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Impact Made By Human Resource Management Practices Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 4637 words Published: 1st Jan 2015

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The best human resource practices are always concentrated on knowledge management. In recent years, Knowledge Management has emerged as one of the prime concerns of human resource Management Performance of organizations is the focus of intensive research efforts. How well an organization performs its mission and accomplishes its goals of program service delivery is the measure of all things. Administrative capacity is a major component of this performance. Administrative capacity, which is, a resource-based view of an organization, focuses on factors that are actually within the power of the organization to change. Improving administrative capacity and, especially, improving those aspects of capacity that deal with human capital, offer the most promise for peak performance.

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The importance of HRM has increased these days as the organization's objectives can only be achieved with the co-operation of the people working in the organization. Human Resource Management is the heart and essence of being a HR manager, the nearest analogy to the human body. HRM is not the brain, the controller, nor only just a limb, a member, nor yet the bloodstream - the energizing force. It is the nervous system - the line channel, inherent in the whole body and intimately connected with every movement.

The human resource department should arrange for training not only of new employees but also of old employees to update their knowledge in the use of latest techniques of production. Training is also provided to the existing employees to prepare them for promotion to higher posts. Training and development of personnel is a follow up of selection. It is the duty of management to train each employee properly to develop technical skills for the job for which he has been employed and also to develop him for the higher jobs in the organization which will also lead to achieve organizations long term goals and objectives.


2.1 Selection and organisation effectives

There has been a growing interest in establishing that selection procedure and the human capital attracted by an organisation have an impact on organisation level out come such as profitability and productivity studies have also attempted to so what combinations of human resource intervention, as well as other organizational input have such impact .early approaches that examined the impact of selection decision practices at the organizational level did so in isolation of other human resource (HR) functions (eg:- Terpstra and Rozell 1993) these studies were soon replaced by studies looking at the effect of multiple HR functions (Huseild 1995)and specific combinations of functions, sometimes thought to represent 'high -performance work system'(Becker and huselid)

(I) it is not productive to consider HR functions or human capital in other aspect of the organization or even of the society in which the organization function. Most representative of this position is the work of (Lepak and Snell 2002)who describe configuration of HR activities that are most often associated with particular types employment modes (i.e. Knowledge-based, Job-based, contract work, and alliance or partnership)

(II) Successful organisation or system must have human capital (knowledge, skills, and abilities) the social capital (process, technology, and databases) to be successful. Firm must have developed practice that motivates people. This resource-based view (wright et al.2001 a) and a more theoretical view of firm performance, strategy, and the role of human resources appear to be the direction in which this area of the study is now headed. Finally,(wright et al 2005) show that HR practice are strongly related to future performance assumption that HR practice cause organisation performance rather then the reverse, or that both are caused by some external variable.

(The oxford handbook of HRM Peter Boxall, John Purcell, Patrick Wright; page303)

2.2 Tanning and organisation effectives

The training is seen as a key instrument in the implementation of HRM policies and practices, particularly those involving culture change and the necessity of introducing new working practice. Of equal importance in the training process is the recognition of individual needs. These may, however, clash with organisation needs, and it is crucial to harmonise these demands, to the mutual benefit of both parties. The first most vital step in a Human resource development plan is to analyse the training needs of the organisation in relation to its strategy. And equal these with the needs of the individuals within it. Proposals were then made as to how this might be effected, including the use of various forms of analysis job requirements and personal performance. A choice of methods was then outlined, which fell into the basic categories of on- the -job and off-the-job training, followed by the equally important consideration of who was to deliver the training. . (Ian Beardwell Holden HRM contemporary approach page: 326 chapters 8)

Example 3

British companies seemed to be taking training more seriously (saggers 1994).the price water house cranfield project surveys indicate that training and staff development is the leading issue for most personal department across Europe, including the uk (Brewster and Hegewisch, 1993).

