The 7 Major Functions of HR Activities

Human resources (HR) departments are considered one of the essential areas of a company’s operations. They manage everything from new hire paperwork to employee complaints and management oversight. While the HR department is responsible for a wide range of duties, the core job is to handle the “people” side of the business.

Almost every industry requires HR professionals. However, few people outside the field of human resources understand or appreciate how critical these roles are to a company’s success.

Human Resources activities fall under 7 major functions: Recruitment and Employee Screening, Company Benefits and Compensation, Performance Evaluation, Employee Relations, Enforcement of Disciplinary Actions, Employee Records, Continued Education.

In this post, you’ll discover the seven major functions of a human resources department and why they’re essential to the success of a business. If your company has hit a performance plateau or experienced issues with a reliable workforce, it may be time to reinvest in one of these areas of HR activity.

1. Recruitment and Employee Screening

Acquiring new talent is a crucial HR function that every business needs to prioritize if they wish to grow. HR professionals tend to be at the forefront of the recruitment process. They will likely be present at a candidate’s first interview and work with hiring managers in specific departments until hiring.

Finding the right people is a crucial task for HR. After all, people are the most valuable component of a successful company.

When a new job or a position opens up, the hiring managers will pass the job details on to the human resources department and third-party recruiting firms. During this process, HR professionals will use a wide range of tools to identify the right talent.

Some of the tools include:

• Background checks
• Interviews
• Checking references
• Digital assessments

Using these processes helps protect the company culture and reduces the risks of a bad hire. Background checks are vital to avoid any lawsuits or liabilities from hiring an underqualified applicant.

Once they find the right people, HR professionals will also help with the onboarding process to transition them to their new working environment.

2. Company Benefits and Compensation

A company can attract highly sought-after employees by providing them with appealing benefits and fair compensation. Additionally, providing proper compensation and benefits can be an excellent way to motivate current staff and decrease employee turnover rates. This is why it is considered one of the most crucial functions of HR.

Maintaining payroll, benefits, and company culture is an essential function of the HR department. Companies need to create attractive salaries while minding profit margins to sustain growth. As a result, HR monitors employee pay and ensures adherence to all company cultural standards.

Employee compensation comes in two forms:

• Primary Compensation. Money in exchange for work (salary) and performance-based pay ( commissions, meeting quotas, etc.)
• Secondary Compensation. Non-monetary forms of compensation include holidays, paid time off, company vehicles, housing, 401K, etc.

HR professionals craft unique and attractive forms of compensation to motivate current employees and attract top-tier talent for new positions.

3. Performance Evaluation

Around 90% of employees would prefer to forgo performance reviews and have management evaluate and correct their mistakes in real-time. A knowledgeable HR department can help to meet employee and management needs.

Assessing performance is one of the essential HR functions of the department. They can implement tools to gather data to analyze and report back to the company executives.

Furthermore, they ensure that performance is always on track to meet company standards. HR professionals may also create training programs for managers on how to evaluate and improve employee performance.

HR departments can improve performance metrics that include:

• Learning how to set/monitor company goals
• Providing feedback to employees
• Recognizing accomplishments
• Developing clearer communication channels among teams

Read more: What Is Human Resource Management? What To Know

4. Employee Relations

Companies are required to maintain a safe and healthy working environment for all employees. A positive and constructive company culture motivates employees to stay and perform at their best. The HR department is responsible for maintaining and managing good employee relations, a critical aspect of HR functions.

HR professionals are responsible for resolving any issues or disputes among employees. They are also required to form policies that enforce a fair workplace for all staff.

An HR professional needs to view all employees as stakeholders and primary contributors to the company’s success. Doing so will encourage those in management positions to gather feedback and criticism about the workplace to make improvements.

Working with people isn’t always easy, so having a competent HR department is vital if a company wants long-term growth. Company policy is constantly changing, so HR is also responsible for implementing new policies as they become appropriate.

