Everything you need to know about the importance of human resource management. Human resource management is that branch of management which is concerned with the recruitment, selection, development and the optimum use of the employees.
In other words, human resource management is concerned with the employees engaged at all levels of an organisation.
Human resource management ensures that every employee makes his maximum contribution to the achievement of business goals.
Any organisation will have proper human resource management- (i) to improve the capabilities of an individual; (ii) to develop team spirit of an individual and the department; and (iii) to obtain necessary co-operation from the employees to promote organisational effectiveness.
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The importance of human resource management at different levels of an organisation are:- 1. Social Level 2. Professional Level 3. Individual Level 4. National Level 5. Organisational Level.
Additionally, learn about some other reasons why HRM is important for an organisation and enterprise:-
1. Explicit Communication 2. Successful Procurement 3. Reduced Layoffs 4. Reduced Turnover 5. Coordination and Integration 6. Increased Productivity 7. High Motivational Levels 8. Parity in Compensation 9. Competitiveness 10. Reduced Discontent 11. Retaining Effective Employees 12. Ensuring Integration 13. Effective Separation 14. Cordial Human Relations and 15. Enforced Values.
Importance of Human Resource Management – For an Organisation, Enterprise, Individual, Society and the Nation
Importance of Human Resource Management – At Different Levels of an Organisation
Human resource management is that branch of management which is concerned with the recruitment, selection, development and the optimum use of the employees. In other words, human resource management is concerned with the employees engaged at all levels of an organisation. Human resource management ensures that every employee makes his maximum contribution to the achievement of business goals.
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According to French Wendell, “Human resource management is the recruitment, selection, development, utilisation, compensation and motivation of human resources of the organisation.”
The importance of HRM is discussed below:
Importance # 1. Social Level:
Proper management of personnel’s enhances their dignity by satisfying their social needs.
This is done by taking following steps:
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(i) Forming a balance between the jobs available and the job seekers, according to the qualifications and needs of the organisational criteria.
(ii) Giving the organisation suitable and the most productive employment, which might bring to them psychological satisfaction.
(iii) Utilising maximum resources in an effective manner and paying the employee a reasonable compensation in proportion to the contribution that has been made by him.
(iv) Reducing waste or improper use of human resources, through conservation of their normal energy and health.
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(v) Assisting people to take their own decisions that are in their interests.
Importance # 2. Professional Level:
By crediting healthy working environment, teamwork in the employees is promoted.
This is done by taking the following steps:
(i) Forming the dignity of the employees as a ‘human-being’.
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(ii) Giving maximum opportunities to the development of individual.
(iii) Giving healthy relationship between different workgroups so that the work may be effectively performed.
(iv) Enhancing the employee’s working skill and capacity.
(v) Rectifying the errors of wrong postings and proper re-allocation work.
Importance # 3. Individual Level:
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It can help the organisation in accomplishing its goals by adopting the following measures:
(i) Making right attitude among the employees through effective motivation.
(ii) Making effective use of effectively the available human resources that are available.
(iii) Tying willing cooperation of the employees for achieving goals of the enterprise and fulfilling their own social and other psychological needs of recognition, love, affection, belongingness, esteem and self-actualisation.
Importance # 4. Corporate Level:
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HRM is of great use in helping business organisations to attain its goals and objectives more efficiently and effectively in the following ways:
(i) By ensuring that business organisation has a team of dedicated, competent employees.
(ii) By utilizing all available human resources.
(iii) By attracting as well as retaining requisite talent through the following effective HR planning, recruitment, selection, placement, orientation, compensation, and promotion policies.
(iv) By developing a requisite skills and correct attitude amongst the employees through the proper training of employee, development, performance appraisal and other schemes.
(v) By effectively securing the willing cooperation of employees through motivation, grievance handling and so on.
Importance # 5. National Level:
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HRM plays a very vital role in the development of nation in following ways:
(i) Judious utilisation of natural, physical and financial resources of nation requires an efficient and committed workforce.
(ii) Economic development of nation is dependent upon the skills, attitudes, and values of its human resource.
(iii) It aids to accelerate the process of economic growth.
(iv) It assists to help in improving the standard of living and better employment.
Importance of Human Resource Management – For an Individual Enterprise: Social, Professional and Individual Enterprise
The importance of human resource management can be discussed from three standpoints, viz., social, professional and individual enterprise.
1. Social Significance:
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Proper management of personnel, enhances their dignity by satisfying their social needs.
This it does by:
(i) Maintaining a balance between the jobs available and the jobseekers, according to the qualifications and needs;
(ii) Providing suitable and most productive employment, which might bring them psychological satisfaction;
(iii) Making maximum utilization of the resource in an effective manner and paying the employee a reasonable compensation in proportion to the contribution made by him;
(iv) Eliminating waste or improper use of human resource, through conservation of their normal energy and health; and
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(v) By helping people make their own decisions, that are in their interests.
2. Professional Significance:
By providing a healthy working environment it promotes team work in the employees.
This it does by:
(i) Maintaining the dignity of the employee as a ‘human-being’;
(ii) Providing maximum opportunities for personal development;
(iii) Providing healthy relationship between different work groups so that work is effectively performed;
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(iv) Improving the employees’ working skill and capacity;
(v) Correcting the errors of wrong postings and proper reallocation work.
