What is Human Resource?
Human resources is used to describe both the people who work for a company or
organization and the department responsible for managing resources related to
employees. The term human resources were first coined in the 1960s when the value
of labor relations began to garner attention and when notions such as motivation,
organizational behavior, and selection assessments began to take shape.
Human resource management (HRM):
Human resource management is a contemporary, umbrella term used to describe the
management and development of employees in an organization. Also called
personnel or talent management (although these terms are a bit antiquated), human
resource management involves overseeing all things related to managing an
organization’s human capital.
The policies, practices, and systems that influence employees’ behavior, attitudes,
and performance. Human resource management is therefore focused on a number of
major areas, including:

Recruiting and staffing

Compensation and benefits

Training and learning

Labor and employee relations

Organization development
Due to the many areas of human resource management, it is typical for professionals
in this field to possess specific expertise in one or more areas. Just a few of the
related career titles for HR professionals include:

Training development specialist

HR manager

Benefits specialist

Human resource generalist

Employment services manager

Compensation and job analysis specialist

Training and development manager

Recruiter

Benefits counselor

Personnel analyst
There are several important HRM practices: analyzing work and designing jobs,
attracting potential employees (recruiting), choosing employees (selection), teaching
employees how to perform their jobs and preparing them for the future (training and
development), evaluating their performance (performance management), rewarding
employees (compensation), creating a positive work environment (employee
relations) and supporting the organization’s strategy (HR planning and change
management).
HRM practices can be valuable. Decisions such as whom to hire, what to pay, what
training to offer, and how to evaluate employee performance directly affect
employees’ motivation and ability to provide goods and services that customers
value. By influencing who works and how those people work, HRM contributes to
basic measures of success such as quality, profitability and customer satisfaction.So
HRM helps determine the effectiveness and competitiveness of businesses.
Competitiveness: A company’s ability to maintain and gain market share in its
industry, this is linked to effectiveness.
Effectiveness: Is determined by whether the company satisfies the needs of the
stakeholders.
Human capital: An organization’s employees, described in terms of their training,
experience, judgment, intelligence, relationships, and insight.
In terms of business strategy, an organization can succeed if it has a sustainable
competitive advantage (is better than competitors at something and can hold that
advantage over a sustained period of time). Therefore, we can conclude that
organizations need the kind of resources that will give them such an advantage.
Human resources have these necessary qualities:
1. Human resources are valuable. High-quality employees provide a needed
service as they perform many critical functions;
2. Human resources are rare in the sense that a person with high levels of the
needed skills and knowledge is not common. An organization may spend
months looking for a talented and experienced manager or technician;
3. Human resources cannot be imitated. To imitate human resources at a highperforming competitor, you would have to figure out which employees are
providing the advantage and how. Then you have to recruit people who can
do precisely the same thing and set up the systems that enable those people to
imitate your competitor;
4. Human resources have no good substitutes. When people are well trained and
highly motivated, they learn, develop their abilities, and care about customers.
It is difficult to imagine another resource that can match committed and
talented employees.
5.  Responsibilities of HR Departments
6.  Responsibilities of HR Departments
7.  Responsibilities of HR Departments
8.  Responsibilities of HR Departments
Responsibilities of HR Departments:
 Job analysis: The process of getting detailed information about jobs.
 Job Design: The process of defining the way work will be performed and the
tasks that a given job requires.
 Recruitment: The process through which the organization seeks applicants for
potential employment.
 Selection: The process by which the organization attempts to identify applicants
with the necessary knowledge, skills, abilities, and other characteristics that will
help the organization achieve its goals.
High-performance work system:
An organization in which technology, organizational structure, people, and
processes all work together to give an organization an advantage in the competitive
environment.
Maintaining a high-performance work system may include development of training
programs, recruitment of people with new skill sets, and establishment of rewards
for such behaviours as teamwork, flexibility, and learning.
Managing (un)voluntary turnover:
It is clear that many managers have been slow to pick up the relationship between
retention and organisational performance. To compete effectively, organisations
must take steps to ensure that good personnel is motivated to stay in the organisation
and low performers leave the company. What needs to be done to retain employees
involves compensation and benefits.
Involuntary turnover: Turnover initiated by an employer (often which employees
who would prefer to stay).
Voluntary turnover: Turnover initiated by employees (often when the
organization would prefer to keep them).
Replacing workers is expensive, and new employee need time to learn their jobs. In
addition, people today are more ready to sue a former employer if they feel they
were unfairly discharged. Effective human resource management can help the
organization minimize both kinds of turnover, as well as carry it out effectively when
necessary.
Realistic job preview:
Background information about a job’s positive and negative qualities - can get
around the problem (that the job is misrepresented) and help organizations minimize
turnover among new employees. On the whole, the research suggests that realistic
job previews have a weak and inconsistent effect on turnover. Realistic job previews
are helpful, but have a weak and inconsistent effect on job turnover compared to
personnel policies and actual job conditions.
Recruiting and selection:
Any activity carried on by the organization with the primary purpose of identifying
and attracting potential employees. It thus creates a buffer between planning and the
actual selection of new employees. Because of differences in companies’ strategies,
they may assign different degrees of importance to recruiting. In general, all
companies have to make decisions in three areas of recruiting: personnel policies,
recruitment resources and the characteristics and behavior of the recruiter. These
aspects of recruiting have different effects on whom the organization ultimately
hires.
Personnel policies influence the characteristics of the positions to be filled.
Recruitment sources influence the kinds of job applicants an organization reaches.
And the nature and behavior of the recruiter affect the characteristics of both the
vacancies and the applicants. Ultimately, an applicant’s decision to accept a job offer
and the organization’s decision to make the offer depend on the match between
vacancy characteristics and applicant characteristics (see the figure below).
1. Recruitment: the process through which the organization seeks applicants for
potential employment.
2. Selection: the process by which the organization attempts to identify applicants
with the necessary knowledge, skills, abilities and other characteristics that will
help the organization achieve its goals.
To reduce a surplus, downsizing, pay reductions, and demotions deliver fast results
but at a high cost in human suffering that may hurt surviving employees' motivation
and future recruiting. Also, the organization may lose some of its best empoyees.
Transferring employees and requiring them to share work are also fast methods and
the consequences in human suffering are less severe. A hiring freeze or natural
attrition is slow to take effect but avoids the pain of layoffs. Early-retirement
packages may unfortunately induce the best employees to leave and may be slow to
implement; however, they too are less painful than layoffs. Retraining can improve
the organization's overall pool of human resources and maintain high morale, but it
is relatively slow and costly.
 Training: A planned effort to enable employees to learn job-related
knowledge, skills, and behavior.
 Development: The acquisition of knowledge, skills, and behaviors that
improve an employee’s ability to meet changes in job requirements and in
customer demands.
The process of HR planning:
Two of the major ways that societal trends and events affect employers are
through:

