Introduction

Regardless of the relative absence of a universal definition, the meta-analytical scope of

organisational performance can be analysed along two streams. Firstly, performance can be

considered as a function of economic output in which case the financial and market outcomes of

a firm is assessed, including but not limited to issues of sales, profits, returns on investment for

shareholders and other financial metrics. Secondly performance can be also analysed from the

operational perspective in which case there is a clear focus on observable indices including but

not limited to customer satisfaction and loyalty, competitive edge derived from capabilities and

resources and the firm’s social capital.

As a key strategic approach, human resource management can be considered as an effective and

efficient management of people within an organisational context in a way that enables the

business to gain competitive advantage. Key issues of human resource management ultimately

concern with the maximization of employee performance and service of an employer strategic

objectives. In this essay, very key issues relating to organisational performance and human

resource management are analysed. Adequate emphasis is placed on the relationship between

human resource management and organisational performance, performance management

strategies, relevant theories and models of performance management, interventions and

approaches used for effective performance as well as strategies for managing underperformance.

The insight drawn from existing literature is applied to a model organisation which I work for.

The name of my organisation is withheld due to ethical reasons. However key efforts have been

made to structure the arguments in context of my organisational practices.

1.0 Relationship Between Human Resource Management and Organisational Performance

Human Resources Management can effectively influence organisational performance by serving

as a source of competitive advantage (Ali, Salehnejad and Kawalek, 2019). The resource-based

view opines that human resource can add up to a firm’s competitive advantage by improving the

skills that are exclusive to the firm (Bal and Dorenbosch, 2014). The reason for many companies

performing extraordinarily higher than most other companies is because of the exclusive ability

to properly manage the human resource. In contrast, in so far as HR systems can be able to

supress the mobilisation of new competencies as well as terminate already existing competencies

their actions may lead to creating organizational vulnerability as well as destroying the ability for

the company to compete within the market (Idowu, 2022).

Getting to the end of the twentieth century, HR systems have come to note that the most crucial

part of the sustainability of a company is human resource and not products, logistics such as

cash, buildings or equipment. All the other assets that belong to firms with the exception of

humans are inert in nature. They all operate and can only be maximized by their application by

the human resource (Lall, 2018). The most crucial part of managing a firm is to focus on

maximizing the human resource. It is crucial to recognize why competitive advantage through

human resource can be properly sustained unlike products which are often very conspicuous and

apparent and can be easily imitated by competitors. Firms are quick to brush of the culture and

soft side of businesses which include, the attitude of the human resource and how they are

managed and how they can be leveraged to get the desired outcomes for the company. In

instances when they are not brushed aside, it is often difficult to understand the dynamics of the

human resource in a company. It is easy to replicate on system but replicating multiple systems

can prove difficult in certain instances (Lin and Sanders, 2017).

Organizations such as mine (name withheld for ethical reasons) are plagued with the unique

problem of market unpredictability. For firms to remain relevant and sustainable in markets they

must improve upon their performance. My company is cognisant of how improved human

resource impacts competitive advantage. In lieu of this, there is implementation measurement

and assessment mechanisms such as workforce scorecards in order to understand how human

resource within the firm contributes to productivity. Companies are incentivized to do this as

there has been numerous research that show a positive correlation between effective human

resource management and performance. The existing relationship between the two have been

aggressively debated over the past three decades with a substantial part of the research coming

from the USA and also the UK (Owoeye, 2018). Organizations and academic work by

institutions have gone a long way to prove effective HR management practices positively affect

the bottom-line productivity of firms. The feedback and results obtained from the strategic

management of the human resource is crucial in moulding and developing the existing human

resource to be able to serve the interests and meet the desires of the company.

The human resource management role in my organization has been facing issues with regards

vindicating its role. When there are enough funds in the organization, firms easily spend on

training, staffing, benefits and incentives for employees but when faced with financial

difficulties, firms easily cut the expenditure allocated to improving human resource (Pereira and

Gomes, 2012). The creation and exploration of SHRMs in the human resource field has provided

the avenue for HR to explore mechanisms in improving business hence demonstrating its

importance to the firm. The advent of strategic human resource management is known to have

begun in 1984 when Devanna, Tichy and Fombrun comprehensively looked at finding the link

between business strategy and human resource (Pereira and Gomes, 2012).
 The field of HRM has undergone massive changes over the past years. The changes have

encompassed two major categories. The first transformation is the change from personal

management to human resource management. The second major change is the transformation

from being the human resource management to being strategic human resource management.

