CHAPTER TWO (2)

2.0 LITERATURE REVIEW

2.1 INTRODUCTION

Specifically, this paper examines the literature on human resource management system methods
to illustrate the study's theoretical bedrocks. This study seeks to understand the significance of
human resource management system and human needs to retain employees in any organization.
Resources are used by the company in employee retention strategies. This dissertation, which
offers a review of HRMS and HRMS methods and seeks to enhance organizational performance,
was developed using research from books, research papers, and internet sites that explain and
provide details about human resources management systems.

2.2 HUMAN RESOURCE MANAGEMENT SYSTEM

All management choices and procedures that have an impact on an organization's workforce are
included in human resource management system (HRMS) (Bhatt and Reddy, 2011). Different
academics have utilized a variety of definitions of human resource management system. HRMS
was defined by Daud (2006) as a system, policy, and practices that have an impact on people
who work for an organization. In addition, Human resources management (HRMS) was defined
by Shahnawaz and Juyal (2006) as all actions and practices that affect employees within firms.
HRMS was defined as "the policies, practices, and systems that influence employees' behavior"
by De Cieri et al. (2008, p. 5). As opposed to Hussain and Ahmad (2012), who saw HRMS as a
system that actively seeks to strike a balance between individuals' personal interests and their
economic added value. Last but not least, Burma (2014) saw HRMS as a clear and strategic
approach for the employees, who are the company's most valuable assets. According to Obeidat
et al. (2012), Masa'deh et al. (2019), human resources management is regarded as the most
crucial element that enables a firm to get a competitive edge. This is because managers in both
public and commercial businesses believe that maintaining a competitive advantage primarily
depends on having the "best of the best" human resource systems in place for finding, choosing,
motivating, and effectively managing their workforce (Mesch, 2010).
Human resource management system (HRMS) techniques are described as "organizational
activities focused on managing the pool of human resources and ensuring that the resources are
utilized towards the achievement of organizational goals" (Pankaj and Saxena, 2012, p. 671).
However, it must be remembered that human resource management system procedures are not
universal and vary from one nation to another (Ozutku and Ozturkler, 2009; Tiwari and Saxena,
2012).

A sizeable amount of research concentrates on a few distinct human resource management

system techniques. Staffing, training and development, performance reviews, pay management,
safety and health, labor relations, and recruiting and selection are some of these activities
(Ferguson's, 2006). Planning, performance reviews, career management, and awards are some of
the HRMS activities that attempted to include Singh (2009).

Karunesh and Pankaj (2009) reviewed the HRMS techniques used and discovered some
additional activities, including establishing culture, career development, benefits, and
relationships between employers and employees. Pahuja and Chander (2012) also included the
following practices: cultivating the proper knowledge, abilities, and attitudes; creating a pleasant
work atmosphere; and upholding positive employee interactions. Other HRMS activities, such as
staffing, training and development, performance appraisal pay management, safety and health,
and labor relations are covered in Hussain and Ahmad's (2012) study. Additionally, Obeidat, et
al. (2014) listed cooperation and job design as crucial HRMS practices.

This study's focus on four HRMS practices such as recruitment and selection, performance
reviews, training and department etc, which is based on thorough literature analysis. The
practices were chosen for this study because they appear often in the HRMS literature for the
industrial and service industries.
2.3 RECRUITMENT AND SELECTION

The majority of employers concur that their employees are their greatest asset, making recruiting
and selection processes crucial to ensure that a new hire can quickly become productive and
provide the results they are looking for. In other words, having the appropriate personnel size
and skill set is essential for an organization to succeed (Mark, 2014).

The work of Taylor (2008) and Rees and French (2010), two authors who have studied
recruitment and selection, both agree that there is a clear distinction between the two.
Recruitment is the process by which an organization gathers applications for a position and
creates a pool of potentially qualified candidates, whereas selection includes using using various
evaluation methods to determine which candidates are most suitable for the open post, meet
management objectives, and adhere to regulatory criteria. According to Mondy and Noe (2013),
recruiting is the process of gathering candidates who are qualified for the positions being offered
and who are available when needed. The term "selection" refers to the process of picking the
person who is most fit for a role and for the company. Khanna (2014, 148) defines recruitment as
"the process of advertising the vacancies of any esteemed capacity in the most attractive and
rightful manner with the sole objective of attracting the largest pool of eligible candidates for the
position," while selection is "the process of sorting the most relevant job applications." of
candidate choice or conclusion."

