Does the Bundling of Human Resource Practices Result in Better Performance - Case Study Example

Human resource management Student’s Name: Instructor’s Name: Course Code: Date of Submission: Introduction Human resource management is an important aspect in the success of any organization. For any organization to succeed, it must be able to effectively manage the human resource requirements by developing various practices in the organization. Human resource bundling involves designing various strategies which will enable an organization to create a competitive advantage. There are various human resource bundling practices which can be applied by an organization like centralizing decision making and strategic human resource planning (Arthur 1994). Developing human skills will help to improve the productivity per employee. However, human resource bundling works in particular industries better than other industries. For instance, centralized decision making works better in manufacturing industries than processing industries because centralized decision making ensures that the decisions made in an organization is of high quality (Barber et al 1999). From the research which has been conducted by various scholars, it has been found that human behavior can influence the performance of an organization. In this regard, therefore, this essay justifies that human resource bundling helps to improve the performance of an organization, however, this is only in specific contexts, and if these bundles are aligned with the strategy of the organization. The essay will justify from various researches which have been conducted to support the argument that human resource practices help to improve the performance of an organization. Literature review To start with the research which has been conducted, it is clear that human resource management practices helps to improve the performance of an organization through employees. For instance, through centralized decision making, training and rewards can help to improve the morale of the employees if they are administered effectively. Since the employee goals are aligned with those of the management, the productivity of the employees will improve thus improving the performance of an organization. This is the research which has been conducted in human resource management practices in the manufacturing industry. In addition, human resource practices help an organization to lower the employee turnover. This is because human resource practices help the employees to be satisfied with their jobs, thus the organization will be able to attract and retain competent skills which can enable the organization to improve its performance and also helps to improve utilization of resources in an organization. Moreover, from the research which was conducted by Becker & Gerhart it has been found that human resource management practices also help to improve the performance of an organization (Becker & Gerhart 1996). The main human resource practices which help to improve the morale of the employees and job satisfaction includes self directed work teams, practicing job rotation and teams for solving problems among the employees. The above are the common practices which help to improve the performance of an organization. Other practices which can help to improve the performance of an organization include profitability of an organization which is reaped from improved productivity, cycle time and customer complains which enable an organization to define better strategies to manage the complains of customers thus improve customer satisfaction. However, organizational improved performance is achieved if the organizational goals are aligned with then organizational practices such as in-house than outsourcing. Moreover, another research which has been conducted finds out that human resource practices work better in some organizations than others. There is little evidence which explains that human resource bundles work in all organizations but from the research which has been conducted, it is clear that human resource bundles work best in manufacturing firms (Dyer & Reeves1995). The human resource bundles on the other hand, are not equal since some are superior to others. The most superior human resource practices include top management commitment and developing working bundles which are flexible. Flexibility in the workplace helps to improve the morale of the employees since they can schedule their work at convenient time. In the manufacturing organization, flexible production can help to meet different needs of the employees, thus improving their morale which in turn helps to improve the productivity of the manufacturing organization (Artis et al 1999). In addition, research has also been using the sequential tree to search for human resource practices which help to improve the performance of an organization. According to this research, the main practices of human resource include employee training, innovation and participative leadership style. These are the main practices which improve the performance of an organization in the manufacturing industry. This research indicated that for the practices to have an effect on the performance of an organization, practices such as employee training should be practiced. This helps the employees to acquire skills which can enable them to be competent in their operations (Guest et al 2004). The employees can also be motivated from these practices, thus they can improve their performance, which in turn improves the performance of the organization. Another research conducted is the high performance work systems. These are the systems which are designed by an organization to improve the performance of an organization. HPWS can work better if it is aligned with the organizational structure and the corporate function of the organization. The research which was conducted by Huselid and Becker indicated that the value of the dollar increased when the organizations applied high performance work systems which created a core competency of the organization. From this research, it is clear that the performance of an organization can be improved when applying human resource management practices such as compensation and employees’ training as well as participative leadership style (Huselid & Becker 1997). One of the competitive strategies which can be applied by an organization is developing