The first transformation helped individuals recognised that humans are a crucial asset to firms

and they can be managed systematically (Bal and Dorenbosch, 2014). Strategic human resource

management is also premised off the fact the companies must improve their performance if

management of huma resource involves policies and standardized practices that ensue that the

workforce has the necessary competencies and motivations needed to thrive in the organization

(Lall, 2018).

2.0 Performance Management Strategies

Performance management is a comprehensive approach that assists organization meet their

desired quotas and objectives by taking critical look and analysing the performance of workers,

in teams or individually and how they contribute to the organization. Armstrong and Baron

describe performance management as “a process which contributes to the effective management

of individuals and teams in order to achieve high levels of organizational performance (Allameh,

2021). As such, it establishes a shared understanding about what is to be achieved and an

approach to leading and developing people which will ensure that it is achieved”. They clearly

define that is “a strategy which relates to every activity of the organization set in the context of

its human resource policies, culture, style, and communications systems.”

My organization follows the stringent once a year performance review model of employee

development, performance management is still being developed. Instead of making people go

through an annual review, performance management looks at collaborations between

management and employees in order to reach the desired goals. Various research has proven the

result-oriented nature of performance management (Lin and Wu, 2013). A Gallup poll showed

that more than half of American employees are not in touch with their work which results in

lower productivity and reduced profits. By enhancing stronger employee interactions with

efficient goal-setting through performance management, companies can be able to boost their

operating margins up to three times compared to their competitors with very little employee

interactions and benefit from 22% increase in profit margins (Opeke and Oluremi Titilope,

2020).

The implementation of efficient performance management can prove herculean in certain

instances. In a recent study, only 8% of companies that undergone the study claimed that the

process increases value in the firm. About 58% claim that it is not an effective mechanism

considering time constraints (Zgrzywa-Ziemak, 2015). My organisation has created a framework

that pushes factors in dialogue, mentoring and cyclical feedback, firms will be able to create a

more inclusive and efficient workforce. For performance management to be effective, the

company factors in the overall goals of the firm and focus on how the corporate goals can be

met. This involves the design of a systematic framework for performance management and

generating the necessary momentum in achieving the goals.

3.0 Relevant Theories and Models of Performance Management

Motivation Theory

Frederick Herzberg introduced the motivation theory based of two factors. Therefore, the theory

is sometimes referred to as the two-factor theory. The factors are based off motivations and

hygiene (Trout, 2017). The hygiene factors are considered as extrinsic motivators while

motivation factors are known as the extrinsic factors. The hygiene factors are considered under

the working conditions of individuals, salary and job status, company policy and benefits as well

as the working relationships. In the absence of these factors, the motivation levels of workers are

reduced and will have negative impacts on productivity. This aspect is crucial because factors are

known to be the most important element within a workplace. In instances where crucial attention

is provided to these elements, organizations can grow exponentially due to the increased

motivation of workers which will ultimately have a positive effect on productivity.

Even though these factors do not have any impact on employee dissatisfaction, they go a long

way to affect the performance rates of employees (Arruda, 2016). However, motivation factors

are increasing factors and they include recognition, achievements and responsibility levels.

These factors are key in increasing satisfaction levels and a decrease in these factors will result in

increased employee dissatisfaction which affects the performance rate of workers. These changes

can be either positive or negative. This aspect can be ascertained by using the incentive

programmes employed by organizations such as mine particularly by the human resource

management to improve performance across board in the organization (Michaelson, 2015).

Operant Conditioning

Operant conditioning shows that by implementing reward and punitive mechanisms in a firm, the

behaviour of employees can evolve to meet reflect the intended productivity of an organization

(Vargas, 2017). The theory is premised on two concepts, reinforcements and punishment,

although they can be either positive or negative. Management sustains positive behaviour

through positive and negative reinforcements. With positive reinforcements, employees are

provided with rewards and incentives in order to boost their productivity. This mechanism has

gained widespread popularity and buy-in from numerous management bodies. The incentives can

range from increased salary, bonuses, share in company profits as well as upward mobility in the

company’s hierarchy (Staddon and Niv, 2018).

The existence of these benefits pushes employees to increase their efficiency and output and

provide the company with the desired behaviour. Negative reinforcements on the other hand are

punitive in nature. As rewards are provided for positive reinforcements, these same rewards are

decreased or cut out entirely in the instance of negative reinforcements. Punishments are also

given by management to remove undesirable behaviour. Positive punishments are employed

when employees demonstrate undesirable behaviour. These punishments can be employed to

boost the daily-based performance level (Owoeye, 2018). These punishments come in the form

of penalties to withdraw the negative behaviour of workers.

