Human Resource Policies to Enhance Organisations Performance - Research Paper Example

Human Resource Policies and Practices Enhance Organization’s Performance and Productivity: A Critical Analysis A brief review of the area andreasons for choosing the work Human Resource is the central resource of any organization, and when an organization recruits its employees, it not only hires their hands or skills but the entire person as a whole. Though all organizations follow some set of rules and practices in the administration of personnel affairs, those organizations that understand that the development of its people is crucial to enhancing productivity do so by streamlining their policies with individual development, motivation and job satisfaction. By doing this, it is hoped that the results will translate in improved performance and productivity. Others however try to take the short cut – increase work hours, cut-costs and overload employees – and expect to see productivity increase. Such organizations too have HR policies in place and practice them rigorously, but at the cost of reduction in employee moral and commitment. Organizations spend millions annually in recruiting, training and maintaining a workforce. Some also allocate budget for introducing latest fads on People Management and try to continuously upgrade their HR systems. But do HR policies actually affect employee’s productivity? Or productivity is dependent on an individual’s general attitude towards work, irrespective of how good or bad the organization’s HR practices are? Common sense says that good HR should correlate with productivity – but do ground data support this hypothesis? The author’s reasons to undertake the above research include the quest to answer the above questions. The research will give a chance to the author to find out the diverse and current HR practices that are popular (through literature survey) and also, to interact first hand with HR managers in organizations selected for carrying out the interviews. With this, the author hopes to not only benefit as a researcher but also to get insights into the interesting realm of worker’s psychology, while at the same time conclusively establishing the truth of his chosen topic. An identification of aims and objectives to be achieved The primary objective of the present study is to discover if HR practices and policies do indeed influence the productivity and performance of an organization. This exercise, in addition to revealing insights about popular practices, will also justify spending (in terms of time and money) over the introduction and implementation of the same. Secondly, the research will also try to elaborate on production and performance and also present diverse (and some contrary) view on how job satisfaction translates into performance and productivity. A data -base of case-studies/news/articles that elaborate how different organizations benefited due to better HR practices. Also, a primary research will be conducted where the author will administer questionnaires to the HR Managers of 50 organizations. This instrument will have items that detect the presence of HR practices, Productivity and Performance. The data thus collected will correlate the HR practices part with the Productivity and Performance, and state if the correlation is relevant. The findings of the Literature Survey and the Primary Research will then be used to answer the question: Human Resource Policies and Practices Enhance Organization’s Performance and Productivity. An initial Literature Review, highlighting the main theoretical areas that underpin the work Since the time Elton Mayo emphasized the human factors in the functioning of the organization through his Hawthorne Studies (Introduction to Theories and Models in Applied Behavioral Science. pg. 89. 1996.), there has been a tremendous increase in the domain of Human Resource Management. Increasingly, the organizations are realizing the contribution of the whole gamut of HR policies and practices – from recruitment and selection to training and development, from performance evaluation to awards and incentives administration. Organizations like Microsoft believe that “careful recruitment policies are critical to the future success of Microsoft” (Robbins, S. P. 1999.) Productivity is generally measured in economic terms, but human and social inputs and outputs are also relevant, and ultimately translate into economic profits. In organizations where employees feel that policies are not aimed at distributive justice (equitable distribution of rewards), and procedural justice (fairness of allocation procedures) have to face the brunt of low productivity, discontentment and even workplace aggression. (Baron, R. A. and Byrne, Donn. 2000). It has been conclusively proved by the Canadian Public Service