What Are the Functions of HRM? A Complete Guide for Business Growth

If you're running a business or managing a team, understanding what are the functions of HRM is one of the most critical insights you can gain. HRM, or Human Resource Management, plays a vital role in acquiring, managing, and optimizing your workforce.

In the first 50 words, here’s the answer to the most common question: what are the functions of HRM? Human Resource Management includes all the activities involved in managing people within an organization—from hiring and training to compliance, payroll, and employee development. These functions align your workforce with your company’s strategic objectives.

To explore this further, check out our guide on the best HR software in India to streamline your HRM process with modern tools.

In this article, we will explore in detail what is HRM and its functions, uncover the managerial functions of HRM, and explain why every growing business needs to understand and apply these principles. We’ll also discuss how digital tools like HRMS can automate and simplify these responsibilities.

For businesses in metropolitan areas, especially those looking for HRMS software in Mumbai , having a cloud-based platform can significantly boost HR efficiency.

What is HRM and Its Functions?

To understand what are the functions of HRM, we must begin with the definition of HRM itself. Human Resource Management refers to the process of recruiting, developing, retaining, and effectively utilizing the people who make up an organization. It includes the planning, implementation, and management of policies that guide workforce behavior and performance.

When we ask what is HRM and its functions, we’re essentially exploring how a company creates systems and strategies to attract top talent, foster skill growth, maintain employee engagement, and ensure legal and ethical compliance. The HR software for small businesses helps startups and SMEs adopt HR best practices without needing a large team or infrastructure.

The primary objective of HRM is to align the goals of the organization with the needs of its people. Through various functions of HRM, businesses can ensure that they are not only complying with laws but also building a culture that fosters productivity, innovation, and long-term growth.

Core Functions of HRM

Now that we’ve explored what is HRM and its functions, it’s time to dive deeper into the specific tasks involved in the role. When people ask what are the functions of HRM, they are often surprised to learn just how broad and impactful this area is.

The functions of HRM are divided into two major categories:

Managerial Functions of HRM: These are the strategic tasks that focus on planning, leading, organizing, and controlling HR activities.
Operative Functions of HRM: These are the daily operational duties, including recruitment, employee development, compensation, and more.

Let’s break each of these categories down further so you can see exactly how they contribute to your business.

Managerial Functions of HRM

The managerial functions of HRM focus on the leadership and strategic side of managing a workforce. These are the high-level activities that determine how HR policies are shaped and implemented.

The basic managerial functions of HRM are:

Planning: This involves forecasting the company’s future HR needs. HR professionals analyze internal and external workforce trends to ensure the organization always has the right number of employees with the right skills. Strategic workforce planning helps businesses prepare for growth or restructuring.
Organizing: After planning comes organizing. HR departments create clear structures that define reporting relationships, roles, and responsibilities. Organizing helps eliminate confusion and ensures resources are used efficiently.
Directing: HR plays a major role in leading and motivating employees. This includes managing team communication, resolving internal conflicts, supporting leadership, and cultivating a positive work environment.
Controlling: Finally, HR ensures that everything is running according to plan. This involves monitoring employee performance, ensuring compliance with labor laws, conducting audits, and adjusting strategies as needed.

These managerial functions of HRM are vital for any organization seeking to maintain control over its workforce and achieve long-term success. When you understand what are the functions of HRM from a managerial perspective, it becomes easier to lead teams and implement effective policies.

Learn how top HR software in India enables better workforce planning and performance tracking through analytics and reporting tools.

Operative and Supportive HRM Functions

While managerial roles focus on strategy, operative functions of HRM involve the hands-on tasks that keep the business running on a day-to-day basis. When people ask what are the functions of HRM, these are often the responsibilities they are most familiar with.

