Organizations with strong HR practices are 2.5 times more likely to perform better than their competitors. That’s because the various functions of human resource management (HRM) are the foundation of any successful business.
Let’s say you hired 30 new developers in just three months to scale your production. But you don’t have a formal onboarding process or clear job roles. Within a week, many new hires might start to feel confused about their responsibilities. Managers get overwhelmed with questions, project timelines slip and team morale drops. The root cause of this disaster is a lack of structured HR department functions.
Clear and defined HRM strategies help you select the right talent, train and manage their performance and sync their goals with those of your organization. The functions of human resource management teams span HR planning, recruitment, workplace safety, training, learning and development initiatives, compensation, labor law compliance and fostering healthy managerial relations.
In this article, we’ll walk you through the 10 core functions of HR and explain how each one can help your business run smoothly, grow steadily and thrive in the long run.
What is human resource management?
Human Resource Management, or HRM, is all about managing people in a company. The term is increasingly used to refer to philosophy, policies, procedures, and practices related to the management of people within the organization. HRM practices aim to develop their skills and motivate them to perform at a higher level.
HRM roles and responsibilities
HRM roles and responsibilities include things like:
- Finding the right people for the job (recruitment)
- Hiring them and making them feel welcome (onboarding)
- Giving them training so they can do their job well
- Helping them grow in their career
- Taking care of salaries, promotions, and benefits
- Solving workplace problems and keeping employees happy
Core HR functions include ensuring the company’s employees are productive, motivated, and working towards the company’s success.
Why are the functions of HR important?
If you’re running a business, you’ve probably noticed how quickly things can spiral when people aren’t managed well. This is where core HR functions become important to keep everything on track. Here’s why human resources department roles matter so much:
- To attract and retain the right talent: 72% of recruiting leaders agree that employer branding significantly impacts hiring
- Ensuring a smooth employee experience: a clear onboarding process helps improve new hire retention and productivity
- Aligning employees with business goals: Aligning employees’ goals with organizational goals motivates employees, resulting in high team performance
- Building a positive company culture: HR fosters an environment where employees feel respected and valued, lowering the employee churn rate by up to 68%
Now that you understand why HRM strategies are important, let’s dive deeper into what these functions are.
Top 10 functions of human resource management
HR department functions play a crucial role in making an organization successful by focusing on workforce management. Let’s look at the top 10 core functions of HR that every business, big or small, needs to get right:
1. Human resource planning
Human resource planning is the foundation of all HRM strategies. A good plan keeps your company immune to talent shortages for meeting critical business milestones.It also prompts you to work on critical questions, like:
- How many people will we need next quarter?
- What roles will we need to fill?
- Will our current team be enough to meet future goals?
You have to work around data and business forecasts to plan for staffing needs ahead of time.
2. Recruitment and selection
How often do you struggle to find the best candidates for your business? According to LinkedIn, companies with strong employer brands see 50% more qualified applicants. To become a strong employer brand means creating a persona that attracts candidates to join your organization.
Interestingly, it starts with choosing skilled candidates who not just meet the job requirements but also fit your company culture. On the flip side, hiring a bad candidate can result in compromised team productivity and up to 30% of the employee’s annual salary.
3. Performance management
More than hiring, it’s a tough task to make great candidates perform at their best.
In this regard, the HR takes care of the performance management, making it one of the sensitive human resources department roles. Candidates appreciate companies with continuous feedback, clear goals to target and a well-synced team to grow together.
According to Gallup, teams that receive regular feedback see 12.5% higher productivity.
That’s why there is a huge demand for tools that facilitate 360-degree feedback to employees not just from their managers but also from peers, subordinates and even customers.
It helps HR professionals get a clear, unbiased view of individual performance and identify blind spots that need to be addressed.
4. Learning and development
It is one of the core functions of HR to ensure that employees upgrade to new skills and become more productive over time. That makes learning and development (L&D) an essential function of HR. The HR department helps employees upgrade their skills through new courses, workshops, mentorships, or any such medium.
The list of other core duties includes:
- Tailoring training programs to each individual’s learning capacity
- Increasing cross-functional team collaboration during the training
- Measuring and tracking employee performance post-training
- Making adjustments to L&D initiatives as per the feedback
5. Career planning
No one likes to be stuck in a role with no idea where it could lead. In this regard, HR helps employees by planning policies on career goals and achievements in the organization.
