HRM Practices and Organizational Behavioural Tools that Can Drive Organizational Performance - Coursework Example

Evaluation of HRM Practices and Organizational Behavioural Tools that can Drive Individual and Organizational Performance Name Course Name and Code Instructor’s Name Date Introduction Human resource management involves the management of people. Human resource strategy is a process of management which forms part of the formation of emergent strategy (Holman, Frenkel, Sorenson and Wood, 2009). Human resource strategy helps in creating ways that manages people in such a way that the goals of an organization are realized (Raminta, Anna-Maija and Aurelija, 2010). The successful performance of many companies is a result of outstanding management of employees. Thus HR practices which are innovative result in increased output per employee (Combs, Liu, Hall, and Ketchen, 2006). It is widely agreed that human capital if well managed can offer a firm a competitive advantage and that human capital is directly influenced by the HR practices of a firm (Datta, Guthrie, and Wright, 2005). Furthermore, it is agreed that inimitability of a company system can be enhanced by the complex HRM systems (Carmeli and Schaubroeck, 2005). People contribute to the efficiency and effectiveness of a firm and cannot be replicated by competing firm. They also fulfil a unique function in an organization and they cannot be bought in the market (Boselie, Dietz and Boon, 2005). On the other hand, organizational behaviour involves description, understanding, prediction and control of human behaviour within the environment of an organization (Arthur and Boyles, 2007). It involves the study of group dynamics, relationship of individuals in groups, leadership, and the function of organizations and implementation of change in a firm. The behavior of a firm is influenced by the management of the organization (Takeuchi, Lepak, Wang and Takeuchi, 2007). The management determines the work life, models of leadership, job enrichment and helps in resolving conflicts at the firm (Keegan and Boselie, 2006). All this have direct influence on the behavior of individuals in an organization (Hitt, Bierman, Uhlenbruck, and Shimizu, 2006). This essay provides a critical evaluation of HRM practices and organizational behavioral tools that can drive individual and organizational performance (Boselie, Dietz, Boon, 2005). HRM practices Research has shown that for an organization to be high performing it must embrace seven major elements (Subramaniam and Youndt, 2005). First, the company must realize that performance is driven by people and not processes (Cropanzano and Mitchell, 2005). Even though firms must control various processes to enable them manage quality and costs, market forces can help an organization achieve low cost. It is reported that many organizations have successful controlled processes but have been unable to deal with issues relating to their people (Raminta, Anna-Maija and Aurelija, 2010). It is the organization that has leveraged its people that is capable of achieving process efficiency that brings about high level of performance (Edgar and Geare, 2005). Therefore, high performing organizations are efficient managers of people in their firms (Hesketh and Fleetwood, 2006). People are important in the performance of an organization because organization activities are directed by or toward people (Carmeli and Schaubroeck, 2005). Thus people are the heart and soul of all organizations. This implies that an organization needs to balance the needs of all people (shareholders, employees, business partners and customers) for it to be able to become a high performing organization (Paauwe, 2009). Employees are the main determinant of how organization meets the needs of different people (Combs, Liu, Hall, and Ketchen, 2006). Research has shown that when employees are engaged in a better way, they provide excellent services to the firm’s customer (Combs et al., 2006). This in turn results in increased customer loyalty and engagement. As a consequence, the returns to the firm increases thus the needs of shareholders are met. Even though people are the core element of high performing organizations, they must be surrounded by the following four cardinal elements to drive the organization to success (Carmeli and Schaubroeck, 2005). These elements include leadership, innovation, strengths and vision. These elements are dependent on the core element of people. The balance in these four elements needs to be balanced to encourage growth of an organization (Raminta, Anna-Maija and Aurelija, 2010). An organization that does not balance the four cardinal elements more often than not end up failing to succeed and to become a high performing organization (Ployhart and Moliterno, 2011). All firms which are struggling to become high performing organizations lack the necessary balance in the four elements (Hitt, Bierman, Uhlenbruck, and Shimizu, 2006). A good vision motivates the employees to be committed to the success of a firm. It is the vision and not the leaders that should inspire the employees to aspire great things (Schulte et al. 2009). The leader should be involved in creating emotional connection between the vision and the employees. A successful vision should have the purpose, values and goals of the organization aligned. The purpose of the organization is almost as important as the core element of people (Combs, Liu, Hall, and Ketchen, 2006). The purpose is the second reason behind the existence of an organization after money making reason (Youndt, Subramaniam and Snell, 2004). The purpose distinguishes an organization from others which deal in similar activities. The