How Strategic HRM Is Used to Build High Performance Work Systems in Modern Organisations - Literature review Example

HOW STRATEGIC HRM IS USED TO BUILD HIGH PERFORMANCE WORK SYSTEMS IN MODERN ORGANISATIONS By Name Course Instructor Institution City/State Date How Strategic HRM is used to Build High Performance Work Systems in Modern Organisations Introduction A number of studies have pointed out that employing a set of HR practices, together with comprehensive procedures for worker recruitment and selection, performance and compensation management systems, employee involvement information sharing, and training, can improve the company’s ability to acquire, develop and retain motivated and talented workforce. Normally, these HR practices are known as high performance work systems (HPWSs). According to Boxall and Macky (2007, p.262), high-performance work systems (HPWSs) are a form of HR system and crucial concept in modern studies of workplaces. In the current economic globalisation epoch, HPWSs are a key issue in the on-going debate about how to build a ‘high-road or high-skill economy as well as avoid taking part in the race to the bottom. In the modern competitive environment, Çalışkan (2010, p.100) posits that human resources are amongst the crucial source of competitive advantage. In this case, HR systems may lead to sustained competitive advantage by means of improving the competencies’ development that is specific to the company. Strategic HRM is associated with the development of the association between the overall business strategic aims as well as the HR strategy. Many organisations have become aware that successful HR practices and policies can improve performance in diverse areas like financial performance, quality and productivity (Çalışkan, 2010, p.102). In this case, the essay seeks to analyse how strategic HRM is used to build high performance work systems in modern organisations and explains the process through which strategic HRM impacts on individual and organisational performance.  Discussion According to Mittal (2012, p.2), the HRM fundamental principle is the manner in which employees are managed in the organisation resulting in success and sustenance. In the last two decades, research on HRM has established the existence of particular HR practices that improve the effectiveness of the employee and envisage higher organisational performance levels. The fundamental argument behind High Performance Work Systems (HPWSs) is that organisations may get high performance through espousing practices, which identify as well as leverage the ability of employees to generate value. If an organisation can recognise a bundle of HR practices that enhance performance in the organisation, then it is imperative to know if such practices may be replicated in different societal cultures and nations. Plausibly, these best HR practices attain the looked-for organisational outcome through impacting behaviour and attitudes of employees. Given that the person’s cultural background plays a key role in shaping his/her behaviour, Mittal (2012, p.2) asserts that it is rational to suppose that HPWSs success in one cultural context or nation may not be replicated easily in other cultures or countries. Rationally, the HPWS notion comprises of a claim that there is a work practices system that results somewhat in improved organisational performance. This proposition is embedded explicitly in three concepts: work practices, performance, as well as systemic effects (Boxall & Macky, 2009, p.4). According to Gooderham et al. (2008, p.5), successful organisations are those that have attained and employed rare, valuable, unmatched as well as non-substitutable resources, which includes human resources. Managing human resources is a challenging task particularly in this age of increased market share and intense competition in the market. This according to Timiyo (2014, p.8) connotes that the modern HR manager in an international company is expected to face the predicament of filling vacant positions with the right personnel. Currently, companies require workers who are able to work in diverse cultural environments, considering that this is a must when the global strategies are pursued. Globalizing is needed so as to overcome the issues brought about by the current economic crisis that has shaken the footings of many powerful countries in the world such as the United States. HPWPs as mentioned by Timiyo (2014, p.8), are means of making sure that workers are effectively managed so as to become very productive in the place of work (Timiyo, 2014, p.8). Even though resources required so as to implement the HPWPs’ bundles that are more costly are limited by the size of the company, Kroon et al. (2013, p.75) posit that size by itself is not enough to expound the subsistence of the various HPWPs configurations of in similar companies. In small companies, Kroon et al. (2013, p.75) assert that it is mainly the entrepreneur who makes the majority of decisions associating with HRM. In essence, strategic choices concerning the HPWPs are affected directly by the attitudes and knowledge of the entrepreneur. Kroon et al. (2013, p.75) define strategic choice as the process whereby decision is made by the manager concerning a particular policy or strategy that is to be espoused by the firm in reaction to the accessible resources, competitive environment, and the design of the organisational routines, rules and structure. Certainly, most small companies evaluate the introduction as well as utilisation of HR practices in comparison to the needs and situation of the company. In view of this, it is evident that the decision of whether or not to put HPWPs into practice is to a large extent a strategic choice since it lead to resource constraints. In brief, the process of decision-making resulting