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Human Resource Management; Functions, Importance & Benefit [PDF Included]

In human resource management, human resource (HR) managers take on a variety of roles, including hire and retention of quality employees, supporting collaboration, managing conflict, and even working with leaders to set the objectives of an organization. HR management professionals bring tremendous value to their organizations with advanced skills in mentorship and teaching, and by offering other kinds of professional support besides managing benefits and social opportunities.

As a practice, businesses and organizations depend on three key properties: physical resources, such as supplies and equipment; financial resources, comprising cash, credit, and debt; and people. People play a significant role in an organization or business as a resource.

Having a thorough game plan, a profitable product or service, and productive processes are all important. But all of this depends on the ability of the people within the organization to implement strategies, plans, and processes to make an organization successful.

An organisation’s HR function plays a major part in the growth of its bottom line and the success of its business approach. The very nature of a company is in its people, and giving guidance to people is what human resource management is all about. HRM serves an organization with the best services and systems to drive both profit and team synergy.

Definition of Human Resource Management

Human resource management is the organizational function that manages all the issues related to the people in an organization. That includes but is not limited to compensation, recruitment, and hiring, operation management, organization development, security, wellness, benefits, employee encouragement, communication, policy administration, and training.

Human Resource Management; Functions, Importance & Benefit [PDF Included]

Functions Of Human Resource Management

1. Managerial Functions


The planning function of HRM provides the best fit between employees and jobs while avoiding human resources shortages or surpluses for the business or the organization. There are four vital steps of the HRP process: analysing the present human resource supply, determining the human resource demand, balancing the human resource demand with supply, and regulating the first three steps to the organizational goals.

Strategic HR planning is essential for achieving organizational objectives and ensuring the right people are in the right roles at the right time. By continuously monitoring and adjusting human resource requirements, organizations can proactively address any issues and maximize the potential of their workforce. Effective planning can help organizations adapt to changing market conditions, technological advancements, and workforce trends, ultimately driving business success.


Organizing is the function of human resource management that involves developing an organizational structure to assure the accomplishment of the organizational goals. An organization chart, which provides a graphic representation of the chain of command within an organization, usually represents the structure.

This structure helps to define roles, responsibilities, and relationships within the organization, making it easier to coordinate activities and communicate effectively. By organizing effectively, a company can ensure that resources are allocated efficiently, tasks are completed in a timely manner, and goals are achieved. Proper organization is essential for the success of any business, as it establishes a framework for operations and provides clarity for employees at all levels of the organization.


Directing includes activating employees at various levels and making them contribute the maximum towards organizational aim. Using the maximum potentialities of an employee via constant motivation and direction is a prime focus for this function of human resource management.

It involves providing clear instructions, setting performance expectations, and offering feedback to ensure employees are on track to achieve goals. Effective directing also involves managing conflicts and resolving any issues that may arise within the team. By guiding and supervising employees, HR managers can help them reach their full potential and contribute positively to the organization.


Post planning, coordinating and directing, performance of an employee is to be assessed, verified and matched with organizational goals. If performance is found to be departing from the plan, control actions are to be taken.

In order to ensure that performance remains aligned with organizational objectives, regular monitoring and feedback mechanisms should be established. This will enable timely identification of any deviations from the plan, allowing for prompt corrective measures to be implemented. Through effective control measures, organizations can optimize employee performance and drive success towards their goals.

2. Operative Functions

Recruitment and Selection:

This human resource management function involves attracting people to work for the organization and choosing the best candidates.

Attracting people normally starts with an employee brand. Being an attractive employer has a number of advantages; just as it is the other way around. A good example of the latter is the tobacco industry, which struggles to attract talent because of its corrupt reputation.

With a strong employer brand and the right sourcing policies, you are already halfway there. Once candidates apply, the selection process is a human resource technique to pick the best qualified and highly inclined candidates. Technological developments in recruitment have gone quick and as a result, there are various types of recruitment tools for each part of your recruitment process.

Job Analysis & Design:

 This human resource management function includes defining the nature of the job, including the requisite qualifications, bits of intelligence, and work experience for an individual position within an organisation. This function is necessary for helping to combine tasks, roles and responsibilities into a single work unit to achieve organizational goals.

Training & Development:

Training and development of people are a follow up of the employment function. It is the role of management to train each employee perfectly to develop their technical skills for the job for which they have been employed and also to develop them for the higher job roles in the organisation.

Proper development of staff is necessary to increase their skills in doing their jobs and in complying with their growing need. For this purpose, the human resource departments will arrange training programs. There are a number of on-the-job and off-the-job methods available for training.

A good training program should comprise a mixture of both types of methods. It is important to point out that the human resource department provides training not only for new employees but also for experienced employees to update their knowledge in using the latest techniques.