Here, the role of HR is to show them potential paths and the skills they need to move forward.
This function also requires HR to:
- Offer guidance on lateral moves or job rotations
- Providing resources and support for skill development
- Creating a supportive environment for growth
Employees are given options, but HR decides the best course of action and suggests it to the management for approval.
6. Job evaluation
HR undertakes job evaluations to ensure fair and equitable compensation for employees within the organization. This helps the organization attract and retain top talent in the long term.
HR might use different ways to do this, such as:
- Ranking method: Compare roles and rank them by value to the organization (ideal for companies with less than 100 employees)
- Point factor method: Assign points to job factors (e.g., problem-solving, leadership)
- Classification method: Ranks jobs based on pre-determined grade comparison, such as required skills, responsibilities and seniority
Through this function, the HR department also prepares the organization to comply with equal pay regulations and maintain trust among employees.
7. Rewards and recognition
You might be surprised to know that 75% of employers expect compensation to become more challenging in the future, yet only 53% feel confident about their current rewards strategy.
Your job in HR is to create a total rewards package that fits your people. That includes not just pay but also perks that matter to them. It might be a bonus, recognition, flexible working hours, career growth or a positive work environment.
One of the best ways to run a fair evaluation is to conduct 360-degree feedback for all employees on automation through modern tools that integrate OKRs with Continuous feedback models. Use of the famous OKR framework and continuous feedback model to help HR reward true performers is guaranteed to create a transparent review system.
8. Employee and labor relations
Employee and labor relations are two different functions of human resource management. Labor relations refer to maintaining a good relationship between employees and the labor union. Here, the HR team handles challenges like union agreements, collective bargaining and other labor duties.
Meanwhile, employee relations for HR is all about maintaining a good relationship between employees and the organization. The duties, naturally, include everything it takes to work. It could be working on employee satisfaction, boosting morale, or addressing employee concerns regarding their jobs or benefits.
9. Employee engagement and communication
Do you know that 74% of employees are more productive when they feel heard?
HR ensures employees feel fulfilled in that regard by:
- Sharing important employee concerns with the management
- Constantly gathering feedback from employees to improve the workplace environment
- Encouraging employees to open up about their performance challenges to the leader
- Involving employees in decision-making processes to boost engagement
The aim is to promote two-way communication between employees and the management. According to a Gallup study, companies with this level of engagement see 23% higher profits and 81% less absenteeism.
10. Health and safety
As per one McKinsey survey, 89% of employees feel psychological safety is important at the workplace. In this regard, creating a safe work environment is not just a legal obligation but one of the necessary HR department functions as well.
HR ensures the organization meets workplace safety standards, everything from fire drills to mental health support. The role of HR for workplace health and safety includes, but is not limited to:
- Conducting periodic safety training
- Promoting a culture of safety
- Boost employee morale
- Developing health and safety policies
- Ensuring employee understanding of workplace safety
Using the right HR tech tools can help teams scale and stay efficient. Right tools will save HR countless hours on educating employees on necessary rules, as and when required.
Conclusion
The function of HR is not just limited to hiring or managing payroll. Instead, it looks forward to building a workplace where people feel valued, supported and aligned with the company’s goals. The core functions of HR include but are not limited to workforce planning, recruitment, performance management, training development, rewards and workplace safety.
However, managing all these HRM roles and responsibilities smoothly is not easy when your team is growing or working across different locations. That’s where the right HR tool can make all the difference. Leveraging tech tools can help HR streamline everyday tasks, stay organized and focus more on people than paperwork.
FAQs
What are the primary functions of human resource management?
The HR department undertakes a lot of responsibilities. Core HR functions include:
- Hiring the right people
- Managing salaries and benefits
- Supporting employee growth
- Tracking employee performance
- Ensuring the company meets labor compliance
What is the role of human resource management in an organization?
The primary role is to create a healthy workplace culture where employees feel heard and motivated to give their best. It leads to a broader goal of ensuring everyone is working toward the same vision.
How do HRM functions contribute to employee development?
HR supports employees to improve their skills with new training, regular feedback and clear growth plans within the organization. For that, it tracks individual progress and develops plans on how to help them become more valuable to the organization.
Why are HR functions important for organizational success?
As HR management functions involve hiring and nurturing employees, the fuel of the organization, it directly impacts the company’s bottom line. The more productive, engaged and satisfied employees are, the easier it becomes for the organization to achieve new turnover heights.
