The Role of Theories in Shaping Modern Management - Literature review Example

Running Head: Managing human resources Student’s name Institution Course Lecturer Date 1.0 Introduction Human Resource management is an important part of an organisation owing to the fact that it has become a prevailing methodology to people management. Perhaps, the best way to understand the importance of Human Resource Management for an organization is by first defining it. According to Schuler & MacMillan (1984), Human Resource Management can be defined as the policies, practices and systems that can have effects on the behaviour, attitude and performance of the employees. Human Resource Management comprises of three components including; formal policies having direct impact on development of certain practices, specific human resource practices and primary human resource practices specifying values of organization’s policies and practices (Schuler & Jackson, 1995, p.238). The contextual understanding Human Resource management can be achieved by considering these three components and how they are influenced by some factors within and outside the organization. The shift towards technology is as a result of competition and the need to deliver quality services. Technological innovations and inclusions have resulted to the changing landscape of human resource. Needless to say, the roles of human resource managers have been decreased by technological innovations. Technological advancements such as internet have decreased the human resource role in maintaining records and offering self-service to employees (Greengard, 1998, p.61). It is for this reason that the human resource of past years cannot be compared to the current human resource management. However, even though there has been an intensifying technological dependence, the role of individuals in an organization cannot be evaded. Technology itself on the other hand is one of the challenges to managers today. It has led to unemployment due to the reduction in the roles of managers. Despite technological advancements, the role of human resource management and organizational behaviour theories still come into practice in the any managerial position. The most common set of theories in practice are the motivational theories. Motivation is an important aspect in management. Managers apply these theories in solving the challenge of management of human relations in organizations. 2.1 Best Practices and Organizational Culture in Relation to Human Resource Management Employees are the most important resource for any organization. A human resource manager should therefore try to create a balance between the welfare of the employees and goals of the organization. This is due to the fact that labour force is important in the achievement of organizational goals and objectives. The relationship between the performance in an organization and human resource management customs have been investigated extensively by a number of authors. For example, Marchington & Grugulis (2000, p.1105) looked into the idea of appropriate practices in human resource management that can lead to better performance in an organization. Most of them disagreed with this general conclusion of this concept. They regard the idea of ‘Best Practices’ as biased and that it is quite difficult to establish their relationship from past literature of the same subject. Boxall & Purcell (2000) points out the fact that there have been considerable discussions within literature arguing against the presence of a link between human resource practices and performance of an organization. It is for this reason that several studies on the relationship between organizational culture and performance have come into sight. However some of them such as Chan, Shaffer & Snape (2004, p.18) do agree with the analysis of Marchington and Grugulis that there is direct link between organizational performance and human resource practices. Their analyses are based on data collected from managers and other human resource practitioners. Various research studies have been conducted on organizational culture and its impacts on an organization. These research studies have shown that organizational culture has a great impact on the productivity of a firm. Organizational culture can impact the ability to accomplish a firm’s plans and attain the strategic goals (Chan, Shaffer & Snape, 2004, p.23). On the other hand, Barney (1986) asserts that a firm’s culture can be a basis of sustainable of competitive advantage if it is valuable, rare and imperfectly imitable. Human resource practices can affect the attitudes and values of employees. When they are implemented by an organization, they will lead to emergence of certain behaviours from employees (McKenzie, 2010, p.62). Best practices brings along the positive effects including improved behaviour. As a matter of fact, it will result to good relationship among the employees of an organization. Human resource practices are collective in nature and they have a positive impact on the organizational performance. A strong human resource system will result to good work place climate. Much has been done in trying to get a relationship between human resource practices and organizational climate. Implementation of human resource practices in an organization will result to manipulation of an organizational culture. This indicates that there is a direct link between best practice and organizational culture. In addition to this, past research studies as pointed out by McKenzie (2010, p.62) have shown that organizational culture is dependent on implementation of best practice. To get an insight on the influence of culture with regard to the enactment of human resource practices on management especially for multinational organizations, the definition of culture has to be sought first. Many researchers have come up with various definitions of the concept ‘culture’. Though they use different wordings to explain it, they center on one idea. According to Hofstede (1998, p. 478), culture is the “collective programming of the mind which characterizes people of the same organization from those of other institutions’. As earlier stated, other researchers have defined ‘culture’ differently but they all focus on the same idea, concept of social phenomena such as values and beliefs. Social phenomena mould an organization. McKenzie (2010) argues that social phenomena consisting of culture mould the way an organization conducts its activities and the interaction with external environment. Scholars such as Bowen & Ostroff (2004) argued that there is a strong relationship between human resource practices and culture. Their arguments center around one idea. They believe that human resource practices influence the culture of an organization. Best practices motivate the workers to take on specific behaviours and the end result of these behaviours is an organizational culture. Human resource management systems are assumed to be instruments responsible for the transmission of beliefs and values. These beliefs and values will sequentially mould the character. According to Schein (2004), the sole behaviour of founders of an organization is reflected by the present culture the same organization. Managers and proprietors are therefore responsible for shaping the behaviour of the workers. The profitability of an organization is dependent on its performance. Past studies have shown that there is a direct link between human resource practices and the profitability of an organization. Barney (1986) argues that the performance of a firm is frequently attributed to increased profitability. Similarly, various studies have been conducted to establish the link between profitability and organizational performance. Human resource practices have been found to have positive impacts on the performance of an organization. Motivation for example leads to increased performance in an organization. Bowen & Ostroff (2004, p. 204) points out that increased motivation among the employees results to higher performance of affirm. High performance job practices help in boosting firm’s performance. High performance work organizations are those firms employing creativity, ingenuity and problem solving skills of their workers to survive increasing competition (Kling, 1995, p.29). Empowerment, skill training and diversity are examples of work practices that help in improving the performance of a firm. Various studies have been conducted to ascertain the relationship between work practices and the performance of organizations. Pfeffer (2005) who was the father of best practices of management came up with thirteen key practices deemed to characterize well performing organizations. They include; selective hiring of employees, employment security, high wage, incentive pay, employee ownership, information sharing, self managed teams, participation and empowerment, cross utilization and cross training, training and skill development and promotion. Training for example helps the organizations to adapt with precipitously changing conditions of the market. Training is necessary for the upgrade of upgrade of skills of both managers and employees (Pfeffer, 2005, p.100). However, it should not lead to structural change within the organization where employees are allowed to do something different. Kling (1995) emphasizes the fact that employing formal training programs enhances a firm’s productivity significantly. It also has an effect on the output of a firm. Employee training reduces the rates at which products are scrapped (Kling, 1995, p.30). High performance practice is also called best human resource practices. Implementing best practices will result to increased level of job satisfaction and motivation among the employees. These two characteristics do have positive results within an organization. McKenzie (2010) argues that job satisfaction and motivation influence an organization’s effectiveness and performance. In addition to this, they can lead to high retention of employees of a firm. Retention, employee satisfaction and organizational performance are affected by some factors relating relationship between employees, work environment and quality of work life (Newfoundland & Labrador, 2008, p.10). 2.2 Human Resource management and Organizational Behaviour Theories Various organizational behaviour theories have deemed helpful for managers in the implementation of human resource practices and creating a good work environment. As noted by Tzafrir (2005, p.1602), managers play a key role in moulding an organization. Various theories indicate a link between human resource practices and the resultant employee behaviour. Motivational theories such as Maslow’s hierarchy of needs, McGregor’s theory X and Y, Theory Z, Expectancy theory, Equity theory and Reinforcement theory have proved helpful to modern management. These theories in one way or another have affected different organizational management in different ways. Expectancy theory developed by Victor Vroom, examines motivation through the expected output (Sims, 2002, p.62). Employees are motivated towards certain goals. A positive reward will result to high performance of a firm. If a manager wants to achieve certain behaviour among the employees, then he or she should be willing to use the right reward. A good behaviour will demand for a positive reinforcement. Similarly, inappropriate behaviour will call for a negative reinforcement. As highlighted earlier, incentive pay is one the human resource practices or best practices. It is an application of Vroom’s Expectancy theory in an organization. Indeed there is a link between human resource practice, behaviour and performance of a firm. It is therefore important for managers to be knowledgeable about motivational theories. Being knowledgeable about these theories will help them identify and understand the motivational problems facing employees (Sims, 2002, p. 64). With the current competition in the market, organizations are required to train their employees in order to be updated with latest trends. Organizations need to concentrate on three R’s; recruiting, retraining and retaining high quality people (Sims, 2002, p. 63).Motivation theories should come into practice in this process. Employees ought to be motivated to go for training. In addition to this, the current move towards self-managing groups will also call for motivational elements. Other motivational theories are also useful in the development of good management qualities. Of great importance is for managers to have a clear understanding of employees’ needs. As a matter of fact, employees do have needs. The right motivational activity should be chosen. To understand their needs, communication is necessary. Human