Importance of Human Resource Management

Question: What do you mean by Human Resource Management (HRM)? Describe the importance of Human Resource Management.


Importance of Human Resource Management (HRM) - Human Reource Management is development oriented. It is concern of managers of all level and provides space for employee involvement, performance and growth. It has several importance which are discussed below


Human Resource is the most valuable resource in any organisation because it can function only through people. Human Resource Management has come to be recognised as an inherent part of management, which is concerned with the human resources of an organisation. Its objective is to maintain better human relations in the organisation by the development, application and evaluation of policies, procedures and programs relating to human resources to optimise their contribution towards the realisation of organisational objectives.

Meaning and Definition

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.”

According to John Bratton and Jeffrey Gold (2007), “Human Resource Management is a strategic approach to managing employment relations which emphasises that leveraging people’s capabilities is critical to achieving competitive advantage, this being achieved through a distinctive set of integrated employment policies, programmes and practises.”

Importance of Human Resource Management

Human Resource Management is development oriented. It is concern of managers of all level and provides space for employee involvement, performance and growth. It has several importance which are discussed below:-

To maintain quality of work life

Quality of work life is the perception of employees regarding the relationship between working condition with management. Simply, it is the relationship between employees and total work environment.

Quality of work life is concerned with the employee’s perception of physical as well as psychological wellbeing at workplace and it can be obtained by maintaining work autonomy, work freedom, job recognition, belongingness, rewards, etc.

To increase productivity and profit
Human resource management ensures right quality and quantity of personnel in workplace, apart from which, it creates opportunities to facilitate and motivate individual and group of employees to grow and advance their career. Motivated employees work hard to meet their personal career goal which directly influences productivity of organisation. Minimising cost and maximising profit is the essence of productivity.

To produce employees who are easily adaptable to change
Human resource management performs various functions, among which training and development of employees is one of the vital ones. Training and development programs keep employees updated with skills necessary to adjust with alteration of organisation’s environment, structure and technology.

To match demand and supply of human resource
Human resource management probes existing human resource in certain interval of time to identify if the company has adequate number of workers or not. In case when company has inadequate human resource, human resource management performs activities like recruitment and selection to balance the need. In the same way, it lay-off inefficient employee in case when the company has excessive employees

To retain employees and motivate them to accomplish company’s goal
Utilising human resource to their fullest and maintaining them in the company for a long term is a major function of human resource management. Under this function, HRM performs tasks like providing fringe benefits, compensation and rewards to the deserving employees. These activities do not only help in retaining employees in the company but also in achieving organisation’s goal effectively.

To recognise merit and contribution of employee
Human resource management performs timely appraisal of employee’s performance in order to recognise excellent and poor workers. The excellent workers are then rewarded as a return for their contribution.

To create a feeling of belongingness and team spirit in the employee
Human resource management designs job on the basis of teamwork. As teamwork demands contribution from every team member, HRM focuses on making each and every employee feel valued so that employee contributes best from their side.

To sustain business in the market
Human resource management makes sure that the company has the best employee because promising employees are capable of taking their company ahead in the race by delivering excellent results. This guarantees organisation’s success and stability in future.

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