Competitive Exams: HRM Introduction

The most important resource of an organization is its human resources the people who work in the organization. People are vital for the effective operation of a company. To meet the challenges and competitive atmosphere of today's business environment, managers must recognize the potential of human resources, and then acquire, develop and retain these resources. This forms the basis of human resource management (HRM). HRM is the management of various activities that are designed to enhance the effectiveness of the manpower in an organization in the achievement of organizational goals. Acquiring skilled, talented, and motivated employees is an important part of HRM.

Human resource management forms a crucial function in organizations of all sizes. Larger firms usually have a separate HRM department. Small organizations, however, cannot always afford to have a separate HRM department that can continually follow the performance of individuals in the organization and review their accomplishment of goals. Instead, in such organizations, each manager is responsible for utilizing the skills and talents of the employees under him, effectively. Traditionally, HRM departments had a relatively small role to play in the organization's overall mission and plans. They developed staffing plans, handled complaints, determined benefits and compensation, and conducted performance appraisal programs. These activities were, and still are, very important in managing an organization. However, today HRM departments are playing a more strategic role in charting the course of their firms. Changes in the environment, such as increasing costs, changing demographics and limited skilled labor supply, rapid technological changes and the need for new skills, have created a strategic need for HRM expertise. These changes have led to the acknowledgment that human resources need careful attention and are vital to the success of any business.

In this chapter, we will first discuss HR planning. The other steps in the HRM process staffing, training and development, performance appraisal, and compensation will also be discussed. The later part of the chapter will discuss the two important elements of staffing recruitment and selection. The chapter concludes with a description of the socialization process of new employees.

Human resource management: An overview

Human Resource Management (HRM) may be defined as the organized function of planning for human resource needs, and recruitment, selection, development, compensation and evaluation of performance to fill those needs. The HRM process is an ongoing function that aims to keep the organization supplied with the right people in the right positions, when they are needed. HRM includes five basic activities:

  1. human resource planning

  2. staffing

  3. training and development

  4. performance appraisal

  5. compensation