This paper describes how thw HRM function can positively influence the satisfaction of both its internal customers, such as, line employees, and external customers. Evidence is cited for how satisfaction levels in these internal and external markets often are correlated in services organization. The management practices apparently associated with this correlation are described, concentrating on HRM's role in creating satisfied employees who are motivated and able services providers. The importance of customizing HRM practices to fit a specific market segment is emphasized.