Negative punishment is premised off taking away an element to reduce the likelihood of it

leading to undesired behaviour. Example, downward promotion or the removal of certain

benefits can negatively reinforce behaviour. In addition, they can go a long way to contribute to
the motivation level or performance of an employee. Several research has also proven that the

use of negative reinforcements can negatively affect the self-esteem of workers and breed

dissatisfaction amongst them (Staddon and Niv, 2018). There are lots of controversies about the

use of punishment and if it adds up to the efficiency of an organization. The author looked

critically at the traditional approach which is not considered in contemporary setting as a means

of controlling behaviour.

The technique however, can only provide results on a short-term basis. Human resource

management can use this mechanism to create a competition-based motivation which can prove

critical in the compilation of employees and increasing performance. The level of performance

can have a direct link to the quality of output and can go a long way in enhancing productivity.

Management of various organizations employ reinforcement techniques that improve upon the

efficiency of employees across varying divisions and sectors in the organization. Training and

development programmes are one of the most crucial aspects of performance management and

can prove very useful in the overall output of an organization (Rachlin, 2019).

4.0 Interventions and Approaches Used for Effective Performance

The need to rake in as maximum profit as possible has been a crucial factor that corporations

look out for. Ensuring that individuals within an organization can work to meet the goals and

objectives of an organization is the most important goal of the organization. Various research

show that these concerns largely started from the first world war (Sethibe and Steyn, 2016).

Frederick Winslow Taylor, a notable scientific figure in management stated that productivity will

take a positive rise if jobs are made more optimal and basic. In the early 1900s, management was
premised on rationality and it quickly became the norm and individuals begun to question the

‘Rule of thumb’, and the promotion of harmony contrasted with cooperation and disharmony as

opposed to individualism (Kourti, 2017).

Elton Mayo’s contribution to management and relating practices in the early 1920s cleared the

path for the development of contemporary human relations processes. The theory opined that

human resource are comparatively incentivized by more proximate factors including attention

and companionship than monetary rewards or ecological influences such as humidity or

temperature. As talked about in the literature, ‘industrial welfare’ is targeted towards reducing

working hours and bridging the gender gap in the workforce (Sethibe and Steyn, 2016). During

the second world war, the primary focus was on the enrolment process and much later on

training the recruits and then adding up to the morale and discipline, and then focusing on health

safety and policies on renumeration. When the management process is based on providing

efficiency and ensuring that goals and objectives are met then it means that the management

process must equally encompass the behaviour of the worker in the workplace. Personal

departments advanced into Human Resources Management and also there was increased

advocacy to normalize Human Resource Development (Henry, 2016).

Performance excellence is necessary for organizations to achieve excellence in a toughly

competing business environment that focuses on providing services to consumers. In lieu of this,

the conversation around human resources shifted to being more about human beings. Since the

management of persons is linked to performance, it is important that organizations consider the

wellbeing of individuals and assign according to the interests of the organization and how the

skills of each individual can be leveraged for maximum output (Kourti, 2017). Peter Drucker’s

model for ‘Management by Objectives’ and HR Partner and HR Champions for change by Dave
Ulrich focused on modelling out strategic placement of human resource in order to achieve

optimum productivity.

The evolution of Information Technology created another perspective for management

procedures. IT sectors of various organizations take loads of work from HR and aid in providing

solutions to complex tasks. Solutions offered by IT divisions also ensure that there is always

readily available information to make decisions (Pillay, 2016). The increased patronage of the

internet which led to increase digital jobs as well as increased use of social media led to the birth

of humanistic management. This brought about contemporary ideas that include flexibility,

diversity as well as distance working and work from home. The use of empowerment and the

avoidance of micromanagement which involves owning the successes of team members as their

career progression proved to be a crucial mechanism in managing human resource in boosting

performance in the workplace (Mullins, 2016). The role of management teams involves strong

commitment to short- and long-term productivity of the workforce.

