Know the top functions of HRM


The Human Resource department is an indispensable part of any organization. Companies are always on the lookout for proficient HR professionals who can join their teams. There are more than 12,000 job openings for HR professionals on job portals like LinkedIn. Human Resources offers a promising career for everyone interested in the field. Before you decide to make a career in Human Resources, you need to know the major functions of the Human Resource Management System.

In any organization, HR has several essential functions. We will be discussing 15 key Human Resource functions later in the article but first, let’s understand what Human Resource Management (HRM) is.

  1. What Is Human Resource Management (HRM)?
  2. Key Functions Of Human Resource Management

What Is Human Resource Management(HRM)? 

As per Storey (1995), Human Resource Management is a transparent way of workforce management that tries to accomplish competitive advantage through the strategic deployment of an exceptionally dedicated and able workforce, employing a combined array of cultural, structural, and personnel techniques.

The functions of HRM are mainly planning, directing, managing, and organizing, comprising the entire Human resource management in an organization. Let us explore how the functions of the HR department carry a seamless way to deal with different aspects of HR.

Functions Of HRM in Business

The evolution of an organization’s HR department follows closely behind that of the rest of the business. As a business function, a business partner, and finally, a strategic partner, HRM functions go through three distinct stages.

In each of these cases, the HR department’s role and responsibilities evolve to become more strategic. The function of HRM is to improve the value of leadership potential, top talent, employee retention rate, company goals, and the long-term manageability of the company at a more advanced maturity level than the one currently in place.

The HR is responsible for overseeing employee information, time management, finances, and setting up organizational strategies. The effectiveness of these human resource strategies is the responsibility of the HR department, which should be a part of every company’s decision-making process.

In the role of a business partner, the function of human resource management is to support the company’s “current business needs” to increase the company’s growth rate. At this point, HR begins to focus on competency-based recruitment, unexpected events, pay grades, correspondence, and the organization’s long-term strategy.

Human Resources (HR) becomes a key player in the company’s ability to attract and retain talented employees by becoming a leader in the field of compensation.

Organizations that view HR as a strategic business partner have the confidence to give their HR work its fullest maturity. As a result, these organizations focus on achieving leadership positions rather than on year-to-year growth.

What are the functions Of Human Resource Management(HRM)

  1. Human resource planning
  2. Recruitment
  3. Performance management
  4. Learning & development
  5. Career planning
  6. Information sharing
  7. Rewards & recognitions
  8. Compensation & benefits
  9. Industrial relations
  10. Policy formulation
  11. Health and safety
  12. Personal well-being
  13. Employee engagement
  14. Compliance
  15. Administrative responsibilities

1) Human Resource Planning

The principal function of HR is to know the future needs of the company. What sort of individuals does the company need, and how many? Understanding this will shape the recruitment, determination, execution of the executives, learning & development, and all other functions of HRM.

2) Recruitment

The second function of HR includes recruiting people to work for the organization and selecting the best suitors. Recruiting individuals generally begins with an employer brand. Being an alluring employer has many advantages and vice versa. For instance, a tobacco business that battles to pull in talent because of its tainted reputation. You’re almost halfway there with a reliable employer brand and the privilege of sourcing policies. When candidates apply, the selection process is an HR instrument to pick the best qualified and most potential candidates.

3) Performance Management

Performance management is essential in ensuring that workers stay productive and engaged. Good performance management includes sound leadership, clear goal-setting, and welcoming feedback. Performance management tools include the (bi)annual performance evaluation, in which the manager reviews the performance of the employee. It also incorporates 360-degree feedback tools in which peers, directors, subordinates, and even clients evaluate the employee’s performance. Performance management is additionally an instrument to close the gap between the workforce you have today and the one you will need tomorrow. Probably the ideal approach to building your future workforce is through Learning & Development (L&D). Performance management is one of the vital functions of the HR department.

4) Learning & Development

Empowering representatives to build the skills they require in the future is one of the fundamental functions of HRM. Every organization understands the value of investing in the reskilling of its employees. It is one of the vital functions of the HR department to lead these efforts in the right direction.

5) Career Planning

One of the vital functions of HRM includes career planning, guidance, and growth for employees. Guiding employees about how their aspirations align with the organization’s objectives helps engage and retain them.

6) Information Sharing

One of the essential functions of human resource management is sharing information with employees; this can be through a newsletter to keep everyone up to date with the latest news. It likewise involves safety procedures, announcements of layoffs, mergers, acquisitions, or any other significant occasion applicable to employees. Clear, straightforward, and ideal information sharing is critical in building and keeping up help and successful organizational change.

7) Rewards & Recognitions

Recognition & rewards, one of the many functions of HRM, is to appreciate employees’ efforts and to sustain notable talent. Rewards and recognition make employees feel worthy of their work, as appreciation serves as motivation. They can be financial or non-monetary rewards.

8) Compensation & Benefits

This function of HR requires continual observation of industry pay benchmarks and keeping up with industry standards, including new and variable payment parameters in salary, simple pay expectations, and faster processes. Money is the prime motivation that drives individuals to work. Nonetheless, to retain individuals, this function is very important.

9) Industrial Relations

Another crucial function of HR is managing and cultivating relationships with labor unions, other forums, and their members.

10) Policy Formulation

Policies are the backbone functions of Human Resource Management. An organization needs policies that are tried and tested as much as it needs policies that are more up-to-date and sensitive. A reasonable and well-defined policy framework structure covers all the minute aspects of a company and its operations. Policies can control activities like better participation, standardized methods, procedures & implementation, and proper communication, to name a few.

11) Health and Safety

Devising and implementing health and safety regulations are one of the significant functions of HRM.

12) Personal Well-being

Supporting and taking care of employees when they’re having personal problems that affect their performance is a key function of HR. Emotional well-being is about helping employees when circumstances don’t go as planned.

13) Employee Engagement

Employee engagement, as one of the essential functions of human resource management, has gained much attention over recent years affecting employee turnover positively to a considerable extent. Furthermore, introducing exciting employee engagement initiatives can acquire new and brilliant talent in the company. Organizations are putting significant sums into employee engagement to convince employees that they matter.

14) Compliance

As an HR professional, seeing that your organization is complying with labor laws is one of the crucial functions of HR. The HR management department understands these legal concerns and ensures that the employee and the organization are protected. Compliance comprises the estimation of leave, payroll legalization, govt. and tax reporting, etc.

15) Administrative Responsibilities

One of the crucial functions of human resource management includes administrative responsibilities. Operations like relocations, further upskilling, promotions, illness, leaves, and many more come under this function.


The function of HRM are not only limited to these points but also include activities and initiatives that run under them. An HR department is the core of any company, similar to the nervous system in the human body that oversees & controls everything. An organization with well-defined functions of human resource management is organized and has a long way to endear.

If you are aspiring to build a career in HR and workforce management, check out our 3-month People Analytics & Digital HR program. The online-live instructor-led program is directed by IIM Indore in collaboration with UNext.

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