Human resources

Human resources refers to the collective workforce of an organisation, industry, business sector, or economy. The term encompasses all individuals who contribute labour, skills, and expertise to productive activity. A narrower related concept is human capital, which focuses specifically on the knowledge and competencies individuals possess. Other synonymous expressions include labour, manpower, personnel, and labour power. In everyday organisational usage, human resources commonly denotes the human resources department, which is responsible for managing employment relationships, overseeing recruitment, administering benefits, ensuring legal compliance, and maintaining personnel records.
Human resources departments act as an intermediary between management and employees, ensuring that organisational goals are aligned with workforce needs. The scope of HR activities includes job advertisement, candidate screening, performance evaluation, payroll processing, benefits administration, employee well-being programmes, scheduling, and record keeping. HR departments also handle employee relations, conflict resolution, counselling initiatives, and offboarding procedures. They ensure that employment practices conform to labour regulations and maintain accurate and updated personnel files, payroll systems, and benefits records.

Functions and activities

Human resources functions are central to organisational operations and are generally wide-ranging. Key activities include:

• Determining staffing needs and deciding whether roles should be filled by temporary staff or permanent employees.
• Managing recruitment processes, interviewing, and selecting candidates.
• Preparing and maintaining employee records and organisational policies.
• Overseeing payroll, compensation, and benefits, including sick leave, holiday entitlements, insurance claims, and invoice approvals.
• Administering performance management systems designed to evaluate productivity and address issues such as absenteeism, underperformance, and skills gaps.
• Developing talent management strategies including succession planning, professional development, and establishing remote or hybrid work policies.
• Enhancing organisational culture by reducing workplace politics, promoting equality, and fostering positive employee relations.
• Monitoring staff well-being and implementing motivational programmes.
• Ensuring compliance with legislation and applying HR metrics and software tools to improve efficiency.

Human resources effectiveness may be assessed through empirical frameworks such as the Stamina Model, which analyses HR performance through indicators such as capacity, resilience, and organisational alignment.

Historical evolution of human resource management

Human resource management evolved from the early practice of personnel administration. In the early twentieth century, personnel departments emerged primarily to deal with hiring, wage administration, and employee grievances. One of the first documented personnel departments was established in 1900 at the National Cash Register Company, where John Henry Patterson implemented systematic approaches to grievance handling, safety, and supervisory training following labour disputes.
During the 1910s and 1920s, personnel administration focused largely on hiring, evaluating, and compensating workers, without addressing broader organisational relationships. The Ford Motor Company famously doubled its line workers’ wages in 1914 from a daily rate of $2.50 to $5.00, an early example of how improved employment conditions can boost satisfaction and reduce turnover, which had reached 380 per cent in 1913.
From the 1970s onward, shifts in global competition, deregulation, and technological change encouraged firms to adopt more strategic approaches to workforce management. Human resource management emerged as a discipline incorporating long-term planning and organisational effectiveness. Academic programmes in HRM developed within business schools, formalising its study and practice.
Two principal definitions of HRM are widely recognised. The first, aligned with traditional personnel management, focuses on structured processes such as hiring, remuneration, and performance evaluation. The second adopts a macro-management perspective, emphasising the long-term optimisation of the employment relationship and viewing employees as central stakeholders similar to customers or competitors in a market environment.
The human relations movement, led by Elton Mayo, underscored the importance of employee communication, cooperation, and involvement. Mayo’s research demonstrated that psychological and social factors—including recognition and a sense of belonging—often influence productivity more strongly than physical conditions.

Terminological origins and labour market influences

The phrase ‘human resources’ appeared in academic literature as early as the late nineteenth century. John R. Commons referenced the term in 1893, although without detailed elaboration. It gained prominence between the 1910s and 1930s, when it was used to affirm the intrinsic worth of human beings. By the 1950s, however, the term increasingly reflected a managerial perspective in which people were considered inputs within production systems.
Economist E. Wight Bakke’s 1958 report is regarded as the first scholarly use of ‘human resources’ in its modern sense. Analyses of labour market behaviour highlight several factors influencing HR practices:

• Skills and qualifications: As economies transition from manual labour to managerial or technical occupations, demand for skilled employees increases.
• Geographical spread: Job accessibility depends on commuting distance, infrastructure, and regional development.
• Occupational structure: Mahoney’s 1989 typology identifies craft-based careers, organisational career paths, and unstructured labour roles.
• Generational differences: Different age groups exhibit varying work expectations, communication styles, and motivational drivers.

Recent terminology trends include phrases such as people operations, employee experience, employee success, and partner resources, reflecting attempts to modernise HR language and emphasise employee-centred approaches.

Criticism and debates

The human resources concept has attracted criticism, particularly concerning the implication that people can be treated as commodities or economic resources. Critics argue that individuals are inherently social and creative beings whose contributions cannot be reduced to financial metrics. These concerns have influenced international labour standards and management frameworks.
ISO 9001:2000, for example, emphasises defining and communicating responsibilities rather than classifying people as resources. Similarly, the International Labour Organization’s principle that “labour is not a commodity” reflects resistance to objectifying workers.
In heavily unionised countries, social welfare systems and labour protections promote mobility and skill development, allowing employees to move between organisations with minimal conflict and supporting productivity at the national level.
Another controversy concerns global labour mobility and the ethics of human capital migration. Developing countries frequently argue that immigration policies in developed nations contribute to ‘brain drain’, limiting their economic progress by drawing away highly skilled workers in whom they have invested. This issue is widely recognised in international policy debates on sustainable development and labour rights.

Contemporary HRM and organisational significance

Modern human resources practice integrates administrative functions with strategic management. Organisations now view HR as central to fostering innovation, maintaining competitiveness, and building adaptive cultures capable of responding to economic and technological change. Human resources professionals contribute to shaping organisational policies, enhancing diversity and inclusion, and promoting well-being to support long-term performance.
Increasing adoption of HR analytics, digital HR systems, and evidence-based management has transformed HR operations. Data-driven decision-making enables organisations to assess workforce patterns, optimise talent acquisition, and evaluate training effectiveness.