Human Resource Management Meaning, Definition, Nature, Scope, Objectives

Table of Contents:-

  • Meaning of Human Resource Management
  • Human Resource Management Meaning
  • Definition of Human Resource Management
  • Nature of Human Resource Management
  • Scope of Human Resource Management
  • Evolution of Human Resource Management
  • Objectives of Human Resource Management
  • Functions of HRM
  • Importance of Human Resource Management
  • Challenges and Issues in Human Resource Management

Meaning of Human Resource Management

Organizations are comprised of people and operate through them. Without a workforce, organizations cannot exist. Human resources, such as materials, money, men, and machines, are considered one of the most critical factors of production in an organization. This is because using other physical resources like land, materials, and capital depends on how the human factor is utilized in various operations. Except for the workforce, all other resources depreciate with time. A human being is the most valuable resource that appreciates with time if a positive environment is provided to them, and hence is termed a “human resource.” Human resources consists of those groups of people offering services for the organization’s growth.

According to Michael J. Jucius, “Human resources are a whole consisting of inter-related, inter-dependent, and interacting physiological, psychological, sociological, and ethical components”.

Human Resource Management Meaning

Human resources remain central to organizations, as dynamic and influential people can construct active enterprises. Only efficient workers are capable and have the inspiration to turn dreams into reality. Organizational objectives can only be accomplished through talented people. Therefore, to remain competitive in the dynamic business environment, organizations should constantly endeavour to assist, energize, and train their employees to maintain maximum efficiency.

Human resources are both exclusive and essential. An organization should always strive to obtain and use these resources best. Human resource management is concerned with effectively managing the organization’s most critical and challenging asset – its people. It was formerly known as personnel management.

HRM can be defined as acquiring the right talent, training, developing, and motivating them to sustain themselves in the workforce to achieve the organization’s objectives effectively. One of the primary objectives of this process is to establish a strong connection between the organization and its employees. This process motivates individuals to perform their best and provide unwavering support to the organization.

Definition of Human Resource Management

According to Invancevich and Glueck, “HRM is concerned with the most effective use of people to achieve organisational and individual goals”.

According to Edwin B. Flippo, “Human resource 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 social objectives are accomplished”.

According to Milkovich and Boudreau, “Human resource management is a series of integrated decisions that form the employment relationship; their quality contributes to the ability of the organisations and the employees. to achieve their objectives”.

Nature of Human Resource Management

The nature of HRM is explained as follows:

1) Universal in Nature: HRM practices are prevalent in every organization, whether public or private, government or non-governmental, educational or corporate, i.e., in almost every area. Its existence is not limited to personnel functions; it is pervasive in all functional areas, including marketing, finance, production, etc.

2) Action-Oriented: HRM focuses on action rather than keeping records, written procedures, or rules. Workplace employee issues are resolved with the help of rational policies.

3) Focused on People Dimension: HRM is focused on developing people at work, both at the individual and group levels. It seeks to correlate the capabilities of employees with the job requirements. HRM constantly strives to motivate people for better performance and higher productivity.

4) Growth-Oriented: The main concern of HRM is to develop the employees’ capabilities and maintain the reward system according to their expectations. The reward system constantly motivates the employees to achieve desired performance. Training is also offered to employees to discover and develop their potential. Job rotation is also used to analyze the overall performance of the employee.

5) Cordial Integration: HRM develops and restores harmonious relations among human resources in the organization. It coordinates and controls the human resources in the organization in such a manner as to obtain maximum results.

6) Challenging Function: People are complex and dynamic. Hence, the organization’s human resources management demands very close supervision of the employees. It is critical to control and coordinate employees because of the human factor. HR managers must be careful while controlling and dealing with them without hurting their sentiments.

7) Supplementary Service: HR also plays a supportive role by assisting and advising operational/functional managers. As specialist advisors, they supervise and guide other managers to achieve their tasks as more effective managers.