Performance Evaluations Performance reviews play a significant role in raising the standard of
work output and motivating employees to work harder. Likewise, performance evaluations offer
a framework for improvements, organizational development, and staff succession planning
(Shaout and Yousif, 2014).

The goal of performance evaluation is to direct and motivate employees to align their actions
with the organization's goals (Zhu, 2010). As a result, performance evaluations are crucial to the
growing relationship between employee and employer. Additionally, it is a key factor in
businesses succeeding and enhancing their performance (Burma, 2014). Additionally, it serves as
a legal requirement to record employees' performance (Gordon, 2016).
Phin (2015) described performance appraisal as a procedure for assessing an employee's
performance at work. It contains components of employee job performance that are both
quantitative and qualitative. To communicate with an employee and create an improvement plan
is a procedure. Additionally, performance evaluation is seen as the procedure that influences an
employee's status, including whether they are retained, fired, promoted, transferred, paid more or
less, or accepted into a training program (Neeraj, 2014). Singh (2014) claims that performance
evaluation is a methodical process for routinely assessing work performance in light of pre-
established standards and organizational.

2.4 PERFORMANCE EVALUATIONS

Performance reviews play a significant role in raising the standard of work output and motivating
employees to work harder. Performance evaluations also lay the groundwork for improvements,
the creation of organizational structures, and staff succession plans (Shaout and Yousif, 2014).

The goal of performance evaluation is to direct and motivate employees to align their actions
with the organization's goals (Zhu, 2010). Therefore, performance evaluation is crucial to the
development of the relationship between employee and employer. Additionally, it is one of the
crucial issues for businesses to succeed and operate better (Burma, 2014). Additionally, it serves
as a legal requirement to record employees' performance (Gordon, 2016).

Phin (2015) described performance appraisal as a procedure for assessing an employee's

performance at work. It contains components of employee job performance that are both
quantitative and qualitative. To communicate with an employee and create an improvement plan
is a procedure. Additionally, performance evaluation is seen as the procedure that influences an
employee's status, including whether they are retained, fired, promoted, transferred, paid more or
less, or accepted into a training program (Neeraj, 2014).

Singh (2014) claims that performance evaluation is a methodical process for routinely assessing
work performance in light of pre-established standards and organizational objectives. As one of
the core human resource practices, performance appraisals is usually managed within an official
setting in order to provide a basis for decisions that pertain to employees, improve employees’
performance, and ultimately enhance the effectiveness of organizations (Kalender and Vayvay,
2015). For example, through performance appraisal results, organizations can determine the
training needs of their employees by identifying the weaknesses and strengths of each employee.
By doing so, organizations can determine the appropriate training programs that will help to deal
with the weaknesses and to develop the strengths, thereby improving the performance level of
their employees (Abu-dhaim, 2011). This point is also made by Wienclaw (2016), who claim
that performance appraisal is one of the key functions of an organization’s human resources
section.

2.5 TRAINING AND DEVELOPMENT

In order to survive and keep businesses alive as well as to gain a competitive advantage and
obtain the best results, organizations must provide training and development programs that
improve staff skills and also enhance their performance. Training and development are crucial in
the business world, particularly in the face of increasing competition and challenges between the
companies (Chaudhary and Bhaskar, 2016). It is a crucial method for assisting individual
workers in acquiring new knowledge and abilities in order to advance their existing skill sets
(Joarder, et al., 2011). According to Jimenez and Valle's (2013) study, people are the
organization's most significant asset, hence spending on training and development is necessary to
increase their capacities and skills.

The process of developing skills and the capacity to carry out activities in organizations
efficiently and effectively is referred to as training and development (Robert and John, 2004).
Additionally, this procedure is regarded as technical use to transfer information, abilities, and
competences to enhance worker performance in the present and future of the firm (Parce and
Robinson, 2009). Adjirackor, et al. (2016) recognized training as another methodical strategy for
enhancing the effectiveness of individuals, teams, and organizations. Noe (2010, p. 24) agreed
and defined training as "to an organized effort by a corporation to promote employees' learning
of job-related competencies. These competences comprise the knowledge, abilities, or conduct
necessary for effective work performance. Marskova and Slaichova's (2015) claim that training
and development is a set of tools, methods, and content to build a deliberate approach that is
intended by the company's efforts to develop the skills of its employees is consistent with this.
Due to the multiple advantages that training offers, it is regarded as the most crucial aspect in the
business world. Technical, human, conceptual, and management competences are developed
through training to support the development of both individuals and organizations (Kulkarni,
2013). Additionally, it improves the effectiveness of interactions with supervisors and coworkers
and the capacity for teamwork (Vute and Farcas, 2015). Training boosts employee morale and
enhances pay, promotions, and other benefits for the benefit of the workforce.

