High Performance Work Systems in Modern Organisations - Assignment Example

Strategic Human resource Name: Lecturer: Course: Date: How is strategic HRM used to build high performance work systems in modern organisations? Answer the question using a case study organization of your choice. Introduction In the contemporary business world, the human resources are said to be valuable in the sense that they are the assets that add value optimally for the success of the organization. The actions of the employees depend on how the organization treats them, which consequently determine the overall performance of the organization. In order to increase the overall organizational productivity, the human resource management purposes to make sure that the organization attracts, employs and retains the competent, devoted and self-motivated labor force (Darwish, 2013). Ideally, the human resource is the heart of the organization, as it performs the organization’s vital functions like recruitment and selection, development and training of the workforce in line with the job requirements (Armstrong, 2006). As a result, the Human Resource department has resulted in an advanced approach known as strategic human resource management (SHRM) to increase the overall organizational performance and gain a competitive advantage over other organizations. In connection with this, more and more institutions and firms depend on the measurement approaches, which may include labour force records, as a way to understand the way in which the human resources in their various organisation add value and hence being the performance determiners. The growing interest and concern about the measurement is further stimulated by a growing number of researches that indicate a positive connection between human resource management and organizational performance (Dyer and Reeves, 1995). SHRM is the approach that defines how the organization’s goals will be achieved (Armstrong, 2006). This paper, therefore, aims at ascertaining how strategic human resource management builds high organizational performance in the modern organisations. Moreover, it will explain at length the process through which strategic HRM impacts on individual and organisational performance. AAT Corporation Limited is an investment company that is located in Sydney, Australia. It has developed and grown over the years and being among the best-listed companies on the Australian Stock Exchange. Therefore, it is ideal to be the case study for this research. Strategic Human Resource Management plays a major role in attracting, developing and retaining highly qualified and competent employees. The Strategic HRM matches the employees to the strategic and operational objectives and goals of the organization. Strategic HRM basically ensures that the organization’s goals are achieved by people through the integration of the strategic policies and practices. In regards to that, SHRM provides for the acquisition, development and retention of talented and qualified employees who can deliver superior performance in their job (ÇALIŞKAN, 2010). These employees further ensure high overall productivity, work flexibility, innovation in their part of specialization, as well as high levels of personal customer service, which attains customer satisfaction (Darwish, 2013). These employees will otherwise fit in the culture and the strategic requirements of the organization and hence building high-performance work systems in modern organisations. AAT Corporation Limited is a company that has surely managed its operations hence attracting and retaining competent employees. A low labour turnover has been recorded, which is an indication of the high retention of highly qualified employees. Strategic Human Resource Management is a strategic approach to the contemporary business world that is used to harness talents and skills in the organisation as a way to gain a competitive advantage in the marketplace. Talent management area has been developed to ensure that the organisation wins over the limited and scarce talents and skills in the labour market. The organisations through SHRM are ensuring that the skilled, talented and self-motivated people who are essential to the success of the organisation are acquired in due time as a way to meet present and future requirements available in the global market. A highly skilled, motivated and talented workforce is basically the ladder towards building high-performance work systems in modern organisations (ÇALIŞKAN, 2010). AAT Corporation Limited is a contemporary organisation that has advanced technologically with time and hence it has been a spot light for talent harnessing in the workforce. AAT Corporation Limited has focused on acquiring talented, highly skilled and experienced, as well as well-motivated employees hence preparing for the current and future demands in critical areas, such as a technological field. It is not always obvious that people will join an organization when they are adequately equipped with the required expertise in undertaking their job requirements. The employees require constant training and development to ensure that they fit in the organisation by meeting the organisational demand. Moreover, there is constant technological dynamics in the contemporary business world, therefore, the competent and skilled employees require training in order to become more valuable contributors in the organisation. Moreover, as people move up the ladder in terms of promotions, the employees require training and development to march up their added responsibilities. Strategic Human Resource Management thereby emphasizes on the training and development of the organization. When the organisation’s faculty and management are trained, they become more competent hence maintaining high-performance work systems (CANIA, 2014). In high-performance management area, Strategic Human Resource management ensures there is the development of a high-performance