Meaning of Human Resource Management

Human Resource Management is a management function concerned with hiring, motivating, and maintaining workforce in an
organisation. Human resource management deals with issues related to employees such as hiring, training, development,
compensation, motivation, communication, and administration. Human resource management ensures satisfaction of
employees and maximum contribution of employees to the achievement of organisational objectives.

According to Armstrong (1997), Human Resource Management can be defined as “a strategic approach to acquiring,
developing, managing, motivating and gaining the commitment of the organisation’s key resource – the people who work in
and for it.”
Human Resource Management (HRM) is the function within an organization that focuses on the recruitment of, management
of, and providing direction for the people who work in an organization. As you can imagine, all of the processes and programs
that are touched by people are part of the HR kingdom.
The HRM department members provide the knowledge, necessary tools, training, administrative services, coaching, legal and
management advice, and talent management oversight that the rest of the organization needs for successful operation. Many
HR departments are responsible for organization development that generates the culture of the organization. They are
charged with oversight responsibilities to ensure that their organization appropriately builds teams and inspires employee
empowerment.  

Objectives of HRM
1. To develop a thorough knowledge of corporate culture, plans and policies.
2. To act as an internal change agent and consultant.
3. To initiate change and act as an expert and facilitator.
4. To actively involve himself in company’s strategy formulation.
5. To keep communication lines open between the HRD function and individuals and groups both within and outside the
organisation.
6. To identify and evolve HRD strategies in consonance with overall business strategy.
7. To facilitate the development of various organisational teams and their working relationship with other teams and
individuals.
8. To try and relate people and work so that the organisation objectives are achieved effectively and efficiently.
9. To diagnose problems and to determine appropriate solution particularly in the human resources areas.
10. To provide co-ordination and support services for the delivery of HRD programmes and services.
11. To evaluate the impact of an HRD intervention or to conduct research so as to identify, develop or test how HRD in
general has improved individual or organisational performance.

Organizations also perform HRM functions and tasks by outsourcing various components to outside suppliers and vendors. The
tasks that are most frequently outsourced are those that take HR time and energy away from the HR activities that provide the
most strategic value to the company. This outsourcing most frequently involves payroll functions, but vendors and external
consultants can help an organization with HRM in many ways. Specifically, many HR departments outsource background
checking, benefits administration, training such as sexual harassment training, temporary staffing, and the production of
employee handbooks, policy manuals, and affirmative action plans.

Functions of Human Resource Management

Human Resource Management functions can be classified in following three categories.
 Managerial Functions,
 Operative Functions, and
 Advisory Functions
The Managerial Functions of Human Resource Management are as follows:
1. Human Resource Planning - In this function of HRM, the number and type of employees needed to accomplish
organisational goals is determined. Research is an important part of this function, information is collected and analysed to
identify current and future human resource needs and to forecast changing values, attitude, and behaviour of employees and
their impact on organisation.
2. Organising - In an organisation tasks are allocated among its members, relationships are identified, and activities are
integrated towards a common objective. Relationships are established among the employees so that they can collectively
contribute to the attainment of organisation goal.
3. Directing - Activating employees at different level and making them contribute maximum to the organisation is possible
through proper direction and motivation. Taping the maximum potentialities of the employees is possible through motivation
and command.
4.  Controlling - After planning, organising, and directing, the actual performance of employees is checked, verified, and
compared with the plans. If the actual performance is found deviated from the plan, control measures are required to be
taken. 
Staffing – hr decided if the person is fit for the organisation or not, once ppl are in it helps make them feel welcomed and
comfortable, it is responsible for salary administration and looks after training of new candidates. Every enterprise is very
much concerned with the quality of its people, especially its managers. The staffing function is concerned with this aspect of
management. According to Harold Koontz and Cyril O’ Donell, “the managerial function of staffing involves manning the
organisational structure through proper and effective selection, appraisal and development of personnel to fill the roles
designed into the structure.”
Thus, the staffing functions involve:
(a) Proper selection of candidates for positions;
(b) Proper remuneration;
(c) Proper training and development so as to enable them to discharge their organisational functions effectively; and
(d) Proper evaluation of personnel.

Coordination – hr plays a crucial role in uniting the various depts thru games, activities etc, internal link between all
departments. Co-ordination is one of the most important functions of management. It is essential to channelize the activities
of various individuals in the organisation for the achievement of common goals. Every department or section is given a target
to be achieved and they should concentrate only on their work and should not bother about the work of other organs.
It is left to the management to see that the work of different segments is going according to pre-determined targets and
corrective measures have to be taken if there is any deviation. Co-ordination creates a team spirit and helps in achieving goals
through collective efforts. It is the orderly arrangement of group effort to provide unity of action in the pursuit of common
objectives.

