According to Blunt, Human Resource Management is the discipline, which concerned with the human side of the enterprise was largely regarded as covering moribound house-keeping operational activities.

Generally, HRM is the concept which basically deals with all transformative changes in the management of employee relations. HRM is an integral part of management of any business enterprise.

The contribution in terms of productivity as well as best and optimum utilization of all other resources depends on the efficiency and effectiveness of HRM.

In a fast changing business environment, organisations can succeed only through the efforts of competent employees. Therefore, HR has to develop the competency of the individual employee, develop team spirit and obtain necessary co-operation from employees to achieve organisational goals.

Learn about the Importance of HRM

Importance of Human Resource Management

Money, Men, Materials, Machines, Markets are very important Five M’s, which are essential for carrying on the activities of production and selling the same in order to carry on the business of an organisation. The proper and efficient management of these Five M’s is very essential for the success of an organisation. But, the management of men and human resources is most fundamental and is really a challenging task.


In a wider sense, human resources create organisations and make them survive and prosper. If human resources are neglected or not properly managed, the organisation is not likely to do well. The human resources of an organisation are considered as one of the largest investments and play a very crucial role in the development process of an organisation at the micro-level and of the whole economy at the macro-level.

For full and proper utilisation of natural resources, machines, technology, etc., efficient and committed manpower is very essential. Hence, successful human resource management is very essential for the growth and success of an organisation.

The importance of Human Resource Management is universally recognised from different standpoints and its role is continuously becoming very important in long-range planning and policy making activities from the viewpoint of enterprises and economic development of a country.


Human Resource Management helps the organisations in the public, private, and co-operative sectors in accomplishing their goals to effectively utilise the available human resources by systematic planning and control of a network of fundamental organisational processes, affecting and involving all organisational members. These processes generally include human resource planning, job and work design, job analysis, staffing, recruitment, training and development, compensation and reward, employee protection, etc.

Efforts are made to develop positive attitude amongst the employees through proper and effective motivation. This leads to creating healthy work environment and promoting team work. All this helps the organisations to become successful in attaining their goals and flourish in a systematic way.

Social significance of Human Resource Management is evident since it maintains and increases the dignity of the employees by satisfying their social needs. This is done by utilising the resources to the optimum in an effective manner and paying employees the best rewards for their participation in the organisation. As a result, they get the psychological satisfaction and social status.

So far as economy is concerned, though it has plenty of natural and physical resources, they cannot be used profitably, efficiently for economic development if human resources are not managed properly. Human resources are basically responsible for transformation. It is observed that, lack of proper organisation of human resources comes in the way of development of less developed or backward economies.


For utilising all the resources properly, Human Resource Management is essential. Human Resource Management is really a multi-sided approach from the beginning to the end. It is, in fact, a scientific process that enables the employees to improve themselves and their competency and capability to play their roles properly, so that the goals set are achieved more fully by meeting the needs of the employees to a great extent.

Importance of Human Resource Management – At Different Levels

People are the key resources of the organization. The organizations having more skilled, knowledgeable and competent employees are more successful. This can be achieved through appropriate HR policies and practices.

The importance of HRM can be viewed from four angles as described below:

1. At the Enterprise Level:


i. Good HRM practices help in attracting and retaining the best employees in the organization.

ii. HRM provides adequate training to people to make them competent enough to face challenging roles.

2. At the Individual Level:

i. HRM helps in developing skills and competencies.


ii. HRM promotes team spirit and team work.

3. At the Society Level:

i. As a whole employment opportunities increase.

ii. The society has more devoted, committed, trained and motivated workers.


4. At the National Level:

i. Effective use of human resources leads to the exploitation of land, capital and entrepreneurs.

ii. Nation grows at a faster speed with better manpower.

Importance of Human Resource Management

(1) HRM is an Integral Part of Management:


HRM is an integral part of management of any business enterprise. The contribution in terms of productivity as well as best and optimum utilization of all other resources depends on the efficiency and effectiveness of HRM.

There are differences in development of countries though the resources are more or less equal the only reason behind this is differences in human behaviour. In fact all development comes from the human mind only, none of the factor is significant than the human resource. Moreover it aims at attaining the goals of organization, individual and society.

