The Impact of Human Resource Management on Organizational Performance

Introduction Human Resource Management (HRM) is a unit within an organization responsible for recruitment, hiring, induction, training, compensating and management of staff working in a firm. It is the link between the employees and the top management. Management is the process by which a corporative group directs actions towards a common goal, that is, the process of getting things done by others and through others for the purpose of achieving organization’s effectiveness and efficiency (Combs et al., 2006).Advertising We will write a custom essay sample on The Impact of Human Resource Management on Organizational Performance specifically for you for only $16.05 $11/page Learn More Human resource is a series of integrated decisions about employment relationships that influence the effectiveness of employee and organization. It is the function of the human resource manager to synchronize the employees’ goals and those of the firm in order t o achieve the organizations mission and objectives effectively (Boxall Purcell, 2008). Human resource refers to the policies and practices set by the firm to be closely followed by the employees in their work duties. A good company must have a clear vision, mission and objective where the mission statement describes how a firm handles and relates with its employees. HRM came into light in the early 1900’s where the human resource manager’s function was to manage the relations between the organization and labor unions, known as personnel management (Becker Gerhart, 1996). It became popular with time and got wide usage in the 1980’s. HRM has several functions in an organization which some of them can still be handled by those organizations which do not have the HR department. It is the duty of the HRM to look for well qualified personnel, offer an attractive package for them in terms of remuneration, and preserve them for the benefit of the organization. The dep artment is responsible for planning and forecasting all the relevant resources needed and used by the staff, selection and recruitment of employees that are qualified for the advertised job post, appraisal of employees whenever they deserve it, evaluation of the employee trends and behaviors within the organization and ways of motivating them in order to create a good and pleasing working environment (Fischer Mittorp, 2002). Some scholars believe that HR is the HR’s job while others argue otherwise. Human resource management has both positive and negative impacts. An organization need not have an HR department if it is growing and has less than fifty employees as a single individual can handle them and without the necessary expertise. Organizations that do not have a compensation scheme need not have HR department as the task can be handled by other another departments. Some HR functions can be carried out elsewhere in the firm. According to Ethan, 2005, describes that itâ⠂¬â„¢s the function of the accounting department to handle the payroll records and pay the employees.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More HR can be handled by both accounting department and the administration department since hiring of employees can be handled by the administration while paying them and remunerating then the accounting department. A firm with good human resource management usually has a lower labor turnover compared to one with a poor human resource management where good employees prefer to work in another company when given an offer. In firms without a HR department, labor turnover would be high as the management deals directly with the employees, thus, motivation would not be as much since the management has less focus on employees and focuses on other critical matters (Cappelli Neumark, 2001). HRM may decide to employ staff who are his/her relatives, close f riends or even of his own tribe encouraging nepotism in the organization. This affects the organization negatively since the employees will not have qualified for the task but will be assigned duty due to the relationship with the HRM, thus, the firm incurs extra costs in terms of training and low employing unqualified staff. This reduces the employees’ motivation leading to increased levels of complaints and dissatisfaction which in the long run, will be reflected to the customers who perceive it as low quality of services (Boxall Purcell, 2003). In a firm with no HRM department, the top management plays that role and chances of nepotism are less likely to be experienced since employees are selected on basis of merit and qualification (Becker and Gerhart, 1996). In some cases an organization may decide to hire employees who are overqualified. It is the duty of the HR department to know the position of the organization in terms of finances and if they will be able to afford the services for the benefit of the organization or the employee is not worth the risk or will be a liability to the firm if they can hire some else with the right qualification and still serve the same purpose. A company without a HR department may not know what to do and how to go about it and may end up hiring him/her at the expense of the organization. HR is responsible for making the employee understand his/her role with regard to the organizations mission, goals and objective and aims at achieving them (Boswell, 2006). Organizations without HR department do not carry out follow ups on employees as they assume they should know. Great stress energy resources and time is spent in the laying out of a good HR, thus, some organizations opt to do without it. This may help an organization to direct the resources that would have been used to other departments and reduces time wastage and resource wastage.Advertising We will write a custom essay sample on The Impact of Human Resour ce Management on Organizational Performance specifically for you for only $16.05 $11/page Learn More Lack of HR may lead to mismanagement of activities. According to Becker and Gerhart (1996), HR ensures recruitment of the right number of staff at any given time and at each level in the organizational hierarchy. Using the HR, movement of staff from one department to another is made easier as the HR knows the strengths and weakness of all employees hence where to place them. This may encourage nepotism and favoring some employees which may lead to an organizational politics. It is with the help of the HR that areas with high labor turn over or most productive staff and vice versa within the organization is identified and the situation rectified accordingly. HR is important in that it may lead to other plans and may assist other departments like in the case of making budgets, planning for space and equipments among others (Becker, et al., 2001). With the futur e being unpredictable, according to Cappelli Neumark 2001, organizations need to plan and forecast a lot so as to cope with the changing times and know their position in future, thus, HR planning, which is the core pillar in HR, requires detailed records and expensive clerical staff which at times are rare and expensive to