3. Individual Enterprise:
It can help the organisation in accomplishing its goals by:
(i) Creating right attitude among the employees through effective motivation;
(ii) Utilising effectively the available human resources; and
(iii) Securing willing co-operation of the employees for achieving goals of the enterprise and fulfilling their own social and other psychological needs of recognition, love, affection, belongingness, esteem and self-actualisation.
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Dynamic and growth-oriented organisation do require effective management of people in a fast-changing environment. Organisations flourish only through the efforts and competencies of their human resources. Employee capabilities must continuously be acquired, sharpened and used.
Any organisation will have proper human resource management- (i) to improve the capabilities of an individual; (ii) to develop team spirit of an individual and the department; and (iii) to obtain necessary co-operation from the employees to promote organisational effectiveness.
Importance of Human Resource Management – Organisational, Social and Professional Significance
Human resource are the most precious assets of the organisation. The role of HRM is of paramount importance for every industry.
Significance or importance of HRM can be explained by dividing in into the following categories:
1. Organisational Significance:
Human resource management can help an organisation in achieving its goals more efficiently and effectively in the following manners:
(i) Attracting and retaining the required talent through human resource planning, recruitment, selection, placement orientation, compensation and promotional policies.
(ii) Developing the necessary skill and right attitude among the employees through training, development, performance appraisal, etc.
(iii) Helps in achieving the objectives of the organisation by effective utilisation of human resource through motivating them and changing their approach towards work and organisation.
(iv) Ensuring that the organisation will have in future a team at competent and dedicated employees.
(v) Securing willing cooperation of employees through motivation, participation, grievance, handling, etc.
2. Social Significance:
Social Significance of HRM lies in the need satisfaction of the personnel in the organisation.
It enhances and maintains the dignity of labour in the following ways:
(i) Maintaining the balance between the jobs available and job seekers in terms of numbers, qualifications, needs and aptitudes.
(ii) Providing most productive employment from which socio-psychological satisfaction can be derived.
(iii) Eliminating or minimising wasteful organisations and individual practices.
(iv) Utilising the capabilities of human resource and matching rewards for contributions made by the workers.
3. Professional Significance:
Every management wants best workers in its organisation, through effective management of human resource this can be done. HRM attempts to develop personnel and provides appropriate environment for their effective utilisation.
This is done by:
(i) Providing maximum opportunities for personal development of each employee.
(ii) Maintaining the dignity of personnel at the work place.
(iii) Providing environment and incentives for developing and utilising creativity.
(iv) Maintaining healthy relationships between individuals and work groups.
(v) Allocating work properly.
According to Lawrence Appleby, “Management is the development of people, not the direction of things. In the modern era of automation and computerisation, machine is useless without competent people to run it.”
Management of human resource has become more significant due to the following reasons:
(i) Increase in the size and complexity of the organisation.
(ii) Change in the technology.
(iii) Changing professional knowledge of workers.
(iv) Growth of trade unions at work places.
(v) Change in governments legislations related to workers and work places.
(vi) Revolution in information and technology.
(vii) Change in the jobs and skills required for long-term manpower planning.
(viii) Increase in the ratio of women workers in the enterprises.
(ix) Increase in expectations of society.
It is thus, through the combined efforts of people that economic and material resource are utilised for the achievement of organisational objectives. Therefore, creating and maintaining a motivated work force is the central responsibility of management everywhere. The effectiveness with which human resource are coordinated and utilised determines the success in achieving organisational objectives.
Importance of Human Resource Management – For the Organisation: Explicit Communication, Successful Procurement, Reduced Layoffs, Reduced Turnovers and a Few Others
Human resource management performs a number of management and operative functions. A lot of time and effort is involved in conducting the various human resource activities, so it becomes important to ensure that these activities should return value for the investment which is made in them.
Human resource activities if conducted properly can result in tremendous benefits to the organisation; some of the important ones are listed as under:
Importance # 1. Explicit Communication:
HR planning can help a firm develop a focused set of strategic objectives and communicate them effectively to people at various levels in the organisation. It ensures effective communication to employees regarding the organisation’s policies, procedures and guidelines.
Importance # 2. Successful Procurement:
An effective human resource management program ensures successful procurement which results not only in the organisation’s acceptance of the person, but also in the person’s acceptance and satisfaction with the job and the company.
Importance # 3. Reduced Layoffs:
It results in reduced number of voluntary as well as involuntary layoffs in the organisation by listening to the employee’s grievances and handling them at priority basis.
Importance # 4. Reduced Turnover:
An effective HRM system can ensure reduced absenteeism, and turnover of employees.
Importance # 5. Coordination and Integration:
Human resource managers ensure proper coordination and integration between the authority and responsibility relationships existing between various levels in the organisation.
Importance # 6. Increased Productivity:
It can result in increased productivity for the organisation and realisation of the individual as well as organisational goals effectively by ensuring fully trained and developed workforce.
Importance # 7. High Motivational Levels:
The motivational levels of employees in the organisation can also be maintained by ensuring fairness and equitableness in their compensation with the help of effective human resource management.
