•Human resources play a crucial role in the development process of modern economics. Arthur Lewis observed “there are great differences in development between countries which seem to have roughly equal resources, so it is necessary to enquire into the difference in human behavior.” It is often felt that, though the exploitation of natural resources, availability of physical and financial resources and international aid play prominent roles in the growth of modern economies, none of these factors is more significant than efficient and committed manpower. It is in fact, said that all development comes from the human mind.
•Human resources management is the central sub-system of an organization and it permeates all type of functional management, like production management, marketing management and financial management.

•A nation with abundance of physical resources will not benefit itself unless human resources make use of them. In fact human resources and for the transformation of traditional economies into the modern and industrial economies. Lack of organization of human resources is largely responsible for the backwardness of the nation. Countries are underdeveloped because their people are underdeveloped. In essence, “the difference in the level of economic development of the countries is largely a reflection of the differences quality of their human resources. The shift from manufacturing to service and the increasing pace of technological change are making human resources the ingredient to the nation’s well-being and growth. And in a service-oriented industry like banks, railways the quality, quantity and utilization of human resources become all the more important.

•Personnel manager can’t perform his job in a vacuum as a number of environmental factors affect the HRM. In fact these influence the organization through human resources. The term environment in human resources management has reference to the totality of all factors which influence both the organization and HRM sub-system. The external environment is comprised of those factors which affect an organization's human resources from outside the organization, Important among them are: economic, social, political, Governmental and legal, technological, manpower in the country, tradition and culture, customers, other organizations and trade unions in other organizations.
•The internal environment also affects the job of a personnel manager.Impact of internal environmental factors is profound as they frequently and closely interact with HRM function in an organization. Thus, the internal environment of an organisation influence heavily the HRM.

•1. Technological Factors: Just as necessity is the mother of invention. Competition and a host of other reasons are responsible for the rapid technological changes and innovations.
•2. Human Resource in the Country : The influence in the country can be studied through the changes in structure of employment. There has been a significant change in the structure of employment with the entry of candidates belonging to scheduled caste, scheduled tribe and backward communities. Thanks to government policy. And more female employees, due to increased career orientation among women to the suitability or women for certain jobs and to women becoming more acclimatized to the working climate and higher level commitment. Organizational workforce is composed of people from different regions.
•Changes in Employee Roles and their Values : It was the opinion of the management that it was the boss and employees had to follow obediently management’s decision. But gradually, this relationship has been replaced by the relationship in which employees and management are partners in the organization.
•Level of Education : Workers have been entering the organizations with increased level of formal education in recent years. Increased formal education led to the changes in attitude of employees. The well educated employees always challenge and question the management’s decisions and want a voice in the company’s affairs their interest. “ As the base of education broadens, management must plan to deal with employees on a higher plane of logical interactions.”
•3. Changing Demands of Employers: Changes always are not on the side of employees. Organisations also undergo changes and consequently their demands on employees will also change. As per the technological revolution.
•4. Legal and Governmental Factors : Governmental had neither time nor interest to spare for the problems pertaining to labour arising in industry till the end of 1940s. But the need for Government interference arose out of the belief that Government is the custodian of Industrial and economic activities. The various reason like trade union movement, failure of many employers to deal fairly with workers. Consequently the Government has imposed the complex web of rules and regulations on the employment policy of the organizations. The important legislation in India affecting HRM are: Factories Act, 1948, Trade Union Act 1926, Payment of Wages Act 1936, Minimum Wages Act 1948, Worksmen’s Compensation Act 1923., Payment of Gratuity Act, 1972. etc.
•5. Employees’ Organizations : Employees’ organizations have mustered strength as a parallel to the growth of industrialism. At present these organizations constitute one of the power blocks in many countries including India.
•6. Customers: Organizations produce or render services for the ultimate consumption/use by the customers. In a sense it can be said that organizations depend upon customers for their survival and growth. Customers revolt against employees if services rendered are less qualitative. There were a number of instances of this kind in commercial banks in India. Customers may develop negative attitude towards the organisation.
7. Social Factors : Social environment consists of class structure, mobility, social roles, social values, nature and development of social institutions, caste structure and occupational structure, socially forward and weaker sections, traditions, religion, culture etc.
8. Economic Factors : A number of economic factors affect human resources management of an organisation by influencing it operations. The significant among them are, economic system, economic policies, national income, per capital income, wage level and structure, distribution of income and wealth etc. these factors mostly influence the wage and salary levels of an organisaion.
9. Political Factors : Political satiability, Political parties and their ideologies and political gimmicks, formations of new political parties, These changes in trade unions complicate the task of HRM.
Considering the complexities and the challenges in the HRM now and in near future management has to develop sophisticated techniques and efficient specialists to manage the personnel on sound lines.

•Strategy of Offering Best Product : The strategy of offering best product requires best people. The HRM strategies in this case include:
-Employing the people with original and creative skills. Providing resources for experimentation and minimization of controls.
-Encouraging employees for risk-taking
-Empowering the people
-Retaining competent and innovative brains.
-Providing training and development facilities for skill-building.
-Integrating performance analysis and development and reward systems to the long-run corporate objectives, mission and vision.

•Corporate compete with the best service package, the vital factor in the package is the human resource. The HRM strategies in this case include :
-Employing people with right mixture of initiative and skill
-Developing multi-talented team-players