Management 4

The Human Resources Cycle We’ve been talking about how people within a business interact with each other, both in terms of hierarchy and structure. There’s another important piece to consider, and that is the role of each person individually and his or her relationship to the organization. Each individual employee is on a journey within the business, which we’re calling the human resources cycle. This path starts when the business recruits a person, and it continues as the person works at the business, earns rewards, improves her performance, develops professionally, and transitions into new roles or exits the company.

Why does human resources matter? Well, no matter how good a business concept is, it’s nothing if you don’t have the people who can make it a reality. In the words of one business thought leader, “Great vision without great people is irrelevant.” But a business doesn’t just need smart people. It needs the right people in the right jobs, getting the right opportunities, support, and development. All of that is the function of human resource teams.

The human resources cycle captures the six steps or stages of human resources: recruit, employ, reward, manage, develop, and transition or exit. We’ll look at each of these in turn.

Recruit Once a business realizes it needs to hire someone, it must define the role that needs to be filled. That means figuring out the purpose, duties, and deliverables of the job —and drafting the job description. After the job description, the human resources team writes the person specification, which summarizes the knowledge, skills, experience, and education of an ideal candidate. It should guide both applicants and the business in determining whether an applicant is an appropriate hire.

Once the job description and person specification are finalized, the search begins. There are a few sources of applicants. First, a business often looks internally to existing employees who may be seeking advancement or a change across departments, known as a lateral change. Second, a business might encourage its current employees to recommend friends. Finally, a business may seek external applicants. For a broad external search, businesses may use traditional venues like career fairs, job boards, or recruiters, but it’s very common now to also seek applicants through social media and networking sites such as LinkedIn, Facebook and Twitter.

Employ After collecting applications, the HR team reviews each applicant’s curriculum vitae, also referred to as a resume, and cover letter, compiling a shortlist of the most promising candidates. Interviews and other assessments often help to identify the best candidate. In some cases, references are also required so that the human resources team can verify the accuracy of the information provided by the candidate and hear from those who know her best. When the team agrees on the best candidate, an offer is made, typically in the form of a formal letter referred to as an offer letter or an employee contract. If the candidate is not satisfied with the terms of the offer letter, there are sometimes negotiations regarding salary and benefits. When an agreement is reached, the employment contract is signed and the candidate is hired—and becomes a new employee.

Reward We all know that people work in order to earn a living. But there are lots of other reasons to work as well! Non-monetary rewards can often do an even better job of motivating workers than money can.

Extrinsic rewards are essentially monetary rewards, and include pay and benefits, such as holidays and health insurance. Intrinsic rewards are non-monetary and come from the way a person thinks and feels about the job. Intrinsic rewards might include an employee’s sense of purpose in getting the job done, ownership and responsibility, and the satisfaction of making progress and a job well done.

Although intrinsic rewards relate to the employee’s thoughts and feelings about the job, businesses can have a significant impact on those intrinsic rewards for each of their individual employees in the following ways:

Purpose: A clear mission and vision for the organization, and clear expectations for the employee

Recognition: Praise and constructive feedback for the employee

Development: Education, mentoring, and opportunities for advancement

Culture: A team-oriented, transparent organization

Manage The job of taking care of a business’s people doesn’t end when the people are hired and rewarded. After that, everyone still needs ongoing management. Why? To make sure everyone is working together well to meet the organization’s goals— and their own.

The traditional performance management cycle has five steps. First, an employee sets goals for herself based on what she wants to accomplish and what the business needs. Second, the employee and the HR team have an ongoing dialogue about what the organization expects of the employee and what the employee’s work looks like. Third, HR team members and others in the organization provide

feedback and coaching on the employee’s work and decisions to help her become more efficient and effective. Fourth, a formal review involving the employee’s manager and possibly others gives the employee insight into how she can improve. Finally, high-performing employees receive promotions and pay raises.

Develop Hand-in-hand with management comes development. A business can invest in its people by providing additional training opportunities, both on the job and outside the business. Development can include classes, books, trainings, and even formal education or degrees. That’s good for individuals, who continue to get better at their own jobs and become more qualified for promotions. It’s also good for the business, which reaps the benefits of having workers who are continually learning about their fields, the business, and the changing world in which they operate.

Transition or Exit There are two ways that an employee’s human resources cycle ends—although, as you’ll see, the cycle never really ends. One possibility is that the employee transitions to a new job in the same business. This can happen when the employee undergoes enough development that he or she is qualified for a promotion. It can also happen when the employee decides she is interested in a different business unit and wants to make a lateral move—not a promotion, but not a demotion either. In either of these cases, the human resources cycle starts again with that individual—usually with a streamlined recruitment process.

The other way an employee’s human resources cycle ends is on exit—when the person leaves the business completely. A person can leave a business for many reasons: he finds a job he likes better at a different company, the business no longer needs her at the company, or he retires and leaves the workforce entirely. Except in the case of retirement, the human resources cycle just begins again when that person joins a different business.