What’s Human Capital, Human Resources & Labor & Employment Law & Labor & Employee Relations? & How Can HC/HR Improve a Business’ $?
* What are Human Resources & Human Capital & Why Should It Matter to You?
* Micro & Macro HR
* How Macro & Micro HR Impact the Bottom Line
* What is Labor & Employment Law
* What are Labor & Employee Relations
* Examples of Labor & Employee Relations & Law in the Workplace
* Why Utilize an HR Counselor & Attorney?
* Why Utilize Charles Krugel?
What is Human Resources & Why Should It Matter to You?
The simplest definition of human resources (HR) is that it’s the approach, the philosophy, a business adopts for the acquisition & management of employees. My philosophy is that it’s most effective for businesses to think of acquiring & managing employees in a manner similar to that of any other capital asset. This is why I also call HR human capital (HC), & probably why the HC label is increasingly popular. Now what exactly does employees being a capital asset mean?
Employees are human & they’re a business resource. However, in the same way that machinery or equipment is capital that appreciates or depreciates in value, & which can be improved, sold or discarded, HC/HR relates to the management of employees in a similar manner.
Although the above explanation may seem callous, when further scrutinized, it’s evident that effective HR pays as much attention to the “human” half of its name as it does to the “resources” or “capital” half. It concerns:
- The approach & ideology a business adopts for its culture & employment.
- It’s how a business enhances & protects its human assets; & ultimately how a business maximizes profits.
- Recruiting, selecting, compensating, motivating, maintaining & promoting employees are all core aspects of HR.
- Consequently, to some extent, all businesses with more than one employee practice HR.
- A business’ HR philosophy or strategy may be multidisciplinary or may be singular in approach.
- Yet, an effective HR philosophy has to acknowledge that because employees affect every facet of business, employees & HR affect profit.
For example, an HR ideology may focus more on labor & employee relations than on organizational culture & development. Yet, an effective HR philosophy has to acknowledge that because employees affect every facet of business, & are the human face of business, employees have the greatest impact on productivity & profits.
Therefore, in order to improve productivity & profits, & decrease employment related expenses, management must know how to treat employees in a fashion which enhances their value. Ultimately, effective HR helps to maximize profitability by minimizing employment related expenses & maximizing employee performance.
In U.S. industry, modern HR theories date back to the Industrial Revolution. Moreover, since the Industrial Revolution, HR has evolved along with changes in production, distribution, finance &, perhaps most importantly, legal & civil rights. HR poses problems for a business when it fails to understand how these changes influence macro & micro HR practices.
Micro & Macro HR
Macro HR is:
- The strategic (big picture) purpose of human capital management in a particular company.
- It encompasses the understanding of what HR means to a business.
- It’s how HR fits into the organization’s structure, mission & planning.
- Macro HR further incorporates policy & practice development.
Micro HR is:
- The actual execution of those duties mandated at the macro level.
- These duties include the administration of policies regarding the usual core functions of HR; e.g., recruiting, hiring, compensation, benefits, etc.
How Macro & Micro HR Impact the Bottom Line
As stated above, a business will encounter difficulties when it fails to account for changes to macro & micro HR practices & changes to our labor & employment laws. Such difficulties include an unsafe workplace, attendance issues, misconduct, union organizing campaigns, high turnover & 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 leave through the “back door” because of poor HR practices. For instance, time & money is lost when a business realizes, after-the-fact, that it hired the wrong employee & may now have to discharge that employee. Consequently, that business now has to spend money & time finding & training a new employee & may even have to defend its treatment & discharge of the former employee.
Recognizing & efficiently resolving these problems often expends a great deal of time, energy & money. However, time & energy spent upfront, proactively, on HR related matters could help to reduce, & in certain instances eliminate, the loss of money out the “back door.” Thus, HR ideology is transformed into an investment in capital. Time, energy & money will be saved & increased productivity & profits will result. This ideology is commonly referred to as “preventive,” “positive” or “proactive” HR. Additionally, this is sometimes referred to as the human capital management philosophy. It is knowing which HR practices to adopt & which HR disciplines to focus on that is crucial in resolving macro & micro HR issues.
