The Components of Human Resource Management 's Success - Coursework Example

? High-involvement employee performance and aligned HR and business strategies: The components of HRM’s success 21 November For the past twenty five years, human resource management in theory and practice, as it evolved into strategic human resource management and similar models, has shifted from its usual core function of personnel management, to becoming a strategic driver of individual and organisational performance (Liu et al., 2007; Nohria, Groysberg and Lee, 2008). In 1987, Guest wrote about the beginnings of Human Resource Management (HRM), and its poor connection to organisational performance, except when policies of employee involvement showed effects on employee performance. In 2011, Guest reviewed the connection between HRM and corporate performance again and found conflicting results. Despite Guest’s hesitancy in concluding that HRM contributes to organisational performance, other scholars provided an empirical link between HRM strategies, policies and practices and certain aspects of individual and organisational performance (Liu et al., 2007; Nohria, Groysberg and Lee, 2008; Huselid, 1995: 635; Wall and Wood, 2005: 430; Pfeffer; and Pfeffer and Veiga 1999). This paper aims to determine HRM issues and to offer some solutions. After reviewing several studies, including opposing ones, HRM systems, policies, and practices are believed to drive company performance through shaping recruitment, selection, and retention strategies that develop engaged and creative employee, who can serve as one of the company’s sustainable competitive advantages. The role of human resource systems in strategic recruitment cannot be undermined (Liu et al., 2007). Recruitment should not be dismissed as something that can easily be outsourced to other parties because recruitment strategy should meet existing HR strategy goals. Walker, Bernerth and Tocher (2009) studied job seekers’ organisational attitudes at different phases of the recruitment process by evaluating the interactions among the variables of job seekers’ procedural justice anticipations, procedural justice perceptions and preliminary screening feedback quality. After using two phases of data collection that included 392 participants in phase 1 and 351 in phase 2, findings showed that participants who were engaged in the recruitment process with high procedural justice expectations were more affected by initial screening feedback quality than those with low justice expectations (Walker et al., 2009: 5). Procedural justice perceptions throughout the preliminary screening affected their organisational attitudes (Walker et al., 2009: 5). These authors concluded that how firms recruit candidates can affect the quality of perceptions regarding the organisation (Walker et al., 2009: 6). Rehman (2012) affirmed the same findings for his empirical work on the recruitment efforts of public sector organisations in Pakistan. He discovered that organisations with poor promotion and governance systems tend to recruit fewer competent applicants and tend to have higher turnover rates. Managers must be clear in explaining what they expect from their employees and what employees can expect from the organisation, in terms of rewards, culture and other organisational and managerial factors. HRM managers who carefully carve the right organisational image and job expectations for its employees during the recruitment process can hire high-performing employees than those who do not care on the image and expectations they provide to applicants. HRM affects individual performance through its recruitment strategies because they influence individual decisions through organisational factors, which when affirmed through hiring, can result to employee job satisfaction and retention. Han and Han (2009) explored the relationship between hiring perceptions and retention and found a correlation between the two. Another studies emphasised that in recruiting the right people, job experience, skills, and personality are critical. Newman and Lyon (2009) promoted recruitment strategies that embrace cultural diversity. They proposed the use of attributes-focused recruiting because they hypothesised that the different job advertisements will draw applicants with diverse traits and abilities, including those with the needed conscientiousness and general mental abilities. Their findings showed that targeted recruiting can improve recruitment diversity and result to candidates that match job requirements and targeted demographics. When jobs, cultures, and employees are matched during the recruitment process, job satisfaction and retention can also be attained. One more study showed that managerial factors can link employee recruitment to retention, when they present the same values and expectations that candidates formed during the hiring process. Managerial factors can impact employee satisfaction and commitment, thereby connecting hiring to retention. Employees’ perceptions of their direct managers affect their job satisfaction and commitment (Nohria et al., 2008: 6). HRM should be able to train direct supervisors as leaders who can inspire their different employees, where they project similar values and goals that employees had when they were still job candidates. The alignment between expectations and workplace management realities can enhance employee engagement. Aside from recruitment, the strategic selection of employees is a significant first step toward establishing a productive and committed workforce. Liu et al. (2007: 505) asserted that: “Systematically designed selection processes help identify people with the right set of knowledge, skills, and abilities for individual jobs.” Selection is a complex endeavour because companies should not only fit