The Importance of Human Resource Management in Organizations


Human resource is an essential department within the organization and is responsible for the well-being of the workers. It focuses on the function of the employees within the organization, ensuring best work practices are adopted at all times. Human resource managers are tasked with planning, coordinating, and directing the administrative functions of a firm. They oversee all actions related to the workforce, including hiring new staff, firing current staff, and interviewing potential employees. Companies all over the world are now paying more attention to the establishment of an excellent human resource management (HRM) department. With proper HRM, employee productivity is maximized, increasing company productivity. Walmart is an example of large-scale human resource management with millions of workers globally. The company’s human resource managers effectively address criticisms and issues within the organization, thus optimizing the business and its workforce. Human resource management plays a critical role in attaining company growth and employee satisfaction; it provides policies for engaging and retaining employees, monitoring individual and company growth, reward strategies, and guidelines for overcoming rising challenges.

The Implications of Human Resource Management

The success of any company heavily depends on the effective integration of human resource management (HRM) practices with organizational strategies. The HR department has five primary duties: talent management, compensation and benefits to all employees, workplace safety, training and development, and compliance (Torrington, Hall, Taylor, and Atkinson, 2020). Human capital is the most valuable resource any firm has (Boon et al., 2017). As a result, there is a need to formulate policies that provide guidelines and workplace structure for the most effective workforce use. HRM policies’ implications mean using human capital appropriately, attaining job satisfaction, and having an impressive bottom line (Wellin, 2007). An effective HRM department helps provide the ability to meet business needs and an excellent organizational structure.

Human resource theories have been formulated, highlighting the policies and procedures to be administered concerning employee performance management. They explain how management practices can influence employee behavior in a wrong or profitable way. In the contingency theory, a leader is a central part resulting in the success of an organization due to the skills they possess (Hewett, Shantz, Mundy, and Alfes, 2017). The theory portrays an effective leader as an individual that can offer solutions to underlying issues. In this case, HR managers can determine the success or failure of an organization based on the strategies they adopt and implement. Managing the employees, who are the business’s most valuable assets, helps meet the company’s goals (Varadaraj and Al Wadi, 2021). Firms adopt strategies to engage their workforce, monitor individuals and company performance, and reward top performers (Varadaraj and Al Wadi, 2021). Walmart has an HR management team at every store, given Walmart’s size and global status. Employees are sourced yearly to meet the demand, while the already employed are retained using unique strategies.

Engaging and Retaining Employees

Walmart’s HRM involves programs, policies, and strategies that help address workforce problems and issues in retail stores. The company operates in 24 countries globally and employs over 3 million people (Ammar, 2017). In America alone, about 1.6 million associates are used, while the global market accounts for about 2.3 million workers, with many more working hourly shifts (Ammar, 2017). Walmart has adopted an employee engagement strategy, resulting in positive outcomes. It has played a critical role in long-term employee retention, organizational success, improved quality of work, and higher workforce performance.

The general systems theory emphasizes the importance of changing unproductive systems within an organization (Hewett, Shantz, Mundy, and Alfes, 2017). It shows the relying nature of different departments. A failure in one affects the performance of the other. In this case, the company’s performance is affected if the HR department has problems. Companies that have better employee engagement have proved to be 17 percent more productive and 21 percent more profitable than the ones that do not engage their workforce (Yuniati et al., 2021). The HR managers in each of the stores adopt five main strategies that better engage employees with the work they perform. They communicate regularly with the employees, invite feedback, define the company’s purpose, and empower and recognize the workers’ efforts.

A motivated workforce is an advantage as it guarantees the organization’s success. Walmart suffers from a relatively high turnover, especially for the hourly sales employees hence the need to adopt retention strategies (Heisler and Bandow, 2018). Its standard methods include recognition, bonuses, training and development, promotions, and academic credit. The top performing employees in each store are given a non-financial award for their superb performance. Prizes are offered based on business performance, mainly for those employees in managerial posts (Wisetsri, 2020). Training is provided to the workers to enhance their job skills, preparing them for promotions (Torrington, Hall, Taylor, and Atkinson, 202. The strategy has played a critical role in employee retention, and the companies are always ready to invest. Walmart promotes its workforce to higher jobs within the company, increasing its pay. The move is used as a strategy aimed at retaining the current workforce. Academic credit is given for work experience at Walmart (Ammar, 2017). It is a long-term retention strategy for all workers pursuing a career to climb the corporate ladder. The plans have effectively enabled the company to retain an adequate number of experienced employees.

