Importance of HRM

1. Policy Formulation-If HRM can effectively create a human

resource policy, its importance may be acknowledged. It is
the managerial insight into human resources. If all these
policies are formulated as per desire and for the fulfillment of
organizational objectives. 2. Retaining Employees and Motivation for
Gaining Goals-Human Resources Management (HRM) plays an
important role in retaining employees and motivating them
to accomplish the company’s goal. By developing effective
HR policies and practices, HRM helps directly in creating a
positive work environment that attracts and retains talented
employees. Additionally, by providing training and
development opportunities, HRM helps employees grow
professionally which can lead to increased motivation levels.
Ultimately, by effectively managing employee relations, HRM
can help ensure that all employees are working towards the
same common goal – the success of the company. 3. Policy
Execution-Efficient human resource management executes all
human resource policies in accordance with the goals and
objectives of an organization. Efficient human resources can
implement human resource policies effectively and
indiscriminately.4. Maintaining Quality Work Life-Maintaining the
quality of work life is a major condition for organizations.
HRM helps directly by ensuring that employees are treated
fairly and equitably, providing a framework for managing
employee performance, and creating policies and procedures
that support a positive work environment. By addressing the
needs of employees, HRM helps to maintain morale and
productivity, which in turn leads to better organizational
outcomes.5. Review of Employee Needs-Human resource
management reviews employee needs, hopes, and
aspirations from time to time and regularly. If all these
needs, hopes, and aspirations are properly assessed and
fulfilled, there may be good labor-management relations. 6.
Increasing Profit and Productivity-By helping to increase
productivity and profit, human resource management helps
directly to improve the bottom line. Additionally, by ensuring
that employees are properly managed and trained, human
resource management can help reduce turnover and
improve employee satisfaction, both of which can also lead
to increased profits.7. Utilization of Human Resources-Efficient
human resource management can successfully utilize the
efforts and sincerity of employees. As a result, organizational
goals may be met and all tasks can be successfully carried
out.8. Producing Skilled Employees-Producing employees who are
easily adaptable to change is the main function of human
resource management. By helping to directly shape the
workforce, HR professionals can create an organization that
is better able to respond quickly and effectively to new
opportunities and challenges. This adaptability is essential in
today’s rapidly changing business environment, where
changes in technology, consumer preferences, and other
factors can occur suddenly and with little warning. By
proactively preparing employees for change, HR managers
can help their organizations stay ahead of the curve and
maintain a competitive edge.9. Social Welfare-Employees are
social beings. There may have various needs and demands
that deserve to be mitigated. Social welfare can enhance the
involvements of employees, which can help the satisfaction
of top management.10. Sustaining Business in Market-Human
resource management is very important in an organization
for sustaining business in the market. It helps to ensure that
employees are properly trained and have the skills
necessary to meet the needs of the company. Additionally,
human resource management can help to identify potential
problems with employee relations and resolve them before
they become bigger issues. By effectively managing human
resources, businesses can create a positive work
environment that is conducive to productivity and success 11.
Effective Trade Unionism-An efficient Human Resource
Management system can handle peacefully and
appropriately industrial disputes, trade unionism, conflict,
grievance, and almost all hazards of an organization. This
can also help establish a peaceful environment and workable
environment in the organization.12. Developing Corporate Image-
Human resource management is critical for developing a
strong corporate image. By ensuring that the company’s
employees are well trained and represent the brand in a
positive light, HRM can help create a favorable public
perception of the organization. Additionally, by managing
employee relations effectively, HRM can minimize negative
publicity and help maintain a productive workforce. In short,
human resource management is essential for maintaining a
positive corporate image. This is done properly through
the different phases of HRM.13. Overall Development of
Organization The ultimate and overall development of an
organization can be contributed by effective human resource
management because employees are properly utilized and
managed by human resource management which can
streamline the growth of the organization
Environmental Challenges----The environmental challenges are related
to the external forces that exist in the outside environment of an
organization and can influence the performance of the
management of the organization. These external forces are
almost out of control of the management of the organization. 7
Rapid Change-The world is changing at a faster rate because
change is constant for several centuries. So the management of
the organizations should be quickly adaptive to the changing
requirement of the environment otherwise they become obsolete
from the market.The human resource management of an
organization plays a basic role in response to environmental
change. The HR department should adopt such policies that can
avail the new opportunities of the environment and keep the
organization away from the newly emerging threats. 6 Workforce
Diversity- the changing environment provides both the
opportunities and threats to the human resource management of
the organization. The HR manager should adopt such policies that
can make possible the diverse workforce of employees. Although
on one hand diversity creates a big problem, in the long run, the
survival and performance of the organization is flourished. 5
Globalization-One of the serious issues that today’s organizations
are facing is the issue of globalization. The world is converting
into a global business and severe competition is started between
domestic and foreign companies. Such competition results in
laying off the effective workforce of the organization. The HR
department can play an important role in keeping the culture of
the organization as global and wider. 4 Legislation-It is the old
environmental challenge that is faced by the organization for
many decades. There are certain labor laws that are declared by
the government for the benefits of the working employees. Some
of these laws are disadvantageous to the interests of the
organizations so it is one of the big challenges for the HRM to
implement all those labor laws within the organizations. If any
such law is violated, serious actions are taken by the relevant
government authority that may result in serious penalties for the
management of the organization. 1.Technology-Technology is also
growing at great speed especially in the field of computer and
telecommunication. New methods are emerging that quickly
dominate the older ones and make them obsolete. Therefore the
skills required by the employees also change with the changing
technology and this would compel the worker to advance the
skills three to four times throughout their working lives. So there
comes a burden on the HR department to constantly update the
skills and expertise of its employees. 2Job and Family Roles-In
recent years, dual-career families are increasing in which both the
wife and husband work. This creates a serious burden on the
women that they have to give time to their families also. In many
organizations, the policies of HR favors the employment of more
than 10 years. The working hours of the organizations are also
strict and tight for the employees.Moreover, the selection and
training procedures are two tough and time consuming so most of
the talented women hesitate to join any organization which would
result in the wastage of talent and potential. Even working men
also suffer from these employment policies because they do not
properly give time to their families. So the challenges for
the HRM increase with this particular issue and special favorable
working policies are needed to be employed in all organizations.
