor. Labor relations demanded mechanisms to deal with labor grievances against management. As labor contracts became more complicated and sophisticated, HR's role increased. HR continues to participate in grievance committees and grievance procedures, but management demands that HR assist with bargaining talks over labor contracts. HR also reviews other company's labor contracts and surveys these companies regarding salaries and wages. Federal and state laws need to be read and contracts brought into compliance.

Today, HR accomplishes the above tasks and responsibilities, but as the modern world has become more complicated, so has the HR role. HR should develop a reasonable and specific procedure to handle employee grievances. The procedure should be simple and clear. Employees must believe HR is unbiased and reasonable in the pursuit of resolving differences. Employees must believe their problems will be handled in a professional and timely manner. Both employees and managers should believe HR will not take sides in favor of one party or the other.

HR also takes on the role of developing training programs so the company has a trained and skilled workforce. HR continues to grow in response to many companies' development and continued growth.

Application. HR still holds grievance hearings, etc. but only 10.7 percent of the US workforce was unionized as of 2016 (US Bureau of Labor Statistics). Most unions are in the government sector and the traditional heavy industries such as automobile manufacturing.

HR still processes employment applications, but now, instead of advertising in newspaper help wanted ads, HR helps departments to advertise employment on the company's web site or other employment web sites such as monster.com. Resumes now come to HR via e-mail or through on-line applications. Job descriptions should be available to assist HR.

HR is also tasked with developing and updating job descriptions. Job descriptions are necessary for managing the employment process. They inform an employee of responsibilities, duties, reporting hierarchy, and evaluation parameters. Job descriptions are the joint responsibility of HR and the department actually employing the employee. These descriptions should be concise and specific—making sure to avoid generalities. For new candidates, the description provides an accurate idea of what is expected from an employee.

Because job evaluations and success monitoring are based on the job description, the employees can measure their success against the employment standard; the job description. All job descriptions should be reviewed by HR and each department head annually or sooner if the position is being revised and changed.

In many companies, HR is the initial screener of candidates. For example, if a company is planning to add another accountant, the initial HR screening may be used to "weed out" the non-degreed candidates or candidates without the necessary background. The needs and requirements will vary from department to department.

To assist in the hiring process, HR must ensure the candidate is acceptable and qualified. The information provided on the employment application must be verified. All references should be checked. Work history must be verified. Educational background and degrees should be checked. If the company requires back ground and credit checks, these also must be reviewed and verified. Please note that not all companies require these types of checks. Many companies now require drug testing. HR has the responsibility to order the tests and review them when received. All these requirements assure the company that the candidate is acceptable.

In another important area, the company should have an employee handbook which is given to all employees, particularly new employees. Normally, the handbook is written by HR because HR is the repository of company rules and procedures regarding employment. The handbook should cover and include all areas of employment activities such as holidays (paid or not), grievance procedures, company's mission statement, promotion guidelines, vacations, etc. The handbook should be as detailed and specific or as general as management requires.

HR is routinely tasked with reviewing and updating the handbook. Many companies use ring binders for their handbook so old pages can be removed and new revised pages inserted without having to reprint a new handbook every time a change takes place. It is most important that HR keep the handbook up to date to reflect changes in company policies and the legal changes required by law.

Another area of HR's involvement is the development of the company's organizational chart. Many companies use the organization chart to identify reporting responsibilities, e.g. who reports to whom. The best organizational chart is one based upon functionality. Who, for example, should the accounting function report to? A well-conceived chart should address all company functions. People come and go, but the functions will remain. Organizational charts are a pictorial representation of a company's activities. Employees will find a reporting hierarchy easier to visualize. HR needs to maintain and update the chart as needed, but must, at the very least, perform annual reviews of the chart.