people and their jobs, but they must also align people and organisational cultures (Liu et al., 2007: 505). A closer look into the selection strategies of successful companies, such as Google, Microsoft, Southwest Airlines and Toyota, reveals that they recruit people with the kind of attitude that will fit their cultural norms. Moreover, corporate vision and strategy should guide recruitment and selection (Hendry et al., 2006: 51). Hendry et al. (2006) emphasised the connection between vision and HR functions (51). In terms of selection, if the company sees itself as a driver of innovation in mobile technologies, then it should recruit people who have high creativity and openness levels because these have been correlated to innovation. Wright, Dunford and Snell (2001: 704) explored the internal and external recruitment and selection strategies that can affect a firm’s competitive advantage. Another article explains the three factors of HRM and company effectiveness (Liu et al., 2007: 508). One of the factors is horizontal alignment, which pertains to aligning all HR practices, while another is vertical integration, which refers to aligning HRM and business strategy (Liu et al., 2007: 509). If retention and selection strategies are aligned with business strategy and overall HRM strategy, they can be designed to have a more decisive role in affecting the performance of individuals with respect to their jobs. HR can enhance the success of selection strategies through conducting tests on emotional intelligence competencies. Blank (2008) argued for the importance of selecting employees based on emotional intelligence competencies. She based her hypothesis on the literature on emotional intelligence (EI or EQ) that connects EI with individual employee performance and group performance (Blank, 2008: 79). People with high EI tend to be more productive and well-coping employees than those who have low EI; at the same time, leaders with high EI tend to be more successful in directing their team toward success (Blank, 2008: 79). Blank (2008) suggested choosing candidates who have strong “core emotional intelligence competencies that predict successful job performance” (Blank, 2008: 83). Blank (2008) added that the risks of discriminative hiring can be reduced through making hiring decisions that include emotional intelligence competencies. The risk of hiring emotionally unstable people, who are demoralizing to their team, can also be reduced (Blank, 2008: 81). Furthermore, when emotional competencies are considered, the possibility of hiring the most superior candidate improves. Blank (2008) recommended the importance of tracking the performance of high performers with high EI, so that the connection between EI and individual and team performance can be further established. This article demonstrates the relationship among selection strategies, EI, and individual/team performance, thereby reinforcing the argument that HR can drive individual and organisational effectiveness. Apart from recruitment and retention strategies, retention strategies are important and it is HRM that will design retention policies and practices that can reduce the company’s turnover of high-performing employees, as well as those who are reliable enough to support the firm’s development. In reality, a firm is not made of all top performers, and sometimes, even top performers slip when they lose motivation or they want to pursue other career objectives, for instance. Because of varying work objectives of employees, HRM can design its systems and practices around a climate that supports as many motivational factors as possible. If the firm is struggling with low employee morale and engagement, it might be fruitful to conduct an empowering process of change management. Randolph (2000:94) underlined that HRM managers should realise that empowerment requires changing assumptions about supervisor-employee interactions. He used his case studies and personal experience to build the process of achieving the culture of empowerment and they are: sharing information freely and honestly; building autonomy through boundaries that are expanded throughout time; and eliminating hierarchies and replacing them with self-managing teams (Randolph, 2000: 100). These retention strategies focus on empowering employees through expanding job roles and responsibilities, where they can access the right resources and technologies. One of the ways of empowering people is through giving them honest feedback. The intended use of feedback is a crucial factor to be considered because HRM must be clear on its feedback goals to help attain its target effects. Firms must decide whether feedback would be employed for personal/professional development or as a performance evaluation (Carson, 2006: 400). Almost all of the sources that Carson (2006) examined recommended that feedback should primarily be used for personal/professional development, although organisations with a history of triumphant implementation may soon use it for evaluation purposes (400). Furthermore, HRM must connect performance measures to feedback goals (Carson, 2006: 400) that emphasise motivation (Locke and Latham, 2004; Nohria, Groysberg and Lee: 3). Feedback should help people understand their strengths and weaknesses and use that knowledge to enhance their performance levels. In addition, HRM should select and train people who will perform and interpret the results of feedback measures (Carson, 2006: 400). Learning from initial implementation can help improve the effectiveness of these tools in retaining people (Carson, 2006: 400). Professionalising the approach to feedback will improve employee perceptions that these are reliable and unbiased sources of information for self growth. Many employees are retained in organisations that have a strong