in the HPWPs’ implementation appears to be rooted in two elements: first, an assessment of the existing problem as an issue associated with HR and, second, an assessment of the resources required for managing the issue through HPWPs implementation. As stated by Kumar (2014, p.3), leadership from top management and all through the organisation is crucial for creating momentum for High Performance Work Systems. In this case, decentralising decision making is required at staff and line level, in everyday functioning in their influence sphere, and bringing about improved quality levels devoid of time delays. The HR play a major part in building culture as well as support systems that comprise of people management and performance operations processes, aligned to the strategic objectives of the organisation so as to build commitment, enthusiasm and trust in the direction that the organisation has taken. Kumar (2014, p.5)suggests that knowledge must be offered to the internal customers based on their importance as well as contribution towards realising the organisational objective as well as the impact they make on the external customers in relation to the service or product produced. HPWSs arise from the concept of integrating Total Quality Management (TQM) and HR functions. In this case, HR must clearly comprehend the different jobs that have to be performed within the organisation. Moreover, since all jobs involve TQM methodologies like quality teams and six-sigma, the job description and job analysis must be functions of Total Quality Management principles. Therefore, it is very important that the HR executives as well as managers, are employed based on their understanding of the core organisational competencies. Kumar (2014, p.5) points out that this knowledge in the combination of the HR expert functionality may be very helpful in creating integration of staff and line functions. Therefore, the HR department is tasked with preparing the work flow design including the right staffing, job description, attitude and knowledge. General Motors current situation that includes autonomous work teams, performance-based pay and open systems are collectively described by the High performance work system (HPWS). At General Motors, these practices were deliberately introduced so as to improve the performance of the company with the main focus being the rearrangement of work in order that the workers take part in decisions that have an effect on the company’s everyday operations. At General Motors, there are three key factors affecting its high performance work system; the retrenchment of workers, layout design, the technology used and employees’ retrenchment. Without a doubt, employees are key to organisational success, and so retrenchment will make General Motors lose employees who are talented and consequently lose their competitive edge. In order to survive in the modern changing environment, General Motors depends on their employees’ creativity, strong teamwork, as well as ingenuity problem solving capability. The company allows its workers to decide on the best way of finishing their work. The skills and knowledge shared at the general motors generates a high performance work system. For instance, when a General Motors engineer is developing a fuel efficient engine they need help from other engineers, but when the workers are retrenched by the company, the collaboration between engineers will be eliminated leading to challenges in developing engines that are fuel efficient. Besides that, workers performance at General Motors is boosted through team works, which consequently has resulted in a huge increase in productivity and profits. Another feature of High Performance Work System at General Motors is the use of technology and every manager in all General Motors departments recognise the technology employed in their organisation. The company uses HR Information System to store employees’ data that may help managers to decide which worker is performing well and poorly. So, the company managers can easily identify if the qualified employees can operate the existing machines or not. Besides that, the company employs different monitoring and controlling mechanism along with its High Performance Work System so as to help in implementing its strategic goals. In view off this, diverse motivational methods are utilized to as to build up the confidence as well as create higher labour output through the members of different teams. Such teams comprise of employees enrichment, which is achieved through training and development. Undoubtedly, General Motors could not be enjoying the current success if it did not have the visionary leadership of management. Dimba and K’Óbonyo (2009) as cited by Jimoh and Danlami (2011, p.49) examined the nature of the SHRM practices effect on the performance of the organisation. They intended to establish whether the effect is direct or indirect by means of employee motivation as well as whether the cultural orientations of the worker moderate the association between employee motivation as well as strategic HR practices. In this case, the authors’ sampled 50 multinational companies in Kenya and established that SHRM practices, apart from recruitment and selection were significantly as well as positively related to performance (Jimoh & Danlami, 2011, p.49). They further noted that the relationship between firm performance and SHRM practices mediated by motivation, which also impacted firm performance. The key objective of performance management is generating a high performance culture wherein teams and individuals are accountable for the nonstop improvement of their skills. Particularly, performance management according to Cania (2014, p.374) may be expressed as the employees’ individual objectives’ approximation with the objectives of the