Page 629 - Business Principles and Management

Unit 7

23.1 Human Resources in Business

Goals Terms
• Identify the reasons human • human resources • employee assistance
resources management is impor- management (HRM) programs
tant to businesses and employees. • 360-degree feedback
• Identify and describe each of the
major human resources activities.

The Need for Human Resources

Of all the resources used by a business, probably the most important to its suc-
cess is people. People are responsible for the effective use of all other resources in
the business. People make decisions, operate equipment, maintain records, and
deal with customers. Because of their value to the business, managing people is a
critical function.
All managers work with people. However, human resources management
(HRM) consists of all activities involved with acquiring, developing, and com-
pensating the people who do the company’s work. HRM is sometimes called
personnel management. Employees’ pay, training, benefits, work environment,
and many other factors contribute to their productivity, performance quality,
and willingness to stay with the company. The people who work in human
resources management perform the tasks that help the business keep the skilled,
productive, and satisfied employees it needs to succeed.
To begin human resources planning, companies must determine the number
of people they will need in order to perform all tasks as well as the skills those
people will need. Then they must recruit, hire, and train those employees. Once
on the job, the employees will need equipment and other resources to accom-
plish their jobs. Directions provided through descriptions of job duties, policies,
and procedures help the organization operate effectively. Human resources employ-
ees take part in all of these activities.
Businesses must be sure that employees are satisfied with their jobs and moti-
vated to perform well. They need to be concerned about employee safety and
health, working conditions, wages, and benefits. Employees who are doing a
good job need to be recognized and rewarded, and those who are not must be
given training and support to improve their performance. In some cases, employ-
ees must be removed from their jobs if their performance does not improve or if
there are major changes in company operations. As you can see, working with
people involves many responsibilities.
Most companies have a department that is responsible for human resources
management. Large companies may have several specialized divisions within the
department, each of which deals with a specific area in human resources. Some
human resources activities may be performed in other departments across the
organization but are planned and coordinated through the human resources (HR)
department. Most managers regularly use the services of the human resources

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