The importance of HRM in an organization

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What is HRM

Human resources management (HRM) is a strategic approach to the effective and efficient management of people in an organization and can help their business gain a competitive advantage and benefits. HRM is essential for the organization to achieve it’s goals and success (Pfeffer, 1994 Jackson and Schuler 2000, Barney, 1991). In every organization, HRM has now become the major role as they act as a bridge between employer and employees and has the power that influences growth, success, and substantially because people are the most important asset of an organization. “Our employees are our most important asset” (Guest, 2001).

HRM involves creating the right roles and opportunities, planning for workforce recruitment, ensuring continual training and development, fostering strong performance management, offering attractive compensation structures and benefits, keeping updated with legislation and legal compliances, and providing protection against economic instability.

The objectives of HRM

 

Figure 1: Objective of HRM: Source: The Investors Book

Edwin Flippo defines HRM as “planning, organizing, directing, controlling of procurement, development, compensation, integration , maintenance and separation of human resources to the end that individual, organizational and social objectives are achieved.” Where the objectives of HRM can be broken down into four broad categories:

1. Societal objectives: Measures put into place that responds to the ethical and social needs or challenges of the company and its employees. This includes legal issues such as equal opportunity and equal pay for equal work.

2. Organizational objectives: Actions taken that help to ensure the efficiency of the organization by providing training, hiring the right number of employees for a given task, or maintaining high employee retention rates.

3. Functional objectives: Guidelines are used to keep HR functioning properly within the organization as a whole and to ensure that all of HR's resources are being allocated to their full potential.

4. Personal objectives: Resources used to support the personal goals of each employee. Eg. providing the opportunity for education or career development as well as maintaining employee satisfaction.

Scope of Human Resource Management

 Figure 2: Scope of HRM; Source: MBA Tuts

1. Personnel Aspect - Process of bringing people and organizations together so that the goals of each are met. Through;

Human Resource Planning

Job Analysis and Job Design

Recruitment and Selection

Orientation and Induction

Training and Development

Performance Appraisal

Compensation Planning and Remuneration

Motivation

2. Welfare Aspect

Refers to the working conditions and amenities at the workplace. This includes responsibilities and services such as safety services, health services, welfare funds, social security, and medical services.

 3. Industrial Relation Aspect

Dynamic and complex relationship between employers and employees which is a web of much more complex than the simple concept of handling labour-capital conflict

Importance of HRM

HR management practices and systems have been linked to the increased productivity, higher quality work, higher level of profitability, and organizational competitiveness (Cascio, 1992; Schulr and Jackson 1996).

The importance of HRM can be discussed as:

1. Importance on an individual organization

-Procurement of required talents through recruitment, selection, placement, inducting,

training, compensation, and promotion policies and ensure a team of the efficient and competent workforce 
-Proper utilization of human resources for the success of the organization.

2. Professional Importance

-Provides opportunities to employees for their personnel development and provide healthy relationship among employees

-Proper allocation of work among employees and training for the development
 
3. Social Importance  
 
-Enhances the dignity of labour, provides suitable job to the suitable person and it will help to satisfy the psychological and social satisfaction of employees. 
-Helps to provide reasonable compensation to workers, which leads them to have a good standard of living and helps to maintain a work-life balance 
-Takes health and safety measures that ensure the overall health of the employees.

National Importance

-Effective HRM will speed up the economic growth of the nation. This will lead to a better standard of living and more job opportunities.

Conclusion

In today’s world, HRM plays a very significant role in daily life and it is considered the backbone of any organization. Human resources are a key element in the success or failure of an organization’s growth, sustainability, and meeting it’s objectives. Strengthening human resource management is considered as  one  of  the  solutions  to  elevate  organizational  performance  through  organization capability (Katou, 2010; Chang and Huang 2005). Effective human resource management is very much crucial if an organization want to entice and hold a good workforce and to influence the  the development rapidly to improve employee’s motivation in a business and pay attention to company’s policy and law respectively. Wich can overall increase the efficiency of the company and leads to gain higher profits.

References

Barney, J. B. 1991. Firm resources and sustained competitive advantage. Journal of Management, 17: 99-120.

Cascio, W. F., & Boudreau, J. W. 2012. Short introduction to strategic human resources. New York: Cambridge University Press.

Chang, W. A. and Huang, T. C. (2005) Relationship between Strategic  Human Resource Management and Firm Performance a contingency  Perspective. International Journal of Manpower 26(5): 434-449.

Guest, D. 2001. Voices from the boardroom. London: Chartered Institute of Personnel and Development.