HR is responsible for maintaining current benefits information for all employees. If benefits are to be changed or adjusted, HR will research and then advise management of the best choice(s). Once management has decided, HR will install and administer the new benefit program. The task of administration includes enrollment, answering questions, verification of enrollment, distributing benefit pamphlets or booklets, and maintaining liaison with the benefit provider. HR becomes the information resource for employee benefits.

Part of the benefits monitoring process includes the benefit improvements and employment practices of competing companies. In order to stay competitive and attract the best candidates, HR should closely monitor other companies for competitive wages and benefits.

HR must be knowledgeable and familiar with all types of benefit programs the company offers so that programs can be monitored for effectiveness and usage. Benefits range from medical benefits to dental benefits to death benefits to disability benefits to adoption benefits to vision benefits, etc. Employees normally come to HR for answers and help. HR should be familiar with all insurance forms used by benefit providers so employees can fill out the forms accurately to receive payment with no delay.

HR also maintains and updates legal changes in company rules and policies with regards to employment and benefits. Management will undoubtedly request HR to give its opinion and input about legal changes. Such changes may include the areas of diversity, discrimination and harassment, equal employment opportunity (EEO), affirmative action, privacy, and employee rights.

Federal and state legislation normally applies to most companies and therefore provides a "level" playing field. Beyond the level field, opportunities exist for a company to present itself as an attractive employer and recruit the best candidates. HR should reveal these opportunities.

HR also takes part in the bidding process between benefit providers. HR's job is to solicit bids for services in order to maximize benefits and minimize cost. If HR develops strong working relationships with benefit vendors, every cost saving opportunity can be exploited.

In union/management negotiation, HR has a major role to play regarding benefits. Every wage and benefit addition has a cost and HR must be able to calculate that cost. Management will rely on HR to provide dollar amounts to the labor contract changes so that everyone in the negotiations will have knowledge of the true costs of doing business. HR becomes a valuable tool in the negotiations.

Another area of a company's activities in which HR performs a critical function is training and employee development. Every employee brings to the company some education and skills. It's HR's task to harvest and improve employee skills to help all to become more valuable and contributing employees.

The whole process of training and development begins with the new employee's orientation. First impressions are lasting impressions. Usually, the first people an employee meets are the HR people. These people need to be bright, enthusiastic, helpful, and positive. New employees will have many questions about the company and the employee's coming role in the company. HR should put the employee at ease and provide all necessary information to allay any doubts or questions.

As employees learn their jobs and settle into the work environment, HR will continue to provide information and assistance to insure a smooth transition in company employment. HR will also help to provide any training needed to bring the employee up to the job requirements and skill levels. In order to perpetuate job improvements for the employee, the employee should be encouraged to attend local schools for upgrading skills or obtaining a relevant degree. HR should be available to assist and inform the employee on these matters. There also may be a possibility that the employee needs career advice.

The largest area of training for HR is in management training. Most companies try to promote from within. In order to have a solid and effective management team, employees' skills need to be developed by the company. HR is responsible for providing internal and external management training. Local colleges can provide management or management related courses. HR should have working relationships with these educational vendors that offer courses that are valuable to honing in-house talent.

Some employees have yearly professional development courses they must take to retain their licenses, e.g. accountants, nurses, doctors, etc. HR should be familiar with these professional needs and arrange with the employee to fulfill these requirements. In job descriptions and career development rules, training and educational requirements will be listed. Employees focused on promotion may need course(s) to satisfy job requirements.

Training can also keep employees fresh in their outlook and skills. Employees performing the same job day after day, week after week, month after month . . . can become stagnant and bored. New challenges can revitalize employees' outlook and morale. HR can provide a positive and forward thinking work environment.

If a company has a stated preference for promoting from within, HR should review employment files for possible promotions and promotion requirements. Promoting from within is a powerful and effective morale builder. If employees know opportunity exists, they will strive to perform well in their job, knowing that if the job is well done, there maybe other jobs with better pay available. Promotion is also a great retention tool. If an employee is unable to succeed in one area of employment, perhaps movement to another area will improve the employee's performance.