organisation as long as the workers support the organisational culture. The goal of strategic HRM is improving performance of the business through people management; therefore, organisations have to manage efficiently and effectively their HR so as to attain the set goals and objectives. Strategic HRM as observed by Cania (2014, p.378) epitomizes a change that is comparatively novel in HRM field. The crucial role of strategic HRM is about centering the management in workers as a means of gaining competitive advantage. Currently, organisations understand that successful HR practices as well as policies, can improve performance in different areas like quality, productivity as well as financial performance. Strategic HRM offers a platform for communication between employees and managers concerning performance needs as well as further organisational development. As evidence by General Motors, strategic HRM may bring about numerous benefits to the organisation: contributing to the goal achievement as well as continued existence of the firm; successfully putting the company’s business strategies into practice; forming as well as sustaining a competitive advantage; improving the company’s innovation and responsiveness ability; heightening the number of achievable strategic choices that can be accessed by the company; and improving collaboration between the line managers as well as HRM department (Cania, 2014, p.379). In order to realise a strategic alignment and integration of human resource management with business strategies, Sani (2012, p.9) suggests that an HRM strategy that is documented may as well be useful since it can make HR managers’ authority and role more concrete in corporate decision making as well as improves the ability to manage externalities like tight labour market). Therefore, a documented HRM strategy assists the organisation in developing HRM objectives and vision as well as to monitor performance. Citing a number of studies, Waiganjo et al. (2012, p.63) posit that employees together with their collective experience, abilities and skills coupled with their capability of deploying these for the organisation interests, are currently documented as making crucial input to the success of the organisation and they constitute a key basis for competitive advantage. The SHRM practices like training and development, resourcing, reward management as well as employee relations are related to how employees are recruited and managed within the organisations with the aim of achieving competitive advantage by means of workforce strategic deployment, especially those who are highly capable and committed (Waiganjo et al., 2012, p.63) . Therefore, for the company to achieve competitive advantage it must align the management of HR to the overall corporate strategy, and this in consequence will result in superior performance. Human Resource as indicated by Shaukat et al. (2015, p.329) is a key asset for all organisations, and it is a crucial tool for realizing the competitive advantage. However, management of human resources is exceedingly challenging than management of capital or technology, and for its management to be effective, the organisation needs effective human resource management system that is supported by strong human resource management practices. These practices are organisational activities for managing human resources and ensuring that the resources are employed towards the fulfilment of organisational goals. According to Buller and McEvoy (2012, p.48), organisational culture is a crucial determinant of performance, and therefore organisational performance can be improved when workers at every level share beliefs, assumptions and values that are aligned with strategic organisational capabilities as well as goals. Imperatively, HRM systems, practices and policies have an effect on the behaviours, attitudes and perceptions of individual employees which consequently affect organisational and individual performances. High performance work systems as mentioned by to Nirmala and Kumar (2007, p.358) embrace high wages and employment security in addition to involvement and communication strategies. HPWSs intend to reduce costs, absenteeism and turnover by means of reducing the need for monitoring as well as control (Nirmala & Kumar, 2007, p.358). Besides that, HPWS according to Nirmala and Kumar (2007, p.358) generate high involvement, high trust, and high intrinsic satisfaction, consequently, high performance. Nirmala and Kumar (2007, p.358) established that there was a positive connection between employee commitment and HPWS. Conclusion In conclusion, the essay has analysed how strategic HRM is used to build high performance work systems in modern organisations and has explained the process through which strategic HRM impacts on individual and organisational performance. As indicated the essay, one of the key philosophies of strategic HRM is the evaluation of how performance in the organisation is impacted by the manner through which employees are managed. In order to support this assessment, a number of measures have been espoused in HR practices, which have been established to improve the effectiveness of the employees and to bring about higher performance levels at the organisation. Besides that, high performance work systems as indicated in the essay are combination of work structures, HR practices, as well as processes that maximize worker skill, knowledge, flexibility and commitment, with the intention of improving the effectiveness of employees. As evidenced by the General Motors case study, organisations can realise high performance through implementing strategic HRM practices that identify and leverage the ability of employees to generate value References Boxall, P. & Macky, K., 2007. 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