For many years among the issues critical for survival of any business were considered its financial health, company competitiveness and positioning, product and market development, minimizing costs and improving customer relations. Nowadays more companies recognize that managing people within the organization is no less important than creating a competitive product or launching a successful promotional campaign. Therefore, Human Resource Management, which concerns the management of personnel, is more often recognized as a fundamental element in any organization. It has become a common notion that an organization's greatest assets are its people; therefore only effective management of its personnel allows organizations to achieve their goals and objectives. .
Once known as Personnel Administration, the discipline of Human Resource Management is continually evolving and expanding. The change in title reflects the way the discipline has moved from being largely administrative in nature to being a strategic and dynamic management function that is entitled to respond to changes in the business environment. The strategic aspect of Human Resource Management has outgrown the boundaries of a departmental concern, and nowadays the main challenge Human Resource Management faces is aligning its planning and operations activities with the general goals and objectives of the company as whole. .
Very often traditional company structure prevents HRM department from actively participating in strategic decision-making. Matters relating to the labor force may be lower down on corporate agenda rather than being front running items - unless they are cost cutting issues. Yet managers may endeavor to define HRM strategies particularly where there is a belief that investment in the quality and enthusiasm of the work force will add to competitiveness, quality and overall business performance.