Importance of Human Resources Management

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A company needs to seek ways to optimize its performance continually. Human resources management (HRM) is one of the common sources of the company’s development and growth, as no organization can progress without properly utilizing the tools – or employees – at hand. HRM, alongside innovational technologies, is one of the primary ways for a company to gain an advantage over others in the market.

A significant part of the success of any organization lies in its structural integrity, employees’ skills and knowledge, and the ability of leaders to enable the application of employees’ abilities to their best extent. Dessler (2020) describes HRM as “the process of acquiring, training, appraising, and compensating employees, and of attending to their labor relations, health and safety, and fairness concerns” (p. 3). The term “management” implies multiple tasks that are related to the creation and upkeep of the organizational structure. The management process includes planning, organizing, staffing, leading, and controlling the organization’s personnel (Dessler, 2020). The approach to this process has changed significantly over the past decade as companies across the globe continue to experiment with different managerial tactics to gain an advantage in the market (Dessler, 2020). This research paper aims to provide an overview of HRM and its primary areas.

Performance Management

One of the critical managerial tactics for ensuring the increased productivity of employees is the assessment of their performance and its further correction and optimization. They are essential for the company as they help align the goals of each individual with those of the firm (Dessler, 2020). These appraisals show what improvements can be made to correct lacking aspects or reinforce the strengths of an employee (Dessler, 2020). Performance has close ties with incentives, as the potential rewards tend to significantly increase the efforts of workers (Mondy & Martoccio, 2016). Moreover, these appraisals allow employees to review their career development plans, identify what training might be to achieve the desired position, and what new opportunities are present about the current strengths and weaknesses (Dessler, 2020). Performance management, when done right, can be beneficial to both the employee and the employer.

Currently, the process of performance management undergoes a significant revolution towards more open relationships between a manager and an employee. Traditional performance management implies an annual assessment of workers’ performance following a set of standards of the company, with the inclusion of feedback regarding this parameter (Dessler, 2020).

However, traditional assessment is regularly considered overly complicated, time-consuming, and challenging to perform in an efficient and timely manner (Jones, 2016). In recent years, many companies have replaced this approach with a more person-oriented and less bureaucratic one (Jones, 2016). It is suggested to switch to regular meetings between managers and employees, preferably in a one-on-one setting, to provide adequate feedback, avoid lag in communications, and support and correct employees’ decisions and actions (Jones, 2016). Jones (2016) states that “this future-oriented approach to performance management emphasizes how employees and managers can take action to achieve the results that matter to the business” (p. 101). By setting achievable goals for the right people and ensuring their completion, managers can greatly contribute to the organization’s value.

Human Resources Development

The future of any organization lies in its ability to stay competitive on the market, and employee training is one of the crucial elements in this race. Human resource development (HRD) is the process of fostering the willingness to expand the knowledge base and increase the output of employees (Dessler, 2020). It can be achieved by promoting a positive attitude to training and education, providing them with an opportunity to practice the current skills and acquire new ones to reach a better job. HRD is a primary source of the career progress of people outside of education facilities.

However, training is not the only process that enables the company’s expansion. As more prominent corporations more desire highly trained workers, it is crucial to create an atmosphere that will attract employees to the company and encourage them to say as they become more qualified. There are several ways to achieve that, including a promise of career growth, an increased salary, and orientation of employees’ goals and values with the ones of the company (Dessler, 2020). By analyzing employees’ performance, HR managers can predict their future decisions and correct them with the desired result.

This area of HRM has some altruistic connotations, as workers might come to the company with the idea of leaving it after gaining more knowledge and skills. However, it does not mean that it can be overlooked, as the increased number of qualified workers benefits all companies. Shuck et al. (2018) argue that “career development is a societal concern,” and society suffers when “its citizenry is not educated or developed to their full potential” (p. 6). Therefore, the contemporary notion regarding HRD aims to provide an equal opportunity for all workers to become more qualified for the betterment of society, including the average quality of the available workforce.

Human Resources Planning, Recruitment, and Selection

These three functions of HRM are focused on the initial creation of the company’s manpower. Recruitment is considered one of the most intense HR activities on par with rewards balancing (Fahim, 2018). Before hiring any employee, the organization must realize its goals, ways to achieve them, and what skills will be required to complete the necessary tasks. HR professionals must be able to identify the number of employees that will be optimal for the company to cover all of its weaknesses and then focus on improving its strengths. A proper recruitment plan must focus on long-term goals and the prevention of future threats, assess the ability of a potential employee to perform organizational tasks, and develop new skills (Kosiorek & Szczepańska, 2016).

By outlining the desired organizational structure, the company gains a better understanding of its potential, what workers are required for its realization, and discovers the ways for future expansion and improvement. It is up to the manager to compile a profile of an ideal candidate, however, it is not necessary to search for the exact match.

The search for a job candidate can take place over multiple platforms and recruitment sources, depending on the type of position. Traditional methods include advertisements, employment agencies, job fairs, and internships, with many other innovative ways, such as competitive games, available for more bold companies (Mondy & Martocchio, 2016). However, the most important task for HR after attracting candidates is choosing the right one for the position. A selection test must be standardized, objective, reliable, and assess the skills of a candidate about others (Mondy & Martocchio, 2016).

After excluding candidates who are not qualified for the job via this test, HR managers should consider the most suitable person by their personal qualities, experience, education, and expectations, including salary (Mondy & Martocchio, 2016). It is essential to look at all inside factors, such as expanded skillset, and outside ones, such as the company’s image, that will be affected if a selected candidate will receive the job (Mondy & Martocchio, 2016). Moreover, future employee development is based on the initial introduction to the company, which must be the concluding part of the hiring process.