Importance # 8. Parity in Compensation:
The salary structure designed for organisation ensures not only the internal parity but at the same time maintains external parity with other competitive organisations as well.
Importance # 9. Competitiveness:
In addition to ensuring that the firm is generally competitive in terms of salary, the human resource manager also ensures that expenditures are within allocated budgets.
Importance # 10. Reduced Discontent:
An effective HRM program tries to reduce employee’s discontent with organisation by handling their formal as well as informal complaints effectively.
Importance # 11. Retaining Effective Employees:
Various types of incentive pay plans are also introduced by human resource managers to attract and retain effective employees in their organisation.
Importance # 12. Ensuring Integration:
Ensuring integration of individual, societal and organisational interests is one of the most difficult tasks being performed by the human resource managers. They deal with the feelings and attitudes of employees in conjunction with the principles and policies of organisations ensuring an overall increase in the goodwill or the image of the organisation.
Importance # 13. Effective Separation:
The HRM program ensures effective separation of employees through carefully designed programs for retirement, layoffs, and discharge. Even the separation needs to be handled carefully so that the employees who are leaving the organisation should leave it on a good note.
Importance # 14. Cordial Human Relations:
Finally human resource management ensures cordial human relations existing within the organisation and reduced cases of industrial disputes, strikes and lockouts.
Importance # 15. Enforced Values:
The strategic HRM plan reinforces certain values, such as, customer focus, innovation, fast growth, and cooperation which go a long way in adding to the success of the organisation.
Importance of Human Resource Management – Filling Organizational Positions, Developing Competencies, Optimum Utilization of Human Resources and a Few Others
In the present competitive business environment, organizations are developing competitive advantage at the marketplace. Most of the forward-looking organizations are making efforts to develop distinctive competence through their human resources as these resources are the prime mover of physical and financial resources.
Because of this feature of doing business, more and more organizations are strengthening their human resource management.
The importance of human resource management is as follows:
1. Filling Organizational Positions:
Various organizational positions, created in an organization through organizing process are filled by performing relevant human resource management functions. Human resource management ensures that- (a) various organisational positions are filled by right persons and (b) these persons are retained in the organization over a period of time.
In the present business environment, there is not only intense competition for customers but for human resources too. In such a situation, it is very difficult to keep the organizational positions filled without effective human resource management.
2. Developing Competencies:
The importance of human resource management lies in developing competencies (various skills) in employees. While India has abundant human resources, a very high proportion of these resources do not have required competencies. These competencies are developed by human resource management.
3. Optimum Utilization of Human Resources:
While filling organizational positions by human resource management, an attempt is made that there is match between job and employee performing the job. This feature covers all jobs and all employees. Because of this match, there is optimum utilization of human resources.
4. Efficient Utilization of Other Resources:
Various organizational positions are allocated non-human resources — physical and financial. When there is match between a position and the position holder, physical and financial resources are used efficiently because the position holder knows well how these resources may be utilized in the most efficient way.
5. Employee Satisfaction:
Effective human resource management leads to employee satisfaction in several ways- feeling of an employee that he is doing a job which matches him, development of the employee on continuous basis, availability of promotion avenues, incentives for better work performance, etc. This satisfaction leads to heightened employee morale and his productivity goes up.
6. Improved Organizational Performance:
Human resources are the source of developing competitive advantage because through these resources, other resources are put into operations. Thus, matching jobs and employees, developing them into more competent ones, and their heightened satisfaction lead to higher organizational performance.
Importance of Human Resources Management – Professional, Social and National Importance
The importance of Human Resources Management can be studied under four levels namely:
1. Importance to an enterprise.
2. Professional importance.
3. Social importance and
4. National importance
1. Importance to an Enterprise:
The HRM can contribute the following importance to an enterprise:
(a) Human Resource Management helps in attractions and retaining the talented people in the organization through effective planning, recruitment, selection, placement, orientation, compensation and promotion policies.
(b) It helps to develop the skills and positive attitude among the employees in the organization through proper training, development, performance appraisal etc.
(c) This helps in getting a good co-operation among the employees through proper motivation, participation etc.
(d) The available human resources can be utilized effectively.
(e) It helps in securing competent and dedicated employees in the organization in future.
2. Professional Importance:
It contributes to professional growth in the following ways:
(a) This provides good opportunities to the employees to develop in the organization.
(b) It ensures a healthy relationship among individuals and ether work groups in the organization.
(c) It helps in assigning a suitable work to employees.
3. Social Importance:
This HRM contributes much to the society in the following ways:
(a) This HRM provides suitable employment opportunities to the people which provide social and psychological satisfaction among them.
(b) It maintains a good balance between the jobs and job seekers.
(c) This eliminates the wastage of human resources through conservation of physical and mental health.
4. National Importance:
This HRM plays an important role in developing the nation. This helps in utilizing nations natural, physical and financial resources effectively. The country’s development mainly depends upon the skill, attitudes and values of its human resources. Thus, effective management of human resources helps to speed up the process of economic growth which in turn gives a higher standards of living and full employment.
Importance of Human Resource Management – At Different Levels (With Assumptions)
The importance or significance of human resource management can be explained at different levels as follows:
1. Significance for an Organization:
(i) It helps in adopting the main skills with the help of proper attitude among the employees training, developing, performance appraised and control,
(ii) It helps in retaining the required talent through effective human resource planning, recruitment, placement, selection, orientation, compensation, wage policy and promotions.
