Improving Performance By Linking Hrm With Goals Commerce Essay

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Do you think "The linking of HRM with strategic goal and objective by any organisation will help to improve business performance and develop organisation cultures that foster innovation and flexibility" Discuss & debate what factor should management consider in your opinion? Substantiate with many examples.

As per my point of view the linking of HRM with goals & objectives of any organisation is helpful to improve business performance and also help for develop culture for innovation & flexibility. HRM is the term increasingly used to refer to the philosophy, policies, procedures & practices related to the management of an organisation's employee. HRM is concerned with all the activities that contribute to successfully attracting, developing, motivating and maintaining a high performing work-force that result in organisation success. How effectively employees contribute to organisation goals depends to a larger extent upon the ability of its HRM staff.

To achieve the objective, HRM undertakes following activities: Manpower planning - Recruitment, selection, placement & personnel - Training & development: performance appraisal - social security & welfare facilities - collective bargaining, contract negotiation and grievance handling - staffing - motivation - reviewing & auditing man power management - feedback - job rotation - Quality circle. HRM is often seen as the major factor differentiating between successful & unsuccessful organisation more important then technology or finance in achieving competitive advantages. In services sector where workers are primary sources of contact with customers, either face to face in services encounter or over telephone or net. Even in manufacturing firm the way in which human resources are managed as an increasingly critical component in production process. HRM - as the management of employment - an take many farms in practice and it may vary between organisation & occupation group which targeted. HR strategy is multidimensional concept and despite common usage of the term. "Performance is a function of all the HR components. Selecting people who are the best able to perform the jobs defined by the structure appraising their performance to facilities the equitable distribution of reward, motivating employees by linking reward to high level of performance and developing employees by linking reward to high level of performance and developing employee to enhance their current performance at work as well as to prepare them to perform in position they may hold in the future." (Devanna, 1984)


Why HRM is important?

An effective HRM system allows organisation to address human resource issue strategically. This helps the workforce deliver high quality health service, despite internal & external challenges to the organisation. A strong HRM system helps organisation & business strategies while effectively managing the changes inherent in health sector reform & decentralisation. HRM helps attract & retain component employees, assistance employees and managers in adapting to organisation change and facilities the use of technology to determine how & where work is done.

HRM is perhaps one of the most misunderstood but most important management system. Employees are an important assets of organisation and also most expensive personal cost often consumers 70% - 80% of organisation total budget.


HRM covers so many things function in organisation such as:

Human Resource auditing

HR strategic planning

Human resources planning

Manpower planning

Recruitment/ selection




Management development

Composition development

Performance appraisal

Performance management

Career planning/development



Staff management

Event management

Succession planning

Talent management

Safety management

Staff communication



Workplace Culture

Motivation & Incentives


Procedure Recruitment




Authority & Retention


Functions Contract Of Employment

Teams Job Description

Personal Specification

Health & Safety

In Workplace

HRM is effective with linking of objective & goals. It is measure through several performance

­­- Profit

- Revenue

- Return of investment

- Growth

- Value

- Market share

- Share price

- Job satisfaction

- Good safety

- Facilities


But there are always some problem regarding wrong HR or not perform well or correctly.

- Lower productivity levels

- Poor quality/services

- High level of complaints from customers

- Loss of customers with subsequently lower revenues

- Higher cost

- Poor industrial relation

In addition Human Resources are managed ineffectively then

- Teams may not function appropriately

- Individuals may be placed in position that do not maximise or utilise skills

- Communication & decision making can be affected & mistake occurs.

Clusters Outcomes

Strategic planning  Analysing, decision and action needed to create and certain

competitive advantage.

