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

Does the Bundling of Human Resource Practices Result in Better Performance? Name of Student: Name of Course: Name of Instructor: Date of Submission: Does the Bundling of Human Resource Practices Result in Better Performance? Over time, human resource scholars and professionals have been engaged in studies about the importance of human resources in an organization. It has been identified that human resources provide an organization with a competitive advantage over its competitors in the markets thus explaining the reason as to why they are classified as some of the most important assets of an organization (Becker & Gerhart 1996, p.781). On this discovery, there have been many studies seeking to identify the best human resource management practices that translate to increased performance. One of the high performance strategies that have received much attention is the bundling of human resource practice (Chow & Liu 2011, p.2). Bundling human resource practices has been found to increase a firm’s performance if it is done strategically. Various authors have written about the impact of bundling of human resources practices on the performance of an organization. Most of the literature acknowledges that indeed, bundling increase the performance but only if the right practices are bundled together and aligned to the strategy of an organization. The following essay will discuss why bundling of human resource practices increases the performance of an organization but only in contexts where the right practices are bundled together and aligned to the firm’s strategy. According to Arthur human resource management is shifting from the traditional approach of analyzing the impacts of specific human resource management practices in to an approach where a system or configuration of strategies are used to impact specifically on an organization (Arthur 1994, p. 671). On the other hand, Perry-Smith and Blum point out that bundling of human resource management practices involves the establishment of a group of practices which are interrelated, overlapping human resource policies and complementary, so as to manage human resources better (Perry-Smith and Blum 2000, p.1107). Dyer & Reeves and McDuffie also concur with the above arguments (Dyer & Reeves 1995, p.657) (MacDuffie 1995, p.198). They all acknowledge that bundling of human resource management practices results to the improvement of the performance of organizations. From the above, it can be acknowledged that bundling of human resource practices is done to those practices which complement each other. Additionally, it is done to practices which are interrelated. The following section will discuss why bundling of human resource management practices leads to the improvement of the performance of organizations. The first argument for bundling of human resources and its impacts on the performance of an organization is that it has a positive impact on the employee performance (Dyer & Reeves 1995, p.657). According to Huselid, bundling of human resources can influence the human resource skills in an organization; thus leading to the growth of its human capital (Huselid 1995, p.636). On this point, it can be argued that bundling enables an organization to get the most competent employees in the labour market; hence gaining a competitive advantage over its competitors. Additionally, bundling enables organizations to develop their human capital; thus empowering their employees to deal with the ideal and changing market scenarios. The development of human resources includes such practice s as training and personal development programs. According to Dyer and Reeves, bundling of human resources enables organizations to motivate their employees (Dyer and Reeves 1995, p.657). Dyer and Reeves go further to argue that the performance of human resources is usually a function of motivation and ability. On this point, it is worth noting that bundling has enhances the ability of employee to perform their duties as seen in the argument by Huselid shown above. On the other hand, it is worth noting that motivation of employee is also a major factor influencing their performance. Motivation of employees comes about from practices such as remuneration, personal development, appreciation and reward system amongst others which have an effect on increasing the motivation. Therefore, bundling enables organizations to achieve this function. From the argument above, it can be acknowledged that bundling if human resources increase the performance of employee, thus increasing the organizational performance altogether. Another argument supporting the proposition that bundling of human resources improves the performance of an organization is because of the fact that bundling enables organizations to group together complimenting practices. According to McDuffie, bundling of human resource practices involves the grouping together of practices from core business and management functions; hence enhancing the overall organizational performance (McDuffie 1995, p.198). With the bundling of complementing practices, organizations are able benefit from the impacts of each of the practices in the bundle (Huselid & Becker 1997, p.3). Analyzing this argument by taking an analysis of two human resource management functions namely ability and motivation, it can be acknowledged that it makes sense if the two elements were grouped together (Huselid 1995, p.636). Employee performance, which is a function of the two elements, would only be enhanced if the employees had the technical ability to perform their tasks and well motivated so as to give their best to their jobs. For this reason, it is logical that organizations bundle up their human resource practices so as to optimize on their human resources. The third argument for the proposition that bundling f human resource practices impacts positively on the performance of a firm is that it adds value to an organization (Perry-Smith & Blum 2000, p.1108). It is worth noting that values are important elements of an organizations culture. They depict what an organizations stands for. Ideally, organizational culture is very important in influencing the success of an organization. Organizational culture determines how an organization perceives its customers and how it builds its relationship with the market amongst other processes that are critical to the success of an organization. Values are those aspects that are held dear at the core of organizations’ practices. Such includes quality, accountability, corporate social responsibility, customer service and others. Owing to the fact that human resources management has an impact on all the core business processes; it is important to embed the values in the employees so as to ensure that the entire organization gives a reflection to the values of an organizations. Establishing work family bundles that lead to the development and sustaining of the outlined values is a sure way of developing values in organizations (Perry-Smith & Blum 2000, p.1108). On the other hand, it is automatic that bundling of human resource practices will enhance the performance of an organization. According to Armstrong there is a need for a best fit approach so as to ensure that the right practices are bundled together (Armstrong 2010, p.45). It is important that human resources managers identify the complementing practices and bundle them together. According to Guest, Conway & Dewe, should use an analytical approach to identifying the best practices to bundle up together (Guest, Conway & Dewe 2004, p.80). In their article, the three authors recommend the sequential tree analysis model to search and identify appropriate bundles in human resource management (Guest, Conway & Dewe 2004, p.80). Gooderham,Parry, & Ringal emphasize on the need for human resource managers to employ calculated and collaborative human resource management (Gooderham,Parry, & Ringal 2008, p.10). They point out that human resource managers should strategic HRM practices so as to instigate increased performance in their organizations. In addition to the need of human resource managers to identify complimenting bundles, there is also a need for the bundles to be aligned to the organizational strategy. On this point, it is important to appreciate that the grand organizational strategy overrides all the other strategies in an organization. All the other business processes are guided by this strategy. According Huselid & Becker, the impact of human resources bundles on the performance is only positive when the bundling is made in line with the firm’s strategy (Huselid & Becker 1997, p.2). This argument is also made by MacDuffie in his study on the effect of bundling in the automotive manufacturing firms (MacDuffie 1995, p.203). Marchington and Grugulis point out to the need of having the best practice in place; one which integrates the human resources management needs with the organization’s strategy so as to achieve overall success in a firm (Marchington and Grugulis 2011, p. 1112). From the arguments above, it can be acknowledged that bundling is able to impact positively on the performance of an organization when the right practices are bundled together and when it is aligned to an organization’s strategy. In conclusion, it can be acknowledged that bundling of human resources has a positive impact on the performance of a firm. It was identified that bundling of human resources in the grouping together of human resource practices that are interrelated and complimentary. Bundling of human resource management practices is able to impact positively on an organization’s performance by enhancing employee performance, complimenting practices and defining the values of an organization. However, it was found that it is necessary for the bundling to put together practices which are complimentary and interrelated in addition to aligning the bundles to the organization’s strategy. It can be concluded that bundling of human resource practices increases the performance of an organization but only in contexts where the right practices are bundled together and aligned to the firm’s strategy. References Arthur, B., 1994. Effects Of Human Resource Systems On Manufacturing Performance And Turnover, Academy of Management Journal, Vol. 37, No.3, pp. 670-687. Armstrong, M., 2010. Armstrong’s Essential Human Resource Management Practice. Koigan Publishers Becker, B., & Gerhart, B., 1996.The impact of Human Resource Management on Organizational Performance: Progress and Prospects, The Academy of Management Journal, Vol. 39, No. 4, pp. 779-801 Chow, I.,&Liu, S., 2011. In Search of the Best Human Resource Practices in China’s Chain Stores, pp. 1-27 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, Vol. 6, No.3, pp. 656-670. Gooderham, P., Parry, E., & Ringal.,K., (2008). The Impact of Bundles of Strategic Human Resource Management Practices on the Performance of European Firms , The International Journal of Human Resource Management, Vol. 19, No. 11, pp. 2041-2056 Guest, D., Conway, N. & Dewe, P. 2004. Using Sequential Tree Analysis to Search for Bundles of HR practices. Human Resource Management Journal, Vol. 14, No.1, pp. 79-96. Huselid, M.A. 1995. The Impact Of Human Resource Management Practices On Turnover, Productivity And Corporate Financial Performance. Academy of Management Journal, Vol. 38, No.3, pp. 635-672. 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, MA. 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, Vol. 48, No.2, pp. 197-221. Marchington, M., & Grugulis, I., 2011. Best Practice' Human Resource Management: Perfect Opportunity Or Dangerous Illusion?, The International Journal of Human Resource Management, Vol.11, No. 6, pp. 1104-1124 Perry-Smith, J.E., & Blum, T.C. 2000. Work-Family Human Resource Bundles And Perceived Organizational Performance, Academy of Management Journal, Vol.43, No.5, pp. 1107-1117 Read More