Top 12 functions of an HRM

HRM ensures the smooth functioning of an organisation. The process starts with formulating the right policies for the job requirements and ends with ensuring a successful business growth of the company. Therefore, HRM is an invisible agent that binds all the aspects of the organisation to ensure smooth progress.

In this modern era, organisations have become more people-centric than ever — especially since this approach pays great dividends in terms of enhanced employee performance and lower attrition rates. Human Resource Management or HRM plays a key role in allowing employers and organisations to reach their objective.

The functions of HRM hold great significance in the growth and overall development of the organisations. After all, when the employees grow and develop their skills, the organisation will automatically experience growth and expansion. Some of the primary functions of HRM include job design and job analysis, recruitment/ hiring and selection, training and development, compensation and benefits, performance management, managerial relations and labour relations.

Evolution Cycle of the HR Function

Every HR department develops along with the development and growth of the organization. The HRM evolves through 3 distinct stages where it begins as a Business Function, turns into a Business Partner and afterwards a Strategic Partner.

In every one of these cases, the job and responsibilities of the HR division evolve to be more strategic. At more elevated levels of maturity, the HR department can increase the value of the leadership potential, top talent, company goals, employee retention rate and long haul manageability of the association.

At each stage, the credits and worth added by the Human Resources department change and the mediums required for this will change . At any rate, HR in an association should be liable for overseeing employee information, finance, time management, and setting up organization strategies. The HR department handles the effectiveness of human resource strategies and should be incorporated into every decision making process in the organization.

As a business partner, HR’s job is to meet the “current business needs” with the goal that the association can develop at a quantifiable rate. At this stage, HR moves to competency-based recruitment, pay grades, sudden turn of events, correspondence and organization plan.

HR helps in formalizing the organization hierarchy (who does what and reports to whom). That done, it recognizes the skills essential for each work job. Further, it helps in characterizing programs that are essential for building up these abilities, recruitment strategies to assess the expertise levels and benchmarking the abilities against industry norms and contenders etc.

All out salary (finance and advantages) likewise turns into a centre territory where the HR assists the association with drawing in and holding talented employees by turning into a pioneer in paying the employees.

Utilizing the expertise database and the company structure, the HR work develops pay hikes, improves the preparation capacity and makes the recruitment work more receptive to the abilities required by the association.

Organizations that see their HR as a strategic business partner have faith in giving the full maturity of their HR work. Such organizations are centered around accomplishing leadership roles instead of a year-on-year development.

So, let us find out more about each of these seven functions of HRM.


1. Job design and job analysis

One of the foremost functions of HRM is job design and job analysis. Job design involves the process of describing duties, responsibilities and operations of the job. To hire the right employees based on rationality and research, it is imperative to identify the traits of an ideal candidate who would be suitable for the job. This can be accomplished by describing the skills and character traits of your top-performing employee. Doing so will help you determine the kind of candidate you want for the job. You will be able to identify your key minimum requirements in the candidate to qualify for the job.

Job analysis involves describing the job requirements, such as skills, qualification and work experience. The vital day-to-day functions need to be identified and described in detail, as they will decide the future course of action while recruiting.

2. Employee hiring and selection

Recruitment is one of the primary functions of human resource management. HRM aims to obtain and retain qualified and efficient employees to achieve the goals and objectives of the company. All this starts with hiring the right employees out of the list of applicants and favourable candidates.

An HRM helps to source and identify the ideal candidates for interview and selection. The candidates are then subjected to a comprehensive screening process to filter out the most suitable candidates from the pool of applicants. The screened candidates are then taken through different interview rounds to test and analyse their skills, knowledge and work experience required for the job position.

Once the primary functions of HRM in recruitment are completed, and the candidate gets selected after rounds of interviews, they are then provided with the job offer in the respective job positions. This process is important because these selected employees will, after all, help the company realise its goals and objectives.

3. Employee training & development

Imparting proper training and ensuring the right development of the selected candidates is a crucial function of HR. After all, the success of the organisation depends on how well the employees are trained for the job and what are their growth and development opportunities within the organisation.

The role of HR should be to ensure that the new employees acquire the company-specific knowledge and skills to perform their task efficiently. It boosts the overall efficiency and productivity of the workforce, which ultimately results in better business for the company.

HRM plays a very crucial role in preparing employees for bigger tasks and responsibilities, which leads to the holistic development of employees at work. And an organisation which provides ample growth and development opportunities to its employees is considered to be a healthy organisation.

4. Compensation and Benefits

Benefits and compensation form the major crux of the total cost expenditure of an organisation. It is a must to plug the expenses, and at the same time, it is also necessary to pay the employees well. Therefore, the role of human resource management is to formulate attractive yet efficient benefits and compensation packages to attract more employees into the workplace without disturbing the finances of the company.

