What contribution does human resource management brings towards its employee related performance - Literature review Example

? HR and effects on performance 3 April Table of contents Introduction 3 Performance of the individual, teams, and the whole organisation 3 Understanding of HR and performance 7 Conclusion 8 Reference list 9 Introduction Human resource management (HRM) aims to achieve optimal performance for organisations, as well as drive or sustain needed organisational changes. Some studies agree that HR can influence performance, primarily through affecting employee attitudes and behaviour (Tsai, Edwards, & Sengupta 2010), but the causal relationship between the two is said to be more complex (Nishii, Lepak, Schneider 2008). Niishi et al. (2008) explore the right interpretation of HR efforts from the individual perspectives of employees, in order for the target attitudinal and behavioral changes to be achieved. This paper seeks to explore how HR affects employee performance. After carefully reviewing literature, findings showed that HR practices can impact individual performance through an effective performance management system and it can raise team and organisational performance through mediating factors, such as performance management, emotional intelligence building, collaboration, and affecting organisational culture and employee engagement and satisfaction. Performance of the individual, teams, and the whole organisation Human resource management has evolved to strategic HRM, which designates HR manager as strategic allies to managing performance (Zink 2008). In particular, it is engaged in management development, organisational culture, appraisal system, discipline, environmental issue, diversity, culture, and HR policy dimension (Nemiro et al 2008). Though some still assert that HR should only focus on human resource performance, there is growing evidence that HRM can directly affect performance across different levels, by creating different systems that can impact organisational performance (Tsai et al. 2010; Nishii et al. 2008). Sources argue that HR practices can impact individual performance through mediating effects on perceptions of the connection between reward and performance and management skills. Properly designing and measuring performance is one of the basic and critical steps of performance management. HR can create an effective performance management system to impact individual, team, and organisational performance (Chuang & Liao 2010). Tsai, Edwards, and Sengupta (2010) build on and test an alternative view of the association between HR and organisational performance. Their model argues that organisational performance affects employee attitudes and that the performance-attitude relationship is mediated by HRM practices. To test their model, they conducted management interviews and employee surveys for thirty-two small firms in the Midlands of England that come from diverse industries. Findings showed that HRM practices are directly related to two measurements of employees' attitudes: “perceptions of management skills and the perceived link between reward and performance” (Tsai et al. 2010, p.15). This provides evidence that HRM can impact links between reward and performance. Chuang and Liao (2010) and Zhang and Li (2009), however, specifically argued for the importance of high-performance HR practices, which focus on concern for internal and external customers to achieve better market performance. In improving team performance, the rewards system must rationally inspire team performance measures (Nemiro et al. 2008). An appropriately-designed reward and pay system can motivate individual members to work as a team (Nemiro et al. 2008, p.63). This means that HR performance management efforts and tools must promote collectivity among individual members, so that each member values and respects each other’s impact on the total team performance. Rajagopal and Rajagopal (2008) investigate team performance in the article, “Team performance and control process in sales organizations.” The researchers observe that the main characteristics of a good team are that they understand goals; there is clearness of roles, shared feeling; and motivation, commitment and collaborative outlook are present (Rajagopal & Rajagopal 2008, p. 70). Rajagopal and Rajagopal (2008) also emphasise that the reward and punishment systems in a team symbolise a “post-process synergy” of all intersecting team performance variables and they are largely affected by the factors such as general feeling, impetus, dedication and collaborative attitude (Rajagopal 2006a cited in Rajagopal & Rajagopal 2008, p. 70). This article relates reward and punishment systems to intrinsic satisfaction. It maintains that rewards and punishment can rouse internal states, such as impetus, dedication and collaborative attitude. This study focuses though in sales team performance, which limits the generalisability of their results. Nevertheless, it presents interesting insight on how HR can mediate team performance through offering the right rewards and other motivators for collective performance. This article is also significant in defining the importance of intrinsic individual and team motivators and HR should consider these intrinsic factors, when designing team and individual rewards. Collaboration is chiefly critical to effective team performance management. Nemiro and colleagues (2008), in the book, “The handbook of high performance virtual teams: A toolkit for collaborating across boundaries,” argue that collaboration is decisive to the success of the team (p.32). Collaboration means that the members are working together to accomplish shared goals (Nemiro et al. 2008, p.32). When people work together, they can achieve individual and team satisfaction, depending on different factors. This book maintains that relationships are vital to attaining team goals. When there are positive relationships, the team can achieve common goals. In relation to HR, collaboration should be rewarded, so that it can become the driving force for teams. HR can mediate organisational success by creating engaging organisational cultures and supporting change management and employee involvement. Zink (2008) provides a conceptual analysis of the relationship between HRM and organisational excellence. He reviewed different studies and concluded that single aspects, such as process design and evaluating these concepts exclusively by short-term cost factors, lead to limited successes. He argues for more holistic concepts that can attain sustainable success. He further stresses the demand for development of organisational culture. He also relates HRM and organisational excellences, as long as HR supports change management and employee involvement. He asserts that a better integration of human resources aspects into organisational strategies will increase the effectiveness of HR practices. Shaw et al. (2009) show from their study that quit rates differs among poor-performing and good-performing employees. HR inducements and investments encourage good-performing employees to stay and for poor performers to leave. This article supports that HR can affect employee engagement through inducements. Employee engagement can be enhanced through developing EI across the organisation. Koman and Wolff (2008) highlight that emotional intelligence is vital to team performance. They examine connections among team leader emotional intelligence competencies, team level emotional intelligence, and team performance. Koman and Wolff (2008) stresses because teamwork is an inherently social activity, and that emotions affects team effectiveness (p.56). Findings showed that the emotional intelligence of team leader affects the emotional intelligence of team members and that emotionally intelligent teams have better performances. This indicates that HR must also train leaders and members for emotional intelligence (EI). Through EI, HR can increase individual and group, as well as organisational performance. Understanding of HR and performance A study shows that attributions to “what HR is for” can impact individual performance. Nishii, Lepak, and Schneider (2008) study the relationship among HR practices, HR attributions, and outcome factor for companies. They believe that employees react attitudinally and behaviorally to HR practices, using the “attributions” they make about management’s reason in implementing these HR practices. This is based on the social attribution theory, where people can connect different meanings to social stimuli (Fiske & Taylor 1991 cited in Nishii et al., 2008, p.505), and through how they process these stimuli, their attitudinal and behavioral responses to that information may be at variance. In application to HR practices, it is inferred that the association between HR practices and employee attitudes and behaviors, and eventually organisational performance, may rely on the attributions employees make about the underlying justifications of existing HR practices (Nishii et al., 2008, p.505). They produce a typology of 5 HR-attribution dimensions. After collecting data from a service firm, findings showed that employees make different attributions for the same HR practices, and that these attributions result to differences in commitment and satisfaction. These attitudes can be a shared one for the units and that they are connected to unit-level organizational citizenship behaviors and customer satisfaction. This study underscores that it is important for HR to understand that similar HR practices are perceived differently. It is critical for the same policies and efforts to be perceived in equally positive levels, but for which may needed a deeper understanding of the individual human behavior and perceptions of employees. Conclusion In conclusion, findings showed that HR practices can impact individual performance through mediating effects on perceptions of the connection between reward and performance and management skills and it can raise team and organisational performance through mediating factors, such as performance management, emotional intelligence building, collaboration, and affecting organisational culture and employee engagement and satisfaction. Properly designing and measuring performance is one of the basic and decisive steps that HR can do to affect performance. Performance can also be effectively raised by considering the intersections between individual, team, and organisational motivations. Reference list Chuang, C & Liao, H 2010, ‘Strategic human resource management in service context: taking care of business by taking care of employees and customers,’ Personnel Psychology, vol. 63, no. 1, pp.153-196. Tsai, C, Edwards, P, & Sengupta, S 2010, ‘The associations between organisational performance, employee attitudes and human resource management practices,’ Journal of General Management, vol. 36, no. 1, pp.1-20. Koman, ES & Wolff, SB 2008, ‘Emotional intelligence competencies in the team and team leader: A multi-level examination of the impact of emotional intelligence on team performance,’ Journal of Management Development, vol. 27, no. 1, pp.113-117. Nemiro, J, Beyerlein, MM, Bradley, L, & Beyerlein, S 2008, The handbook of high performance virtual teams: A toolkit for collaborating across boundaries, California, Jossey-Bass. Nishii, LH, Lepak, DP, & Schneider, B 2008, ‘Employee attributions of the “why” of HR practices: their effects on employee attitudes and behaviors, and customer satisfaction,’ Personnel Psychology, vol. 61, no. 3, pp.503-545. Rajagopal & Rajagopal, AR 2008, ‘Team performance and control process in sales organizations,’ Team Performance Management, vol. 14, no. 1/2, pp. 70-85. Shaw, JD, Dineen, BR, Fang, R, & Vellella, RF 2009, ‘Employee-organization exchange relationships, HRM practices, and quit rates of good and poor performers,’ Academy of Management Journal, vol. 52, no. 5, pp. 1016-1033. van de Water, H, Ahaus, K, & Rozier, R 2008, ‘Team roles, team balance and performance,’ Journal of Management Development, vol. 27, no. 5, pp. 499-512. Zhang, Y & Li, S 2009, ‘High performance work practices and firm performance: evidence from the pharmaceutical industry in China,’ International Journal of Human Resource Management, vol. 20, no. 11, pp.2331-2348. Zink, KJ 2008, ‘Human resources and organisational excellence,’ Total Quality Management & Business Excellence, vol. 19, no. 7/8, pp.793-805. Read More