5. Enforcement of Disciplinary Actions

This HR function can make the professionals in the department unlikeable among other employees. Let’s face it: nobody likes to be disciplined or told to change their behavior. However, it’s necessary for maintaining a healthy and happy workplace.

That said, HR can protect the business’s reputation by implementing these rules and disciplinary actions with respect and professionalism. Tardiness tends to be the most common problem that HR departments need to address. Being late once or twice is often understandable, but routine tardiness can disrupt company productivity.

If an employee is constantly late even after a warning, HR may need to investigate. However, they can do so in a manner that benefits the business and maintains a level of respect for the employee in question.

Instead of reprimanding the employee and enforcing disciplinary actions, they can try to use effective communication. For example, they may ask the employee for a reason for their routine tardiness. Maybe there’s a personal issue preventing them from arriving on time, but they weren’t comfortable sharing it with their manager.

In that case, HR can work with the employee to try and see if there’s a solution to the tardiness.

6. Employee Records

Even in a world full of technology, company offices are still handling overwhelming amounts of paper files. Regardless of whether files are kept digitally or in file cabinets, managing all employee records is one of the most important HR functions. All documents need to be stored neatly and follow a specific standardized security protocol.

Some essential records that HR manages are:

• CVs/resumes
• Employee verification documents
• Licenses, certifications, and other credentials
• Records of performance
• Retirement & termination files
• Training and career development documents
• Payroll and compensation records

Since many of these records contain sensitive information about employees and shareholders, HR needs to ensure that this data is protected. Fortunately, a vast array of software is available to help human resources professionals organize and safeguard their employee records.

7. Continued Education

Learning opportunities in the workplace are an excellent way to ignite company growth. As current systems become outdated, HR is responsible for finding and implementing training programs to ensure that employees are at the forefront of cutting-edge technology and other instruments.

Adding new assets will increase company productivity and make everyone’s lives much more manageable. While the company funds new programs and systems, it’s up to HR to ensure everyone makes it through the transition.
Some forms of continued education are:

• E-learning. The virtual world is quickly becoming highly beneficial to businesses across a wide range of industries. Today, there are numerous websites where employees can sharpen their skills and contribute more to their employer. Whether a marketing class or a crash course in human psychology, HR can offer these virtual learning experiences to whoever needs them.
• Job Training. Let’s say a company is trying to break into a new market. In that case, their sales and marketing team will need to collaborate on new ways to market and sell their services. HR might find some learning materials that will help form a new path for a small selection of employees.
• Diversity Training. Diversity is a significant contributor to company growth. Staff must understand the importance of diversity inclusion. HR may conduct exercises to help educate current employees on diversity and create a more open-minded working environment.

Continued education is something every company needs if they want to stay ahead of the competition. A competent HR team can ensure that all the educational resources are readily available, and ensure that all employees have the skills and knowledge to perform at their best.

Final Thoughts

HR is a company sector that has to wear many hats. They need to continually ensure that their people are happy, healthy, and contributing to the organization.

While sometimes this is easier said than done, HR can utilize a variety of tools to streamline their processes.

If you’re an HR professional who needs help acquiring the right talent, reach out to our team at ScoutLogic. We’ve helped numerous HR departments and recruiters conduct background screenings for job candidates to ensure they’re working with the right people.

Contact our team today to learn more about how ScoutLogic can make acquiring talent quicker and easier.

David Garcia

David Garcia, co-founder and CEO of Scout Logic, is an industry leader in the bulk background check world. With his strategic acumen and expertise in the HR sphere, specifically in hiring, recruiting, legal compliance, background checks, and resume screening, he’s an invaluable asset and consultant.

David's counsel extends across the boards of ScoutLogic, YipitData, and Supplier.io, drawing from his impactful stints on the boards of Infutor and Avetta. With an extensive 25-year journey, he champions unparalleled B2B commercial leadership within data & analytics, significantly shaping the HR landscape.