(iii) Human resource management can help an organization in achieving its goals more efficiently and effectively,
(iv) Utilizing efficiently and effectively the available human resource.
2. Professional Significance:
Professional significance of Human resource management lies in developing people and providing appropriate environment for effective utilization of their capabilities.
This can be done by:
(i) Allocating work properly.
(ii) Maintaining the dignity of personnel at the workplace,
(iii) Maintaining healthy relationship between individuals and different workgroups.
3. Social Significance:
Human resource management has a great significance for the society.
It helps to enhance the dignity of labour in the following ways:
(i) Maintaining a balance between job available to the people and people who are interested in terms of qualification, need and aptitudes.
(ii) Utilizing human capabilities effectively and efficiently.
(iii) Providing suitable employment opportunities which provide satisfaction to the people.
4. National Significance:
Human Resources and their management play a vital role in the development of a nation. The effective exploitation and utilization of a nation’s natural, physical and financial resources require efficient and committed manpower. There are wide differences in developing between countries with similar resources due to differences in the quality of their people.
Countries are underdeveloped because their people are backward. The level of development in a country depends primarily on the skills, attitudes and values of its human resource helps to speed up the process of economic growth which in turns leads to higher standards of living and full employment.
Assumptions of HRM:
The fundamental assumptions of HRM are as follows:
1. The members of an organization can be conceptualized as “Reservoirs” of untapped resources and people capabilities. Experts are of the opinion that organizations championing the cause of realizing such untapped potentials can create competitive advantage as compared to their business rivals.
2. There is scope for unlimited development of knowledge and human resource capabilities in an organization.
3. HRM is more involved with the development of individual potential and capabilities rather than emphasizing on the development thrust from outside (that is provided by conventional routine training programme).
4. The organization also undergoes development with the overall benefits along with the development of its members.
5. The organization should develop and nurture a culture in which prime importance is given on the harmonious boss-subordinate relations, teamwork, and collaboration among different groups of individuals including the customers of the organization. Managers should also emphasize on open communication and integration of goals of the organization with the needs and aspirations of the employees.
6. The top management along with the team of employees should participative take the initiative for HRM, formulate necessary plans and strategies and create an empowering climate in the organization and support for its implementation.
Importance of Human Resource Management – At the Individual, Organization, Society and National Level
An organization’s success depends on three dimensions of employees viz. Knowledge, Skills and Abilities. These dimensions establish a set of core competencies that distinguishes an organization from its competitors.
With appropriate HR policies and practices, an organization can hire, develop and utilize best brains, realize its professional goals and deliver results better than others.
HRM helps an organization and its employees accomplish their respective goals.
Importance # 1. At the Individual Level:
(i) It offers excellent growth opportunities to people who have the potential and attitude.
(ii) It allows employees to work with diligence and commitment.
(iii) It promotes team work arid team spirit.
Importance # 2. At the Organization Level:
(i) It helps in attracting and retaining the best people.
(ii) It alerts the firm, through forecasting the types of people required in the short, medium and long run.
(iii) It comes handy in training people for challenging jobs.
(iv) It develops right attitude toward the job and organization.
(v) It promotes loyalty and commitment through appropriate reward schemes.
Importance # 3. At the Society Level:
(i) It improves employment opportunities.
(ii) It puts the scarce talents to best use.
Importance # 4. At the National Level:
(i) Efficient and effective use of human resources helps in usage natural, physical and financial resources in a better way.
(ii) People with right attitude, appropriate values and proper skills help the nation compete with the best in the world.
(iii) Proper HRM with HRD results in better standard of living.
Further, good HR practices result in the following:
(i) Attract and retain best talent with less attrition.
(ii) Train people for challenging roles.
(iii) Develop skills and competencies.
(iv) Promote team spirit.
(v) Develop loyalty and commitment.
(vi) Increase productivity and profitability.
(vii) Improve job satisfaction.
(viii) Enhance standard of living.
(ix) Generate employment opportunities.
Importance of Human Resource Management – For the Organisation, Individual, Society and Nation
Effective management of human resources is essential not only for the organisation but also for the society & nation.
The significance of human resource management as discussed below:
1. Significance for the Organisation:
The contribution of human resources management to the organisational objectives is as follows:
(i) Effective human resources policies can help in attracting and retaining the best people in organisation.
(ii) Appropriate training, development, performance appraisal can help developing the right skills & right attitudes among the employees.
(iii) Appropriate recruitment & selection activities places right people at right place at a right time.
(iv) Utilising effectively the available human resources.
(v) Healthy human resources practices creates healthy employer employee relations & so in the enterprise.
(vi) Preparing the people to adapt to technological & other changes in the organisation.
2. Significance for Individual:
HRM contributes to individual growth in the following manners:
(i) For personal development it provides maximum opportunities to each employee.
(ii) Maintaining healthy relationships among individuals and different work groups.
(iii) Allocating work properly.
3. Significance for the Society:
It helps to enhance the dignity of labour in the following ways:
(i) It maintains a balance between the jobs available & the jobseekers in terms of numbers, qualifications, needs & aptitudes.