culture that encourages and motivates the employees to work towards high performance. An organisation that incorporates strategic human resource management in its administration ensures quality production, customer satisfaction, organizational growth and development hence high overall organisational productivity and ultimately increased shareholder value. Moreover, Strategic Human Resource Management empowers the employees to display the discretionary behaviours, which are mostly related to higher business performance, for instance, risk taking, knowledge sharing, innovation and ensuring that there is trust between managers and subordinates (ÇALIŞKAN, 2010). The Strategic Human Resource management also deals with the enhancing of the employees’ motivation, loyalty, commitment, as well as role engagement and participation. SHRM is an approach that encourages the workers to categorize themselves with the organisational core values and objectives and act upon them accordingly (Wright & Nishii, 2006). Furthermore, the SHRM motivates the employees to willingly contribute to the attainment of the ultimate organisational objectives. As a way of ensuring employee commitment and loyalty, strategic human resource management creates an environment of trust and cooperation, thus clarifying the psychological agreement. Employee commitment and loyalty results in high performance work system (Verma, 1995). SHRM is also concerned with performance appraisal. Performance appraisal is basically the process by which the organisation evaluates the employee performance and document the results. Performance appraisal is mainly carried out in the organisation for decision-making pertaining promotions, demotion, payment, transfers, as well as retention of the employees in the organisation in accordance to the performance of individuals (Armstrong, 2008). It is also a guide for development in training need assessment, as well as employee feedback. It further promotes an organisation’s culture into a high performing one because of the constant evaluation within the measurable objectives and goals. Results oriented performance appraisal results in the development of a high performance work system in the organisation (CANIA, 2014). The AAT Corporation Limited is a listed company in Australia that has really emphasized on performance appraisal to regularly evaluate the performance of each and every employee in the organization. AAT Corporation Limited has, therefore, been able to enhance both the individuals’ and the organisation’s performance. Moreover, Strategic Human Resource Management focuses on the employee security. An organization, such as the AAT Corporation Limited, with SHRM, employee rights and the procedures to enact them are an assurance to the employees that they are secure and valued accordingly. Employees who feel valued and cared for tend to feel a sense of belonging in the organisation and hence they work more towards the organisational success (Katou, 2008). Employees who are sure of job security normally have their full concentration on performing their job successfully rather than worrying about their job (Rubery, 1997). Devoted employees always ensure and maintain high performance work systems in the organisation. AAT Corporation Limited has ensured employee security by the fact that it has well stated human resource policies and strategies that protect the employees from violation of any kind. The employees need to feel the sense of recognition and value if they are given a chance to participate in decision making by having an employee voice in the organisation. Strategic Human Resource Management is contemporary management approach that emphasizes on employee participation, empowerment and involvement. Employee participation harmonizes the organisation hence promoting good employment relationship (Cooke, 2000). An organisation that ensures good employment relationships has reduced complaints and grievances basically because there are reduced workplace conflicts. A voice in the organisation can be viewed as a political dimension rather than a channel to express and eradicate any niche for customer dissatisfaction (Hirschman, 1970). The Strategic Human Resource Management seeks to create an open forum for the employees to freely air out their views in order to enhance employee relationships in the organisation. Neglecting in the organisation should be highly avoided for it is detrimental to the organisational success. Neglect can results in negative results, such as lateness, high labour turnover, absenteeism or even a do not care attitude in the organization, which will eventually result in the failure of the organisation. AAT Corporation Limited is an organisation that has emphasized on employee participation in the decision-making and employee voice is one of the major concerns in the Human Resource Management department of the organisation. The strategic Human Resource Management is moreover concerned with the compensation system in the organisations. It ensures implementation of reward management system, which ensures that the right pay structure is used in the organisation. The organisations determine and affect the employee motivation in various ways. However, compensation and rewarding is a major area that can be used to motivate or demotivate the employees in the organisation (Wright, & Nishii, 2006). The firms can use performance-based payment to reward the employees for accomplishing certain goals and objectives that are outlined and specified in the job description of every job position in the firm. A credible and significant body of work has indicated the fact that incentive-based compensation has a great impact on the firm’s performance and productivity (Milkovich and Boudreau, 1998). The SHRM is an approach that emphasizes on the proper compensation structure to be used in the organisation. The organisation that remunerates its employees appropriately ensures that