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Human Resource Management

Human resource management is a central component of corporate management and includes all tasks and processes involved with the recruitment, development, and retention of employees. The goal of human resource management is to find the right employees for the company, to use them optimally, and to promote their performance and satisfaction. The various functions and tools of human resource management ensure effective personnel work and contribute to the achievement of company goals.

Definition and Importance of Human Resource Management

Human resource management, also known as Human Resource Management, is a central element of business administration theory and practice. It encompasses all activities that are directed towards the personnel of a company and aims at optimally integrating the employees into the business processes, promoting their efficiency, and increasing their satisfaction. Thus, human resource management significantly contributes to the achievement of company goals and influences the success of the entire company.

Functions and Tasks of Human Resource Management

Human resource management is often divided into four main functions:

  1. Recruitment
  3. Employee Development
  5. Employee Retention
  7. Personnel Administration

Recruitment includes all measures that serve to find, attract, and hire qualified employees for the company. This includes, for example, creating job advertisements, selecting suitable candidates, and conducting job interviews.

Employee Development aims to continuously promote and develop the competencies and skills of the employees. This includes planning and implementing training measures, introducing talent management programs, and supporting professional career planning.

Employee Retention aims to increase employee satisfaction and loyalty and to bind them to the company in the long term. This includes measures such as fair compensation, flexible working time models, company pension schemes, or creating a positive working climate.

Personnel Administration deals with administrative tasks in the HR area, such as creating employment contracts, payroll accounting, or organizing personnel files.

Tools and Methods of Human Resource Management

To effectively handle the diverse tasks of human resource management, various tools and methods are available:

  • Human Resource Planning: Human resource planning is used to determine future personnel needs and the necessary qualifications. It considers both the quantitative and qualitative dimensions and includes needs, inventory, deployment, and development planning.
  • Personnel Selection: Personnel selection involves various procedures and techniques to identify and select suitable candidates for an open position. This includes job interviews, assessment centers, psychological tests, or reference checks.
  • Performance Appraisal: Performance appraisal systematically captures and evaluates employees' performance, potential, and behavior. This serves as a basis for HR decisions, such as promotions, salary increases, or further training.
  • Compensation: Compensation includes determining salary structures, designing incentive systems, and conducting salary negotiations. Aspects such as performance fairness, motivation, and market fairness are considered.
  • Labor Law and Occupational Safety: Human resource management also has to observe and implement legal regulations on labor law and occupational safety to ensure compliance with the rules and the safety of the employees.

Human Resource Management in Digital Transformation

Digitization and the associated changes in the world of work also present new challenges for human resource management. On the one hand, the introduction of new technologies and work processes requires an adjustment of employee qualifications and corresponding further training. On the other hand, digitization offers new possibilities for shaping human resource work, such as the use of e-recruiting platforms, digital personnel files, or the introduction of collaboration tools.


Human resource management is a central component of corporate management and significantly contributes to the success of the company. Through targeted personnel planning, recruitment, development, and retention, the performance and satisfaction of employees can be promoted, and the achievement of company goals can be supported. Both the classic tools and methods of human resource management and the new possibilities of digitization play an important role.