Everything You Need To Know HRM: Functions, History & Purpose

Everything You Need To Know HRM: Functions, History & Purpose

Sugandha SrivastavaFebruary 9th, 20247 min read

Employees are widely recognized as the most valuable asset within an organization. Simultaneously, effective human resource management (HRM) plays a crucial role in fostering the development of an organization. The significance of HRM holds substantial value within organizations.

The HR department is responsible for ensuring that employees experience a safe, respectful, and supportive environment. Exceptional human resource management ensures the efficient and effective operation of the HR department while also allowing for continuous growth and evolution through ongoing enhancements. This article will provide an in-depth exploration of what constitutes human resource management, its necessity, and its pivotal importance within the organizational context.

What is HRM?

HRM, which stands for Human Resource Management, encompasses the oversight of HR functions within an organization. This extends beyond activities such as recruiting, onboarding, training, and employee management, to encompass responsibilities related to employee retention, as well as the design and administration of benefits and compensation structures.

The primary objective of HRM is to ensure productivity, foster employee engagement, and cultivate commitment to the organization's success. To achieve these aims, HRM focuses on attracting, developing, and motivating the most suitable talent within the organization.

HRM Software

The field of HRM has indeed experienced substantial advancements in HR technology, with sophisticated software automating processes and integrating analytics. This is evident across various HR functions, especially in recruitment, which has seen a surge in software tools and management systems that facilitate candidate-employer matching while streamlining other hiring steps like interviewing and vetting.

Moreover, HRM software has transitioned from traditional on-premises systems to cloud-based software-as-a-service platforms, offering enhanced flexibility and accessibility.

Key vendors in the HRM market, such as Intervue, ADP, BambooHR, HROne, Isolved, Paycom, Paylocity, Personio, Rippling, SAP, and Workday, provide a range of HR tech solutions to meet the diverse needs of organizations. These platforms offer features to support various HR functions, from recruitment and onboarding to performance management and analytics, reflecting the evolving landscape of HR technology.

What are the functions of HRM?

Understanding some key functions of HRM in an organization:

  1. Recruitment and Hiring: HR managers play a pivotal role in recruiting new talent, utilizing various channels such as job boards, agencies, and ad placements. They also design the compensation structure for new hires.
  2. Planning and Scheduling: HR is responsible for planning and scheduling events, meetings, celebrations, and employee recognition activities, ensuring all employees are informed about these events.
  3. Onboarding and Training: HR ensures smooth onboarding for new employees, facilitating their acclimation to the organization’s culture. They also oversee training to familiarize employees with organizational policies and procedures.
  4. Documentation of Rules and Policies: HR managers collaborate with management to design and update organizational policies and rules, ensuring transparency and compliance with the latest regulations.
  5. Performance Management: HR is involved in designing performance evaluation systems, determining promotions, demotions, and payout structures based on employee performance. They also design rewards and recognition programs.
  6. Conflict Resolution: HR plays a key role in resolving disputes and conflicts among employees, aiming to prevent clashes and ensuring unbiased decisions in conflict resolution.
  7. Health and Safety: HR ensures the health and safety of employees by providing insurance plans, organizing safety arrangements, and promoting employee wellness through activities such as gym memberships, competitions, etc.
  8. Positive Reinforcement: HR fosters a positive workplace culture by working with employees and managers, using strategies like employee recognition programs and incentives to reinforce positive behavior.
  9. Recording and Reporting: HR is responsible for documenting performance metrics, departmental performance, and reports on accidents and incidents, which are essential for setting and tracking improvement goals.
  10. Compensation and Benefits Management: HR designs the compensation and benefits packages for employees, including salary and additional benefits, aiming to attract and retain top talent within the organization.
HRM History

The roots of contemporary human resource management can be traced back to the 18th century, which was marked by significant changes during the British Industrial Revolution. This period led to the establishment of large factories, creating a surge in demand for workers. It became evident that worker satisfaction and happiness were closely linked to productivity, especially as laborers often worked extensive hours, sometimes up to 16-hour workdays. In response, initiatives aimed at enhancing worker satisfaction were introduced with a focus on maximizing return on investment.

As the 19th and early 20th centuries progressed, attention was also directed towards improving factory conditions, addressing safety concerns, and advocating for workers' rights. This led to the emergence of departments within organizations dedicated to managing personnel, dealing with legal compliance, and implementing worker satisfaction and safety programs.

The aftermath of World War II saw the adoption of the U.S. Army's training programs as a model for companies, emphasizing the importance of employee training. In the 20th century, these personnel departments evolved into human resources departments, distinguishing themselves by incorporating technology to enhance communication and access to employee information. The shift towards human resources from personnel management reflects the growing influence of technology in streamlining HR processes and improving employee management.

How does HRM work?

Human resources professionals oversee the day-to-day implementation of HR-related functions within organizations. Typically, human resources operates as an independent department within an organization.

The structure, size, and nature of positions within HR departments can vary widely. In smaller organizations, a single HR generalist may handle a diverse range of functions. Conversely, larger organizations may employ several HR professionals in specialized roles, such as recruiting, immigration and visas, talent management, and employee benefits and compensation. Despite the specialization of these HR roles, there may be some overlap in job functions.

