In the 18th century, the U.S. economy was primarily agricultural, dependent on crops such as wheat and cotton. During the 19th and early 20th centuries, however, the United States experienced an Industrial Revolution. With this revolution, the economy shifted largely toward production of raw materials, such as iron and steel, and finished products, such as cars and refrigerators. Although there were great differences between the agricultural society of the 18th century and the industrial society that followed, in both cases, the economy was based on the goods produced.
Today, however, an increasingly large portion of the economy depends on service industries. A service industry is one in which the main product is not something that can be sold in a store but rather is a set of actions performed for a client. The service itself is the product that is sold. This shift toward a service economy has contributed to the growth of the human resources industry, abbreviated to HR.
Just as agricultural and industrial economies thrive when there are plenty of high-quality natural resources available, a service economy succeeds based on the quality of its workforce. Therefore, the function of the human resources industry is to produce competent personnel and to keep employees productive.
The increased emphasis on human resources is not limited only to service industries. High-tech, goods-producing industries, such as the computer industry, are placing greater importance on the quality of their personnel. Such industries are especially vulnerable to human error, because the smallest mistake in a complex computer system can make the entire system unusable. The more technical skills involved in the design, manufacture, marketing, and sales of a product, the more competent a company's workers must be. Meeting these increased demands has caused new developments in the field of human resources. In the past, human resources professionals, sometimes referred to as personnel specialists, served primarily as technicians with such responsibilities as hiring and training workers, managing payroll, and dealing with labor issues.
Today, HR professionals are being entrusted with a broader, more conceptual, and strategic set of responsibilities. They may set up job classifications and employee benefits systems. In addition, they often work with top management to devise plans for the optimal use of human resources. For example, HR professionals often advise management on policies to reduce absenteeism and on methods to improve morale and productivity.
In recent years human resources professionals have realized the importance of having a good training and development program for their employees. By teaching employees the latest in computer software programs, sales techniques, safety procedures, and other workplace skills, the company ensures that it can remain competitive in the future. New theories of adult education have enhanced the effectiveness of such employee training and development programs, and today, human resources professionals can choose from several different modes of instruction to find the educational program that best fits the needs of their employees. Some of the different forms of instruction include interactive CD-ROMs, DVDs and videos, webinars and trainer-led workshops and orientation sessions.
Another important responsibility of human resources professionals is the employee benefits program. In order to attract the best employees, build loyalty, and maintain employee morale, companies must offer attractive benefits programs. HR professionals use their expertise to design benefits packages that are most effective for their companies. In addition, HR professionals must be sensitive to the needs of their employees and ensure a non-hostile workplace. In large, multinational corporations, an international human resources department is often created to meet the needs of U.S. citizens working in foreign countries, as well as people from other countries working in the United States.
The essence of HR management is transforming an input, which is an employee or group of employees, into an output, which is a job well done. To effect this transformation, HR professionals use systems that acquire, develop, allocate, conserve, utilize, evaluate, and reward workers.
Human resources management encompasses several job responsibilities, which may be carried out by one person or by a number of specialists. Different kinds of specialists include human resources generalists, employment and placement managers, employer relations representatives, personnel managers, industrial relations directors, job-development specialists, job analysts, compensation managers, training instructors, benefits managers, employee health-maintenance specialists, mediators, and employment, placement, and recruitment specialists. Other occupations in the HR field include ergonomists, employment firm workers, and career and employment counselors and technicians.