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International Business
notes 12.2 Hrm functions
The main functions of HRM are as follows:
l z Planning for Organizations, Jobs and People
z The Strategic Management of Human Resources
z Human Resource Planning
l z Acquiring Human Resources
z Selection
z Recruitment
z Integration
l z Building and Motivating Performance
z HR Development
z Performance Appraisal
z Compensation Systems
l z Maintaining Human Resources
z Benefits
z Safety & Health
z Collective Bargaining
z Organizational Exit
z Employment transitions
l z Multinational Human Resource Management
12.2.1 strategic functions of iHrm
Research confirms and anecdotes suggest a powerful relationship between HRM process,
management productivity and strategic performance. The following figure shows the strategic
decisions and their implications for human resource management.
CEO and Chairman of General Electric once said, “Success is truly about people, not about where
the buildings are. You have got to develop people so they are prepared for leadership jobs and
then promote them. That is the most effective way to become more global”.
The Chairman of Unilever in 1990 said, “The single most important issue for us has been and will
continue to be, organization and people”.
Research confirms these views, showing that superior human resources can sustain high
productivity, competitive advantage and value creation for an international company.
1. High Productivity: On the basis of the Human Capital Index study, it was found that
superior HR practices are positively correlated with the firm’s financial returns. Hence,
superior HRM was a stronger determinant of a firm’s financial performance. Research
shows that while executives acknowledge that the effectiveness of HR practices materially
affects a firm’s performance, many firms fail to achieve their HRM goals.
2. Competitive Advantage: A study of the role of HRM to enhance competitiveness at more
than 300 multinationals reported that effectively developing HRM has positive effect on
competitive advantage as through better HRM practices the right persons are placed in
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