WordPress is quite smart and does it’s best to resize images on the fly, but if the image has very different dimensions to the space, WordPress will either severely crop, stretch or squash the image to make it fit the space. It is after all, only a computer program. 😉

For best effects, you should use an image editing software or online tool to pre-size your images to the correct size (or close to it).

I use Photoshop. But there are some light weight free alternatives that will do the job nicely:

Canva

Canva Photo Editor (free web app, runs instantly, nothing to install)
Tutorial to Resize and Crop using Canva

Pixlr

Pixlr Photo Editor (free web app, runs instantly, nothing to install)
Tutorial to Resize and Crop using Pixlr

Gimp

Gimp Image Editor (free software, download & install required)
Tutorials to Resize and Crop using Gimp

The built in WordPress image editor

WordPress image editor in the Codex
Tutorial to Resize and Crop using the built in WordPress image editor

For bonus points…

Another useful addition is the Resize Image After Upload plugin by ShortPixel. This plugin runs silently in the background. It allows you to set a maximum width and height for images so if you (or another editor on your WordPress site) try to upload a massively large image it will resize it to the maximum dimensions set in the plugin. Very helpful because in this day and age cameras have gone stupidly overboard with high megapixel cameras on every device so chances are, your snaps are all ten times larger than they need to be for web.