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What is Human Resource Management (HRM)? [Functions & Objectives]

10th May, 2024
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    What is Human Resource Management (HRM)? [Functions & Objectives]

    Every organization, business, and NGO uses many inputs and resources to manage and efficiently run their organization. The resources and inputs include a wide variety of services and goods, including cash, valuables, goods, and services which are ultimately used for the main motive of a business- Profit Making. In the case of an NGO, the main motive is self and social service.

    It is required in every industry. They all require people who can coordinate and manage all the resources and inputs that the company possesses to keep it running and afloat. For example, a retail store uses registers and inventory, while a consulting firm may have proprietary software or buildings. These people usually form a team and join hands to manage the resources and people to keep the company running. They are known as HRs, and their occupation is Human Resource Management. The HRM's main occupation is profit generation through the people's ability and skills working in the organization.

    Through this article, we'll learn what HRM is, the meaning of human resource management, principles, characteristics, and functions.

    What is Human Resource Management?

    What exactly is the definition of human resource management?

    role of human resource management

    Human resource management, also referred to by its abbreviations HRM, is the process of recruiting people who fit the profile of the job and the organization and training them accordingly. Moreover, they also compensate them with salary, remuneration, and bonuses according to their performance, standing and position, and contribution to the organization.

    They also overlook the policy formation for the company's welfare and develop the work environment and strategies accordingly. Simply put, it is the management of humans working for the company for more growth and profits.

    You will be shocked to know HRM's meaning and role in any organization has changed drastically in the past few decades.

    Earlier, Human Resources' main work was dealing with salaries, remuneration, and bonuses, organizing events for team bonding, sending their employees birthday presents, and ensuring other miscellaneous works were carried out properly.

    People across different sectors have realized the importance of the good and effective e meaning of Human Resource management in an organization. From an administrative-driven setup, they are now at the front seat of handling the company's affairs. Today, the Human Resource department creates the company's structure.

    What are the Principles of HRM?

    Now that we have learned about the HRM meaning, we will go through the HRM principles. Although there are numerous human resources principles, only a handful are discussed here with advice on how to implement them appropriately.

    These principles are highly helpful for HR experts and practitioners to assess how three stakeholders—individual employees, society, and the firm itself—are impacted by strategic human resource management.

    There are some basic principles of Human resource management that every HR person should be aware of. Here are the four basic principles -

    1) Recruitment and Selection

    Let's start from the basics. Every organization needs people to work in the company for reasons that should be pretty obvious. To get skilled and talented people to work in the company, you need to interview them and select the perfect candidate accordingly. This is Recruitment and Selection. The job of HR is basically to Recruit the most suitable candidates and select them according to the criteria, qualifications, and candidature. They screen the application of the many candidates and then select the most appropriate one.

    2) Management of the performance

    Now that HR has hired the most suitable candidate for the job, HR has to help them to perform at the best of their potential so that the employee and the company can experience collective growth. In addition, they can help the employees by giving them feedback on the task they perform.

    Various methods can do the same, but most HRs use feedback from other peers, self-evaluation, and the evolution in their performance over the period. At the end of every year, companies usually put employees into two categories, high and low-performing individuals.

    3) Learning and Development

    This one is pretty simple. We all know that development is synonymous with the future. As time passes, we witness some or other development in every industry. The HR Department ensures that people can easily adapt to the changes that are taking place in the industry. Another thing, people in an organization come from different sects of society. They come from different classes, cultures, ethnicity, and nationalities. So, learning anything, in particular, is crucial for all employees since their previous knowledge of the same can be different.

    4) Salaries, Compensation, and Bonuses

    Let's be honest. The main motivation of employees working in an organization is their monetary salary. Unfortunately, the HR department overlooks this, too. They must ensure that the companies are being compensated fairly and timely. The HRM requires them to offer fair and attractive salaries for professionals to take up the offer to work in their company while also ensuring that the salary is in check with the company's financial standing. There are two types of compensation- Primary and secondary. Primary pay is the usual salary, while secondary pay is the non-monetary gifts, they receive to boost their morale.

    Want to learn more about HRM and its role? Why not take certification training?

    Characteristics of Human Resource Management

    The hard version and the soft version of the HRM concept both exist. The hard version or variant highlights the requirement for effective people management to extract additional value from them and, as a result, gain a competitive edge.

    On the other hand, the soft version focuses on considering people as valuable assets who may be a source of competitive advantage through their dedication, adaptability, and high caliber. Both of these systems are combined to create modern HRM. HRM is the management of human potential and energy.