HR also has responsibilities in the area of motivation. Not every employee will be positive and happy every day. On any given day, some employees will have low morale. Maybe a supervisor is having medical problems affecting their attitude and work. HR should identify these difficulties and problems and try to alleviate the issues surrounding these problems. Not every problem is solvable, but HR must be in the forefront to try and help.

Another way to motivate employees and increase morale and teamwork is company sponsored leisure activities. These can take many forms. Some companies have set up co-ed basketball teams between different departments. These activities allow employees to relax and get to know their fellow employees in an informal atmosphere. Or maybe an employee has a hobby which others are interested in. Seminars and workshops can be presented. The number of leisure activities is only limited to HR's imagination. Traditional motivators are employee of the month awards, suggestion boxes, and production achievement (individual or team) awards.

Ultimately, HR is in the business of working with employees (people). It is a peoples' business. Employees are the company's greatest resource. HR can provide an open positive environment so employees have answers and help. HR can help resolve employee-management issues with a fair and open-minded demeanor in order to deal with important differences. Maybe an employee has a serious drinking problem. Terminating the employee may be the final solution, but if the employee is a good worker, maybe alternate steps can be taken to help the employee overcome a problem or maybe some type of rehabilitation.

Wellness programs are an area where HR can take the lead and encourage employees to live a healthier lifestyle. This can range from quit smoking seminars to exercise programs for all ages. If a company has a web site, the employee section can offer healthy eating tips and cooking recipes for better living.

Besides the more traditional HR activities, there are other areas in which HR can be involved due to a lack of necessary resources within the company. Sometimes, HR manages the receptionist and the business office. Or HR can become the travel agency for the company.

Health and safety is sometimes handled by HR. HR many times is part of software development or part of a purchasing group. Sometimes, company newsletters and internal memorandums are the responsibility of HR. In addition, HR sometimes maintains the company web site and updates the site as needed, particularly in the employment area. On-line applications should be handled by HR.

One of the biggest issues facing businesses today is employee privacy. HR should assist management in developing and establishing a company-wide policy regarding privacy, both corporate and personal. No information should be given out or released to any one outside the company without management's approval. Internally, anyone requesting information regarding an employee must justify the request and have upper management's approval. All employee information must be safeguarded and secure. All files should be reviewed annually by the employee and management and any unnecessary information should be removed and destroyed.

Conclusion

In closing, HR people should possess a wide range of knowledge in the management and the operation of a company. To complete their training and education, HR personnel should take a variety of business courses in school so HR can have a firm grip on all areas of management. HR people should be generalists in the company. HR employees need to continually sharpen and learn new skills to be a beneficial contributor to the value of the company. The core competencies mentioned previously are the necessary starting point for HR. As the business grows and changes, HR must continue to expand and develop new expertise.

Terms & Concepts

Bottom Line: Net profit or loss on a project for a specific period of time.

Core Competency: Broad knowledge sets required for successful performance that span the entire organization and differentiate it from other organizations.

Functional Job Analysis: A job system analysis that examines jobs based on data, people, and things.

Functionality: Activity for which a person or department is specifically fitted or used.

Global Market: The way that all markets around the world affect one another.

Globalization: The trend towards more international markets.

Human Resource Management: The set of activities focused on the effective management and development of the organization's work force.

Job Description: A document that itemizes the tasks and responsibilities of a job.

Job Evaluation: The method of determining how much a job is worth to an organization.

Reporting Hierarchy: A chart organizing a company into orders or ranks; each subordinate to the one above it.

Retention: To remain and keep employed in the pay of the company.

Wellness Program: Company-sponsored programs which emphasize the good health of employees.

Bibliography

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Labor Relations and Human Resource Management

On this Page

Subject Terms

Labor Relations and Human Resource Management

Abstract

Overview

Conclusion

Terms & Concepts

Bibliography

Suggested Reading