Importance Of Human Resources Within A Business Commerce Essay

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Human Resource is becoming more popular within a business, but why is it so important? I will look through the key role and responsibilities of Human Resources to see how they benefit a business, although the roles of Human Resources may vary from business to business there are several key roles in which usually take place. There is no set definition for 'Human resources' but usually is used to describe any approach to managing people and each business may have different objectives of how Human Resource helps improve their business. I will also look into how Human Resources are carried out in smaller businesses as well as larger corporations, and whether they perform similar roles with any other member of staff. I will also look at how Human Resources have helped a business succeed so well in what it does. As a subject I am passionate about and the subject I am going to study at university. This will help me gain a true understanding of human resources.

Firstly, before discussing the main roles and functions of human resources it is important to understand how and why it was developed. During the middle of the last century, larger corporations (mainly corporations US that emerged after the Second World War) recruited members from the US Military and were able to apply training, leadership, and management development techniques. These skills were originally developed by the Armed Service. These people usually worked with university-based occupational psychologists. This then caused some leading European globalised corporations, such as Shell and Phillips to develop new approaches to personnel development and used similar approaches already used in Civil Service training. The role of Human Resources grew throughout the middle of the 20th century. Arguments occurred over academics that had preference of either 'soft' or 'hard' HR. Those who preferred 'soft HR' favoured areas of Employee enhancement Improving Commitment, quality and flexibility of employees that play important roles in a business's success. Those who favoured 'hard HR' preferred more "Human resource is deployed to achieve a business goal just like any other resource department" approach and favoured cost minimisation and lean production.

One of the first areas of Human Resource is recruitment; this could be internal or external but is seen as one of the most fundamental roles of a Human Resource department. The reason that this is so important is that if each vacancy has a big amount of applicants, and it is important to the company that they employ the most competent and skilled employee for the job role on offer or the business itself. The role of Human Resources is to assess the potential employees, the assessment itself may vary dependant on the business itself, but usually asses the skills, abilities and the character of the person, some businesses may ask their Human Resource manager to assess employees by asking them 'behavioural interview questions' in which potential employees are asked how they would solve or react to certain circumstances. In larger business this is a vital responsibility for the Human Resource department, in smaller businesses however, if they lack a HR manager or department it's usually the business owner, or manager that would manage this employment process. In some cases however some smaller businesses use 'out sourcing' this is where they may employ a HR manager just for certain jobs or contracted to only a few hours a week. This is used as it makes the manager's job easier and doesn't cost as much as employing a full time HR manager. The employment process in a smaller business may also not be as in depth or intense as what it would be in a bigger business with a HR department.

Human Resources also help improve employees with training schemes and also employ people on internships. Training can be needed for many reasons and it is also not dependant on how long the member of staff has been there. If there are new systems or technology in place, staff training will be needed. New training may also need to be given for legal requirements or to keep the business one step ahead with-in the market rather than falling behind with old procedures. Training is not only for skills but also training can be given to help employees with their attitudes to work, help boost confidence and increase motivation. This type of training is sometimes done through meetings or staff workshops. It is up to the HR department to assess the employees and decide who needs training, what sort of training needs to be provided and who by. This increases employee morale as well as production of work and is highly valued for many businesses. With internships new employees need a sense of direction, although they did well in the interview process they still need to familiarise themselves with the companies processes and functions, this is so that new employees know the companies targets and makes them work more efficiently. Smaller businesses may use similar but probably less direct schemes. For an example they may employ somebody at a law firm on an internship, but wouldn't be as dedicated to staff training as a big corporation.

Organisational Planning is another responsibility of Human Resources. Organisational planning ensures that the business is ready for any future engagements which will include the employees. The role of the HR department is to make sure that there is enough staff in each departments, this also means they need to make sure there isn't too many. "The Department is also responsible for setting day to day objectives necessary for streamlining activities within the organisation and thus ensuring that work is not just done haphazardly." (Hyde, 2004). This is helpful for the business itself and the employees, it sets employees targets and high up management can see if the company is improving and moving forward. This is more important in larger businesses, as a small business it is much easier to see where the problems are occurring and as there is a smaller amount of employees they are much easier to manage and direct.

Another key responsibility of HR is performance appraisal. Performance appraisal is important to keep staff morale high. This could include benefits such as bonuses, awards and promotion schemes. The HR department evaluate the performance of employees, and if an employee has been performing above their expectations, they are awarded accordingly. "If the HR department includes these incentives, then it will ensure that employees are satisfied with the Company. It will also contribute towards good staff retention rates. This is especially crucial in increasing stability within the organisation. It also makes employees identify with the firm and instils a sense of loyalty." (Handy, 1999) In smaller businesses the manager would be the one who offers these incentives, but could be based on the relationship with the manager himself, rather than staff performance. This is totally dependent on the culture of the business itself but is mainly seen in bigger organizations, ones of which have a much bigger turn-over.