purpose of an organization is the intersection of three concepts: what the organization is passionate about; what the organization can be best at all over the world and what the organization can make money at (Hitt, Bierman, Uhlenbruck, and Shimizu, 2006). Organizations which mainly focus their efforts at making profit at the expense of the two other concepts of organization’s purpose always cost the firm financially (Carmeli and Schaubroeck, 2005). Firm which realizes that it exists to serve others in some fashion or form engages both customers and employees who are the centre stage of driving the firm to success (Khilji and Wang, 2006). High performing companies have a set of values which is strong that guide the operations of the firm (Harrison, Newman and Roth, 2006). The values guide the employees on how they relate to their colleagues and the customers. In these organizations values are living statements instead of written documents (Ployhart Weekley and Baughman, 2006). They constitute rules which guide people in the organization. Together with the purpose of the organization, values constitute the core of an organization (Hitt, Bierman, Uhlenbruck, and Shimizu, 2006). Even though the values vary from organization to another, they should be shared by all organization’s people (Combs, Lui, Hall and Ketchen, 2006). Shared values therefore define the behavior of all persons in the organization and thus there is no need for bureaucratic rules and regulations. Well spelt out goals that are known to all employees, makes achievement of a firm’s vision visible since this excites the employees. Since the core element of an organization is people, the organization goals related to people should always come first. This ensures long term sustainability of the organization. Organization’s goals should be built around people: employees and customers. The goals should engage both employees and customers. Goals should also focus on the financial stability of the organization since money making is one of the reasons the firm exists (Raminta, Anna-Maija and Aurelija, 2010). Thus the goals should ensure there is cash flow in the organization. The goals should also address the process flow, total cycle time, adherence to legal regulations and waste. The goals should also be able to ensure the longevity of the firm. Leadership is at the heart of high performance creation. Leadership here refers to all acts of leadership which defines behavior of dealing with ideas and people (Combs, Liu, Hall, and Ketchen, 2006). Leadership involves establishment of direction through devising a vision for future and changes required for achieving this vision; aligning people to understand the vision and be committed to achieving it and motivating and inspiring people (Carmeli and Schaubroeck, 2005). Many organization struggles to become high performing because leadership needs of the organization are not met. Many of managers in these organizations lack understanding of their leadership roles (Hitt, Bierman, Uhlenbruck, and Shimizu, 2006). Leaders should be involved in creation of change and innovation as they preserve the core of purpose and values to achieve the goals of the organization. The interests of other members and core constituents of the organization should come first. Leaders should strive to make others to be the best they can become. Thus they should create relationship with and for others (Bell and Kozlowski, 2008). They should also create an environment where personal responsibility and trust flourish. Research indicates that organization should invest much of their resources in leveraging their strengths for them to become high performing firms instead of concentrating on improving their weakness. Concentrating on strengths ensures that an organization accentuates the positive side of it. Research has also shown that a company which stimulates progress and at the same time preserves its cores (purpose and values) is likely to become successful than one which does not. Organizations should be involved in developing new ideas, technology, methodology and creativity which constitute innovation. Thus organizations need to react continuously to changes in their environment in addition to continuously making things better. This calls upon the organizations to find new ways of running its activities. People are at the centre stage of this element since innovation can only be brought about by people. Organization’s culture should be centred at encouraging innovation in addition to other things which are necessary for innovation for example risks and failure (Raminta, Anna-Maija and Aurelija, 2010). Organization’s members should thus be encouraged to take risks and to be receptive to new innovations. People’s thoughts should be directed toward solving problems (Kuvaas, 2008). Learning is essential for innovation and all persons at the firm should be encouraged to learn. An organization which ceases to innovate also ceases to grow and to perform well since other innovative organizations become better and more competitive than it (Carmeli and Schaubroeck, 2005). It is widely accepted that innovation out ways other cardinal elements of becoming high performing organization. The final two elements of high performing organization constitute foundational elements. They include trust and personal responsibility. The four cardinal elements need foundational elements much as they need core element of people to exist. All elements of high performing organization are built upon the element of trust. Four components make up trust. These include openness, straightforwardness, reliability and acceptance (Hitt, Bierman, Uhlenbruck, and Shimizu, 2006). The firm