Introduction to HRM “The greatest asset of an organization is its people.” — Peter Drucker

 

Human Resource Management (HRM) is broadly defined as a strategic and systematic approach to managing people within an organization to ensure that their performance contributes effectively to organizational  goals. According to Armstrong (2020), HRM focuses on building a committed, capable, and high-performing workforce by integrating people management practices with long-term business strategy. From a strategic perspective, Storey (2007) explains HRM as a set of interrelated policies with an ideological and managerial commitment to developing employees as valuable assets rather than costs. HRM also incorporates behavioral and human capital theories, emphasizing that people’s skills, knowledge, attitudes, and behavior directly influence organizational success (Becker & Huselid, 1998).

In essence, HRM aims to balance both organizational efficiency and employee well-being by aligning recruitment, development, performance management, and reward systems with organizational objectives (Dessler, 2021). This makes HRM not just an administrative function, but a strategic partner that shapes the organisation’s culture, competitive advantage, and long-term growth.

 

Objectives of HRM

 

 

HRM objectives can definitely be categorized into broad types, and this is a widely accepted approach in HRM theory and practice. The main categories generally include. 

Social Objectives

One of the primary objectives of HRM is to contribute positively to society by promoting the welfare and well-being of employees. HRM ensures that organizations adhere to labour laws, provide safe and healthy working conditions, and maintain ethical practices in hiring, promotion, and remuneration. By emphasizing fair treatment, equity, and social responsibility, HRM not only safeguards employees’ rights but also strengthens the organization’s reputation and its relationship with the wider community (Armstrong, 2020; Dessler, 2021).

 

Organizational Objectives 

HRM plays a crucial role in helping organizations achieve their goals efficiently and effectively. Its organizational objectives focus on improving productivity, ensuring efficient use of human resources, and aligning HR practices with strategic goals. By designing proper workforce planning, job structures, and performance management systems, HRM enhances organizational performance and fosters a positive work culture. These objectives ensure that employees’ efforts contribute directly to the overall growth, competitiveness, and long-term sustainability of the organization (Storey, 2007; Becker & Huselid, 1998).

 

Functional  Objectives 

HRM also aims to develop and support employees at an individual level. Its functional objectives focus on training, career development, motivation, and performance management. By providing opportunities for learning and growth, HRM enhances employees’ skills and competencies, which increases job satisfaction, commitment, and productivity. Motivation through both intrinsic and extrinsic rewards encourages employees to perform effectively, while performance appraisal systems guide improvement and recognize achievements. These practices ensure a skilled, motivated, and engaged workforce capable of meeting both personal and organizational goals (Herzberg, 1968; Maslow, 1943).

 Individual objectives

The individual or personal objectives of Human Resource Management focus on enhancing the skills, motivation, satisfaction, and overall development of each employee. HRM recognizes that employees are the key drivers of organizational success, and it aims to provide opportunities for learning, career growth, and personal development (Armstrong, 2020). By implementing training programs, mentoring, and continuous development initiatives, HRM helps employees acquire the knowledge and competencies needed to perform effectively.

 Motivation is another crucial aspect of personal objectives. Drawing from Herzberg’s Two-Factor Theory (1968) and Maslow’s Hierarchy of Needs (1943), HRM seeks to create an environment where employees are recognized, rewarded, and engaged, which improves both their job satisfaction and commitment to the organization. Performance management systems are also used to monitor, guide, and enhance individual performance, providing feedback and setting goals aligned with personal growth and organizational needs.

 

Functions as HRM

 

The image divides the Functions of Human Resource Management (HRM) into two broad categories:

 Managerial Functions

 Managerial functions refer to the responsibilities HR performs as a part of general management. These functions involve planning, organizing, directing, and controlling the workforce to ensure that all HR activities align with organizational goals. Through these functions, HR provides strategic leadership, allocates resources, guides employees, and monitors performance to maintain efficiency and effectiveness across the organization

These functions are related to managing people effectively through basic management principles.

 1. Planning

Planning in HRM means forecasting future human resource needs and deciding how to meet them.