Human Resource Management Agency, that there are certain practices in human resources management that contribute to high performance in organizations. (Website: Public Service Human Resource Management Agency of Canada, Framework for Good Human Resources Management in the Public Service.) A study by Watson Wyatt (a global consulting firm specializing in human capital and financial management) has identifies certain HR practices as leading indicators of financial success. (Website: Watson Wyatt Worldwide, Press Release). A report in Business and Health by Dennis Richling states that the traditional cost-cutting approach to save health-care dollars can result in unintended productivity losses. Sighting the example of Bank One, the report reiterates how the organization experienced productivity improvements when it included health-care policies in its employee’s benefit program. (Workforce.com, Productivity). Annmarie Geddes Lipold believes that benefit integration boosts productivity and profits. By streamlining a combination of benefits such as health, disability, time-off, and workers compensation, unscheduled absences can be better managed, thus saving time and money. She makes her point by taking the case of Steelcase Inc (Michigan manufacturer of custom office furniture), where the combined cost of short-term disability, long-term disability, and workers’ compensation has dropped 13 percent, (from $1.63 per $100 of payroll in 1998 to $1.42 in 2001). Restricted workdays have plunged 73 percent, (from 63,000 in 1992 to 16,943 in 2000). Lost-time days have declined 70 percent, (from 4,313 in 1992 to 1,313 in 2000). And the number of litigated disability-related cases fell from 15 in 1996 to 6 in 2000. (Annmarie Geddes Lipold, Workforce.com, Productivity.) Rensis Likert, Director of the Institute for Social Research, University of Michigan, states that employee productivity is directly related to the type of supervision that the organization carries out as a policy. (Rudhra Basavaraj, M. N., 1999.) The above preliminary Literature Review points out that Organizations all over the world, are benefiting from the application of good and sometimes innovative HR policies, and are able to enhance their productivity. A discussion of the research methodology and research methods and the reasons for choosing these The research will comprise of two distinct approaches – Literature Survey and Primary data collection and analysis. For the Literature Survey, the author will be compiling a comprehensive data on that elaborates how different organizations benefited due to better HR practices. For this, numerous books, journals, and websites will be researched. The primary research will require the author to administer questionnaires to the HR Managers of 50 organizations. The author will aim to collect the data from 5 organizations per day, thus restricting the data collection activity to 10 days only. The questionnaire will be customized to include items that detect the presence of HR practices, Productivity and Performance. The data thus collected will be used to correlate the HR practices part with the Productivity and Performance part. The questions included in the instrument will be based on the authors understanding of good HR policies and practices. This, in turn, has been developed through the Literature Survey. Measures of productivity and performance will include data related to absenteeism, turnover, number of disputes related to wages/allowance, The findings of the Literature Survey and the Primary Research will then be used to answer the question: Human Resource Policies and Practices Enhance Organization’s Performance and Productivity. The Literature Survey will enable the author in understanding the prevalent HR practices and benefits that are being derived by organizations. The data collected through the Primary Research will easily be amenable to statistical analysis and interpretation, and hence will lend objectivity to the overall evaluation. A recognition of any problems or opportunities that could arise and hence any limitations in scope of the work. The above approach will lead valuable insights and help identify HR practices that translate into enhanced productivity. However, the scope of the primary research is limited as no actual item analysis was carried out for the above questionnaire (Singh, A. K., 1997.) so, it cannot be stated with statistical proof that the questionnaire is valid. A pilot survey too was eschewed, so the reliability of the Instrument is at stake. Measure of Correlation only indicates the degree and direction of relationship between two variables, but does not establish a cause and effect relationship; also, it does not differentiate which is cause and which is effect. Hence, even if we can establish that HR practices and productivity improvement occur together, it will be premature to say that second is the result of the first. For this, a further extensive study will be needed that eliminates other (other than HR policies) external variables (like employees age, sex, background etc.) and narrows down the productivity and performance to HR policies and practices. An identification of the main tasks that should be carried out to complete the work according to the set timescale 1. Finding articles/books/websites related to the topic 2. Compilation of examples of organizations (by researching through the above) that use HR policies and practices and have improved productivity. 