Overview: Hiring and Managing Employees

What It Means

The task of hiring and managing employees plays a crucial role in the day-to-day operations of a company or business. By definition employees are people who work for a company, an individual, or another entity in exchange for some form of compensation, typically a money payment. In broad terms the first step toward becoming an employee of a company is referred to as the hiring process. When a company hires an employee, it agrees to offer him or her compensation in exchange for his or her labor. Employees can be hired on a temporary or permanent basis. Once a company has hired an employee, it proceeds to manage that employee for the duration of his or her service to the company. There are numerous aspects of employee management, including overseeing the process through which employees are compensated and evaluating employee job performance.

In larger companies the responsibility for hiring and managing employees generally belongs to a specific department. This department is commonly known as the human resource department, or simply human resources. Human resource departments oversee numerous aspects of an employee’s service with a company and are responsible for establishing and maintaining employee rules. Human resources is responsible for hiring employees and for making sure they adhere to an agreed-upon work schedule and also get paid. Human resources is responsible for ensuring that the company’s employment needs are addressed, by keeping track of employment openings at the company (in other words knowing when specific job positions become available) and seeing that these openings are filled in a timely manner. Human resources also deals with issues relating to employee performance and is responsible for making sure that all employees are working to the satisfaction of the company’s managers, supervisors, and executive officers.

In most companies the human resource department is also responsible for addressing employee grievances (specific complaints made by employees or groups of employees). Most employee grievances are minor; for example, employees may complain that a snack machine in the employee lunchroom lacks an adequate range of healthy food options, or an employee may request that he no longer be required to work overtime because he wants to spend more time with his family. Other employee grievances (for example, if a particular employee habitually uses abusive or offensive language or if a supervisor makes sexual advances toward his or her assistant) are more serious and will generally be brought to the attention of the company’s owner or executive officers.

When Did It Begin

In the United States the modern practice of hiring and managing employees traces its origins to the industrial revolution. The industrial revolution was a period of profound economic change that took place in Europe and the United States during the late eighteenth and early nineteenth centuries. In broad terms the industrial revolution represented the transition from an agrarian (farming) economy to an industrial (large-scale manufacturing) economy and was characterized by a number of technological innovations (in particular the use of complex machinery rather than traditional tools in the production of goods). By using machines companies were able to manufacture a far greater quantity of products, in a much shorter amount of time, than was previously possible. This process of large-scale manufacturing is commonly referred to as mass production.

In order to operate these machines, many of which were quite large, manufacturers built factories, or mills. The first modern factory in America was built in 1814 in Lowell, Massachusetts, by the Boston Manufacturing Company, a maker of textiles. A number of other companies followed shortly thereafter, and soon there were several factories operating in Lowell and in other New England cities. These early factories were designed to accommodate diverse aspects of the textile production process, from making the thread to weaving the thread into cloth.

With this shift to factory-based labor, the concept of hiring and managing employees changed radically. These early factories recruited young women from throughout the region to operate the textile machines. These women (who were commonly known as mill girls) lived in boarding houses that were owned and supervised by the various companies. The mill girls were expected to adhere to very strict moral codes, both at work and in the boardinghouses. In the factory the mill girls were supervised by foremen (men responsible for supervising employees). The size of these new workforces was unprecedented; for example, the Boston Manufacturing Company employed more than 300 young woman in its Lowell factory.

As the nineteenth century progressed a number of other manufacturers (makers of furniture, shoes, or other goods) began to adopt the model of mass production created by the textile factories. As demand for new products increased, so did demand for employees. As a consequence recruiting and managing labor became a vital aspect of the manufacturing industry.

More Detailed Information

When a company hires an employee it agrees to compensate that person in exchange for his or her labor. The hiring process is often complex and can sometimes take several weeks to complete. A number of stages are involved with hiring employees. First companies will post a job listing, either as a classified advertisement in a newspaper or another publication, on a job board (a bulletin board, often found on college campuses), on an Internet employment website, or at an employment agency (an organization that helps companies find employees, in exchange for a fee). The job listing will generally include the job title, a description of the duties the potential employee will need to perform, the amount of money the job pays, and a description of other forms of compensation, such as benefits (usually health insurance) and paid vacation time (in the United States this is typically two weeks for new employees). The job listing will also include information on how to apply for the job. Most companies ask that prospective employees begin by submitting a résumé (a document providing a detailed description of previous work experience, educational background, and relevant job skills; also known as a curriculum vitae, or C.V.).

After reviewing the résumés of various applicants a company will contact the most qualified potential employees to arrange interviews. When trying to fill a particular position companies generally consider several candidates at once, with the aim of finding the best possible fit for their needs. Although they do not actually interact with each other, these prospective employees are all in competition with each other and must therefore present themselves in the best possible light to increase their chance of getting the job. During the interview the representative of the company (either a member of the human resource department, the specific supervisor or manager for whom the job applicant will potentially work, or even the owner of the company) will ask questions concerning the applicant’s past work experience, as well as his or her career goals. The company representative will also ask the applicant the reasons why he or she feels qualified for the job in question. Generally the company representative will have a copy of the applicant’s résumé at the time of the interview, so that he or she can ask specific questions relating to the applicant’s experience. In considering the applicant’s answers to these questions, the company representative will pay attention not only to the clarity of the applicant’s ideas (in other words whether the applicant has a clear idea of what his or her responsibilities would be or whether the applicant has clear, specific goals concerning his or her future) but also to the manner in which the applicant replies. Applicants who appear focused and attentive, who are articulate, and who shape their responses intelligently will impress the company representative more than applicants who mumble or who seem bored.

Typically the number of employees working for a company is in constant flux. Larger companies must contend with continual changes to personnel, as employees retire, quit, are laid off or asked to resign, or take an extended leave of absence (for example, when an employee takes a leave of absence to take care of a newborn baby, also known as maternity leave). These changes to company personnel are commonly known as employee turnover. In managing its employees a company must often confront difficult decisions concerning a specific employee’s future with the company. Because of the effort and costs involved with hiring an employee, companies are generally reluctant to fire an employee unless his or her performance falls significantly below company expectations. In some cases (for example, when profits are lower than expected) a company is compelled to lay off a certain number of employees; this process is often referred to as downsizing. In other instances a company will want to replace an older employee with a younger employee, even when the older employee has continually met the company’s expectations over the course of a long career, in the belief that a new employee will bring more energy and a fresher perspective to a particular job. Sometimes a company will try to persuade the older employee to leave, usually through financial incentives like pensions (annual payments made to retired employees) or early-retirement bonuses. The golden boot is a term often used to describe the incentives a company offers an older employee to persuade him or her to accept an early retirement.

Recent Trends

Since the emergence of the Internet in the late 1990s, typical practices associated with hiring and managing employees have changed dramatically. On the one hand the hiring process has been transformed by the development of online employment resources, as more and more human resource specialists place job listings on websites or else recruit prospective employees who have posted their résumés online. At the same time, the Internet has transformed the ways that companies communicate with their existing employees. Electronic mail (commonly known as e-mail) has made it possible for company managers or human resource directors to pass along important information to employees more quickly and easily and accounts for a large proportion of interoffice communication in the early twenty-first century.