2.6 COMPENSATION AND REWARD

According to Mondy (2010), remuneration is a collection of advantages and services given to

employees in exchange for their work, which has a favorable impact on both attracting and
encouraging workers. Werner (2011, p. 587) described compensation as consisting of "packages
involve some essential qualities that tend to make people satisfied on the job, among which
includes salary, bonuses, incentives, allowances, promotion, and recognition."

Additionally, Gopinath and Shibu (2016) defined compensation as a payment made to an

employee in exchange for their contribution to a company. This compensation is a crucial
component of the human resources management Gateway because it provides both financial and
non-financial benefits that encourage workers and increase the efficiency of the company.

There are many advantages to compensation, including the capacity to boost employee retention
and performance inside the organization (Osibanjo, et al., 2014). Additionally, it could aid in
achieving goals and boosting the organization's competitiveness (BeckKrala and Scott, 2014).
Additionally, remuneration can help an organization's labor turnover by keeping workers on
board and retaining them (Odunlami, 2014). Consequently, the remuneration structure should be
a powerful weapon for encouraging desired employee behavior and optimistic attitudes within
the company (BeckKrala and Scott, 2014).

Rewards are "whatever employees perceive to be of value stemming from the employment
connection," according to Chen and Hsieh (2006, p. 66). Additionally, Armstrong et al. (2011)
described rewards as a strategy, policies, and practices that the business pursues to ensure that
the value of people and the contribution that they make to accomplishing organizational goals. A
reward, according to Lim and Ling (2012), is a system of benefits and rewards provided to
workers. These incentives include paid time off, health coverage, a transportation allowance, and
performance bonuses.

2.7 CUSTOMER SATISFACTION

In today's fiercely competitive business world, customer satisfaction is one of the most important
success criteria since it affects companies' market share and customer retention (Ooi et al., 2011).
Customers are frequently seen as an organization's most valuable resource, therefore having
enough of them is essential to its success (Iakov, 2013). People who paid for a product or service
and used it were more likely to be satisfied with it (Ling, et al., 2016).

It refers to the degree to which a product satisfies consumers or meets their wants and
expectations (Bitner and Zeithaml, 2003). Customer satisfaction was defined by Qi et al. (2012)
as the contrast between anticipated performance and actual performance following a particular
purchase. Therefore, it is thought that customer happiness is a good indicator of how strong the
bond between the client and the product supplier (Saleh, 2015).

According to Akenbor (2014), a business should consider the following fundamental inquiries
when measuring and tracking customer satisfaction: How happy are the customers overall? Is
client satisfaction with the business higher or lower than it was in previous years? How does the
level of client satisfaction compare to that of the rivals? What effect does their degree of pleasure
have on the revenue of our business?

2.8 LEADERSHIP

Leadership is crucial to the TQM (total quality management) system's success during both its
introduction and the process of ongoing improvement that follows. Selăgean Nwabueze (2011)
asserts that leadership is entirely in charge of the effectiveness of the TQM programs' execution.

Every company needs strong leadership because it sets the organization's direction and ensures
that it is carried out. Leadership is one of the fundamental and most crucial requirements in any
business. Additionally, leadership creates a long-term vision for the company and directs the
company through the plan as it is driven by constantly shifting client demands (Ulle and Kumar,
2014). To put it another way, leaders work to share their vision of what is possible with others
while also making to achieve their objectives

Many academics have studied leadership extensively. Sharma and Jain (2013, p. 310), for
example, described leadership as "a process by which a person inspires others to attain a purpose
and manages the organization in a way that increases its cohesiveness and coherence." In a
similar vein, Northouse (2010) defined leadership as the process through which an individual
persuades others to pursue a common objective. Sălăgean (2014) also gave a definition of
leadership, referring to it as the most crucial resource that stands in for all other resources in the
absence of them and has the ability to adapt to change. Leadership, according to Helmrich
(2015), is the ability to achieve goals while motivating others.