    Now, let's talk about the four main characteristics of Human Resource Management.

    1) Human Oriented

    For Human Resource Management to be essential for humans and work in their favor, they need to be People or 'Human-oriented. For the better running of the company, this department has to keep people and their welfare as the main focus. Also, it is quite obvious that the Key focus of the Human resource department is the humans who work in the company.

    2) Employee oriented

    The HR's employee-oriented, too. They look after the problems of the employees and try to make their professional lives easier in whatever way they can. There is a key rule that is crucial for a happy company, and that is to make its employees happy. It's simple; happy employees give out better results. They keep a company's work culture in check and ensure a healthy atmosphere where employees feel free, safe, and happy.

    3) Gives opportunities

    Human resource management also ensures that their fellow employees know about the larger scope of their careers and helps them set their career goals within a specific time. They give out career opportunities to the better-working employees because they know their dedication and hard work.

    4) Decision Oriented

    The main focus of the human resource management department is also to make some important decisions for the company's welfare. They need to ensure those good policies are in place and followed for smoother company management.

    Objectives of Human Resource Management

    1) Achieve organizational goals

    It is key for the Human resource department to work in sync with the objectives that the company was founded upon or is currently in place to attain its key objectives.

    2) Work Culture

    The HRM ensures that healthy work culture is set in place so that the employees are motivated to work in a safe and happy work environment. By this, there is no unnecessary drama and disturbance created within the organization.

    3) Team integration

    The human resource department of any organization also has to ensure that there is such team coordination and understanding that they can churn out effective and efficient results.

    4) Training and development

    The training and development of all employees who join the company are crucial in getting them on the same page as the latest technology and advancements made in the industry. So, the HRM ensures that all employees, new or old, get adequate training and development to get better results in the company.

    5) Employee Motivation

    Employee motivation is another important thing for the HR department to keep in mind. They need to ensure that the motivation of any employee in their organization is high, and they do so by setting up different activities and non-monetary gifts such as holidays and paid leaves.

    6) Workforce Empowerment

    Any organization must fulfill its corporate social responsibility. Companies do so by getting people from all backgrounds into their company. Women, disabled people, people of color, and other underrepresented people are welcomed in their company.

    7) Retention

    Retention is the HRM department's process to ensure that more people do not leave the company. Different companies and industries have different retention rates.

    8) Data and Compliance

    Compliance is the business's commitment to following the working standards set out by employment law. The HRM must ensure that the organization and its employees follow the government rules.

    Functions of Human Resource Management

    The introduction to human resource management also introduces us to the various functions of HRM. The duties of human resource management go well beyond simply processing payments and hiring employees. Every task that impacts an organization's workforce falls under the purview of HR management, from routine HR duties to strategic decision-making.

    1. Job design and job analysis

    The HRM department makes up of different job profiles required to fulfill certain tasks and duties in the company. They do so by analyzing the company and the external organizations as well.

    2. Employee hiring and selection

    After doing the said job profiling for their organization, they now accept job applications for the same role and screen applications. They hire the employees who are the best fit for their company.

    3. Employee training and development

    After hiring the best candidate, they train the employees accordingly. Their training and development are crucial for the company and the individual employee. The company gets benefits and better results from the employee's personal development.

    4. Compensation and Benefits

    Compensation and benefits are the main reasons that motivate the employee. Therefore, the HR department is responsible for compensating the employees fairly.

    5. Employee performance management

    The employee's performance is managed greatly by the HR department. They regularly check their work and give them appropriate feedback to improve and work accordingly.

    6. Managerial Relations

    A human resource manager is responsible for management's planning, organizing, controlling, and coordination functions. He maintains a proper formal relationship with other managerial personnel. This helps to form and evaluate various training and development programs, forming policies and procedures regarding employees working in the organization. Since he is a link between workers and top management, he advises them on maintaining good relationships with the workers. This would ultimately result in a good performance.

    7. Employee engagement and communication

    The human resource manager is in direct and continuous communication with the employees. He keeps a proper record of employee performance, leaves, and absences. He evaluates the performance and always engages with them to provide promotion opportunities. In addition, he keeps a record of any transfers happening. If any employee has issues with another employee, work, or his superior, he directly approaches the HR manager.

    8. Health and safety regulations

    This function of human resource management is concerned with the safety and security of the workers and employees associated with the organization. He ensures whether proper safety measures are being followed in the organizational procedures or not to reduce any mishappening in the workplace. He is continuously involved in making and identifying proper procedures to be followed while working so that no one is exposed to any harmful situation.

