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What is Human Resource Management (HRM)?

Human resource management (HRM) is the process of managing an organization's most valuable asset - its people. It's a critical function that plays a key role in the success of any business. Effective HRM can help attract and retain top talent, improve employee engagement and performance, and align the workforce with the organization's goals and objectives. In this guide, we'll cover everything you need to know about HRM, including its functions, challenges, and best practices.

What is Strategic Human Resource Management?

Strategic human resource management (SHRM) is an approach to managing human resources that aligns the workforce with the organization's overall goals and objectives. It's a long-term perspective that looks at the big picture and considers how the organization's human capital can be leveraged to achieve a competitive advantage.

The benefits of incorporating a strategic approach to HRM include:

  • Improved alignment of the workforce with organizational goals
  • Increased efficiency and effectiveness of HRM practices
  • Greater flexibility and adaptability in the face of change

Why is Human Resource Management Important?

Effective human resource management is critical to the success of any organization. It can have a direct impact on organizational performance and is essential for attracting and retaining top talent. Some key benefits of effective HRM include:

  • Improved employee engagement and performance
  • Enhanced corporate culture and work environment
  • Increased competitiveness and innovation

Functions of Human Resource Management

  • Recruitment and selection: Attracting and hiring suitable candidates for open positions.
  • Training and development: Investing in employee skills and knowledge to improve performance and advance the organization's goals.
  • Performance management: Measuring and evaluating employee performance to identify areas for improvement and recognize achievements.
  • Compensation and benefits: Developing and administering compensation and benefits packages that are fair, competitive, and aligned with organizational goals.
  • Employee relations: Managing communication, collaboration, and problem-solving between employees and management.
  • Employee engagement and communication: Creating an environment where employees feel valued and heard and are able to communicate openly and effectively.
  • Diversity and inclusion: Promoting an inclusive work environment where all employees are valued and respected.

Types of Human Resource Management Tools

There are many different types of tools that can be used to support human resource management. Some of the most common include:

  • Human resource information systems (HRIS): software that helps manage employee data, such as personal information, job history, and performance evaluations.
  • Applicant tracking systems (ATS): software that helps manage the recruitment process, including posting job listings, tracking resumes, and scheduling interviews.
  • Performance appraisal software: software that helps track and evaluate employee performance.
  • Learning management systems (LMS): software that helps manage training and development programs.
  • Time and attendance tracking systems: software that helps track employee hours and attendance that helps manage employee training and development, including monitoring progress and providing resources.
  • Time and attendance tracking systems: software that helps manage employee time and attendance, including tracking hours worked and managing time-off requests.
  • Employee self-service portals: software that provides employees access to their personal information, benefits, and other HR-related information.
Human Resource Planning Template Google Sheets
HR Planning Google Sheets Template

A free Google Sheets template to analyze and track your workforce per team, calculate salaries, and forecast future changes to help run your business smoothly.


Top 10 Human Resource Management Software and Tools

When it comes to choosing HR software, there are many options to choose from. Some of the most popular include:

  • ADP Workforce Now
  • BambooHR
  • SAP SuccessFactors
  • Oracle HCM Cloud
  • Workday HCM
  • UltiPro
  • Zenefits
  • iCIMS Talent Platform
  • Namely
  • JazzHR

Each of these software options has its unique features and pricing. It's important to research and compare different options to find the best fit for your organization.

Human Resource Management Examples

Effective human resource management can be found in many different industries and organizations. Some examples of successful HR initiatives include:

  • Google's emphasis on employee engagement and development.
  • Zappos' focus on company culture and employee empowerment.
  • Patagonia's commitment to sustainability and social responsibility.
  • HubSpot's focus on transparency and open communication.

These examples illustrate the importance of aligning HR strategies with organizational goals and values.

Human Resource Management Use Cases

Human resource management can be applied in a variety of different types of organizations, including small businesses, non-profits, and large corporations. Some examples of how HRM is used in different contexts include:

  • In a small business, HRM may focus on recruiting and retaining a small but dedicated team of employees.
  • In a non-profit, HRM may focus on aligning the workforce with the organization's mission and values.
  • In a large corporation, HRM may focus on managing a large and diverse workforce and aligning the workforce with the organization's strategic goals.

Human Resource Management Best Practices

To achieve effective human resource management, it's essential to follow best practices. Some strategies for managing employees and attaining organizational goals include:

  • Managing diversity and inclusion: Creating a workplace where all employees feel valued and respected.
  • Improving communication and employee engagement: Encouraging open and honest communication and creating opportunities for employees to provide feedback.
  • Handling difficult employee situations: Addressing performance issues and conflicts in a fair and timely manner.
  • Compliance with labor laws and regulations: Understanding and complying with all relevant laws and regulations.
  • Managing remote and virtual teams: Ensuring effective communication, collaboration, and performance management in a remote work environment.
  • Creating a positive work culture: Building a workplace where employees feel valued, respected, and motivated.
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How To Share Only One Tab in Google Sheets

When sharing a Google Sheets spreadsheet Google usually tries to share the entire document. Here’s how to share only one tab instead.


Challenges of Human Resource Management During Mergers

Mergers and acquisitions can be challenging for human resource management. Some key challenges include:

  • Integration of different corporate cultures
  • Managing employee uncertainty and resistance to change
  • Ensuring continuity of key HR functions
  • Addressing legal and regulatory compliance issues
  • Managing changes in employee benefits and compensation

To overcome these challenges, it's crucial for HR leaders to have a clear plan in place for managing the transition and to communicate effectively with employees throughout the process.

The field of human resource management is constantly evolving. Some emerging trends include:

  • The increased use of technology in HRM, including the use of artificial intelligence and machine learning.
  • The impact of the gig economy on HRM, including the management of independent contractors and other non-traditional workers.
  • The growing emphasis on employee well-being and mental health.
  • The shift towards a more strategic and data-driven approach to HRM.


Human resource management is a critical function that plays a key role in the success of any organization. By understanding the basics of HRM, the challenges that can arise, and the best practices for managing employees, organizations can create a workforce aligned with their goals and objectives.

This guide has provided an overview of the field of human resource management, including its functions, challenges, best practices, and the tools and technologies used in HRM. Additionally, it provided examples of HRM in action and discussed emerging trends in the field.

Remember that effective HRM is not a one-time event. It's a continuous process that requires regular review and improvement to adapt to the changing needs of the organization and the workforce. Additionally, seeking professional guidance and resources, such as those offered by professional associations or consulting firms, can provide valuable insights and support for implementing effective HRM strategies.

Hady ElHady
Hady is Content Lead at Layer.

Hady has a passion for tech, marketing, and spreadsheets. Besides his Computer Science degree, he has vast experience in developing, launching, and scaling content marketing processes at SaaS startups.

Originally published Jan 28 2023, Updated Jun 26 2023

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