2.9 EMPOWERMENT OF STAFF

According to studies by AlHrassi, et al. (2016), Obeidat, et al. (2016), Abualoush, et al. (2018),
Al-dalahmeh, et al. (2018), and Masa'deh, et al. (2018), employees are seen as having a certain
kind of power that can be released through empowerment through increased knowledge,
experience, and motivation.

The initial definition of empowerment dates back to 1788, when it was thought to be the
delegation of a position in an organization that should be given to a person depending on that
person's organizational role (Rezaie and Bagheri, 2014). Allowing others to take on the
obligations, dangers, and benefits associated with making their own decisions is another
definition of empowerment (Armache, 2013). Employee empowerment, according to Reji
(2011), entails confidence, influence, information involvement, decision-making, and liability.
Ukil (2016) also noted that empowerment is a type of clever decision-making capacity that can
be used to assist the organization with their activities successfully. Empowerment is not just
about providing people the ability to make decisions. For people to properly complete the duties
they are assigned, they must be given the necessary authority. Therefore, the foundation of any
effective organizational strategy should be empowerment (Awamleh, 2013). Both managers and
employees must work together to implement empowerment effectively.
Employee empowerment is a tactic that improves organizational performance and contributes to
the creation of flexible organizations that can respond to rapidly changing external environments
(Ferit, 2015). Employees who feel empowered and can see how their work affects the company
are more dedicated to it since they can more easily relate to its objectives (Elloy, 2012).
Employee empowerment can have a notable impact on motivation and performance with the
correct people, jobs, and organizational environment. It has also been noticed that employee
empowerment is vital to organizational innovation and effectiveness (Kimolo, 2013).
Consequently, empowering employees can also boost output, performance, and job satisfaction
(Greasley, et al., 2005). According to Chaturvedi (2008), empowerment is one of the best
methods for allowing workers at all levels to apply their creativity to enhance both the
performance of the company and the quality of their own working lives.

2.10 PLANNING STRATEGICALLY

Strategic planning is now extremely essential for all businesses, since there appears to be an
unusual phenomena where every industry is seeing significant increases in both unpredictability
and competitiveness (Vel, et al., 2012). It is believed that all forms of organizations, whether for
profit or nonprofit, participate in the strategic planning process (Hough, et al., 2011). Making
long-term decisions that enable an organization to adapt to changing surroundings is the focus of
strategic planning (Volberda, 2010).

Strategic planning, according to Suklev and Debarliev (2015), is defined as efforts aimed at
achieving success and maintaining competitiveness in any industry. An effective strategic plan
assists organizations in adapting their strategies to meet market demands; it places special
emphasis on the organizational planning process (Brah and Lim, 2006).

Strategic planning, according to McNamara (2016), is a methodical process for generating

essential decisions and actions that provides members of an organization with guidance and
direction, with a focus on their role in providing goods and services.

Strategic planning's guiding philosophy, according to Rahman (2016), is collaboration and

adaptability in order to envision and define a better future and deal with a variety of issues.
Additionally, David (2013) stated that strategic planning is a method of achieving the set vision,
goal, and objectives core objectives of the company.

Strategic planning is to strike a balance between the firm's internal resources and the external
environment. Through a procedure known as the strategic management process, the strategic
managers define crucial activities for this reason (Pearce and Robinson, 2009; Jofre, 2011).
Strategic planners presently employ a procedure that has numerous stages and is called a process.
According to Ololube et al. (2016), these phases include analysis, formulation, implementation,
assessment, and control.

2.11 COMPETITIVE BENEFIT

Businesses that fail to adapt to these developments risk losing significant market share and
profit. The business sector is currently seeing intense competition from both domestic and
foreign companies in the market. The key to a business's survival and long-term success is
finding a suitable position in a highly competitive environment. Achieving this goal requires
developing and maintaining a competitive edge (Gareche, et al., 2013). Only a few market
leaders are concentrating on the competition, thus they are able to thrive while the others perish
in the current highly competitive atmosphere where all market players are competing for their
share (Essays, 2013).