(2) Man vis-a- vis Machine:

In a business organization most of the problems are human oriented rather than physical, technical or economic. Man is entirely different from machine, having mind, emotions, temperament and moreover is a living being, these features are not possess by a machine, is non- living thing having no mind, emotions, etc., Man handles the machine, machine does not handle the man.

There is full dominance of a man on machine. No industry can run effectively until and unless the basic fact remains unrecognized that it is principally human. It is a body of magnified nervous system. Managing the men is more challenging than managing the machine.

(3) HRM is Different from PM:


PM is traditional and old concept but HRM is a new and rapidly growing concept.

PM emphasizes on promoting the interest of the organization i.e. increase profits, growth and expansion, optimum utilization of workforce etc. On the other hand HRM revolves around the attainment of the mutuality of interest.

PM treats the labour or work force as one of the factor of production like any other physical components which are expendable, usable and replaceable. But HRM treats the workforce as human being and as an asset of the organization.

PM resolved the conflicts and differences by giving temporary solution. But HRM avoids disputes and tries to eliminate the same if possible and develops healthy relation between management and employees. It establishes an improved organizational climate and culture.

(4) Human Resource System is a Central Sub-System:

Human resource system is not only a unique system but is a principal and central sub-system. It operates upon and controls all other sub-systems such as materials, marketing, technology and financial.


(5) Human Resource Accounting:

In modern era human resource is not treated only as a factor of production but it is treated as asset of the organization. The potential and promise of human resource accounting have been recognized by the accountants. HRM is the measurement of the cost and value of people for organization.

HRM helps the management to utilize human resources most economically and efficiently, human resources are identified as the value of its customer goodwill. The manager can make the sound and accurate decisions on the basis of information provided by human resource accounting.

Importance of Human Resource Management

In the fast changing complex environment, human resource managers need to func­tion within the context of fast changes. These changes take place because of information explosion and technological advances and developments occurring almost every day. The role of HRM within an organization is becoming more crucial in the present scenario.

Other managerial inputs such as machines, materials, methods, and markets are far more predictable than the response of human resources. Therefore, given all other resources, what matters the most is human resources and HRM in achievement of organizational goals.

Today no organization can:


i. Risk employing the wrong person for the job;

ii. Have a high employee turnover, particularly when substantial investment gets made on a new employee by imparting him/her with the requisite in-house training;

iii. Have demotivated employees;

iv. Have employees who waste their time on the job;

v. Get quoted as an organization not adhering to statutory provisions;

vi. Make employees feel that they are not being paid commensurate with their contribution to the organization; and


vii. Lag behind in imparting training to its employees that would adversely affect their effectiveness and overall performance.

All the above factors make the role of HRM crucial to the achievement of organizational goals in the current business environment. Organizations, today, have to focus on creating a distinctive competitive advantage within an organization by focusing on HRM.

The employees of an organization create value through cost reduction, quality improvement, and creating unique products and services for their customers. Their competencies, capabilities, and knowledge are rare and probably difficult to be reproduced or imitated. It can be honed only through organized teamwork to ensure multiplicative returns.

Who Performs HRM Activities?

In majority of medium to large organi­zations, HRM functions are performed by both professional HR managers as well as operating managers, super­visors, departmental heads, group heads, etc. Although devis­ing HRM policies is the exclusive task of HR specialists, operating managers operationalize the same policies.

The involvement of operating managers becomes imperative, as they have to effectively manage all resources at their dis­posal. However, smaller organizations may not be able to afford professional HR specialists and, therefore, operating mangers have to deal with various HRM func­tions such as scheduling work, recruitment and selection, compensation, rewards, and training.


Of all the resources in an organization, the only one that can be unpredictable is HR. With HR gaining more importance in the present information and knowledge age, companies need to devise effective HRM policies and practices to gain a distinctive advantage over their competitors.

HRM planning, programming, review, and eval­uation ensure that the right number and kind of people are made available at the right time to effectively implement the company’s business plan.

