IntroductionIncreased demands for greater efficiency and productivity, accountability as well as the value of money have contributed to the need for re-evaluation of how the public or international services ought to be resourced and delivered. Therefore, the human resource functions and practices are considered as one of the major functions in both the development and implementation of the applicable strategic responses aimed at increasing the competitive pressure. For example, public and private organizations are expected to adapt and respond to the domestic and international competition, declining markets and slower growth. The study evaluates the impact of human resource practices on organizational efficiency and productivity as the most important channel of organizational departments in the UK as the case of study.
Based on the French industry survey data, there is an indication that human resource practices greatly influence organizational efficiency and productivity, though moderated by the availability of unions. For instance, in France the human resource practices have positive effects on organizational scale efficiency. On the other hand, such an effect is more dampened within the presence of unions (Tzafrir 2005). Studies indicate that on the basis of their own capability, human resource practices do not have any effect on the technical efficiency.
However, various research findings suggest that the human resource practices can largely exert positive influences if combined with unions. Human resource managers are tasked with the responsibilities of selling the management values across the entire organization. They engage in persuasive acts that explicitly inculcate certain values into employees through a variety of channels. For instance, marketing and selling roles of the human resource is considerably more visible than with employees who are perceived as consumers of both human resource programmes and policies.
Therefore, the contributions made by human resource specialists are currently working in specific organization contexts under the circumstances in which the practices are appropriate (Zheng, Morrison & O’Neill 2006). Human capital and performanceMore and growing body of evidences demonstrate that a positive relationship between human capital development and organizational performance exists. The emerging emphasis on human capital within the organizations reflects the perception that market value has less dependence of the tangible resources, but instead on intangible ones with particular focus on human resources.
This implies that human capital generally consists of individual capabilities, knowledge and skills as well as experience of an organization’s employees and managers (Dess & Pickens 2000). Nahapiet and Ghoshal (1998) argue that social capital increase the efficiency of employees’ actions, and as a result, aids the aids the cooperative behavior. They also examined that both social relationships and social capital are the significant influences on the development of human and intellectual capital. This suggests that based on the individual level, employees attributed with better social capital such as stronger contact networks, are able to earn more rates of return on their respective human capital than those with poor social capital.
There is an implication that human capital is a common term used in the business literature, and thus widely recognized among the UK firms in developing mechanisms that determine their employees’ value base. In addition, there is a suggestion that the significance of human capital notion as well as its measurement may lie within its capability to re-frame the perceptions of the existing relationship between employees’ contribution and the competitive performance of business operated (Kintana, Alonso & Olaverri 2006)