Improving the business culture itself is also a responsibility of HR. This is done in different stages and is done with a lot of attention to detail and analysis. In the first step HR needs to find out what makes up the business culture in its current state and how improving it would be beneficial to the employees, stakeholders and the organization itself. "In this stage, HR should try to explain to all staff members or stakeholder the advantage of transforming the culture in the organisation. This should be made clear so that all can see the advantages at the individual level and not simply at the organizational level." (Erica, 2006) The next step is for HR to promote the idea of change to the employees themselves, the employees need to be pro-change and HR needs to remove any doubts that may be of concern to any employees. The next step is to analyse various aspects, to be certain that the culture can change. Certain factors and featured need to be checked and researched in order to be sure that the change can be successful and benefit the business accordingly. HR also needs to make employees understand that there are no perfect situations for implementing change. The data is then analysed as to whether it is too little or too much and how helpful the data is. Employees should also be reached for data which helps implement the change. HR needs to be sure that there are benefits of the change and reassure employees of the benefits, the changes need to be implemented with the use of planning and sticking to a deadline. "Through this scheme HR Department should be able to change the culture in the organisation and add value to it." (Harold, 2003)

Now that some of the main responsibilities of human resources have been defined I will now discuss in how it has helped a business excel itself. Starbucks is one of the fastest growing companies in the world and it was set up in 1971 in Seattle America. As a company Starbucks paid close attention to the people it hired, and believed that they created a different atmosphere which is how they got on top of their competitors. The recruitment used by Starbucks is "To have the right people hiring the right people". There were certain qualities that Starbucks looked for when hiring employees, such as dependability and the ability to work as a team. When they posted vacancies they stated the qualities they were after so people decide for themselves whether they are suited to the job or not. Starbucks also invested a lot of time and money into training their employees, not only full time employees but also part-time employees. However in the early 2000's Starbucks expanded greatly, and was spending more money on Human Resources methods of staff training. This began to show financially as the price of their coffee went up slightly, Starbucks did not reveal the amount it spent on employees, and they did state that they spent more on employees than it did on advertising, which stood at $68.3 million in fiscal 2004. Starbucks is still around today and invests money in other projects, and still makes quite a substantial turn over.

It's fair to say that small businesses still perform some roles of what a department of HR would perform, but this would typically be left to the manager or the owner of the business. With small businesses there are generally less members of staff meaning it would be cheaper for the manager to do it, but this is less effective as somebody who specialises in HR. It wouldn't be fair to say however that Human Resource isn't needed in a small business; as if it wishes to survive some practices do need to be put in place. Most small businesses are highly dependent on staff, and keeping up their morale should be a key factor to the company's managers or directors. Some businesses will reach for external help and outsource for a human resource manager to come in and keep the business organised for several hours a week, and this is becoming increasingly popular as many smaller businesses are wishing to grow or exceed further within the market. In reflection their maybe some businesses that don't need Human Resources for example businesses such as hair dressers and market stalls, these are usually small family ran businesses and the lack of need for Human Resource within them is self apparent.

I believe from my research I have gained a much more in depth understanding of Human Resources and how it helped a company develop by it roles and responsibilities. I believe that generally Human Resources are needed within a business, whether it is a department or Human Resource related practices. I believe that if a business has a person or a group of people who specialise in Human Resource it can open new doors for the business and help the business succeed and develop not only to survive in the current market but for the future too. There is a saying of "A happy workforce is good for business" and it is true that the key to any business is its employees and there is no better example of this that Starbucks. Even though Starbucks invested a lot of money into its Human Resourcing it still stands today. A business can develop its own training and do this effectively with the help of Human Resource, employees can be moulded to the company itself and familiarise themselves with the set procedures. With the current economic climate change for a business is in evitable, with the help of Human Resource a business can learn how to adapt to these changes and the employees can learn new skills and develop techniques in order for the business to move forwards. New techniques and strategies are being developed and Human Resource is now a standalone study subject at university, I believe that the need for Human Resource is growing and will soon become an important area of business just like finance and sales. Although the main objective of Human Resources is not to make the business money, it objective is to get the most out of the employees. The more trained and the happier the employees are the more trust towards the business is developed, and the more employees work to a high potential and develop job satisfaction, the business will inevitably make more profit in the long run.

Sources / References:

Beardwell, J & Clayton, T (2007) Human Resource Management: A Contemporary Approach, Financial Times/ Prentice Hall; 5th edition

Harold, K. (2003): Project Management: A systems approach to planning, scheduling and controlling, Blackwell publishing

Erica, W. (2006): Strategic public relations management planning, University of York Publishers.

Handy, C. (1999): Understanding Organizations fourth edition, Penguin.

Hyde, J. (2004); Managing and Supporting People in organization, Bailliere Tindall.