Most companies will have a human resource department that is often associated with catering to staff welfare. However, this department and its team serve many other key purposes that are essential to employee management and organizational success.

What Does HRM Stand for?

HRM refers to human resource management. A function of organisations that is responsible for managing the human element required to meet company goals. Even for small organisations, having HRM remains important as it serves to ensure employee needs are met as they facilitate and strengthen business operations.

Some of the top responsibilities of HRM include:

  • Recruitment, training, and deploying of employees where and when they are needed
  • Developing, executing and overseeing policies that govern employees
  • Managing the relationship between the organisation and its employees
  • Ensuring employee satisfaction
  • Providing opportunities for employee growth and advancement

Different organisations will have HR teams of varied sizes, structures, and skillsets. Most modern firms now also incorporate the use of HR management software that can automate various processes such as employee recruitment, payroll management, and compliance. Managing HR payroll is a key function as it involves various data including gross pay, benefits, deductions, bonuses, leave encashment, overtime and other incentives.

How Organisations Measure Performance

To determine if your organisation is being successful, you need to have a way to measure performance. Some experts have suggested two main areas in which one can measure this performance.

Economic performance is the first consideration that delves into the financial outcomes of the organisation's operations. This can be measured by such metrics as profits, sales, and return on investment (ROI). The other area is operational performance. This refers to observable indicators of success like customer satisfaction and market dominance.

Overall, there are many ways in which to measure organisational performance and the indicators chosen will often depend on the type of business and its goals. The levels at which this performance is being assessed will also matter. For instance, how you measure the performance of an individual employee will differ greatly from how you measure that of the entire organisation.

How HRM Impacts Organisation Performance

Hiring Processes

HRM is responsible for the recruitment, hiring, training and deployment of employees where and when they are needed across the organisation. It is only through good hiring decisions that the organisation can secure the talent it needs to perform well. When the right job candidates are brought into the organisation, only then can it achieve its goals. HR departments must develop good hiring processes that will allow them to identify the best candidates for the job and be able to offer them positions where they can exploit their talents to the benefit of the organisation.

Setting remuneration

HRM develops the compensation structure that organisations use to pay their employees. The amounts they set can impact the quality of talent they attract during recruitment as it is a factor that competing businesses can use to tempt employees away. It is necessary to conduct research into suitable wage and salary levels that will enable the organisation to offer competitive remuneration that is in line with their financial status and projected revenue. The more competitive the pay, the better talent that can be recruited and ultimately contribute towards improving the organisation's performance.


Employees are the most important asset a business has. They are what allow it to function and deliver whatever products or services are needed to the target market. HRM makes it possible for the organisation to hire the employees they need to carry out various functions. It is their work that helps establish the business and allow it to grow. In exchange for this service, HRM caters to the wellness of the employees.

It accomplishes this by providing a conducive and safe work environment, organising benefits, and facilitating compensation through the payroll system, amongst many other functions. As long as employee needs are met by the organisation through its HR function, the organisation will continue to survive and thrive.


How much the organisation grows is another indicator of its performance. Whether in terms of profit, geographical presence, or other parameters, growth is a key indicator of success. Growth in an organisation is driven by the ideas and actions of its employees. HRM is responsible for identifying areas within the organisation that have gaps and finding suitable employees to fill them. It is the skills and ideas that these people bring to the organisation that aid it in expanding.

Internal Branding

HRM is responsible for creating a positive image of the organisation in the eyes of its employees. Developing a good company culture helps in attracting talented job candidates. The better the calibre of employees a business recruits, the better performance is assured. It takes more than just offering a high salary. The best talent will often look into what kind of welfare, treatment and work environment the organisation nurtures in deciding whether or not to accept a job offer.

Employee productivity and satisfaction

There are many ways by which HRM can impact employee productivity and satisfaction positively. Offering flexible work options where permissible can help boost productivity by reducing stress. HRM systems can even be used to carry out staff surveys on what may be impeding their productivity and what the organisation can do to help. Employees welcome the opportunity to give their opinions and feel satisfied when they see their proposals considered and implemented.

Conflicts can also affect productivity and performance. HRM should have conflict management skills that ensure fair treatment and resolution. Conflict is normal in the workplace, hence the need for policies that give clear guidance on how to resolve them and where necessary have HRM step in as a mediator.

Liability Issues

HRM oversees much of the liability related concerns of the business. Especially issues surrounding employees, like diversity, hiring practices, discrimination, and harassment. It is the responsibility f o the department to develop and institute policies that would forestall any unfair treatment. they need to also identify potential workplace concerns, investigate and resolve them before they escalate. If such situations escalate, they can easily damage the image of the organization and lead to legal problems that would further affect the performance of the organisation.

About the author
Khun Sea brings over nine years of diverse professional experience spanning across HR, recruitment and marketing in the technology and startup industries. Currently, she's making her mark in London's hospitality sector, leveraging her vast experience to drive innovative marketing strategies.