This growing awareness of the importance of training over the past decade was also supported by reports that employers were spending more in aggregate terms on training activities (Training Agency, 1989) however, the measurement of training expenditure is still controversial, and those figures that do exist are open to question, interpretation and political manipulation (Finegoal, 1991; Ryan, 1991)

Theories of training are based on theories of learning since training effectiveness is measured by the extent to which the individuals concerned learn what they need to know, can do what they need to do ,and adopt the behaviours intended; i.e. the acquisition of knowledge, skills, and attitudes. Cognitive learning, related to the understanding and use of new concepts (knowledge), may be contrasted with behavioural learning related to the physical ability to act (skill). welford (1968:12-13)who defined skill as combination of factors resulting in 'competent, expert, rapid and accurate performance', regarded this is equally applicable to manual operations and mental activities.welford's (1968,1976)work demonstrates how actions are selected and coordinated at different levels of skilled performance and the conditions of practice and training that facilities the acquisition and the involving

(1) A cognitive phase of understanding the nature of the task and how it should be


(2) An associative phase involving in puts linked more directly to appropriate actions

And reduced interference from outside demands: and finally

(3) An autonomous phase when actions are 'automatic' requiring no conscious


(The oxford handbook of HRM Peter Boxall, John Purcell, Patrick Wright; page329)

Organization functioning consists of 3 broad identified events - inputs - transformational process - outputs. How are inputs converted to outputs depends on the functioning of the organization.

The core finding of organization goal-setting is that under certain conditions, specific, difficult goals lead to higher levels of performance than easy goals or vague goals (Locke and Latham, 1990). One of the most frequently cited conditions necessary for the goal-performance relationship is that employee must possess the requisite commitment to achieving the organizations goal. In short, no motivational effects will occur from goal-setting, if there is no commitment to the goal.

Example 1

Human resource management practices of Bangladesh Orion infusion limited (Oil). oil is a highly professionally managed organizations .a team of skilled professionals has been dedicating their efforts in order to achieve the corporate Objectives. (Annual report Orion infusion lid financial year 2005-2006)

'Goal commitment represents an employee's attachment to or determination to reach a goal (Locke, Latham, and Erez, 1988), embodying both the strength of one's intention to zzreach a goal and the unwillingness to abandon or lower a goal over time. Two reviews (Hollenbeck and Klein, 1987; Locke, Latham, and Erez, 1989) highlight the central importance of goal commitment in the goal-setting process. (Locke and Latham 1990) point out that organization goal commitment's impact on the goal-setting process is reduced when goal conflict is present. However, the few research studies dealing with goal conflict have evidenced consistent results. In addition only one study (Locke, Smith, Erez, Chah, and Schaffer, 1994) directly measured organizations goal conflict among employees.'

Example 2

IBM starts by understanding key workforce performance challenges identifying the Leading human resources practices used to overcome these challenges and helping Companies improve their own human capital management (IBM.com/bcs/Human capital)


Yes, HRM practices such as staff selectivity and training can have a positive impact on firm's performance and use of effective HRM policies will lead to organizations goals and objectives.

"The main objective of staff selection is to attract people with multidimensional skills and experience that suits the present and future org strategies with a new prospective to lead the company where it will infuse fresh blood at all levels and to develop an org culture that attracts competent people to the company and to search or head hunt people whose skills fit the companies values"

Erik Vettor, "A process by which an organisation ensures hat it has the right number and kinds of people at the right place, at the right time, capable of effectively and efficiently completing those tasks that will aid the organization in achieving its overall objectives"

(Employee Resourcing Stephen Taylor 1998)

Example 4

Intel Technologies India conveys that"at Intel, a manager's main job is to take care of his employee's career development"

Selection process is the system of functions and devices adopted to ascertain whether the candidate's specifications are matching with the job requirement. It is the process of identifying right employee at the right time. Selection involves three distinct but not mutually exclusive stages - recruitment, selection and placement

Hiring process can be successful if someone should have the authority to hire with high standards of the personnel should be established against which a candidate can be compared e.g... Job description or job specifications also sufficient number of applicants from who required number of employees can be selected.