(ii) By giving employment it provides social & psychological satisfaction to people.
(iii) Eliminating waste of human resources by providing counseling on motivation etc.
4. National Significance:
Nations differ in the social, economic, and other developments due to the capability, values, attitude and aptitude of their people. Proper management of people results in effective & efficient utilisation of a nation’s physical, financial & natural resources. It speeds up the process of economic growth leading to higher standards of living & employment opportunities.
Importance of Human Resource Management – To the Organisation: At the Enterprise, Individual, Society and at the National Level
Human resource management helps an organization and its people to realize their respective goals at different levels:
1. At the Enterprise Level:
i. Attract and Retain Talent:
Good human resource practices can help in attracting and retaining talent. They keep employees happy and remain focused on enterprise goals. They can act as morale boosters.
ii. Prepare People for Challenging Roles:
HRM helps in training people for challenging roles, developing right attitudes towards the job and the company, promoting team spirit among employees and developing loyalty and commitment through appropriate reward schemes.
iii. Outperform Competition:
When talent is put to best use, organizations begin to outperform competition. When the climate is right, human beings are motivated to give their best. Such a company is able to turn out superior performance consistently.
iv. Improve Creativity:
Good human resource practices help people assume responsibility, take initiative, assume risk, and experiment a lot without any fear of criticism. In such an invigorating atmosphere, people can put their creative energies to best use.
v. Achieve Results Effectively and Efficiently:
Good HR practices help companies acquire, develop, stimulate and keep outstanding employees. Getting and keeping good people is critical for the achievement of enterprise objectives effectively and efficiently.
2. At the Individual Level:
a. It promotes team work and team spirit among employees.
b. It offers excellent growth opportunities to people who have the potential to rise.
c. It allows people to work with diligence and commitment.
3. At the Society Level:
a. Employment opportunities multiply.
b. Scarce talents are put to best use. Companies that pay and treat people well always race ahead of others and deliver excellent results.
4. At the National Level:
a. Effective use of human resources helps in exploitation of natural, physical and financial resources in a better way.
b. People with right skills, proper attitudes and appropriate values help the nation to get ahead and compete with the best in the world leading to better standard of living and better employment.
Importance of Human Resource Management – Top 10 Reasons Why HRM is Important
Human resource management is important for the following reasons:
Reason # 1. Employing Competent Employees:
The HR department conducts series of tests and interviews before employing any individual for the organization. The HRM helps in selecting right employees for the right job in any organization. In turn, HR department plays role in achieving organizational objectives by employing competent and committed employees.
Reason # 2. Development of Human Resource:
The HR department organizes various seminars and training sessions for the development of technical and operational skills of employees. The arrangement of training programs on regular basis helps employees to improve their skills, attitudes and knowledge.
Reason # 3. Efficient Utilization of Manpower:
The HR department ensures that there is optimum utilization of human resource. The department assigns specific tasks to the employees on the basis of their knowledge, skill set and abilities. It ensures that all employees perform the assigned task in the most efficient way.
Reason # 4. Performance Appraisal:
The HR department conducts appraisals on regular basis. The department develop various methods and systems to evaluate the performance of employees. HR department recognizes the efforts and achievements of employees by rewarding them. Performance appraisal motivates employees to perform better.
Reason # 5. Provision of Opportunities for Career Advancement:
The HR department is responsible for evaluating the potential of employees and providing them with opportunities to advance in their career. The competent employees are given fair chance of promotions. HR department also arranges training programmes to prepare them to assume more challenging roles & responsibilities. The department also provide opportunities to pursue further studies.
Reason # 6. Motivating and Retaining Employees:
The attractive pay structure motivates employees to perform better and stay committed to the organization. The HR department also arranges for monetary and non-monetary benefits such as bonuses, incentives, promotion etc. The various welfare facilities such as crèches, transport and housing facilities, loans, health and medical insurance and so on encourage the employees to take genuine interest in accomplishing organization’s objectives.
Reason # 7. Cultivating Team Work and Team Spirit:
The HR department encourages the employees to take active participation in group discussions and brain storming session. HR team reward departments or groups on the basis of their performance which builds morale and team spirit of the employees.
Reason # 8. Maintaining Relation between Management & Employees:
The HR department is responsible for maintaining harmonious relationship between the management and employees. The department sets up a system to address and solve the grievances of employees. The department is also responsible for taking disciplinary actions in case of any unacceptable behaviour. In short, HR department ensures smooth flow of communication between management and employees.
Reason # 9. Building Corporate Image:
Effective human resource management aids to improve the organization’s image in the minds of various stakeholders such as customers, shareholders, employees etc.
Reason # 10. Facilitating Social Development:
The various HR initiatives (such as CSR activities-corporate social responsibility) aids social development & thereby help in fostering social progress.
Importance of Human Resource Management – Importance and Objectives of Human Resource Management
1. Human Resource or Manpower Planning helps in determining the number and kinds of personnel required to fill various positions in the organization.
2. Employment function, i.e. recruitment, selection and placement of personnel.
3. Training and development of employees to ensure their efficient performance and growth.
4. Performance Appraisal Function, for evaluation of performance of employees and taking corrective steps such as transfer from one job to another etc.