should continuously communicate about all elements for creation of high performance and trust to increase its trust level. Personal responsibility ensures that everything in an organization takes place effectively and efficiently. It ensures that trust survives in an organization. It is through personal responsibility that the stage for individual’s contribution to the organization’s success is set. This calls for personal direction for all individuals concerned (Carmeli and Schaubroeck, 2005). This also calls for consultation before making and implementing decisions. Opportunities of organizational behavior Organization behaviour plays a vital role in improving the performance of the firm (Hitt, Bierman, Uhlenbruck, and Shimizu, 2006). By putting the interests of employees at heart and employing appropriate organization behaviour at different levels of the firm the performance of the firm is likely to improve since different employees have different needs (Bell and Kozlowski, 2008). In addition, fostering participative decision-making process that is ethical and based on moral judgment is likely to increase the performance of the firm. Finally, having organizational behaviour that fosters organization development based on introduction of change that involves consultation can help a firm to adopt new techniques of carrying out its practice with little or no resistance (Carmeli and Schaubroeck, 2005). This can help improve the performance of the firm. Challenges of organizational behaviour Currently, organization behaviour is based on systems approach, which has five parts: the individual, the formal organization, the informal organization, the fusion process and the physical environment. These parts are supposed to coexist. These parts have been founded on three behavioural sciences: anthropology, sociology and psychology. Failure to understand the contribution of one of these subjects to organization behaviour can result in uncalled for organization behaviour. For instance, failure to understand sociology may result in difficulties in managing groups and formation of teamwork (Raminta, Anna-Maija and Aurelija, 2010). Thus, one shortcoming of organization behaviour is that it is based on three broad subjects, which need to be integrated in order to allow employee development, motivation, teamwork and development of organization culture. To avoid this limitation the management need to consult or be knowledgeable in the three subjects, which affect organization behaviour (psychology, sociology, and anthropology (Hitt, Bierman, Uhlenbruck, and Shimizu, 2006). Organization behaviour also entails individual behaviour, group behaviour, organization structure and organization processes. These areas have an impact on the personality and perceptions of individuals within a firm, group dynamics, attitudes and job satisfaction, politics and role of leadership, decision making processes, job design, chain of communication and culture f the firm and its environment. Various models have been devised to explain the behaviour of individuals within an organization (Carmeli and Schaubroeck, 2005). They include autocratic, custodial, supportive and collegial models. Even though these models may coexist in a firm, one of them is usually dominant. Thus, organization behaviour has a limitation of having unbalanced models of organization behaviour some of which like autocratic model could have negative impact on the performance of the firm if it is dominant (Hitt, Bierman, Uhlenbruck, and Shimizu, 2006). Thus, managers within a firm need to ensure that the dominant model adopted support the performance of a firm to avoid this limitation. Another limitation of organization behaviour is that one member of an organization can have an impact on the behaviour of others. This implies that in case the firm recruits a new employee, the new employee could influence others either positively or negatively. To avoid problems, which arise from negative influence the management, need to undertake strict and thorough training of the employee (Bell and Kozlowski, 2008). The social system, which influences organization behaviour, has no boundaries and hence the behaviour of a firm may be influenced by other firms (Carmeli and Schaubroeck, 2005). To avoid this, firms need to instil into their employees the values and teach them the culture of the firm. By doing so, the culture of the firm will be able to influence the behaviour of new employees to act in specified way. Once the employees understand the culture of the firm, they will acquire a sense of security, stability, and understanding and be able to respond to different situations appropriately. Organization behaviour also entails individualization that can involve exertion of influence on the social system of the firm by employees. When the culture of a firm is challenged by such employees and the management becomes rigid, this can result in strikes that may influence negatively on the performance of the firm. To avoid such limitations of organization behaviour the management ought to balance socialization and individualization of employees in their firm. This will ensure that radical ideas by employees are discussed among employees and the management in order for a negotiated order to be arrived at. Impact of Organizational behavior on performance As mentioned earlier there are four models of organization behaviour. Each of these models has different impact on the performance of employees and the firm at large. In the autocratic model has the managers being powerful and authoritative. The employees on the other hand are oriented to be obedience and dependent on their manager. The only need of the employee that