People Management and Organizational Performance, Theories of People Management - Essay Example

People management and organizational performance Student’s Name: Instructor’s Name: Course Code: Date of Submission: Introduction The way people are managed is very vital to the organization is a topic which will enable the learners to know the importance of managing employees well (Michael 2008). Management of people is the practice of the Human resource managers to guide and organize the employees of a company by delegating activities and responsibilities to employees so that they will work together to achieve the organizational objectives. From the research which has been conducted there is great evidence that there is a close relationship between Human resource management and the performance of the organization (Michael 2008). However there are those studies which argue that there is no significant relationship between Human resource management and employees performance. In this discussion we will discuss both instances and how Human resource management is vital to the whole organization. People management and organizational performance From the research which has been done there is clear evidence that people management is very vital for the organizational performance. For instance when people are managed well they will be motivated through socialization and thus they will improve their performance in their workplaces. Improved performance per individual in turn increases the production of the whole organization in terms of capacity and sales (Alvesson 2001). Effective people management will contribute to the achievement of the goals and objectives of the organization (Analoui 2007). When people are managed in a company they will be able to work together in team work spirit which will benefit the whole organization through improved production per employee. Cooperation is possible when employees are well managed and they can share ideas. Through social groups they will be able to exchange ideas and skills. Managing people well will enable the organization to implement the ideas and strategies effectively. The organization may design viable ideas to help the organization perform well but if the ideas are not implemented as expected, the performance will still not be good. Therefore when people are managed well they will cooperate to implement the strategies for the benefit of the organization and the benefits of the ideas are enjoyed like increased sales, increased profits and production improvement. Effective management of people will enable the organization to maintain the competitive advantage against other competitors (Bagshow 2004). Competitive advantage is achieved when the organization recognizes and encourages its employees to better their skills through learning. Through learning the employees will improve their capabilities in offering the goods and services towards achieving the organization objectives. Improved capability of employees will in turn increase the production capacity for the organization as well as maintaining the market share for its products. Competitive advantage is also gained through commitment of people. Commitment is gained when there is good management of people through motivation and other incentives. Michael Porter explained that competitive advantage will be achieved through the market forces which are only realized when there is good management of people therefore it is of great importance for the whole organization. Furthermore, research which has been done concerning the Human resource management has shown that the performance of a firm is based on the management of people. The theoretical research which has been done has proved that the Human resource systems can improve the performance of the organization because these systems are unique to other organizations and cannot be easily imitated hence there is competitive advantage (Boselie & Paauwe 2005). People management can also improve the performance of an organization by measuring the performance of each employee by applying use of scorecards. These exercise aims at improving the value of each employee. From the research done in the USA and United Kingdom it is clear that measurement of employee performance improves his or her productivity. There is a great impact of managing people well on organizational performance. Effective people management enables the organization to attract and retain best skills in the organization as well as well motivated and who are committed in their tasks (Bratton & Gold 2003). In this regard the Human resource management identifies the various capacities of each employee and design plans on how to improve those skills. Therefore best skills in the organization improve the performance they offer their full potential executing their tasks. People management also has an impact the financial costs of an organization. When the staff or the employees are well managed, the cost associated with Human resources management is reduced (Bratton & Gold 2003). Reduced costs will mean the production cost of the products or services will be less when it's compared with the costs associated with poor management of the people. This lowers the cost of each product being offered and therefore it will sell more in the market hence the profits of the organization are improved. Theories of people management The theories of people management are explained by three approaches which are Universalistic, contingency and configuration (Anthony & Govindarajan 2001). The universal theoretical approach proposes that an organization that practices universal theory is better placed than other organizations. This theory states that an organization which practices universal theory will have a competitive advantage in the market according to the research which has been conducted. This research conducted in the USA found out that practices such best selection, training and compensation increase the performance of the organization (Anthony &Govindarajan 2001). This theory argues that an organization will be best valued in the market if its Human resource management is effective and this will increase the organization’s sales thus improved performance in terms of financial and social terms. The contingency approach of managing people proposes that effective alignment of employees and an effective strategy is more productive (Bamberger &Meshoulam 2000). Research conducted has shown that the management of people and services is more effective in performance improvement of an organization. A well designed strategy in alignment with a team of experts will improve the performance of an organization by implementing the strategies effectively. From the research conducted there are many firms which have succeeded as a result of applying this theory of managing people. For example the Singapore Airlines succeeded financially because of the alignment of employees and the strategies which were implemented fully. In South Africa for example according to the research done organizations failed to align people with strategies and therefore there was poor performance of organization. This implies that alignment of people and strategies is important in any organization because the policies will be implemented well thus the performance of an organization will improve. On the other hand, the Configuration approach proposes that any organization which configures people into strategies will succeed better (Bamberger &Meshoulam 2000). This approach argues that there are people management configurations which are better than other. These configurations enhance the employee productivity, better management of employees and enhancing the quality of products and services offered. Similarly, the research conducted in the Automobile industry showed that economic performances of the organizations improved because of the good relationship between employees and configurations of people management practices. This approach enables people to be innovative and creative which add value to the products and services offered by the organization. However, not all studies agree that there is a positive relationship between people management and organizational performance. According to the research conducted there are fewer processes to determine the human potential (Alvesson 2001). This makes it hard to determine the relationship between the performance of the organization and the management of people. This makes it hard to show how the management of people affects the performance of the organization. In spite of the above arguments, those who argue that there is no relationship between people management and organizational performance argues that there are other factors which influence the performance of an organization for example the external and internal factors (Analoui 2007). These factors can influence people when they are carrying out their duties hence their performance is influenced either positively or negatively. In addition there is no clear policy for aligning the management of people and the performance of the organization (Analoui 2007). This makes the competitive advantage unclear and it can not be concluded that alignment of management of people organization’s systems influences the performance of an organization. This is because there are other factors which affect the performance of employees and the organization as a whole. Conclusion From the research conducted it is clear that the performance of an organization greatly depend on the way the organization manages its Human resource (Boselie & Paauwe 2005). Effective people management helps an organization to have a competitive advantage over other organizations by developing unique systems. It also improves the quality of products being produced by encouraging innovation and creativity of employees’ talents and these quality products will improve the image of the organization in the market hence increase the sales. Effective people management motivate employees which will improve their productivity and for the organization as a whole (Bratton & Gold 2003). Considering the above factors it can be concluded that there is significant relationship between people management and organizational performance. However it should not be forgotten that there are other factors which affect the performance of the organization apart from effective people management. This makes other people to argue that there is less significant impact of effective people management on organizational performance. References Alvesson, M 2001, Knowledge Work: Ambiguity, Image and Identity, Human Relations, Vol. 54, No. 7, p. 863-886 Analoui, F 2007, Strategic Human Resource Management, UK: Thomson Learning Anthony, R & Govindarajan, V 2001, Management Control Systems, New York, McGraw-Hill. Bagshaw, M 2004, Is Diversity Divisive? A Positive Training Approach: Industrial and Commercial Training, Vol. 36, No. 4, p.153-157. Bamberger, P & Meshoulam, I 2000, Human Resource Strategy, Thousand Oaks (CA), Sage Publications. Bratton, J & Gold, J 2003, Human Resource Management: Theory and Practice, Basingstoke, Palgrave McMillan. Boselie, P & Paauwe, J 2005, Human Resource Function Competencies in European Companies, Personnel Review, Vol. 34, No. 5, p. 550-566. Michael, A 2008, Strategic Human Resource Management: A Guide to Action, 4th edn. Kogan Page, London. Read More