‘Strategic Hrm and Performance Essay Example for Free

Strategic Hrm and Performance EssayThe people in an organization atomic number 18 considered to be one of the most valuable imaginations of todays firms. Other options over such(prenominal)(prenominal) as brands, products, processes, technological advancement, economies of scale can still raise a competitive advantage except an administrations gentlemans gentleman metropolis be more vital for its sustain cl invariablyness. The idea that an organisations benevolent imaging can play a strategicalalal role in determining its success has led to the development of a field of research commonly referred to as Strategic forgiving imagery caution. The understanding of the causal human affinity amongst HR and organisational surgical procedure helps HR managers to design policies that will lend forth better operational efficiency to action higher organizational process. The emergence of strategic HRM represents a paradigm shift from the traditional HRM models. It is concerned more specifically with the relationship between HRM and the strategic context. ( timberland, Holman and tone, 2006 100)HR practises are the main tool which an organisation can use to qualifying the pool of human capital as well as an attempt to shift and align organisational behaviours which leads to organisational success. The skills, behaviour and attitudes of employees must fit the strategic needs of the firm in revisal for it to develop a competitive advantage. How incessantly, the singular focus on the strategic interests of an organisation have been criticised by some who suggest that this whitethorn be to the detriment of the employees (Van Buren, Greenwood and Sheehan, 2011 209) in that respect has been a steady growth over the last two decades of research publications aroundstrategic HRM and according to Gooderham, Parry and Ringdal (2008 2042), this can be broadly divided into three main kinds of theories universalist, Contingency and Configurational. Universalistic theories have an underlying assumption that there is a enjoin link between some human resource put ons and organisational performance across all organisations and under all conditions (Lengnick-Hall, Lengnick-Hall, Andrade, and Drake, 2009 68) and are concerned with best physical exercise.Contingency theories reject the universal applicability of human resource practices, therefore supposing that the relationship between them and performance will differ depending on various external and internal factors and influences.Configurational theories suggest that the regard of strategic HRM on organisational performance is dependent on the use of an effective combination of interconnected human resource practices. This provides a useful framework for closer examination of the link between guess and practice.Universalistic suppositionIn relation to the universalistic theory, the current literature provides much empirical recount for a direct and linear link between st rategic HRM and a positive force on organisational performance (Boselie, Dietz and Boon, 2005 67 Combs, Liu, Hall and Ketchen, 2006 501 Katou and Budhwar, 2006 1248 Stavrou, Brewster and Charalambous, 2010 952). In their study of the retail industry, Chuang and Liao (2010 185) concluded there was a clear link between strategic HRM and performance. They found that human resource practices can facilitate a climate of concern for two customers and employees which subsequently encourages employees to work well with their customers and co-workers which is essential in achieving higher takes of market performance. However the specific ways in which human resource practices impact on organisational outcomes are not always clear and their level of impact has been subject to criticism.Whilst there is strongevidence to support the vision that universal best practices provide a strong foundation for strategic HRM, distinguishable factors need to be considered in order to achieve a highe r level of performance. (Lengnick-Hall, Lengnick-Hall, Andrade, and Drake, 2009 68). Despite the volume of evidence to suggest the contrary, there is also an change magnitude consensus in the current literature amongst researchers that human resource practices themselves do not directly impact on performance. Instead, it is suggested that they merely influence resources, such as the human capital, or how employees behave, and it is these, rather than the practices themselves, that subsequently lead to performance. (Katou and Budhwar, 2006 1224). The ability to influence through with(predicate) strong leadership plays an important role in helping employees to be aware(predicate) of the sets of HR best practices.These best practices need the support of top-level managers to adopt them in the first place, which in acidulate will greatly influence the buy-in from the rest of the employees in the organization. If these so called best practices are mainly from the spot of top attent ion and shareholders, while there is no room for employees voices to be heard, the theoretical aspect of strategic HRM will not work. In their study of performance and strategic HRM in Call Centres across the