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The field draws upon concepts developed in Industrial/Organizational Psychology. Human resources has at least two related interpretations depending on context. The original usage derives from political economy and economics, where it was traditionally called labor, one of four factors of production. The more common usage within corporations and businesses refers to the individuals within the firm, and to the portion of the firm's organization that deals with hiring, firing, training, and other personnel issues. This article addresses both definitions.

The objective of Human Resources is to maximize the return on investment from the organization's human capital and minimize financial risk. It is the responsibility of human resource managers to conduct these activities in an effective, legal, fair, and consistent manner. Human resource management serves these key functions:

1. Recruitment Strategy Planning
2. Hiring Processes(recruitment)
3. Performance Evaluation and Management
4. Promotions
5. Redundancy
6. Industrial and Employee Relations
7. Record keeping of all personal data.
8. Compensation, pensions, bonuses etc in liaison with Payroll
9.Confidential advice to internal 'customers' in relation to problems at work.

Human resource development

In terms of recruitment and selection it is important to consider carrying out a thorough job analysis to determine the level of skills/technical abilities, competencies, flexibility of the employee required etc. At this point it is important to consider both the internal and external factors that can have an effect on the recruitment of employees. The external factors are those out-with the powers of the organization and include issues such as current and future trends of the labor market e.g. skills, education level, government investment into industries etc. On the other hand internal influences are easier to control, predict and monitor, for example management styles or even the organizational culture.

In order to know the business environment in which any organization operates, three major trends should be considered:

* Demographics – the characteristics of a population/workforce, for example, age, gender or social class. This type of trend may have an effect in relation to pension offerings, insurance packages etc.
* Diversity – the variation within the population/workplace. Changes in society now mean that a larger proportion of organizations are made up of "baby-boomers" or older employees in comparison to thirty years ago. Also, over recent years organizations have had to become more diverse in their employment practices to cope with the lower work ethic of the newer generations. The service industry for example, has embraced those "baby-boomers" desiring to reenter the workforce. Traditional advocates of "workplace diversity" simply advocate an employee base that is a mirror reflection of the make-up of society in so far as race, gender, sexual orientation, etc. These advocates focus on the social engineering theory without understanding the more important points: diversity of ideas to prevent stagnation of products and business development; expanding the customer base through "outreach"; and profit. Alarmists and advocates of social engineering theory cite a "rise in discrimination, unfair dismissal and sexual/racial harassment cases" as an indicator of the need for more diversity legislation. While such measures have a significant effect on the organization, they effect little or no real change in advancing diversity of ideas in the workplace. Anti-discrimination laws and regulations do require businesses to undertake a cost-benifit analysis. The result of this analysis is often to adopt an approach that generally recognizes gender, racial, and sexual orientation diversity as a cheaper alternative to fighting endless litigation. In summary, diversity, based on social engineering “is about creating a working culture that seeks, respects and values difference” without regard to how diversity increases productive and unity of effort.
* Skills and qualifications – as industries move from manual to a more managerial professions so does the need for more highly skilled graduates. If the market is ‘tight’ i.e. not enough staff for the jobs, employers will have to compete for employees by offering financial rewards, community investment, etc.

In regard to how individuals respond to the changes in a labour market the following should be understood:

* Geographical spread – how far is the job from the individual? The distance to travel to work should be in line with the pay offered by the organization and the transportation and infrastructure of the area will also be an influencing factor in deciding who will apply for a post.
* Occupational structure – the norms and values of the different careers within an organization. Mahoney 1989 developed 3 different types of occupational structure namely craft (loyalty to the profession), organization career (promotion through the firm) and unstructured (lower/unskilled workers who work when needed).
* Generational difference –different age categories of employees have certain characteristics, for example their behavior and their expectations of the organization.

Recruitment methods are wide and varied, it is important that the job is described correctly and any personal specifications stated. Job recruitment methods can be through job centres, employment agencies/consultants, headhunting, and local/national newspapers. It is important that the correct media is chosen to ensure an appropriate response to the advertised post.

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