Human resource management (HRM), also called human capital management, refers to how organizations strategically allocate their most valuable resources – their employees – to areas of the company where they will be the most productive. HRM requires more than a strong human resources department: it requires smart, capable team managers working together with the human resource (HR) department to carry out common goals. This cooperation involves careful strategizing, good leadership, and other solid business practices. Companies often maintain their competitive advantage by holding onto resources other businesses lack.

Having the right employees separates highly successful firms from their competitors.
As a discipline, HRM dates back to the early 1900s, but its most strategic components result from transitions that took place in the workforce in the late 1960s. When it passed Title VII of the Civil Rights Act of 1964, the U.S. Congress mandated that all organizations adhere to laws that now govern how they treat and respond to complaints from their employees. At the same time, businesses began to realize the advantage they gained when they integrated women and minorities who were transitioning into the workplace. Increasing diversity created cultures that reinforced and supported their missions and visions.

Everyone has a core belief system that is shaped by our individual circumstances and experiences which guides our perceptions and beliefs. We often gravitate toward the situations we understand and make sense to us. To effectively manage human capital, business professionals often have to step outside of their comfort zone to support innovative practices and make strategic decisions that are in the best interest of the company, rather than support a static culture they may consider to be more “comfortable”.