8) Multi-Disciplinary Function: HRM is essential to an organization, as is the concept of its constitution. It draws ideas, practices, concepts, and principles from various soft disciplines such as anthropology, sociology, psychology, economics, etc. A thorough understanding of multiple disciplines is essential, as they all directly correlate with human resource management (HRM) and involve interactions with individuals.

9) Ongoing Process: The function of HRM cannot be restricted to a particular time and date. It is present in every department. Therefore, it is continuous and is practised every second, hour, day, and year in the organization.

Scope of Human Resource Management

HRM has an extensive application; it includes all areas from when employees enter until they quit. The scope of HRM consists of the following areas:

1) Procurement: It involves recruiting prospective employees and then selecting the most appropriate ones for the desired posts in the organization. This is followed by their induction and settlement into their respective positions.

2) Training and Development: Employees must perform well in realistic situations. Employees are encouraged to participate in committees and board meetings to aid their development.

3) Job Analysis and Job Description: These are prepared to hire qualified employees by studying the job requirements of the organization and assigning definite functions to jobs. They also act as a basis for wage determination.

4) Compensation/Rewards: Compensation is provided to the employees for their work. The amount of compensation to be given to the employees is ascertained through job analysis and job evaluation, which involves determining wage rates, methods of wage payment, and performance appraisal.

5) Employee Records: Employee records are maintained to collect details about all employees’ work, such as job performance, aptitude, payment records, and achievements.

6) Welfare: In HRM, the welfare aspect focuses on providing good working conditions to the workers. It includes programs for health and safety, sanitation facilities, entertainment facilities, accommodations, education, security, etc.

7) Industrial Relations: IRM helps maintain cordial relations in the industry. It comprises collective bargaining, workers’ participation in management, dispute resolution, grievance management, etc.

Evolution of Human Resource Management

Human resource management has emerged as a vast field in today’s business environment. It began in India in 1800 BC. The historical evolution of HRM can be described in the following phases

1) Industrial Revolution: During this phase, mechanisation and technological advancement took place at a rapid speed. At that time, jobs were divided and workers had to do only a small portion of the work assigned rather than completing the whole work. Thus, specialisation in work increased workers’ speed and efficiency but at the same time, work became monotonous. The treatment which was given to the workers was similar to “glorified machine tools Employers’ concern was only to fulfilling the targets of production not to fulfilling the demands of the workers. The government was not at all active in working for the welfare of the workers.

2) Scientific Management: F.W. Taylor advocated the concept of scientific management to increase the efficiency of the workers. Scientific management is a methodical analysis which involves breaking tasks into many small parts and re-organising them to get a perfect combination. Taylor also stated that people’s physical and mental abilities must match with the tasks which are to be performed on the job.  Therefore, highly proficient people must be removed and supervisors should provide training to the employees who have low skills to make them highly skilled. Taylor further emphasised using incentives to motivate employees.

3) Trade Unionism:  Over time, workers have become aware of their rights and have collaborated to protest against the exploitation done by employers. They have created trade unions, and with the help of trade unions, workers protest against unfair labour practices. Through collective bargaining, trade unions address workers’ grievances regarding working conditions, wages, benefits, and disciplinary actions.

4) Human Relations Movement: During 1930s and 1940, Elton Maye along with las enlleagues froon Harvand voordactad Hawbone еxресinent. The experiment showed that job design and reward were not the only factors which affected the productivity of employees and that there are some societal and psychological factors too which can also influence employees’ productivity.

The widespread implementation of behavioural science techniques was due to the human relations movement. It involves using supervisory training techniques, providing assistance to workers, counselling programmes and strategies to make the relations stronger between management and labour. These programs have helped the workers to discuss work-related and personal life problems with counselling professionals.

The increasing influence of trade unions during the 1930s and 1940s affected the human relations movement. The emergence of unions at this time was because of the Wagner Act. The Act gave workers the legal right of collective bargaining with employers on matters like salary, job stability, benefits and other working conditions

5) Human Resource Approach: In the early 60s, the ‘put milk theory of human religionists had been discarded largely. According to the pet milk theory’, “happy workers are productive workers or happy cows give more milk. Every worker is different from the other workers and has different personal needs, the factors which one individual may not stimulate the other. Positive emotions, such as happiness and contentment, can have very little influence on the efficiency and productivity of some employees. Gradually, the genetics of considering employees as assets became prominent.”

