Significance of Human Resource Management - Coursework Example

Human Resource Management [Data] Human Resource Management Introduction When major shifts came in world’s business domain, there came several theories and concepts to get applied in the human resource management section. It was because the organization structures transformed from small SMEs to large size multinationals, managers start compelling with modified and advanced methods of human resource management (Sole & Costa, 2001). Only those concepts came forward, which provided impact, and those got rejected which were weak in terms of future application and adaptation. Today human resource management (HRM) as a subject is present with several tools and methods, providing the right support required by managers in the challenging situation. This study is going to overview all the conventional tools/methods in contrast to the organizational best practices, in order to evaluate and identify the most viable tools in terms of both application and adaptation (Banfield & Kay, 2012). According to past literature, HRM is a broad subject which requires extensive research to understand it in its true essence. Efforts have been made in this respect in order to understand HRM to its real extent, but due to limitations in research methodologies, the subject has been understood in sections and not as a system or notion for organizations (Guest, 2011). Periods of 1980s and 1990s have been frequent in research, where an association between HRM practice and organizational performance has been established (Wright et al., 2001). Analysts believe that HRM is not just associated with performance but it is the cause of evolving such performance, which may require more time for managers to understand it in that real extent (Guest, 2011). Research conducted in the last few decades highlight that HRM among its best practice is part of organization work structure. If the subject is stretched to its viable norms it can be applied in organization business strategy. This may require direction of understanding that HRM is a central player in an organization and is the cause to fabricate long term business goal and objective (Guest, 2011). Significance of Human Resource Management According to studies like Becker & Gerhart, (1996), Dyer and Reeves (1995) or Wright and Gardner (2003), HRM practices hold a direct or indirect relationship with organizational performance (Wright & Nishii, 2006). Due to changes in organization structures, there is a parallel change in the HRM adaptation (Armstrong, 2010). There are large number of factors that influence the relationship of HRM practices and performance (Guest, 1987). Factors include diversity of organizational systems, behaviors or organization work objectives, which to great extent influence HRM practices and their respective adaptation (Secord, 2003). Apart from internal factors there are a couple of external factors too like diversity of economics, politics or work environment which influence HRM worth practices to a major extent (Guest, 2011). With changing trends, managers rely most on efficient HRM methods, for which they have to adapt conventional and most implicated methods. In contrast to organizational behaviors and attributes, managers choose the most suitable HRM practice, which is suitable in terms of homogeneousness and flexibility of implementation (Gilmore, 2008). Apart from HRM best practices, the subject is of paramount importance especially when firms have to address internal or external pressures, which could be in the form of cultural, political or organizational social pressures (Miner, 2007). In modern business perspective HRM holds parallel importance, especially when organizations have to develop effective strategies in competitive business environment. With respect to changing organizational behaviors, the levels of HRM practices are changed too. Like there could be difference in recruitment & selection method, skill development or employee appraisals method, depending upon the organization work structure and administrative policies (Miner, 2007). Practices in Recruitment & Selection For any organization whether it is a small size SME or a large size multinational, it cannot ignore the importance of “human resource”. It is a key functioning resource which actuates all the other respective departments in an organization (Reddy, 2005). Meanwhile “human” is an asset, a fundamental resource which brings all functioning areas into work and progress. This is how managing the human resource feeds organization system and its components. For such reason “human” is on the focus of HRM methods and practices, where the first stage is recruitment and selection (Turner, 2002). Recruitment and selection are two different things, which quite often get overlapped with respect to theory, definition and adaptation. Recruitment is actually the complete process having stages of design, attraction, filtration and selection of the employees. Selection is the last phase of recruitment, where recruitment itself is a long term planning process (Haines & Bandt, 2004). It is the first level of human resource planning, the stage where HR (function) addresses long term business goals and objectives (Compton & Nankervis, 2010). The recruitment operation starts off with an assessment stage, assessment of staff requirements with respect to the present and future work perspective. There are different factors that influence the recruitment process, like cultures of employees, environment in which the organization has to operate, the organizational structure, the behavior and attributes, and nature of work in which the employees had to fit in (Parikh & Gupta, 2010). These are certain factors which affect recruiters’ strategic decisions, often focused to align long term business objectives and employee satisfaction goals (Phillips & Gully, 2011). This is how the recruitment process establishes the base of strategic human resource management, where important decisions are from administrators and actions are from the specialists (Champoux, 2010). In effective HRM