Strategic Human Resource Development and Organisational Performance - Literature review Example

How does strategic human resource development (HRD) lead to improved individual and organisational performance? Name Institution Course Tutor Date Effective organizations have a workforce that is committed to contribute to organizational success. Strategic human resource development (HRD) is an essential component in organizations that makes such organizations successful. SHRD provides training and development opportunities to employees and organizations to achieve their business goals (Tseng and McLean 2008). It involves the use of training and development, career development and organizational development to improve individual and organizational performance (Agwu and Ogiriki 2014). Rani and Khan (2014) defined HRD as the practice of improving the learning ability of individuals, collectives, groups and organizations through the development and use of learning-based interventions, in order to make individuals and organization to growth and more effective. Performance is the accomplishment of something or the act of working effectively. In organizational context, performance is experienced at individual, process and organization levels (Tahir, Yousafzai, Jan and Hashim 2014). The impact of SHRD on individual and organizational performance have been broadly studied by researchers and they have found that SRHD has a positive effect on individual and organizational performance (Rizov and Croucher 2008; Agwu and Ogiriki 2014; Kesti 2012). However, the organizations have been facing the challenge of implementing effective HRD strategies to promote performance. In this essay, we focus on how strategic HRD helps to improve individual and organizational performance. The literature argues that when organization experience confusion and changes at various levels, especially in the context of economic crisis, the strategic HRD may provide an important framework for the management of organizations in order to deal with crisis at the institutional level (Manole, Alpopi, and Colesca 2011; Rani and Khan 2014). According to Manole et al (2011) the strategic development of employees has to results to practices that can help improve the performance of individual employees and the organization in general. Because of emphasis on the proactive management change, strategic HRD enables organizations to survive in unstable and complex environment (Kesti 2012). Indeed, it is argued strategic HRD is a very important request aspect in this era of globalization. Therefore, strategic view, according to Rizov and Croucher (2008) entails developing and implementing HRD policies and practices which can contribute to the achievement of individual and organizational goals. In the era of liberalization, globalization and competitiveness companies emphasize on HRD and its contribution towards organizational performance and competitiveness (Sahoo and Sahoo 2012). The success of developed countries’ companies like Japan is highly attributed to HRD. They have implemented HRD because they understand its importance (Rani and Khan 2014). To improve on performance, every organization needs contribution of all levels of the organization including employees and top management. Appropriate HRD mechanism helps to employee improve their skills and competences and this positively affects their performance and the performance of the organization (Sahoo and Sahoo 2012). In the Indian context, organizations develop HRD systems that enhance their performance and the performance of individuals through different sub systems of HRD such as performance appraisal, training and career development (Rani and Khan 2014). Rani and Khan (2014) argue that HRD has helped to promote an environment in which individuals are willing and committed to contribute to organizational success in most organizations in India. Therefore, sustainable development of human resources helps to improve the quality of employee performance and this eventually contributes to organizational success. Sahoo and Sahoo (2012) suggested that sustainable development of human resources requires identification of appropriate HRD programs and activities which should be aligned to employees’ performance. This helps organizations to understand how HRD activities can reduce expenses for training and development, and enable the organization achieve its strategic goals. When aligned with the growth and development needs of individual employees, strategic HRD activities are likely to motivate employees to perform and produce the best results (Katou 2009; Muda and Rafiki 2014; Sahoo and Sahoo 2012). According to Tahir et al (2014) HRD improves job knowledge in individuals and also helps them to identify with organizational goals. Since employees are taught how to perform current and future jobs through training and development they are able to improve their performance in the workplace (Muda and Rafiki 2014). As a result, improvement in individual performance contributes to organization growth and profitability because of ability by employees to put into practice the expertise and competences they acquire through HRD activities. Building the organization through HRD is very important in current business environment because it facilitates the existence and survival of organizations. Additionally, sense of ownership requires human resource professionals to create HRD programs that enable employees to acquire superior skills, knowledge and competence so that they remain committed to the organization (Tahir et al 2014). The purpose of training and development from the individual perspective