It is also important to note the most contemporary mechanisms employed by notable authorities

in the field of HR all encompass keeping employees’ interest ahead of customers, ensuring

workers have increased capacity building and not just the focus on adherence. Also, it includes

looking less in the direction of expertise and focusing on the employee experience. There are two

generally prescribed models adopted by my organisation (Mullins, 2016). The EACH model;

Employees as Adults, Consumers, and Human beings and the SMAC model; Social, Mobile,

App and Cloud management of the human resource. The focus primarily of the study is on

comprehending the strengths of workers as well as taking into account their unique strengths and

how they can improve upon it. Data-driven HR which employs machine learning & Artificial

Intelligence is currently being researched into by multiple firms. Also, the health aspect of the
workforce is also being looked into and how HR can institute more empathetic measures in

management processes. Performance Excellence require constant improvement of HR practices

from lens of academic researchers to organizations as well.

5.0 Strategies for Managing Underperformance

The best mechanism to use as a starting point when dealing with issues of performance and help

reduce the need to check underperformance is Effective Performance Management. Dealing with

underperformance can prove herculean in most instances but failure to deal with

underperformance may limit the ability for the concerned staff member to rectify their behaviour

and can also lead to decreased productivity in the long run for the organization as well as

decrease in the general morale and motivation for team members (Bokareva, 2021). There are

also associated costs with mediation or conflict/dispute settlement that could be offset through

timely intervention. Each member of the workforce has different qualities and abilities hence

require different approaches in times of underperformance. Hence, it is crucial to note that there

is no blanket solution or approach to such issues and this study does not seek to recommend one.

The Beginning of Cycle (BoC) phase of the performance management mechanism serves as the

baseline for an effective appraisal cycle in my organisation. The Job Descriptions and Employee

Profiles of staff members serve as a crucial mechanism for obtaining information with regards

the roles, skills, experiences and aspirations. It has been crucial to factor in the information

during work-planning and goal-setting for each individual. This has ensured that management

can leverage on the strengths of each individual. Management must also have clarity on the

intended goals and objectives to be achieved.

Performance monitoring is employed throughout the cycle of appraisal. Management makes sure

to guide workers in overcoming barriers and hindrances in order to keep delivery of work on

time as well as maintaining quality in order to have a productive work environment.

Management is also involved in giving feedback to workers. This goes to show how keen of

attention is being paid to their work. Feedback is also crucial in displaying appreciation as well

as ensure there is growth amongst workers and also inspire workers to contribute efficiently.

Management also signals to workers that they are every readily to meet with workers. Certain

workers require intermittent guidance and support to be productive while others continuously

procrastinate wasting quality time and resources and so it is crucial that management intervenes

in the work process. Management also blocks out time to prepare and facilitate formal

discussions but also ensure time is made for informal discussions or sessions to happen between

teams and individuals.

Support and guidance are always be provided to new staff to ensure they adopt the organization

culture and standards of the organization. New members joining the workforce are also made to

properly assimilate their roles and that of the unit they work under as well as establish a BoC

within the first 60 days in the organization. Workers that have been placed on probation require

two assessments on productivity. The first looks one covers twelve months and the second one

overs three-fourths of a year.

6.0 Conclusion

This essay addressed key issues on HRM and organisational performance. The economic arena is

fast modifying. The modification is largely spearheaded by the shift in consumer desires,
increasing globalization, the demand of investors as well as competition within the market. In

order for companies to survive in the changing economic environment, they need to improve

their productivity by cutting production cost, bringing up new products and services, enhancing

the quality as well as the speed they engage the market with. The human resource – the human

components of an organization are classified to be the most important in today’s world. They

management of the human resource is considered to be a very crucial skill in contemporary

firms. Taking into account the fact that the metric for competitive advantage amongst companies

have shifted, it is crucial to develop strategies that look at the management of human resource.

The other known means of obtaining success in performance such as economies of scale, product

and process technology and protected markets are still able to give provide competitive

advantage to companies but the human resource of a firm is still most vital to the overall success

of a firm. In addition to the idea that human resource is vital to the performance of a firm, the

role of managing human resource is also obtaining huge relevance in the organogram of

companies. The role of human resource management looks at obtaining the most able, dedicated

and committed labour force for the organization.

This entails taking active measures to develop and train workforce by improving upon their

intrinsic capacities ranging from their contributions to their employability, in order to meet the

requirements of the consumer base. This is done by providing developmental opportunities for

workers. This role looks at implementing comprehensive selection and employment mechanisms

that feed into the goals of the company. Strategic human resource management (SHRM) is a new

field in human resource management that is being explored currently. SHRM looks specifically

at how human resource management interacts and improves performance of firms, taking into

particular consideration how human resource management can contribute to gaining competitive
leverage as a firm. Most organizations are becoming conscious of how implementing efficient

human resource management policies in firms can lead to increased output and financial

performance.
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