The Operative Functions of Human Resource Management are as follows:

1. Manpower planning
2. Job Analysis- Job analysis is the process of describing the nature of a job and specifying the human requirements
like qualification, skills, and work experience to perform that job. Job design aims at outlining and organising tasks,
duties, and responsibilities into a single unit of work for the achievement of certain objectives.
3. Recruitment and Selection - Recruitment of candidates is the function preceding the selection, which brings the pool
of prospective candidates for the organisation so that the management can select the right candidate from this pool.
4. Induction / orientation 
5. Training and Development - This function of human resource management helps the employees to acquire skills and
knowledge to perform their jobs effectively. Training an development programs are organised for both new and
existing employees. Employees are prepared for higher level responsibilities through training and development.
6. Wage and Salary Administration - Human resource management determines what is to be paid for different type of
jobs. Human resource management decides employees compensation which includes - wage administration, salary
administration, incentives, bonuses, fringe benefits, and etc,.
7. Performance Appraisal - Human resource professionals are required to perform this function to ensure that the
performance of employee is at acceptable level. The employees of any organization will be evaluated by the HR
department as per the performance. This function of Human Resource Management is to help the organization in
finding out if the employee they have hired is moving towards the goals and objectives of the organization . On the
other hand, it also helps the company to evaluate whether the employees needs improvement in other areas. It also
helps the HR team in drawing certain development plans for those employees who have not met the minimal
requirements of the job.
8. Employee Welfare - This function refers to various services, benefits, and facilities that are provided to employees for
their well-being.
9. Retention / Talent Mgt  - Human resource is considered as asset for the organization. Employee turnover is not
considered good for the organisation. Human resource management always try to keep their best performing
employees with the organisation.
10. Labour Relations - This function refers to the interaction of human resource management with employees who are
represented by a trade union. Employees comes together and forms an union to obtain more voice in decisions
affecting wage, benefits, working condition, etc,.
11. HRIS - This function involves recording, maintaining, and retrieving employee related information like - application
forms, employment history, working hours, earnings, employee absents and presents, employee turnover and other
other data related to employees.
12. Ensuring Legal Compliance: To protect the organization this function plays a crucial role. The HR department of every
organization should be aware of all the laws and policies that relate to employment, working conditions, working
hours, overtime, minimum wage, tax allowances etc. Compliance with such laws is very much required for the
existence of an organization.
The Advisory  Functions of Human Resource Management are as follows:
Human Resource Management is expert in managing human resources and so can give advice on matters related to human
resources of the organisation. Human Resource Management can offer advice to:
1. Advised to Top Management
Personnel manager advises the top management in formulation and evaluation of personnel programs, policies, and
procedures.
2. Advised to Departmental Heads
Personnel manager advises the the heads of various departments on matters such as manpower planning, job analysis, job
design, recruitment, selection, placement, training, performance appraisal, etc.

HRM's Changing Focus

HRM is the organizational function that deals with or provides leadership and advice for dealing with all issues related to the
people in an organization. HRM, as such, deals with compensation, hiring, performance management, organization
development, safety, wellness, benefits, employee motivation, communication, administration, and training. 
HRM is also a strategic and comprehensive approach to managing people and the workplace culture and environment.
Effective HRM enables employees to contribute effectively and productively to the overall company direction and the
accomplishment of the organization's goals and objectives.
HRM is moving away from traditional personnel, administration, and transactional roles, which are increasingly outsourced.
The HRM function is now expected to add value to the strategic utilization of employees and to ensure that employee
programs recommended and implemented impact the business in positive measurable ways.