A competent professional knows which disciplines & policies to focus on & understands how the legal environment affects HR. A competent 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 & increased profits. Implicit in this explanation is the fact that results are measurable via means such as before & after analyses & time & expense audits.
It’s knowing which HR practices to adopt & which HR disciplines to focus on that is crucial in resolving macro & micro HR issues. Labor & employment law & labor & employee relations fall into both the macro & micro categories of HR.
What is Labor & Employment Law?
These are two distinct categories which are often confused with one another because they overlap.
Generally, labor law refers to the body of laws & rules regulating labor unions & associations & their relationship with management. Such laws include the National Labor Relations Act & other similar state & local labor laws or ordinances. These laws & regulations permit employees to organize, elect representation & enter into legally binding contracts with management.
Generally, employment law concerns the body of laws & rules regulating civil rights & non-union related conduct in the workplace. Civil rights include a workplace free from discrimination & harassment for people (not necessarily an employee) who fit into one of the legally protected classes (e.g., race, gender, disability, national origin, religion, military status, pregnancy & in some instances sexual or gender orientation). Conduct laws refer to equal & fair pay, immigration & employment-at-will laws. Like labor laws, these are federal, state & local laws.
What are Labor & Employee Relations?
On the macro HR level, labor relations refers to the philosophy a business adopts for dealing with labor unions, union organizing & employee associations. On the micro level, this refers to practices & rules for dealing with individual employee issues relative to unions & associations.
Employee relations refers to the ideology (macro) a business adopts for dealing with harassment & discrimination & other employee issues, unrelated to labor unions or associations. This may include communication, discipline, recognition & payroll policies. On the micro level, it generally refers to how these laws & rules are applied to individual employees.
Examples of Labor & Employee Relations & Law in the Workplace
A company hears of a union organizing campaign. In order to prevent unionizing, the company commences an overly aggressive prevention campaign which incorporates talk of layoffs, relocation & creating new compensation & benefits policies. Consequently, the prospective union fights back by proliferating fear & filing agency complaints (e.g., unfair labor practices charges), which the company now has to defend. Thus, productivity decreases, expenses increase, morale deteriorates & the potential for unionization is significantly increased.
A supervisor receives a complaint from an employee concerning racial harassment in another department. Thinking that this has nothing to do with her department, the supervisor tells her employee to ignore it, & let the supervisor of the other department handle it. The issue falls through the cracks. Subsequently, a fight breaks out between employees in the other department. One employee is hospitalized with injuries. Another employee is arrested & fired. The arrested & fired employee is a minority who files a civil rights complaint for racial harassment & a lawsuit for wrongful discharge, intentional infliction of emotional distress & negligence. The company has little to no supporting documentation to show that it did anything to determine whether or not racial harassment existed in the workplace. Even if it wins the civil rights complaint & lawsuit, it will either have to pay thousands in legal fees or its employment practices liability insurance premiums may skyrocket.
Poorly aligned macro & micro HR practices led to the above discussed problems. It could be as simple as a business not recognizing that its HR philosophy is out-of-synch with its business strategy. Subsequently, policies are misinterpreted & incorrectly applied, & costly mistakes occur. Such mistakes further include improperly administered performance appraisals & improperly allocated wage & salary increases; all which could lead to legal exposure & liability.
The fact is, in order to prevent money from escaping out the back door, a business needs to understand & anticipate HR related issues before they arise or escalate. Usually, these issues are best resolved through means such as effective communication, policies & practices, the utilization of successful diagnostic & investigative techniques, & via effective legal counsel & representation.
Why Utilize an HR Counselor & Attorney?
Although all businesses with employees practice HR, & some even have an in-house HR department, many businesses still encounter HR related problems. These problems generally start with the conflicts between business strategy & HR practices (again, macro versus micro). It could be as simple as a business not recognizing that its HR philosophy is out-of-synch with its business strategy. Subsequently, policies are misinterpreted & incorrectly applied, & costly mistakes occur. Such mistakes include improperly administered performance appraisals & improperly allocated wage & salary increases.
