Human Resource Management and Its Five Areas


Human resource management (HRM) is relevant for any organization, especially at the current stage, when the human factor, which ensures its competitiveness, plays an increasingly important role in improving production efficiency. The administration of human resources is considered one of the essential areas of organization management. Numerous employees are a valuable structural element for any business. They create new products, accumulate and use financial resources, control quality. At the same time, people are capable of continuous improvement and development. Their abilities and initiative make a difference for a company since they contribute to its growth and development. The primary function of HRM is to improve employees’ efficiency and their contribution to the achievement of the objectives and the intentions of the organization. There are five areas of it, and their overview will be presented in this essay.

Performance Management

Productivity denotes the process in which employees effectively carry out work by achieving their goals with the help of their skills and knowledge. It is an element of the performance management process, and the latter term stands for the collection of communication during a specific period between the supervisor and the employee. Performance assessment is usually applied over a one-year or half-year period depending on the specific management policy of the organization concerned (Aguinis, 2017). The first step in the performance evaluation process is to establish standards that will then be used as a basis for comparing actual employee activity (Aguinis, 2017). It requires the definition of criteria for assessing the work of employees as successful or unsuccessful and the amount of their contribution to help the organization achieve its objectives. These standards should be clear, understandable, and measurable to reach the best outcomes.

The information above demonstrates that performance management deals with aligning individuals to support the company’s activities. If a business wants to achieve successful results, it is necessary to reconsider a traditional approach to performance management. For example, implementing checklists can be a more productive substitution to the oral representation of data; this strategy will contribute to better and faster performance within a firm (Aguinis, 2017). The option above can result in positive outcomes if the business is ready to rely on simplicity, flexibility, and blind adherence to the recommended policies.

Businesses should both provide their staff members with strict guidelines for how to set the practical goals and allow them to choose the most suitable strategy to achieve the required results. However, it is not a productive case when all the objectives are defined at the beginning of the calendar year. It is so because employees cannot align with project deadlines during this period. (Aguinis, 2017). There is no necessity to document the targets in a specific HR system because doing so would limit the employees’ opportunities to introduce adequate changes according to new conditions (Aguinis, 2017). After completing the performance evaluation, the obtained results will be compared to the standards to understand any possible deviations. Finally, this process concludes by providing feedback to employees, thereby giving them the knowledge that their efforts and work are rewarded and valued.

Human Resources Planning, Recruitment, and Selection

Human resource management also entails aspects such as planning, recruitment, and selection of human resources. These processes are essential in any organization, regardless of size (Leatherbarrow & Fletcher, 2018). In particular, in strategic planning, employees are viewed as resources that can be structured for their maximum performance. While effectively built work of recruiting and selecting affects the quality of future employees in the organization, it also determines the efficiency of all processes and the company’s success as a whole.

Human resource planning consists of comparing the competencies required to implement the development strategy and the actual state of the organization’s human resources. It aims to determine how many employees will be needed to meet the organization’s strategic goals, what qualifications, skills, and abilities they should have, and what an optimal size of their remuneration is (Leatherbarrow & Fletcher, 2018). It must ensure that the best conformity between workers and jobs is provided while avoiding labor shortages or oversupply (Leatherbarrow & Fletcher, 2018). The result of successful planning lies in determining the quantitative and qualitative needs for personnel and establishing the criteria based on which the selection will be performed.

The selection of human resources is the process of examining each applicant’s professional and business qualities to determine their suitability for the performance of duties in the assigned position. The pretenders’ preference is given to the more appropriate candidates, considering the conformity of their qualifications, specialty, personal qualities, and abilities to the activity’s nature (Leatherbarrow & Fletcher, 2018). In addition to that, it is necessary to focus not only on the level of professional competence of candidates but also on how new employees will fit into the existing organizational culture.

The recruitment concept is broader and includes the attraction, selection, and appointment of potential candidates for the position. It is influenced by several factors, including external and internal ones. In particular, the latter include company policy, its size, and organizational culture (Leatherbarrow & Fletcher, 2018). Simultaneously, the former comprises labor market conditions, demographic characteristics, unemployment rates, legal considerations, and laws (Leatherbarrow & Fletcher, 2018). It should be noticed that this process is most effective only if a precise formulation of the vacancy requirements is presented. The role and importance of the processes of human resources planning, recruitment, and selection can hardly be overestimated since the further activities of the organization largely depend on them.

Human Resources Development

Human resource development (HRD) is the part of management that deals specifically with the employees’ evolution and training. It includes post-recruitment education for a person and provides them with a variety of opportunities after the onboarding process to acquire new skills, which will help employees complete their tasks (Eknath & Janardhan, 2020). Apart from it, it involves other development activities that are essential for further development. HRD is significant for any organization that claims to be dynamic and growth-oriented.

This set of processes within a company is paramount to employee adaptation and retention in the long run. Without proper training, people, and therefore the organization, will not be successful. In the absence of the development of professional and personal skills and training, employees become stagnant and unmotivated to complete their daily tasks (Eknath & Janardhan, 2020). In contradistinction to other organization resources, people can show an unexpected improvement in their performance and results. In turn, their potential can only be harnessed by creating conditions that can continually reveal, identify, develop, and use people’s capabilities (Eknath & Janardhan, 2020). The human resource development system aims to make such an environment.

Recent years have witnessed an essential increase in HRD techniques that can be used to cope with appropriate challenges. They include educational, informational, socio-cultural, and motivational methods that help increase employees’ competence (Eknath & Janardhan, 2020). In particular, this process comprises offering assistance to human resources on a regular and planned basis in three areas. Firstly, it includes acquiring and honing the skills required to perform various functions within the company (Eknath & Janardhan, 2020). Secondly, it leads to the development of the general abilities of a person to discover and use their inner potential for growth (Eknath & Janardhan, 2020). Finally, it includes the development of organizational culture in a way that relationships between subordinates and managers contribute to the professional well-being, pride, and motivation of human resources (Eknath & Janardhan, 2020). Human resource development results in higher productivity, profitability, and healthier relationships within the company.