are to gain knowledge and skills to perform the job in the best way possible and advance their career. Therefore, strategic HRD is about building capacity in individuals in order to enable them to do what previously they could not do, in terms of performance (Agwu and Ogiriki 2014). In respect to this, Tahir et al (2014) agreed that HRD benefits not just the organization but also individual working for the organization. HRD benefits individuals by helping them to achieve self-confidence, handle frustration and tension and make better decisions in the workplace (Tahir et al 2014). Consequently, these help individual employees to improve their morale while on the job and hence improve their performance. Okoye and Ezejiofor (2013) recognized the importance of human resources to the organization in helping it achieve its goals and objectives. However, most organizations have ignored the development of this essential asset despite the potential of HRD to improve the performance of employees and the organization in general (Okoye and Ezejiofor 2013). Through HRD, individuals gain insight and attitude to perform their job more effectively. It is a framework that enables the organization to expand its human capital through development of individual and organization in order to achieve improvement in performance (Kesti 2012; Sahoo and Sahoo 2012). According to Okoye and Ezejiofor (2013) HRD develops essential competencies that allow individual employees in organization to perform their job through planned activities of learning such as career development and planning and development. It helps individuals develop their personal and organization skills and abilities which contribute to improved performance. A growing body of literature on HRD indicates a positive relationship between HRD and individual and organizational performance. Increased emphasis on human resources in organizations implies that market value depends more on intangible resources, especially human resources (Agwu and Ogiriki 2014). Some of the elements of HRD framework are recruitment and retaining and these are often practiced in virtually every organization. Besides focusing on employee recruiting and retention, Itika (2011) observed that organizations can also influence the capabilities and skills of their employees through employee development. By creating a supportive environment in which individuals develop and share knowledge, organization can improve individual and company performance. Thus, increasing the skills and abilities of employees through HRD are likely to create future benefits through increased employee productivity and organizational performance (Hashim 2013). As Agwu and Ogiriki (2014) connoted, the development process meant to increase individual skills directly affects their attitude, including commitment, motivation and satisfaction. In particular, employees’ motivation contributes significantly to improved performance. Ideally, the attitudes and behaviors of individuals in organization depend on the existing HRD policies and procedures (Agwu and Ogiriki 2014). This implies that establishment and maintenance of effective HRD activities is essential to enhancing the performance of individuals and organization. There are some HRD policies and procedure, in Agwu and Ogiriki (2014) view, which may communicate to employees that the organization is interested in having its employees stay longer in the company. When this message is translated into behaviours of employees, they may stay longer within the organization (Luthans, Avey, Avolio and Peterson 2010). According to Ericson (2006) human resource practices significantly influence the perceptions and expectations of individuals. This means that individuals’ performance in the organization reflects the perceptions, expectations and treatment they receive from the firm. Important to note though, is that HRD changes employees’ attitude towards the job and organization, which influence individual behaviour and performance (Luthans et al 2010). It has been argued that employees are interested in staying and working to their best level in organizations that consider them valuable and recognize their need to grow as individuals. This is achievable through sustainable development of human resources (Agwu and Ogiriki 2014). As indicated earlier, job satisfaction, organizational commitment and motivation influence individual performance and these three are products of HRD (Itika 2011). Therefore, workplace employee development opportunities are significant to creating an environment that supports employees to improve on their performance. Employees, being the most expensive resource in the organization need to be supported and nurtured through HRD in order to achieve their full potential, not just for themselves but also for their organization. HRD is career-oriented and therefore it is concerned with the long term potential of individual employees in the organization (Itika 2011). When effectively conducted, HRD provides individuals with appropriate blend of experiences, skills and contacts that allow them to realize their complete potential. In fact, organizations invest in HRD in order to improve individual and organizational performance through change in skills, knowledge and attitudes (Sahoo and Sahoo 2012). In regard to this, Tahir et al (2014) postulated that if individuals cannot transfer experiences they acquire from HRD activities and utilize them in their real job and the working environment in the organization, the development efforts will not be useful both to the individual and organization. Therefore, the ability for individual to apply the