It includes:

 ●      Predicting manpower requirements

●      Preparing job descriptions/specifications

●      Planning recruitment and training

●      Setting HR policies and strategies

 Organizing

Organizing involves structuring the workforce so that tasks, responsibilities, and authority are clearly defined.

It includes:

 ●      Creating an organizational hierarchy

●      Assigning duties

●      Establishing coordination between departments

 Directing

 Directing means guiding, motivating, and leading employees to accomplish organizational goals.

It includes:

 ●      Providing leadership

●      Giving instructions

●      Supervising work

●      Motivating employees through incentives and communication

controlling

 Controlling involves monitoring HR activities to ensure they meet standards.

It includes:

 ●      Evaluating HR policies

●      Measuring performance

●      Ensuring compliance with rules

●      Taking corrective actions

 Operative Functions

Operative functions are the practical, day-to-day activities carried out by the HR department. These include procuring the right employees, developing their capabilities, compensating them fairly, integrating them into the workplace, and maintaining their well-being. These functions ensure that employees are properly recruited, trained, supported, and retained, enabling the organization to operate smoothly and achieve its objectives.

These are the practical or operational activities carried out by the HR department.

1. Procurement

Procurement refers to acquiring human resources.

It includes:

 ●      Recruitment

●      Selection

●      Placement

●      Induction

 

Development

Development focuses on improving employees’ skills, knowledge, and abilities.

It includes:

 ●      Training

●      Career development

 ●      Performance appraisal

●      Leadership development

Compensation

 Compensation refers to providing fair and adequate pay to employees.

It includes:

 ●      Salary and wages

●      Bonuses

●      Incentives

●      Benefits (insurance, allowances, retirement plans)

Integration

Integration focuses on fostering positive relationships between employees and the organization.

It includes:

 ●      Employee engagement

●      Conflict resolution

●      Communication

●      Building trust and teamwork

Maintenance

Maintenance ensures employees' physical and emotional well-being.

It includes:

 ●      Health and safety programs

●      Employee welfare activities

●      Work–life balance initiatives

 ●      Grievance handling

 HRM as a System: Harvard and Michigan Models

 Human Resource Management can be understood as a system in which various components—such as people, policies, processes, and organizational strategies—interact to shape employee behaviour and organizational outcomes. Two major theoretical frameworks that conceptualize HRM as a system are the Harvard Model and the Michigan Model, both widely recognized in HRM literature.

•  The Harvard Model of HRM

 

 

The Harvard Model, introduced by Beer et al. (1984), views HRM as an interconnected system influenced by different stakeholders such as employees, managers, government, unions, and society. It emphasizes that HRM decisions are shaped by four key policy areas: employee influence, human resource flow (recruitment to exit), reward systems, and work systems. These policies operate within a context of stakeholder interests and situational factors such as labour markets, business strategy, and societal expectations. The model highlights that HRM outcomes—commitment, competence, congruence, and cost-effectiveness—lead to long-term organizational consequences such as individual well-being, organizational effectiveness, and societal impact. Therefore, the Harvard Model presents HRM as a holistic and strategic system in which employee welfare and organizational goals must be balanced (Beer et al., 1984).

• The Michigan Model of HRM 
   

  The Michigan Model (also called the Matching Model) developed by Fombrun, Tichy, and Devanna(1984), provides a more performance-driven view of HRM as a system. It argues that HRM practices must be strictly aligned (“matched”) with the organization’s strategy to achieve high performance. According to this model, HRM consists of four interrelated functions—selection, appraisal, rewards, and development—which must operate as a unified system to produce the desired employee behaviour and performance. Unlike the Harvard Model, which focuses on balancing stakeholder interests, the Michigan Model places stronger emphasis on organizational goals, managerial control, and workforce performance. It views employees as strategic resources whose capabilities must be systematically developed and aligned with the organizational strategyfor competitive advantage (Fombrun et al., 1984).