Consumer markets: affect the demand for goods and services;

Labour markets: affect the supply of people to produce goods and services.
Organizations should carry out human resource planning so as to meet business
objectives and to gain an advantage over competitors. To do this, organizations need
a clear idea of the strengths and weaknesses of their existing internal labour force.
They also must know what they want to be doing in the future: what size they want
the organization to be, what products and services it should be producing, and so on.
This knowledge helps them define the number and kinds of employees they will
need. Human resource planning compares the present state of the organization with
its goals for the future, then identifies what changes it must make in its human
resources to meet those goals. The changes may include downsizing, training
existing employees in new skills, or hiring new employees.
Goal setting and Strategic Planning:
The second step in human resource planning is goal setting and strategic planning.
In the goal setting and strategic planning stage, the plans are ideally derived from
assessment of Labour Demand or Labour Supply Forecasts and often supplemented
by expert judgment. The purpose of setting specific quantitative goals is to focus
attention on the problem and provide a benchmark for determining the relative
success of any programs aimed at redressing a pending labour shortage or surplus.
The goals should come directly from analysis of labour supply and demand and
should include a future prediction and a timetable for when results should be
achieved.
#Selection of Employees:
Selection process: Poor hiring practices are costly because there are eroding
advantages of strategic HRM practices in terms of planning, job analysis and
recruitment, high costs from the perspective of the Resource Based View, there is
poor performance of inappropriately selected job candidates, costs associated with
dismissal of inappropriately selected job candidates, effects on survivors (demotivating symbolic effects of dismissal of inappropriately selected job candidates),
time to look for a new candidates, and loss of or damage to reputation of company.
In general, poor selection methods have a profound effect on recruitment and
performance. Therefore, careful selection practices are vital. The most important
considerations when choosing the selection methods include: that the selection
decisions are congruent with the strategic goals of the organization, the selection
criteria for the post to be filled, the acceptability and appropriateness of the methods,
the abilities of the staff involved in the selection process, the administrative ease,
time factors, accuracy, and cost. Moreover, the selection methods should be highly
related to the particular job.
At most organizations, selection includes the following steps;
1. Screening applications and resumes;
2. Testing and reviewing work samples;
3. Interviewing candidates;
4. Checking references and background;
5. Making a selection.
Criteria for evaluating selection methods:

Reliability: the extent to which a measurement is free from random error
(correlation coefficients);

Validity: the extent to which performance on a measure (such as a test score)
is related to what the measure is designed to assess (such as job performance);
o
Criterion-related validity: a measure of validity based on showing a
substantial correlation between test scores and job performance scores. Note:
the types of criterion-related validity include: predictive validation and
concurrent validation;

Predictive validation: research that uses the test scores of all applicants and
looks for a relationship between the scores and future performance of the
applicants who were hired;

Concurrent validation: a measure of validity based on showing a substantial
correlation between test scores and job performance scores.
o
Content validity: consistency between the test items or problems and the kinds
of situations or problems that occur on the job. Content validation has
limitations: a) an assumption is that the person who is to be hired must have
the knowledge, skills, or abilities at the same time she is hired. So it is not
useable when the person is expected to learn the job. b) Because subjective
judgement plays a large role in content validation it is critical to minimise the
amount of inference involved on the part of judges. c) Content validation
would be inappropriate for assessing more abstract characteristics such as
intelligence, leadership and integrity etc;
o
Construct validity: consistency between a high score on a test and high level
of construct such as intelligence or leadership ability, as well as between
mastery of this construct and successful performance of the job. Construct
validity establishes that the test actually measures a specified construct, such
as intelligence or leadership ability, which is presumed to be associated with
success on the job.

Generalizability: valid in other contexts beyond the context in which the
selection method was developed. A selection method also should be
generalizable, so that it applies to more than one specific situation.
Generalizability is the degree to which the validity of a selection method
established in one context extends to other contexts such as different
situations, different samples of people, and different time periods. The three
contexts include different situations, different samples of people, and different
time periods. The aim is to find out whether a selection method is valid in
other contexts beyond the context in which it was developed;

Utility: the extent to which something provides economic value greater than
its cost. Each selection method should have utility, meaning it provides
economic value greater than its cost. Utility is the degree to which the
information provided by selection techniques enhances the effectiveness of
selecting personnel in organizations. It is impacted by reliability, validity, and
generalizability. In general the more reliable valid and generalizable the
selection method is the more utility it will have. The utility of any test
generally increases as the selection ratio gets lower, so long as the additional
costs of recruiting and testing are not excessive. Many other factors relate to
the utility of a test like the value of a product or service produced by a job, the
more value a certain job the more value there is in selecting the best personnel.
Utility depends on the job vacancy. If it involves offering a product of high
value to the company, then more money will be spent to find qualified
applicants;

Legality: finally, selection methods should meet the legal requirements for
employment decisions. Legality refers to the fact that all selection methods
must conform to existing laws and legal precedents. Various acts around the
world form the basis of legal standards to which selection methods are judged,
and challenges to selection decisions made. Legality and job relatedness go
together, which is supported by clear employment laws for all Western
European countries. Legal standards pertain to the prevention of
discrimination (e.g. sex, race, individuals with disabilities etc). All selection
methods should conform to existing laws and existing legal precedents. Three
primary laws are most common on the work floor: the civil rights act, the age
discrimination law, and the disability act.
Structured Interviews:
A selection interview that consists of a predetermined set of questions for the
interviewer to ask. There are two types:
1. Situational interviews: a structured interview in which the interviewer
describes a situation likely to arise on the job, then asks the candidate what he
or she would do in that situation;
2. Behavior description interview (BDI): a structure interview in which the
interviewer asks the candidate to describe how he or she handled a type of
situation in the past. This has the highest validity.
Talent management is the systematic attraction, identification, development,
engagement, retention and deployment of those individuals who are of particular
value to an organisation. This may be through their high potential or because they
fulfil critical roles.
Talent management includes seven components that, when implemented
strategically, combine to keep an organization on the leading edge.

Strategic Employee Planning. ...

Talent Acquisition and Retention. ...

Performance Management. ...

Learning and Motivating. ...

Compensation. ...

Career Development. ...