HRM challenges:
HRM can be a challenge for small businesses especially, which typically don’t have an HR department to rely on. They may be
limited to one HR person, or this responsibility may still belong to the CEO. Regardless, small business owners need to
understand the challenges facing them so they’re prepared to tackle HR issues as their company, and workforce, grows.
#1 Compliance with Laws and Regulation
Keeping up with changing employment laws is a struggle for business owners. Many choose to ignore employment laws,
believing they don’t apply to their business. But doing so could mean audits, lawsuits, and possibly even the demise of your
company.
Solution:
No matter how large or small your business, it’s important to make sure you’re in compliance with local, state, and federal
labor laws. There are regulations on everything from hiring practices, to wage payment, to workplace safety. Take a few
minutes to read through the U.S. Department of Labor’s Employment Law Guide.
#2 Management Changes
As a business grows, its strategies, structure, and internal processes grow with it. Some employees have a hard time coping
with these changes. A lot of companies experience decreased productivity and morale during periods of change.
Solution:
Business owners should focus on communicating the benefits of the change for everyone. Regular staff meetings are a good
place to start. When your team understands the why, how, and when of the change, they’ll be more likely to get on board.
#3 Leadership Development
A recent study showed more than a third of companies are doing an average job, at best, at implementing leadership
development programs. Thirty-six percent of companies surveyed in Brandon Hall Group’s State of Leadership Development
Study admitted that their leadership development practices are below average.
Solution:
Leadership development is critical in keeping your management team engaged and motivated, and prepares them to take on
more responsibilities in the future. Make it part of the culture. Create opportunities for them to use their strengths every day.
Accomplishing goals will motivate them and give them a chance to develop their skills.
#4 Workforce Training and Development
Investing in the training and development of lower-level employees is another common HR problem. Some businesses have
trouble finding the resources to do so. Employees on the front lines are some of your hardest workers, and may not have the
time to take a training course.
Solution:
Training and development doesn’t have to take a lot of time or money. Recruit managers and senior leadership in mentoring
their subordinate employees. You could also provide online training courses so people can go at their own pace. Invest in your
workforce and you will have a loyal, productive team.
#5 Adapting to Innovation
Technology is constantly changing. Businesses must be quick to adapt, or risk being left in the dust by their competitors . The
challenge for small business owners is getting employees to embrace innovation and learn new technology.
 Solution:
Communication is critical. With any change, make sure your team understands the why, when, and how. Set clear goals for the
adoption of initiatives, and provide employees with the training they need to get comfortable with it.
#6 Compensation
Many companies are struggling with how best to structure employee compensation. Small businesses have to compete not
only with businesses of a similar size, but also with corporations with big payroll budgets. Plus, you have to factor in the cost of
benefits, training, taxes, and other expenses, which can range from 1.5 to 3 times the employee’s salary.
Solution:
Even though salary is important, it isn’t always the most important factor for job candidates. Creating a system to reward
employees for excellent performance is one way to make up for a lower salary. In addition, consider offering incentive
programs such as profit sharing or bonuses, which can be a win-win for the employee and the company.
#7 Understanding Benefits Packages
The Affordable Care Act has been a pain point for many small businesses in the past few years. Rising healthcare costs mean
companies must either pass these costs on to employees, or take a hit to their bottom line. Since good benefits packages can
be a deciding factor for potential hires, understanding them is key.
Solution:
For small business with fewer than 50 employees, there are many options for offering healthcare benefits. One option is
purchasing a plan through the Small Business Health Options Program (SHOP) marketplace. Doing this gives you the
opportunity to take a tax credit, which can help offset costs.
And don’t forget about benefits such as:
 Unlimited vacation time, Flex time, Free snacks, Wellness programs, & Commuter benefits
These benefits are affordable ways to offer extra perks—and they’re extremely popular with today’s workforce!
#8 Recruiting Talented Employees
Attracting talent is a huge investment of time and money. It’s difficult for entrepreneurs to balance between keeping a
business running, and hiring the right people at the right time. In addition, it’s impossible to know whether a candidate will
actually be a good fit until they’ve worked for you for a period of time.
Solution:
One of the best ways to find the right people for your business is to use a staffing company. They provide temp-to-hire
solutions that allow you to try out new employees with little to no risk. You’ll save time, money, and frustration, and maybe
even find a future executive or business partner.
#9 Retaining Talented Employees
Competition for talented employees is fierce. Startups and small companies don’t have big budgets for retirement plans,
expensive insurance plans, and other costly items that their larger competitors do—at least, not yet. Employee turnover is
expensive and can negatively impact business growth.
Solution:
Onboarding is highly effective for employee. Research shows having a structured onboarding process means employees are 58
percent more likely to stay with a company for three years or more. Read our article on 5 Employee Onboarding Technology
Solutions Your Company Needs to Be Using to learn about your options.
#10 Workplace Diversity
Multiple generations. Ethnic and cultural differences. These are just a few of the many factors that make workplace diversity a
continual challenge for small businesses. The risk of lawsuits for failing to protect employees from harassment is real.
Solution:
Creating a culture of teamwork and respect will keep the work environment positive and productive. In addition,
implementing a diversity training program is a must. Employers are responsible for setting standards of behavior in the
workplace. Standards and a system of accountability should be set up early on.
Employees are a company’s best asset. Small businesses that invest in their teams will enjoy faster growth and outpace their
competition.
Here are just a few more reasons to focus on effective HRM:
 Creates a unique workplace culture
 Emphasizes the rules, expectations, and standards for the workplace
 Helps everyone understand workplace diversity
 Facilitates communication between HR and employees
 Strengthens the importance of training and development
 Eliminates employee uncertainty

It’s important to know common HR issues so you can put the right policies and procedures in place now. Understanding the
complexities of employee benefits, employment laws, leadership development, and other areas will help you stay ahead of the
competition and meet your business goals this year, and in the years to come.