People are essential to the success of any business. The performance of employees can be a liability or asset to a company. As an HR professional, you will play a pivotal role in how successful your company is. Good Human Resource Management (HRM) is essential for businesses of all sizes. In this article, we will breakdown the fundamentals of Human Resource Management.

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We will start with a brief description of HRM and HR. Then we will dive into the seven HR basics you have to know to have a good understanding of what HR does. We will end with some information on technical terms, such as HRIS (Human Resources Information System).

What is Human Resource ManagementWhat is a Human Resource?The 7 HR Basics1. Recruitment & selection2. Performance management3. Learning & development4. Succession planning5. Compensation and benefits6. HR Information Systems7. HR data and analyticsConclusionFAQ

What is Human Resource Management?

Let’s start with a brief definition. Human Resource Management, or HRM, is the practice of managing people to achieve better performance.

For example, if you hire people into a business, you are looking for people who fit the company culture as they will be happier, stay longer, and be more productive than people who won’t fit into the company culture.

Another example is engagement. Engaged employees are more productive, deliver higher quality work and make customers happier. This means that if we can find ways to make employees more engaged, we help the company.

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What is a Human Resource?

It may feel a bit weird to refer to people as ‘human resources’. Human Resources are all the people that in one capacity or another work for or contribute to an organization.

These people make up a company’s workforce. They can be regular employees, for example, but also contractors. Especially with the rise of the gig economy, more and more people are starting to work for an organization on a contract basis without having a traditional labor contract.

These people include independent contractors, workers provided by contract firms, on-call workers, and temporary help agency workers.

An independent contractor can be under contract for years at the same organization, while an agency worker can work at 20 different companies throughout one year. Because these people are all involved in the company to a different extent, the way they are managed and involved in the organization should also be different.

Also, there are increasingly non-humans at work at the company.

In this case, we’re talking about the increase in robotization. Robots are increasingly involved in day-to-day work and the interaction between man and machine is becoming increasingly essential to the success of the organization. Although these machines are not considered ‘human resources’, there is a case to be made that they should be included in some way as they are part of the workforce.

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The seven HR basics

When we talk about Human Resource Management, several elements are considered cornerstones for effective HRM policies. These cornerstones are:

Recruitment & selectionPerformance managementLearning & developmentSuccession planningCompensation and benefitsHuman Resources Information SystemsHR data and analytics
Erik van Vulpen

Erik van Vulpen is an expert in shaping modern HR practices by bringing technological innovations into the HR context. He receives global recognition as an HR thought leader and regularly speaks on topics like HR Analytics, Digital HR, and the Future of Work. In his passion to share his ideas, he founded, the Academy to Innovate HR in 2016. Which has since become the #1 leader in online training courses for HR professionals across the globe. Connect with Erik on LinkedIn and discover"s curriculum here.