Compensation Management:

This function is concerned with the determination of suitable and fair remuneration of the employees in the organisation for their contribution to achieving the organisational goals. The people can be compensated both in terms of financial as well as non-financial rewards.

Factors that must be taken in mind while fixing the remuneration of people are their basic needs, obligations of jobs, legal arrangements regarding minimum wages, the capacity of the organisation to pay, wage level afforded by rivals, etc. For securing the wage levels, the human resource department can make use of various techniques, like job evaluation and performance assessment.


Employees work in the organisation for the fulfilment of their needs. In many of the cases, we found they do not assist towards the organisational targets as much as they can. This happens because employees are not properly motivated. The human resource manager encourages the various departmental managers to design a structure of financial and non-financial rewards to motivate the employees.

Industrial Relations:

Another function of human resource management is maintaining and improving relationships with labour unions and other cooperatives, and their members.

Unionization is still preferred in Europe, although it is dropping overall. In 2018, 67% of employees in Denmark and 92% of employees in Ireland were a member of a union. But, in the UK and Estonia, only 23% and 4% of employees, subsequently, were. In the USA, trade union membership is low, with 10% of employees being members in 2018. Keeping good relations with unions will help to spot and deal with potential conflicts quickly and will also be helpful in more difficult economic times when layoffs or other actions are required.


The duties of the procurement manager do not end with picking the right people, their training and development, but also their separation from the system. Some people quit their job before they die. It may either be because they shift to some other organization or they reach the age of superannuation.

In both cases, the HR manager is expected to complete their dues well in time and in good shape so that the persons quitting the organization to join society do not spread ill-words about the business unit.


Human resource management functions by designing, developing, publishing and achieving the organizational policies, which are necessary for the proper treatment for all the employees.

3. Advisory Functions

Top Management Advice:

One of the significant HRM functions is to advise the top management in developing policies and practices. The advisory function of human resource management also advises the top management on the valuation of manpower. This function also requires advice regarding maintaining high-quality human relations and improving employee morale.

Department Head Advice:

Under this human resource management function, HRM advises the managers of different departments on policies related to job design, job description, recruitment, selection, appraisals.

Importance of Human Resource Management

Human Resource Management is a modern concept to maintaining people at the workplace, which concentrates on acquisition, development, utilization and maintenance of human resource.
It is development-oriented. It is a belonging to managers of all levels and provides space for employee involvement, performance and success. Several companies currently prefer human resource management to staff management because it plays a vital role in managing a quality team of working experts. Besides, it has other importance which is discussed below.

Developing an engaged workforce

Without human resource management, employees can lose the vision of their purpose or role in the company. HRM provides strategic coaching, professional development, and mentorships that help each employee take part and grow.

To Increase Productivity and Profit

HRM ensures the right quality and quantity of the people in the workplace, apart from which it creates opportunities to facilitate and motivate individual and group of employees to grow and enhance their career. Motivated employees work hard to satisfy their personal career goal which directly influences the productivity of the organization. Minimizing cost and maximizing profit is the basis of productivity.

Recognizing and Valuing Individuals

Human resource management acknowledges every employee’s worth within the organization, hinting that the organization recognizes and value individual contributions. The empathy monitor study by a business consultant states that 93% of employees say they are more likely to work at an organization with an empathetic employer. Also, the happy work-study by Ultimate Software says that 75% of employees would stay longer at an organization that admits and discusses their concerns.

Enhancing Collaboration and Improving Communication

 The “soft skills” of human resource management have a tremendous impact on organizations. Employees may use conflict resolution training provided by HRM to solve problems, or managers could use HR training to support them in communicating with their employees more effectively.

To Match Demand and Supply of Human Resource

HRM probes existing human resource in certain intermission to identify if the company has enough workers or not. In case when a company has an inadequate human resource, human resource management issues activities like recruitment and selection to stabilize the need. In the same way, it lay off an inefficient employee when the company has extra employees.

Employee Satisfaction

Using human resource to their completest and maintaining them in the company for the long term is a major function of HRM. HRM performs tasks like providing fringe benefits, compensation and rewards under this function to the deserving employees. These activities help not only in retaining employees in the company but also in achieving the organization’s goal effectively.

Boosting Employee Morale

By managing services such as gym memberships and mental health services, Human resource professionals are at the core of company culture. When human resource management arranges activities, such as a company sports team or a weekly outing, it brings employees together as people and enhances morale.

Benefits of Human Resource Management

The process comprises many steps including selection, recruitment, training & development, directions, building up a healthy environment, promoting good relationships, taking medical and safety measures, designing a workable schedule, scheduling meetings and conferences along delegating tasks among the teams to intensify the work output which will lead up to the success of the organization.

