The functions of human resource management (HRM) are usually grouped into two types:
- Managerial functions: planning, organising, directing and controlling.
- Operative functions: procurement, development, compensation, integration, maintenance and separation.
In practice, these become the everyday work of an HR team: hiring, onboarding, training, appraisal, payroll, engagement, compliance, safety, grievances and exits. This guide explains each function with Indian examples and the 2026 legal position, and links to the tools that put each one into practice.
Classification of HRM functions
- Planning – deciding people needs and policies
- Organising – structure, roles, reporting lines
- Directing – guiding and motivating people
- Controlling – measuring results, correcting gaps
- Procurement – planning, hiring, onboarding
- Development – training, careers, appraisal
- Compensation – pay, benefits, incentives
- Integration – engagement, grievances, relations
- Maintenance – health, safety, welfare, compliance
- Separation – exits, retirement, settlement
This two-way classification, popularised by Edwin Flippo, is the one used in most Indian commerce and management syllabuses. Some textbooks add a third group: advisory functions, where HR advises top management and line managers on people matters.
Managerial functions of HRM
- Planning: deciding in advance how many people are needed, with what skills, and the HR policies and budgets to get them. See workforce planning.
- Organising: designing the structure: roles, reporting lines, departments and the HR team itself.
- Directing: guiding, motivating and communicating with people so plans are carried out.
- Controlling: comparing results with plans, for example attrition against target or the hiring plan against actual hires, and correcting gaps.
Operative functions of HRM
1. Procurement: HR planning, recruitment, selection and onboarding
Getting the right people into the right roles:
- estimating staff requirements;
- writing job descriptions;
- sourcing candidates through job portals, referrals and campus hiring;
- running interviews and tests;
- issuing offer and appointment letters;
- onboarding new joiners.
Under the OSH Code, every employee must now receive an appointment letter.
Related tools:
2. Development: training, career growth and performance appraisal
Building employees' skills and careers:
- induction training;
- technical and soft-skills training;
- leadership development;
- career and succession planning;
- performance management, through goal setting, regular feedback and appraisal.
3. Compensation: pay, benefits and payroll
Designing fair, competitive and legally compliant pay:
- salary structure;
- increments;
- bonus and incentives;
- benefits;
- monthly payroll, with deductions for PF, ESI, professional tax and TDS.
Since 21 November 2025, the Code on Wages' 50% rule affects how PF, gratuity and bonus are calculated, and the PF wage ceiling is ₹25,000 a month from 17 September 2026.
Related tools:
4. Integration: engagement, employee relations and grievances
Aligning employees' interests with the organisation's, through:
- engagement and recognition;
- internal communication;
- a fair grievance procedure;
- good relations with unions where they exist.
Under the Industrial Relations Code, establishments with 20 or more workers must have a Grievance Redressal Committee.
5. Maintenance: health, safety, welfare and compliance
Keeping employees safe, healthy and protected by law:
- workplace safety;
- welfare facilities, such as canteens and crèches where applicable;
- PF and ESI coverage;
- gratuity;
- maternity benefit;
- a POSH Internal Committee;
- statutory registers and returns.
Most of this is now governed by the four Labour Codes. See the new Labour Codes guide.
6. Separation: exits, retirement and settlement
Managing resignations, retirements, retrenchment and terminations fairly and lawfully:
- exit interviews;
- knowledge handover;
- full and final settlement within the legal time limit;
- relieving and experience letters.
Related tools:
Functions of HRM across the employee lifecycle
Which law governs which HR function (India, 2026)
| HR function | Main law from 21 November 2025 | Examples of what it covers |
|---|---|---|
| Compensation and payroll | Code on Wages, 2019 | Minimum wages, wage definition and the 50% rule, payment timelines, bonus, equal pay |
| Benefits and social security | Code on Social Security, 2020 | PF, ESI, gratuity, maternity benefit, gig workers |
| Employee relations and separation | Industrial Relations Code, 2020 | Standing orders, grievances, layoffs, retrenchment, strikes |
| Working conditions and safety | OSH and Working Conditions Code, 2020 | Working hours, leave, safety, welfare, contract labour, appointment letters |
| Prevention of harassment | POSH Act, 2013 | Internal Committee, complaints, awareness |
| Tax on salary | Income-tax Act, 2025 | TDS on salary, salary certificate (Form 130) |
Earlier laws such as the Payment of Wages Act, the ESI Act and the Maternity Benefit Act are now part of these Codes.
Strategic and emerging HR functions
- HR business partnering: linking people decisions to business goals. See HRBP roles and responsibilities.
- HR analytics: using data on attrition, hiring and engagement to make decisions. See the HR dashboard Excel template.
- HR technology: HRMS, applicant tracking and payroll automation. See how to choose HRMS software.
- Diversity, equity and inclusion, plus hybrid and remote work policies.
Example: HR functions in a 200-person company
- Planning: the business plans to add a new client team, so HR forecasts 30 hires after expected attrition.
- Procurement: HR writes job descriptions, posts jobs, interviews candidates, issues offers and appointment letters, and onboards the new joiners.
- Development: new joiners complete induction and role training. Quarterly reviews track goals.
- Compensation: salary structures are checked against the 50% rule, and payroll deducts PF, ESI, professional tax and TDS.
- Integration and maintenance: a grievance committee and a POSH committee are in place, and safety and welfare requirements are met.
- Separation: leavers get an exit interview and their full and final settlement within the legal time limit.
- Controlling: HR reports monthly attrition, hiring against plan and payroll cost to management.
Frequently asked questions
What are the functions of human resource management?
They are classified into managerial functions (planning, organising, directing, controlling) and operative functions (procurement, development, compensation, integration, maintenance and separation). Some authors add advisory functions.
What are the managerial functions of HRM?
Planning, organising, directing and controlling the organisation's people and HR activities.
What are the operative functions of HRM?
Procurement (hiring), development (training and appraisal), compensation (pay and benefits), integration (engagement and relations), maintenance (health, safety, welfare and compliance) and separation (exits).
Who classified HRM functions into managerial and operative?
The classification is widely attributed to Edwin B. Flippo and is used in most Indian commerce and management courses.
What is the most important function of HRM?
There is no single answer. Procurement and development decide the quality of people, compensation and compliance carry the most legal risk, and integration drives retention. In practice, they depend on one another.
Which laws govern HR functions in India now?
Mainly the four Labour Codes, in force since 21 November 2025, along with the POSH Act and the Income-tax Act, 2025 for salary tax.
Updated October 2026, reflecting the Labour Codes in force from 21 November 2025.