Human Resource Systems and Organizational Performance - Coursework Example

Human resource systems and organizational performance Name Institution Human resource systems and organizational performance Background Strategic human resource management has been researched to find out the link between outcomes in organizations and activities in human resource. The main component of strategic human resource management is the assumption that human resource management systems give organizations a competitive advantage as compared to human resource practices. Reviews of human resource management systems and the fit perspectives have led to several conclusions such as the assumption that ‘fit’ does not evidently result to organizational success. There are various theories and research that have been done in the past to review the perspective of internal fit to improve our understanding of internal fit in human resource management systems. There are various issues arising from types of internal fit, empirical evidence and analysis and levels. Therefore, it is important to review theories and past research on internal fit to improve our knowledge on internal fit and human resource management systems. This can help us understand the types of internal fit, interplay between internal and external fit, empirical evidence, theory behind fit, level of abstraction and issues encountered before giving a conclusion. Reviewing literature and research on human resource management systems would help determine their effects on organizational performance. The methods an organization employs to manage its employees can have a huge impact on outcomes of the organization. Management of human resources has been linked with productivity, turnover, survival, firm value and financial returns. Human resource management can help a business meet its business objectives. However, there is lack of understanding between the mechanisms that link effectiveness in business and human resource management practices. Human resources greatly affect the performance of a firm. Strategic human resource management has adopted a re-source based view. This view proposes that a firm gains competitive advantage from its resources. This puts the focus on internal resources of an organization and not the external environment. Resources that have a competitive advantage have to be valuable, rare, non-substitutable and inimitable. Internal resources with a competitive advantage provide increased fit and flexibility. Strategic human resource management uses policies and practices in human resource management to sustain and develop human resources. Researchers have focused on various practices in human resource management that organizations need to use to improve performance. In relation to this, strategic human resource management focuses on two types of fit. These are vertical fit and horizontal fit. Horizontal fit is an alignment of human resource practices to a system of practices that support each other coherently. Vertical fit refers to alignments in practices in human resource to organizational contexts. Both forms of fit have been reviewed and found effective, however, there lacks evidence that explains the benefits or necessity of using vertical or horizontal alignments. The level of analysis used to measure human resource management practices has important consequences. This is because areas of interest should be measured using appropriate levels. For instance, in an organization, some employees can require a work system that requires higher performance as compared to others. This could include the core workforce who should not be managed at the same level as other employees (Doty and Delery, 1997). This is an example of a framework that has direct implications on the level of analysis used in human resource management. Therefore, the system of management of the core-workforce would be more important compared to human resource management systems used in the organization. When practices are measured and weighted average of non-exempt and exempt employees computed, this may be less appropriate (Huselid, 1995). The problem that this approach might face is the non-core workforce may be viewed as less important despite them having a lot of impact on organizational outcome. According to Snell (1992), crystalized standards of expected performance in jobs affect the systems used by the organization for the jobs. Focusing the system on particular jobs can shed light on how an organization can gain competitive advantage using human resources. Incorporating substitutable, additive, negative synergistic and positive synergistic to influence firm resources has implications on human resource management systems. Organizations use various means of measurement such as index or scale measure through summing group scores gained from analysis. Firms also use human resource management systems based on descriptive cluster analysis. The problem with this measurement approaches is they are not so useful because they are based on assumptions. Using scales and indexes has been part of human resource management. Factor and principal analysis have been used have been used to identify practices that should be combined into a principal measure. Classification techniques have also been used in classifying firms. According to research, firm performance is not linked directly to human resource systems. However, the systems influence firms’ resources such as employee behavior and human capital and which later lead to performance. Despite the assumption that there are mediating linking frim performance and human resource management practices, there is little if any mention of this mentioned. Focusing on the mediators may be the solution to determining the measures of the constructs. According to Doty and Delery (1997), human resource management affects performance of firms as it creates a skilled, empowered, motivated workforce. Human resource systems can affect organizational climate. In an organization helping is one of the behaviors in the workplace which it different from other prosocial behavior that may be more prohibitive, challenging or directed to the organization. Helping in the workplace reflects similar levels in the workplace in terms of employee relations. The choice of whether or not to help in an organization comes from evaluating relationships flow and influences