emphasis on learning, training, and skill development. Several studies showed a significant connection between commitment and performance through internal and external foci (Pfeffer and Veiga, 1999; Siders, George and Dharwadkar, 2011). Siders et al. (2011) showed that employee commitment to organisation is significant when objective indicators of organisationally-rewarded job performance are considered. Employees who feel connected to organisations demonstrate augmented sales volume (Siders et al., 2011: 576). As for employees who feel more connected to customers, getting praises and appreciation from customers motivate them more volume (Siders et al., 2011: 576). HRM managers must realise the significance of employing objective measures of performance in order to produce more reliable connections between pay and performance to understand the benefits of commitment. Managers must be aware of and responsive to the diverse foci that impact the motivation perspective of employees. High-involvement work practices have been shown to be related to both retention and employee productivity (Guthrie, 2011). Based on studies, high-involvement work practices can boost employee retention for critical employees (Guthrie, 2011: 181). High-involvement jobs increase the costs of turnover, which is why HRM must ensure that they can engage dedicated and experienced employees (Guthrie, 2011: 182). Ulrich (2008) talked about being an employee champion, which is not necessarily being biased for employee needs and goals only, but ensuring the integration between HR strategies and employee welfare. He discussed the challenges of demanding so much from employees, and yet not giving them enough power and resources to their job. In order to reduce the gap between employee demands and resources, Ulrich (2008: 9) recommended decreasing demands, increasing resources and turning demands into useful resources. Moreover, employee retention is especially significant when investments in high-involvement work practices are comparatively high (Guthrie, 2011: 187). For instance, for knowledge-based firms, they are investing significantly in developing their employees through seminars and trainings. When these employees resign and go to competitors, it seems that the company only wasted money providing for the competencies of the workforce of competitors. HRM should carefully study potential sources of high-involvement through academic articles and industry benchmarks, while understanding their fit with organisational strategies and culture. HRM designs and implements the performance management system, which, when aligned with motivating rewards, pay and other benefits, can engage employees and ensure their loyalty to the organisation. In several studies, one article concluded that a suitable design and alignment of the HR system with business priorities is highly firm-specific (Hendry et al., 2006: 51). Firms have their own goals and context that impact their performance management system’s goals and processes. HRM, when learning from other benchmark examples, must underscore the firm-specific variables that will impact the design and implementation of its performance management system. In addition, the alignment of performance management and business strategy enhances the effectiveness of the former in supporting the latter (Hendry et al., 2006: 59). An article noted the application of performance management diagnostics, which analyses the contribution of performance management to the company’s bottom-line (Hendry et al., 2006: 57). HMR must also consider performance and reward management issues because people are motivated with different rewards in mind (Hendry et al., 2006: 47). Some people, for instance, are more motivated by social connection than money. Others desire less work hours so that they can be with their families and pursue other fulfilling endeavours. These are motivation considerations that vary for every individual, which asks HRM to develop contingency strategies in managing, measuring, and improving employee performance. Paauwe (2009) warned that HRM must be careful in measuring the link between HRM strategies and individual and organisational performance. He recommended the balance between managerial and employee issues and concerns, so that HRM functions will not be divided from greater organisational goals and individual and collective aspirations of the workforce. Indeed, HRM must not conduct studies on its effectiveness and efficiency haphazardly. It should use psychologically sound instruments and valid data analysis measures when conducting their own studies. At the same time, in consulting the academic and practical literature of HRM, they must critically evaluate their sources. They should not blindly follow the recommendations of these studies without understanding their fit and relevance to organisational goals too. As an HR specialist, HRM practices and organisational tools that can be used to drive individual performance are vertical and horizontal alignment of HRM strategies and business strategies, as well as various specific tools that improve the effectiveness of selection, retention, and development strategies in attaining individual and organisational goals. The 360 degree feedback and developing high-performance practices are some of the tools that engage customers. Empowerment and self-managed teams can be used to increase creativity and engagement. These factors of engagement and innovation can affect organisational performance through higher productivity and development of creative products/services. Hence, HRM may not always have a causative nature in driving performance, but it has components that can ensure the success of engaged individuals in high-performance organisations. 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