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Published: 2013-02-15

Counseling the Human Resource Function - Understanding What HR Does



Even if you are not an "employment law" specialist you will almost certainly get involved with personnel issues that arise with your clients and will interact with their human resources professionals, often referred to as "HR". Therefore, it is important for you to understand some of the basic issues associated with counseling the HR function and this is what I intend to focus on over my next three posts of the Business Counselor Advisor on FINDLAW. This month I'll begin with discussing the strategic importance of HR, the evolution of the HR function and the scope of HR activities. You need to know a bit about all of these topics in order to understand what HR does and how you can help.

The HR function is at the forefront of a company's efforts with respect to two of the key elements of organizational design--people and organizational structure. In order for companies to successfully achieve their strategic goals and objectives they must strive to attract, motivate, and retain those employees who are best qualified to carry out the necessary activities of the company and make sure that they are placed into the right spots in the most effective organizational structure. The traditional role of HR was perceived as being largely administrative--recruiting and interviewing prospective employees, administering benefit plans and writing policies; however, forward thinking companies now realize that the HR function must be part of the company's strategic planning activities and that HR leaders must proactively suggest new policies and initiatives to the senior executives of the company in order to ensure that the company has access to appropriate knowledge and talent in each of the markets where it is active. In addition, HR managers and specialists are now involved in training and development, job analysis, oversight of workplace conditions and mediation of disputes between employees and the company.

When companies are first launched there may be little attention paid to the formal aspects of HR apart from the activities necessary to comply with the basic legal and regulatory requirements and reliance may be placed on outsourcing to handle payroll processing and benefits issues. The first full-time HR manager usually takes a generalist approach and therefore should have an extensive range of knowledge in order to adequately address all the needs of the company in the HR area as it grows rapidly. For example, the manager may be the only person working on recruiting at the same time that he or she is administering benefit plans, writing new policies and procedures and coordinating training programs. When the company reaches the point where it has hundreds, even thousands, of employees spread across multiple business units and geographies the HR function will become much larger, formal and specialized with an executive-level leader who supervises several departments that each specialize in activities such as employment and placement, compensation and benefits and training and development.

While HR issues are literally around every corner of the workplace, it is possible to create a practical framework of the main categories of "HR activities", which I like to break out as follows:

Employment and placement activities
Obviously one of the key activities of the HR function is recruitment, hiring and termination of employees. Recruiters are responsible for screening and interviewing applicants, including testing, and will typically handle reference checks and transmitting offers of employment and notices of the company's decision not to extend an offer. Given their role in the hiring process, recruiters must be fully versed in relevant laws and regulations to ensure that the company does not run afoul of the rules relating to non-discrimination and that information regarding applicants is properly collected, used and stored.

Job analysis activities
Job analysis activities include the study of the duties and responsibilities associated with various positions within the organizational structure of the company and the creation of job descriptions and position classifications.

Compensation and benefits activities
Compensation and benefits activities include establishing and maintaining the company's pay structure and administering the employee benefits programs offered by the company, including vacation and health insurance benefits and retirement plans. Compensation managers may also be involved in the design and implementation of tools that the company can use to measure the performance of workers as part of any pay-for-performance compensation program that the company decides to implement.

Training and development activities
Training and development activities include creation, procurement and conduction of training and development programs for employees in order to add value to the company by developing skills within the workforce, enhancing productivity and the quality of work and improving employee morale and loyalty. Managers in the training area are responsible for developing training programs, contracting with outside providers for training activities and setting and monitoring budgets.

Employee relations activities
Employee relations, sometimes referred to as industrial relations, is concerned with establishing and maintaining formal relations with unions and their representatives when that issue is relevant to a particular company.

Depending on the circumstances, managers and specialists within the HR function will be engaged in a variety of other activities that require particular skills, training and experience. One role that has become particularly important is involvement in dispute resolution in an effort to resolve issues that arise with employees that may lead to litigation, governmental investigations or work stoppages. Another activity in the HR area is the design and administration of HR information systems, an activity that requires participation of technical specialists who develop computer programs that can be used to process HR information, maintain appropriate records and create reports on HR-related issues. Finally, companies that expand their activities internationally will need to bring in new managers and specialists with expertise in handling overseas operations and supervising local HR personnel in foreign countries.

In my next post on counseling the HR function I'll take a closer look at the legal and regulatory environment that HR specialists needs to navigate--with your help!


Alan S. Gutterman is the founder and principal of Gutterman Law & Business (http://www.alangutterman.com), a leading provider of timely and practical legal and business information for attorneys, other professionals and executives in the form of books, online content, newsletters, programs, training and consulting services. Mr. Gutterman has three decades of experience as a partner and senior counsel with internationally recognized law firms counseling small and large business enterprises in the areas of general corporate and securities matters, venture capital, mergers and acquisitions, international law and transactions, strategic business alliances, technology transfers and intellectual property, and has also held senior management positions with several technology-based businesses including service as the chief legal officer of a leading international distributor of IT products headquartered in Silicon Valley and as the chief operating officer of an emerging broadband media company. All editions of the Business Counselor Advisor are compiled into Business Counselor Update, which is released monthly and available along with other publications by Mr. Gutterman on the West Web site or at Westlaw Next at Business Counselor. For further information on the topics covered above, see the chapter on Human Resources in Mr. Gutterman's Business Counselor's Guide to Organizational Management. Mr. Gutterman can be reached at agutterman@alangutterman.com.