3.Lack of Skills-The service sector development is expanding due
to many reasons like change in the tastes and preferences of
customers, technological change, legal change, etc. All of this
affected the structure and managing style of business
organizations.The skills required in the employment of the service
sector are also advancing but the graduates of the technical
colleges and universities are groomed according to the latest
requirements. Therefore most of the employees lack the standard
required skills to perform their duties and it becomes a big
challenge for HRM to properly train these new and old employees
to become an efficient and effective worker.
Organizational Challenges-The organizational challenges for HRM are related to
the factors that are located inside the organization. Although these challenges are
evolved as a byproduct of the environmental challenges these can be controlled by
the management of the organization to much extent.The proactive HR managers
take notice of such challenges in advance and take corrective measures before
these would convert into serious issues. The human resource management
challenges within the organization include competitive position and flexibility,
organizational restructuring and issues of downsizing, the exercise of self-managed
teams, development of suitable organizational culture etc. 1Controlling Costs- An
organization can avail of the competitive position by lowering its cost and
strengthening its cash flows. For this purpose, the labor cost of the organization is
minimized through an effective compensation system that adopts innovative
reward strategies for good performances. In this way, the favorable behaviors of
the employees are rewarded so the organization would get the ultimate
advantage.Moreover, the policies of compensation should keep the labor cost
under control. Effective employees should be selected that keep with the
organization for longer duration and proper training should also be provided to
these employees. The HR department should also restore the work of the
employees along with the improvement in the health and safety issue of the
working environment. All of these efforts would limit the cost of
labor.2.Improving Quality-Quality improvement can lead an organization towards
a competitive advantage. The total quality management programs are employed
that improve all the processes within the organization which would ultimately
result in the improvement of the final product or service. 3 Developing Distinctive
Capabilities-Another method of gaining a competitive advantage is to employ the
people that have distinct capabilities to develop extraordinary competence in
specific areas. 4 Restructuring-Another technique is the restructuring of the
organization in which the methods of performing different functions are altered
positively. In the case of the HR department, the majority of functions are still
performed within the organization.In some organizations, the major functions of
the HR department are now transferred to the other parties in the shape of
outsourcing, shared service centers, etc. The sizes of the HR department in those
organizations are shrinking because most of the functions are performed by
outsiders. But in most organizations, the HR manager performs all the relevant
functions of HRM. The HR department is now involved in mission-oriented and
strategic activities.
Individual Challenges---The decisions related to the specific individual
employees are included in the individual challenges for the HRM.
The organizational issues are also affected by the fact that how
employees are treated within the organizations. 1 Productivity is
defined as the measure of the value that an employee can add to
the final product or service of the organization. The increased
output per employee is reflected as increased productivity. Ability
and motivation are two important factors that affect employee
productivity.The ability of the employee can be improved by the
hiring and replacement along with the proper training and career
development. On the other hand, high quality of work-life serves
as an accelerator to the motivational factor of the employees. 2
Empowerment-In modern days, many organizations make changes in
such a way that their individual employees exert more control
over their work as compared to their superiors. This individual
control of employees is called empowerment which helps the
employees to work with enthusiasm, commitment and learn new
skills because they are more normal decisions about their work by
themselves and hence enjoy their work. 3 Brain Drain-One of the
challenges for HRM is the detachment of the key potential
employees from the organization which links with the competitors
for higher remunerations etc. In such cases, the organization
loses its intellectual property and in many situations the leaving
employees at the higher levels also take with them the potential
lower-level employees. This brain drainage is becoming a serious
issue in high-Tech companies. 4 Ethics and Social Responsibility-Under
this challenge, the organizations make an effort to benefit some
portion of society. This is now considered to be the social
responsibility of the organization to show favorable behavior
towards society. Ethics serves as the basic principle for the social
behavior of the organizations.Within organizations, the HR
departments develop a code of conduct and principles of the code
of ethics that serve as guidance for the personal behavior of the
employees of the organizations. The employees also expect
management to show favorable decisions. 5 Job Insecurity- In
recent years, restructuring and downsizing develops a sense of
insecurity of jobs within the employees of the organizations. How
many employees only desire to get a steady job rather than a job
with a promotional future.Even most successful organizations lay
off their employees in the period of cut-throat competition. The
stock market also shows favorable results when layoffs have been
made. All these things create fear among employees about the
insecurity of their jobs which would hinder their effective
performance. 6 Matching People and Organizations- It has been proved
from the research that the HR department contributes to the
profitability of the organization when it makes such policies of
employee selection in which those employees are selected and
retained that best suits the culture of the organization and its
objectives. For example, it is proved from research that those
employees would become beneficial for high-Tech companies that
can work in a risky, uncertain environment having low pay. In
short, it is an important challenge for the HR department to hire
and keep such employees whose abilities and strengths would
match the requirements and circumstances of the organization.