 HRM as an Integrated System

 

Together, these models show that HRM is not a set of isolated activities but rather a coherent system. The Harvard Model expands HRM into a socially responsible and stakeholder-oriented system, while the Michigan Model presents HRM as a performance-driven system focused on achieving strategic alignment. Both demonstrate that HRM functions—recruitment, development, motivation, and retention—must be coordinated and interconnected for effective results. As such, HRM operates as a system where organizational strategy, employee needs, policies, and outcomes continually influence one another (Beer et al., 1984; Fombrun et al., 1984).

 common practical issues in organizations

•  High Employee Turnover

High employee turnover often occurs when HRM fails to build strong retention systems, competitive reward structures, and clear career development pathways. According to the Harvard Model, HRM must balance employee needs and organizational strategy through effective reward systems and human resource flow (Beer et al., 1984). When HR fails to provide fair compensation, opportunities for growth, or supportive performance management, employees feel undervalued and seek better opportunities. Motivation theories such as Herzberg’s Two-Factor Theory show that poor hygiene factors—salary, job security, supervision—directly push employees to leave (Herzberg, 1968). Therefore, turnover becomes a symptom of deeper HRM weaknesses in strategic alignment, reward management, and employee development.

 HRM principles help reduce high employee turnover by applying strategic retention, fair reward systems, and structured career development. According to the Harvard Model, employee commitment increases when HR policies focus on fair rewards, employee influence, and opportunities for growth (Beer et al., 1984). Practically, HR can redesign compensation structures, implement recognition programs, and establish internal career pathways that motivate employees to stay. Motivation theories, such as Herzberg’s Two-Factor Theory, support this by showing that improving hygiene factors—salary, working conditions, management fairness—reduces dissatisfaction (Herzberg, 1968). HRM can also implement clear career development systems, mentorship programmes, and succession planning to create long-term attachment. These HRM strategies reduce turnover by making employees feel valued, rewarded, and supported in their career journey.

•  Poor Employee Morale

Poor morale largely results from HRM failing to address employees’ psychological and motivational needs. Maslow’s Hierarchy of Needs reminds us that employees require recognition, belonging, and security to stay motivated (Maslow, 1943). When HRM does not implement strong recognition systems, constructive feedback mechanisms, or employee engagement programs, workers begin to feel disconnected and undervalued. The Harvard Model also stresses the need for employee influence and commitment; when these are absent, morale collapses. Ineffective communication, unclear expectations, or lack of participation often stem from weak HR policies in employee relations, resulting in dissatisfaction and emotional withdrawal.

HRM principles address poor morale by strengthening employee engagement, communication, and recognition systems. Maslow’s Hierarchy of Needs highlights that employees require belonging, esteem, and self-actualization to feel motivated (Maslow, 1943). HR can meet these needs through transparent communication, empowerment, supportive supervision, and recognition programmes. The Harvard Model also encourages giving employees a voice through participation and involvement, which increases commitment and morale. Practically, HR can introduce employee wellness programmes, satisfaction surveys, team-building activities, and recognition events that improve psychological well-being. Strengthening internal communication channels—meetings, feedback sessions, digital platforms—helps employees feel included and valued. Through these HRM practices, morale improves as employees experience respect, appreciation, and meaningful connection with the organization.

• Low Productivity

Low productivity is a direct outcome of HRM’s inability to design meaningful jobs, provide adequate training, and monitor performance effectively. According to Job Design Theory (Hackman & Oldham, 1976), employees perform well when jobs are structured with clarity, autonomy, and adequate feedback. When HR fails to design roles properly or neglects training and skill development, employees lack the competence and confidence needed for high performance. Moreover, weak performance appraisal systems fail to identify problems early or guide employees toward improvement. The Michigan Model also stresses the importance of tightly linking selection, appraisal, rewards, and development; failure in any of these areas reduces overall productivity (Fombrun et al., 1984).

HRM improves low productivity by applying principles of job design, skill development, and performance management. Job Design Theory states that jobs must have clear tasks, autonomy, and feedback to enhance performance (Hackman & Oldham, 1976). HR can redesign tasks to make them more meaningful, reduce work overload, and establish clear responsibilities. In addition, the Michigan Model emphasizes aligning selection, appraisal, rewards, and development for productivity (Fombrun et al., 1984). Practically, HR should conduct training needs analysis, offer targeted skill development, and run effective performance appraisals that identify gaps early. HR can also introduce KPIs, coaching, and incentive-based performance systems to keep employees focused. When HRM integrates these principles, employees gain clarity, skills, and motivation—directly boosting productivity.