The primary objective of the benefits and compensation is to establish equitable and fair remuneration for everyone. Plus, HR can use benefits and compensation as a leverage to boost employee productivity as well as establish a good public image of the business.

Therefore, one of the core HR department functions is to lay down clear policies and guidelines about employee compensation and their available benefits. One of the functions of HR manager is to ensure the effective implementation of these policies and guidelines. This creates equality and builds transparency among the employees and the management within the organisation. After all, the level of employee satisfaction at work is directly proportional to the compensation and benefits they receive.

5. Employee performance management

The next activity on HR functions list is effective employee performance management. Effective performance management ensures that the output of the employees meets the goals and objective of the organisation. Performance management doesn’t just focus on the performance of the employee. It also focuses on the performance of the team, the department, and the organisation as a whole.

The list of HR functions for performance management includes:

  • Developing a proper job description
  • Initiating an appropriate selection process to hire the right candidates for the job positions
  • Providing the right training and education needed to enhance the performance of the employees
  • Enabling real-time feedback and coaching employees to boost efficiency among them
  • Conducting performance reviews monthly or quarterly to discuss the positives and the improvement areas of employees
  • Formulating a proper exit interview process to understand why experienced employees choose to leave the company
  • Designing a proper appraisal and compensation system that recognises and rewards the workforce for their effort and hard work

6. Managerial relations

Relationships in employment are normally divided into two parts — managerial relations and labour relations. While labour relations is mainly about the relationship between the workforce and the company, managerial relations deals with the relationship between the various processes in an organisation.

Managerial relations determine the amount of work that needs to be done in a given day and how to mobilise the workforce to accomplish the objective. It is about giving the appropriate project to the right group of employees to ensure efficient completion of the project. At the same time, it also entails managing the work schedules of employees to ensure continued productivity. It is essential that HR handles such relations effectively to maintain the efficiency and productivity of the company.

7. Labour relations

Cordial labour relations are essential to maintain harmonious relationships between employees at the workplace. At the workplace, many employees work together towards a single objective. However, individually, everyone is different from the other in characteristics. Hence, it is natural to observe a communication gap between two employees. If left unattended, such behaviours can spoil labour relations in the company.

Therefore, it is crucial for an HR to provide proper rules, regulations and policies about labour relations. This way, the employees have a proper framework within which they need to operate. Therefore, every employee will be aware of the policies which will create a cordial and harmonious work environment.

Such a structured and calm work atmosphere also helps with improving performance and aching higher targets.

8. Employee engagement and communication

Employee engagement is a crucial part of every organization. Higher levels of engagement guarantee better productivity and greater employee satisfaction. Efficiently managing employee engagement activities will help in improving the employee retention rates too. HRM is the right agent who can manage the employee engagement seamlessly. Proper communication and engagement will do wonders for the employees as well as the organization. The more engaged the employees are, more committed and motivated they will be.

Human resource teams know the ‘humans’ of the organization better than anyone else. This gives them an upper hand in planning engagement activities. Although such activities might not fall under the direct functions of HRM, they are indeed required for the organizational welfare and employer branding.

9. Health and safety regulations

Every employer should mandatorily follow the health and safety regulations laid out by the authorities. Our labour laws insist every employer to provide whatever training, supplies, PPE, and essential information to ensure the safety and health of the employees. Integrating the health and safety regulations with company procedures or culture is the right way to ensure the safety of the employees. Making these safety regulations part of the company activities is one of the important functions of HRM.

10. Personal support for employees

HRM assists employees when they run into personal problems which may interfere with the workflow. Along with discharging administrative responsibilities, HR departments also help employees in need. Since the pandemic, the need for employee support and assistance has substantially increased.For example, many employees needed extra time off and medical assistance during the peak period of the pandemic. For those who reached out for help, whether it may be in the form of insurance assistance or extra leaves, companies provided help through HR teams.

11. Succession Planning

Succession planning is a core function of HRMs. It aims at planning, monitoring, and managing the growth path of the employees from within the organizations.

What usually happens is that promising and bright employees within the organization who have excelled in their roles are handpicked by their supervisors and HRs, and their growth paths are developed.

This, of course, becomes quintessential as those employees who recognize the fact that the company is investing in their growth and development, and therefore, will stay loyal in the long run. However, while developing such employees towards a higher role, companies must keep in mind several aspects, such as improving employee engagement, assigning challenging tasks and activities.

An employee leaving the organisation can prove to be disruptive and expensive. Therefore, succession planning is a saviour of some sorts, as it helps identify the next person who is just right to replace the outgoing individual.

12. Industrial Relations

It’s usually the production lines and manufacturing units where this HR function is mostly used. You see, Unions exist in factories and manufacturing units. And their responsibility is towards the goodwill about the workers — in fact, they’re always vocal and upfront about.

Now, for a company, especially into manufacturing and production, the HRs must have ongoing Industrial Relations practices. They must also continuously engage with the Unions in a friendly and positive manner to maintain amicable relations.

