Human Resource Management, The Origin, and Functions of HR

Human resource management contributes to the overall health of your organization. Without a solid human resource management team in place, some businesses may risk monetary assets such as cash and human assets (your people).

Generally, human resource management departments are tasked with creating procedures and policies that allow a company to run effectively.

Human resource management covers job design and analysis, workforce, recruitment, training, performance management, compensation, and some legal issues.

What is Human Resource Management?

Human resource management is the management of human assets. It is a function within an organization that primarily focuses on the management of people.

It is designed to maximize the performance of your employees. If you operate a medium to large-scale business, human resource management is essential to your company’s overall success.

The functions of human resource management also include making sure that a company’s policies and procedures are in compliance with government laws such as the human rights commission and labor associations.

Human resource management departments maximize the performance of your employees by setting up programs like employee referral programs, survey programs, and innovation management systems

A little History About Human Resource Management

Human resource management began with the human relations movement of the early 20th century.

The movement refers to researchers that specialize in the study of human behavior in groups. Employers used to view employees as interchangeable parts in a machine. After the 1930’s Hawthorne studies, many employers began to view their workers in terms of their psychology and how they would fit within their companies.

The Hawthorne studies examined the effects of social relations, motivation, and employee productivity.

The study was able to show that the overall satisfaction of an employee is directly related to their level of productivity. The Hawthorne studies proved that employees were more motivated by group involvement and managerial attention than they are with financial compensation.

This understanding significantly increased the importance for organizations to have a team that manages its human assets.

This does not mean that you should pay your employees less, as nice as that may seem to some people. It simply means that as long as your wages are fair and you have a solid human resource management department in place, your employees will perform better.

If you have ever worked for a corporation before, you may have witnessed a situation that could have been easily resolved if a good human resource management team was in place.

However, the situation only escalated, and the result is an unhappy employee that doesn’t care about the company anymore. This scenario happens very often in corporations.

“One friend, one person who is truly understanding, who takes the trouble to listen to us as we consider our problems, can change our whole outlook on the work”.
George Elton Mayo, psychologist, industrial researcher, and organizational theorist.

 Functions of Human Resource Management

Your most valuable resource in your company
Your most valuable resource in your company is your employees. An effective human resource management team will ensure that you are able to meet company needs, goals, and expectations by managing your human resources, also commonly referred to as HR. There are several disciplines that must be met in your human resource management or HRM or HR department. For the remainder of this publication, we will refer to human resource management as HR.

Sometimes in small businesses, one or two HR individuals can meet these disciplines. So if you run a small business, having one HR individual may be all it takes to turbo charge your employees.

Big businesses require more professionals to successfully run an efficient HR department  As a CEO, it may be difficult to know what disciplines to look for in your department. So here are the main disciplines or functions of an HR department.

Employee Relations

This is the HR discipline that strengthens the bond or relationship with employer and employee by resolving workplace conflict, measuring employee engagement, and job satisfaction.

Recruitment and Retention

It is the responsibility of your HR department to ensure that processes and systems are implemented to fill positions timely. They are also responsible for ensuring that your employees are retained.

In many cases, organizations that perform well have long-term dedicated employees that are happy.

They will put processes in place to help with employee satisfactionadvertise job postings, and source candidates. They may also screen applicants, conduct preliminary interviews, and coordinate hiring efforts with top-level management that is responsible for making final hiring decisions.

“Great vision without great people is irrelevant”.

Jim Collins, business consultant, author, and lecturer.


For an organization to strive, it must be in compliance with labor and employment laws. This is a critical function for HR departments. Noncompliance is a recipe for disaster; this is something that is not an option for many companies.

Noncompliance can lead to complaints about general dissatisfactions about the working conditions, employment practices, unsafe working conditions, and much more.

These complaints can affect the productivity of your employees and cause the loss of company profits (lawsuits are expensive).

Training and Development

You must provide the tools necessary for your employees to be successful within your organization. HR will help you accomplish this. HR provides procedures and extensive orientation training that help new hires transition to a new organization.

HR is also responsible for facilitating the training of new managers. In many cases, new managers require training on employee relations, sensitivity, labor, and employment laws.

Ensuring that this part of the training is met will reduce the risk of one of your managers making a costly mistake.

Safety in The Workplace

Workplace safety is important for your employees and your organization. Failing to provide a safe work environment will violate the Occupational Safety and Health Act of 1970. The act states that employers have an obligation to provide a safe working environment for their employees.

Having a safe work environment will prevent most workers compensation issues. It will also prevent most legal issues that may arise from employee injuries or government policy violations.

Employee Compensation and Benefits

HR is responsible for setting up pay structures and evaluating competitive pay practices. Your company has to be competitive with its wages because your focus should be to retain your employees.

Some studies by professionals, such as SHRM (society for human resource management) have reported that the average cost of losing an employee is around $3,000 depending on the employee. For example, if an employee makes $40,000 a year, the cost to replace that employee may be anywhere from $3,000 to $30,000 in recruiting and training expenses.

Collecting Data With Human Resource Management

As you have seen, there are many ways that HR departments help companies.

Yet, one thing that is largely overlooked is data collection. It is important that you collect data from your HR department in order to measure its effectiveness. The data that you collect has to be reliable and easily accessible to your HR department. Your HR department can use the data to improve its effectiveness.

You also want to use your HR department to collect data from your employees.

After all, they are the most important assets to your organization. One trait of a successful company is to host regular meetings to discuss opportunities or to collect ideas from their employees.

How are you currently collecting data for your organization?

Do you have any additional functions that HR should handle? Please let us know in the comments.