The main challenge that lies before HRM is to manage change by eliminating systems and practices that come in the way of effective implementation, and have ethical leaders at different tiers of the organization, outsourcing functions, services, and production processes.

Importance of Human Resource Management

Human Resource Management has become the important approach in the modern management system. People are the most significant resource of any organisation. HRM has provided a wide ranging perspective to employer-employee relationship and has taken the place of new management discipline in recent years.

The main factor is resentment of the existing personnel practices. The speedy development in technology, economic and social systems and also the Information Technology created a prototype in human resource management.

Following important points denote significance of human resource management:

i. Success of any organisation depends on the suitability and ability of the employees.

ii. Optimum utilisation of Human Resource by HRM to reduce labour cost.

iii. Better and efficient utilization of resources like material, machine and money can be achieved by proper management of human resource.

iv. Getting effective result in the job of good management is the motivation of human efforts. This is the vital factor in HRM.

v. Enterprise must be a partnership between management and employees. The cooperative effort by HRM can alone achieve this partnership in any organisation. This philosophy of social justice and welfare is the ‘Motto’ of human resource management.

Importance of Human Resource Management – Corporate, Professional, Social and National Significance

The significance of Human Resource Manage­ment can be discussed at basic four levels-corporate professional, social and national.

(1) Corporate Significance:

Human Resource Management can help an enterprise in achieving its goals more efficiently and effectively in the following ways-

(a) Developing the necessary skills and right attitudes among the employees through training development, performance appraisal, etc.

(b) Utilizing effectively the variable human resources.

(c) Attracting through effective human resource planning, recruitment, selection, placement, orientation, compensation and promotion policies.

(d) Securing willing cooperation of employees through motivation, participation, grievance handling, etc.

(e) Ensuring that the enterprise will have in future a team of competent and dedicated employees.

(2) Professional Significance:

Effective management of human resource helps to improve the quality of work life. Human resource management creates team work among employees by providing a healthy working environment.

It contributes to professional growth in the following ways:

(a) Providing maximum opportunities for personal development of each employee.

(b) Maintaining healthy relationship among individuals and different work groups.

(c) Allocating work properly.

(3) Social Significance:

Sound human resource management has a great role for the welfare society.

It helps to enhance the dignity of labour in the following ways:

(a) Providing suitable employment that provides social and psychological satisfaction to people.

(b) Eliminating waste of human resources through conservation of physical and mental health.

(c) Maintaining, a balance between the jobs, available and the job-seekers in terms of numbers, qualifications, needs and aptitudes.

4. National Significance:

Human Resource Management plays a vital role in the development of a nation. The primary duty of HRM to stop exploitation of workers in the organisation. Most of the 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 resources. Effective management of human resources helps to speed up the process of economic growth.

Management is primary dealing with human beings and also human problems. In the opinion of Lawrence Appley, “Management is the development of people, not the direction of things.”

Therefore, Human Resource Management playing a vital role in the modern age. Its aim and objectives is to change the system and structure of the organization. It want to create a knowledgeable worker, so it provide training to them because, a sound HRM must help for nation-building. It is the art and science of management.

Importance of Human Resource Management in the Context of Globalisation

Globalisation is the process of extending business activities of foreign countries. It has significant implications for employment, HRD, compensation, labour relations, etc. Most of the Indian companies have become multinationals by acquiring firms abroad. World has become a global village. The growth of International business places new responsibilities on human resource managers.

According to Blunt, Human Resource Management is the discipline, which concerned with the human side of the enterprise was largely regarded as covering moribound house-keeping operational activities. Generally, HRM is the concept which is basically deals with all transformative changes in the management of employee relations.

Human Resource Management also related to the word POSDCORB, which is analysed by Gulick. POSDCORB means Planning’s, Organizing, Staffing, Directing, Coordinating, Reporting and Budgeting.

Objectives of Human Resource Management are derived from the basic objectives of an organisation.

Its objectives may be summarised as follows:

1. To help the organisation attain its goals by providing well-trained and well-motivated employees.

2. To establish and maintain productive, self- respecting and internally satisfying working relationships among all the members of the organisation.

