A lot of us make the mistake of thinking that human resource management is a contributory function and it follows the decisions that are set by top leadership or other business linked functions. Perhaps this might have been the case some years ago. But it is no longer the trend or the general belief. Organizations and the HR community itself, realize the importance of this function and how decision making is integral to the human resource roles in current times. Many hr management courses will cover this thought process too.


  1. It involves all people processes – When we refer to decision making in HR, it means all people processes are involved. The decisions taken within this function or by it, cover the entire employee lifecycle from the time potential talent is identified, to the hiring, performance management, compensation and exit. HR relies on market data as well as internal feedback and insights, to enable faster and better decision making. For example, compensation increases are not linked only to how the company has performed, but also to how the jobs are being paid, size of the jobs and difference in the pay as compared to the external market. These aspects are part of HR’s role.
  2. It impacts all business processes– The decision making impacts all business processes. Unlike what was earlier believed, HR is truly a business partner now. Its decisions have a direct implication for all the businesses that the company operates in. For example, there is a need for new skills that are coming up for an upcoming business project. HR will be responsible for creating the Skills Matrix which in turn will impact the big decision of whether to build it internally or buy it externally. These are key business decisions which are driven by the practitioners in Human Resource Management.
  3. It connects with organizational goals – All HR decisions have a direct and deep-rooted link to organizational goals. Given how teams now function, there is hardly any organization where HR operates in silos. Overall organizational goals such as what kind of business parameters are being assessed, will percolate down to the individuals in the form of performance goals. Also, if the organizational goal is to become a market leader, the culture of achievement orientation will be created through a great recognition policy that the HR will decide to roll out.

These are some major ways in which decision making takes place and manifests itself in human resource management. Companies are now taking such aspects more seriously and laying emphasis on how HR’s decisions are becoming more and more critical to business operations.


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