is met in this model is subsistence. Firms that embrace this model as the dominant model have minimal performance. The custodial model is based on economic resources and the managers are oriented towards money (Raminta, Anna-Maija and Aurelija, 2010). The workers on the other hand are oriented towards security and benefits in addition to being dependent on the organization. Thus, the firm is able to meet security need of employees and it allows cooperation among employees. Supportive model of organization behaviour is based on leadership with the managers oriented to support the employees while the employees are oriented towards job performance and participation. The employees thus receive recognition and are given status under this model. The model awakens the talents in the employees and allows increased performance. The collegial model is based on partnership, the management is oriented toward teamwork, and the employees are oriented toward responsible behaviour and self-discipline. This allows self-actualization of employees and these results in moderate enthusiasm that drives performance at the firm (Carmeli and Schaubroeck, 2005). Proper balance of these models in a firm can increase performance at different levels of the firm dependent on the needs of the employees. Change is often painful and most people tend to reject it since it disrupts the familiar operations of a firm. Organization behaviour that is rigid and does not allow or entertain new ideas often leads to difficulties when the firm wants to implement change (Bell and Kozlowski, 2008). However, organization behaviour which allows organization development and new ideas are welcome allows introduction of planned change with little or no resistance. One of the key functions of management is decision making. The influence of ethics on decision-making process is a trend in organization behaviour. Ethical practice depends on awareness, consequences and the use of personal and social values to make decisions. It requires that leaders use moral judgment at workplace to make decisions. This ensures that people hired to work for the firm are aware of the consequences of their decisions on the stakeholders of the firm. An individual who acts ethically in decision-making is first able to recognize the ethical issue, evaluate the issue based on personal ethics and resolve to comply with this ethical judgment and act ethically (Carmeli and Schaubroeck, 2005). Thus organization behaviour which fosters moral judgment often leads to better performance and unlikely of the firm collapsing. It is argued that stress results from extraordinary demands, constraints or opportunities. Thus, organization behaviours that encourage such demands and constraints often lead to development of stress among its employees (Bell and Kozlowski, 2008). The stress in turn leads to job dissatisfaction, employee turnover, absenteeism, accidents, poor interpersonal relations, low morale, poor customer service and low productivity. The dynamic development in information technology has increased job demands for many firms and many employees are left to work in constantly changing work environment. This has in turn resulted in increased stress among employees due to inability to handle the changing work conditions. Organization behaviour, which allows employees to access rewards and benefits such as flexible work schedules, compensation time or telecommunication options can reduce workplace stress and result in increased performance of the employees and the firm at large. The relationship between OB and performance Therefore, the dominant model of organization behaviour is related to performance (Mathieu and Taylor, 2006). A balance of these models at various levels of the firm will result in increased performance while poor balance can affect negatively on the performance of the firm (Bell and Kozlowski, 2008). In addition, ethical decision-making process as a trend in organizational behaviour is related to performance of the firm with decisions based on moral judgment being able to increase stability and performance of the firm. Organization behaviour plays a vital role in improving the performance of the firm (Combs, Lui, Hall, and Ketchen, 2006). By putting the interests of employees at heart and employing appropriate organization behaviour at different levels of the firm the performance of the firm is likely to improve since different employees have different needs (Subramony, Krause, Norton and Burns, 2008). In addition, fostering participative decision-making process that is ethical and based on moral judgment is likely to increase the performance of the firm (Raminta, Anna-Maija and Aurelija, 2010). Finally, having organizational behaviour that fosters organization development based on introduction of change that involves consultation can help a firm to adopt new techniques of carrying out its practice with little or no resistance (Evans and Davis, 2005). This can help improve the performance of the firm. Conclusion From the discussion above it is clear that even though HRM practices are essential for establishing performing employees and organization, these have to interact with other factors such as organization behavior. It should be noted however that HRM practices forms the core of high performing organization since people are used to differentiate the firm from others and offer it a competitive advantage. These HRM practices influences the mode of organization behavior of the firm and hence influences the output of employees and thus the performance of the firm as a whole. It is clear that organization behavior is mainly determined by the various models (autocratic, custodial, supportive