Employees are a key success factor for small businesses. Companies that can attract, train and motivate the best talent have a significant competitive advantage over competitors that ignore this resource.
Since the beginning of the Industrial Age, hr departments have evolved from hr professionals simply taking employment applications to a highly specialized internal consulting organization dealing with performance management as well as training and development.
The basis for human capital management lies in making arrangements for the welfare of apprentices to master craftsmen in the Middle Ages and colonial times.
The first human relations evolution and start of the history of human resources came in the 18th century, when factories needed to hire and train thousands of workers quickly. These employees initially worked 16 hours a day, seven days a week in conditions even worse than those of medieval apprentices.
Soon, however, factory owners discovered that satisfied workers produced more and introduced programs to meet their basic needs. At the same time, federal and state governments began to regulate working conditions. This introduced a need for human resource planning to manage these variables.
Increased government regulation and the rise of labor unions led to the creation of personnel departments. During this era, which lasted from roughly 1900 to the 1960s, personnel management was essentially an administrative hr function tasked with tracking employee records, talent management, staffing retention, monitoring the performance appraisal process and implementing workplace safety, training and anti-discrimination programs.
Personnel specialists also enforced standards based upon scientific management principles, such as those of Frederick Taylor, who believed jobs should be simplified so workers could perform them in one best sequence of motions. Productivity increases or decreases provided a key measurement of personnel department effectiveness and decision making.
In the last part of the 20th century, the term "human resources" became popular. Throughout the evolution of human resource management, theories of behavioral scientists such as Abraham Maslow and Douglas MacGregor demonstrated that the need for achievement, affiliation or self-actualization was a stronger motivator for many employees than money.
The American economy increasingly became service-oriented and knowledge-based, making recruiting and retaining talented workers even more important. Human resource managers began to suggest and implement changes such as more challenging work environments, active office social communities and free time. This is an important part of employee benefits, employee engagement, and employee motivation we see nowadays.
Strategic Human Resources
HR managers today are a key part of an organization's senior management team, helping determine the company's overall business strategy.
HR processes partner with operations departments to align the goals of employees with those of the organization and facilitate creativity and innovation rather than simply train workers to perform a function the traditional way.
The human resource department also offers key advice on corporate culture as businesses merge, open offices internationally or recruit a diverse workforce.