The paper "Human Resource Systems and Organizational Performance" is a great example of management coursework. 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 in 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 the 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 of internal fit and human resource management systems. This can help us understand the types of internal fit, the interplay between internal and external fit, empirical evidence, the 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 the 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 a 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 the 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 working 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 the 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 a competitive advantage using human resources.
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