and collegial) which explain the behaviour of individuals within an organization. The innovativeness and hence performance of the firm will be determined by these models which often are related to HRM of a firm. References Arthur, J. B. and Boyles, T. 2007. Validating the human resource system structure: a levels-based strategic HRM approach. Human Resource Management Review, vol. 17, pp. 77–92. Bell, B. and Kozlowski, S. 2008. Active learning: effects of core training design elements on self-regulatory processes, learning, and adaptability. The Journal of Applied Psychology, vol. 93, no. 2, pp. 296–316. Boselie, P., Dietz, G. and Boon, C. 2005. Commonalities and contradictions in HRM and performance research. Human Resource Management Journal, vol. 15, pp. 67–94. Carmeli, A. and Schaubroeck, J. 2005. How leveraging human resource capital with its competitive distinctiveness enhances the performance of commercial and public organizations. Human Resource Management, vol. 44, no. 4, pp. 391–412. Combs, C., Yongmei, L., Hall, A. and Ketchen, D. 2006. How much do high-performance work practices matter? A meta-analysis of their effects on organizational performance. Personnel Psychology: A Journal of Applied Research, vol. 59, pp. 501–28. Combs, J., Lui, Y., Hall, A. and Ketchen, D. 2006. How much do high-performance work practices matter? A meta-analysis of their effects on organizational performance. Personnel Psychology, vol. 59, pp. 501–28. Cropanzano, R. and Mitchell, M. 2005. Social exchange theory: an interdisciplinary review. Journal of Management, vol. 31, pp. 874–900. Datta, D. K., Guthrie, J. P. and Wright, P. M. 2005. Human resource management and labor productivity: does industry matter? Academy of Management Journal, vol. 48, pp. 135–45. Edgar, F. and Geare, A. 2005. HRM practice and employee attitudes: different measures – different results. Personnel Review, vol. 34, pp. 534–49. Evans, W. R. and Davis, W. D. 2005. High-performance work systems and organizational performance: the mediating role of internal social structure. Journal of Management, vol. 31, pp. 758–75. Harrison, D. A., Newman, D. A. and Roth, P. A. 2006. How important are job attitudes? Meta-analytic comparisons of integrative behavioral outcomes and time sequences. Academy of Management Journal, vol. 49, pp. 305–25. Hesketh, A. and Fleetwood, S. 2006. Beyond measuring the human resources management-organizational performance link: applying critical realist meta-theory. Organization: The Interdisciplinary Journal of Organization, Theory and Society, vol. 13, pp. 677–700. Hitt, M.A., Bierman, L., Uhlenbruck, K. and Shimizu, K. 2006. The importance of resources in the internationalization of professional service firms: the good, the bad, and the ugly. Academy of Management Journal, vol. 49, no. 6, pp. 1137–1157. Holman, D., Frenkel, S., Sorenson, O. and Wood, S. 2009. Work design variation and outcomes in call centers: strategic choice and institutional explanations. Industrial and Labor Relations Review, vol. 62, p. 510–32. Keegan, A. and Boselie, P. 2006. The lack of impact of dissensus inspired analysis on developments in the field of human resource management. Journal of Management Studies, vol. 43, pp. 1491–511. Khilji, A. and Wang, X. (2006). “Intended” and “implemented” HRM: the missing linchpin in strategic human resource management research. International Journal of Human Resource Management, vol. 17, pp. 1171–89. Kuvaas, B. 2008. An exploration of how the employee-organization relationship affects the linkage between perception of developmental human resource practices and employee outcomes. Journal of Management Studies, vol. 45, pp. 1–25. Mathieu, J. E. and Taylor, S. E. 2006. Clarifying conditions and decision points for mediational type inferences in organizational behavior. Journal of Organizational Behavior, vol. 27, pp. 1031–56. Paauwe, J. 2009. HRM and performance: achievements, methodological issues and prospects. Journal of Management Studies, vol. 46, pp. 129–41. Ployhart, R.E. and Moliterno, T.P. 2011. Emergence of the human capital resource: a multilevel model. Academy of Management Review, vol. 36, no. 1, pp. 127–150. Ployhart, R.E., Weekley, J.A. and Baughman, K. 2006. The structure and function of human capital emergence: a multilevel examination of the attraction–selection–attrition model. Academy of Management Journal, vol. 49, no. 4, pp. 661–677. Raminta, P., Anna-Maija, L., and Aurelija, N. 2010. Building organizational trust in a low-trust societal context. Baltic Journal of Management, vol. 5, no. 2, pp.197 – 217 Schulte, M., Ostroff, C., Shmulyian, S., and Kinicki, A. 2009. Organizational climate configurations: Relationships to collective attitudes, customer satisfaction, and financial performance. Journal of Applied Psychology, vol. 94, no. 3, pp. 618-634 Subramaniam, M. and Youndt, M.A. 2005. The influence of intellectual capital on the types of innovative capabilities. Academy of Management Journal, vol. 48, no. 3, pp. 450–463. Subramony, M., Krause, N., Norton, J., and Burns, G. 2008. The relationship between human resource investments and organizational performance: A firm-level examination of equilibrium theory. Journal of Applied Psychology, vol. 93, no. 4, pp. 778-788. Takeuchi, R., Lepak, D., Wang, H. and Takeuchi, K. 2007. An empirical examination of the mechanisms mediating between high-performance work systems and the performance of Japanese organizations. Journal of Applied Psychology, vol. 92, no. 4, pp. 1069–1083. Youndt, M.A., Subramaniam, M. and Snell, S.A. 2004. Intellectual capital profiles: an examination of investments and returns. Journal of Management Studies, vol. 41, no. 2, pp. 335–361. Read More