Human resource management – organization performance

Author: Valliammai SM , Co-author: Jeevanraj N

Chettinad college of Engineering and Technology, Karur.
Mobile number: 9894481452 email-ID: mahishashakthi@gmail.com

Abstract:

Human Resource Management (HRM) has mature extremely popular over the past decades,
and it's currently a standard characteristic for nearly all larger firms and plenty of smaller
ones. one in every of the explanations for this quality is that the assumption that HRM could
be a supply for competitive advantage and can influence the organisational results and
performance in a positive direction. The thesis takes a more in-depth consider the probable
relationship between HRM and performance. the most plan behind the time unit M-
performance presumption is that HR practices have an effect on the employee’s attitudes and
behaviour, that any affects the operational performance, like productivity, quality and
innovation, that successively have a positive on impact on the monetary and market
performance. an oversized quantity of empirical proof support such a positive relationship
between HRM and organisational performance. However, there also are critics commenting
on the analysis field method limitations. thanks to these method limitations the empirical
proof for a positive link is weakened. These limitations include: range of respondents and
their role within the organisation, analysis style, analysis execution and interpretation, and a
scarcity of attention to influencing variables and also the risk of a reversed relationship.

Keywords: Human resource management, Business performance, Employee productivity,

Business strategy.

Introduction:

Human resource management is organizing, coordinating, and managing employees within an

organization to carry out an organization’s mission, vision, and goals. This includes recruiting,
hiring, training, compensating, retaining, and motivating employees.

HRM staff also develops and enforces policies and procedures that help ensure employee
safety. The HRM team manages adherence to federal and state laws that may work to protect
employees’ private information and ensure their physical safety and mental and emotional well-
being.

Purpose of human resource management (HRM):

Companies use HRM to invest in employees to boost job satisfaction and improve employee
performance. The methodology behind HRM recognizes the value employees bring to an
organization, also known as human capital. Investing in employees and strategically supporting
their needs can improve job satisfaction and, therefore, greater success in their role within an
organization.

Employees who are well trained, competent, valued, and supported by their employers will
likely have the skills and motivation necessary to carry out the organization’s goals. This might
look like tuition reimbursement programs, on-the-job training, or mentorships within an
organization that can help employees develop their talents and boost productivity. HRM aims
to create a highly skilled workforce and boost confidence and competence so that employees
are motivated to contribute. HRM has a strong focus on company culture and job satisfaction.
Much of what motivates employees comes from the culture in which they work. Building and
maintaining company culture can be challenging to measure and quantify, but it’s an important
function of HRM to retain and recruit employees.

HRM also protects employees. Human resource (HR) professionals manage legal documents,
policies, and regulations, identify what applies to their organization, and find effective ways to
educate employees and enforce company policy. HRM aims to be an ally or partner to
employees. HRM emphasizes employee development while protecting employees from
discrimination, workplace hazards, and unfair compensation.

Objectives of the study:

The study highlights the key role of human resource management in developing effective
organizational performance measurement and management. To understand the state of the art
of this role, the paper reviews the literature on human resource management in the
performance measurement and management domain. Utilizing human resources to achieve
business requirements and goals is very important for an effective HRM. Organizational
objectives include workforce handling, staff requirements like hiring and onboarding, payroll
management, and retirement. To succeed at the organizational objectives, HR requires
efficient planning and execution.

Objectives of HRM in organization:

 Work Culture

 Achieve organization objectives

 Team Integration

 Training and Development

 Employee Motivation

 Workforce Empowerment

 Retention

 Data and Compliance

Scope of the study:

The scope of HRM in organization performance is comparatively wider with enhanced vision
so far as the following fields are Human Resource Planning (HRP), Job Analysis, Job
Evaluation, Recruitment and Selection, Performance Appraisal, Training and Development,
Employee Compensation, Employee Motivation, Employee Welfare, Industrial Relation,
Organisational Development, Career Development, Job Design, Performance Management
Systems, Employee Assistance, Labour Relations, HR Research and Information Systems
and Audit, Succession Planning, Quality of Working Life, Personnel Welfare.

Achieve Organizational Goals:

HRM function starts here. One major HRM objective is to fulfil organizational goals.
Utilizing human resources to achieve business requirements and goals is very important for
an effective HRM.

Organizational objectives include workforce handling, staff requirements like hiring and
onboarding, payroll management, and retirement. To succeed at the organizational objectives,
HR requires efficient planning and execution. Without a set parameter for goals and mission
and resources, HRM is incomplete. After you know your resources and planning at the place,
achieving HRM objectives is not so difficult. Some more objectives are explained further.