Here are some benefits of HRM;

Strategic Management:

Human resource management strengthens the company’s bottom line by triggering positive result, leading to organizational achievement. Leaders with proficiency in HRM take part in making the corporate decision that determine human resource decisions.

Employees are considered as valuable assets and investing in their well-being and development can result in increased productivity and overall success for the organization. Effective HRM practices can lead to a motivated workforce, reduced turnover rates, and improved employee satisfaction. This, in turn, can create a competitive advantage in the market and contribute to the long-term success of the company. By aligning HR strategies with the overall business objectives, leaders can ensure that the HR function plays a strategic role in achieving organizational goals.

Recruitment and Training:

Hiring the right people on board is a very difficult job without a properly devised recruitment method. To perform a task is as crucial as hiring.

Human resource management will not only approach all the suitable candidates in a matter of days but will also create the job characters that would fit perfectly to each defined role. After the hiring, they will make the new employees train in order to fit in the workplace with no significant issues.

Performance Management strategy:

Human resource management measures the work efficiency and designing a performance management strategy accordingly. Which helps the employees feel more proficient and rewarded for their performance and effort. This type of approach would assure not only maximum brilliance but also build up work efficiency.

Not only this, but the human resource management would also help them with improving their skills and inspire them to be more extraordinary in all their tasks. They will always be open to providing well-deserved appreciation and respect. An effective PMS is the most potent tool used by the human resource management department.

Building Relationships:

Everyone has their own moral values, similarly, a place has its own principles and values. It is the moral right of the human resource management department to secure the safety and privacy of its employees. Establishing healthy relationships between the clients, the employers, and their employees, preserving the work balance by applying rules without hurting the sentiments or values of the employees, are the major responsibilities.

Conflict Management:

Human resource management department takes timely action to fix the argument systems in which multiple people are sharing a common channel to lead to conflicts. This department also deals with one-to-one conflicts, which could be between the employer and the employee or the other way around.

In addition, the conflict resolution strategies employed by the human resource management department include mediation, negotiation, and fostering a culture of open communication within the organization. By addressing conflicts promptly and effectively, the department plays a crucial role in maintaining a harmonious work environment conducive to productivity and employee well-being.

Improving Employee Turnover:

Employees are the asset of a company, and recruiting is a very painstaking process. Even a single employee turnover can cost twice as much as their current salary to hire a new person and then instructing them for a replacement. It is cost-inefficient and undesirable for a healthy work atmosphere.

To enhance the turnover, the human resource management department is always very clear about the terms & conditions of the business. They would carefully develop the contracts that will represent those terms & conditions.


Human Resource Management (HRM) is a dynamic field that plays a critical role in the success of any organization. By effectively managing the people within a company, HR professionals ensure a positive work environment, a competent workforce, and compliance with labor laws. From recruitment and onboarding to training and development, compensation and benefits, and performance management, HRM encompasses a wide range of activities that directly impact employee relations, productivity, and ultimately, the organization’s bottom line.

As the workplace continues to evolve, HR professionals must adapt and stay up-to-date on emerging trends. This includes embracing technological advancements that can streamline HR processes, fostering a culture of diversity and inclusion, and prioritizing employee well-being. By focusing on these key areas, HR can ensure it remains a strategic partner in achieving organizational goals.

Terms Related To Human Resource Management

Project Management:

Project Management is basically leading the work of a team to achieve goals and meet the success criteria of an organization at a specified time.

The primary assert of it is to achieve all the project goals within given constraints. The initial constraints are time, budget and scope. The secondary challenge is to improve the allocation of basic inputs and apply them to meet pre-planned aims. read more>>>

What is Procurement:

If you ask for what procurement definition is we can define procurement as sourcing goods, and services from a third-party seller through direct purchasing, competitive bidding, or tendering process while securing the proper quality and quantity.

The term procurement is often used to refer to buying goods and services for a business matter, which is generally performed on a large scale. Procurement requires two parties; one is the buyer, and another is the seller or vendor. But it is the act of buying that is pinned procurement and not the exercises of the vendor. Read more>>>

Resource Management:

In the last few decades, resource management has become a very essential part of modern business organization. This area is mature. It has introduced ever an array of novel ideas since it started rising. Resource management has come out as an independent practice after organizations became complex with matrix structure and extended in multiple geographies. Read more>>>

What is Management Style?

Management style is a a unique way manager go about accomplishing their goals. Management style refers to the way that a manager plans, controls, make decisions, designate, and manages their staff.

It can vary extensively depending on the company or organization, level of management, production, region, culture and the person himself. An ideal manager is someone who can align their management style in reply to various factors while keeping their focus on successfully accomplishing goals. Read more>>>

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