flexible workplace which will help to attract and retain competent skills in an organization which enable an organization to improve output. High performance work systems include use of computers to manage the operations of the organization instead of practicing labor intensive strategy which is associated with low production. With the application of information communication technology, the management of the organization will be done better thus improving the resource utilization which in turn improves the performance of the organization. There is also another research which was conducted on a hundred firms by Huselid to investigate the effect of human resource management practices on employee turnover, productivity and corporate finance in an organization. The research indicated that the performance of every organization improved since the application of human resource practices started. However, the research confirmed that human resource bundling work better in manufacturing and automobile organizations and not all organizations (Huselid 1995). The research also indicated once there is the application of effective human resource practices in an organization, the employees will be satisfied and they will offer their best skills to improve their performance. They also develop good citizenship, which promotes the relationship of employees and management, thus good sharing of information which lead to creativity and quality decisions made (Huselid 2005). These decisions help to improve the performance of the employees and the performance of the organization as a whole and in particular organizations. Human resource practices also help to lower the employee turnover rate due to the satisfaction of their jobs (Becker et al 2009). Retaining employees ensure that an organization maintains the required skills which have competent knowledge which help to improve the performance of an organization. It is therefore important to decide which particular bundle to implement in a certain organization so that better results can be effective. Moreover, evidence from the research conducted by MacDuffie indicates that human resource practices such as flexible production, collaborative working team and relationship between product and organizational architecture helps to improve the performance of an organization (MacDuffie1995). This research was conducted in the automobile industry since the human resource practices work better in the automobile industry and manufacturing firms. According to this research, the main practices which improve the performance of an organization include teamwork, human resource planning, performance appraisal and practicing total quality management. There is strong evidence which shows that there is a relationship between the human resource innovative practices and the performance of an organization. Finally, there is research which was conducted to find out the effect of family work bundles and how they affect the performance of an organization (Perry-Smith & Blum 2000). Commitment and control bundles are the most applied in manufacturing and automobile organizations and they have been proven to improve the performance of the organizations. They help an organization to achieve high results due to low employee turnover and job satisfaction. In this regard, human resource practices help to improve the performance of an organization. So far there is no evidence which indicates if human resource practices undermine the performance of an organization. These practices are mostly applied in the automobile and manufacturing industries. Conclusion Human resource practices help to improve the performance of an organization. However, these practices work best in automobile firms and manufacturing firms. The main human resource practices which help to improve performance of an organization include better employee compensation, employee raining, teamwork, effective scheduling of work groups and practicing flexible work. These practices help to improve the performance of an organization through employees. They help to improve employees’ morale, their satisfaction and enable an organization to attract and retain most competent skills in the organization. Human resource practices therefore, improve the performance of an organization, but are most applicable in automobile and manufacturing organizations. References Artis, C.R., Becker, B.E. & Huselid, M.A. 1999. Strategic Human Resource Management at Lucent. Human Resource Management, 38(3): 309-313. Arthur, J. 1994. Effects of human resource systems on manufacturing performance and turnover. Academy of Management Journal, 37(3): 670-687. Barber, D. Huselid, M.A., & Becker, B. 1999. Strategic Human Resource Management at Quantum. Human Resource Management, 38(2): 321-328. Becker, B. & Gerhart, B. 1996. The impact of human resource management on organizational performance: progress and prospects. Academy of Management Journal, 39(4): 779-801. Becker, B.E., Huselid, M.A., & Beatty, R.W., 2009. The Differentiated Workforce: Transforming Talent Into Strategic Impact. London: Harvard Business Press Bestseller Dyer, L. & Reeves, T. 1995. Human resource strategies and firm performance: what do we know and where do we need to go? International Journal of Human Resource Management, 6(3): 656-670. Guest, D., Conway, N. & Dewe, P 2004. Using sequential tree analysis to search for bundles of HR practices. Human Resource Management Journal, 14(1): 79-96. Huselid, M.A. 2005. Keynote Speaker. The Workforce Scorecard: Managing Human Capital to Execute Strategy. Washington, DC: CLC-Metrics Annual Conference. Huselid, M.A. & Becker, B.E. 1997. The impact of high performance work systems, implementation effectiveness and alignment with strategy on shareholder wealth. Paper presented at the 1997 Academy of Management Annual Conference, Boston. Huselid, M.A. 1995. The impact of human resource management practices on turnover, productivity and corporate financial performance. Academy of Management Journal, 38(3): 635-672. MacDuffie, J.P. 1995. Human resource bundles and manufacturing performance: Organizational logic and flexible production systems in the world auto industry. Industrial and Labour Relations, 48(2): 197-221. Perry-Smith, J.E. & Blum, T. 2000. Work-family human resource bundles and perceived organizational performance. Academy of Management Journal, 43(5), 1107-1117. Read More