What is HRM

Human resource management (HRM) is the process of employing people, training them, compensating them, developing policies relating to them, and developing strategies to retain them. As a field, HRM has undergone many changes over the last twenty years, giving it an even more important role in today’s organizations. In the past, HRM meant processing payroll, sending birthday gifts to employees, arranging company outings, and making sure forms were filled out correctly—in other words, more of an administrative role rather than a strategic role crucial to the success of the organization. Jack Welch, former CEO of General Electric and management guru, sums up the new role of HRM: “Get out of the parties and birthdays and enrollment forms.… Remember, HR is important in good times, HR is defined in hard times.”

As business has changed, HRM has changed as well. We can look at HRM in four main stages: Industrial era, post FLSA (Fair Labor Standards Act) era, twenty-first century era, and the information age era. During the industrial era, HR was focused mostly on labor unions and contracts. Because of this, personnel departments were created to perform administrative activities, and their main focus was to resolve issues between the union and management.

The FLSA occurred around 1938, and the FLSA mandated minimum wages, and other health and safety guidelines and laws. The role of HR changed during this time to focus on worker health and safety, and to promote compliance with the new minimum wage laws.

Twenty-first century HR was different than the last two, because of the economic changes happening in the country. HR duties included the ones mentioned above, but also focused on building human capital, which can assist in the alignment of company goals. This was a major change for HR—because it meant HR had become more strategic in nature.

The current state, the information age, is very important in HRM, as you will learn throughout this book. The elements of the other three stages still hold true, however the information age brought new technology and globalization, which changed business processes, but also allowed HR to utilize technology in many facets of their duties.   

Despite this evolution of changes, it is important to note that often managers are involved in HR tasks, too. Often, the extent of involvement depends on the industry and the size of the company. As you read this book, it is important to note that just because we do not have the title of HR manager doesn’t mean we won’t perform all or at least some of the HRM tasks. For example, most managers deal with compensation, motivation, and retention of employees—making these aspects not only part of HRM but also part of management. As a result, this book is equally important to someone who wants to be a HR manager and to someone who will manage a business