practices, recruitment and selection is one tool of integration. It is an instrument that integrates organization key components like vision, structure (behavior and attributes), and performance outcomes (productivity and efficiency). Aligning all the major components in one box, recruitment and selection comes out as a door of organizational success (Champoux, 2010). According to modern literature, it has been noticed that recruiters adapt change. Their decisions and techniques are according to both time and market perspective (Armstrong, 2008). The techniques rely on time and its changing trends, where recruiters try to engage with the depth of the variation. At times of progress, recruiters adapt expansion strategy, which is to adjust new employees with respect to the requirement of the work place (Armstrong, 2008). Similarly recruiters adapt retrenchment strategies, when there is a need of subtractive progression. This is how human resource management (HRM) evolves with business timelines, in order to retain the best in the entire competitive position (Armstrong & Baron, 2002). As per contemporary practices, recruitment and selection is part of HRM system, a system which flows from top to bottom in organizations (centralized/decentralized). In this respect an effective recruitment process is part of effective HRM system, which is not possible without organization’s wide vision and objective (Lundy & Cowling, 1996). To establish a feasible HRM system, it is necessary that leaders stand out clear, having the right goals and theme to adapt the HRM methods in their organizations. In an efficient organization system there is a need to adjust such adequate practices, in which human resource planning and recruitment are definite parts of the setup (Kumar, 2010). According to different surveys most precisely on UK based firms, it has been projected that recruitment is one tool to solve human resource problems at the work place. The surveys identify that 85% of the firms rely on human resource planning (recruitment) to solve their major recruitment problems like skilled employee shortage, less employee retention or changing skill requirement of the work etc (Kumar, 2010). The surveys also project that majority of the firms are large size, containing a staff of more than 4000 employees at one time, which require a structure and system for long term human resource planning. Hence majority of the organizations are present with long term recruitment goals, covering a timeframe of about 4 to 5 years of period. The plans are inclusive with features like recruitment, selection, skill development and employee engagement (Wagner & Hollenbeck, 2011). This is how human resource management comes up as a tool of planning, coordinating and integrating the organization key components (Wagner & Hollenbeck, 2011). The contemporary practices indicate that organization compel with effective HRM system. It is one system that performs organization planning operation, including planning of employees (recruitment and selection), work appraisals, and planning of work tasks and objectives etc (Haines & Bandt, 2004). Hence human resource management starts with recruitment and selection and continues until the employees are totally engaged with the organization system as a whole. The key objective of a strategic HRM system is to get the right person at the right job and position. This is to ensure a strong relationship between the employees and the organization system (Armstrong, 2008). Practices in Training and Skill development In global business spectrum, training and development is up on the highest consideration of HRM practices. It is one method to advance the progress of employees, as once they are trained they can perform, and when they perform the organization will progress too. This is one motive in the training and development stage, which HR heads also know and understand it to the utmost level (Champoux, 2010). When employers train their employees, they are in a motive to set competitive advantage for the organization. Training and development is one augmentative activity that sets the ground to develop competitive advantage. Employees train the workers to meet the same objective, as they want to see them as drivers of competition in the competitive market position (Kumar, 2010). Motivation to learn and progress comes from the top level leadership. It is not just that recruiters push new comers and they will start learning, but it is a socio-psychological process that actually gives the basis to learn and excel (Miner, 2007). Motivation is the core factor and it is very important in the HR training and development phase. Companies like Ritz-Carlton hotel move with the same objective, where motivation and encouragement are drivers of employee training and skill development (Jackson et al., 2011, pp. 269). When employees are recruited in the Ritz-Carlton, they feel proud as they are in the worlds’ top ranking leisure companies, holding the prestige to attract new employees in the workplace. It is the pride of organization which actually is a motivational factor for the upcoming employees. They are self-motivated and determined to learn and proceed with such successful organization (Miner, 2007). In training and development stage, orientation is the key player which is found in companies like Ritz-Carlton hotel (Jackson et al., 2011, pp. 269). It is one central feature that develops a team building process in the organization, where all the teammates share one vision, one goal and one motive to stand. It is a kind of fuel that stimulates the team building process in the entire organization system (Jackson et al., 2011). After the firms appoint specialized people on the specialized jobs, the next phase is to bring the workforce on an understanding of how the organization system functions (Armstrong, 2008). It includes the organization behavior, setup, policies and standards, which the managers have to communicate to the new workforce (Armstrong, 2008). This stage is human resource development stage, in which managers are concerned of developing the work