Significance of Human Resource Management in Business

Significance of Human Resource Management in Business

Definition - Human Resource Management

Human resource management (HRM) means to Select, Develop, Motivate and Maintain human resources, in the

organisation. It first selects the right human resources or staff (i.e. managers and employees). It trains and develops them. It motivates them by giving them recognition and rewards. It also provides them with the best working conditions. - Wikipedia Human resource management (HRM) is the governance of an organizations employees. HRM is sometimes referred to simply as human resources (HR). Human resources are the people who work for the organization; Human resource management 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).
Human Resource Management is a series of integrated decisions that form the employment relationship; their quality contributes to the ability of the organisations and the employees to achieve their objectives. - Milkovich and Boudreau Human Resource Management is concerned with the people dimension in management. Since every organisation is made up of people, acquiring their services, developing their skills, motivating them to higher levels of performance and ensuring that they continue to maintain their commitment to the organisation are essential to achieving organisational objectives. This is true regardless of the type of organisation government, business, education, health, recreation or social action. - David A. Decenzo and Stephen P. Robbins Human Resource Management is the planning, organizing, directing and controlling of the procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organizational, and social objectives are accomplished. - Edwin B. Flippo

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Significance of Human Resource Management in Business

What exactly is Human Resource Management?

The study of human resource management is concerned with the nature and regulation of the employment relationship and is a field to which a variety of disciplines contribute, notably sociology, psychology, and industrial relations. The subject covers areas of work and employment as diverse as...

Equal opportunities Recruitment in work Career development Rewards

Motivation Employee relations Training Power and influence

Human resource, along with financial and material resource contribute to the production of goods and services
in an organization. Physical and monetary resources, by themselves, cannot improve efficiency or contribute to an increased rate of return on investment. It is through the combined and concerted efforts of people that monetary and material resources are harnessed to achieve organizational goals. But these efforts, attitudes and skills have to be sharpened from time to time to optimise the effectiveness of human resources and to enable them to meet greater challenges. This is where HRM plays a crucial role. The significance of HRM can be discussed at four levels: 1. Corporate: Good human resource practices help in attracting and retaining the best people in the organization. Planning alerts the company to the types of people it will need in short, medium and long run. HRM can help an enterprise in achieving its goals more efficiently and effective in the following way: 2|Page

Significance of Human Resource Management in Business Attracting and retaining talent through effective human resource planning, recruitment, selection, compensation and promotion policies Developing the necessary skills and right attitude among the employees through training
Securing co-operation of employees through motivation; and

Effectively utilizing the available human resources 2. Professional: Effective management of human resource helps to improve the quality of work life. It contributes to professional growth in the following way: Providing maximum opportunities of personal development of each employee; Allocating work properly and scientifically; and Maintaining healthy relationships between individuals and groups in the organization 3. National: Development of a country depends primarily on the skills, attitudes and values of its human resource. Effective management of human resources helps to speed up the process of economic growth which in turn leads to higher standards of living and fuller employment. 4. Social: Social human resource management has a great significance for society. Society , as a whole is the major beneficiary of good human resource practices Employment opportunities multiply Scarce talents are put to best use Organizations that pay and treat people well, are always ahead of others and deliver excellent results Maintain a balance between the jobs available and job seekers in terms of numbers, qualifications, needs and aptitudes

Provide suitable employment that gives social and psychological satisfaction to people.

Human resources play a crucial role in the development process of modern economies. There are great differences in development between countries which seem to have roughly equal resources, so it is necessary to enquire into the difference in human behavior. It is often felt that, though the exploitation of natural resources, availability of physical and financial resources and international aid play prominent roles in the growth of modern economies, none of these factors is more significant than efficient and committed manpower. It is in fact, said that all development comes from the human mind. 3|Page

Significance of Human Resource Management in Business

HRM becomes significant for business organization due to the following reasons.
1. Objective :HRM helps a company to achieve its objective from time to time by creating a positive attitude among workers. Reducing wastage and making maximum use of resources etc. 2. Facilitates professional growth :Due to proper HR policies employees are trained well and this makes them ready for future promotions. Their talent can be utilized not only in the company in which they are currently working but also in other companies which the employees may join in the future. 3. Better relations between union and management :Healthy HRM practices can help the organization to maintain co-ordinal relationship with the unions. Union members start realizing that the company is also interested in the workers and will not go against them therefore chances of going on strike are greatly reduced. 4. Helps an individual to work in a team/group :Effective HR practices teach individuals team work and adjustment. The individuals are now very comfortable while working in team thus team work improves. 5. Identifies person for the future :Since employees are constantly trained, they are ready to meet the job requirements. The company is also able to identify potential employees who can be promoted in the future for the top level jobs. Thus one of the advantages of HRM is preparing people for the future. 6. Allocating the jobs to the right person :If proper recruitment and selection methods are followed, the company will be able to select the right people for the right job. When this happens the number of people leaving the job will reduce as the will be satisfied with their job leading to decrease in labour turnover. 7. Improves the economy :-

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Significance of Human Resource Management in Business Effective HR practices lead to higher profits and better performance by companies due to this the company achieves a chance to enter into new business and start new ventured thus industrial development increases and the economy improves.

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