“The Human Resource Approach believes that the satisfaction and motivation of employees main source of satisfaction in their job or task. This approach focuses on the involvement of individuals in organisational decision making”.

Moreover, this approach focuses on the following factors:

i) Employees are more likely to enjoy their work if they are involved in establishing objectives that they have to attain.

ii) Many individuals show more self-direction, self-control and creativity than needed in than present jobs (Theory Y).

iii) The primary responsibility of the manager is to exploit the full potential of their team members to effectively serve the organization. 

iv) A healthy, safe, comfortable comfortable and convenient workplace environment should the provided by the managers so that employees can fully utilise their abilities.

v) The manager must encourage employees to take initiative and actively participate in all essential factors of the organization.

vi) Increasing subordinate’s influence, self-direction and self-control will lead to enhanced working efficiency.

vii) Employees’ job satisfaction may increase if they can make maximum utilisation of their work potential.

Behavioural science has contributed to management practices by introducing new perspectives instead of providing advanced techniques. It has developed a valuable way of thinking about the manager’s role, the nature of organisations and individual behaviour in the organisation.

Objectives of Human Resource Management

Objectives of HRM are as follows:

1) To help achieve the goals established by the organisation: The primary objective of human resource management (HRM) is to support employees in reaching the desired organizational objectives. Failure to do so may result in the discontinuation of its operations.

2) To Help the Employees in Securing Personal Goals for Individual Growth: HRM not only focuses on the organisational goals but also tries to explore and develop the capabilities of the employees through training and development so that employees can achieve their personal as well as organisational goals. This not only enhances the employees’ productivity but also increases the employees’ loyalty towards the organization.

3) To Make Maximum Utilisation of Employee’s Potential: The essence of the HRM lies in its basic function of effectively matching the skills of the employees with the work assignments in the organisation. This process helps thoroughly assess the employees’ abilities to improve organizational performance and meet the needs of its stakeholders.

4) To Procure Efficient Employees within the Organisation: HRM focuses on maintaining an effective reward system to motivate the employees to improve the efficiency of the employee.

5) To Enhance Job Satisfaction: Various programmes of human resources welfare have been framed and implemented by the HRM to enhance the quality of life. This helps in increasing the employee job satisfaction.

6) To Improve Quality of Work Life: HRM must make the organisation a pleasant place for employees. This is important as organisational performance cannot be enhanced without improving the quality of work life.

7) To Update the Employees regarding Managerial Policies: One of the most important duties of HRM is to update the employees with the internal policies, feedback from customers, opinions of the management and also to generate creative ideas from the workforce.

8) To Fulfil Social Responsibility: The HRM function also ensures the fulfilment of the social responsibility of the organisation towards the different groups of society, while adhering to the moral and legal norms.

9) To Maintain Discipline among Employees: HRM focuses on ensuring discipline and motivation among the employees in the organization. One way by which HRM achieves this objective is by providing incentives to employees based on their performance. It tries to create an employee-friendly atmosphere in which the focus is on a healthy working style.

10) To Increase Organisational Productivity: HRM tries to enhance the overall productivity of the organisation by effective utilisation of available resources.

11) To Focus on Quality Performance: One of the significant responsibilities of Human Resource Management (HRM) in every organization is ensuring that the right job is assigned to the right candidate at the right time. This brings efficiency to the working system of the organisation and enhances quality performance.

12) To Develop Harmony in the Work Culture: HRM makes continuous efforts to fill the gap between individual and organisational goals. This results in building cordial relationships within the organisation and the employees for the achievement of the desired objectives of the organisation as a whole.

13) To Create a Respectful Environment: HRM must ensure that a respectful environment of dignity, trust and happiness exists within the organisation for everyone. If a conducive environment is lacking, there are chances of potential crises within the organization.