Key operative and supportive HRM functions include:

Recruitment and Selection: Identifying the need for new talent, advertising job roles, interviewing candidates, and selecting the most suitable employees.
Onboarding and Orientation: Introducing new hires to the company’s culture, values, and operations. Effective onboarding improves retention and employee engagement.
Training and Development: Helping employees grow their skills through structured training programs, workshops, and professional development initiatives.
Performance Management: Assessing employee performance through regular reviews and appraisals. This ensures employees meet their goals and align with organizational standards.
Compensation and Benefits: Managing salaries, incentives, insurance, and retirement plans. A competitive compensation strategy helps attract and retain top talent.
Employee Relations and Engagement: Managing workplace dynamics, fostering strong communication, and creating initiatives that keep employees motivated.
Workplace Safety and Health: Ensuring compliance with labor safety regulations and promoting wellness programs.
HR Data and Reporting: Collecting and analyzing HR data to make evidence-based decisions.
HRMS and Automation: Using technology tools such as Infowan to automate core HR tasks, including attendance tracking, payroll, leave requests, and more.

Understanding these roles is essential when considering what are the functions of HRM in today’s tech-driven, people-centered workplace.

Why Understanding HRM Functions Matters

You may be asking yourself: why is it so important to know what are the functions of HRM?

HRM helps businesses optimize productivity by ensuring that every employee is working in the right role with the right support.
It ensures legal compliance with labor laws and regulations, helping you avoid fines and reputational risks.
A well-structured HR department can build a strong workplace culture that attracts top talent and retains it.
HRM functions support the company’s ability to scale effectively, especially when automated through HRMS systems.

Today, platforms like Infowan HRMS bring all your HR tasks into one system—handling payroll, attendance, employee records, and performance management efficiently and accurately. This is why understanding what are the functions of HRM is not just theoretical—it has real, practical business value.

How to Implement Effective HRM in Your Organization

Now that you know what are the functions of HRM, the next step is implementation. Every organization, big or small, can benefit from applying these functions more efficiently.

Here’s how to start:

Develop a strategic HR plan aligned with your business goals.
Assign clear roles and responsibilities within the HR team.
Implement a reliable HRMS platform like Infowan to reduce manual work.
Standardize HR policies and make them accessible to all employees.
Provide continuous training and professional development.
Measure HR outcomes using key performance indicators (KPIs).

The better you implement these practices, the more effective your HRM strategy will be. It all begins with a clear understanding of what are the functions of HRM and how to tailor them to your unique business needs.

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Infowan’s cloud-based HRMS platform helps you automate payroll, manage attendance, streamline leave requests, and improve employee performance—all in one place. Save time, reduce costs, and empower your HR team today.

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Final Thoughts

Understanding what are the functions of HRM is one of the most important steps in creating a successful, sustainable business. From strategy and planning to recruitment, compliance, and employee engagement, each function plays a unique role in supporting your organization's growth.

Whether you're reviewing the managerial functions of HRM or digging into the daily operative duties, this knowledge helps you build an HR framework that works. The basic managerial functions of HRM are not just abstract ideas—they form the foundation for every HR decision you make.

If you want to make HR management easier, faster, and more accurate, adopting a robust HRMS like Infowan can help. It's the future of human resource management—and it's available today.

Frequently Asked Questions (FAQs)

Q1. What are the functions of HRM in a company?

The functions of HRM in a company include workforce planning, recruitment, training, performance management, compensation, and compliance with labor laws.

Q2. What is HRM and its functions in simple terms?

HRM is how a company manages its employees. Its functions include hiring, training, managing pay, resolving issues, and ensuring legal compliance.

Q3. What are the basic managerial functions of HRM?

The basic managerial functions of HRM are planning, organizing, directing, and controlling the workforce to achieve company objectives.

Q4. Why is HRM important in modern organizations?

HRM supports business goals by managing talent, ensuring compliance, and fostering employee engagement—making it vital for long-term success.

Q5. How does HRMS support HRM functions?

HRMS automates key functions of HRM such as attendance tracking, payroll, and performance management, helping reduce errors and improve efficiency.

Q6. What are the common operational functions of HRM?

These include recruiting, onboarding, training, compensation management, and employee relations—core tasks handled by HR departments daily.

Q7. How can small businesses benefit from HRM functions?

By applying HRM principles, small businesses can hire smarter, retain talent, stay compliant, and scale more efficiently with fewer resources.

Q8. What tools can help manage the functions of HRM effectively?

Tools like Infowan HRMS centralize and automate HR tasks, giving businesses a powerful system to handle everything from payroll to analytics.

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