find. Employees may also create opposition and skepticism may exist among them, thus resisting changes as they would focus some of the HR plans as a threat to there careers. Organizations with HR department usually encounter difficulties in implementation of the set policies, plans, procedures and practices. However, HR planning is fundamental in developing and implementing the HR strategies and ensuring that organizational objectives are met, (Boxall Purcell, 2003). In the case where an organization has surplus staff, the HR planning provides a clear solution to the problem which includes laying off workers (Gerhart et  al., 2000). This does not encourage the remaining workers as they think they will follow the suit. Instead, the HR planning should formulate a way to handle the above crisis without terminating any of the workers like re-training or probation. Anyone can do HR is another myth which prevents HR from being a profession. Initially HR was viewed as more of personnel management but that changed gradually with time and anyone can do HR regardless of his/her area of expertise, thus, carrying out the task will need him/her to consult with other experts in cases regarding employment laws. The new role of HR is changing from that of person ell to that of line management where the HR is considered as part of the top management and considered a partner, a staff sponsor and a change mentor. HR is regarded as HR generalists since they still undertake the work of employee administration and payroll payments.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Ulrich recommends HR be added the roles of business and strategic partners, employee advocate and change mentor. According to Des Pullen, HR director of Allied Bakeries, explains that the ability to influence employees at the operational level does not require one to have HR expertise but it depends on ones ability to understand the staffs’ together with the organizations issues and providing relevant and effective solutions when they arise. Steve, Deloitte and Touche HR director argues that leaders who are successful are those who understood HR and non-HR dynamics of their organization, can relate with others, communicate both the issues and their solutions effectively and encourage change which brings about growth. It does not depend on the HR but with the right team with relevant qualifications, skills and knowledge anyone can be effective without any HR background. Others argue contrary that one has to have the relevant qualifications. Andrew and Alison point out that HR need to learn the skills and perfect on them and understand the development, resourcing, relations and rewards. Those with the qualifications have the knowledge of employment issues and legislations since they are exposed to them hence are able to come up with effective solutions. Gerhart, 2005 describes HR as a myth, and the department that plays the role of a policy police since it sets the ‘rules’ to be followed by the employees, and ensures that each and every staff involved in the organization is familiar with what is expected of them, and are aware of the consequences pertained to inappropriate actions in the line of duty. It plans the policies, procedures and practices by forecasting and estimating the extent to which demand and supply of labor is likely to be met (Boswell, 2006). It also analyzes each and every job position then grades it according to the level of hierarchy from the most important one i.e. top management to the least important and determining wh at each job requires for its execution. Besides job analysis, it goes further and designs the job by determining what procedures and operations are to be performed by employees in each job position (Boselie, et al., 2001). Without the help of a qualified HR, the organization may incur a lot of unnecessary costs as it may end up hiring experts to come to their rescue in times of crisis where as they could have controlled it. This is evident more in the long run than in the short run thus those organizations that do not prefer waiting for the long run so as to cut costs may prefer not to have a HR department and plan, analyze and design the relevant tasks and policies which may be difficult to design as the management may not have the expertise thus formulating weak policies (Wright Haggerty, 2005). In conclusion to the above argument, we can say that organizations with HR department are more advantageous than those which do not have one. This is because HR department simplifies most of the wok for the top management, thus enabling them to focus on better issues and growth of the organization. It is recommended that the HR of today implement the new role suggested b Ulrich in enhancing the growth of organizations. HR also helps reduce unnecessary costs that may be incurred by the organization in the long run as they help in recruiting and training employees (Goss, 1994). Further, HR is used to lias with the external environment such as the labor unions and the government through the ministry of labor in cases concerning employees and tax collection (Boswell, 2006). It is also a way to change with the changing times and technology by storing details and other necessary information regarding employees in a simplified and secure manner for easy processing and storage. Finally anyone can become a HR regardless of education background but with the right teamwork. Reference List Becker, B. Gerhart, B., 1996. The impact of human resource management on organizational performance: progress and prospects. Academy of Management Journal, 39: 779–801. Becker, B. Huselid, M. Ulrich, D., 2001. The HR Scorecard: Linking People, Strategy and Performance. Boston: Harvard Business School. Boselie, P. Paauwe, J. Jansen, P., 2001. Human resource management and Performance: lessons from the Netherlands. International Journal of Human Resource Management, 12, 1107-1125. Boswell, W., 2006. Aligning employees with the organization’s strategic objectives: out of â€Å"line of sight†, out of mind. International Journal of Human Resource Management, 17: 9, 1489–1511. Boxall, P. Purcell, P., 2008. Strategy and Human Resource Management. 2nd ed. Basingstoke: Palgrave Macmillan. Cappelli, P. Neumark, D., 2001. Do â€Å"high performance† work practices improve establishment level outcomes? Industrial and Labor Relations Review, 54: 737–776 Combs, J. Liu, Y. Hall, A. Ketchen, D., 2006. How much do high-performance work prac tices matter? A meta-analysis of their effects on organizational performance. Personnel Psychology. 59: 3, 501–528 Fischer, H. Mittorp, K., 2002. How HR measures support risk management: the Deutsche Bank example. Human Resource Management, 41: 4, 477–490. Gerhart, B., 2005. Human resources and business performance: findings, unanswered questions and an alternative approach. Greenwich, CT: JAI Press Goss. D, (1994). Principles of Human Resource Management. London; New York: Routledge. This essay on The Impact of Human Resource Management on Organizational Performance was written and submitted by user Bridger Lancaster to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.