    9. Personal support for employees

    Human resource manager provides personal support to employees in many ways. He manages employees of different cultures and handles all the requests that the immediate superior of the employees cannot address. Whenever any employee has any personal emergency, he could go to the HR manager. HR managers are trained to handle any such employee in an emergency or emergency. Suppose any employee faces any problems with any organization's process, like transport facility or any wrongful behavior by a fellow employee. In that case, they can always approach the HR manager.

    10. Succession planning

    This function is related to identifying prominent job positions and preparing steps to fill those positions with competent candidates. HR managers continuously train capable candidates in such a manner that they could take leadership roles that might come up in the future due to retirement or voluntary leaving in any case. This is an essential function as the HR manager knows that a candidate already associated with the company completely understands its values and belief and will join the leadership position with full enthusiasm and respect.

    11. Industrial Relations

    The human resource manager acts as a link between the workers and employees and the top-level management. He is responsible for maintaining a cordial relationship between the workers and management. He has to listen to the workers' grievances and address them with importance by conveying them to the top management, effectively helping in collective bargaining and settling the workers' disputes. A human resource manager performs this function because he has complete control over all the information of the employees his team is working with. He is very much aware of the labor unions and maintains good relations with them.

    Importance of Human Resource Management

    In every industrial organization, human resource management is significant in some ways. These factors can aid in comprehending the significance of human resource management. One of an HR manager's main duties is hiring new employees. An organization's success is always significantly influenced by its personnel. The proper staff for the right profile must be hired for this reason. We may claim that human resource management is significant if all of these things are well managed. The following, however, is a brief examination of these points:

    1. Strategy management

    Human resource management is very much concerned with strategic management. This means it is involved in the formation and implementation of the management of employees in such a way that it aligns with the organization's long-term objectives. All the activities of the HRM process are directed towards the holistic development of the organization and fulfillment of the goals and objectives as a whole. Therefore, strategy management is important as it focuses on long-term development and helps cope with any future talent shortage.

    2. Benefits analysis

    HRM is very important to check the benefit analysis. Human resource manager analyses the return from the employees when any training and development activities are organized for such employees. He analyses whether there is any value-added or not. This helps him to understand the return on investment, and he could then think of alternative solutions if there is any deviation from his calculations.

    3. Training and development

    Training and development are the most important aspect of HRM. This is the very basic need of any organization. When an employee is hired for any position, he continuously needs to update his skills and talents. This is beneficial for the employee as well as the organization. In case any updates are required in the job position, or any upper position is left vacant, then the trained employee could be able to take over that position.

    4. Conflict Management

    Human resource management plays a crucial role in managing conflicts. Conflicts can be between superiors and subordinates, between subordinates, or between workers regarding any issue. HRM tends to solve these issues as it maintains proper industrial, managerial, and labor relations. This helps to solve these conflicts and maintain a good working environment within the organization. In addition, HRM ensures proper procedures are in place if any dispute arises. This will help to cope with the conflicts well without affecting the organization's output.

    5. Establishing a healthy work culture

    A healthy work culture is one where every employee is satisfied with the work assigned and his relations with fellow employees and his subordinate. HRM handles this aspect also by giving various opportunities to the employees for greater positions and increased incentives. All these activities help encourage the employees, get the work done, retain the employees for the long term, and achieve the organization's goals effectively and efficiently.

    6. Interactivity with employees

    HRM always maintains a good relationship with the workers and employees of the organization. Interactivity with the employees helps them understand their feelings about their work and the organization. This, in return, helps the HR managers set the right procedures. Employees are always involved in the decision-making process. In case any new update is there. Employees have properly conveyed the information and always welcome suggestions. This makes them feel connected to the organization and develops a feeling of belongingness.

    7. Compliance

    Compliance is essential and critical for every HR department. It refers to adopting the policies and procedures related to the industry laws in the organization's work. Adopting these regulations and labor laws is crucial to HR functions. These regulations must be kept in mind in every human resource process step. Hence, HR managers are continuously involved in maintaining this compliance in the long term and in the daily working of the organization.

    Scope of Human Resource Management

    Human resource management goes beyond simply managing and maximizing human intelligence. To put it another way, it's about fostering positive working connections and finding a balance between corporate and personal objectives.

    Additionally, it emphasizes managing the human and material resources of employees. The complexity involved means that HRM's range of applications is expanding daily.