3. To bring maximum individual development of members of the organisation by providing for training.

4. To develop and maintain a quality of life.

5. To maintain high morale and good human relations within the organisation.

6. To help maintain ethical policies and behaviour inside and outside the organisation.

7. To manage change to the mutual advantage of individuals, groups, the organisation and the society.

Importance of Human Resource Management – In International Field

Human Resource Management playing a significant role in international field on different aspects, which is discuss in following points:

1. On Employment:

Entry of multinationals and expansion of Indian firms since 1991 have led to increase in employment opportunities. The Government of India has created a National Renewal Fund to compensate workers thrown out of jobs.

2. On Human Resource Development:

Under global competition, more qualified staff is required to satisfy and delight customers. Therefore, globalisation and liberalisation has a positive role on HRD. Proactive and continuous learning has become necessary.

3. On Compensation:

Globalisation has resulted in higher salaries and benefits for highly skilled and committed employees but low wages for the unskilled and indifferent. That means, most of the companies give higher salaries to the workers, who are highly skilled.

Therefore, the compensation structure should fulfil the following main objectives:

(a) The compensation policy should be consistent with the overall strategy.

(b) It should help in attracting and retaining the needed talent.

(c) It should enhance employee satisfaction and motivation.

(d) It should be fair and equitable.

(e) It should be convenient to administer.

4. On Trade Unions:

The trade unions of India related the policy of economic liberalisation, globalisation and privatisation. But gradually they have accepted the realities. In some cases unions are cooperating with management to ensure the survival of their organizations which is at stake in a competitive environment.

5. Rise of Professional and Knowledgeable Workers:

Due to the globalization, Human Resource Management create professional and knowledgeable workers.

6. It also helps the growth of technological like automation, computerisation, etc.

7. It helps the growth of expectation of society, which is fulfil by only employers.

8. It also helps to increase proportion of women in the work force.

There is no doubt that, the significance of Human Resource Management playing a vital role in both national and international field. The basic aim of HRM is to bring some change in human life. The main goal of the HRM is to improve the efficiency of the worker, which help in productive process of the company. Therefore, HRM should bring change in the companies, which is most essential for a welfare society. It created knowledge to workers and desire for a total quality management.

A sound HRM help for nation building. It is socio-economic planning of the state. It is a vital and an imperative component for developing countries where human capital waste accrues due to under- utilisation of capacity. It is the art, science and craft of management.

It deals on three basic things like- advising, implementing and organizing change. It also deals in planning, employee relations, organisation development, development training programmes and total quality management.

Importance of Human Resource Management

In a fast changing business environment, organisations can succeed only through the efforts of competent employees. Therefore, HR has to develop the competency of the individual employee, develop team spirit and obtain necessary co-operation from employees to achieve organisational goals.

There are three broad areas, i.e., social, professional and individual enterprise that deals with the importance of HRM and the details are given below:

1. Social:

Effective human resource management could serve the goals of our society by satisfying the social needs of the employees and this can be achieved by taking the following initiatives:

a. Maintaining a balance between jobs available and the job-seekers according to qualification, experience and the needs of the organisation.

b. Providing suitable employment which might give them psychological satisfaction.

c. Paying the employee a reasonable compensation in proportion to the industry wages and contribution made by him.

d. By helping people to make decisions that are in their own interest.

e. Eliminating waste/improper proper use of human resources.

2. Professional:

Provide a healthy and congenial working environment that promote individual brilliance as well as teamwork among the employees and this can be achieved by:

a. Maintaining the dignity of the employees as “human beings”

b. Giving maximum opportunities for personal development.

c. Providing healthy relationship between different work groups so that work is effectively performed.

d. Developing the knowledge, skills and attitudes of employees.

e. Correcting the errors of wrong postings and improper reallocation of work.

3. Individual:

HRM is important for achieving the objectives of individual enterprise. Trained and motivated employees help the organisation to achieve its short-term and long-term goals.

This is possible by:

a. Developing right attitude among the employees and

b. Effectively utilising the available human resources and securing willing co-operation of the employees for achieving the goals of the enterprise and fulfilling their own social and other psychological needs.