Main Content

Lesson 01: An Overview of Human Resource Management

What is HRM?

The following video was produced by the Society for Human Resource Management (SHRM), which is one of the leading professional organizations that promotes and supports Human Resource Managers. 

Video Length: 00:01:50, Human Resource Management Transcript

SPEAKER: The pace of change in the world is accelerating. For business, staying on top of that relentless change can be all consuming. But there is one asset that can be harnessed to keep up with change and even manage it into an advantage. This asset makes us more competitive. It grows in strength as an organization grows. It positions countries to perform better in the world. That asset is people.

Human resources. Developing people is the best way to adapt to change, because people drive the change. A human resource professional is the voice of those people. A strategist, a builder, a catalyst, an expert on what's next. Great companies and countries adapt to change faster, because they know what's next. Next is evolving from bricks and mortar into a digital business. Next is transforming a nation of workers into a nation of innovators. Next is changing from office hours to productive hours. Next is responding to an economy gone down with a strategy for an economy turning up. Next is human resources, seeing now what others won't see until later. HR, we know next.

 

What are the Basic Functions of HRM?

As the video demonstrated, Human Resource Management is an essential part of every organization.  Within every business, there are five fundamental HRM functions, which are shown below in Figure 1. These five functions work together as part of an integrated HRM system. Although each function is important as an individual entity, all five of these areas are interrelated. Each builds upon the other and strengthens the organization as a whole. For example, an organization must employ workers before it can develop and reward them. Please click on each of the functions in Figure 1 below to see how it relates to the HRM process.

Figure 1. Functions of Human Resource Management
Graphic shows five HRM functions, staffing, human resource development, compensation, safety and health, and employee and labor relations

Staffing
Staffing sets the stage for every organization because without people, businesses would not exist. To have employees, an organization must first recruit potential workers and select from the pool of applicants.

 

Safety and Health, and Employee and Labor Relations
Treating labor unions and non-unionized workers in a fair and equitable manner is as essential as physical safety and health provisions. How people are treated within an organization will become known in the external environment, influencing the number and type of potential workers who apply for jobs at the organization. This leads us back to the beginning of the overall process.

 

Human Resource Development
Once employees are hired, it is important to ensure that they are properly trained for the jobs for which they were selected. New training and overall development provides the employees opportunity for growth, which benefits both the person and the organization. Measuring employee and organizational effectiveness keeps businesses informed about progress and helps them develop new goals.

 

Safety and Health, and Employee and Labor Relations
Treating labor unions and non-unionized workers in a fair and equitable manner is as essential as physical safety and health provisions. How people are treated within an organization will become known in the external environment, influencing the number and type of potential workers who apply for jobs at the organization. This leads us back to the beginning of the overall process.

 

Compensation
Employees need to be compensated for their performance with financial and nonfinancial rewards.

 

Now that you have an overview of the functions of HRM, let’s look at each function in greater detail.


Top of page