What are the Basics of HRM (Human Resource Management)?

Workforce Management

People are an integral part of any organization. Employee performance can either hinder or contribute to a company’s success. As a Human Resources expert, you will play a vital role in the growth of your organization. This is because effective human resource management (HRM) is crucial for organizational development, no matter the size of the corporation.

In this article, we discuss the principles of human resource management. We will begin with a brief outline of HRM and HR, followed by an explanation of the seven HR fundamentals every HR professional should know. You can also skip to the FAQs section at the end for a quick breakdown of everything we are about to cover.

Human Resource Management Basics

What is Human Resource Management?

Let’s start with a definition. Human resource management, or HRM, is the practice of managing people to perform better in the workplace. When you hire individuals for a company, for example, you want candidates who will fit in with the corporate culture because they will be more content, stay longer, and be more productive than people who don’t. Employee engagement is another factor that benefits companies when those involved in HRM develop strategies to increase it.

Simply put, human resource management is about improving an organization’s chances for survival and success through effective human resource management. The next question that needs answering is thus, who are these human resources?

What is a Human Resource?

While it may seem strange to refer to people as ‘human resources’, the term collectively refers to all the individuals who comprise a company’s workforce. They may be contractors or regular employees, but the bottom line is that they all contribute to the business in some way.

With that being said, there is a major difference between the way regular workers and independent contractors are managed since they are all involved in the company to varying degrees. An independent contractor, for example, may work for many different companies in a year, whereas an employee may work at the same company for 20 years.

Then, there is the rise of robotization. Businesses are increasingly employing non-humans to perform everyday tasks, and the relationship between man and machine is becoming an integral part of an organization’s journey to success. While computers and other information processing systems are not typically considered ‘human resources’, there is a debate that they should be included in some way because they fulfill the duties of employees.

The Seven HR Basics Every HR Professional Should Know

There are several factors that influence the effectiveness of a company’s human resource management policies. These include:

  1. Recruitment and selection
  2. Performance management
  3. Learning and development
  4. Succession planning
  5. Compensation and benefits
  6. Human Resource Information System
  7. HR data and analytics

We will cover each of these HR fundamentals in more detail below.

1.  Recruitment and Selection

Recruiting and selecting candidates to fill vacant positions is probably the most visible aspect of an HR professional’s job. After all, one of the most significant roles of the Human Resources Department is hiring the best applicants to come work for the company.

When an existing job becomes available or a new position is created, a request for new hiring is usually made. Once this is done, the direct manager sends a job description to the HR Department, which initiates the process of recruiting candidates. HR professionals have a wide selection of tools at their disposal for locating the best person for the job, including background checks, various tests, and interviews. When there is a large number of applicants, HR may also use pre-screening methods to sort potential recruits. Successful candidates progress to the next stage in the recruitment process, where they receive a more thorough evaluation.

2. Performance Management

Once a candidate has been hired, performance management becomes the next critical step in human resource management. Performance management involves assisting employees to do their jobs to the best of their ability, thereby improving the company’s overall performance.

Employees usually have specific duties assigned to them. Performance management provides employees with feedback on their work, giving them scope for improvement while also recognizing the effort they put into their jobs.

Some of the approaches that HR managers use to provide feedback to their workers include peer, client, and other relationship evaluations, 360-degree feedback instruments, and formal one-on-one performance assessments. However, note that successful performance management is a shared responsibility involving both the person providing the feedback and the person on the receiving end of it.

3. Learning and Development

Human beings are the sum of their cultural beliefs, life experiences, and the time and location in which they were raised. The third HR fundamental ensures that staff are able to adapt to changes in society, technology, processes, and legal changes. In a nutshell, learning and development helps employees to improve their existing skills and master new ones.

The majority of organizations will factor learning and development into their budget since it will help them to achieve their long-term goals. These funds are distributed among staff, with new recruits, future leaders, and other promising candidates typically receiving more training than others. Thus, learning and development can help to bridge skill gaps and create opportunities for existing employees to grow into leaders.