5. Motivation of workforce by providing financial and non-financial incentives and opportunity of promotion.
6. Remuneration of employees to ensure that employees must be given sufficient wages and fringe benefits to achieve higher standard of living and to motivate them to show higher productivity.
7. Social security measures and welfare facilities for the employees
The specific objectives of personnel management may be described as under:
1. To create and utilize an able and motivated workforce to accomplish the basic organizational goals.
2. To establish and maintain sound organizational structure and desirable working relationships among all the members of the organization.
3. To secure the integration of individual or groups within the organization by coordination of the individual and group goals with those of the organization.
4. To create facilities and opportunities for individual or group development so as to match it with the growth of the organization.
5. To attain an effective utilization of human resources in the achievement of organizational goals.
6. To identify and satisfy individual and group needs by providing adequate and equitable wages, incentives, employee benefits and social security and measures for challenging work, prestige, recognition, security, status.
7. To maintain high employees morale and sound human relations by sustaining and improving the various conditions and facilities.
8. To strengthen and appreciate the human assets continuously by providing training and development programs.
9. To consider and contribute to the minimization of socio-economic evils such as unemployment, under-employment, inequalities in the distribution of income and wealth and to improve the welfare of the society by providing employment opportunities to women and disadvantaged sections of the society.
10. To provide fair, acceptable and efficient leadership.
11. To provide facilities and conditions of work and creation of favourable atmosphere for maintaining stability of employment.
Importance of Human Resource Management – With Definitions by Gary Dessler and Edwin B. Flippo
Human resource management has been successfully defined by various authors. In the words of Gary Dessler (2008), Human resource management is the process of acquiring, training, appraising, and compensating employees, and attending to their labour relations, health, safety and fairness concerns.
Edwin B. Flippo (1984) has defined human resource management in terms of personnel management. Personal management is the planning, organising, directing, and controlling of the procurement, development, compensation, integration, maintenance, and separation of human resources to the end that individual, organisational, and societal objectives are accomplished.
This definition reveals that personnel management deals with planning, organising, directing and controlling the personnel functions so as to help the top management in attaining the objectives of individuals, organisations and society. The personnel function includes procurement, development, compensation, integration, maintenance and separation of employees. Human resource management considers ‘personnel’ or ’employees’ as ‘human resources’ and attaches them utmost importance.
The importance of HRM has been discuss in the following points:
Importance # 1. With Respect to Organisation Design:
Simon’s concept of ‘mean’ end and ‘fact’ and ‘value’ has giving “purposive behaviour”. Decision are taken at all levels within an organisation, and each decision has both mean (more fact) and end (more value). So there is no doubt that if human resource management is means to the end of organisational development, it functions as a section under organization development.
Importance # 2. With Respect to Personnel Administration:
Generally, Human Resource Management deals with Personnel Administration. Administration as the activities of groups cooperating to accomplish common goals. At the enterprise level, good human resource practices help attract and retain the best people in the organization.
Importance # 3. With Respect To Policy:
Policy formulation is the basic aims and objective of the Human Resource Management. The Human Resource Department involved in business strategy and it accepted as a fact or a “given” of organisational life. The focus is directed instead to utilizing it to the maximum.
Importance of Human Resource Management
The rapid industrialisation during the last couple of centuries has given rise to a new civilisation, popularly known as ‘industrial civilisation’. Whereas this civilisation has led to material prosperity of the world, it has not paid adequate attention to human values. As the modern industrial structure is gradually getting complex, human problems in industry are also assuming new forms.
It is rather unfortunate that human factor which is a living and an active factor of production and which activates the passive factors of production, namely land, capital and so on, and is the foundation pillar of industrial development has not received adequate attention.
As a matter of fact, the development of human factor is more important than that of other factors of production because the use or misuse of other factors of production depends on the human factor. Thus, the importance of HRM, which aims at seeking willing and effective cooperation of human factor towards the accomplishment of the objectives of an organisation, hardly needs any elaboration.
While management gives due consideration towards the development of technical skills required for human factor to achieve higher production, it should not be forgotten that man possesses other attributes as well. When a worker enters the factory, it is not only the two hands and a few heat units of energy that he/she carries with him/her but also a live personality throbbing with aspirations and anxieties.
He/ she has got various feelings, desires, perceptions, motives, values and drives. His/her personality, ambitions and aspirations, attitudes and perceptions affect his/her working because all personnel in the organisation are concerned about their status, roles, personal and family needs, security, and relations with their fellow workers.
In case the management does not take care of all these factors, the efficiency of the workers will be adversely affected and it may be quite difficult to obtain their willing and effective cooperation. On the other hand, if all the dimensions of human factor are taken care of, the workforce will be more effective in the working situation. Here comes the HRM into picture.
Human resources must, therefore, be dealt with as both a technical factor and a human being. An individual is a complicated creature. He/she is a combination of perplexing forces. He/she manifests himself/herself through his/her individual actions as well as group interactions.
His/her human aspects are subjective and changeable, qualitative and dynamic, and more often than not, with the passage of time, vary with a number of factors such as economic events, personal background and cultural environment in which he/she has been brought up.
