Explain why human resource management (HRM) is important to organizational success.
HRM is an important task that involves having the right number of the right people in the right place at the right time.
A major HRM challenge for managers is ensuring that their company has a high-quality workforce. Getting and keeping competent and talented employees is critical to the success of every organization.
HRM is important for three main reasons.
First, various studies have concluded that an organization's human resources can be a significant source of competitive advantage. The Human Capital Index, a comprehensive study of over 2,000 global firms has concluded that people-oriented HR gives an organization an edge by creating superior shareholder value.
Second, HRM is an important part of organizational strategies. In order to achieve competitive success through people, managers must change the way they think about their employees and also the way they view the work relationship. Managers must stop treating people as costs to be minimized or avoided. Rather, they should treat them as partners.
Finally, it has been found that the way organizations treat their people significantly impacts the organizational performance. For instance, one study reported that significantly improving an organization's HRM practices could increase its market value by as much as 30 percent.
Source: Management, 11e (Robbins/Coulter)