HR system-is a central sub-system

Human resources system in an organization is not only unique subsystem but a principal and central sub-system and it operates upon and controls all other sub-systems (as shown below ) Thus, in the words of Wendell L. French, “ Personnel management is a major pervasive sub-system of all organizations�

Human Resources as Central Sub-system in an Organization

Human Resource Sub-systems

Financial Subsystems

Technology Subsystems

Material Subsystems

Marketing Subsystems

Whatever in the environment affects the organization like economies, social, cultural, legal, political, historic, competitors, consumers etc., as whole also affects the personnel system. The resources system receives inputs from the organization, like objectives and the individual and organizational performance that may be viewed as individual and organized output. Both the personnel system and the entire organizations operate under the same cultural, economic, social, legal, political and other constraints. Hence, greater the effectiveness and productivity of personnel, the more will be the effective functioning of an organization. Peter F. Drucker has rightly observed the significance of personnel as; managers are fond of repeating the truism that the only real difference between one organization and the other is the performance of people. In essence the survival, development and performance of an organization—although not solely but heavily— depend on the quality of personnel.