resource management and organizational behaviour theories have been applied in modern institutions to improve the performance especially with the current competition. Expectancy theory for example has been used extensively by many managers to motivate employees. Despite the general perception that expectancy theory is quite complex to apply (Green, 1992, p.8), many managers have succeeded in its application and disapproved that notion. In the current management, most of the employers offer compensation to employees who get hurt in the course of his or her duties. This is one way of motivating employees so that they can work to achieve the organizational goals and objectives. Some of the employers offer flexible work schedules such as compressed week periods to employees as a way of motivating them. Employees perceive away from job time as a crucial factor influencing their productivity. There are other motivational strategies used by managers and they all originate from motivational theories. In fact, managers consider most of the characteristics upon which these theories center on (Shanks, 2011 p. 29). The characteristics considered by most employers include performance, equity, expectancy and goal setting. Similarly, employees are motivated if they are involved in decision making process of the organization. The process of bringing entire stakeholders onboard in managerial activities is referred to as participatory management. Sharing of ideas will only be possible if the workers are working in teams. Team working is believed to have more benefits besides from sharing of ideas. Kling (1995) argues that team working will help in reducing stress, improves job satisfaction and reduces absenteeism from work. Currently, managers have shifted towards participatory management because it motivates employees. Contrary to this, a lot of misconceptions have emerged regarding motivation especially among the managers. Morse (2003) points out that most mangers believe that there is variance on how employees are motivated, others being motivated by intrinsic incentives than others. The same idea of misconception has been pointed out by Manion (2005), where he states that all individuals are intrinsically motivated. These misconceptions have led to misuse of motivation. To be a successful motivator, one has to understand these theories well. It simply takes a comprehension of human resource management and organizational behaviour theories and basic principles (Manion, 2005, p. 284). Additionally, one needs to have a desire to develop motivational skills. Of great importance is that, managers need to know that extrinsic rewards will motivate the employees intrinsically. In essence, extrinsic motivation precedes intrinsic motivation. All these ideas originated from motivational theories. 3.0 Conclusion Indeed, the general conclusion is that, theories have played a significant role in shaping modern management. The two major challenges faced by human resource managers today are; their shift from current operations to the future and difficulties in development and implementation of best practices. The endless technological, political and socio-economic changes have in one way solved some problems but at the same time coming along with some other problems. Some of the challenges especially those related to human relations can be solved through the application of human resource and organizational behaviour theories. The key factor in solving most of the problems in today’s organizations is participatory management. 4.0 References Barney, J. (1986). Organizational Culture: Can it be a source of sustained competitive advantage? The Academy of Management Review, 11(3), 656-665. Bowen, D. & Ostroff, C. (2004). Understanding HRM-firm performance linkages: The role of the “Strength” of the HRM system. The Academy of Management Review, 29(2), 203-221. Boxall, P. & Purcell, J. (2000). Strategic human resource management: Where have we come from and where should we be going? International Journal of management reviews, 2(2), 183-203. Chan, L., Shaffer, M. & Snape, E. (2004). In Search of sustained competitive advantage: The impact of organizational culture, competitive strategy and human resource management practices on firm performance. Journal of Human Resource Management, 15(1), 17-35. Green, T. B. (1992). Performance and Motivation Strategies for Today's Workforce: A Guide to Expectancy Theory Applications. New York: Greenwood Publishing Group. Greengard, S. (July 1998). Building a Self-Service Culture that Works: Workforce. 60-64. Hofstede, G. (1998). Attitudes, Values and Organizational Culture: Disentangling the Concepts. Organizational Studies, 19(3), 477-492. Kling, J. (1995).High Perfomance Work Systems and Firm Performance. Monthly Labor Review, 29-36. Manion, J. (2005). From management to leadership. San Francisco: Jossey-bass. Marchington, M. & Grugulis. I. (2000). “Best Practice Human Resource Management: Perfect Opportunity or dangerous Illusion?” International Journal of Human Resource Management, 11(6), 1104-1124. McKenzie, K. (2010). Organizational Culture: An Investigation into the Link between Organizational Culture, Human Resource Management, High Commitment Management and Firm Performance. Otago Management Graduate Review, 8, 57-68. Morse, G. (January, 2003). Why we misread motives. Harvard Business Review, 81(1), 18- 19. Newfoundland & Labrador. (April 2008). Developing an Integrated Talent Management Program: A human Resource Management Framework. Pfeffer, J. (2005). Producing Sustainable Competitive Advantage through the Effective Management of People. Academy of Management Executive, 19(4), 95-106. Schein, E. (2004). Organizational Culture and Leadership. San Francisco: Jossey-Bass. Schuler, R & MacMillan, I. (1984). Gaining Competitive Advantage through Human Resource Management Practices. Human Resource Management. 23, 241-55. Schuler, R. & Jackson, S. (1995). Understanding Human Resource Management in the Context of Organizations and their Environments. Annual Review, 46, 237-64. Shanks, N. H. (2011). Management and Motivation, 23-35. Sims R. (2002). Managing Organizational Behavior. New York: Greenwood Publishing Group. Tzafrir, S. (Sept 2005). The relationship between trust, HRM practices and the firm performance. The International Journal of Human Resource Management, 16(9), 1600-1622. Read More