UK, Wood, Holman and Stride (2006 120) found very limited support for the human resource-performance relationship and identified inconsistent results across practices and performance.Furthermore, in otherwise research conducted by Hesketh and Fleetwood (2006 678), they conclude that the empirical evidence for the existence of an HRMperformance link is equivocal. In real life, companies may need to respond to external pressures which creates problems of treating employees with consistency of treatment, especially over period and may cause problems of retaining good and loyal staff. Simply developing the appropriate HR practices in theory will not be enough because HR advantages also depend on how these practices are apply on the ground.For example, an organisation that focus es on the well- creation of their employees in an economic recession or times of change magnitude competition may be forced to decide between commitment to employees and a need to slue costs, re organise or lay-offs in order to stay solvent. Therefore, looking for a link between HR practices and performance is a futile effort because the main focus needs to be on the relationship between policy, practices, processes, implementationand performance. This is a huge effort that is not easily and practically achieved in many a(prenominal) organisations today.Contingency TheoryIn relation to the contingency theory described by Gooderham, Parry and Ringdal (2008 2042), whereby the relationship between strategic HRM practices and performance is said to vary according to different external and internal factors and contextual variables, there is some support. Internal influences identified in the literature complicate factors such as technology, structure and size of the organisation and business strategy, and external influences include factors such as the legal, social and political environs (Lengnick-Hall, Lengnick-Hall, Andrade, and Drake, 2009 66). For instance, within Wal-Mart, those in charge of logistics have extremely valuable and unique skills, much more so than the average sales associate. On the other hand, at Nordstroms, because customer service is important, sales associate skills are more critical to the strategy than those of the logistics employees.Indeed Godard (2010 466) argues that a backbone criticism of the current research around strategic HRM practices is its failure to pay sufficient systematic attention to these variables and to the impact that historical, institutional and socioeconomic conditions may have had on human resource practices over time. Similarly, Hueslid and Becker (2001 427) suggest that whilst the nature of work and organisations has undergone considerable change over the past two decades, the practice of strategic HRM has changed much less and this failure to adapt and be flexible has a direct impact on how well it works in practice and how much influence it has on organisational performance.Relating to this, Kim (2010 42) asserts that understanding employees expectations for their work environment is funda affable to developing successful human resource practices including expectations around merit awards, promotion and career development opportunities and organisational rules. Critics of the contingency theory approach, however, suggest that whilst the arguments surrounding it demonstrate a theoretical foundation that is more solid that that of the universalistic approach, the evidence of its effectiveness in practice does not reach the said(prenominal) level of statistical validity. (Martin-Alcazar, Romero-Fernandez and Sanchez-Gardey, 2005 636).Configurational TheoryFinally, with regard to the third theory proposed by Gooderham, Parry and Ringdal (2008 2042), there appears to be a strong evide nce base of support in the current literature for configurational theory. This theory suggests that the impact of strategic HRM is dependent on the effective combination of a range of interrelated and multi-dimensional practices that must work well with one another in order to achieve positive performance outcomes. In their study of strategic HRM and organisational development in British manufacturing firms, De Menezes, Wood and Gelade (2010 468), concur with this and argue that strategic HRM only has the ability to achieve multiple goals and higher organisational performance, when it is fully integrated with other practices.Similarly, Boxall and Purcell (2000 186) note that too a good deal there remains a marked tendency in organisations to view human resource practices as an end in themselves, rather than as integral to the organisation and they are therefore are not appropriately linked in to one another and to other management practices, which subsequently impacts on how effe ctively they operate.The role and skills of human resource practitioners has also been the subject of much research in relation to what impact they have in making strategic HRM work in practice. Some commentators suggest that in order for practices to be effective, practitioners need to possess key strategic skills and centre of attention abilities including a high level of knowledge about the business and the environment in which it operates, organisational effectiveness skills, and fighting management skills (Ingham, 2010 32). Furthermore, Van Buren, Greenwood and Sheehan (2011 210) propose that the duality of roles that human resource practitioners have historically played, as both employer representatives and as employee advocates, has led to complications and may impact on how effective human resource management is in practice.They go on to suggest that human resource managers face pressures to emphasise employer goals, and often this impacts negatively on their role of advoc ating for employee welfare, and that they are constrained by demands of their managers and the organisational cultures in which they operate. (2011 211). Related to this, another feature of the current literature is howhuman resource practices are implemented and by whom within organisations. The evidence suggests that rather than being seen as a specialist role, much of the work around human resource practice is increasingly being delegated to middle managers to implement. Critics of this approach suggest that these managers are not equipped with the essential skills and time needed to effectively implement strategic HRM.Growing workloads and rising expectations of their roles have increased tensions within their position as middle managers, with their perception that they do not have the time or resources to effectively manage their staff (McConville and Holden, 1999 406). In a study of line manager involvement in human resource practice in the NHS, Currie and Proctor (2001 53) f ound that line managers are important to strategic change within the organisation when inclined discretion to implement human resource strategies within their own teams.However, managers may not place the same value on strategic HRM, and managers are much more reactive than proactive, and are not believably to prioritise human resource issues unless any problems associated with them become critical. Many managers in todays organisations are more task oriented because of the demands of multi-tasking, while ideally they should be spending most of their time authentically managing their staff and segments.This may not be entirely their fault because many organisations today are often dominated by cost-benefit analysis and talk a lot about trade-offs rather than the emotional and mental well-being of their employees. Another key feature of the literature is associated with the methodological challenges that exist in assessing to what extent strategic HRM theory works in practice. Th ese challenges arise from the lack of a single agreed definition or list of human resource practices or systems to rhythm the relationship between strategic HRM and organisational performance (Paauwe, 2009 136). The absence seizure of this means that performance may only be ascribed to the specific effects of single interventions rather than mensurable as a whole. It has been recognised that the development and evaluation of a more comprehensive model demonstrating a causal link between strategic HRM and performance is needed.(Huselid and Becker, 2011 422). Wright and McMahan (2011 95) propose that there are three key measures that exist whereby the effectiveness of human capital and therefore human resource practices can bemeasured. These include subjective measures such as employee perceptions proxy measures which are used as alternatives where aspects of practice are nasty to quantify and direct assessments which involves measuring tangible factors such as levels of academic at tainment of employees or productivity. However, they allow that these measures are not necessarily easy to implement and that all pose challenges for those wanting to research and measure the effectiveness of human resource practices. Others argue that any measures of the impact of strategic HRM and human resource practices are at high risk of bias and misinterpretation and any results relating to this should therefore be treated with fear (Gardner and Wright, 2009 68).ConclusionThe purpose of this paper is not to ignore the importance of Strategic gentleman Resource Management theories and the benefits it brings to organisations competitive advantage. The studies put in by many renowned theorists seemed to show that there is indeed a link between well executed merciful Resource policies and strategies with organizational performanceTable 1 Outcomes of research on the link between HR and organizational performance. Source Michael Armstrong (2006). Strategic Human Resource Manage ment A Guide to Action. Kogan Page. London. p. 73-74The current research literature provides a very mixed view of how well the theory of strategic HRM works in practice. Whilst some studies provide convincing evidence to signalize to a direct causal link with strategic HRM and high organisational performance, others provide equally compelling evidence to suggest that there is no link and in some cases, even a negative correlation coefficient with good performance.In addition, many studies suggest that there are a wide range of variables which impact on how effectively the theory of strategic HRM translates into practice, and which make it difficult to differentiate the impact of strategic HRM from other management activities, and other factors including internal and external organisational pressures and drivers, the type and size of the organisation, and the skill base and strategic lieu of human resource management related roleswithin the organisation. It also depends on whether the organisation has the capability and the delicate resources to communicate and implement the HR strategies across all level in the organisation.For example, from top management to department heads or from line managers to service staff as well as interactions between departments and employees. The issue is to boot problematic when combined with the lack of consensus on the measures to be used to assess the impact of strategic HRM on performance. A major challenge for Strategic Human Resource Management in the near coming(prenominal) is to is to establish a clear and consistent construct for organisational performance. Despite the strong theoretical grounds for believe that strategic HRM should be beneficial for organisational performance, the evidence in practice is ambiguous. Strategic HRM is a complex and ever evolving process and given the contesting evidence and the lack of agreed metrics, the debate around whether or not strategic HRM works in practice will continue on. On e aspect of this debate, however, where there does seem to be consensus, is around the need for further research in this area, and perhaps only with this, can the debate ever be truly settled.Reference ListBoselie, P., Dietz, G., and Boon, C. (2005) Commonalities and contradictions in HRM and performance, Human Resource Management journal, Vol. 15 (1), pp. 6794. Boxall, P. and Purcell, J. (2000) Strategic Human Resource Management where have we come from and where should we be going? transnational Journal of Management Reviews, Vol. 2 (2), pp. 183-203.Chuang, C.H. and Liao, H. (2010) Strategic Human Resource Management in Service linguistic context Taking Care of Business by Taking Care of Employees and Customers, Personnel Psychology, Vol. 63, pp. 153-196. Currie, G. and Procter, S. (2001) Exploring the Relationship between HR and Middle Managers, Personnel Review, Vol. 11 (3), pp. 53-69. De Menezes, L.M., Wood, S. and Gelade, G. (2010) The integration of human resource and operat ion management practices and its link with performance A longitudinal latent class study, Journal of Operations Management, Vol. 28, pp. 455-471. Edgar, F. and Geare, A. (2005).HRM practice and employee attitudes Different measures different results, Personnel Review, Vol. 34 (5), pp. 534-549. Godard, J. (2010) What Is Best for Workers? The Implications of Workplaceand Human Resource Management Practices Revisited, Industrial Relations, Vol. 49 (3), pp. 466-488. Gooderham, P., Parry, E. and Ringdal, K. (2008) The impact of bundles of strategic human resource management practices on the performance of European firms, The global Journal of Human Resource Management, Vol. 19 (11), pp. 2041-2056. Gould-Williams, J. and Davies, F. (2005).Using social exchange theory to predict the effects of HRM practice on employee outcomes, Public Management Review, Vol. 7 (1), pp. 1-24. Hathorn, M. (2012) Human Capital Challenges and Priorities, Optimis Human Capital Management Switzerland. Katou, A .A. and Budhwar, P.S. (2006) Human resource management systems and organizational performance a test of a mediating model in the classical manufacturing context, International Journal of Human Resource Management, Vol. 17 (7), pp.1223-1253. Lengnick-Hall, M.L., Lengnick-Hall, C.A., Andrade, L.S. and Drake, B. (2009) Strategic human resource management The evolution of the field, Human Resource Management Review, Vol. 19, pp. 64-85. Marescaux, E., De Winne, S. and Sels, L. (2010) HRM practices and work outcomes The role of basic need satisfaction, look into Centre for Organisation Studies Belgium.Martin-Alcazar, F., Romero-Fernandez, P.M. and Sanchez-Gardey, G. (2005) Strategic human resource management integrating the universalistic, contingent, configurational and contextual perspectives, The International Journal of Human Resource Management, Vol. 16 (5), pp. 633-659. McConville, T. and Holden, L. (1999) The filling in the sandwich HRM and middle managers in the wellness sector, Personnel Review, Vol. 28 (5/6), pp.406424. Stavrou, E.T., Brewster, C. and Charalambous, C. (2010) Human resource management and firm performance in Europe through the lens of business systems best fit, best practice or both?, The International Journal of Human Resource Management, Vol. 21 (7), pp. 933-962.Van Buren III, H.J., Greenwood, M. and Sheehan, C. (2011) Strategic human resource management and the decline of the employee focus, Human Resource Management Review, Vol. 21, pp. 209-219. Wood, S., Holman, D. and Stride, C. (2006) Human Resource Management and Performance in UK Call Centres, British Journal of Industrial Relations, Vol. 44 (1), pp. 99-124. Wright, P.M. and McMahan, G.C. (2011) Exploring human capital putting human back into strategic human resource management, Human Resource Management Journal, Vol. 21 (2),pp. 93-104.