Example 5

Infosys company technologies - it is role based organisation, i.e. every position is defined in terms of skills - attitude - based competencies.

Combining human resource practices with a focus on the achievement of organizational goals and objectives can have a substantial effect on the ultimate success of the organization. Resource-based theory posits that competitive advantage and the implementation of plans is highly dependent upon an organization's basic inputs, including its human capital (Wernerfelt, 1984; Barney, 1991; Boxall, 1996). Research on strategic human resource management (SHRM) offers empirical support that this relationship enhances productivity (Fitz-Enz, 1994; Delery and Doty, 1996; Ulrich, 1997).

Example 6

Microsoft company how the businesses that are run with common goods and vision make money for their investors and employees. Microsoft has done for its employees. And how well the HRM have been able to align the work culture to the business strategy to achieve goals and objective.

"Impact of human resource management practices on nursing home performance" by

(Kent V. Rondeau and Terry H. Wager) reports on empirical findings from research that examines the relationship between HRM practices, workplace climate and perceptions of organizational performance, in a large sample of Canadian nursing homes.

In the healthcare industry, as in most other service industries, the interaction between patients and healthcare service providers (professionals and other employees) is an integral part of the service process (Conway & Willcocks 1997, Benbassat & Taragin 1998). HCOs should be encouraged to take the role of the patient into consideration in the healthcare service process, and in order to achieve high quality service (White 1999) respond to patients' needs and expectations. Another issue that is likely to challenge HCO management is the central role played by employees in SQ achievement. White (1995) reported cooperation between employees and managers as the key to providing high quality care, because it can compensate for the constraints imposed by cost containment and managed care. In pursuit of this objective, management might seek to implement progressive HRM practices that encourage service oriented behaviour and show concern for employees' organisational and personal needs.

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Furthermore, knowing how employees perceive HRM practices may shed light on how customers service process (Schneider & Bowen 1985). Indeed, a study (Mallak, Lyth, Olson, Ulshafer & Sardone 2003) that was undertaken in two hospitals (a main hospital and a satellite hospital in the USA) showed a positive and significant correlation between employee job satisfaction and patient satisfaction. Service oriented logic is demonstrated by alignment between the service concept and employee perception. In contemporary progressive institutions this can be done by shaping practices in a way that emphasises service orientation and creates a climate for service (Schneider & Chung 1996) as well as adopting HRM practices that employees perceive as positive and considerate (Schneider & Bowen 1993, Gilson, Palmer & Schneider 2005). It is likely that such institutions will be reflected in employees' attitudes and behaviour, which will be demonstrated in the way employees serve their customers. This potential added value of HRM practices lies in their ability to create a foundation for a work environment that encourages SQ in service organisations, given that quality and productivity in such organisations depend, to a great extent, on employee behaviour (Zerbe, Dobni & Harel 1998).

Example 7

Across 590 firms in the us progressive HRM practice, including selectivity in Staffing, training and incentive compensation are positively related to perceptual measures of organization performance, these effects were similar in profit and none profit organizations.

Some studies that were conducted in service organisations corroborated the proposition of a positive relationship between employees' perceptions of HRM practices and customers' rating of organisational effectiveness (Schneider & Bowen 1993, Schneider & Chung 1996). The HRM practices that were chosen to be examined in this study are: leadership and supervision; training; compensation; promotion and career development; and feedback and recognition. These practices were chosen for three main reasons. First, these HRM practices are consistent with the universalistic view (e.g., Pfeffer 1994). Because they are approach oriented, some High Performance Work Practices (HPWP) enhances organisational performance and is appropriate for all firms (Tzafrir 2006). And according to the universalistic perspective, organisations from different sectors, across industries, and through different time periods are likely to benefit by using these HPWP (Delery & Doty 1996). Second, these practices could be valuable in achieving SQ for two reasons: (1) by providing the required knowledge for high quality service provision, and (2) through enhancing employee motivation to provide customers with high quality service. Last, the chosen HRM practices are related to the dimension of employees' trust in their managers (Mayer, Davis & Schoorman 1995).