Monitoring Individual and Company Performance

Human resource managers adopt several actions to help monitor employee and company performance. They watch employees work at a close range, directing them on where to rectify and making their work more productive. With technological advancement, companies are adopting new ways to monitor performance. There is the introduction of company phones or laptops used for official business communications. Software is used to monitor and has proven to be the most effective strategy (Lockwood, 2018). Walmart has recently adopted the patent technology tool to monitor employee performance (Ammar, 2017). Customer and employee conversations are recorded, thus managing productivity and effectiveness. Walmart sees this strategy as a cross-cutting technique that improves the efficiency of the workforce in the stores. Other ways to track employee performance adopted by various HR managers include frequent check-ins, setting expectations and goals, improving leadership skills, and gaining 360-degree feedback (Torrington, Hall, Taylor, and Atkinson, 2020). The moves are better for small organizations unable to invest in technology.

Companies need to focus on specific metrics aligned with their goals and objectives. The organizations will likely focus on the following metrics: sales, online, financial, accounting, and marketing. Business owners, customers, investors, and employees get informed on how their organization performs based on the results attained from any of the metrics above (Hristov and Appolloni, 2021). Walmart adopts 90-Day Order Defect Rate (ODR), valid tracking rate, and on-time shipment rate metrics to measure its performance (Lockwood, 2018). ODR is measured by calculating the number of purchases and dividing them by the total number of defective orders under the same period. A good performance is determined if the ODR is 2 percent or less. When the other metrics are used, good performance is only attained if the rate is 99 percent; anything less indicates poor fulfillment.

Reward Strategy

Employee appreciation is shown through giving out rewards for good work performance. HR managers use the reward strategy to encourage employee behavior and loyalty through a package of bonuses and benefits (Wellin, 2007). The reward strategies vary between companies though the main aim remains to motivate the workers and increase their productivity. Employees respond well to positive praise and reinforcement. When they are happy and feel appreciated, they will continue producing quality results and work extra hard. Motivated employees significantly impact company growth which is what each business wants to achieve (Wisetsri, 2020). Walmart is adopting two reward strategies, the cash incentive and a Protected paid time off (PTO) program (Yuniati et al., 2021). The PTO program protects the associates ensuring they are supported when unexpected things happen, and they cannot make it to work. Walmart appreciates its workforce as they enable the attainment of the organizational objectives and goals. Incentives offered by the company to its employees are in the form of health and wellness and financial benefits.

The company’s rewarding strategies have proved not to be compelling enough. Walmart has an estimated employee turnover rate of about 70 percent yearly (Ammar, 2017). The plans are good but need to be reviewed and amended to reduce turnover and increase employee retention. The company has invested over 2.7 million dollars in workforce wages, education, and training in recent years (Ammar, 2017). Part-time and full-time employees get 15 percent tuition grants, company-paid life insurance, dental and vision plans, healthcare plans starting at 23 dollars, and business trip insurance (Ammar, 2017). The hourly employees earn up to 170000 dollars annually (Ammar, 2017). The compensation strategy is built on hiring and retaining the current workforce. The compensation strategy is ineffective with the high turnover rate, especially for part-time employees and hourly associates. Walmart continues to invest in improving and developing its total rewards packages annually to prevent


The human resource departments in organizations are constantly faced with challenges that inhibit the employees’ good working performance. Some common challenges experienced by organizations include compliance, management changes, leadership development, workforce training and development, recruitment, employee retention, and compensation (Cooke, Dickmann, and Parry, 2020). Walmart is not an exemption as it faces similar shortcomings. With the high turnover rate, the company is exposed to higher financial loss as human resource expenditure increases. Recruitment, selection, and training require funds that could be saved if the employees get retained. Major issues experienced at Walmart include low employee tardiness and morale due to inadequate compensation and long working hours. The HR problems reduce the organization’s financial performance as the workforce gets demotivated (Boon et al., 2017). Investing in training and reward programs requires funds that some companies cannot source. Adopting new systems and structures leads to decreased morale and productivity during change periods, as some employees take much time to adapt (Boon et al., 2017). Like any other problem, shortcomings can be prevented if appropriate strategies are adopted.

