Issues in Human Resource Strategies That Improve Organizational Performance Essay Example for Free

Issues in Human Resource Strategies That Improve organisational capital punishment EssayA rapidly changing economic environment, characterized by such phenomena as the globalization, and deregulation of marts, changing customer and investor demands, and ever increasing product market competition, has become the norm for most organization. To compete, they must continu each(prenominal)y improve their exertion by reducing costs innovating products and processes improving quality, productivity, and speed to market and more importantly by improving their individual performance within the organization.In order to do this, a set of distinctive human resource strategies, defined as internally consistent bundles of human resource suffices (Dyer Reeves, 1995), is clearly essential. Sparrow and Marchington (1998) suggested that HR practices are the most advanced, the most sophisticated, and the most efficient basis for organizing and for obtaining highschool performance from employe es since it seeks to strategically integrate the interests of an organization and its employees.In addition, a number of studies have also indicated that there is a positive relationship among effective HR strategies and organizational performance. Specifically, it is suggested that HR practices can improve organizational and operational performance when matched with quality manufacturing strategies (Stone, 2002). Nevertheless, despite the positive relationship found between HR practices and steady performance, there are a number of issues and questions surrounding them.One problem in relating HRM and performance is the lack of theoretical background resulting in both monetary value remain ambiguous concepts. Other questions arise in relation with the link between HR strategies and performance are the inconsistent findings in regards to what constitutes a high performance HR strategy (Becker Gerhart, 1996 Cooke, 2001) and the problems with HRM and performance measurements (Guest et al. , 2003). The aim of this analyse is to outline and explain the issues in developing human resource strategies that improve organizational performance.Specifically, the essay shall begin with presenting the issue of theoretical background of the concept of HRM and organizational performance. Subsequently, it shall discuss the issue astir(predicate) diversified strategies used to improve performance, and the problems in measuring HRM and performance. ?HRM and Organizational Performance The Lack of Theoretical Background Guest (1997) pointed out that to improve our understanding of the bear upon of HRM on performance we need a theory about HRM, a theory about performance, and a theory about how they are linked.Unfortunately, there has been a great deal of debates amongst leading researchers and practitioners about the concept and contributions of HRM practice in managing employees in overall organizational objectives (Loosemore, Dainty Lingard, 2003 Analoui, 1998 Sparrow M archington, 1998). McCarthy and Stone (1986) argued that the concept of HRM is ambiguous and that its contribution to organizational performance remains unclear and is not well understood.In addition, Sparrow and Marchington (1998) pointed out that rather than adding value to the business through its strategic integration with managerial objectives, HRM can remain a disappointingly mechanistic function. Similarly, there is no universal theory about performance (Guest, 1997). It was proposed that the meaning of performance involves two dimensions the types of criteria and the weight of each. Organizations have different interpretations of performance accord to the sector of their industries.Service providers, for example, might consider customer satisfaction as their top performance indicator, while manufacturers might view inventory level as an important criterion to measure their performance level. In addition, some organizations put financial results on top of their performance i ndicator list and employees patronage satisfaction at the bottom, but others may view this in the opposite position. As a result, it is hard, if not im achievable, to define the concept of performance that applicable for all organizations.The impact of HR practices on firm performance is without a doubt an important topic in the fields of human resource management, industrial relations, and industrial and organizational psychology (Huselid, 1995 Jones Wright, 1992). This literature, although largely conceptual, concludes that HR practices can help to create a source of sustained competitive advantage, especially when they are aligned with a firms competitive strategy (Jackson Schuler, 1995 Wright McMahan, 1992, both as cited in Huselid, 1995).Specifically, a large majority of published studies found an association between HR practices and firm performance, regardless of whether they are cross-sectional or longitudinal, whether conducted at establishment or company level, whether based on strong performance data or subjective estimates, whatever sector they are based on, whatever operational definition of HRM is used, and wherever they are conducted (Guest et al. , 2003). Nevertheless, despite the positive thrust of most observational findings, Wood and de Menezes (1998, as cited in Guest et al. 2003) failed to find consistent associations between HRM and performance. Furthermore, Wood (1999) has also argued that the relationship between HRM and performance is relatively weak.One possible explanation lies in the various contingency factors, other than HR activities, that might contribute to organizational performance such as organizational culture (Kotter Heskett, 1992 caravan der Post et al. , 1998), business strategy (Richard Brown Johnson, 1999), and political considerations (Ferris et al. 1998). ?Improvement Strategies Is There One Best Way? Much of the research on the link between HRM and firm performance has looked at integrity HR practice such a s compensation or selection, while others attempted to look on the impact of combining different HR practices to improve firm performance (Becker Gerhart, 1996). Pfeffer (1998, as cited in Tyson, 1997), for instance, put forward a seven-principle best practice which he believed is universally applicable.The seven best practice HRM elements include employment security, selective hiring, self managed teams, high compensation contingent on organizational performance, extensive training, reduction of post difference, and information sharing. Theoretically, bundling several HR practices should produce greater performance effects than any of the individual human practices (Dyer Reeves, 1995). However, in reality, there is no single standardized bundle of HR strategies that is universally applicable for all organizations. Each firm might require different bundles of HR strategies to improve its organizational performance.