The true motive of Industrial Relation touches on a lot of issues within the company. For instance, Industrial Relations may be in place to meet wage standards, reduce instances that call for strikes and protests, improve working and safety conditions for employees, reduce resource wastage and production time and so on.

Industrial Relations is extremely important because, if handled properly, it can circumvent protests, violence, walkouts, lawsuits, loss of funds and production time. IR is a sensitive yet critical function of the HR department, naturally, it requires personnel with vast experience.

HRM plays a major role in the smooth functioning of the organisation. The process starts with formulating the right policies for the job requirements and ends with ensuring a successful business growth of the company. Therefore, HRM works as an invisible agent that binds together all the aspects of the organisation to ensure smooth progress.

Frequently asked questions

1) What are the basic functions of Human Resource Management?
The basic functions of human resource management are planning, controlling, directing and organizing company activities, utilization of workforce, recruitment and staffing etc.

2) What is the employee retention rate?
It is defined as the rate of ability of the organization/employer to retain its employees. It is one of the most important objectives of human resource management.

3) What is the role of HRM in retaining employees?
Human resource management functions as a main contributor to the employee retention efforts. The HR department plays a crucial role in employee retention and management. Their retention efforts include training, internal promotions, bonus, employee engagement activities, improving workplace policies etc.

4) What is HR outsourcing?
HR outsourcing is an authoritative understanding between a business and an outside outsider supplier whereby the business moves the administration of, and duty regarding, certain HR capacities to the outer supplier.

5) Why is HR outsourcing important?
Outsourcing HR functions help companies streamline important HR functions. The companies can then focus more on other relevant management functions. Efficient HR services providers can help companies declutter the office activities and work progressively to achieve company goals. Staffing flexibility and cost efficiency are the major reasons why companies outsource HR services.

6) What is HR gamification?
Gamification is the use of game-thinking and game mechanics in non-game situations, for example, business conditions and processes, explicitly in recruitment, employee training and development, and employee motivation; so as to draw in clients and tackle issues.

7) What is Human Resource Software?
HR software helps companies manage worker records, salary and related information. It is also known as Human Resources Information System (HRIS) and Human Resource Management System (HRMS). The capability of the software varies according to the service provider.

8) How is performance appraisal related to Human Resource Management?
Performance appraisal is an efficient assessment of the employee’s current occupation abilities and his potential for development and advancement by his employer. It tends to be either casual or formal.

The casual appraisals are spontaneous while a formal appraisal framework is set up by the association to normally assess expected performance. It decreases the opportunity of inclination and snap judgment yet bound to yield better outcomes. Performance appraisal functions are usually managed by human resource departments.

9) Does HR include payroll services?
Payroll functions are managed by either the finance department or human resources division in many organizations. Payroll is number-driven and calls for information on tax laws of the country and bookkeeping. Simultaneously, payroll is additionally viewed as a component of HR since it pays and manages people in the organization.

10) Is training and development part of Human Resource Management?
Training and development are an integral part of the human resource development activity in all kinds of organizations. Mostly the training and development is managed by HR teams or dedicated teams who specialize in employee development.

1 Star2 Stars3 Stars4 Stars5 Stars (6 votes, average: 5.00 out of 5)

One of the prime contributors for this blog, Expertise in Staffing and Recruitment, Content Strategist by Profession. A Music Lover & Traveller by Choice.

Get Connected with HR Trends

    Sign me up for the newsletter!


    1. comment-author
      Angok mathiang Angok

      I’m so delighted and thrillied with explanation given so far in fact i wants to be part of the platform as it is that interesting for me to learn.

    2. comment-author
      Samrat. G

      Your article is very informative for HR students and with your consent, I would like to refer this article on my website.

      1. comment-author
        Rishabh Ranjan

        Hi Samrat,

        Good to know that you like and wanted to refer this article on your website. You surely can do, but don’t forget to give credit back to us 🙂

    3. comment-author

      Hi your article is interesting, I’m looking for a HRM specialist for a new company administration.Thank you

      1. comment-author
        Shalini L

        Hi Nancy,

        We’re glad you liked it! Be sure to subscribe to our bi-monthly newsletter that captures the best and the latest stories from the world of HR.

      1. comment-author
        Shalini L

        Hi Benjamin,

        Thanks for your kind words. We do our best to bring fresh content in the space of HR for readers like yourself. Be sure to subscribe to our bi-monthly newsletter that captures the best and the latest stories from the world of HR.

    4. comment-author

      Thanks for sharing this blog! It is very informative and useful for many students who want to study HRM course and it also useful for HR consultants and people who want to choose HR as a career.

    Post a Comment

    Your email address will not be published. Required fields are marked *

    Subscribe For Newsletter

    Subscribe to get the latest news and happenings around recruitment space

    Please hold while we process the request.