Katou, A. A. and Budhwar, P. S. (2010) Causal relationship between HRM   policies and organisational performance: Evidence from the Greek  manufacturing sector. European Management Journal 28: 25-39.

University of Calicut: Human Resource Management

Available at: http://www.universityofcalicut.info/cuonline/exnotif/ex5462.pdf

Accessed on: [24.07.2021]

What is Human Resource Management:  What is HRM

Available at: https://www.whatishumanresource.com/human-resource-management

Accessed on: [24.07.2021]

 

Comments

  1. Hi, you have brought up a broad concept Jackson. Nicely written. The importance of Hr has become obvious due globalization, technological advances, and competition. Thankyou for sharing.

    ReplyDelete
    Replies
    1. Thank you for your valuable comments Rukmali. Appreciate it..

      Delete
  2. HRM is the key towards the success of an organisation. Also it is a vast subject and you have summarise the importance of it nicely.
    Good job.

    ReplyDelete
  3. Correct Jackson. Not the HRM but the effective HRM is so much important or the organizations nowadays. The high competitive HR market sometimes deviate the efficiency of HR practices. HR plays a key role in developing, reinforcing and changing the culture of an organisation. Pay, performance management, training and development, recruitment and onboarding and reinforcing the values of the business are all essential elements of business culture covered by HR

    ReplyDelete
    Replies
    1. Thank you for your inputs Oshadha. Appreciate it.

      Delete
  4. Agreed Jackson. Human resources management is a very important function in every organization. Without human resources management, companies are not be able to effectively recruit and retain employees, improve and enhance the organization, and they wouldn't be able to maintain a healthy, accepting workplace culture and environment. Thanks for sharing.

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  5. Looking after the most important asset of the organization is the key responsibility of HRM. So obviously HRM is a crucial part of organization. Having a department just for sake of following standard guidelines is no use . HRM should be very effective to get the maximum outcome

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    Replies
    1. Thank you for your valuable comments Tharindu.

      Delete
  6. Hi Jackson. These are the new trends of HRM. The most inspiring shifts have related to changing core HR practices such as the remote onboarding of new employees, the shift to virtual/online learning and development interventions rather than the more traditional face-to-face practices that employees have been used to.

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  7. Human resource is the most important asset that company has and managing it in a effective way is always give a competitive edge. As you discussed importance of HRM subject is a broad one which goes beyond the organization up to social responsibilities. Effective and efficient workforce is the deciding factor for company success.

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  8. Effective human resource management necessitates both scientific and human relations approaches. The emphasis is both goal-oriented and on human welfare. To summarize, HR practices are critical for overall organizational performance levels, and any move to drive the firms towards higher goals should be based on attainable HR strategic goals. Strategic policies create a clear path for the firm's goals while also building an effective workforce team. You have nicely arranged your article Jackson, also informative article.
    Nice work

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  9. Nice topic ,, well explanation People are always an organization’s most valuable asset. They ensure organizational success by contributing to the best of their abilities towards the company’s goals. It is significant to consider the employees’ health and well-being and treat them well enough, so they align their goals with the company’s growth. And if they’re treated like cattle or being mistreated, they will dissociate themselves from such a workplace. That’s where human resources play an essential part in developing organizational strategy as well as addressing the employee-centered needs of an organization.

    ReplyDelete
    Replies
    1. Thank you for your valuable comments Janarthan.

      Delete
  10. Human resource management (HRM) is the management of people in a business. HR management bridges the gap between employee performance and the organization's strategic goals. Furthermore, an effective human resource management team can provide businesses with a competitive advantage.

    ReplyDelete
    Replies
    1. Thank you for your valuable comments Nadeeshan.

      Delete
  11. Agreed Jackson,HRM can pay attention to accomplishing the organization's strategic goals, through making use of the capabilities present in it. HRM allows in education employees and reaching their task balance, in addition to wages and salaries, to make sure elevated productiveness.

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    Replies
    1. Thank you for your valuable comments Bhashitha.

      Delete
  12. In every organization, human resource management is a important function. Without human resource management, businesses cannot effectively recruit and retain employees, improve and enhance the organization, or maintain a healthy, accepting workplace culture and environment. Human resource management is so critical to organizations that many refer to it as the "heart and soul" of the business. You have explained it very well Jackson.

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  13. Human resource management is a key division in every company. Companies would be unable to successfully recruit and retain personnel, improve and enhance the company, or maintain a healthy, acceptable workplace culture and environment without human resources management.

    Very well written with proper reaserch Jackson. All the best.

    ReplyDelete

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