A well-known talent management tool that HR professionals and managers use for evaluating their employees’ potential is the 9-Box Grid. This tool combines learning and development with performance management, providing a useful framework that Human Resources can use to guide employees based on their performance and potential ratings.

4. Succession Planning

Succession planning is vital for prolonging the lifespan of any organization since it ensures continuity in the event that key personnel leave the company. It involves establishing a talent pipeline through a combination of learning and development initiatives and performance ratings. A talent pipeline refers to a pool of qualified candidates who are ready to fill (senior) positions should the need arise. Good human resource management is responsible for developing this pipeline.

5. Compensation and benefits

Another HR fundamental is ensuring that employees are fairly compensated for the work that they do. This is vital for motivating and retaining employees, as well as attracting top personnel. Of course, employee wages also depend on the company’s profit margins and budget.

Human resource management involves keeping track of pay raises and establishing merit-based pay criteria. The HR Department may also carry out a compensation audit from time to time. There are two types of compensation in this regard: primary and secondary compensation. Primary compensation can be defined as the fixed sum of money that is paid to employees on a monthly or weekly basis. This includes their salary or wages, allowances, and performance-based pay. All non-cash benefits, on the other hand, are considered secondary advantages. These may include a company car and a laptop, pensions, daycare, flexible working hours, and extra vacation time, to name a few. The aim of it all is to motivate employees to work harder by rewarding them for their efforts.

6. Human Resource Information Systems

Up till now, we have been discussing HR practices that increase the effectiveness of a company’s human resource management policies. Here, we will shift our focus to the last two HR fundamentals, which are not HR practices, but rather instruments that help HR professionals to do their jobs more effectively. The Human Resources Information System (HRIS) is one such tool. It supports all the other principles we outlined above.

During the recruitment and selection process, for example, HR professionals often use an Applicant Tracking System (ATS) to monitor applications. Likewise, a performance management system is used to record individual goals and allocate performance ratings for performance management. A learning management system is also typically implemented for handling budgets and training approvals, while a payroll system is used for keeping track of employees’ salaries. In addition, there are digital tools that assist with succession planning.

The majority of these tasks are carried out by one system – the HRIS. However, the management of these tasks is frequently divided into separate HR systems. The fact of the matter is that there is a substantial digit component involved in human resource management, which is why the HRIS is included in discussions on HR fundamentals.

7. HR Data and Analytics

HR has become increasingly data-driven in the last half-decade. Thus, the final element of HR fundamentals is data and analytics. As you may have gathered from the previous section, the HRIS is mainly a data-entry system that can be used to make better-informed judgments.

One of the ways to gauge the effectiveness of an organization’s human resource initiatives is by using HR metrics, also known as HR KPIs. These are measurements that demonstrate a business’s performance on a particular metric. The process of preparing business reports that assess HR data is known as HR reporting.


This article has discussed the 7 human resource management basics every HR professional should know. It has demonstrated that none of these HR basics can function in isolation, but rather influence and interact with one another. Thus, we can regard these seven elements as building blocks in the sense that the effective management of one contributes to the performance of another.

Simply put, these HR basics not only improve a workforce’s performance, but they also enable it to perform at its peak.

Frequently Asked Questions

What is human resource management?

Human resource management, or HRM, is the practice of managing people to perform better in their jobs, thereby improving company performance as a whole.

What is a Human Resource?

Human resources is a collective term that refers to all the people in a company’s workforce or who are actively involved in the organization to some degree. In other words, they may be full-time employees, freelancers, contractors, on-call workers, or any other type of ad hoc worker.

What are the 7 Human Resource Management Basics?

The seven HR basics include:

  1. Recruitment and selection
  2. Performance management
  3. Learning and development
  4. Succession planning
  5. Compensation and benefits
  6. Human Resources Information Systems
  7. HR data and analytics