Impact of HRM on organizational performance ppt
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IntroductionIn the existing business environment, the majority of business entities has well established human resource departments within the main organization structure or in other circumstances the organization may choose to outsource human resource functions from experts and specialists in the particular field. Specifically, Human Resource Management ( or HRM) is concerned with the people dimension in management. Since every organization is made up of people, acquiring their services, developing their skills and talents, motivating them to higher levels of performance and ensuring that they continue to maintain their commitment are essential to accomplishing organizational goals and objectives (Aswathappa, 2005) . Therefore, HRM is primarily concerned with ensuring that proper practices and policies among others personnel or human resource planning, recruitment and selection, training and development, employee loyalty, employee motivation , performance appraisal, total reward or compensation and benefits are put in place and will help the company achieve its business success. The function of Human Resource Management plays a crucial role in assuring employee satisfaction, enhanced business productivity and performance. As a result, this can provide the organization with a clear competitive edge and openly contribute to the organizational success in general. Valuable HRM practice and policies enable companies to deal with human resource problems in a strategic way. This allows the labor force provide high quality services, regardless of both internal and external obstacles to the company. Adequate human resource management policies facilitate business entities prioritize their complete business strategies. The function of Human Resource Management is also vital in the sense it makes it easy for the company to attract a new, practical and talented workforce and retain highly performing and competent employees; supports managers and different group of employees when they are adapting to organizational change and enables the use of knowledge to decide how the job is going to be performed. Even though there are certain companies that do not regard Human Resource Management as a key function of management, one can admit that human resource is of great help and contribute immensely to the largely success of several corporations nowadays. The labor force (or employees) represents undoubtedly the organization’s most essential asset because the employees are well involved in the business operations and also enable the decision-making process to take place. In addition, it can be said that employees are the most costly asset due to the fact that roughly 70% of a company’s budget is allocated to the workforce. Hence, since employees are such valuable assets who can make a business profitable and developed, there is a necessity to identify the proper Human Resource policies and practices on which any business entity can rely in a bid to put up its success in the industry. The success of the organization can simply be assessed by how these specific Human Resource polices can support business strategies and lead the company to enhanced performance. To accomplish this, it is clearly vital to understand and employ the best Human Resource policies and practices and realize the resulted outcomes from a bigger perspective. This should facilitate the company draw precise and relevant conclusions. Concept of Human Resource ManagementMost companies employ well-written HRM practices and policies that the Human Resource department is asked to follow lawfully for the benefit of the organization. These policies and practices essentially consist of human resource planning, recruitment and selection, training and development and total rewards. The totality of these human resource practices found within the human resource unit support the final aim of Human Resource Management that is reinforcing the employer-employee rapport. Basically, the above practices and policies are planned to allow the total success of the company. Hence, there is a need to care for human resources and consider them as strategic associates. Human Resource individuals and the organizational workforce in general should work in agreement and support the organizational general goals and aims. The Human resource division of a company must know the various employees and specifically their duties and responsibilities in their part of operation towards accomplishing the objectives of the organization. It is purely to find out whether all the employees are following the same path. Human resource should be involved at all functional levels of management. This implies that they should assess the performance of the employees at diverse phases in order to determine the personal performance of every employee and his effect on the company. For lowly performing employees, the human resource department can advise and make needed improvements. Moreover, human resource personnel should focus and use time and efforts to support the business during the planning, implementation and control process. As a trustworthy strategic partner, Human Resource Management practices and policies must be efficient and effective. The impact of HRM on organizational performanceHuman Resource activities such as recruiting skilled and talented individuals, developing them during their time with the company and ultimately retaining them affects positively the general performance of the company by linking individuals to the operational, business and strategic aspirations of the organization, providing for the possession, improvement and retention of brilliant workforce, who can bring higher productivity, flexibility ,innovation and who fit the corporate culture and the planned necessities of the company (Armstrong, 2009). Training ,Development and Education can have a positive influence on the performance of business entity by enlarging the proficiency foundation and develop the levels of competence