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Human Resource Is the Most Important Asset of an Organization Essay

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This essay will provide a definition to Human Resource (HR) and determine whether HR is the most important asset in the organization. The first part of the essay will discuss the importance of human resource and how is it is essential to the success of any organization. The second part will identify the impacts on the performance of an organisation.

Human Resource (HR) and Human Resource Management (HRM)

Oswin (2011) states that human resource is a term used to describe the individuals who make up the workforce of an organization. Rouse (2011) defines human resources as the people who work for the organization; human resource management is really employee management with an emphasis on those employees as assets of the business. In summary, all organization are made up of men and women to take up positions to do specific task and directly manage by human resource management.

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No matter what organization there are out there in the business world, neither technology nor machines can out beat the importance of having qualified men and women to do the task. (Dashgarzadeh et al (2012) states that an organization’s human resources are of strategic importance, because knowledge, skills, abilities, behaviours, and interactions of employees have the potential to influence organizational performance. It is true that without technology, the amount of time needed to mass produce their products will take a longer time but what are these machines without the people who operate them.

People Practices

Noe et al (2012) states that HRM practices include analyzing and designing work, determining human resource needs (HR planning), attracting potential employees (recruiting), choosing employees (selection), teaching employees how to perform their jobs and preparing them for the future (training and development), rewarding employees (compensation), evaluating their performance (performance management), and creating a positive work environment (employee relation). From the stated above, we can see that there a lot of money and time spent to recruit the right people and qualify them for the right job. In a study shows by Fleming (2008), it can take up to £8000 to replace a staff member.

Impact to Organisation’s Performance

A huge percentage of an organization’s budgets are spent on human resources – in the form of recruiting, training and development, salaries, benefits and compensation. With the substantial amount of money invested on human resource, the returns must be of a measurable benefit to the organization. (U.S Office of Personnel Management (OPM) 1999: 3). If the organization decides to cut costs, in-house coaching or mentoring would be an ideal step to ensure their development are up to mark instead of reducing staff whom they had spent time and money on. By deploying a non-qualified employee to a certain task is disastrous to any organization.

Selection – Choosing Employees

At this stage, the organization will be conducting interviews to determine the suitability and abilities of the candidate for the job. By employing an experienced and knowledgeable candidate means the organization would be able to spend less resources, like money and operational hours, to train and develop the individual to meet the standards that is required. By doing so, the organization would be able to save or invest on other resources to increase the productivity.


Human resources are the most important assets a modern organization has, because only human beings can make, transfer and exercise knowledge (Write Works, 2006). It is an utmost important that the organization recruit, select, train and develop the right people and ensure that their welfare and benefits are taken care of. I must say that every person working in the organization is the backbone and play a major role in the success or failure of an organization, regardless of how major or minor their job may be.

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