3. Preparation of the Questionnaire A) Selecting the items that indicate good HR practices (using the literature review) B) Selecting the items that indicate productivity and performance C) Setting the scoring criteria, and enumerating the calculation of correlation. 4. Selecting 50 organizations to administer the questionnaire 5. Getting appointments with the HR managers 6. Meeting and interview/survey 7. Compilation of the data scores and finding coefficient of correlation. 8. Presenting the findings and literature review in a comprehensive manner A bar (Gantt) chart showing the tasks, their interactions and the key points when milestones/deliverables are expected Activity Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 181920 1. Finding articles/books/websites related to the topic 1 1 1 1 1 1 1 2. Compilation of examples of organizations (by researching through the above) that use HR policies and practices and have improved productivity 1 1 1 1 1 1 1 1 1 1 3. Preparation of the Questionnaire a)Selecting the items that indicate good HR practices (using the literature review) 1 1 1 1 1 1 1 b) Selecting the items that indicate productivity and performance 1 1 1 1 1 1 1 c) Setting the scoring criteria, and enumerating the calculation of correlation. 1 1 Selecting 50 organizations to administer the questionnaire 1 1 1 1 Getting appointments with the HR managers 1 1 1 1 1 1 1 1 1 1 Meeting and interview/survey 1 1 1 1 1 1 1 1 1 1 Compilation of the data scores and finding coefficient of correlation 1 1 1 1 1 Presenting the findings and literature review in a comprehensive manner 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Appendix A Questionnaire Part A: HR Practices and Policies Rate the following on a 1 to 5 scale. 1. The organization has a transparent system of Performance Appraisal 2. The Organization has a objective descriptions of Jobs Specifications 3. The Organization provides regular incentives, bonus, paid leaves and sick leaves 4. The Organization has systems in place for transparent and clear communications 5. Does the Organization’s Human resources management practices promote fair, equitable and impartial treatment of employees Part B: Performance and Productivity Related Questions Rate the following on a 1 to 5 scale. 1. Absenteeism 2. Turnover 3. Number of Disputes related to wage/compensation Appendix B: A sample statistical analysis: Organizations Sum of Part A (X) Sum of Part B (Y) XY X2 Y2 A 25 15 375 625 225 B 9 6 54 81 36 C 21 12 252 441 144 D 16 11 176 256 121 E 17 11 187 289 121 F 10 4 40 100 16 G 13 9 117 169 81 Total 111 68 1201 1961 744 Mean X’=111/7=15.85 Y’= 68/7=9.7 Sum XY Sum X2 Sum Y2 R= {n* Sum XY – Sun X* Sum Y} / {( n* Sum X2 - (Sum X)2 ) * (n* Sum Y2 - (Sum Y)2 }1/2 R= {7*1201 – 111*68 }/ {(7*1961 – 111*111)*(7*744 – 68*68)}1/2 R= 859/ {1406*584}1/2 R= 859/906.147 = + 0.947 Thus there exists a high positive correlation between the HR practices and Productivity References 1. Mayo and the Human-Relations Movement. In Introduction to Theories and Models in Applied Behavioral Science, USA: Pfeiffer & Company. 1996. 2. Robbins, S. P. 1999. Human Resource Policies and Practices. In Organizational Behavior.India: Prentice-Hall Inc. 3. Baron, R. A. and Byrne, Donn. 2000). Groups and Individuals, In Social Psychology, pg. 507-511. 4. Public Service Human Resource Management Agency of Canada, Framework for Good Human Resources Management in the Public Service. http://www.hrma-agrh.gc.ca/hr-rh/hrtr-or/hr_references/Framework/hrmfrtm-cgrhorg1_e.asp) 5. Watson Wyatt Worldwide, Press Releas http://www.watsonwyatt.com/news/press.asp?ID=9047 from:) 6. Workforce Management, Productivity, www.workforce.com/archive/article/23/87/43.php - 51.4Kb) 7. (Annmarie Geddes Lipold, Workforce.com, Productivity.) /http://www.workforce.com/archive/feature/23/36/89/index.php?ht=productivity%20productivity.) 8. Rudhra Basavaraj, M. N., 1999. Human Factor in Management. India: Himalaya Publishing House. 9. Singh, A. K., 1997.Item Analysis. In Tests, Measurements and Research Methods in Behavioral Sciences. India:Bharati Bhawan. 10. Bhalla, G. S. 1999. Elementary Statistics. India: NCERT Read More