What is the function of HRM? (With definitions and tips)

By Indeed Editorial Team

Published 8 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Human resources management (HRM) is a process within an organisation that concentrates on hiring employees and maintaining the workforce. Human resources professionals are responsible for training new employees, managing employee compensation and conducting HR administration. To better understand the role that HR plays within a company, it's important that you learn about the key functions of human resources management. In this article, we answer, 'What is the function of HRM?' and explain different types of HRM functions.

What is the function of HRM?

Human resources management is one of the most important functions within every large or growing company. Through implementing different HR processes, companies can take a strategic approach to managing, motivating and developing the workforce. There are three core elements of HRM, which allow better organisation of HRM functions:

Managerial functions

Managerial functions of HRM concentrate on managing the workforce and all processes related to maintaining it. Most importantly, it involves:

1. Human resources planning

This function of human resources management involves all processes that focus on identifying the type of employees that can help a company achieve its organisational goals. Human resources planning (HRP) processes aim to maximise the use of the company's workforce through selecting and hiring top talent. This function helps HR professionals ensure the best fit between an employer and employees. Key responsibilities of people responsible for HR planning involve:

  • analysing organisational plans and objectives

  • preparing an HR inventory

  • assessing and matching HR supply and demand

  • developing an HR action plan

Related: Why work in HR? A guide to careers in human resources

2. Organising

This is another core function of HRM. It allows the HR department to allocate tasks to their owners, identify workforce relationships and develop different activities to help employees reach a common objective. Once HR professionals develop a workforce structure for the organisation, they can present it to the management using an organisation chart. A chart of this type is a visual representation of the organisational network within the company.

3. Directing

Through directing, the company's HR professionals communicate to individual employees what their responsibilities are and what level of engagement the employer expects from them. The main goal of HR directing is to encourage employees to work on improving their efficiency and productivity, which helps the company achieve its organisational goals. It usually entails motivating and guiding staff to do their jobs well.

4. Controlling

Human resources controlling is a process that takes place once planning, organising and directing ends. It focuses on monitoring and measuring employee performance. Once HR gathers this data, HR representatives can then compare each employee's results with the organisation's objectives to see if they're a good fit for the company. Most commonly, HR controlling also focuses on employee behaviour and ability to comply with important company policies.

Related: Core HR functions and different human resources specialities

Operational functions

Operational functions of HRM revolve around hiring new employees and managing the existing workforce. This usually involves:

1. Recruitment and selection

Recruitment and selection processes involve advertising open roles at the company, analysing incoming applications and selecting the right candidates. This means that recruitment precedes the selection process. In most companies, the HR department is the only team responsible for the recruitment process. When it comes to the selection, it's common for the management to participate in choosing who to interview. Organisations with less formal internal structures may also decide to delegate heads of departments to interview candidates, as they have extensive knowledge about the specific requirements and qualifications that the company requires from new hires.

Related: 11 effective recruitment strategies for attracting top talent

2. Job analysis and design

Job analysis and design is the process of creating roles at the company. It involves identifying specific duties, responsibilities, experience and requirements that the employer can list in the job description that they want to advertise. When analysing a role, HRM concentrates on defining the objectives that the company has, developing job descriptions and publishing them on relevant employment websites. In some cases, this function requires that HR representatives work closely with management or team leaders to determine the contents of job descriptions, for example, specific skills and software requirements.

3. Performance appraisal

Performance appraisal, also known as performance review or evaluation, is a process of documenting and evaluating an employee's or a group of employees' performance. This is one of the primary responsibilities of HR professionals and requires them to use specific tools and techniques to make sure the results of the appraisal are accurate across the entire company. Appraisals of this type are a standard requirement at larger companies, as they help employers make sure their staff's performance is at an acceptable level that helps the company grow.

Related: How to prepare for a performance appraisal

4. Training and development

This function of HRM focuses on providing training to new and existing employees. By giving employees the opportunity to acquire new skills and improve their knowledge, employers can improve their staff's qualifications and make the workplace more attractive for them. A good example of employee training is onboarding, which each new employee completes as soon as they arrive at the office. When it comes to the development of employees, it usually focuses on preparing them for high-level responsibilities, for example, when they become managers or team leaders.

5. Wage and salary administration

HRM also helps companies with determining and administering compensation for employees. This usually involves salaries, wages, bonuses and commissions. It's necessary that the HR department develops a payment structure that's fair for employees of all levels. Developing and implementing an effective compensation system is critical to attracting, obtaining and training employees.

6. Employee welfare

Employee welfare refers to additional services and benefits that employees receive from their employer. Introducing attractive employee welfare programmes is critical to motivating employees, as it provides them with various improvement opportunities. Effective benefits improve employee loyalty and satisfaction. They can come in the form of housing benefits, health and dental insurance, stipends or even food provision.

7. Maintenance

HRM maintenance refers to the efforts that companies make to retain the best performing employees. It focuses on promoting and protecting employees' physical and mental health. Effective staff maintenance helps organisations prevent high employee turnover.

8. Employee relations

This function of HRM concentrates on the processes that take place between employees and employers. Within some organisations, this may involve employees creating unions that work closely with management to make important HR decisions. These decisions may refer to wages, work schedules or working conditions.

Some companies also focus on relations between employees. This involves equipping staff with the necessary knowledge for working within a team or solving workplace conflicts. Investing in these practices has many benefits for employees, as it teaches them the skills necessary for effectively collaborating with each other. Also, employers may find this helpful because staff that works well together is usually more productive and efficient.

Related: What is a work schedule? Including types and benefits

9. Employee research

Employee research is a method that allows the employer to better understand their staff's motivation and opinions about their salaries or working conditions. It's a vital process, as it makes it possible for other functions to take place. What's important about employee research is that it's necessary to continuously engage in it, especially within rapidly growing companies that regularly adopt new changes. While conducting employee research, HR can use surveys, focus groups and even one-on-one meetings, which, depending on the type of company, can all be effective data gathering methods.

10. Employee record

This important HRM function relates to collecting, maintaining and safely storing employee data. This includes everything from application forms and employment history to earnings and personal information. Through keeping track and processing this information, companies comply with local and national labour regulations. It's also helpful to review these records when making important organisational decisions, for example, which employees to promote or dismiss.

Advisory functions

The last type of HRM function is advisory functions. These usually include:

1. Providing advice to upper management

By providing advice to upper management, human resources can help organisational leaders formulate and evaluate various employee programmes. This function is also necessary when implementing staff policies and procedures. Through this advice, leaders can better understand their employees' motivation and expectations.

2. Providing advice to heads of departments

Similarly to the previous function, HR departments can also provide advice to heads of departments. This is especially useful in relation to job planning and recruitment processes. For example, when a head of department is responsible for determining a role's requirements, an HR representative can work with them to make sure these requirements comply with the company's overall job policies.

Explore more articles