Employees in organisations that are characterised by high levels of service view the organisational leadership as putting a strong emphasis on meeting customer needs and delivering excellence in service through clearly stated goals and objectives (Pugh, et al. 2002). Leadership and supervision may contribute to SQ in two ways. Initially, from the knowledge based aspect, managers, by being responsive to employees' questions and concerns and providing them with the information necessary to promote high quality service, can enhance the quality of service given by employees (Schneider & Bowen 1985, Boselie & van der Wiele 2002). And secondly, from the motivational based aspect, the way managers treat staff affects employees' feelings of being valued, thereby affecting their morale and motivation to act according to the managers' expectations.

Training is also a recognised essential component of high performance work systems. From the knowledge perspective, such service workers should be trained to identify and resolve problems, to promote changes in work methods and to take responsibility for quality. Adequate training enables the generation of a work force that is multi skilled, adaptable to rapid changes and has wide conceptual knowledge of the production system (Pfeffer 1998). From the motivational perspective, it is reasonable that employees would feel valued by the organisation that chooses to invest in their professional development. Positive perceptions of training are associated with employees' perceptions of the organisation as having a strong service orientation (Schneider & Bowen 1993).

Example 8

NASSCOM (National Association of Software and Services Companies), the Indian IT corporate training market is expected to yield approximately £80 million within the year of 2010 (Naukhri, 2007). Nevertheless, Singh, (2004), argues that many organisations in India still view Training and Development as only a need-based activity and treat as an expensive activity to frequently invest in. Hence, views about Training and Development activities are thus divided in Indian organisations which indicate both differences and similarity of perceptions of Indian and UK firms towards such activities.

Compensation is another important facet of organisational success. First, it is a concern of equity and fairness. Employees whom expend more efforts and creativity in doing their job and see that their results benefit the employer will expect remuneration in exchange for their efforts. If employees do not receive any appreciable return, it is reasonable to expect that they will stop trying. Second, contingent compensation serves as a motivational tool, because employees know that they will share in the results of their work (Pfeffer 1998). Therefore, a compensation system based on excellence will result in increased employee performance (Boselie & van der Wiele 2002). Internal equity of compensation was found to be related to employees' perceptions of the organisation as having a strong service orientation (Schneider & Bowen 1993).

"More recent empirical study on HRM practices (Lee & Lee, 2007) 'business performance, namely training and development, teamwork, compensation/incentives, HR planning, performance appraisal, and employee security help improve firms' business performance including employee's productivity, product quality and firm's flexibility. This study reveals that three items of HRM practices influence business performance: training and development, compensation/incentives, and HR planning. However, some other researches also show that certain HRM practices have significant relationship with operational (employee's productivity and firm's flexibility) and quality performance outcomes (Chang and Chen, 2002; Ahmad and Schroeder, 2003; Kuo, 2004 Sang, 2005). These research evidence shows that effective HRM practices can have positive impact on business performance".

Using data from 197 Taiwanese high-tech firms Chang and Chen (2002) conducted a comprehensive study to evaluate the links between HRM practices and firm performance. This study reveals that HRM practices including training and development, teamwork, benefits, human resource planning, and performance appraisal have significant effect on employee productivity. This study also found benefits and human resource planning have negative relationship with Employee turnover.

To generalize the efficacy of seven HRM practices by Pfeffer (1998) Ahmad and Schroeder's (2003) found the seven HRM practices such as employment security, selective hiring, use of teams and decentralization, Compensation/incentive contingent on performance; extensive training, status difference and sharing information have significant relationship with operational performance. Kuo (2004) adopted 11 HRM practices found that employment Security, team working and incentive compensation are regarded as three of the main practices for impacting hospital performance.

Example 9

Malaysian private business organization really not practicing HRM into their business (Chew, 2005). It is unclear on how to change the mindset of the Malaysian business organization practicing HRM into their businesses. In order to understand what influence business performance as well we must first find out the HRM practices that are (International Journal of Business and Management June, 2009)

Influencing business performance. Therefore, it is replicated with references to the HRM practices related research in developed countries. In this study six factors have identified and they are training and development, teamwork, compensation/incentives, HR planning, performance appraisal, and employee security.

