What is human resource management?

The emphasis of this chapter is on people - the human element - accomplishing the goals of an organization. The acquisition, training, motivation, and retention of qualified personnel is a critical factor in determining the success or failure of a business firm or a nonprofit organization. As a consequence, most organizations devote considerable attention to the management of human resources.

What is human resource management?

Human resource management can be defined as the process of acquiring, training, developing, motivating, and appraising a sufficient quantity of qualified employees to perform the activities necessary to accomplish organizational objectives; and developing specific activities and an overall organizational climate to generate maximum worker satisfaction and employee efficiency.

While the owner-manager of a small organization is likely to assume complete responsibility for human resource management, most medium and large-sized organizations use company specialists called human resource managers to perform these activities in a systematic manner.

These human resource, or personnel, managers assume primary responsibility for forecasting personnel needs and recruiting and aiding in selecting new employees. Personnel managers also assist in training and evaluation, and administer compensation, employee benefits, and safety programs.

This chapter analyzes the critical process of human resource management. It examines the steps of the employee selection process and techniques used in ensuring the recruitment of qualified individuals. The chapter also discusses employee training, development, and counseling; and promotions, transfer, and separations. Finally, employee compensation, benefits, and safety are analyzed.

A hundred years ago companies hired workers by posting a notice outside the gate, stating that a certain number of workers would be hired the following day. The notice might have listed skills, such as welding or carpentry; or it might simply have listed the number of workers needed.

The next morning people would appear at the front gate - a small number in prosperous times, large crowds in periods of unemployment - and the workers would be selected. The choices were often arbitrary; the first four in the line might be selected, or the four people who looked the strongest or the healthiest.

Two perspectives on human resource management

Human resource management can be viewed in two ways. In a narrow sense it refers to the functions and operations of a single department in a firm: the human resource or personnel department. Most firms with 200 or more employees establish a separate department and assign to it the responsibility and authority for selecting and training personnel.

In a broader sense, human resource management involves the entire organization. Even though a special staff department exists, general management is also involved in the process of training and developing workers, evaluating their performance, and motivating them to perform as efficiently as possible.

The core responsibilities of human resource management are the following:

•    Human resource planning
•    Selection
•    Training/ management development
•    Performance appraisal
•    Compensation and employee benefits


Trained specialists from the human resource department are typically involved in carrying out reach of these responsibilities. However, the responsibilities are typically shared with line managers, ranging from the company president (who involved in overall planning) to first-line supervisors (who may be involved in preliminary interviews with applicants and in employee training).

By accomplishing these critical tasks, the human resource management department achieves it overall objectives of (1) providing qualified, well-trained employees; (2) maximizing employee effectiveness in the organization; and (3) satisfying individual employee needs through monetary compensation, employee benefits, advancement opportunities, and job satisfaction.