To add a contact to your Favourites list, go to the Phone app and find the contact you wish to favourite.
Press their name and a pop-up will appear. Click on the star icon at the bottom of the pop-up. This will then add the contact to your Favourites list which will appear on your home screen and your Favourites list within the Phone app.
TIP: To view your Favourites on your home screen, you will need to add the Favourites widget.