Human Resource Management: The Importance For Business

In the article “Human resource management systems, employee well‐being, and firm performance from the mutual gains and critical perspectives,” the authors explore the influence of different HRM systems on employees and companies. They tested two main theories connecting HRM and performance to understand which party benefits from HRM practices more – business or the workforce. The authors reconsidered a linear relationship between HRM and such indicators as employees’ well-being and business development (Ho & Kuvaas, 2020). They suggested a nonlinear relationship between HR methods and some outcomes. It means that up to a certain point, the introduction of HR systems can give an increase in performance but then lead to such a rise in costs that will block the advantages.

After studying 1,347 firms and 14,384 employees, the researchers concluded that the impact of HRM systems is curvilinear for workers and linear for businesses. The well-being and productivity of employees grow at low and medium levels of HR practices implementation but fall when HR systems are used excessively. Some well-being indicators (job satisfaction, management relations, and anxiety) fall more dramatically than others (Ho & Kuvaas, 2020). However, the firm performance is not that sensitive to HRM execution and always has a positive trend.

Moreover, the authors of the article researched the correlation of different HRM bundles with each other, their synergy, and their impact on employees and business. The researchers analyzed skill, opportunity, and motivation HRM bundles in conjunction and separately and did not find a synergy effect between them. They concluded that isolated usage has a more significant positive impact than the joint application of bundles simultaneously (Ho & Kuvaas, 2020). This study showed why sometimes adverse effects of HRM are observed by scientists and managers implementing them. Not all possible bundle variations were studied, but the results are sufficient to suggest that HRM bundles should be combined carefully.

Article Response

From the business world perspective in general, the importance of human resource management (HRM) is evident to both employees and businesses. Consistent, daily HRM helps companies grow and achieve goals and keep employees satisfied and motivated. Hiring a competent workforce and managing HR gives a company an advantage and is directly linked to market success. However, it is necessary to use HRM systems correctly and effectively because an incompetent or excessive usage can backfire and hinder business development.

The business world and HR managers should apply such research data to correct their vision and usage of HR practices. Managers should not focus on using more systems but should learn to juggle them skillfully to maintain performance without tiring and irritating workers. The “more is better” approach was proven to be inefficient and even damaging to employees’ well-being and potential (Ho & Kuvaas, 2020). Practicing the old HRM paradigm can cause unpredictable harm to the company and slow down its development.

Taking care of businesses and workforce from the HRM perspective means enabling and developing new managing strategies and staffing models. Nowadays, people are highly concentrated on their well-being and job satisfaction. There is a low chance that workers will be effective and inspired just by the salary, they need to feel involved and happy at their job. Otherwise, the most competent and creative staff will choose to leave a company in which they do not feel motivated and growing. Since a competent, high-skilled workforce has become the main resource of modern business, HRM work is of strategic importance in the development of any firm.

Mindful usage of HRM practices is helpful both for firms and employees, but the workforce is much more sensitive to applying the systems. Therefore, the most attention must be paid to workers’ reactions towards practices implementation. Creating and spreading the methods for measuring worker well-being is a task of particular importance. Those who can find a balance in the usage of HRM systems will achieve the best labor performance and the fastest pace of company development.

The benefits of HRM systems implementation for businesses are out of the discussion because any amount of the professional intervention brings positive outcomes. To improve the situation with the workforce, managers can use the approach proposed by the authors of the article – changing different types of HRM bundles from time to time to achieve the best effect. Understandably, people can get used to some practices or become overstimulated by them. Finding the right balance is crucial while working with employees’ motivation and anxiety levels. New data suggests that sometimes the best decision for workers is lowering levels of intervention and observation.

In addition, knowing how management investments affect the employees’ well-being can allow managers to be more productive and control resources more economically. It can lead to the understanding that there is no need to over-allocate time and resources and apply all possible HRM practices to reach the goal. Appreciating the nonlinear relationship between HRM systems and their outcomes can allow HR managers to shift their attention to producing better methods rather than using more of the old ones.

Overall, HRM systems play a significant part in business development and success and influence workers’ professional development and well-being. It has proven to be beneficial for business and can improve the working environment for employees. The opinion about the lack of benefits of HRM practices for the workforce is probably due to the little-studied nonlinear dependence of their application. Most companies are highly interested in their workers because they view human resources as long-term investments. For that reason, research, development, and improvement of HRM will make it possible to better understand in what proportion and volume different practices should be applied and how they should be combined.


Ho, H., & Kuvaas, B. (2020). Human resource management systems, employee well‐being, and firm performance from the mutual gains and critical perspectives: The well‐being paradox. Human Resource Management, 59(3), 235-253.