helping exchanges. People in higher positions in firms influence the relational climate. Therefore, human resource practices which influence employee commitment positively create a climate of trust in the workplace (Collins & Smith, 2006). High performance human resource practices should encourage helping other members of the organization. When defining human resource systems, it is important to look at their purpose. There are various systems which give an approach for human resource management. First, there is a compliance system which views employees as resources that are extrinsically motivated. In this type of system, efficiency and control is established in deployment and administration of employees. There is also a commitment system which aims at elevating employee performance through bolstering the collective commitment. This commitment system views the organization and employees having high regards for the other. There is also the collaboration human resource system that involves the business forming partnerships with employees. This system views employees as though they are alliance with the organization. Emergent relational climate in organizations will be based on employment mode and employment relationship. Human resource practices can be said to have an influence on psychological contracts between employees and organizations (Suazo Martinez & Sandoval, 2009). Employees evaluate their psychological contracts through getting information from others. This is because human resource systems can affect employees sense-making in regards to interpersonal relationships. Human resource systems can affect employee performance as they influence climate perceptions of employees by directly communicating and symbolically signaling key behaviors and values of an organization. This can positively impact the performance of an organization as employees can work better towards the vision and mission of an organization once they have this information. Compliance Human resource systems assume that employees are externally motivated and need applicable control and monitoring. This kind of system sets well specified procedures and rules so that employees can adhere to the expectations and goals of an organization. Moreover, employees are viewed as an expense minimized by improving efficiency and reducing costs of labor. Compliance systems were initially viewed as less viable. However, recent work has shown that this system is suitable when equivalent labor can be accessed easily. This system, assumes that human capital is readily available in the market thus, it does not promote long-term employment relationship. This kind of relationship is transactional characterized by economic inducements and short term relationships. Compliance systems should exemplify the use of practices that promote helping behavior. This can be suitable in this system to boost the organization as there are many people in the market sharing the same skills. The people can work together to improve their skills. Collaborative human resource systems view goal oriented, cooperative relationships as essential for organizational success. This is achieved through rules and regulations to ensure that specific employees contribute to the organization. Collaborative systems should reflect a psychological contract that is balanced with relational and transactional attributes. Balance is achieved through employees having an open communication on employee outcome needs and input opportunities. The organization and employees would strive towards common interests. Thus, the relationship may be more transaction rather than transitional. Example of this type of employees would be people working on contracts with organizations for a long time until they view themselves as partners. This relationship is more durable compared to compliance systems. Collaborative human resource stimulates feelings of social obligations in exchanges. Commitment human resource systems are focused on high performance. Employees are viewed as intrinsically motivated and capable. This system also shows concern for employee well-being. This type of system is sensible in instances where employees have specific skills and knowledge which is not readily available in the market. There is a generalized commitment from the organization and the employees to have a collective focus. This system produces a communal sharing climate defined by employees feeling of solidarity. The system encourages respecting welfare of other party. It also encourages extension of help as members are mindful of each other’s needs. Extensive development and training programs may be involved so that employees can get a better understanding of others. Close relationships among employees result to expressive and instrumental benefits. Creating designs that are team based can also be useful for employees to understand critical work behaviors. In conclusion, organizational performance and human resource systems are linked. It is important to consider the relationships between relational climates, human resource systems and helping behavior. This is because all this are components of the human resource systems and helping will be an important component in future organizations as a good system would be one that encourages employees to work together. The different human resource systems are all suitable depending on the context where it is being applied. When employees work together, this has good long-term effects to an organization as it may impact the organization as a whole. There is growing evidence on the link between human resources and its importance to performance and productivity; however, research has still not explained processes that cause the effects. References Collins, C. J., & Smith, K. G. 2006. Knowledge exchange and combination: The role of human resource practices in the performance of high-technology firms. Academy of Management Journal, 49: 544-560. Doty, D. H. and J. E. Delery. 1997. 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A. 1992. “Control Theory in Strategic Human Resource Management: The Mediating Effects of Administrative Information.” Academy of Management Journal 35: 292-327. Toh, S. M., Morgeson, F. P., & Campion, M. A. 2008. Human resource configurations: Investigating fit with the organizational context. Journal of Applied Psychology, 93: 864-882. Read More