Acquisition of  Effective contribution of new employees to business strategy

Employees implementation

- Planning process, advertising & recruitment sources support

business strategy

- Interviewer effective in selecting height candidates

Training &  Positive change in attitude of participates

Development - Increased expertise in area applicable to job

- Opportunities to practices newly acquired skill on the job

- Support from peers, supervisor & other in using knowledge


Organisation  Higher leave of productivity, quality of product and services

change - Positive change and responsiveness in meeting customer needs

& development - Culture reflects organisation and support business strategy

- Field organisation structure

Performance  Each position and task support strategic business objective

Management - Effective process for maximising performance

Reward system  Reward system motivates increased performance

- Incentive provides to achieve individual and organisation,

behaviours aligned with business strategies and investment

organisation  Employee behaviour reflect desired organisational culture and

behaviour and alignment with business strategy


Clusters Measurements

Strategic planning  Financial profitability

- Social responsibility - viewed by society as ethics, moral,

preferred employer

- Integrated in all area of the organisation

- Efficient utilization of resources

Equalisation of  Adequate number of qualified in combats

employees - Relatively short period of time hire qualified candidates

- Reduce cost per hire

- Reduce employee turnover ratio

- Higher performance output

Training &  Improvement in the performance of the individual, process &

Development organisation

- Ability of organisation to compete effectively in current internal

& external environment

- Quality with output with respect to need customer

- Services provide competitive advantage

- Effectively response to change in external environment

- maximum saving of information, leveraging each employee and

work unit and resolving any internal & external challenges

Performance  Job description develop the thought timely and effective job

Management analysis

- Feedback shred continuously among all stockholder

- Every employee fully aware of his/her role in organisation

- Measurable outcome identify & measure for each position

- Process & system viewed as credible, fair, valid and reliable

Reward system  Acceptance of employment offers based in part on attractiveness

of reward system

- Reward system reflects employees personal value and overall

culture of organisation

Organisation  Ability of HR and other leaders to understand predict and influence

behaviour and employee behaviours

theory - Ability of HR and other leader to plan for future based on

historical data and current environment

(Swason.R (1995) "Purpose of HRD performance is the key" & benefit of HRD)


HRM is a continually evolving field of practice and study. The role and nature of HRM in relation to organisation change initiative such as total quality management (TQM) and strategic role of HRM and its effect on organisation performance.

HRM & Performance:

Over the second half of 1990's a further term in HRM debate saw a more away from attempts to define what its input might be in favour of examining what consequence flowed from applying HRM in fairly tightly defined circumstances. Analysing the links between practice HRM & organisation performance is now a major area of interest for research and policy. (Marlinton and Wilkinson,2005). A recent overview of empirical work into linkage between HRM and performance found 104 relevant articles published in pre-eminent, international journal between 1994 and 2003. The unifying theme of combination of HRM practices, especially where they are refined & modified can give quantifiable improvement in organisation performance. Arthar's work studied 54mini mills (new technology steel mills using smaller workforce & new working practices) and demonstrate that firms using a 'commitment' model of HRM saw higher productivity, lower labour turnover & lower rate of rejected production. Mc duffle's work examined 70 plants in the world car industry and use of HR techniques that were regard's as innovative. His analysis that it is when practices are used together, rather than simply in isolation or only for specific effect of some more than other. There are three factor note in particular 1. Buffers (plants adopted to flexibility) 2. Work system (work arrangement that complemented flexibility) 3. HRM policies (HRM practices that complement flexibility). The marked effect on performance was in the combined impact of all three factor working together.

Strategic HRM can be regarded as a general approach to the strategic management of human resources in accordance with the intension of the organisation on the future direction it want to take. it is concern with longer-term people issues and macro-concerns about structure, quality ,culture, value, commitment and matching resource to future need. Strategic HRM can encompass no, of HR strategies."Boxall and Purcell" argue that strategic HRM is concerned with explaining how HRM influences organisation performance. Strategic are not same as plan

( CIPD articles )

Deliberate Strategy

Intended Strategy Realised Strategy

Unrealised Strategy Emergent Strategy

( Mintzberg's Strategy 1985 )

Strategic HRM is a main concept

Kind & relationship between HRM & process of strategic management

Direct participation in process Indirect process control

Strategic decision making process







HRM function takes parts of specific influencing of strategic

Formulation and implementation decision makers

Of strategy

Participation of HRM consequence of HRM activities

Professional for strategic management

Strategic activities

Link between HRM & organisation strategy strategic orientation of HR functional areas

(strategic HRM - Framework - Elisk- 1992 )

The environment faced by today's organisation is a challenging one. Economic changes and changing demographics, particularly with increase in diversity of employees and the again of workforce to continue to after the labour market. Competing in a global economy has shifted from trade and investment to the integration of operation, management and strategic alliances, which has significantly affected the requirement for developing globally competent employees.