The phenomenon under consideration creates essential benefits because as people become more competent, they become more dedicated to their work and feel proud of doing their job. Furthermore, it establishes an atmosphere of respect and trust as employees know that company leaders are interested in making a profit and in investing in the development of the employees themselves (Eknath & Janardhan, 2020). It also helps train readiness for change because there exists an opinion that employees who have been well trained are better equipped with problem-solving abilities. Apart from it, human resource development improves employees’ overall growth, which makes them stay longer in the company. In turn, this fact improves team spirit and promotes collaboration in the organization (Eknath & Janardhan, 2020). In this way, HRD creates a culture of performance, whereby goals are achieved better, and human resources are used correctly.

Compensation and Benefits

Attracting highly qualified and talented human resources is a leitmotif of the company’s activities, but their retention is no less critical. A leading role in this aspect is assigned to the organizational policy of compensation and benefits because successful talent management cannot exist without proper support. It is so because top workers generally expect higher pay than the average employee. (Martocchio, 2017). Compensation is related to salary or hourly wages, while benefits include dental, life, and health insurance paid leave, and other facilities (Martocchio, 2017). The former can be extended based on merit and bonus programs. It depends on the number of hours worked, the position’s level, and whether the place is non-vacant or vacant.

The goal of implementing a system of compensation and benefits is to develop a motivation and incentive system that eliminates dissatisfaction and contributes to employees’ satisfaction with the work they do. At the same time, the motivation and competence of human resources in the modern management paradigm are considered fundamental elements of the formation of the living force (Martocchio, 2017). The right policy correlates with the company’s strategy and its financial capabilities. It can also form a loyal attitude of human resources towards a company as well as retain and develop talented employees.

Employment and Labor Laws and Regulations

Labor legislation regulates and describes the relationship between employer and employee, which relates to all of the above human resource management areas. The Department of Labor (DOL) enforces and administers over 180 federal laws International Comparative Legal Guides, 2020). These legislation pieces can be applicable at every stage of an employee’s work cycle, starting from admission processes. According to the Equal Employment Opportunity Act (EEO), employers cannot discriminate by any parameter against workers in hiring and in the process of labor relations (International Comparative Legal Guides, 2020). Specifically, these areas include gender, race, religion, skin color, sexual orientation, national origin, genetic information, disability, and age (International Comparative Legal Guides, 2020). In addition to that, federal law stipulates that employees are protected from retaliation, for instance, for reporting a violation. Worker discrimination claims can be filed before the organization invites someone for an interview.

Labor legislation also affects the scope of compensation in terms of the minimum wage. In particular, there are minimum requirements of employment under the Fair Labor Standards Act (FLSA) (International Comparative Legal Guides, 2020). The provisions of this law state that employers must pay employees the federal minimum wage. Simultaneously, if an employee works more than 40 hours a week, the employer must provide him with overtime pay. Moreover, many localities and states may have their regional laws regarding overtime, minimum wages, and mandatory breaks.

There is a category of laws that relates to the provision of employee benefits. In particular, the Affordable Care Act also referred to as “Obamacare,” was passed to expand access to more affordable health care for those living below the poverty line (International Comparative Legal Guides, 2020). Furthermore, the Employee Retirement Assurance Act (ERISA) provisions state that every organization that offers retirement plans to employees must meet specific minimum standards (International Comparative Legal Guides, 2020). The Consolidated Omnibus Budget Reconciliation Act (COBRA) also requires employees to be granted access to continuing medical coverage for a specified period after dismissal (International Comparative Legal Guides, 2020). Knowledge of this pieces of legislation helps employees protect their access to benefits.

It is essential for employees and employers to know the laws and how they are applied. Furthermore, most employers assume that the employees they hire have an understanding of how the governing rules work. This situation stipulates that the organization’s managers will avoid situations that will subject them to legal liability. In turn, employees will know their rights and protect themselves if they witness a violation of some rules against them.


To sum it up, human resource management is necessary to improve employees’ efficiency and help them achieve their career aspirations according to the organization’s goals. All its areas work together to improve and optimize the conditions of the organization and its staff members. In particular, performance management ensures that an individual’s expectations meet the organizational objectives by promoting employees’ development and productivity. The processes of planning, recruitment and selection help identify the most skillful and experienced employees for the organization, which, in turn, determines the efficiency of work processes and the success of the company as a whole. The field of human resource development leads to higher productivity, profitability, and healthier relationships within the company. It creates unlimited benefits because as people become more competent, they become more dedicated to their work and feel proud of doing their job. The area of compensation and benefits is capable of fostering human resources’ loyalty by retaining and developing talented employees. Finally, labor legislation regulates and describes the relationship between employer and employee, which relates to all of the above human resource management areas.


Aguinis, H. (2017). Performance Management. Scotts Valley, CA: CreateSpace Independent Publishing Platform.

Eknath, S. M., & Janardhan, G. D. (2020). Level of human resources development – A conceptual and review exposition. International Journal for Research in Applied Science & Engineering Technology, 8(03), 687-691. Web.

International Comparative Legal Guides. (2020). USA: Employment & labor laws and regulations 2020. Web.

Leatherbarrow, C. & Fletcher, J. (2018). Introduction to human resource management: A guide to HR in practice. London, England: Kogan Page Publishers.

Martocchio, J. J. (2017). Employee benefits. New-York, NY: McGraw-Hill Education.

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