Continued from previous article "What are Human Resources and Why Should It Matter to You?"

Macro HR is the strategic function of HR in a particular work environment. Macro HR encompasses the understanding of what HR means to a business. That is, how HR fits into the organization’s structure, mission and planning. Macro HR further incorporates policy and practice development and designating who administrates HR. Additionally, collective bargaining and union avoidance campaigns are generally considered macro related concerns. Some of the vernacular related to macro HR is strategic planning and organizational design and development.

Micro HR is the actual execution of duties as delineated at the macro level. These duties include the administration of policies regarding the selection, hiring, compensation, placement, performance management, promotion, conflict resolution, discipline and discharge of employees. Some of the terms commonly associated with micro HR are operations planning, practices, procedures and administration.

How Macro and Micro HR Impact the Bottom Line

As stated above, a business will encounter difficulties when it fails to account for changes to macro and micro HR practices and changes to our labor and employment laws. Such difficulties include an unsafe workplace, attendance issues, conflict, misconduct, union organizing campaigns, high turnover and litigation. Simply stated, when a business encounters HR related problems, money is lost.

Businesses have money coming in through the "front door" via revenue, venture capital, grants, investors, etc. However, much of this money can exit through the "back door" because of poor HR practices. For instance, time and money is lost when a business realizes, after-the-fact, that it hired the wrong employee and may now have to discharge that employee. Consequently, that business now has to spend money and time finding and training a new employee and may even have to defend its treatment and discharge of the former employee.

Recognizing and efficiently resolving these problems often costs a great deal of time, energy and money. However, time and energy spent upfront, proactively, on HR related matters could help to reduce, and in certain instances eliminate, the loss of money out the "back door." Thus, HR becomes an investment in capital. Time, energy and money is saved and increased productivity and profits result. This ideology is commonly referred to as preventive, positive or proactive HR. Also, this is sometimes referred to as the human capital management philosophy.

Knowing which HR practices to adopt and which HR disciplines to focus on is crucial in resolving macro and micro HR issues. A competent HR professional knows which disciplines and policies to focus on and understands how the legal environment affects HR. A competent HR professional also knows that effective HR helps transform business from just a place to work into an environment which provides employees varied opportunities for meaningful contributions. Meaningful employee contributions lead to decreased operating costs, innovation and increased profits. Implicit in this explanation is the fact that results are measurable via means such as before and after analysis and time and expense audits.

More about Utilizing an HR Attorney as a Consultant will be explained in my article next week. Do look out for it.

As a labor and employment attorney and businessperson, Charles Krugel has represented management in hundreds of negotiations, in-house and 3rd party proceedings. Charles has over 13 years of experience in the field and he has run his own successful management side practice for the past 7 years.

• 1 Comments

  

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Investing in HR is definitely a long-term investment in capital. The returns will become visible only in the future, it's not immediate.

 Posted by: Sano at November 11, 2007 2:25 AM

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