Succession Planning.
Job Specifications:
A job specification is a detailed description of the role, including all responsibilities,
objectives and requirements. A person specification is a profile of your ideal new
employee, including skills, experience and personality type.
A job specification outlines specific traits a person needs to do the job. Typically,
that includes the qualifications, skills and personal traits you need to be successful.
Usually,
the job
specification follows
the job description,
which
describes
the job itself and how that job fits within the company.
Job Descriptions:
A job description contains the following components: job title, job purpose, job
duties and responsibilities, required qualifications, preferred qualifications and
working conditions.
How to answer "describe current job responsibilities" in an interview?

Remember the responsibilities listed in your resume.

Connect your responsibilities to the ones in the job posting.

Use details when explaining your larger and important projects.

Describe how you use your skills to benefit the company.
A job
description is
an
internal
document
that
clearly
states
the
essential job requirements, job duties, job responsibilities, and skills required to
perform a specific role. They are also known as a job specification, job profiles, JD,
and position description (job PD).
Organizational Chart:
Organizational charts are a good way to visualize reporting relationships and team
roles in businesses, nonprofit organizations, educational institutions and
governments.
The type of organization chart you need will reflect on the type of organization you
have and what information you want to focus on conveying.
Here are four types of organizational charts:
1. Functional Top-Down
2. Divisional Structure
3. Matrix Organizational Chart
4. Flat Organizational Chart
Functional Top-Down Hierarchy
A functional, top-down organizational chart reflects a traditional business structure.
This structure shows the C-Suite at the top, followed by other senior management,
middle managers, and so on. The structure is divided into traditional departments
like IT, marketing, finance, human resources, and operations based on everyone's
functional role in the organization.
In such an organizational structure, employees with similar skillsets and
specialization are grouped together. However, they often suffer from lack of
visibility and communication with other departments.
Divisional Organizational Chart
A divisional organizational chart reflects a company organized along a product line
or specific geography. For example, in a car company the divisions may represent
SUVs, sedans, and electric cars. Each division than has it own functional structure
like IT and marketing.
A company will use a divisional set up like this when one division is sufficiently
independent from another, however this kind of structure can also add some
accounting and other overhead.
Matrix Organizational Chart
A matrix organizational chart reflects a company where employees are divided into
teams by projects or product lead by a project or product manager, but also report to
a functional manager. It shows a company that operates using cross-functional
groups instead of vertical silos.
A matrix organizational structure can help facilitate better, more open
communication and create a flexible, dynamic work environment that can easily shift
resources where they're needed, but it can also create confusion and frustration with
dueling priorities and supervisors.
Flat Organizational Chart
A flat organization structure will show few or no levels of management between
executives and all other employees. This type of structure empowers selfmanagement and greater decision making ability for every employee. It's most often
employed by smaller businesses, but it's not unheard of it even at larger companies.
Organizational Chart Uses
An organizational chart has five principal uses:
1. To Show Management Structure
It shows the management structure of the organization at a glance. It can
also show other organizational structures, such as relationships between
companies with common or affiliated ownership.
2. To Show Other Organizational Structure
Other hierarchies, such as business ownership structures, can be shown
using org charts.
3. As a Planning Tool
Org charts are used to visualize and plan company reorganizations.
4. An Employee Reference
It provides a reference for employees to help them understand their role in
the organization, who they report to, and who reports to them.
5. An Employee Directory
Adding other information, such as headshots, telephone numbers and
email addresses allows the org chart to also function as an employee
directory.
1. Management Structure
The org chart shows the individual roles and chain of command within the business
structure. A well-managed company will function according to this framework, as
well.
The chart above shows the organizational structure of a video game company. This
hypothetical company has four positions that report to the CEO.
 Office
 Art
Manager
Director
 Director
of Technology
 Director
of Operations
At a glance you can see that the company is divided into four areas of
responsibility.
 Administration
 Artwork
Creation
 Programming
 Production
An executive is responsible for each of these areas.
An org chart is useful as a valuable management tool. It allows managers to
effectively manage goals, develop strategy, and improve interaction between
individuals or entire departments. If the org chart structure does not mirror the way
the enterprise functions, it points to potential roblems in operating the company.
2. Other Organizational Structures
An organization chart can also be used to show other hierarchies, such as corporate
entity structure. The chart below shows the corporate structure of a commercial real
estate company. Each property is owned by a separate LLC, and all of the LLCs are
owned by a holding company. The holding company has also organized a
management LLC to oversee property operations.
3. A Planning Tool
You can also use an org chart for planning purposes. An example is to visualize
alternative ways of organizing a work force.
For example, during a planning meeting, the executive committee has decided to
move the Office Manager position. Rather than reporting to the Director of