- A business can hire someone to help resolve individual cases (i.e., micro issues), but without attention being paid to the macro issues, or why these problems arise in the first place, that business will most likely throw more money at resolving the same issues & continue to waste capital. I have seen this happen again & again.
- two unionized companies enter into merger negotiations.
- Neither company approaches their respective unions in a meaningful or timely manner to discuss integration issues (e.g., compensation, pensions & seniority).
- Consequently, each union commences campaigns to destroy the merger. There is further talk of boycotts, slowdowns, “blue flu” & other obstacles.
- Thus, fear & misunderstanding among each company’s officials & customers bring merger discussions to a halt. Eventually, both companies call off the proposed merger.
Or consider this example:
- company officials hear of a union organizing campaign.
- In order to prevent unionizing, the company commences an overly aggressive union prevention campaign which incorporates talk of layoffs, relocation & creating new compensation & benefits policies.
- Consequently, the prospective union fights back by proliferating fear & filing agency complaints (e.g., unfair labor practices charges), which the company now has to defend.
- Thus, productivity decreases, expenses increase, morale deteriorates & the potential for unionization is significantly increased.
Poorly aligned macro & micro HR practices led to the above discussed problems.
The fact is, in order to prevent money from escaping out the back door, a business needs to anticipate & fully understand HR related problems before they arise or escalate. This is accomplished through means such as effective communication, representation, diagnostics & policies. This is where I come in.
Why Utilize Charles Krugel?
- I train my clients to prevent macro & micro HR problems from arising & to resolve issues before they escalate.
- Because of my efforts, my clients know how to “read” & listen to their workforce.
In part, my practice focuses on educating my clients about how the various laws, agencies & regulations work, while simultaneously protecting my clients’ business interests. In other words, I don’t just represent my clients’ legal interests, I also teach proaction & prevention.
- As an owner or operator, you want to be able to resolve your employees’ problems without the intervention of indifferent third parties, such as government agencies or employee representatives. You want to hear about your issues directly from your employees not from their attorneys, their representatives or other 3rd parties. Look at it this way, do you really want bureaucrats or 3rd parties telling you how to manage your workforce or run your business?
I am not an indifferent third party because I not only understand HR & the legal environment, I understand what it is like to run a business. I do it on a daily basis. You started & run your own business. So have I.
Until a few years ago, I worked for various organizations in an HR & labor & employment law capacity. Overtime, I realized that my employment experiences & family background helped forge a distinctive counseling & legal representation style. For instance, like other attorneys, I take an objective view of the issues I deal with. However, because I interact so closely with my clients, I do this to a lesser extent than other professionals. In fact, my clients have said that one of the qualities they admire about me is that I closely identify with them. Moreover, I disliked dealing with the daily drag of bureaucracy & red-tape. So I started my own practice.
Learning about & understanding my client’s internal operations & their external competitive environment is crucial. While maintaining confidentiality, I learn as much as I can about a client’s business by talking with owners, officers & staff. Moreover, beyond the typical reading & research about a company & their industry, I attend industry exhibitions, seminars, conventions & other related events.
Perhaps even more importantly, I understand a client’s need to eventually separate themselves from me. Although I enjoy long-term & mutually beneficial relationships with clients, I recognize that if they are not learning how to resolve issues on their own & saving money, then I have failed. In fact, one of my mantras is that through utilization of my services, I hope to eventually render myself obsolete to my clients. Has this happened? Yes & no.
New issues & problems always arise & though my counseling style involves relating all issues together into the “big picture” (macro), HR issues oftentimes require too much time & effort for in-house people to resolve or they need additional training to learn how to do it themselves. Specific instances include negotiating & implementing employment agreements (hiring & separation), labor negotiations, policy & handbook reviews, & training related to updates or changes in the law.
I have devoted my entire education & experience to helping businesses with their HR needs, with particular emphasis in the areas of labor & employee relations & labor & employment law. My record is superlative, check out my client testimonials for proof. Contact me to discuss your issues & concerns about anything you have read on my blog or to discuss your business’ HR related problems.