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Human Resource Management (HRM)


What is human resource management?

Human resource management (HRM) is the component of an organization dedicated to the recruitment and management of its employees. Its purpose is figuring out how to use the available human capital to meet business goals. In short, the HRM realm covers anything related to the people within a company. When starting a business and employing new team members, figuring out your human resource management is a good first step. This is true regardless of the type of business you plan to start.

The responsibilities of HRM team members range from the logistical to the conceptual. They oversee the practical needs of every employee, from the onboarding process to the distribution of compensation and benefits. On a bigger picture level, they help advance the strategic vision of the company. This can be done by designing job descriptions that support the intended directions for the brand’s growth, and develop trainings and policies that promote a unified company culture.

This field is sometimes referred to as human capital management (HCM), or colloquially as the human resources (HR).

What makes human resource management a business essential

Companies big and small recognize the importance of establishing an HRM team. That’s because employees are one of the biggest assets an organization can boast. Without talented and motivated employees who possess the right skill sets, even a generous funding source won’t necessarily be sufficient in making your business goals possible. It takes people for that.

To keep employees aligned with the company’s direction, HRM needs to operate on both the organizational and individual levels:

  1. Organizational: HRM professionals can translate their understanding of a company’s plans for expansion into the necessary positions, team structures, and managerial training that ensure employees are being effectively utilized and moving the business closer to its goals.

  2. Individual: HRM staff also take charge of systems that keep employees motivated, such as professional development, a positive internal culture, and opening up paths for internal advancement. They also enforce legally-mandated policies that are designed to protect employees in the workplace.


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Common functions of human resource management

The primary responsibilities of the HRM team can be categorized into the following six areas:

  1. Strategic position design: Collaborating with executives and department heads to identify needs for additional human resources and develop a corresponding job description that pays attention to the skills and background required for the role.

  2. Recruitment and selection: HRM members serve as the primary contact point during the interview and hiring process, often being the ones to screen candidates, have initial conversations with them, contact references, and present the offer.

  3. Training and professional development: Institute an onboarding process for each new employee to become acquainted with the company, its values and culture. In addition, the HRM team organizes workshops for long-term employees to continue developing their skills and improving their performance.

  4. Performance management: Develop a formal review structure to track employee performance, helping each team member identify areas for growth that they can work on.

  5. Compensation and benefits: Have oversight over the initial salary offered to each new hire, as well as subsequent raises or other salary adjustments.

  6. Policy formulation and implementation: Certify company adherence to all government workplace regulations, such as the standards set by the Occupational Safety and Health Administration (OSHA). HRM staff are responsible for ensuring these policies are implemented correctly, and that employees are fully aware of their rights within the workplace. An HRM team might also develop additional policies to meet the specific needs of an organization, or to promote a certain workforce culture.

To learn more, read our human resources guide for more in-depth information.


Related Term

Organizational Structure

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