An organization''s human resource management (HRM) function focuses on the people aspect of management. It consists of practices that help the organization deal effectively with its employees during the various phases of the employment cycle. Organization''s success depends on how an organization manages its resources. Human resource is becoming more important because many other sources of competitive successes are less powerful than they once were. As the basis of competitive advantage has changed it is essential now to develop a different frame of reference for considering issues of management and strategy. Competitive advantage is a status achieved by a company when gaining a superior market place position relative to its competition. Organizations can gain competitive advantage over competitors by effectively managing their human resources. HRM practices of an organization can be an important source of competitive advantage. As the management of human resources is less susceptible to imitation, the competitive advantage achieved through HRM practices is likely to be more sustainable than that achieved by other means.