Human Resource and Internal Organizational Variables - Essay Example

?Human Resource Introduction There has been an assumption that all organisations in an industry have the sameinternal organisation plan, however, a growing research base has shown that there are many exceptions to this pattern and most organisations, even those within the same industry or producing the same goods. These differences are not only in form of size, but other factors also contribute to these differences. The purpose of this paper is to determine to what extent understanding of internal context of organisation helps human resource experts in building alliances with key managerial players in the organisations and demonstrate the added value of human resource contribution to organizational efficiency and performance. Human resource and internal organizational variables Internal organizational variables include, size, strategy, technology and the business environment within the organisation, these variables have been identified in several studies as determinants of human resource practises (Jackson, Schuler & Werner, 2011, p124) Human resource management can be defined as the process of attracting, motivating and retaining a gifted pool of employees who work to support the realisation of the organisation’s goal and objectives (Lussier & Hendon, 2013, p 154). Effective human resource practises are becoming a necessity in the current organizational environment as the economies become ‘knowledge based’ and the challenge of finding and retaining highly qualified employees increases due to shortage of skilled labour. Determinants of internal human resource management practises in internal organisational environment The way organisations are run, either formally or informally will also determine the how human resource activities are conducted. For instance in small businesses, human resource activities are more likely to be carried out in an informal and more flexible manner, while in large organisations, human resource activities will be more formal and rigid (Mathis & Jackson, 2011, p123). The size of the organisation will determine the level of sophistication in human resource with large organizations being more sophisticated than the smaller firms are. In small firms, executives are more likely not to get proper education; in addition, they are also less likely to have performance appraisals and bonuses that are present in large companies. The competitiveness of an organisation depends on the resources that help it to differentiate the company’s products from those of its rivals in the long run. Of great importance is the human resources, which are constrained by shortage of labour, which reduces a company’s potential for growth (Chen & Mohamed, 2008, p73). While some authors argue that long run, competitive advantage can be realised through human resources themselves and not the processes that were used to get the human resource (Guest, 2011, p12). Other authors argue that the human resources themselves can be seen as contributing to a firm’s competitive advantage; such practices include the potential to motivate employees, how organisations handle internal conflicts among other practises. Technology, which is the process for transforming the inputs in the organisations in to finished products usable by the consumers vary in many perspectives, which have an effect on human resource perspectives. For instance, the level of continuity in the manufacturing procedure, the level of knowledge that is required in using the technology, the predictability of tasks and the level of interdependence of various tasks within the course of manufacturing (CHUANG & Liao, 2010, p177). Using human capital theory to show the relationship between human resource and technology, firms that use modern and up to date technology are more likely to engage in selective hiring, inclusive training, performance appraisal and fair remuneration evaluation. Understanding the technology usage in organisations has the implication of helping human resource experts to determine the training needs of the management and the employees. Some technologies require certain skills for optimal usage, getting a clear understanding of the technological environment in an organisation will help in recruiting and maintaining of highly skilled workers to use the technology. In addition, technology has a remuneration perspective since the more sophisticate technology is in an organisation, the higher the remuneration that the experts of the technology will require. The organisational structure, which describes the allocation of tasks and responsibilities among individuals and departments, therefore determines the relationship and formal reporting structures within the organisation also affects human resource management practises within the organisation. This division of an organisation may be based on functions, geographical location, product based and matrix departmentalisation, which has a dual reporting structure. These different forms of departmentalisation result from diverse internal and external factors, for human resource management, these different forms have varied challenges that need to be tackled. Human resource as a field is also thought to have evolved from departmentalisation of organisations since people working in different departments needed to be managed differently (Grobler & Warnich, 2006, p101). The greatest impact of organisational structure in human resource management is more pronounced in multinationals where the structure spans across several boundaries with each structure posing an alternative solution to the problems facing these multinationals such as risk management, uncertainty and integration in a global platform (Dowling, Festing & Engle sr, 2008, p158). Human resource experts argue that large organisations should adopt more comprehensive and socially responsive human resource management practises in order for them to gain legitimacy, as they are more noticeable, however due to the cost implications of such HRM practises, a certain threshold of economies of scale should be reached before they can be adopted. Life cycle stage that an organisation is determines what priorities the management have for the organisation. For instance, companies in start up, growth, maturity, decline and revival stages have different priorities, which will in turn affect the human resource practises in the company (Armstrong, 2012, p108). At each stage of development, a company changes its priorities, which has an implication on human resource management activities, these changes, may include the role of managers and heads of departments and how their performance will be accessed. Due to the requirements in each stage, it is likely that external CEO’s and managers will be hired at this time to bridge the expertise gap. Human resource experts will also use the role perspective at this stage to understand the staffing needs and their implications in operations of the organisation. CEO’s and human resource executives in organisations that are expanding at high rates are likely to be more concerned with hiring and recruitment of new employees as the most important aspect of human resource (Harzing & Pinnington, 2010, p24) . On the other hand, executives from more mature or organisations are likely to be keen on a wide range of human activities that maintain the labour force within their organisations. The business strategy that an organisation adopts has an implication on the human resource management practises within that organisation (Bartram, & De Cieri, 2013, p201). Businesses can be classified in to three categories depending on their strategy; they include defenders, prospectors and analysers (Sim & Teoh, 2011, p68). Defenders seek to maintain the types of products that they produce while increasing their volume at low costs; prospectors are concerned with expanding and finding new markets and products in order to grow; analyzers are concerned with growth through more stable and predictable ways such as internal development of their products. These types of strategies will have an implication on the human resource activities that will be implemented in these organisations. For instance, defenders will not be concerned with hiring and recruiting new employees but instead, they will be more focussed on improving and retaining their current workforce, therefore human resource activities will be used more for developmental purposes rather than for appraisal. On the other hand, prospectors are more concerned about growth therefore they will be hiring and recruiting new employees, therefore activities such as performance appraisal will be for evaluation and not for long-term development purposes (Pena & Villasalero, 2010, p2871). Importance of understanding internal organization to human resource management In the internal environment of an organization, human resource management practises are important in several scenarios, which require that the specialist have a good understanding of the organisation. During mergers and acquisitions of one firm with another, several internal changes take place, which requires human resource to consolidate the two merging companies in to one organisation (Ehnert, 2009, p99). This means that human resource experts will play a crucial role in the restructuring and business policy changes, which may include salaries and wages, conflict resolution mechanisms, harmonising various positions and change of management. Knowledge of internal state of an organisation is very important during the process of downsizing. Almost all business entities are faced with the situation of downsizing on their labour force by getting rid of the workers who are not productive and replacing them with ones that are more productive. Human resource experts will have to use the information they have about the labour force in these organisations to determine the workers who will be laid off and those who will retain their positions while at the same time maintaining the morale of the workers. With the recent trend of business opting to outsource some services, human resource department in an organisation acts as the link between the domestic operations and the outsourced services (Datta, Guthrie & Wright, 2005, p142). As such, the department need to be conversant with the internal environment of the organisation in order to ensure effective coordination with the external service providers. Conclusion The internal environment of a business, which includes technology, organisational structure, business strategy, life cycle stages that a business passes through are crucial in understanding human resource activities within the organisation. This is information is crucial to the organisations especially during mergers and acquisitions, downsizing or outsourcing of services as their success will depend on the knowledge that human resource experts have about the organisation. References Armstrong, M. (2012). Armstrong's handbook of human resource management practice. 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