Human resource management (HRM) is the term used to describe formal systems devised for the management of people within an organization. The responsibilities of a human resource manager fall into three major areas: staffing, employee compensation and benefits, and defining/designing work. Essentially, the purpose of HRM is to maximize the productivity of an organization by optimizing the effectiveness of its employees. This mandate is unlikely to change in any fundamental way, despite the ever-increasing pace of change in the business world.
As Edward L. Gubman observed in the Journal of Business Strategy, “the basic mission of human resources will always be to acquire, develop, and retain talent; align the workforce with the business; and be an excellent contributor to the business. Those three challenges will never change.”
Until fairly recently, an organization’s human resources department was often consigned to lower rungs of the corporate hierarchy, despite the fact that its mandate is to replenish and nourish what is often cited—legitimately—as an organization’s greatest resource, its work force. But in recent years recognition of the importance of human resources management to a company’s overall health has grown dramatically. This recognition of the importance of HRM extends to small businesses, for while they do not generally have the same volume of human resources requirements as do larger organizations, they too face personnel management issues that can have a decisive impact on business health.
As Irving Burstiner commented in The Small Business Handbook, “Hiring the right people—and training them well—can often mean the difference between scratching out the barest of livelihoods and steady business growth. Personnel problems do not discriminate between small and big business. You find them in all businesses, regardless of size.”