HUMAN RESOURCES DEPARTMENT

Human Resources Department

Introduction

Corporate Social Responsibility (CSR) is the establishment of optimistic corporation character and its image in front of the community through first-class efforts that creates an edge by focusing on generation of profits as well as contribution in the social, economic and financial development. Company's reputation and its brand perceived by public hold great importance for the company.

The company's actions are analyzed more often now, especially when the actions have a direct impact on the society, therefore managers have to think about this while decision making process. Companies that display a good social identity means they usually gain a competitive edge. A representative from the HR department would help the Humphrey Group in dealing with compensation ethics during the meeting involving the board of directors and senior level managers including the CEO. HR can contribute by leading, educating and guiding the firm regarding the importance of CSR. HR can be the key tool used by Humphrey Group to ensure what they are saying and the message they are sending out to the public is transcendent with how internal stakeholders are treated within the organization.

The 'Bonus scandal' Problem

Economic recession and bonus scandals have put major companies with such highly paid managers under public scrutiny which the Humphrey Group cannot afford to underestimate the impact it could have on the business. The Humphrey Group understands that this general conception is relevant to major firms around the world. The firm need to show the public that it gives great attention and importance to their CSR and HR is a great tool to do this because HR people are in a great position as they usually have the appropriate knowledge and skills required when it comes to organizational behavior and cultural change. Different approaches of executive compensation are explained, one of them is the agency approach. This approach highlights the problems with managers receiving huge amounts of bonuses and pursuing their interests but at the same time a solution is offered too. This solution presents the idea that CEOs and directors need to have their incentives based on performance and should be changing their bonuses to an equity-based venture in their firm.

Large firms around the world are developing a perception that there is a manipulation of information by managers for their own gain, and this implies managers are not concerned about the long term position of the firm; this has a major impact on society as the recent economic recession has proved. HR can help improve the image of the firm by changing policies, organizational behavior and cultural attitudes. HR leaders set the tone of their employees in the way they act according to the organizational culture and thus achieve their goals for their CSR because employees are an important stakeholder for such SCR plans.

The corporate scandals which are revealed in compensation and fraudulent accounts can cause a grave damage to the corporation. Agency theory explains that the major reason or such a scandal is the relation ...