Definition

human resource management (HRM)

Contributor(s): Shaun Sutner

Human resource management (HRM) is the practice of recruiting, hiring, deploying and managing an organization's employees. HRM is often referred to simply as human resources (HR). A company or organization's HR department is usually responsible for creating, putting into effect and overseeing policies governing workers and the relationship of the organization with its employees. The term human resources was first used in the early 1900s, and then more widely in the 1960s, to describe the people who work for the organization, in aggregate.

HRM is really employee management with an emphasis on those employees as assets of the business. In this context, employees are sometimes referred to as human capital. As with other business assets, the goal is to make effective use of employees, reducing risk and maximizing return on investment (ROI).

The modern HR technology term, human capital management (HCM), has come into more frequent use than the term, HRM, with the widespread adoption by large and midsize companies and other organizations of software to manage many HR functions.

Objectives of human resource management

The objectives of HRM can be broken down into four categories:

  1. Societal objectives: Measures put into place that respond 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. This includes providing training, hiring the right amount of employees for a given task or maintaining high employee retention rates.
  3. Functional objectives: Guidelines used to keep the HR functioning properly within the organization as a whole. This includes making sure that all of HR’s resources are being allocated to its full potential.
  4. Personal objectives: Resources used to support the personal goals of each employee. This includes offering the opportunity for education or career development as well as maintaining employee satisfaction.
Objectives of HRM
The four objectives of HRM

Human resource management functions

HRM can be broken down into subsections, typically by pre-employment and employment phases, with an HR manager assigned to each. Different areas of HRM oversight can include the following:

HRM software

Almost all areas of HRM have sophisticated software that automates varying degrees of many HR processes. For example, job candidate recruiting has seen enormous growth in the number of software platforms and systems that help both employers and job seekers to electronically match organizations and candidates with each other and then help manage the interviewing, hiring and employment processes.

While some HRM software systems started out on premises, nearly every area of HR tech, especially HCM systems, is moving to cloud-based software as a service (SaaS) platforms.

The importance of human resource management

The role of HRM is to manage the people within a workplace to achieve the organization’s mission and reinforce the culture. When done effectively, HR managers can help recruit new professionals that have skills necessary to further the company’s goals as well as aid with the training and development of current employees to meet objectives.

A company is only as good its employees, making HRM a crucial part of maintaining or improving the health of the business. Additionally, HR managers can monitor the state of the job market to help the organization stay competitive. This could include making sure compensation and benefits are fair, events are planned to keep employees from burning out and job roles are adapted based on the market.

This was last updated in May 2019

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