Work Culture:

When it comes to handling HRM effectively and following objectives, employee and work
environment are the prior factors.
Work culture plays an important role in defining HRM and business performance. An HR
manager needs to be active while calling for strategies to foster better work culture.
Automated activities like leave approvals, reimbursement request acknowledgement, etc. can
help you. Quick operations and empowerment to employees help in creating positive vibes at
the workplace.

Developing and maintaining healthy and transparent relations among team members and
teams contribute to building a good example of work culture. Adopting the right solutions
like employee management system can solve more than half of your job. Small steps like
short and sound onboarding processes can help build a good image of the workplace.

Team Integration:

One of the prime roles and objectives of HRM is to make sure the team coordinates
efficiently. Easy communication is the need for teams at an enterprise. An HR here must
ensure a tool to assist in making the integration easier and smooth.

The proper connection between individuals is a must to ensure productivity. To make human
capital management successful, you need to search for better integration portals to make data
availability easier for people. Functional objectives like team integration are to produce
streamlined operations and tasks. A right tool like the self-service portal can bring employees
closer to HR folks.

Training and Development:

Workforce being effective and performing are two important and basic elements to work
upon for achieving your basic objectives at an organization. With proper training and
providing future opportunities, employees feel safe and organized. Effective employment is
highly dependent upon the training practices. Providing opportunities to employees is one
great step to ensure workforce management.

There might be difficulties such as planning, scheduling, training sessions, and evaluation of
each on-boards. To lessen the pain, solutions like training management software can help you
with auto-reminders, easy scheduler, reporting, and tracking capability. The HR manager can
ensure effective training practice at the firm.

Employee Motivation:

The prime objective of HR folk is to keep things on the right path. Keep distractions and
negative vibes away. For this, the employees need to be attended to and kept motivated
throughout. How can HR motivate employees?

Give powers to them. Take their views on things. Involve them in weekly meets or decisions.
Even if it is a fresher, let them join. Keep the morale always high. Employee recognition like
yearly appraisal based on their performance can too help.

An automated feedback system for performance appraisal management can keep your
employees motivated and ensure productivity throughout the service. When the employees
are satisfied and fulfilled, nothing else can prevent you from losing your objectives and goals.
Workforce Empowerment:

Talking about employee motivation, nothing can work better than empowering them.
Empowering them with tools like ESS portal can help save HR efforts too.

With the portal, employees can themselves apply for approvals and track them through their
mobile phones. Be it leave request, generating payslip, checking PF account, remaining
leaves, upcoming holidays, manager details, or anything, HR intervention is least required.
Now, you no more need to knock on HR’s desk for small queries.

Retention:

Providing leadership qualities and opportunities, a healthy working area, and employee
retention are some prime objectives and deliverables of the HR managers. Keeping
employees retained and motivated needs to be a top priority for HRM.

Other than employee hiring, onboarding, and training cycle, keeping the employees retained
for long is the biggest challenge AKA objective of the HR people. It often occurs that
employees leave the organization within 2 months of onboarding. It can be due to ineffective
training management or a rough hiring process.

Employee experience needs to be carefully attended. Keeping your employees retained can
help maintain a good state of employee turnover. To keep it stable, the HR manager needs to
learn the best retention tips for business.

Data and Compliance:

Functional and organizational objectives also include managing company/ employee data and
managing compliances. Managing payroll compliances and keeping the company out of any
penalties or fines is a huge challenge for HR people and managers.

Even a small error or miscalculation can owe you huge penalties and even may lose respect.
When committing to tasks like employment and payroll, you need to be careful about laws
and regulations. The objective here is to keep any unwanted claims at bay for smooth
functioning.

Automated software like the HRMS system can help you keep errors at the side and leave no
window for owing any penalty from IRS. It is the responsibility of HR to follow IRS
guidelines and standards for effective employment at the company. Stay assured of all the
legalities.

Operative functions of HRM:

The functions of the human resource department performed at the mid-level are known as the
operative functions. Operative functions of human resource management are directed towards
the execution of plans and strategies designed by the senior managers of a company.
Operative Functions of HRM includes the following:

 Hiring Talent: One of the primary functions of the human resources department is
to hire people who are a perfect fit for the organization. Along with quick and
effective hiring, the HR team also ensures smooth onboarding.
 Orientation: Human resources managers ensure that legal formalities are
effectively completed from every employee’s side. After that, they introduce them
to the company policies, principles and working culture.
  Training and Development: The working needs of every company differ from
one another. Employees are provided with adequate training so that they are on
track with the team’s requirements.
 Employee Retention: The HR team ensures that employees stay productive at
work and deliver their best performance. They try to develop a culture of work and
fun.
 Feedback and Performance Appraisal: Human resource management team
creates a systematic process to improve productivity and work efficiency. They
create a flow where employees receive feedback from senior managers at regular
intervals.
 Provide Actionable Insights: HR insights help the management drive important
metrics for employee engagement. Performance data, employee benefits, their
skills, claims, company turnover and other vital statistics can help an organisation
improve its work culture and stay closer to achieving goals & objectives.

