The Importance of Human Resource Management
Human Resources Management Defined
Ever wonder "what is human resource management?" According to the Encyclopedia Britannica1, human resource management is "the management of the people in working organizations" that's also known as personnel management, industrial relations or employee relations.
Human resource managers may "plan, coordinate, and direct the administrative functions of an organization." They recruit, interview, and hire staff members and "consult with top executives on strategic planning; and serve as a link between an organization's management and its employees."
Brief History of Human Resource Management
Contemporary human resource management2 may be linked to the 1900s, when the labor movement and industrial growth began to take off as companies recognized the importance and value of their employees. Companies started to offer welfare, and unionization became more significant. Some key developments3 included personnel management through recruitment processes, managing employee relations and overseeing health and safety programs.
In 19153, only 5% of large U.S. companies had personnel departments, and by 1920, 20% of large U.S. companies employed "personnel administration" professionals.1 Formal hiring procedures and employment laws started going into effect after The Great Depression and The New Deal "forced employers to get serious about paying workers fairly."
World War II² "demanded the fast mobilization of resources and exorbitant wartime production" and the need for training, and the Training within Industry (TWI) was born with four programs "fostering three contemporary elements of human resource development, performance, quality, and human relations." Following the TWI, the Job Relations Training Program (JRT) "trained supervisors to establish good relations with their employees. The JRT laid the necessary groundwork for the burgeoning of organizational development in companies during the 1950s."
Fast-forward to the 1950s when " The Practice of Management³" was published and the term "human resources" became more widely recognized. From then on, human resources became an important part of the business world, with studies on organizational development, and on the effects of meaningful work for employees and Management and Leadership Development into the 1970s and beyond.
Importance of Human Resources in Organizations
According to the Bureau of Labor Statistics, HRM⁴ help to "attract, motivate and keep qualified employees and match them to jobs they are well-suited to." This is done by directing, supporting and advising employees (people management) and employee-related services and workplace policies, like payroll, training and benefits. "They identify ways to maximize the value of the organization's employees and ensure that they are used efficiently."
Key Functions of the Human Resources Department
Recruitment and Staffing
There are many different systems5 and ways that human resource management teams head up new employee recruitment and staffing. From agencies to staff representatives for an organization, each company has its own hiring process, managers and processes to find and hire qualified candidates for a job.
There are also different terms, conditions6, HR responsibilities and privileges6 of employment, along with considerations for fair and equal opportunity that must be taken into consideration for HR management.
Employee Relations and Performance Management
From developing positive relationships with employees to managing conflicts, consulting on employee concerns and employee satisfaction, employee relations within human resources involves developing strategies to maintain those connections and supporting employees.
According to The U.S Office of Personnel Management7, Performance management involves "the management of employee performance (i.e., planning, developing, monitoring, rating, and rewarding employee contributions), rather than performance-based or performance-oriented approaches to managing, measuring, and accounting for agency program performance." Employee fairness and employee rights are part of the human resources professional's responsibility, motivating employees and supporting employees along the way.
Compensation and Benefits Administration
Some HR managers oversee compensation and benefits administration for existing employees. There are also individual roles within larger organizations that only deal with these responsibilities. A payroll manager8 or compensation specialist may help supervise and process payroll for an organization to "ensure all aspects of payroll are processed correctly and on time." They may also prepare reporting for accounting and resolve any payroll issues.
Compensation managers8 may "monitor market conditions and government regulations to ensure that their organization's pay rates are current and competitive." They review wages, salaries and compare to their organization's pay structure so that the levels are appropriate.
HR professionals may support an employees’ physical and mental health and overall well-being through benefits programs and other initiatives. Benefits managers8 may oversee and administering employee benefits, which can include "retirement plans, leave policies, wellness programs, and insurance policies, like health, life and disability."
They also "oversee benefits vendors and oversee enrollment, renewal and delivery of the benefits to the organization's employees." This involves providing workers with employee assistance programs supporting and promoting work-life balance, and creating a healthy work environment.
Training and Development
HR managers may also deal with training and development8. These roles involve developing training programs and personal development for staff, assessing existing and new employees' need for training so that they perform their jobs effectively, and aligning the training criteria to the organization's goals. Training employees and fostering development opportunities may also involve administrative tasks, overseeing staff and budgets, updates or composing company policies, talent management, dealing with business operations and more.
Providing a Career Path Within the Organization
HR department managers may provide access to educational resources and encourage employees to continue learning in their field and interests. Development, sometimes referred to as personal development, may involve helping employees improve their knowledge in a specific skill set or in a way that may encourage professional growth. Some employees may have personal development goals to move into a different department, achieve a promotion, or continue learning in their current field, offering continuing education resources.
Human Resources Job Outlook
According to the Bureau of Labor Statistics, Human Resource Managers job outlook is projected to grow9 6% from 2023-2033, as "workers are needed to help meet strategic organizational priorities, such as employee engagement and retention, diversity and inclusion, and remote work and return to office."
What Comes Next
The field of human resources has a wide reaching impact on businesses, employees, and everyday life. If you're interested in taking the next step, learn more about what you can do with a human resources degree and see how an academic journey may be beneficial to supporting your human resources career goals.
1 Encyclopedia Britannica, Politics, Law & Government, Banking & Business, Human Resource Management, at https://www.britannica.com/topic/human-resources-management (visited February 11, 2025).
2 Swanson, Richard A., Foundations of Human Resource Development, Third Edition, A publication in the Berrett-Koehler organizational performance series, 2022, Google Books, at https://books.google.com/books?hl=en&lr=&id=XQI_EAAAQBAJ&oi=fnd&pg=PP1&dq=the+history+of+human+resources&ots=T7HfpFTPFW&sig=kF_lO7R3P0ievbI35gkkmsvFAek#v=onepage&q=the%20history%20of%20human%20resources&f=false (visited February 11, 2025).
3Patrick DiDomenico, How we got Here: The 75-Year Evolution of SHRM and HR, at https://www.shrm.org/topics-tools/news/hr-magazine/how-got-75-year-evolution-shrm-hr (February 11, 2025).
4Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Human Resources Managers, at https://www.bls.gov/ooh/management/human-resources-managers.htm (visited February 06, 2025).
5Society for Human Resource Management, Topics and Tools, Recruitment and Selection Process, at https://www.shrm.org/topics-tools/tools/policies/recruitment-selection-process (visited February 11, 2025).
6U.S. Equal Employment Opportunity Commission, E-Race, BEST PRACTICES FOR EMPLOYERS AND HUMAN RESOURCES/EEO PROFESSIONALS at https://www.eeoc.gov/initiatives/e-race/best-practices-employers-and-human-resourceseeo-professionals (visited February 11, 2025).
7U.S. Office of Personnel Management, Policy, Performance Management, at https://www.opm.gov/policy-data-oversight/performance-management/ (visited February 11, 2025).
8Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Human Resources Manager, at https://www.bls.gov/ooh/management/human-resources-managers.htm#tab-2 (visited February 11, 2025).
9Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Human Resources Manager, at https://www.bls.gov/ooh/management/human-resources-managers.htm#tab-6 (visited February 11, 2025).
