Black Box between Human Resource Management and Organizational Performance - Coursework Example

BLACK BOX BETWEEN HUMAN RESOURCE MANAGEMENT AND ORGANIZATIONAL PERFORMANCE By Presented to Introduction The heightened changes in the environment, the rising need for business to expand and increase their market share and the increased competition of firms to be more efficient has become the new trend. As a result, it has fostered the competitive need for the organizations. Performance is the core goal of any organization or firm. The human resource research aims at trying to comprehend the connection between the policies of the HR and the performance of the organization (Katou & Mchang, 2007). Research has shown ample evidence of the massive connection between the performance of the organization and practices undertaken by the Human Resource team. The relationship between performances of the group enables the results of the practices of the human resource. Such practices include the involvement, employee motivation and compensation among many others (Ananthan, 2010). Therefore, the policies and practices of the human resource coupled with the strategies of a business impact the performance of the organization, and this is through the outcomes of the human resource management. Recent investigations have shown that the connection between the performance of the organization and the practices undertaken by the human resource compares to a “black box”. Here a black box primarily signifies the absence of clarity in terms of what influences what. There exists no understanding of how the practices of the Human resource result to increase the firms performance as a result of the competitive breakthrough. The inability to understand the connecting variables and how they impact the practices of the human resource and the performance of the organization commonly known as the black box (Boselie & Boon, 2005). The contents of the black box are still a mystery. Therefore, the aim of this paper is to investigate the black box critically by searching the connecting variables between the policies of the human resource and the performance of the organization. The human resource nature The researchers concerned with human resource have dedicated all their efforts to illustrating that how individual management through the practices of the human resource, has a great connection with the performance (Porter, n.d.). Nevertheless, it is crucial to point out that exists no agreement on the human resource nature. According to the researchers, there exists no permanent record of the practices of the human resource that define them (Boselie & Boon, 2005). Points out an existing problem in the human resource. He claims that though similar notions are utilized, there is a different meaning in terms of the practices of the human resource. Boselie made a discovery of 26 entirely diverse methods that ended up being used in 104 dissimilar studies. The primary practices, according to Boselie include the prudent measures in the process of recruitment, performance assessment, training and improvement and finally the schemes utilized during the rewarding and payment methods (Fargus, 2000). The above four systems of the human resource speak of their objectives as a team. The identification of competent and efficient workers creates the first objective. Moreover, the provision of excellent working skills to the organization, assessing the progress of the workers as per the organizations goals and finally rewarding the employees in a fair, reasonable way (Raymond, 2006). However, these lists of practices are parallel to the AMO theory methods. As a result of this assumption, there exists a connection between the practices of the human resource and the performance of the organization (Baye, 2000). Recruitment process The process of recruitment is a major practice of the human resource (Armstrong, 2000). The recruitment process involves collecting the eligible applicants for the required positions in the enterprise. The process encompasses on determining whether to employ them or not. The selection follows recruitment where the best candidate gets selected. Therefore, when the HR department makes the best decision regarding the choice of employees, the performance of the enterprise rises (Buckner & Mcann, 2004). The hired employees exhibit competency, skills, professionalism and high confidence in the work. Research shows that there exists a positive relationship between the recruitment by the HR and the performance of the business. Therefore, there should be the seriousness of the enterprise to possess the necessary skills and knowledge of the process of selecting employees (Price, 2004). Training There exist a number of ways in which an organization can profit from training its employees. Training involves teaching the employees on how to work. The process aims at providing the employees with instructions and knowledge necessary for improving and developing their performance (Vlachos, 2009). Training increases the competitive advantage of the organization. The training of employees has a positive impact on the performance of the organization. The motivation for the employees derived from the process of training enables them to become better and achieve the goals of the organization (Hannas & Pathak, 2005). Rewards and payments The theories concerning the motivation of employees give special consideration to the impact of monetary compensation to employees (Gocks, 2010). The payments in terms of wages or bonuses give the employees the morale to work. According to Marlow’s theory of needs, employees are motivated when their needs met. Among the needs include physiological needs that include food, clothing and shelter. Meeting these needs involves fair compensation to the employees. Therefore, this heightens the performance of the employees in the organization (Guest, 2011) The content of the black box There is no agreement regarding the constituents of the black box. According to (Boselie & Boon, 2005), the investigation of the 104 Journal articles gives a confirmation that the link between HR and performance mechanisms impression disregarded. The Guest model illustrates the probable basis for the relationship between the Human resource and the performance of the organization. According to the theory, the performance of an individual or employees highly depends on the essential skills that they possess. Skills increase the competency of employees and the level of reliability placed on employees by the employers. The skills also make the employees be considered great assets for the organization. The skills of an employee increase through training. According to the Guest’s black box model, employee motivation increase performance level. The managers of any given enterprise always tasked with increasing the employee motivation by recognition. The employees receive awards for their excellent work. Finally, the reasonable rule, including the understanding of the role of employees improves the performance. The conclusion, according to the model involves selecting the practices that encourage employee motivation, skills and a reasonable role. The three factors have an influence on the outcomes of the employee’s behaviors and this finally impacts their performance. In the end, the resulting effect includes financial benefits that include profits among other things (Becker & Huselid, 2005). The model assumes that the strategies of a business result to the HR design system. The practices of the HR team have an impact on the skills of the employees, their motivation and the design utilized for work. The plan of work has serious consequences on the creativity of employees, the ethics of the business and productivity levels. The results of all these variables increase the performance of the organization. The performance of the outfit increases profit, subsequently increase as a result (Perman & Scouller, 2000). As profit increases, the company expands, and this determines its value in the economy or the market. The results of the above cases involve the increased market share. The team then meets its short term and long term goal that includes profitability and expansion respectively. Therefore, reasonable strategies of the business improve the business performance. Maintaining excellent business ethics influences the motivation of employees. Business ethics attract suppliers and customers, investors and employees and also retains employees in the company. When the amount of investors increases, the company gains protection from activities. The value of the company also increases. Creativity in the business brings about innovation (Ted & Blake, 2012). Innovation enables employees to become more efficient at work and at the end of it all profitability level increases. Productivity mainly revolves around innovation in the workplace. The people-performance structure (Swart & Hutchinson, 2003), encompasses two things. To begin with, the discretionary acts of the employees has an effect on the connection between the HR and the performance of any given company. The employees have the capability of being part of discretionary actions. The other things evolve around line managers who act indiscretion on the application of the HR policies and how they work with employees. The model also puts great emphasis on the abilities of employees, motivation and opportunities among many other factors. The abilities of the employees dictate whether or not they can be able to carry out a given task and whether they have the required skills. Motivation comes from the incentives granted to the employees with the aim of enabling them to work. The working environment also allows the employees the required support and grants them the ability to express themselves. Nishii & Wright (2005) suggest the actual practices by the human resource exist independently, and they must be perceived and subjectively interpreted by every employee in the company. The line managers create the mediating variables. The outcome encompasses on the reactions of the employees. The final result is that the outcome of the enterprise is affected. From the above comparison, the findings include, the different models encompassed on the various practices of the Human resource. The performance of the employees relies on the skills, opportunities and the motivation that the employees receive. The role of the line manager in the organization has also impacted the outcome of the corporation. The only way through which the performance of the business can improve is through the achievement of the HR objectives. The implications of the black box The most rampant issue in the HR-organizational performance is the connection between the two. Some researchers state that there exist a positive relationship between the methodology of the HR and the performance of the organization. In some cases, researchers believe that there is a negative relationship between the practices of the HR and the performance of the organization. According to (Lytras, 2008), there is a large gap elaborating how the methodology of the HR result to the undisputed competitive advantage of the enterprise. The above statement forms the proposal of Lytras concerning the black box. Despite the amount of empirical research and studies, investigating the impact and link between the practices of the organization. Little attention on comprehending the mechanisms involved in HR methodology that influence human performance (Jeong, et al., 2007). The limited research has an adverse effect on the competitive advantage of the enterprise. The research carried out centers mainly on how the practices of the human resource have an impact on profitability. There are little explanation and consideration of the methodology that creates the value. The investigation that is carried out serves to show the positive relationship between HRM and the efficiency of the firm but fails to explain the nature of the link between the two factors. The proposition affects the competitive advantage of the enterprise. There is no understanding on the procedures that lead to the positive relationship. According to Becker’s black box model, HR practices have a bearing on the overall outcome of the firm tied to its employees (Savaneviciene & Stankeviciute, 2010). The outcomes can be HR related while others may be consequential of the HR practice. Findings related to human resource performance include; discretionary effort and productivity. Additionally, other outcomes as per Becker’s model thats not related to HR include improved aggregate organizational performance characterized by increasing profitability and ever growing portfolio size. However, all these outcomes are tied to employee skill set, employee motivation, existence of a work plan as well as a conducive working environment. This theoretical black box model point out to the fact that the workforce is an important cog in any enterprise. This black box model, however, does not specify the human resource practices at an organizational level that have a direct bearing on employee performance (Gardner, et al., 2001). In contrast, the black box model proposed by Guest highlights the impact that HR related practices have on overall employee performance. The model points out to a number of factors that directly influence the overall outcome of the workforce (Wright & McMahan, 2000). The HR methods that affect employees directly include; the overall selection criterion employed by the firm. The framework set up by an organization to reward and appraise diligent staff members, job security, as well as the level of staff participation in firm’s activities. This model emphasizes the importance of a good communication network in the success of any business. A good vertical communication system should be put in place so as to provide a platform for employees can participate in organizational matters. Furthermore, the model suggests that the success rate of any HR department in achieving a firm’s goal tied to the characteristic of its employee composition. The model brings out the essence of skilled workers and delegation of duties in rendering management practices a success. A good blend of HR methods and employee skills impacts the overall performance of any firm. A successful HR black box model results in improving commitment from the staff, job flexibility as well as better motivational levels. The HR initiatives also lead to an increased sense of belonging on the part of employees to increase participation. This increased sense of importance by the staff helps curb labor turnover, as well as improve employee retention. Not to mention, the black box model proposed by Guest points out at how successful HR traditions impact the general performance of a firm. The distal related outcomes include a total improvement on the performance level of both employee and company. This improved performance relates to improved productivity, better service, and product quality, enhanced innovation as well as reduced complaints from the clientele. Another black box model proposed by Purcell underlines the implications that good HR practices have on outcomes. This model asserts that the importance of job security, presence of performance appraisal frameworks, fair remuneration cannot be understated. The AMO framework provides the link between HR practice and employees in this model. A successful HR policy should provide a blend of workplace traditions that based on employee participation. A successful ability, motivation and opportunity to participate framework is beneficial to any organization as it plays a part in the ability of a firm to meet its goals. Lastly, the black box model proposed by Nishi and Wright had a totally new concept in the entire black box concept. The model suggests that both implicit and explicit HR policies have consequences. This black box model stresses the importance of qualified HR team managers in achieving the organizations targets. Quality line managers can be identified by assessing the effect that they have on personnel. Challenges of the Black Box Models The existence of many black box models presents a challenge of choosing the most feasible model suitable for a specific firm. An analysis of the various concepts shows that adopting a criterion on which variables are selected presents a managerial challenge. Furthermore, it is very difficult to draw a line between fundamental and dependent variables. Black box prototypes initially based on two core ideas; firm strategy and HR practices that effectively gave rise to the business’s accomplishments. This challenge that has inhibited the applicability of this theoretical concepts can be narrowed down to the fact that no uniform protocol has been established. This managerial failure to help in deciding the number of boxes in a model to use in designing a black box model. Another problem of applying a black box model relates to the difficulty associated with establishing the specificity level in each box. This underlying problem stems from the fact that the importance of each box with a model cannot be quantified. These challenges are affecting the black box point to the ultimate fact that increasing the number of variables and tables in any black box model does not necessarily guarantee the opening up of the black box. Conclusion A host of organizations has dedicated a lot of time and monetary investment in trying to decipher the link between HR practices and performance outcomes. However, the amount of emphasis that has devoted to human resource management fails to view an organization beyond the production constraints. Furthermore, the inexistence of a unified HR framework that highlights particular structures and practices to be used by firms also curtails the applicability of the black box. In addition, black box concepts have only addressed how HR policies related to performance but failed to explain precisely how the conceptualization of the models. 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