Functions of HRM

Functions of HRM





Functions of HRM


           The major function of HRM is to improve the contribution and effectiveness of the employees towards achieving the objectives and goals of the organizations. Additionally, there are several areas of human resources management, and these include, benefits and compensation, performance management, HR planning, selection, and recruitment, HR development as well as employment and labor laws (Noe et al., 2017). Therefore, Human resource managers are required to have a clear understanding of each of these areas and perform their duties with high levels of professionalism.

Overview of HRM Areas

Performance Management

           Performance management can be defined as a continuous process of communication between employees and managers to achieve the goals and objectives of a company (Noe et al., 2017). It is the basic foundation for the performance of employees and their engagement in the company. Performance management also aims at ensuring that the employees can improve their productivity and attain their full potential as well as success. This process utilizes both the written and oral components and occurs throughout the year. Also, it leads to the annual evaluation of employee performance. Some of the critical elements of performance management include defining specific and clear expectations to the employees, setting explicit objectives provision of continuous feedback, and establishing goals (Cascio, 2015). The most effective performance management is not all about setting annual goals but setting goals that are changing with the dynamic business world and personalized for each employee. Also, employees are given feedback on how they are faring in real time and a sense of accomplishment. 

Human Resource Planning, Recruitment, and Selection

           HR planning involves getting the right employees into the right job positions and at the right time. It is noteworthy that the employees should be in the correct numbers and qualified to carry out those particular jobs. Additionally, they should be in a position to efficiently and effectively carry out the responsibilities assigned to them and assist the firm in attaining its overall goals (Noe et al., 2017). Also, HR planning involves setting human resource goals and making a decision on how they will be accomplished. The HR planning process involves carrying out a forecast of the labor supply and an evaluation of the demand for labor in the organization. In recruitment, its primary role is to develop a supply of potential new hires that the firm can draw from in case a need arises. Besides, recruiting refers to the process carried out by the firm to attract and identify potential new employees. Additionally, the selection is usually considered as the most vital function of the human resource department (Lussier & Hendon, 2019). Selection refers to the process of differentiating between the applicants to a job position to identify as well as hire the ones who have higher possibilities of success. 

Human Resource Development

           HR development refers to the process of improving the personal, group, and organizational effectiveness with a basis on the employees. One of the major elements of human resource development involves the development of talents. Also, HR development involves ensuring alignment between the skills of the employees and the needs of the organization. On top of hiring, orienting as well as training the employees, human resource managers are also expected to improve their career opportunities. In HRM, it is more economical to improve the talents and abilities of the current employees rather than recruiting new employees (Noe et al., 2017). Therefore, human resource development is a trade-off by which the HR department saves finances trough, avoiding any extra costs associated with hiring new employees. 

Compensation and Benefits

           Compensation refers to the payment made to an employee for the contribution he or she has made to the organization or for carrying out their assigned jobs (Noe et al., 2017). The common forms of employee compensation include salaries, wages, as well as tips. Compensation usually has two primary components, which are the base pay and the variable pay. The base pay is generally determined by the position and role held by the individual employees and the available market for the expertise needed to carry out that role. On the other hand, variable pay is usually based on the own performance of an employee. Moreover, benefits refer to forms of value in addition to pay which are offered to an employee for the contribution they make towards the success of the organization or for carrying out their assigned jobs (Bratton & Gold, 2017). Employee benefits usually comprise health life insurance, and employee stock ownership plans. Also, benefits include disability insurance and life insurance, as well as vacation.

Employment and Labor Laws and Regulations

           The employment and labor laws in the USA are administered by the Department of Labor (DOL). These regulations usually cover several workplace activities. Besides, these laws include the Fair Labor Standards Act (FLSA), which defines the standard wage and overtime payment in the workplace among public and private institutions (U.S Department of Labor, 2019). Another regulation is the occupational safety and health act, which is concerned with health and safety at the workplace. Another significant labor law in the US is the employee retirement income security act (ERISA), which is concerned with regulating the employers who provide welfare and pension plans to their workforce (U.S Department of Labor, 2019). The family and medical leave act in the US requires that all employers who have fifty or more employees offer them up to twelve weeks of unpaid leave for the adoption or birth of a child (U.S Department of Labor, 2019). Another significant labor law is the Federal Mine Safety and Health act which covers workers in mines. 

HR Functions for Effective Training and Development

           There are several functions performed by the HR department within a performance management system, which play an essential role in the adequate training and development of employees. It is important to note that most firms view the training and development of workforce as an essential part of HR development (Noe et al., 2017). HR Function, which leads to effective training and development include providing training opportunities to the employees (Noe & Kodwani, 2018). That can be achieved in several ways, such as offering internal training to the employees, conferences, and workshops as well as educational programs. Some of the common strategies applied by the human resource department to promote training and employee development include in-class training, outside class training, and on-job learning as well as online training (Lussier & Hendon, 2019). 

           In-class learning involves the employees attending classes which help in improving their skills and abilities. In those classes, the employees meet external experts who train and equip them with new and dynamic skills required to perform their roles. On-job learning involves the employees gaining more capabilities in the process of carrying out their duties by observing other employees perform those roles (Bratton & Gold, 2017). On the job training are a more effective learning and development strategy since it equips the employees with up to date skills. Another HR function which leads to effective training and development is preparing and training the new employees on how to perform their duties (Noe et al., 2017). Additionally, the HR managers are involved in providing feedback to the employees as well as other mangers. Besides, the main aim of human resource development (HRD), is to ensure individual employees achieve improvements in their performance. 

