The human factor is central to healthcare, yet its proper management has remained beyond the reach of healthcare organizations. This qualitative study examines strategic human resource management (HRM) issues in a university and a community hospital. The findings indicate that the two hospitals lacked a clear understanding of their strategic intent and objectives; as a result, their human resource (HR) practices lacked coherence and direction. Whereas the community hospital understood the interrelationship between culture and HRM, the university hospital did not. Moreover, the university hospital showed only a modest understanding of competencies needed in managing HR function, which hampered its ability to identify competent HR managers and employees. The community hospital made significant gains in the past few years in managing its culture and people by recruiting a competent HR manager. The relationship between HR practices and clinical outcomes was much less clear in the university hospital than it was in the community hospital.