Durmus (2010) claims that a company's competitive edge is made up of strategies it has adopted
to better serve customers and perform better in marketplaces with intense competition.
Additionally, he asserts that businesses might employ one of the strategic methods to compete
with their rivals and gain an advantage in the market. When a company can provide the same
benefits as its rivals but at a lesser cost, this is known as a cost advantage. They can also obtain
an advantage by providing benefits that are higher than those of rival products, which is known
as a differentiation advantage (Dakare, 2015).
2.12 CONTINUAL DEVELOPMENT

The business environment has changed significantly over the past few decades, and
organizations need to know how to work to boost performance (Roghanian, et al., 2012). As a
result, this idea has been successfully applied to achieve fundamental performance improvements
within the business, successfully guiding those organizations in a highly competitive
environment (Patidar, et al., 2016) Continual Development

Continuous improvement is crucial in the long run because improving productivity value, the
organization's competitive image, overall effectiveness, lowering costs, reducing operator errors,
eliminating waste, and maintaining health and safety standards are at the core of any
organization's strategic planning (Singh and Singh, 2014). As a result, the organization must
engage in larger-scale continuous improvement. Due to this, several continual improvement
Systems focused on quality, the process of improvement, or both have been established; the goal
of these systems is to cut waste, streamline the production process, and increase quality.

Continuous improvement, according to Caroly et al. (2010), is a process that tries to reduce
production costs and raise quality by maximizing information, physical flows, and products. The
"continuous identification and elimination of waste" was how Chen, et al. (2010, p. 1070)
defined continuous improvements. Another definition of continuous improvement is given by
Shafeek (2014), who describes it as a constant endeavor to improve maintenance with the goal of
streamlining the maintenance process and reducing or eliminating waste.

2.13 PRACTICES OF TOTAL QUALITY MANAGEMENT AND COMPETITIVE

ADVANTAGE

An essential part of the entire organizational strategy is quality management. The main issue for
international organizations is to endure in this more competitive world market (Zakuan, et al.,
2010). Numerous research (Fuentes et al., 2006; Lam et al., 2011; Fernandez-Perez and
Gutierrez-Gutierrez, 2013) show a strong correlation between TQM and competitive tactics,
specifically differentiation and cost leadership. According to Al-Rfou et al. (2012), competitive
advantage is the capacity of an organization to produce goods or services more successfully than
rivals, outperforming the rivals.
Competitive advantage enables businesses to achieve a higher degree of competitiveness while
also satisfying their customers. It is also a well-known indicator of cost-effectiveness and quality
and prevents time and effort wastage. Operational performance improves when TQM is used.
Total quality management (TQM) is used to acquire competitive advantage, and it has been
found that doing so increases competitiveness and boosts customer satisfaction (Munizu, 2013).

TQM is thought to result in higher financial performance, greater customer satisfaction, a

quicker response to the competitive environment, and enhanced product quality, according to
Herzallah et al. (2014). This could give TQM a competitive advantage.

As previously indicated, TQM components work to improve a company's performance, including

higher customer satisfaction levels, process improvement, and business performance. In turn, this
gives businesses a competitive advantage (Jung, 2009). Additionally, TQM techniques improve
competitive advantage. The impact of TQM procedures in these areas is crucial, thus an effective
TQM implementation can result in improvements in the area of competitive capacities and offer
tactical advantages in the marketplace.

2.14 CONCLUSION

Previous empirical studies looked into how TQM (total quality management) techniques affected
competitive advantage (Reed, et al., 2000; Douglas and Judge, 2001; Munizu, 2013). The impact
of HRMS practices on competitive advantage is the subject of additional research (Takeuchi and
Wakabayashi, 2003; Waiganjo, et al., 2012; Bhattacharjee and Bhattacharjee, 2015).

In order to acquire a competitive advantage, HRMS and TQM procedures are crucial (Usrofand
Elmorsey, 2016). Today, the telecommunications sector is regarded as a key contributor to
productivity in economies and society because it not only contributes significantly to national
economies but also to the growth of other businesses (Venkatram and Zhu, 2012).

Similar to some other nations, Jordan's telecommunications sector has developed quickly, and
many new businesses have just entered the market, bringing about intense rivalry in this market
for the first time. As a result, businesses are working harder to innovate and grow through the
creation of more distinctive offerings (Musa, 2013).