The issue of how the human resource management affects organizations performance has always presented in academic world. Many scholars have done a lot of theoretical and field work, trying to prove that the contribution and impact of human resource management on organizational performance. Human resource management provides direction and enhances competitiveness in organization, and becoming a strategic partner in helping companies improves its performance (Ajit Kumar Kar, 2012). However, when it comes to particular issue, evidence suggesting a possible universal consensus are apparently the division of opinions is nowhere in sight.
Human resource management refers to the policies, practices and systems that influence employees’ behavior, attitudes and performance (Robin Kramar et al. 2011). HRM is a multi-faceted concept and built the foundations of organization. It is an organization’s primary source of competition. The HR practices include recruitment, performance management, industrial relationship, job analysis, job design, selection, employee learning and development, pay structure, incentives, and benefits. And the needs of HR include skills, behaviors and culture.
Robin Kramar et al. 2011). The effective HRM make the company obtain and retain necessary talent and improve employees’ engagement, dispose employee crisis and enhancing the competitive positioning of an organization (Julia Christense Hughes, 2008). The relationship between HRM and organization’s performance: 1. Employee satisfaction Human resource management practices directly affect employee’s emotions and satisfaction, thereby affecting the attitudes and behavior of employee, thus affecting the organizational performance (Ahuja, 2012).
There are several index could measure employee satisfaction: Employee Assistance Programs, Job Descriptive Index and Job satisfaction. The contents of survey included: paid of work, working partner, working conditions, job security etc. (Australia Public Service Commission, 2009). The organization can redesign work to attract and retain talent employees, improve employee behavior, and thus to grow the business and improve the market value. This can reflect the HR practice effectiveness of the organization, on the other hand, the customer satisfaction as an important indicator to measure the overall erformance of the organization. 2. Organizational commitment Organizational commitment – the degree to which an employee identifies with the organization and is willing to put forth effort on its behalf (Robin Kramar et al. 2011). This might be in the form of an investment; it can be anything valuable such as skill, knowledge. It is important to understand the employees’ organizational commitment for managers when develop policy. The method is training the employees’ inner beliefs and willingness to improve the attitude of the work.
Members willing to be the part of the organization and willing to help companies achieve goals. HR policies, salary, benefits, training and career development will affect the level of organizational commitment (Shahid, 2013). 3. Organizational culture Organizational culture refers to the sense of value, spirit, way of thinking, work style, psychological expectations or a sense of belonging that makes all members in organizations commonly accepted (Jennifer Bello, 2011). Organizational culture affects employee behavior, values ?? and beliefs (Sharimllah Devi Ramachandran, 2010).
It motivates organization member’s potential, regulates and set up standard in organization. Organizational culture can also affect the reputation, enhance the employer’s image on the labor market, thereby increasing attractive for potential employees on the labor market, as well as in product, markets. 4. Ability of the employee Ability – an enduring capability that an individual possesses (Robin Kramar et al. 2011). Organization required employee to have knowledge, skills and capabilities to match the technology in order to make organization more efficient.
The competence of the employee can provide high-quality production and service for the organization, which brings to the organization a high operating performance. HRM practices, such as selection, performance evaluation, training and work environment can enhance the competence, in order to improve organizational performance. Job analysis helps organization make right decision; job description and job specification are two types of information are most used in job analysis (Robin Kramar et al. 2011). Job description is a detailed description of the job analysis based on the physical and environmental characteristics.
It helps to clarify the job’s name, powers, duties, and affiliation (Wylie, 2008). Job specification is set to make sure who is qualified for the position and required knowledge, skills, personality and other personal characteristics required for the completion of the work. 5. Working environment Effective HR policy will help to change the organization’s management functions, increase employee participation, improve employee relations, enhance team collaboration, thereby improving staff motivation, increase productivity, reduce turnover to increase the financial performance.
The cost of high turnover occur recruitment and training cost. This means good working environment create a positive impact for employees. Research indicates that over 80% employees consider good working environment play important part in their job (Australia Public Service Commission, 2009). Although research have found the relationship between human resource management and organizational performance, but there are still some concern: 1. The current research perspective lack of HR practices and organizational performance measurement methods.
Whether it is the definition or field of study, different researchers have quite different opinion, resulting in different conclusions, and sometimes even come to completely contradictory results. 2. It is difficult to access direct information because of employees have different individual attitude and cognitive. Poor HRM will lead dysfunctional of the department, conflict between employee and employer, high turnover, increase cost etc. But also cause potential waste, inappropriate working attitude, reducing the effectiveness (Shaw, 2009).
Even though the solutions and measures are theoretically workable, they may not unleash their optimal effects in actual practice. But it is clear to discover that human resource management is the core of organization, and play a pivotal role to affect organizational performance. The organization need adopt the employee to change the HR practice and policy in order to inspire employee to achieve efficiency and improve performance. Reference: Robin Kramar, Timothy Bartram, Helen De Cieri, Raymond A. Noe, John R. Hollenbeck, Barry Gerhart, Patrick M. Wright. 2011. Human Resource Management in Australia: Strategic Human Resource Management.
North Ryde NSW AUS. : McGraw-Hill. Ajit Kumar Kar. 2012. WALKERS ORGANIZATION OF MANAGEMENT STRATEGISTS. 6:1. Australia Public Service Commission. 2009. 2009 Census Report Aboriginal and Torres Strait Islander APS Employees. <http://www. apsc. gov. au/publications-and-media/current-publications/aboriginal-and-torres-strait-islander-aps-employees-census-report/employee-satisfaction-with-their-job-and-agency>. viewed 17 April 2013. Sharimllah Devi Ramachandran, Siong Choy Chong, Hishamuddin Ismail. 2010. Organisational Culture. 25 Jennifer Bello. 2011. Defining and Assessing Organizational Culture. 6 Julia Christense Hughes, Evelina Rog. 2008. Strategic International Human Resource Management. 20 Ahuja, Ajay and Gautam, Vinayshil. 2012. Employee satisfaction: a key contributor to data centers’ organizational effectiveness. 12 Shahid, Amena and Azhar, Shahid. M. 2013. Gaining employee commitment: linking to organizational effectiveness. 5 Wylie, Marcia. 2008. Job descriptions: what you can do to improve them. 42 Shaw, JD; Dineen, BR; Fang, RL; Vellella, RF. 2009. EMPLOYEE-ORGANIZATION EXCHANGE RELATIONSHIPS, HRM PRACTICES, AND QUIT RATES OF GOOD AND POOR PERFORMERS. 52.
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