Depending on the industry of the company, an applicant pool might be excessive or insufficient. It is up to HR professionals to provide a solution to this issue, either by specifying selection criteria or by expanding them (Mondy & Martocchio, 2016). An efficient HRM in regards to recruitment procedures decreases turnover rates and increases retention (Fahim, 2018). A thorough examination can prevent a significant amount of work for HR in the future.

Compensation and Benefits

The payment for employees’ work takes the form of monetary compensation that includes a salary and any additional bonuses and rewards. Adjusting salaries and providing financial and non-financial benefits to employees is one of the primary means of encouragement. Fahim (2018) states that “public sector HR professionals usually confront a variety of barriers to attract and keep qualified workforce, including increased competition with the private sector and inadequate funding” (p. 33).

To promote retention, HR managers need to start working on it from the moment they consider a job candidate for any position. When working closely with employees, continually providing them with feedback, and outlining the objectives and compensations, HR managers can ensure that productive workers will stay within the organization by handing out rewards and benefits. The end goal of this area of HR is to continuously motivate employees to better themselves and the company and influence their decision to continue working with it.

Moreover, to stimulate employees’ output, organizations regularly design benefits and rewards systems. Kadir et al. (2019) state that “performance-enhancing compensation practices are designed to increase employee productivity through greater accountability while highlighting performance differentials across employees” (p. 1). Kadir et al. (2019) state that “the poor compensation and benefits will lead to low performance, thus lead to low satisfaction level and increase absenteeism in employees and the outcome will decrease” (p. 2).

HR professionals must constantly assess the need for the organization to provide these incentives and predict future salary growth. Outlining milestones that lead to promotion and opportunities to earn bonuses with employees can allow the company to increase retainment and increase productivity.

It is also vital for companies to consider the fairness of rewards. HR departments must survey the job market to keep salaries at an adequate rate, while also making sure that it does not fall below job worth and the value the employee generates for the company (Mondy & Martocchio, 2016). Dessler (2020) states that “people are motivated to maintain a balance between what they perceive as their contributions and their rewards” (p. 350). Equity is a critical concept in financial payments, and it is up to HRM to address this sensitive topic if any inconsistency arises.

Employment and Labor Laws and Regulations

HRM is heavily regulated by governmental structures to provide an equal opportunity for all employees, prevent unhealthy HRM practices, and help businesses with HR-related policies. In the United States, many states and cities have passed a significant amount of changes to labor laws, regularly overriding federal laws (Kaplan, 2017). These changes often concern minimal wages, sick leaves, equal payments, the criminal history of employees, and other topics that are insufficiently covered by federal laws (Kaplan, 2017).

Labor laws and restrictions regarding firing and laying off employees are less strict in the United States than in Europe, and European labor councils – organizations similar to labor unions – have more power over management practices (Dessler, 2020). The complexity of multi-jurisdictional coverage of labor laws in the United States harms HRM in the country (Kaplan, 2017). Despite this fact, they aim to empower employees and increase the overall quality of the workforce, and organizations must follow them.

Labor laws are one of the primary sources of leverage from employees on their employers. They restrict unfair behavior, promote human rights, and aim to ensure equity of payments (Kaplan, 2017). These laws also oversee the health, safety, and security of employees (Obedgiu, 2017). HR department serves as a medium between employees, the company’s leaders, and the government regarding these regulations to ensure their fulfillment (Obedgiu, 2017). As the newest changes that give employees higher leverage are being widely picked up, it is expected for the government to allow more additions to local labor laws in correlation with the increasing demands.


In conclusion, this essay shows the importance of each component of HRM and highlights the important developments in these areas. HRM is a powerful tool for the company’s growth, and a knowledgeable manager with an innovative look at this process can significantly boost employees’ output. Obedgiu (2017) argues that HR departments are “responsible for employee experience during the entire employment lifecycle” (p. 987).

Fahim (2018) argues that these changes drive HRM “from being prescriptive, reactive, and administrative to being descriptive, proactive, and executive” (p. 20). HR professionals have a significant influence on the success of the company, and they carry out the tasks of upholding its structure, guaranteeing that its mission is carried out, and its values are being followed. A company that can adapt to the modern HRM strategies, although they increase the complexity of HR responsibilities, secures its spot on the market.

A company needs to choose a proper way to address HR-related topics, develop a suitable set of standards and policies that will align with its goals, and include current labor laws and regulations. Not only does the ever-changing political landscape influences this set of processes, but the cultural changes drive the progress of the human-oriented approach (Dessler, 2020).

The inclusion of all these innovations depends on the organizational culture within a company. In pursuit of the set values of a company, its culture can vary depending on its size, goals, functions given to each employee, their skills and attitude toward work, and the style of management (Kosiorek & Szczepańska, 2016). Together, all parts of HRM allow companies to configure the process of achieving said value via its personnel and significantly affect the result. From planning the structure to handling the compensation, human resources departments take on the role of a nexus of operations as they connect employees, employers, and governmental structures in pursuit of creating a sustainable organization.


Dessler, G. (2020). Human resources management (16th ed.). Pearson.

Fahim, M. G. (2018). Strategic human resource management and public employee retention. Review of Economics and Political Science, 3(2), 20-39. Web.

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Kadir, A. A., AlHosani, A. H., Ismail, F., & Sehan, N. (2019). The effect of compensation and benefits towards employee performance. In Proceedings of the 1st Asian Conference on Humanities, Industry, and Technology for Society. EAI. Web.

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Shuck, B., McDonald, K., Rocco, T. S., Byrd, M., & Dawes, E. (2018). Human resources development and career development: Where are we, and where do we need to go. New Horizons in Adult Education and Human Resource Development, 30(1), 3-18. Web.

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