An effective HR manager takes care of all dimensions of the human factor and makes it a willing and effective contributor towards the accomplishment of the objectives of an organisation.
The HR manager never forgets that while a worker is a technical machine in his/ her physical, manipulative, muscular and effort-exerting operations, he/she is also emotional and creative. In other words, the HR manager takes care of psychological dimensions of the personnel employed in the organisation and also tries to bring about an integration of individual and organisational objectives.
However, the job of a modern HR manager has become all the more difficult because of ever-growing level of education of community members, rise of strong trade unions, rapid advancement in technology, increasing size and complexity of the organisations, consciousness among workers, tendency towards increasing obligations towards society and interference of the government in labour-management affairs.
All these factors have been causing a change in the role of the HR manager during the recent past. Today, the role of HRM in organisations is centre stage. Thus, an HR manager has to be very dynamic and needs to be well-equipped in the field of subjects such as psychology, management, sociology, economics and philosophy besides possessing other relevant qualities.
Such an HR manager would prove effective in performing his/her changing role, which will be in the interest of the organisation and other stakeholders.
Some of the modern writers on management have considered both the management and HR administration as one and the same thing. According to them, these two cannot be separated from each other. They feel that the management is meant for HR development.
In case adequate attention is paid to the betterment and development of personnel, many of the problems of the management would be solved automatically. HRM is always busy making efforts in this direction.
By taking care of physical, mental, social and intellectual development of the employees, the HR manager makes persistent efforts to increase contentment, efficiency and effectiveness of the workforce so that it may contribute substantially towards the achievement of the organisational goals.
Another plus point of human factor is that while the constant use of other factors of production leads to depreciation in their value, human factor gets enriched because with the passage of time it acquires experience and efficiency which lead to higher productivity. Hence, an all-round development of human factor is highly desirable, which is one of the main objectives of HRM.
The significance of recruiting, selecting, training, developing, rewarding, compensating, motivating, increasing employees job satisfaction, self-actualisation, quality, quality of work life, managing changes, managing increased urgency and faster cycle time, and helping the organisation reach its goals is recognized today by managers in every unit and functional area of an organisation.
Gary Dessler and Biju Varkkey have, therefore, rightly remarked that HR activities such as hiring, training, appraising and developing employees are part of every manager’s job. It is because of this that it is said that HRM belongs to all organisations.
Thus, through efficient and effective procurement, development, compensation, integration and maintenance of human resource in an organisation, an HR manager creates and retains an effective workforce which, in turn, creates services and goods. Hence, an HR manager is expected to be a successful psychologist, philosopher and guide also.
Only then he/she can be successful in his/her mission. An HR manager is the greatest friend of workers. It is because of this that the HR department has assumed the place of a necessity rather than of comfort in an organisation. That is why, around the world, managers recognise that human resources deserve attention because they are a significant factor in top-management strategic decisions that guide the organisation’s future operations.
Importance of Human Resource Management – In the Organizational Context
Human resource is the most essential resource in the organization. It is indispensable from the formation stage of the organization (that is from the stage the planning activities start to form an organization for undertaking a venture / project) and its dominance as an important part of the activities continues till the organization survives.
Organization cannot run, cannot operate its activities, cannot function its executive and nonexecutive work without human resource. Human resource, thus, plays a pivotal role in the organizational setting. HRM that deals with acquisition, motivation, development and maintenance/ retention of human resources is, therefore, very much important in the organization for its existence, growth and development.
According to Winstanley and Stuart-Smith (1996), HRM is an activity that looks to ‘people-interest’ in the organization, and is based on the four principles –
(i) Respect for the individual
(ii) Mutual respect
(iii) Procedural fairness
(iv) Transparency.
Importance of HRM in the organizational context can be judged from the following:
1. HRM helps the organization to know details of HR profile, excess / shortage of personnel, category / skill wise requirement, quality, strengths and weaknesses of people. All these create a support-base data bank to guide the organization to take decision on vital issues.
2. HRM provides / supplies people as per indents (i.e., type, grade, skill, specialization of people, time of supply etc.) placed by the departments, and thus helps the departments in smooth running of the operational activities in order to produce the quality goods at reasonable cost as targeted.
3. HRM creates congenial and conducive atmosphere where people can develop mutual understanding, mutual trust, and confidence, which are prerequisites for work in a team/group.
4. Effective human resource management reduces employee absenteeism and increases productivity. So, it helps to achieve individual, organizational and social goals.
5. HRM helps the organization to change strategic activities to suit changing environment by way of creating a committed, dynamic workforce through OD intervention, awareness development mechanisms and other measures.
6. HRM develops knowledge, skill, abilities, aptitude of employees and moulds / changes their attitudes, values, beliefs to make a reservoir of contented, happy and competent workers’ community in order to deliver the goods and services to the delightment of customers.
7. HRM introduces employee’s performance review system (EPRS) to evaluate the present performance and potential of the employees for higher responsibilities wherein, Key Performance Areas (KPAs) are decided jointly by the, subordinate and the superior.
System of self-appraisal, counselling for better performance, evaluation by stakeholders make the EPRS more rational, just and accurate in its assessment process. Employees express satisfaction over performance appraisal system. They feel that the career development exercise mostly based on performance ratings and potential ratings makes wise judgement over the issues for promotion / advancement to higher posts.