Functions of HRM

Functions of HRM can be classified into two main categories given as follows:

Managerial Functions

The manager’s first and foremost job is to manage people. Regardless of the department they are in charge of, all managers are expected to perform various managerial functions. The managerial functions of human resource management include the following:

1) Planning: It is concerned with the pre-planning of activities to be done in future. It is the process of carefully considering various factors and their potential outcomes before taking action. Planning is related to the strategy formulation of personnel programmes and changes in advance that will help in the achievement of organisational goals. HRP (Human Resource Planning), hiring, selection, and T&D (Training and Development) are some of the HR functions which require planning.

2) Organising: It is the procedure of aligning people and other resources so that they can work together to achieve a goal. For this, firms generally need to establish relationships among the employees so that they can mutually contribute to fulfilling the organisational goals.

3) Directing: Directing is concerned with providing clear instructions to employees to perform a specific task and ensuring that the work done is as per the provided guidelines. The voluntary and effective cooperation of employees for the fulfilment of organisational goals is possible in the right direction. It is the responsibility of human resource management to develop a communication network, motivate and unite employees, maintain discipline and resolve employee grievances quickly and properly.

4) Coordinating: Effective coordination among individuals is essential at all levels of management. Achieving organisational objectives is possible only through the seamless coordination among different groups and their respective activities. Developing, interpreting, and reviewing policies and programmes of the employees are the responsibility of the human resource department. The last decisions may be taken by the line managers but the personnel department can give suggestions for improvements.

5) Controlling: Controlling is the process of examining and verifying if everything is as per the set plans. standards. Some of the means through which human resource management functions can be controlled and made effective are auditing of training programmes, analysis of labour turnover records, directing morale surveys and conducting separate interviews.

Operational Functions

Operational functions are the special activities which human resource people have to perform for every department of the organisation. These are the regular functions of the human resource department. It focuses on all activities of the organisational workforce from their HR planning to their exit. These functions are as follows:

1) Employment: It involves acquiring and recruiting qualified candidates to achieve the organizational goals and objectives. Job analysis, manpower planning, recruitment, selection, induction, placement, etc. are the activities which are included in the employment function.

2) Human Resource Development: HRD is the procedure of building and transforming knowledge, skills, creativity, attitude, etc., according to the existing and upcoming requirements of the job and organisation. It consists of training and development, performance evaluation, career planning and development, etc.

3) Compensation: Compensation is about motivating employees by providing them with reasonable and satisfactory remuneration so that they can work more effectively. Employee benefits, incentives, bonuses and social security benefits are all integral components of a compensation package. Job evaluation, wage and salary administration are essential components of compensation management.

4) Human Relations: It is the process of bringing individuals together through meaningful interactions within the workplace. It helps people to work collectively in a team to gain high productivity and satisfaction in terms of money, mind, and society. It involves dealing with employee grievances timely through a well-developed grievance handling procedure, disciplinary action, and employee counselling to give them relief from stress, frustration, etc.

Importance of Human Resource Management

The importance of HRM at the various levels is given below:

1) Corporate Level: Enterprise requires their work to be done effectively and efficiently hence it requires an effective HRM. HRM helps enterprises. in the following manner:

i) HRM focuses on hiring skilled persons who can promote the growth of the enterprise and also retain them for long-term through manpower planning, effective recruitment procedure, selection and fair policies of promotion.

ii) Enriching employees by developing and improving important skills and correcting their attitude through proper training and development, performance appraisal, etc.

iii) Making the best possible use of current human resources.

iv) Ensuring a skilled and dedicated team of employees for the organisation in future.

v) Gaining voluntary cooperation from the employees by motivation, participation, grievance handling, etc.

2) Professional Level: HRM ensures good quality of work life. It helps in the professional growth of employees through the following methods:

i) Building esprit de corps in employees by giving them a congenial working atmosphere.

ii) Creating opportunities for employees to enhance their skills and capabilities for fostering professional growth and development within the organization.

iii) Ensuring that healthy relationships are maintained among team members and work is correctly assigned to both employees and teams, fostering a positive work environment and maximizing productivity.

