Importance of HRM

Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers.

Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.

Human Resource Management has a place of great importance. According to Peter F. Drucker, “The proper or improper use of the different factors of production depend on the wishes of the human resources. Hence, besides other resources human resources need more development. Human resources can increase cooperation but it needs proper and efficient management to guide it”.

HRM is important for below reasons:

  1. Output will be greater than the input
  2. Each individual is different from culture, education, environment, background etc…
  3. We cannot purchase the loyalty, dedication, devotion towards the organization.
  4. Time passes human factor can bring experience to organization to accept the challenges
  5. Recent developments like legislation, trade unions enhanced their importance.

Now let us look at the importance of Human Resource at different levels:

At the enterprise level:

–      Good HR practice can help in attracting & retaining the best people in the organization planning alerts the company to the types of people it will need in the short, medium of long run.

–      It helps in training people for challenging roles developing right attitude towards the job & the company, promoting team sprit among employee & developing loyalty & commitment through appropriate reward schemes.

At the individual level

Effective management of HR helps employee thus:

–      It promotes team work & team spirit among employees.

–      It office excellent growth opportunity to people who have the potential to rise.

–      It allows people to work with diligence & commitment.

At the society level

Society, as a whole, is the major beneficiary of good HR practice.

–      Employment opportunities multiply.

–      Scare talents are but to best use. A company that pays & treats people well always race ahead of others & delivers excellent results.

At national level

Effective use of HR helps in exploitation of natural, physical & financial resources in a better way. People with right skills, proper attitude & appropriate values help the nation to get ahead & compete with the best in the world leading are letter standard of living & better employment.


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