Importance of HRM for Organizational Success

March 19, 2022

Why Human Resources Management Is Important For Every Organization

Human resources management is a very important function in every organization. Without human resources management, companies would not be able to effectively recruit and retain employees, improve and enhance the organization, and they wouldn’t be able to maintain a healthy, accepting workplace culture and environment. Human resources management is so important to organizations that many call this department the heart and soul of a business.

The Evolving Business Paradigm

The nature of businesses in today's business world is one of the reasons why they pay so much attention to their employees. Given the increasing shift toward a service-based economy, it is critical for service companies to retain their staff motivated and productive. Even in industrial and conventional industries, the necessity to stay competitive has led to the implementation of techniques that make efficient use of resources. This new corporate environment has resulted from a paradigm shift in how enterprises and corporations regard their personnel as more than simply resources, adopting a "people first" strategy instead.

Objectives of Human Resources Management

Human resources management is so important to organizations because there are many objectives of this department that can drastically improve or negatively affect the organization. One major objective of human resources management is to drive productivity by ensuring competent employees are hired and remain up to date with training initiatives. Another major objective of human resources management and why it’s so important to an organization is that it builds coordination between organizational departments.

Without proper human resources management at your organization, your departments will have a hard time working together which will cause your business to suffer. More important objectives of human resources management are ensuring employee satisfaction, staying up to date with societal and ethical models, and maintaining a healthy work culture, as well as a healthy work-life balance for employees.

Strategic Management and HRM

As described in the sections on current HRM practices, it is necessary to link organizational goals with HR strategy in order to guarantee that people policies are in line with management objectives.

As a result, the HR function may no longer be considered an afterthought, but rather a critical component in assuring corporate success.

Strategic management's goals are to provide the organization a sense of direction and a sense of purpose. HRM practices are now treated as seriously as marketing and production operations in many businesses, and the days of the HR manager being preoccupied with administrative chores are long gone. (management study guide, 2018)

Importance of HRM for Organizational Success

HRM must be seen through the lens of the organization's broader strategic goals, rather than as a stand-alone department with a unit-based or micro approach. The objective is to take a holistic approach to HRM, ensuring that there are no fragmented tactics and that HRM policy is properly integrated with the organization's goals. For example, if employees' training needs are merely fulfilled with haphazard training on a variety of topics, the company risks losing not just the time spent in training but also the employees' sense of direction.

As a result, a company that takes its HR regulations seriously will guarantee that training is targeted and current.

To summarize, HRM must be incorporated into the entire strategy in order to ensure effective use of people and deliver greater ROI (Return on Investment) to businesses for every rupee or dollar spent on them. Unless HRM is organized in this way, businesses risk losing money by not fully employing their employees. And this does not bode well for the organization's success. (Pribanic, 2019)