HRM as a means of achieving management objectives - at least in enterprises which have recognized, or have been compelled to recognize, the utilization of the human resource in achieving competitive edge - becomes clear from an examination of four important goals of effective HRM. HRM is closely linked to motivation, leadership and work behaviour. An enterprise's policies and practices in these areas have an impact on whether HRM contributes to achieving management goals.

The second is the goal of commitment, which involves identification of the type of

Commitment sought e.g. attitudinal, behavioural. Commitment could be to the organization, to the job, to career advancement. Commitment could be seen as acceptance of enterprise values and goals, and could be reflected in behaviour which seeks to further these goals. Thus: "The theoretical proposition is therefore that organizational commitment, Combined with job related behavioural commitment will result in high employee Satisfaction, high performance.

The third is the goal of flexibility and adaptability, which in essence means the ability to manage change and innovation and to respond rapidly to market demands and changes. Employees at all levels display high organizational commitment, high trust and high levels of intrinsic motivation." Measures to achieve flexibility would include training, work organization, multi-skilling and removal of narrow job classifications.

The fourth goal of HRM is the goal of quality. This assumes the existence of policies and practices to recruit develop and retain skilled and adaptable staff, and the formulation of agreed performance goals and performance measures. To these goals could be added two broader goals - building a unified organizational culture and achieving competitive advantage through the productive use of human resources.

Example 10

Performance measurement systems help underperforming companies improve performance. The utility company Arizona Public Service used a performance measurement system to rebound from dismal financial results. 

Example 11

HRM of organisations turns around of Selfridges

Selfridges's story is one when human resource management has played a vital rule

Delivering high performance enabling the company to emerge in the late 1990s as

An expanding and very successful up market retail department store.

(Sue Hutchinson by tom Redman, Adrian Wilkinson)

Example 12

North Carolina Department of Health and Human Services to assess the effectiveness of the support provided by the state of North Carolina (NC) to county departments. Since prior research tended to focus on high performance, benchmark organizations, and private sector businesses (the 1996 Delery and Dory survey replicated here was administered to bankers), this study tests for the presence of strategic human resource practices in an ordinary, public organization setting.

Example 13

This study comprehensively evaluated the links between human resource management (HRM) practices and firm performance of Taiwan's high-tech firms. Using data from Hsinchu science-based industrial park, the study found that HRM practices such as training & development, teamwork, benefits, human resource planning and performance appraisal have significant effect on employee productivity. In addition, benefits and human resource planning are negatively related to employee turnover this study also shows that competitive strategies, such as cost strategy and differentiation strategy, have revealed moderating effects on the relationship between HRM practices and firm performance.(Ian Beardwell Holden HRM contemporary approach )


Management scholars and practitioners alike have become increasingly interested in learning more about the ability of certain 'progressive' or 'high-performance' human resource management (HRM) practices to enhance organizational effectiveness. There is growing evidence to suggest that the contribution of various HRM practices to impact firm performance may be synergistic in effect yet contingent on a number of contextual factors, including workplace climate. A contingency theory perspective suggests that in order to be effective, HMR policies and practices must be consistent with other aspects of the organization, including its environment to achieve its best performance.

For motivation and incentives to work, they first must be tied to a goal. An organization must employ needs assessment and human resource development strategies in pursuit of its vision or mission. Needs assessment (of where an organization wants to go) and human resources development (of those who are to get it there) focus on the specific organizational and individual needs whose satisfaction will lead to enhanced productivity? The vision and path for fulfilling these tasks are derived from strategic planning and put into practical perspective through the use of macro-tools such as Total Quality Management (at the group-level) and management by objectives at the individual-level which will lead to achieving organization goals.

Based on the above analysis would like to conclude with confirming that an effective HRM practice which includes a proper training, staffing can improve the organizations work force quality to take the organization to the next level which will make the organization achieve its goals.


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