Recommendation for Increasing Employee Performance

HR managers must adopt better schemes to control employee performance and increase productivity. The first requirement is to identify the problems and plan appropriately to overcome them. Walmart faces some human resource issues, the main one being employee retention. The following recommendations can be beneficial in overcoming the problem and maximizing employee performance and productivity. Offering training and development to all employees will result in them being loyal (Boon et al., 2017). Training and development do not have to take a lot of time or money. The subordinate employees can be mentored by their senior managers upon recruitment by the organization. Online training can also be an option allowing everyone to learn at their own pace (Boon et al., 2017). Secondly, the incentive programs and other reward systems must be amended. The company can adopt a profit sharing with the employees, thus being a win-win for both. The third recommendation is to constantly communicate with all employees, which is the key to a productive workforce. Another possible solution is giving each employee feedback; this enables them to know where they are insufficient creating room for improvement.


HR managers are essential in ensuring a company succeeds as they control the most crucial resource for the company: the employees. The strategic contingency and the general systems theories help explain HRM’s role in business fulfillment. An effective HR manager leads to better performance for a company. Walmart adopts HRM strategies to engage and retain its vast employee and associates. Employees are involved through frequent communication with the managers and effort recognition. Keeping them is done through the provision of rewards such as training and bonuses. Companies opt to maintain the current workforce as the cost of getting new ones is expensive. Monitoring the company and workforce performance can be done through technology or feedback. The reward strategies used by Walmart and other organizations to thank their employees for good work performance include training, bonuses, and other gifts such as health benefits. Adopting the strategies has been positive for some companies that have experienced high employee retention. HRM faces several challenges, including low employee retention and poor employee performance, resulting in losses. The shortcomings can be eradicated through the adoption of the recommendations mentioned.

Reference List

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Cooke, F., Dickmann, M. and Parry, E. (2020) ‘Important issues in human resource management: introduction to the 2020 review issue’, The International Journal of Human Resource Management, 31(1), pp. 1-5. doi: 10.1080/09585192.2020.1691353.

Heisler, W. and Bandow, D. (2018) ‘Retaining and engaging older workers: a solution to worker shortages in the U.S.’, Business Horizons, 61(3), pp. 421-430. doi: 10.1016/j.bushor.2018.01.008.

Hewett, R. et al. (2017) ‘Attribution theories in human resource management research: a review and research agenda’, The International Journal of Human Resource Management, 29(1), pp. 87-126. doi: 10.1080/09585192.2017.1380062.

Hristov, I. and Appolloni, A. (2021) ‘Stakeholders’ engagement in the business strategy as a key driver to increase companies’ performance: Evidence from managerial and stakeholders’ practices’, Business Strategy and the Environment, 31(4), pp. 1488-1503. doi: 10.1002/bse.2965.

Lockwood, G. (2018) ‘Workplace monitoring and surveillance: the British context’, Athens Journal of Law, 4(3), pp. 205-228. doi: 10.30958/ajl.4-3-1.

Torrington, D. et al. (2020) Human resource management. 11th edn. Harlow, United Kingdom: Pearson Education Limited.

Varadaraj, D. and Al Wadi, D. (2021) ‘A study on contribution of digital human resource management towards organizational performance’, The International Journal of Management Science and Business Administration, 7(5), pp. 43-51. doi: 10.18775/ijmsba.1849-5664-5419.2014.75.1004.

Wellin, M. (2007) Managing the psychological contract: using the personal deal to increase business performance. 1st edn. London: Routledge.

Wisetsri, W. (2020) ‘The influence of leadership, work motivation and organizational culture on job performance’, International Journal of Psychosocial Rehabilitation, 24(5), pp. 36-50. doi: 10.37200/ijpr/v24i5/pr2020768.

Yuniati, E. et al. (2021) ‘Talent management and organizational performance: the mediating role of employee engagement’, Management Science Letters, 11(9), pp. 41-46. doi: 10.5267/j.msl.2021.5.007.

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