Formation and Major Roles of an HR Department

Introduction to Human Resource Management

Human resource management (HRM) encompasses all operations that handle employee-related matters, including employment, training, compensation, policy development, and retention strategies. HRM has undergone significant changes over the last twenty years, making the field much more important to organizations today (Blaga, 2020). Within an organization, the HR department performs the following functions: human resource planning, job analysis, recruitment and administration of job interviews, appointment of personnel, orientation, training, compensation, assignment of benefits and incentives, employee evaluation, employee retention, career planning, quality-of-work-life improvement, employee discipline, sexual harassment eradication, HR auditing, maintenance of industrial relations, employee welfare, and ensuring compliance with city, state, and federal laws (Joshua, 2019).

HR professionals plan and execute all HRM practices. For example, HR professionals design a company's selection process by choosing among multiple selection exercises or adopting a sequence of activities to identify qualified candidates. Such a sequence might involve asking applicants to complete an application form, sit for an employment test, and then be invited for an interview with the HR professional and the line manager. The HR professional also orchestrates each activity within the selection process — creating the application form, sourcing selection tests from test publishers, and devising interview questions (Joshua, 2019).

HR professionals also evaluate the effectiveness of all HRM practices by monitoring and assessing all executed programs. For example, an HR professional will assess the usefulness of employment tests, the success of training programs, and the cost-effectiveness of all HRM practices. HR professionals complete performance appraisals, deliver formal training programs, and serve as consultants to other parts of the organization, advising line managers on HRM matters such as managing a problematic employee (Bartram, Cavanagh & Hoye, 2017).

Major Roles of the HR Department

A primary function of HRM is the recruitment and onboarding of new employees. The HR professional manages otherwise tedious recruitment processes, reducing both the time and expense required to complete them. The importance of the HR department in recruitment is underscored by the significant effect that poor hiring decisions can have on a business. Recruiting too few people creates a labor shortage, while recruiting too many causes expenditure to outpace revenue. Hiring unqualified candidates further harms the organization by filling it with individuals who cannot deliver expected performance. The HR department also manages onboarding — the full range of activities involved in hiring, welcoming, orienting, and integrating a new recruit into the organization's culture. Effective onboarding improves employee engagement and increases retention (Joshua, 2019).

The HR department is responsible for developing systems to evaluate employees. These systems generate periodic ratings of job performance through annual evaluations, disciplinary warnings, and improvement plans. HR also trains supervisors to provide unbiased performance feedback to employers. Additionally, the HR department works to create a cohesive work environment that allows employers to engage workers on a personal level, encouraging better performance and creating a competitive advantage for the organization (Joshua, 2019).

Another key role of the HR department is developing and maintaining a positive workplace culture. Business culture influences engagement, job satisfaction, and employee retention, and is shaped by factors such as employee pay, training and development opportunities, performance management practices, onboarding processes, and the articulation of organizational values (Joshua, 2019).

The HR department also encourages effective communication within the organization to improve cooperation, employee engagement, innovation, creativity, and client relationships. HR services that handle compensation and benefits analyses identify areas for improvement in the employer's compensation structure. Improving a compensation structure increases its appeal to employees and promotes retention (Bartram, Cavanagh & Hoye, 2017).

A further role of the HR department is creating awareness of and ensuring compliance with all local, state, and federal labor laws. This duty saves a company the legal costs of fighting lawsuits or settling claims of unfair employment practices. Legal compliance is especially important for small businesses, which may suffer financially from litigation expenses or reputationally from such claims. This concern is particularly pressing because any business with 15 or more employees is subject to federal labor and employment laws. HR must ensure that all employer policies comply with labor law, from equal employment opportunity requirements to smaller matters such as break policies. Money saved by averting potential lawsuits and settlement claims can be reinvested to grow the business's wealth, reputation, and competitive advantage (Bartram, Cavanagh & Hoye, 2017).