skills, knowledge and attitudes gained through HRD to their jobs is essential in ensuring that the positive impact of HRD on individual and organization performance realized (Itika 2011). Notably, it is becoming clear that the competitiveness of an organization lies in its employees. Effective development of individual’s creativity, skills and commitment determines organizational success. Through HRD and particularly career development, organizations deploy individuals in appropriate areas and develop their skills so that they can perform better and achieve organizational goals (Agwu and Ogiriki 2014). Therefore, when HRD is done right, both the individual and organization benefit. Most researchers concur that the Strategic HRD implies adapting formal and systematic processes to the needs of individuals and organization (Ericson 2006; Manole et al 2011; Hashim 2013). Nevertheless, this development can enable the organization to acquire adequate knowledge, awareness and psychological skills to improve their operational abilities and hence performance (Manole et al 2011). However, to improve individual and organizational performance in the era of globalization, continuous employee development is essential as affirmed Rani and Khan (2014). HRD produces individuals who are able to practice professionalism on the job and deal effectively with changes occurring in the organization which contributes to improved individual and organizational performance (Sahoo and Sahoo 2012). According to Tahir et al (2014) individuals will be more competent to perform their job when they have acquired knowledge and skills from HRD activities. Employee development provides opportunities to individuals to get better position and improve their career life. Consequently, these increase individual and organizational efficiency (Tahir et al 2014). Alternatively, individuals who have undergone HRD perform better than individuals who have not gone through development because they have adequate expertise and competence. Conclusively, strategic HRD has become significant for every organization in today’s business environment which is characterized by globalization, liberalization and high competition. Employees are the most important resource in the organization and therefore the organization should support and nurture them through HRD. Strategic HRD focuses on long term potential of individuals in the organization. Effective HRD provides individuals with the relevant knowledge, skills, experiences and attitudes that allow them to perform better on the job and hence improve the performance of the organization. Individuals improve their knowledge about the job and they are also able to identify with organizational goals when they attend HRD activities. As such, they are motivated to work hard and improve their performance which benefits the organization also because it improves its overall performance. However, to have a positive impact on individual and organizational performance, strategic HRD should be identify appropriate programs and activities which are aligned to employee development needs. Reference List Agwu, M.O. and Ogiriki, T., 2014. Human Resource Development and Organizational Performance in the Nigeria Liquefied Natural Gas Company Limited, Bonny. Journal of Management and Sustainability, 4(4), p.134. Ericson, M., 2006. Strategic HRD and the relational self. Human Resource Development Quarterly, 17(2), pp. 223-229. Hashim, M., 2013. A Guide to Human Resource Management: Basic concepts”. Academic Press Corporation, Salk lake city, United States. Itika, Stephen, J. 2011. Fundamentals of human resource management: emerging experiences from Africa. African Studies Centre, vol.2 Katou, A.A., 2009. The impact of human resource development on organisational performance: Test of a causal model. Journal of Behavioral and Applied management, 10(3), p.335. Kesti, M., 2012. Organization human resources development connection to business performance. Procedia Economics and Finance, 2, pp.257-264. Luthans, F., Avey, B., Avolio, B. J. and Peterson, S. J., 2010. The development and resulting performance impact of psychological capital. Hum. Resour. Dev. Quart., 21(1), pp. 41-67. Manole, C., Alpopi, C. and Colesca, S.E., 2011. The Strategic Role of Human Resources Development in the Management of Organizational Crisis. Economia. Seria Management, 14(1), pp.207-221. Muda, I. and Rafiki, A., 2014. Human Resources Development and Performance of Government Provincial Employees: A Study in North Sumatera, Indonesia. Journal of Economics and Behavioral Studies, 6(2), p.152. Okoye, P.V.C. and Ezejiofor, R.A., 2013. The Effect of Human Resources Development on Organizational Productivity. International Journal of Academic Research in Business and Social Sciences, 3(10), p.250. Rani, P. and Khan, M.S., 2014. Impact of Human Resource Development on Organizational Performance. Indian Journal of Applied Research, 4(12), pp.85-87. Rizov, M. and Croucher, R., 2008. Human resourcemanagement and performance in European firms. Camb. J. Econ., 33, pp. 253-272. Sahoo, A.K. and Sahoo, C.K., 2012. Impact of Strategic HRD Initiatives on Individual Performance. Productivity, 53(2), p.194. Tahir, N., Yousafzai, I.K., Jan, S. and Hashim, M., 2014. The Impact of Training and Development on Employees Performance and Productivity A case study of United Bank Limited Peshawar City, KPK, Pakistan. International Journal of Academic Research in Business and Social Sciences, 4(4), p.86. Tseng, C.C. and McLean, G.N., 2008. Strategic HRD practices as key factors in organizational learning. Journal of European Industrial Training, 32(6), pp.418-432. Read More