Amazon serves as an example of a large company with several types of specialized HR positions, listed on their career website:

    • HR assistant
    • HR business partner
    • HR manager
    • Recruiter
    • Recruiting coordinator
    • Recruiting manager
    • Immigration specialist
    • Leave of absence and accommodation specialist
    • Compensation specialist or manager
    • Benefits specialist or manager
    • Talent management specialist or manager
    • Learning and development specialist or manager
    • HR technology or process project program manager
    • HR analytics specialist or manager
What is the importance of HRM?

Understanding the importance of human resource management in an organization:

  1. Quality of Work Life: HR management focuses on maintaining a positive work environment to enhance employee productivity by minimizing work-life stress, offering rewards, recognition, and financial benefits.
  2. Bridging Demand and Supply: HR aligns human resources with organizational needs through recruitment and downsizing when necessary, ensuring high performance and productivity.
  3. Training and Development: HR invests in employee training, fostering continuous improvement in productivity and performance, benefiting both employees and the organization.
  4. Employee Motivation and Retention: HR promotes a sense of belongingness and motivation through recognition programs and regular monetary benefits, enhancing employee engagement and retention.
  5. Cultivating a Healthy Work Culture: HR ensures a democratic, transparent, and supportive work culture, encouraging employee wellbeing and productivity.
  6. Employee Compensation: HR ensures fair and competitive compensation, including wages, benefits, and perks, to demonstrate the value of employees' contributions.
  7. Maximizing Profit and Productivity: HR optimizes personnel allocation, providing growth opportunities for employees, fostering their personal and organizational development, thus minimizing costs and maximizing productivity.
  8. Strategic Management: HR contributes to corporate decision-making and strategy management, aligning individual and organizational goals to achieve targets.
  9. Corporate Image Establishment: HR plays a pivotal role in shaping the organization's brand image, both internally and externally, attracting and retaining talent and enhancing the organization's reputation in the market.
Objectives of human resource management

The objectives of Human Resource Management (HRM) can be categorized as follows:

  1. Societal Objectives:
    • Addressing ethical and social needs, including legal compliance with equal opportunity and equal pay for equal work.
  2. Organizational Objectives:
    • Ensuring organizational efficiency, encompassing tasks such as providing appropriate training, optimizing workforce size, and fostering high employee retention rates.
  3. Functional Objectives:
    • Guiding effective HR function within the organization, such as allocating HR resources optimally.
  4. Personal Objectives:
    • Supporting individual employee goals, including opportunities for education, career development, and maintaining high levels of job satisfaction.

More specific objectives of HRM include:

  • Providing and maintaining productive employees.
  • Utilizing the skills and abilities of each employee to their full potential.
  • Ensuring employees receive adequate training.
  • Cultivating a positive employee experience to enhance satisfaction and quality of life, encouraging optimal contributions to their work.
  • Communicating company policies, procedures, rules, and regulations to employees.
  • Upholding ethical, legal, and socially responsible policies and behaviors in the workplace.
  • Managing internal and external changes that may impact employees and staffing.
Skills and Responsibilities of An HR Manager

HRM encompasses various phases, each overseen by an assigned HR manager, with direct responsibility for specific aspects, including:

Pre-Employment Phase:

    • Employee recruitment
    • Talent and workforce management
    • Job role assignment
    • Compliance with labor laws
    • Team building

Employment Phase:

    • Onboarding and retention
    • Career development
    • Compensation and benefits
    • Performance management
    • Training and development
    • Succession planning
    • Employee engagement and recognition

Additionally, HR managers benefit from possessing a diverse set of skills and experience, including:

  • Communication: Strong verbal and written capabilities are essential.
  • Recruitment and talent acquisition: Involves job descriptions, interviews, negotiating offers, and onboarding.
  • Employee relations: Managing labor relations, addressing grievances, and fostering positive employee experiences.
  • Legal compliance: Staying current with employment laws and regulations.
  • Conflict management: Mediating conflicts and resolving difficult situations.
  • Performance management: Establishing performance standards and aiding employee skill development.
  • Strategic thinking: Aligning HR strategies with company goals.
  • Analytics: Utilizing data analysis for workforce metrics and decision-making insights.
  • Adaptability: Navigating evolving workplace and societal changes.
  • Ethics and confidentiality: Understanding confidentiality, privacy requirements, and ethical standards.

Job opportunities for careers in Human Resource Management (HRM) continue to thrive, with companies increasingly recognizing the strategic impact of a proficient HR department and subsequently investing in these roles. This increased investment is reflected in the growing demand for HR jobs.

According to the U.S. Bureau of Labor Statistics (BLS), HRM job titles are projected to experience a 5% growth between 2022 and 2023. Notably, the salary prospects for HR professionals are robust. As of May 2022, the median annual salary for an HR manager was approximately $130,000, while HR specialist positions commanded median salaries exceeding $64,000 during the same period.

These statistics reinforce the promising outlook for individuals pursuing careers in HRM, indicating both growth in job opportunities and competitive compensation within the field.

Summing It Up

Human resource management (HRM) remains an indispensable function within organizations, playing a pivotal role in fostering a positive work environment, aligning personnel with organizational goals, and enhancing employee productivity and satisfaction.

The evolution of HRM is evident through the integration of sophisticated HRM software and the growing strategic importance placed on HR professionals. With a rich history and diverse set of objectives and responsibilities, HR managers have become essential in managing various HR phases and driving organizational success. Furthermore, the thriving job opportunities and competitive salaries highlight the promising prospects within the field of HRM.

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