they are satisfied and hence a motivation factor. Motivated and satisfied workforce works towards the success of the organisation hence it is evident that the SHRM builds a high performance work system in the organisation. AAT Corporate Limited is a company that deals with reviewing the mining investment operations in Asia. Therefore, it is focused mainly on employee satisfaction where its payment structure is among the best and fairest in Australia. AAT Corporations Limited has, therefore, met customer satisfaction in terms of rewards and compensation and hence being among the best listed companies in Australian Stock Exchange. Can you explain the process through which strategic HRM impacts on individual and organisational performance? The process through which the Strategic Human Resource Management impacts on individual and organisational performance has been discussed in three steps. The three stages process involves first the strategy formulation and translating the strategy into achievable Human Resource Management strategic objectives. Secondly, the implementation of the HRM systems founded on the human resource strategy and finally the evaluation of the effectiveness and efficiency of the human resource management system (Oladipo & Danlami, 2011). The initial stage is ideally to formulate the strategy of Human Resources. The strategy formulated basically involves laying down a master plan of how to carry out the Human Resource Management functions. The stage ensures that the organisation is pro-active in terms of future occurrences. The external and organisational context of the HR strategy is essential because it influences the formulation of the strategy (Wright and Boswell, 2002). The external context includes factors, such as nature and degree of competition, product market forces, government policies, labour market, suppliers, the economic situation and stakeholders influence. On the other hand, the organisational context involves the internal organisational situations, which are represented by the various departments of the organisation. The head of Human Resource department plays a vital role in the formulation of the HR strategy. The organisational context is centred on the policies, practices, cultural factors, competencies, strengths and weaknesses, as well as the employee management issues of the organisation. The competencies in the human resources should be available in order for the strategy formulation to be successful. It also depends on whether there is need for training the workforce. Other HRM features, such as obtaining, management and developing the competencies are also important for the success of strategy implementation. The Human Resource Strategy must be in line with the business strategy and are, therefore, translated to the organisational objectives based on the implementation requirements (Oladipo & Danlami, 2011). The second stage involves the implementation of HR system based on the already implemented human resource strategy. In this process, the major Human Resource system functions are aligned with the HR strategy. These systems include compensation, recruitment and selection, training and development, performance management, career planning and development. In this stage, the HR strategy is actualized and enacted. The HR department plays avital role of informing, analysing and enacting the strategy to meet the set goals and objectives of the HR systems. Finally is the third stage, which involves the evaluation of the strategic integration. This stage reviews the effectiveness of the Human Resource Management strategy and the integration with the human resource systems. The survey carried out by the Human Resource Management department to assess the success of the strategy in impacting on the individual, as well as organisational performance. The three-stage process involves the crucial areas that strategic human resource management deals with. The process impacts on the performance of the organisation in the areas, such as reward management area, recruitment and selection, training and development, job and work design, employee involvement, as well as performance appraisal. The process is keenly followed to ensure that each of the above HR systems is accomplished in the organisation. Proper implementation of the above functions translates to the motivation, commitment, and loyalty of the employees. Where the employees are satisfied in their job they tend to work more competently hence increasing the individual performance, consequently resulting in the increase of the overall organisational performance (Oladipo & Danlami, 2011). Conclusion In conclusion, the Strategic Human Resource Management is a contemporary approach that is being used in the modern organizations to increase performance. The human resources are valuable part of the organisation and are mainly termed to be the source of competitive advantage. The HR strategy translates to additional costs to the human resource department. The way in which the organisation handles its human resources is reflected in the organisational performance for they work and perform according to the terms and conditions they are subjected to. Therefore, the SHRM has sort to maintain a positive relationship between the human resources and the organisation by ensuring that the employees are valued and appropriately utilized. AAT Corporation Limited has proven to have known the secret of organisational success in the global market where it highly values its human resources through the implementation of the SHRM. The company has therefore increased both the employees and the organizational performance over the years. The process of strategic human resource strategy involves majorly formulation, implementation and evaluation of the HR strategy. The success of this process results in an increase in both individuals’ and organization’s performance. 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