force (Guest, 2011). They highlight the factors that are associated with employee development like diverse organization behavior, diversity of the work force, their behaviors, in order to proceed with the development stage progressively and comprehensively (Guest, 1987). In human development stage, the first major task is to assess the workforce capability. This is to analyze the future worth of the present employees in terms of organization goals and objectives. It starts with the basic employee integration assessment, which is for developing a strong relationship between the employees and organization system (Compton & Nankervis, 2010). In this stage, HR specialists assess the demographics and skills of the employees, in order to evaluate the attributes/behaviors of employees with respect to the attributes/behavior of the organization system. In demographics employees are assessed on the basis of social class, age, and gender. This highlights behavioral features of the employees in terms of ethics (discipline), commitment (dedication) and moral submission (determination) (Kumar, 2010). Skill of employees is judged by the manner of their qualification and past experience (Gilmore, 2008). This is how the HR personnel understand the capability of the employees, and the level of training they require in the future to come to the organization standards. Workforce assessment is the basal stage as it provides the trait and the passage to move forward the development process (Armstrong, 2010). Facing the global challenge and market competition, all firms are quite deliberate in training and development practices. In United States, majority of the corporations invest on training and development programs. Firms know the importance of HR development, which is essential part of human resource management practices (Kumar, 2010). In US more than 85% of the firms invest $13 million annually in human resource development practices. Nearly 70% of companies invest on training and development including the cost of learning equipments, or the cost of training sessions like seminars etc (Jackson et al., 2011). The firms residing in a competitive market place rely on competitive work force, for which they find HR development as a central source to gain competitive advantage. Employers adapt different training methods like training on the technical side (work training), or on the human attributive side (managerial training). This is how corporations align competitive work force to competitive work environment, to achieve the progress required at a desired period of time (Jackson et al., 2011). Practices in Performance Management It has been seen in the trend of HR practices, that organizations fail just because they do not have an effective performance management system (Paauwe, 2009). Organizations are set with certain growth objectives, these objectives are to be met by employees at a respective timeframe. Hence it is “employees performance” that develops overall “organization performance”, for such reason it may require a system which can manage employees performance on time, and with respect to the organizational growth objectives that are set for the longer duration (DOP, 2005). According to Development Dimensions International (DDI) (1993) study, performance management is one substantial tool for competitive organizations. It is one tool that stimulates organization’s talent, skill, and knowledge to develop a strong business strategy. An effective performance management system serves as a guide to manage human relations, dealing out to people working under one roof, vision, culture and system. This is to integrate human behaviors with organization system and norms (Champoux, 2010). HR best practices include a standardized system of performance management. Here are the basic features of such a system with further elaboration: Integrating employee performance objectives with organization growth objectives Providing a clear accounting system to employees to meet their performance objectives Providing a visible evaluation system to assess employees performance by their own self, and by managers if required Adapting contagious approach to promote performance management as a culture Formulating abstracts to record employee day to day performance Formulating abstract of employee compensation, appraisal and promotion in order to develop motivation among the employees Performance Management in Modern Practices There have been different trends falling in the modern HRM practices like in performance management, where employers face difference of culture, tradition and behavior of the workforce (Tiwari, 2012). In modern perspective, most of the organizations adapt a contagious approach in which each employee whether manager or non manager is part of a performance management system. Other practices indicate that firms mostly train managers on performance management system, as they are the ones who promote such system to the executive staff (Bernthal et al., 2008). In other trends organizations mostly include individual-appraisal system, by which each employee is self-dependant and responsible of his or her own performance at the time of work (Aslam et al., 2007). In current HRM practices individual appraisal system is most adaptive and common, especially in decentralized organizations where employees are set with their own respective goals and ambitions (Krausert, 2009). In other instances, performance reporting is quite common, especially in larger firms where reporting system is adapted from top to bottom in the organization. Actually reports are performance indicators, a sort of feedback coming from customers, peers and workforce. This is how managers find a basis to formulate their respective performance decisions including compensation, promotion and appraisal for employees (Krausert, 2009). In the modern HRM practices, performance is judged by single rating method. In this method managers interpret employee past record summary, highlighting past performances at the workplace with respect to the present ones (Armstrong, 2010). The summary is in abstract