8. HRM promotes the quality of working life of the employees through introduction / implementation of policies, procedures for satisfaction of physiological and psychological needs of the employees.
9. HRM helps the organization to fulfil the needs of the society by way of initiating measures for upliftment and wellbeing of the employees.
10. HRM provides the quality management by way of making an organization as a learning organization where people can learn and experiment innovative ideas, working as change agent to introduce quality oriented company milieu, involving people to promote team work for quality production and services and introducing a culture of partnership, cooperation and participation in the organizational activities.
11. HRM attracts the best quality people to join the organization and retains the achievers, performers by offering excellent pay packages, perquisites, challenging jobs, higher responsibilities, effective career planning and development.
Importance of Human Resource Management – With Limitations
1. HRM teaches how to utilize human and non-human resources so that the goals can be achieved.
2. The human resource management helps to maintain organizational structure by providing required information timely and accurately.
3. Human resource management helps to provide a respectful environment for each employee.
4. Human resource management provides favourable environment for employees so that people working in organization can work creatively
5. Human resource management tries to promote employee discipline and moral through performance based incentives
6. Human resource management bridges the gap between individual goal and organizational goal-thereby resulting into a good harmony
7. Human resource management focuses on achieving higher production and most effective utilization of available resources
Limitations of HRM:
1. One of the disadvantages of these systems is their cost set up cost is very high
2. With the help of HRM the number of employees needed can be clearly specified but when some employees are removed then it may develop a fear in other employees.
3. Human resource management requires implementation of programmes such as career planning, on the job training, development programmes, counselling etc. There is a need to create an atmosphere of learning in the organisation.
4. Human resource department has to collect detail information regarding personnel from all the departments making it a time consuming process
Importance of Human Resource Management – Increasing Importance of Human Resource Management/HRD Manager in Present Time
Under globalisation number of activities, areas, destinations and customers increased drastically. It has become bit difficult for management to manage the business activities effectively and efficiently in the present competitive scenario.
If resources are managed properly by organisation then requirements of customers, employees and society as a whole can be met. This may give competitive advantage to a company over others. It becomes necessary to manage activities relating to production, marketing, human resource, finance, research, etc.
Like other branches of management the importance of Human Resource Management/HRD manager has also increased due to the following reasons:
(a) Globalisation.
(b) Enactment of new or amendment of existing labour legislations.
(c) Development of knowledge of employees and research activities relating to human resource.
(d) Shortage of trained HRD managers at senior level to provide on-the-job training.
(e) Rapidly changing technology creating skill gap among employees.
(f) Changing role of trade unions in present time.
(g) Increasing expectation of employees from organisation.
(h) Competitive demands of employees.
(i) Education at national and regional level not in a position to meet requirement of industries.
The above mentioned reasons increased importance of Human Resource Management in present time. These reasons are very critical and top level management cannot afford to ignore them. Hence, it has been realized that human resource management is a very important branch of management. Further, to carry-out business in different countries the need for HRM has been felt strongly.
Because of employees from diversified culture, sex, highly skilled employees, different labour laws in different countries, enlightened labour unions and leaders, high expectation of employees and competitive demands, management is not in a position to do justice with the job. So a specialist in HR area is needed to handle the situation effectively worldwide.
Importance of Human Resource Management – Significance of HRM under Four Levels: Corporate, Professional, Social and National
The significance of HRM can be discussed under four levels namely corporate, professional, social and national.
Importance # 1. Corporates:
HRM helps the corporate enterprises to accomplish the following:
i. Attracting and retaining resourceful human resources through HR planning, recruitment, selection, placement, orientation, compensation and promotion policies.
ii. Winning the willing cooperation of employees through grievance handling, suggestion systems, motivational programmes and effective implementation of wellbeing measures.
iii. Appraising the human assets periodically to figure out their strength and weakness.
iv. Optimal utilization of available human resources.
Importance # 2. Professional:
Effective and efficient implementation of human resource facilitates enhancing the quality of HR work life. It permits team-work among the employee by ensuring a conducive work environment.
It substantially contributes to professional growth in the following ways:
i. Ensuring maximum opportunities for personal development of each and every employee.
ii. Allocating the work judiciously.
iii. Maintaining healthy relationship among individuals and among different groups.
iv. Developing people on a continuous, basis so as to enable them to face challenges emerging from their jobs.
v. Encouraging creativity by providing incentives.
Importance # 3. Social:
HRM has a great significance for society.
It helps in maintaining human dignity in the following ways:
i. Providing suitable employment to persons. This provides social and psychological satisfaction to them.
ii. Maintaining a fine balance between the jobs available and the job seekers in terms of numbers, qualifications, needs and aptitude.
iii. Rewarding employees suitably for the contributions made by them.
iv. Eliminating wasteful human resources practices like idle time, under-utilization of human resources, under employment of human resources and so on.
v. Enhancing productivity of employees.
Importance # 4. National:
HRM contributes to development of a nation in the following ways:
i. Effective exploitation and utilization of nation’s natural, physical and financial resource by committed manpower.
ii. Developing skills, competencies and capabilities of human assets thereby making them resourceful resources.