Managerial Functions of HRM:

These processes provide important insights to help the top management in strategizing and
successfully implementing the designed schemes, It is one of HR’s main functions.
Basic managerial functions of HRM are the following:
 Planning

Planning is the first and foremost managerial function of HRM. The importance of
human resource planning involves determining the ways to achieve higher
productivity.

At the planning stage, leaders in a company also determine the requirement of

resources across different organizations. In brief, HRM planning is fundamental to
recruitment, retention & other skills required to achieve company objectives.

 Organising

After establishing the objective and setting the plan, managers now jump to the
second stage of managerial functions. The secondary function of HRM is to make
available all possible resources to carry out multiple operations.

The functions of HR managers include setting a framework of operative tasks by

dividing the activities into functions and positions. They also assign activities as
per the groups, delegate authority and responsibility as per the task.

 Directing

Implementation of a strategy depends on how convinced or motivated the

employees are. Therefore, the third managerial function involved encouraging and
directing people at work so that they are aligned with the organizational goal.

Human resource management functions help in keeping mo employees motivated

by taking care of their career planning and monetary needs.

 Controlling

The last function of HRM is all about regulating the activities according to the
plan. The managers now can observe and chalk out the progress as per the set
standards.

Further, they can also figure out deviations, evaluate and control the department
wise progress with respect to operative functions and take necessary actions.

Organizational Performance in Strategic HRM:

 Wright and McMahan (1992) defined strategic HRM as ―the pattern of planned human
resource deployments and activities intended to enable the firm to achieve its goals.‖ (p. 298).
Implicit in this definition is that the ultimate goal of strategic HRM is to contribute to
organizational performance (i.e., the achievement of the firm‘s goals), however that
performance is defined. Considerable research has attempted to test strategic HRM
propositions, usually with the ultimate criterion being how strategic HRM contributes to firm
financial performance (Dyer & Reeves, 1995; Wright & Sherman, in press). Within the field
of strategic HRM, Dyer and Reeves (1995), in their review of research on the efficacy of
―bundling‖ HR practices, proposed four possible types of measurement for organizational
performance:

1) HR outcomes (turnover, absenteeism, job satisfaction),

2) organizational outcomes (productivity, quality, service),

3) financial accounting outcomes (ROA, profitability), and 4) capital market outcomes, (stock
price, growth, returns).

Resource Based View of the firm:

The Resource Based View of the firm (RBV) has also been applied to the HRM-performance
link. RBV is a general way of theorising about how competitive advantage can be achieved
through the possession of valuable and rare resources that are hard to imitate by other
competitors (Takeuchi et al., 2007). When applied to the HRM-performance link, one is to
consider the employees as a resource similar to other organisational resources, where the
main goal for the HR practices is to build up the human capital and stimulate the kind of
behaviour that creates advantages for the organisation (Boxall og Steeneveld, 1999). AMO
theory and KSA theory Another theory that has gained much support lately is AMO theory.
The idea is that HR practices influencing the employees Abilities, Motivation and
Opportunity to participate are the practices that will have an impact on organisational
performance. This is very similar to what some researchers call KSA theory (e.g. Huselid,
1995). It is advocated that the use of HR practices that

1) increase the employee knowledge, skills, and abilities (KSAs),

2) motivate employees to leverage their KSAs, and,

3) empowering the employees to do so, will consistently create growth and prosper for its
organisations.

Conclusion:

This paper describe human resource management (HRM) on business performance is

analysed. The main goal was to thoroughly and systematically examine various domain of
HRM, and business performance. The findings indicate that there is a positive relationship
between HRM practices and overall business performance. In addition, HRM has a positive
influence on employee wellbeing, productivity, and organizational climate. However, there is
a possibility that good HRM practices are not the cause of good business performance, but
vice-versa. the paper can be used as a starting point for future research in the domain of HRM
practices and their impact on business and organization performance.

Reference:
(1)https://www.pockethrms.com/blog/8-primary-objectives-of-human-resource-management-
hrm/
(2)https://www.linkedin.com/pulse/8-primary-objectives-human-resource-management-hrm-
pocket-hrms
(3)https://www.researchgate.net/publication/
325102538_The_Impact_of_Human_Resource_Management_on_Organizational_Performa
nce