    Planning for human resources includes, but is not limited to, hiring (recruitment and selection), training and development, payroll administration, rewards and recognitions, industrial relations, grievance handling, legal procedures, etc.

    The reach and breadth of HRM are enormous. Consequently, it is exceedingly challenging to define it briefly. However, we can categorize it under the following headings:

    The scope of human resource management is huge. It involves many activities and dimensions of human resources. Some of the dimensions are:

    1. Human Resource Planning: this involves the management's procedure to have the right set of employees at the right set of positions at the right time, doing the right things to achieve organizational objectives. It involves making arrangements to minimize labor turnover. It improves employees' standards, skills, knowledge, and ability. This helps to adapt effectively to changes and avoid resistance to change.  
    2. Recruitment and selection: Recruitment involves the creation of a pool of candidates interested in the job positions. It means attracting eligible candidates for various vacant job positions. It is a positive process. Selection involves picking capable candidates from the pool of candidates created during recruitment. It is a negative process. It selects candidates who are qualified and competent to do the job.  
    3. Orientation and induction: After candidates are selected, they undergo the induction or orientation program. Under this, they are provided with information on various work policies, procedures, work environments, organizational culture, and ethics. This enables the employees to properly understand the organization before being part of it and helps them accept the organization wholeheartedly. 
    4. Training and development: training involves a change in the attitude, skills, or knowledge of the person with an improvement in behavior. It tends to improve the quality of the workforce and enhance growth. It also assists newcomers in the organization. Development is a holistic concept with undefined boundaries. It is there with the employees for their whole tenure in the organization. 
    5. Performance Appraisal: This is related to evaluating the employee's organizational performance. The immediate supervisor of the employee does it. First, performance is planned, then it is executed by the employee, after which its assessment is done. And a review is done by the supervisor. There are various traditional and modern methods to carry on performance appraisal.


    Since human resources are one of the most important resources for any organization, their management, and understanding of what HR management is very crucial. Hence, having a Human Resource Management department is very important for every organization. It smoothly does away with the staffing process of the management function and continuously tends to carry out other managerial functions.

    Nowadays, the HR manager has to study and consider external forces that affect HR decisions along with internal forces. In addition, they have to keep up with the changes that are continuously happening in the business environment and prepare accordingly.

    Human resource management is a very comprehensive function and helps to link the employees with the top management. Ensuring the overall cordial environment is what it's concerned with. To master the skill of managing resources, one must know how to handle resources which takes years of practice. If you are looking to prosper as an HR manager, make sure you have a look at KnowledgeHut certification training.

    Frequently Asked Questions(FAQs)

    1Why is HRM important?

    HRM is important for every organization. Without HRM, they will be unable to maintain a proper working environment. They will not be able to recruit candidates according to the job profiles, they will not be able to retain the employees, and there will be chaos and confusion regarding the human resources in the organization. 

    2What are the features of HRM?

    HRM has features like it is focused on employees' work and work conditions. It is all-pervasive, a continuous process, challenging, and involves training and development, performance appraisal, fringe benefits, compensation, job evaluation, job enrichment, job assessment, job analysis, etc. 

    3What is the HRM process?

    The process of HRM is very comprehensive and includes the following steps: Recruitment🡪 Selection🡪 Training🡪 , Assessing Performance🡪 Motivating🡪 Compensating🡪 , Maintaining Human Relations🡪 , Safety and Welfare of Employees🡪 Compliance with the Labor Laws. 

    4Why are human resources significant?

    Human resources are very important for any organization because they tend to have all the skills and abilities to optimum use of other resources. Without human resources, no other resource can be put to any use because they are the ones who extract the usefulness of other resources. Hence. It is necessary to manage them in an organization. 

    5What are the challenges of HRM?

    HRM department faces many challenges Attracting the right workforce for the correct position at the right time, Retaining suitable candidates, seeking through their complaints smoothly without affecting the work environment, maintaining cordial relationships, managing training and development activities as well, and bringing necessary changes without facing any resistance from employees and workers.  

    6What is the future of HRM?

    In the future also, HRM is going to have great importance. There might be shifts and innovations in the managing techniques and the process. More and more companies are now disclosing pay structures openly. They are recruiting through social media channels. Hence, HRM will continue developing with human nature, technology, and competition advancement. 


    Abhresh Sugandhi


    Abhresh is specialized as a corporate trainer, He has a decade of experience in technical training blended with virtual webinars and instructor-led session created courses, tutorials, and articles for organizations. He is also the founder of Nikasio.com, which offers multiple services in technical training, project consulting, content development, etc.

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