Human resource management (HRM) refers to the design of formal programs to enhance the effective and efficient use of employees to achieve organizational goals. In essence, it is the people practices and ranges from hiring new employees to developing them into successful organizational members to managing their separation from the company. Human resource (HR) professionals administer these programs and can be generalists or specialists. Generalists have some knowledge about each HR function (i.e., jack-of-all trades), while specialists are experts in one particular function such as recruitment, labor relations, or training (Guest, 2003).
IBM considers that human capital describes the intangible collective resources possessed by individuals and groups within a given population. These resources include all the knowledge, talents, skills, abilities, experience, intelligence, training, judgment, and wisdom possessed individually and collectively, the cumulative total of which represent a form of wealth available to nations and organizations to accomplish their purpose. Human capital is available to generate material wealth for an economy or a private firm (Guest, 2003). In a public organization, human capital is available as a resource to provide for the public welfare. How human capital is developed and managed may be one of the most important determinants of economic and organizational performance. At IBM, the field of HRM covers many functions, which are briefly described in the following text:
* Equal employment opportunity laws prohibit discrimination against applicants and current employees based on their demographic characteristics—such as race, gender, religion, national origin, age, and disability—in all terms and conditions of employment. Human resource professionals must ensure that all employment decisions are based on merit or other nondiscriminatory reasons (Wright, et al, 2001).
* Job analysis is the process of describing the essential tasks, duties, knowledge, skills, and abilities needed to successfully perform a job. The outcome of this process is a job description that can be used to determine what skills applicants need, what type of training should be conducted, what to evaluate employees on, and so forth.
* Human resource planning entails forecasting the number of employees who will be needed (demand) and the availability of workers (supply) as well as creating programs to remedy any mismatch between demand and supply. To resolve an employee shortage, HR professionals can recruit new employees, hire temporary workers, outsource, require overtime, or reduce turnover. Likewise, when there is a surplus HR can conduct layoffs, implement job sharing, reduce work hours or pay, or transfer workers (Wright, et al, 2001).
The management of human capital is diffused throughout an organization. All management decisions and actions that affect the nature of the relationship between the organization and its employees are seen as important. As a result, all management actions can positively or negatively affect the potential of human capital to influence organization performance. In this view, although the organization may contribute to the development of human capital, its ownership rests with each ...