           Another significant HR function that contributes to effective training as well as development is career development. The HR department is involved in developing and advancing the careers of the employees so that they can attain optimum performance (Bratton & Gold, 2017). The human resource department creates the vital competencies which enable the employees to carry out current as well as future jobs through planned learning activities. Human resource development is used by different groups within an organization to initiate as well as manage change. Besides, training and development incorporates developing the human expertise to improve their performance as well as empower the organization so that it can capitalize on its human resource capital (Noe et al., 2017). It is worth noting that the HR function of training and development improves the knowledge and talent of the employees (Noe & Kodwani, 2018). 

Compensation and Benefits

           An effective performance management system, when used alongside compensation and benefits, plays a primary role in attracting, retaining, and developing talented employees. It is important to note that an effective compensation strategy also plays an essential role in attracting new talents and keeping them within an organization. That is because every employee feels motivated when he or she is paid well for the services he or she provides to the company. Employees always need to see value in the efforts they tirelessly put towards achieving organizational objectives (Lussier & Hendon, 2019). Therefore, employees will always prefer to work in organizations that offer competitive compensation and benefits. Besides, if compensation is not carried out correctly, it can result in several negative consequences. Such consequences may include some of the employees resigning or leaving the organization to join its competitors, who may be offering better compensation and benefits. 

           Besides, pay for performance plays an essential role in the development of employees since the employees work towards improving their performance. Bratton & Gold (2017), argues that for the employees to increase production, they need to acquire new skills from additional training or through learning from their fellow employees. Therefore, by so doing, the employees also achieve some development in their careers. There are three steps in a management performance system used in the implementation of pay for performance. These steps include measuring the performance of the employees, followed by allocating the compensation budget appropriately (Noe et al., 2017). The third step is to connect the compensation to the performance (Noe et al., 2017). Besides, any organization which offers competitive compensation to its workforce will see most of the employees continue to work in the company for an extended period. 

Employment and Labor Laws and Regulations

           There are several labor laws defined by the Department Of Labor which influence compensation and benefits, human resource development, and other HRM areas. For instance, the Fair Labor Standards Act (FLSA), dictates the standard of wages to be offered to employees in both the public and the private sector (U.S Department of Labor, 2019). This law also regulates the relationship between the employer and the employees. Besides, employers should pay all employees who are covered the federal minimum wage. FLSA also prohibits the employment of children aged below 18 years (U.S Department of Labor, 2019). Moreover, the employee retirement income security act (ERISA) impacts employee benefits by regulating the employers who provide welfare and pension benefits to their employees (U.S Department of Labor, 2019). 

           Equal Employment Opportunity Act affects human resource planning, selection, and recruitment function by stating that employers should offer equal employment opportunities to their employees. It requires employers not to discriminate individuals based on religion, gender, race, or ethnicity in the process of selection and recruitment. Therefore, these play an essential role in regulating the relationship that exists between the employer and the employees.

How Functions of HRM Work Together

           The different functions of HRM work in unison to optimize organizational and employee behavior. To begin with, the HR planning, selection, and recruitment function is used to bring new employees into the company. This process ensures that the most suitable individuals are selected to carry out different jobs available in the organization. This function works together with other HR functions such as Human resource development such that the most suitable employees recruited are subjected to training programs that enhance their abilities (Cascio, 2015). This therefore ensures that the careers of the employees are well developed. 

           Further, the HR planning recruitment and selection and the HR function of human resource development work together with the compensation and benefits function. That is achieved through ensuring that all recruited employees are offered a competitive compensation and benefits package. In return, such assures that the employees with the best talents are retained within the organized and their skills even developed further. Also, when the HR department provides competitive compensation and benefits to its employees, that promotes the functions of recruitment and selection. That is because people with the best talents are encouraged to apply for any job opening in the organizations. Therefore, it becomes easy and possible to meet the labor demands within the organization by selecting qualified individuals to fit the available labor demand. Also, compliance with labor laws plays an essential role in ensuring the existence of a good relationship between employees and employers (Cascio, 2015). By so doing, the labor laws compliance HR function will have worked in unison with the employer-employee HR function. 


           To conclude, there are several human resource areas such as compensation and benefits as well as Human resource development. Other HR areas include employment and labor laws, HR planning, selection and recruitment, and performance management. Besides, there are several HR functions within the system of performance management which contribute to practical training and development. Also, an effective compensation and benefits strategy combined with a performance management system can attract, retain, and develop talented employees.


Bratton, J., & Gold, J. (2017). Human resource management: theory and practice. Palgrave.

Cascio, W. F. (2015). Managing human resources. McGraw-Hill.

Lussier, R. N., & Hendon, J. R. (2019). Fundamentals of Human Resource Management: Functions, Applications, and Skill Development. SAGE Publications, Incorporated.

Noe, R. A., & Kodwani, A. D. (2018). Employee Training and Development, 7e. McGraw-Hill Education.

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.

U.S Department of Labor (2019). Summary of the Major Laws of the Department of Labor. Retrieved from: