The Connection between the HRM and the Level of Organizational Performance - Example

1. Introduction There is a big relationship between the performance of an organization and its reward system. Many scholars have actually established the relation that exists between the two (Boxall & Purcell, 2003). Boxall & Purcell (2003) state that some of them argue that the relationship is extremely complex while others discovered that the relationship is remarkably direct. Both the management of the human resource as well as the reward system is important as far as the issue of strategic management in any organization is concerned. This is because the results of any proper management in an organization are dependent on the work output of the employees (Boxall & Purcell, 2003). Therefore, reward system being one of the ways in which an organization can achieve proper management of the human resource in the sense that it improves the performance, it means both are directly connected (Becker and Gerhart, 1996). The two factors may seem complex since they revolve around the ways in which organizations, the practitioners, and the scholars measure any practice’s effectiveness in terms of its performance as well as the approaches. There are so many views, which have emerged concerning the issue of reward management of the employees in the organizations. 2. Human resource management and improved organization performance Human resource management is one of the most noteworthy activities as far as the success of any organization is concerned. This is because it entails the management of the employees in the form of recruitment and management (Becker and Huselid, 2006). It also deals with all other issues that involve the employees in the organization. Some of these issues include hiring, compensation, management of the employee’s performances, development of the organization, wellness of the employees, motivation of the employees, training, administration communication and the employees’ benefits among others (Boselie et el, 2005). If, in any organization, the above factors are well taken care of, then it is definite that the organization’s performance will improve. Organization’s performance refers to the status of the organization measured in terms of its output. It should be noted that this output is because of the employees work. The more the employees work the better their work performance while the lesser they work the less the performance in the organization. One of the ways of human resource management is through motivation. Through motivation, there can be a great deal of improvement in performance. Motivation has been defined as the combination of one’s desires as well as energy, which are all directed in achieving a certain goal. In other words, it is what causes a certain action to be taken. In order to influence people’s motive then it means to get them to do what you actually want them to do. It should be noted that not all people are motivated with the same things and thus the issue of intrinsic and extrinsic motivation comes in. Some people are motivated from within themselves while others have to be externally motivated through rewards and other things (Gerhart et el, 2009). In most cases, an employee knows perfectly well, what it takes to give an excellent performance but still chooses not to give the best for reasons known best to him. However, it has been discovered that it is the personal inherent problems rather than the challenges in the work place that interferes with one's ability to work and give better results. Human resource management as facilitator of the strategic views of organization performance There is a strong relationship between the improvement in the human resource management and management of the human resources in a given organization. Actually, it is particularly evident that the management of the human resource is a facilitator or rather an enabler and a very effective strategic option to achieving improvement in organizational management. Human resource management has also been termed as the perfect approach of personnel. Some of the outcomes that have proved that is a good form of human resource management include low absenteeism; cost effectiveness is high, dull to utilization of the human resource in full, increase performance in their jobs and good relationship with others (Paauwe & Boselie, 2005). Performance in any organization is, however, not entirely based on the human resource management, there are other things other are also involved like the performance relationship. These include the organizational behaviour, economic and sociology organizational. The combination of all the range of factors is what determines the different kind of outcomes both at the organizational and individual level. It should be noted that there are very positive advantages that are yielded because of combining the following other additional variables as far as the performance of an organization is concerned. They include motivation, discretionary effort, and employment skills. Employment skills for instance are important in as far as the performance of any given organization is concerned. This is not only the advantage the organization gets to enjoy but also the fact that it gives it an advantage to compete with other organizations. An organization with better-trained human resource is in a better position to compete even at an international platform with other organizations. Therefore, it is extremely beneficial for any particular person running an organization to treat the relationship between the human resource management and the organization's performance because they are extremely dependant on each other but still they also require other factors to bears positive fruits (Paauwe, 2009). One of the greatest fears that emerged as far as the issue of human resource management is concerned in the issue of unions being eradicated. This is because most of the unions for the employees are formed for the purposes of catering for the needs, rights, and requirements of the employees (Boxall and Purcell, 2003). Paauwe view Paauwe, discovered in his over thirty studies that there is a relationship between the human resource management and indicators of organizational performance like better quality, better sales, customer satisfaction, market value and profitability (Paauwe, 2009). There has also been a strong link between the performance of the organization and the policies that are in existence. Many people have also criticized the relationship between organizational performance and the human resource management. This is because they argue that for them to have a relationship, and then should be some theories about human resource management. Paauwe meant that, in actual sense, the performance of the organization is directly proportional to a number of variables of which goes beyond the human resource management. Some of these factors are what other researchers discover to be the policies that are governing the management of the organization, the better the policies, the better, and the performance. This is further strengthened by the fact that human resource theories are extremely valuable (Paauwe & Boselie, 2005). One of the theories that were then discovered was the motivational theory. There are many types of motivational theories, which are divided into the following broad groups; incentive theory, drive reduction theory, needs theories, broad theories and cognitive theories. In my own opinion, I think, all the factors or rather the variables that entail human resource management are particularly beneficial in the improvement of any organizational performance. 3. Evaluating the differences between Paawe and other theorist ideas of human resource management and performance Human resource management like described entails a wide range of factors. New pay or rather total reward system is an important factor. It is instrumental in improving the performances of the organization. This is because it aids in achieving the satisfaction of the employees. A satisfied employee will undoubtedly put all his or her energy in doing the best for the betterment of the organization (Francis and Keegan, 2006). This is actually or rather specifically in terms of payment. It is extremely crucial for any organization to make the employee fell that the services they are offering the organization are worth the reward they are getting. This is because with that in their mind, they will work exceptionally hard and with their full focus on their work. Further, they will work knowing that they are not just benefiting the organization or rather the owners of the business but also knowing that they are also benefiting to the maximum. The reward system is one of the factors that are known to affect the employees at their personal or rather individual level. This is because it directly affects their behaviors, in terms of their satisfaction and then, as a result, it affects their performance. If an employee is not satisfied from within, then it means that they are likely to perform very poorly. In other words, their output will also not be satisfying to their bosses. The reward system must, therefore, be in such a way that it is appreciated at an individual level, this because if it is not felt at that level, then there cannot be evidence of improved performance. This can be achieved by ensuring the reward system affects all employees in the organization. In addition, the management must ensure that it is equally implemented in that, it is not better for some of the employees while, for others, it is not worth. By doing so, the management can be sure of better results. The outcomes of the management of human resource are measured in very different ways. There are three particular ways, which includes outcome in the finances like sales, profit, share of the market, then the organizational outcomes evidenced by productivity of the organization, the efficiency and the quality of work an organization can offer customers. Finally, the outcomes that are related to the management of the human resource like impacts within the employees in terms of behaviour and attitude, satisfaction of the employees, employees intentions to stop working and finally the commitment of the workers to their job assignments (Gerhart et el, 2009). Research shows that the employee’s skills do not necessarily influence some outcomes like the financial outcome always, but there are other numerous factors, which can be immensely influential, both internal as well as external. Factors like the policies are extremely influential in that case. A good example of the same is whereby the organization has an exceptionally policy in charge of managing the capital of the working capital of the organization in question. The advantage is that it will greatly improve the earnings of the organization in a very high rate. This is not to forget there must be an exceptionally financial manger of the organization to achieve the above results. Apart from that, the other indicators of performance in any given organization includes the issue of improved quality in the production of the services and goods in the organization, the betterment of the employees attitudes like the display of motivation in their work as well as the trust and commitment (Guest, 1997). If the employees display these kinds of characters, then it means that there is an improvement in the performance of the organization. One of the researches to show the relationship between performance and management of human resource shows that the evidence can be proved after the period of performance. This is because the researches that were carried out to show performance level at the level of human resource did not show any fruits. Rather it has shown that after the performance the relation can be easily judged. This is also likely to show that the human resource management is not only related to the current performance of the organization but also to the future (Ramlall, 2003). 4. Intervening factors of the relationship between reward and improved organization performance There is a direct connection between the relation of the management of the human resource and the performance of the organization. However, researchers that have been carried out by Paauwe have also shown that there are a number of other intervening factors. These factors are very essential in ensuring that there is a great improvement of performance in the organization. One of the factors is the issue of policies. The policies governing different areas of the organization makes a different in the kind of performance the organization is likely to experience (Corby et el, 2009). This is because if the policies in the organization governing its finances are good and well applied, then it means that they are likely to yield a better financial output in the organization irrespective the level of human resource management in the organization. Other factors apart from the policies include the management structure of the organization. This is whereby the role of the managers who are also the leader in the organization is key determinant of the organizational performance. If an organization has a good managerial structure, this means that it will definitely have good results. This is because a leader being an influential person in the organization then should be in a position of leading the subordinate staff in the right direction. In addition to that, the leaders should be in a position to delegate duties in accordance to their level of qualification (Druker & White, 2009). 5. Employer’s voice The employer has a very big role as far as the reward management is concerned. The following are the four very important factors that represent the employer’s voice as far as the rewarding system in the human resource is concerned. First, recruitment of the very best performance as far as the job is concerned (Corby et al., 2009). This is whereby during the recruitment, the team should be very keen to go for the finest human resource (Hendry, 2003). By doing this, they will ensure that the organization has the best employees in terms of experiences and capability is a factor that will really aid in the organizational performance improvement. Another very important factor is the provision of the human resource in the organization with the best and the latest training skills to equip them appropriately (Corby et el., 2005). This will give the employees confidence in their work and as a result their performance will greatly improve. Confidence in whatever one is doing is one of the factors that greatly increase the performance of an individual at a personal level. Another factor is the issue of monitoring the employee’s performance (Druker and White, 2009). Regular monitoring of the employee’s performance by the operational or the human resource manager ensures better performance. This is because all employees will work better in order for them to reach the targets that are laid down for them by the management. This is because the employees will definitely be afraid of the consequences that might arise if they are not working well in their department. Another very important factor is the issue of rewarding the employees who effectively and efficiently reach their target it very important. This is because it will greatly motivate them to ensure they reach the target and even exceed the limits (Francis & Keegan, 2006). As a result, the rest of the employees may be forced to adopt the same in order for them to ensure they get the reward. 6. Conclusion There is a very great connection between the management of the human resource and the level of organizational performance. This has been clearly been brought out by the work done by Paauwe. Therefore, different ways of human resource management are very instrumental in ensuring the performance of the organization is improved. One of the most important facts in organization performance is the strategy of the implementation in terms of effectiveness and efficiency. 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