3) Social Level: HRM plays an important role in society in the following ways:

i) Enabling employees to live with dignity by providing them employment which gives them mental and social satisfaction.

ii) Maintaining equilibrium between job openings and applicants in terms of numbers, qualifications, needs and aptitudes.

iii) Utilizing employees’ skills and talents effectively while prioritizing their physical and mental well-being.

4) National Level: HRM plays a very significant role in driving the development of a country through various means as follows:

i) Competent and dedicated human resources result in the efficient use of the physical, natural, and economic resources of the country.

ii) A nation’s development depends upon its people’s attitudes, skills, and values. Individuals who lack the necessary skills and competence indicate an undeveloped or underdeveloped country. HRM plays a vital role in ensuring that the country’s human resources are skilled and developed.

iii) HRM plays an important role in driving economic growth within a country. This finally leads to increased living standards and employment.

Challenges and Issues in Human Resource Management

Some of the major challenges and issues in HRM are given as follows:

1) Globalisation: It has a significant impact on the quantity and types of available jobs. Due to globalisation, organisations are required to manage complex issues such as people management in different topographical cultures, legal environments, and conditions of business. Various HRM functions like hiring, development and remuneration are required to be adapted to consider the global management differences.

2) Technological Advancements: The latest technological advancements have resulted in a reduction of those jobs. which need less-skilled people and an increase in the quantity of jobs which need more skilled people. This has led to the emergence of the concept of ‘knowledge work’ from ‘work’. However, replacing followed by re-training of a few employees is also needed at times.

3) Market Challenges: For fulfilling the needs of the customer in a quicker, desirable, and cost-effective, manner, organisations must incorporate total quality management and business process re-engineering programmes. These programmes need HRM must be concerned with modifying work procedures, training, compensation, job design, etc.

4) Shortage of Skill: It is a very difficult task for every organisation to hire and retain talented employees. Every organisation makes all possible efforts to get the most talented employees of its competitors. HRM should create and execute policies and practices to overcome this challenge by giving performance-related pay, benefits, and effective recruitment techniques.

5) Knowledge Management: Knowledge management is gaining importance as the use of knowledge is continuously increasing. The challenge for HRM is establishing a proper knowledge management system that encourages effective development and use of knowledge.

6) Changing Power Structures: Reducing the levels of hierarchy has led to the transformation of traditional structures to modern decentralised organisations. This has resulted in the freedom of acquiring relevant information for the concerned employees, especially in knowledge-based organisations thereby reducing the centralisation of powers.

7) Training Challenges: Formulating training programmes which are most suitable according to the organisation’s learning needs, is a major challenge for the business. However, the main issue involved here is whether the training and development programmes should be formulated centrally or by considering individual needs.

8) Dynamic Organisational Culture: Developing, transforming and maintaining an energetic and dynamic work culture is a difficult task due to the increasing focus on the competency of human resources. Managers also feel that modern methods of HRM are a hindrance in making maximum utilisation of human resources.

9) Changing Workforce Demographics: In today’s business environment, the workforce within organizations is becoming increasingly diverse. Companies are now emphasizing addressing various employee issues and optimizing multiple employee benefits. The evolving values of the workforce are different from the traditional values. Therefore, HRM requires identifying the probable employee issues and making such exchange among the people and the organisation which is beneficial for both.

10) Changed Employee Expectations: Changes in the HR profile have resulted in the changing desires and requirements of personnel. Attractions such as job security, remuneration, and housing are no longer able to attract, retain and motivate employees. People now want to be empowered and have a good status. This challenge can be overcome by dealing with privacy issues of employees, promoting ethical practices, preventing sexual exploitation, etc. 


1. Explain the nature of HRM

The nature of HRM is pervasive, people, action, future and development-oriented, it focuses on employee relations and an Interdisciplinary approach.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top
Modes of Entry into International Business