 

Skills Gaps

Skills gaps emerge when HRM does not strategically plan its workforce or invest in ongoing employee development. Strategic HRM theory states that HRM must align talent development with long-term organizational goals (Armstrong, 2020). When HR fails to anticipate future skill needs, provide training, or build internal career pipelines, the organization struggles to keep up with technological and market changes. Poor succession planning and weak learning systems intensify the shortage. The Harvard Model highlights the importance of human resource flows—recruitment, development, and retention; gaps within these flows create mismatches between current workforce capabilities and organizational demands.

HRM addresses skills gaps by applying workforce planning, training systems, and strategic HR development. Strategic HRM theory emphasizes aligning HR practices with future organizational goals (Armstrong, 2020). Practically, HR can conduct workforce forecasting to identify future skill needs and design training programmes accordingly. The Harvard Model’s focus on human resource flow—recruitment, development, retention—supports building long-term talent pipelines (Beer et al., 1984). HR can introduce upskilling, reskilling, e-learning platforms, leadership development, and graduate trainee programmes to close skill gaps. Succession planning ensures future leadership talent is developed internally. By integrating these HRM principles, organizations maintain a skilled, adaptable workforce capable of meeting evolving challenges.

• Workplace Conflict

Workplace conflict develops when HRM does not implement effective communication systems, conflict resolution mechanisms, or leadership development programs. Social Exchange Theory suggests that employees expect fairness, respect, and communication in their relationships with management; when these expectations are violated, conflict arises. Additionally, HRM failures in training managers to handle interpersonal issues or applying inconsistent policies lead to mistrust and increased disputes. The Harvard Model emphasizes that stakeholder interests must be balanced; failure to manage these interests—between employees, unions, and leadership—creates tension and conflict. Poor HR policies in employee relations thus directly contribute to workplace disputes.

HRM principles help reduce workplace conflict by improving communication systems, leadership capability, and fair employee relations. Social Exchange Theory states that trust, fairness, and respect form positive workplace relationships; when these are missing, conflict increases. HRM can address this by implementing fair policies, transparent communication, and consistent rule enforcement. The Harvard Model also highlights balancing stakeholder interests—employees, unions, managers—to reduce tension and promote harmony (Beer et al., 1984). Practically, HR can introduce conflict-resolution training, effective grievance-handling procedures, counselling services, and leadership development programmes to improve managerial communication. Clear policies, equal treatment, and regular feedback sessions help prevent misunderstandings. With these HRM applications, conflict decreases as communication improves and relationships strengthen.

 

Reference

Armstrong, M. (2020) Armstrong’s Handbook of Human Resource Management Practice. 16th edn. London: Kogan Page.

 Beer, M., Spector, B., Lawrence, P.R., Mills, D.Q. and Walton, R.E. (1984) Managing Human Assets. New York: Free Press.

 Fombrun, C.J., Tichy, N.M. and Devanna, M.A. (1984) Strategic Human Resource Management. New York: Wiley.

 Hackman, J.R. and Oldham, G.R. (1976) ‘Motivation through the design of work: Test of a theory’, Organizational Behavior and Human Performance, 16(2), pp. 250–279.

 Herzberg, F. (1968) ‘One more time: How do you motivate employees?’, Harvard Business Review, 46(1), pp. 53–62.

Maslow, A.H. (1943) ‘A theory of human motivation’, Psychological Review, 50(4), pp. 370–396.

 Storey, J. (2007) Human Resource Management: A Critical Text. 3rd edn. London: Thomson Learning.

Armstrong, M. (2020) Armstrong’s Handbook of Human Resource Management Practice. 16th edn. London: Kogan Page.

 Dessler, G. (2021) Human Resource Management. 16th edn. Harlow: Pearson.

 Herzberg, F. (1968) ‘One more time: How do you motivate employees?’, Harvard Business Review, 46(1), pp. 53–62.

 Maslow, A. (1943) ‘A theory of human motivation’, Psychological Review, 50(4), pp. 370–396.