HRM: meaning, nature, objectives and significance

Human Resource Management · Unit I · Topic 1 of 14 · 6 min read

What human resource management means, the standard definitions, its nature and scope, its objectives at four levels, why it matters to the firm, the employee and society, and how it differs from personnel management.

← All Human Resource Management topics Past papers

On this page

1. Meaning and definitions
2. Nature of HRM
3. Objectives of HRM
4. Significance (importance) of HRM
5. HRM and personnel management distinguished
How this is examined

Cases checked to exist. Read the judgment before quoting a holding.

Every case cited here has been checked to exist — the citation resolves and names the right parties. The propositions attributed to each case have not been verified line by line against the judgment. Case names link through to the full judgment: read it before quoting a holding in an examination answer, and never carry a proposition from notes into court on trust.

About this paper. The syllabus calls the course “HRM – Industrial Relations”, but all five units are human resource management: planning, recruitment, selection, HRD and appraisal. The law of industrial relations (trade unions, standing orders, strikes, disputes) is in your Labour and Industrial Law papers and these notes link to those notes where the management side touches the law. The examinable core of this first note is a definition, the objectives in four groups, and the HRM versus personnel management table.

1. Meaning and definitions

Human resource management (HRM) is the part of management concerned with the people who work in an organisation: getting them, developing them, rewarding them, keeping them and maintaining good relations with them, so that the organisation meets its goals and the employees meet theirs. The “human resource” is the total knowledge, skill, ability, attitude and creativity of the workforce. Unlike machines or money, it can grow in value with use, it can refuse to cooperate, and it is the only resource that runs all the others.

Definitions to quote (learn two):

Edwin B. Flippo (for personnel management, still the most quoted): the planning, organising, directing and controlling of the procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organisational and social objectives are accomplished.
Decenzo and Robbins: HRM is concerned with the people dimension in management; it is a process of acquiring, training, appraising and compensating employees, and of attending to their labour relations, health and safety, and fairness.
National Institute of Personnel Management (India): that part of management concerned with people at work and with their relationships within the enterprise; it seeks to bring together men and women who make up an enterprise and to enable each to make his own best contribution to its success, both as an individual and as a member of a working group.
Leon C. Megginson described human resources, from the national point of view, as the knowledge, skills, creative abilities, talents and aptitudes of the population, and from the enterprise’s view as the total of the inherent abilities, acquired knowledge and skills represented by its employees.

Flippo’s definition is worth learning because it gives you the structure of the whole subject: four managerial functions (planning, organising, directing, controlling) applied to six operative functions (procurement, development, compensation, integration, maintenance, separation). The functions note builds on it.

2. Nature of HRM

Pervasive. It exists in every organisation with employees, and every manager who supervises people does some HRM, not only the HR department.
People-centred. It deals with employees individually and in groups, at all levels, workers and managers alike.
Action-oriented. It solves practical problems through policies and procedures rather than rules on paper.
Continuous. It runs from manpower planning before hiring to separation and retirement benefits after the employee leaves.
Development-oriented. It treats employees as an asset to be developed, not a cost to be cut.
Interdisciplinary. It draws on psychology, sociology, economics, law and management.
Staff function and line responsibility. The HR department advises and provides services (a staff role); line managers carry out HR decisions for their own people. This line–staff split is a favourite examiner point.
Future-oriented. It plans the workforce for tomorrow’s needs.

Scope

The scope is usually stated in seven heads (Ashwathappa’s list): introduction to HRM; employee hiring (HR planning, job analysis, recruitment, selection, placement, induction); employee and executive remuneration; employee motivation; employee maintenance (health, safety, welfare, social security); industrial relations (unions, collective bargaining, grievances, discipline, participation); and prospects of HRM (audit, research, international HRM).

3. Objectives of HRM

Werther and Davis group the objectives in four sets. Use this grouping: it makes a ten-mark answer look organised.

Group	Objective
Societal	Be ethically and socially responsible to the needs of society; use human resources in a way that does not harm society; obey the law on employment, wages, safety and equality.
Organisational	Help the organisation reach its goals; HRM is a means, not an end in itself.
Functional	Keep the HR department’s contribution at a level suited to the organisation’s needs; neither too costly nor too thin.
Personal	Help employees achieve their personal goals (pay, security, growth, recognition), at least so far as they help the organisation; otherwise performance and retention fall.

Other objectives commonly listed: to obtain the right person for the right job at the right time; to develop employees’ skills to the full; to secure their willing cooperation; to build and maintain high morale and good human relations; to provide fair wages and good working conditions; to maintain industrial peace; and to ensure the effective use of the workforce.

4. Significance (importance) of HRM

KSLU asks this as “significance” for ten marks and as “importance” for six. Arrange the answer under three heads.

To the enterprise

Attracts and keeps capable people through planning, recruitment and fair pay.
Builds skills through training and development, so productivity rises.
Secures commitment and lowers absenteeism and turnover.
Creates a competitive advantage: competitors can copy technology, not a trained and committed workforce.
Handles change (new technology, mergers, restructuring) with less resistance.

To the employee (professional and individual significance)

Dignity, recognition and respect at work.
Opportunities for growth, promotion and career development.
Fair wages, benefits, security and a safe place to work.
Teamwork and a good working environment.

To society (social and national significance)

Employment opportunities and the use of the nation’s human capital.
Industrial peace, which saves output lost to strikes and lockouts.
Fair treatment of disadvantaged groups and observance of labour laws.
A higher standard of living through better incomes and productivity.

5. HRM and personnel management distinguished

Personnel management grew out of welfare work and administration; HRM, from the 1980s, treats people as a strategic asset. The differences:

Basis	Personnel management	HRM
View of employee	A cost; a tool to be used	An asset; a resource to be developed
Approach	Reactive, routine, administrative	Proactive, strategic
Focus	Rules, procedures, compliance	Values, mission, commitment
Relations	Pluralist; collective bargaining with unions	Unitarist; direct communication with individuals
Pay	Fixed by job evaluation, uniform grades	Linked to performance
Job design	Division of labour	Teamwork, empowerment
Role of line managers	Limited; personnel department handles people	Line managers share responsibility
Link to strategy	Separate from corporate planning	Integrated with corporate strategy
Training	Limited, job-specific	Continuous learning and development

Do not overstate the difference. Many writers (Karen Legge among them) point out that the functions are largely the same; what changed is the philosophy and the link to strategy. End the distinction answer with one line saying so. It shows judgment.

How this is examined

Unit I always opens with a definition question: “Define HRM. Explain its functions” (January 2026; August 2024), “What is HRM? Explain its objectives” (January 2025), and “Discuss the significance of HRM” (January 2026; January 2025, as “importance”). Short notes: importance of HRM (January 2026), nature of HRM (January 2025; January 2026 100-mark paper, Q.9(c)), objectives of HRM (August 2024). The 100-mark January 2026 paper set “Difference between HRM and personnel management” in Q.9(a): reproduce the table with at least six rows. For a ten-mark answer, give one definition, the nature in six points, and the four-group objectives table or the three-head significance list.

Now try the real questions: Human Resource Management past question papers.