Operations/Producer, this job will now fall under the Director of Technology/Lead
Programmer.
Quick tip: If you are moving a position in an org chart, simply click and grab the
box you wish to move, placing it into the new position. You'll note that when you
release it, the entire org chart will automatically realign for you. It will look
something like this:
4. An Employee Reference
Many organizations give a copy of the organization chart to each employee, or make
it available on a company intranet.
Once an employee finds their position on the chart, they can see immediately who
their supervisor is, who their co-workers are, and how they fit into the organization.
In a small organization, you can easily print the organization chart on a single page
and distribute it this way. In a larger organization the most practical way to share the
org chart with employees is with an online copy viewed with a web browser.
An Employee Directory
Whether you are new employee in a small organization, or any employee in a larger
organization, an org chart can serve as a directory to the other employees. Adding
headshots is a great way to allow people to use the org chart to "put names with
faces."
An organization chart makes it possible to find the name of the person responsible
for a particular function. For example, it you want to know the name of the VP of
sales' assistant you can immediately find it from the org chart.
A chart shared electronically can be even more useful. The name of each person in
the chart can provide a hyperlink to their email address. Phone extensions can also
be included in the chart.
Trend Analysis:
The Trend Analysis Formula can be calculated by using the following steps: Step 1:
Firstly, decide the base year and then note down the value of the subject line item in
the base year. Step 2: Next, note down the value of the line item in the current year.
Trend analysis is based on the idea that what has happened in the past gives traders
an idea of what will happen in the future. There are three main types of trends: short, intermediate- and long-term.
Examples of Trend Analysis
Examining sales patterns to see if sales are declining because of specific customers
or products or sales regions; Examining expenses report claims for proof of
fraudulent claims. Forecast revenue and expense line items into the future for
budgeting for estimating future results.
HRIS:
A HRIS, which is also known as a human resource information system or
human resource management system (HRMS), is basically an intersection of
human resources and information technology through HR software. This
allows HR activities and processes to occur electronically.
In most situations, a HRIS will also lead to increases in efficiency when it
comes to making decisions in HR. The decisions made should also increase
in quality—and as a result, the productivity of both employees and managers
should increase and become more effective.
How to Conduct an Effective Interview?
Step 1: Design the Interview
Step 2: Review the Candidate’s Background
Step 3: Establish Rapport
Step 4: Ask Questions
Step 5: Close the Interview
Step 6: Review the Interview
Organization and Planning Skills
1. Describe a specific situation which illustrates how you set objectives to
reach a goal.
2. Tell me about a time when you had to choose between two or more
important opportunities. How did you go about deciding which was most
important to you?
3. Tell me how you normally schedule your time in order to accomplish your
day-to-day tasks.
4. Describe a situation where you had a major role in organizing an important
event. How did you do it?
5. Think about a lengthy term paper or report that you have written. Describe
how you organized, researched, and wrote that report.
6. Give an example of how you organized notes and other materials in order to
study for an important exam.
7. Describe a time when you reorganized something to be more efficient. How
did you do it?
8. Think of a time when you made important plans that were fouled up. How
did you react? What did you do?
Interaction and Leadership:
1. Tell me about an event in your past which has greatly influenced the way
you relate to people.
2. Give a specific example that best illustrates your ability to deal with an
uncooperative person.
3. Some people have the ability to “roll with the punches.” Describe a time
when you demonstrated this skill.
4. Tell me when you had to work with someone who had a negative opinion of
you. How did you overcome this?
5. Recall a time when you participated on a team. Tell me an important lesson
you learned that is useful to you today.
6. Describe an instance when you reversed a negative situation at school, work,
or home. How did you do it?
7. Describe a situation which best illustrates your leadership ability.
8. Think about someone whose leadership you admire. What qualities impress
you?
Conducting the Training Needs Analysis:
• Strategic Training Needs Analysis
• Current Training Needs Analysis
• Task Analysis: Analyzing New Employees’ Training Needs
• Using Competency Models
• Performance Analysis: Analyzing Current Employees’ Training Needs
Ways to Identify How Current Employees Are Doing:
• Performance appraisals
• Job-related performance data
• Observations by supervisors or other specialists
• Interviews with the employee or his/her supervisor
• Tests of job knowledge, skills, and attendance
• Attitude surveys
• Individual employee daily diaries
• Assessment center results
• Special performance gap analytical software
Employee Compensation, Incentive, and Benefits Strategies:
Most companies want to hire the most qualified employees and keep those
employees loyal and productive. To attract and keep their best employees,
companies provide a “package” that includes compensation (money), incentives
(special perks or rewards for good work), and benefits (valuable options such as
health insurance and paid vacation).
Because each employee is unique, larger corporations offer a wide range of mixand-match options to suit individual needs and preferences. As a manager, you may
have the option of offering your team members specific incentives based on their
type of work and particular areas of interest and need.
Compensation:
Compensation is just another word for wages. Managers work with human resources
to set and raise wages based on a number of factors:

Competitive analysis (what are people in similar jobs making per hour, week,
or year?).

Cost of living (it’s more expensive to live in New York City than, for
example, in most rural areas).

Labor negotiations (if the person is a member of a labor union, collective
bargaining may apply).

Personal qualifications (Audrey may command a higher salary than Joe
because she has more years of experience or a higher level of education).

Supply and demand (if your company must find a person with specific
qualifications and there are very few people with those qualifications, your
company may need to spend more to attract qualified candidates).
As a manager, you may need to negotiate compensation both within your corporation
and with your new hire. For example, you may need to make the case for paying
Audrey more than Joe would have demanded by explaining why Audrey’s skills will
make a positive difference to the bottom line. The reasons behind compensation are
complex; as a manager, you will need to keep your eyes on the competition and
changing trends to be sure your employees receive fair and equitable pay.
Payroll Management:
Compensation is usually provided through a payroll system that manages and
records payment of wages to each employee. Payroll systems are set up and managed
by HR or by a contracted payroll company. Payroll involves:

Collecting employee information such as W-4 and I-9 tax forms and proof of
legal work status.

Tracking work hours for employees eligible for overtime pay or comp time
(extra time off to pay back overtime hours).

Record keeping related to payment for benefits and bonuses.

Management of state and federal taxes.
Incentives:
If you want to encourage people to work hard, you should offer them both a reward
for good work and a consequence for poor performance. The consequence is often
that if you do poor work, you will get fired and lose your income and benefits. But
how do you encourage (or incentivize) a person to do their best work? The answer
depends on the culture of the business, the needs or preferences of the individual,
and the options available.
One industry that offers an incredible range of perks and incentives to its employees
is software development. Silicon Valley is loaded with companies that provide
everything from free food to massages to its employees. Google, in particular, is
well-known for making its employees happy and providing resources to lower stress.
Free haircuts and dry cleaning, gyms and swimming pools with personal trainers,
nap pods, subsidized massages, and on-site doctors are just a few of the perks it
offers.
Other companies offer completely different kinds of perks. Home Depot, for
example, has a terrific on-site childcare program called Little Apron that is good
enough to be highlighted by the magazine Working Mother:
It’s easy to guess which types of employees would be attracted by foosball (young
single men) and which by a childcare program (working mothers and fathers). But
there are also incentives that can motivate people with completely different needs
and goals. For example:

Many companies offer low-cost, fun perks such as catered lunches, free
snacks and coffee, and Employee of the Month awards.

It’s common for companies to include employees’ families in special events
such as picnics, ballgames, and outings.

To encourage employees who make direct sales, some companies offer
significant incentives for meeting or exceeding goals. For example,
Huntington National Bank offered sales teams a program that allowed them
to earn points toward an all-expenses-paid trip to the World Series.

Some employees are more motivated by opportunities than by “prizes.” For
these individuals, it may be more motivating to offer trips to trade
conferences and conventions, plum assignments, or inclusion in upper-level
meetings.
1974 Employee Retirement Income Security Act (ERISA):
The Employee Retirement Income Security Act; The main purpose of ERISA is to
protect the interests of employees (and their beneficiaries) who are enrolled
in employee benefit plans, and to ensure that employees receive the pensions and
group-sponsored welfare benefits that have been promised by their employers.
A Simplified Employee Pension Plan (SEP) is a relatively uncomplicated retirement
savings vehicle. A SEP allows employees to make contributions on a tax-favored
basis to individual retirement accounts (IRAs) owned by the employees.
The best retirement plans to consider in 2020:

401(k) plans. A 401(k) plan is a tax-advantaged plan that offers a way to save for
retirement.

403(b) plans.

457(b) plans.

Traditional IRA.

Roth IRA.

Spousal IRA.

Rollover IRA.

SEP IRA.
…. THE END….