Ah. Nem brought up a good point. It will do you no good to smooth if you don't have enough faces. Observe the image below.

Image1 - This might be what your hammer handle looks like now. It has few faces to work with.
Image2 - Selecting these faces...
Image3 - then smoothing them, will give the handle a weird look. Probably not what your looking for.
Image4 - Using the Subdivide Tool or Split Polygonal Tool will give you more faces to work with.
Image5 - Selecting these faces, then smoothing them will give you a better look.
Image6 - If you want the head of the hammer to be smooth, you shouldn't have much trouble when smoothing.
Image7 - Just make sure you select the right faces...
Image8 - and you get this when you smooth.