form highlighting the overall status of an individual performance. It contains numerical data indicating the statistics of the employee history and meeting timelines of the present (Marchington & Wilkinson, 2005). The single rating system is adapted in all firms, whether it is a small SME (small or medium enterprise) or a large multinational respectively because it is one feasible method which can applied at all areas of work (Marchington & Wilkinson, 2005). Conclusion With major shifts in the international business system, there has been variation in adaptation of the HRM as a subject (Guest, 2011). The subject provides extensive amount of theories and concepts, for which strategists find it difficult to identify the most appropriate and adaptable concepts. Apart from all there have been researches that identify a significant relationship between human resource management (HRM) practices and organization performance (Armstrong & Baron, 2002). It was the early period of 1990s, when practitioners found HRM as a strategic tool to improvise organization performance. It is one tool that manages organization behaviors, attributes and relationship of the employees at the work place (Banfield & Kay, 2012). There are different segments of HRM like human resource planning (recruitment and selection) and human resource development (training, development and performance management), where each segment is vital with its adaptation and application (Armstrong, 2008). Recruitment and selection is the first planning stage where HR specialists identify the key staff requirements at the work place (Armstrong, 2008). Assessing the requirements specialists hire most suitable employees to lead the organization to progress and growth respectively (Armstrong & Baron, 2002). This is how recruitment and selection becomes part of strategic human resource management, where recruiters are skilled, acknowledgeable well and capable to understand the long term organization goals and objectives. According to HRM best practices, training and development is major part of entire HRM activity. Employers know the importance of development, for which they pass their employees from the latest modules of training, including trainings sessions and seminars (Compton & Nankervis, 2010). Several organizations believe in personnel training, as they consider each employee as one major segment of the system. When an employee is skilled, he or she could performance, and it is employee’s performance that accelerates overall organization performance (Armstrong, 2010). As per current practices, Performance management is another major segment of HRM subject. It is an effective performance management system which encourages, promotes and motivates employees in an organization work system (Haines & Bandt, 2004). An effective performance management always works in the employee integration tactics, integration with organization system, attributes and behavior respectively (Jackson et al., 2011). With the analysis of literature, traditional studies and cases it can be noted that HRM (human resource management) practices are in a significant relationship with organization performance. Aligning all the major segments like HR planning and development, organization performance can be achieved and could excel for the longer aspect of time (Champoux, 2010). On a conclusive node it can be said that an effective HRM system is part of organization system, which actuates and compels organization performance as a whole (Gilmore, 2008). List of References Armstrong, M., 2008. Strategic Human Resource Management: A Guide To Action. London: Kogan Page Publishers. Armstrong, M., 2010. Armstrongs Essential Human Resource Management Practice: A Guide to People Management. London: Kogan Page Publishers. Armstrong, M. & Baron, A., 2002. Strategic HRM: The Key to Improved Business Performance. London: CIPD Publishing. Aslam, Z., Masood, T. & Ramay, M., 2007. 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Human Resource Management and Performance: still searching for some answers. Human Resource Management Journal, 21, pp.3-13. Haines, S. & Bandt, A., 2004. Successful Strategic Human Resource Planning. San Diego: Systems Thinking Press. Jackson, S., Schuler, R. & Werner, S., 2011. Managing Human Resources. Mason: Cengage Learning. Krausert, A., 2009. Performance Management for Different Employee Groups: A Contribution to Employment Systems Theory. New York: Springer. Kumar, R., 2010. Human Resource Management: Strategic Analysis Text and Cases. New Delhi: K. International Pvt Ltd. Lundy, O. & Cowling, A., 1996. Strategic Human Resource Management. London: Routledge. Marchington, M. & Wilkinson, A., 2005. Human Resource Management at Work: People and Development. London: CIPD Publishing. Miner, J., 2007. Organizational Behavior 4: From Theory to Practice. New York: M.E. Sharpe. Paauwe, J., 2009. HRM and Performance: Achievements, Methodological Issues and Prospects. Journal of Management Studies, 46. Parikh, M. & Gupta, R., 2010. Organisational Behaviour. New Delhi: Tata McGraw-Hill Education. Phillips, J. & Gully, S., 2011. Organizational Behavior: Tools for Success. Mason: Cengage Learning. Reddy, M., 2005. Human Resource Planning. New Delhi: Discovery Publishing House. Secord, H., 2003. Implementing Best Practices in Human Resources Management. Toronto: CCH Canadian Limited. Sole, J. & Costa, R., 2001. Strategy, Organization and the Changing Nature of Work. Northampton: Edward Elgar Publishing. Tiwari, P., 2012. Human Resource Management Practices: A Comprehensive Review. Research Report. Udaipur: MSU. Turner, P., 2002. Hr Forecasting & Planning. London: CIPD Publishing. Wagner, J. & Hollenbeck, J., 2011. Organizational Behavior: Securing Competitive Advantage. New York: Taylor & Francis. Wright, P., Dunford, B. & Snell, S., 2001. Human resources and the resource based view of the firm. Journal of Management. Wright, P. & Nishii, L., 2006. Strategic HRM and Organizational Behavior: Integrating Multiple Levels of Analysis. Research Report. New York: Digital Commons Cornell University. Read More