essential in the employees, encouraging flexible learning that takes place when people dynamically seek to gain the knowledge and skills that support the goals of the company and mounting a climate of learning, a growth medium in which self-managed learning in addition to training and mentoring thrive (Armstrong, 2009). Increased motivation and commitment can have a positive impact on organizational performance by ensuring that people are constructive and paying attention to their work activities, that they are happy to work for the company and that they are decisive to accomplish organizational objectives (Armstrong,2009). Recruitment and SelectionRecruitment, by definition, is the process of spotting that the company desires to employ somebody until the point in time at which request forms for the position have reached at the company. We can differentiate two main kinds of recruitment: internal and external. Internal recruitment implies that the company targets or wishes to fill the unoccupied job posts from within the company. On the other hand, external recruitment is when the business company looks to fill the vacancy from any suitable candidates outside the organization. Proper and efficient recruitment practices and policies help the company know which are the appropriate sources of recruitment, the accurate human resource requirements of the company, whether the recruited individuals are the suitable individuals to occupy the vacant job placement . Having performed these activities, the business aims and objectives can be accomplished or in another way the company can simply mentor and train the new workforce to sustain the business position of the company and teach them about the future plans and directions. It should be clear that the company has got to try and recruit individuals who are flexible, trainable, keen to learn new job processes and apply the acquired knowledge to the best of their abilities. Following the recruitment, the second activity known as selection takes place and it is about of the procedure followed to determine the right candidate to fill a given job position . A methodical selection process is crucial to fruitfully examine the skilled, competent and fitting probable human resources. Good example of company practicing effective recruitment practicesOne of the examples of companies employing efficient recruitment and selection practices is Microsoft Corporation. Founded by Bill Gates and Paul Allen in 1975, the company has been leading the technology industry for years; Microsoft is a reputable leader in computing and Information Technology creativity and innovation and also software tools. The business strategy of Microsoft emphasizes on an accessibility strategy that integrates accessibility into product plan, research and development, product development, testing , implementation and control. In the start, when Bill Gates began to staff the company, he was looking for bright candidates , clearly favoring cleverness over experience. In an attempt to accomplish this, they generally hired fresh university graduates with less experience. Microsoft and co-founder Bill Gates always valued his employees and respected them since he knew that the workforce represents the greatest asset of the company, as revealed by his quotes : "it is the effectiveness of our developers that determines our success" and "take our 20 best people away, and I will tell you that Microsoft will become an unimportant company" (Bartlett, 2002). This simply brings to limelight how Microsoft and its founders have always valued the human resources. During the selection process, the students had to be interviewed ; the interview was undertaken by a minimum of three Microsoft employees. The interview had primarily specific objectives among them to test thought processes and also examine problem-solving aptitudes. The ultimate step of the interview process was undertaken by an independent group of interviewers to ensure and confirm the organization employs the suitable individual. Looking at the example, it can be said that Microsoft recruitment practices and policies are detailed as the organization recognizes that its workforce constitutes its best asset. When the employees possess the desired skills, necessary talents and relevant knowledge, they can greatly support the business strategy of Microsoft. These new employees can set up or plan for a new product using their wide knowledge and industrial skills, develop, experiment and deliver the product. Continuous research programs and activities take place to develop the product’s features. In the technology industry, innovation is a requirement in order to be able to satisfy and attract new customers; hence skillful and brilliant employees can impact positively on the company and ease innovation by creating fresh ideas and performing sophisticated business processes. Microsoft focuses on employing the best person for every vacant post, this is a fine approach since each position is filled by an individual with the significant knowledge and every employee competently supports the organizational strategy in his duties and responsibilities by availing the products to the market, by maintaining the dedication and professionalism in the technology operations and lastly by tirelessly diversifying and innovating in a bid to gain and sustain a competitive edge in the market. What is the impact of HRM on organizational performance?HRM practices are able to increase organisational effectiveness by ensuring profitable experiences for employees. For example, when employees get in the organisation well-applied orientation programmes help them to learn about the organisation and its values to increase organisational performance.
What are the 7 role of HRM in an organization?There are seven main responsibilities of HRM managers: staffing, setting policies, compensation and benefits, retention, training, employment laws, and worker protection. In this book, each of these major areas will be included in a chapter or two.
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