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How can high-performance HRM strategies and practices demonstrably contribute to organizational performance? Consider in some detail the evidence both for and against the view that high-performance HRM strategies and practice

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Introduction

Contexts, Concepts and Policy Assignment Question How can high-performance HRM strategies and practices demonstrably contribute to organizational performance? Consider in some detail the evidence both 'for' and 'against' the view that high-performance HRM strategies and practices directly influence the overall performance of an organisation. Answer Introduction The business industry of today is characterized by high pressure from the external environment in terms of changing economic trends, ever-increasing and altering customer and supplier demands and excessive saturation of companies in the markets leading to high competition (Pfeffer, 1994). This pressure is an outcome of globalization that has enveloped the business world. As a consequence, the organizations are urged to adopt strategies that have the capacity to make them meet and exceed demands of business and to improve their competitive stance in the market. Improvement in terms of bringing about innovative products, minimizing costs and enhancing the overall customer experience are now common means of meeting business demands and remain no more effective means of sustaining competitive advantage in the relevant industry. Therefore, in order to remain competitive the organizations need to utilize inimitable, rare and valuable resources that cannot easily be taken over by the competitors, for the sake of gaining efficiency and revenue gains. Researchers assert that the only inimitable, rare and valuable resource that can help companies to attain and sustain competitive advantage and assist in achieving overall performance improvement is human resource (Robbins and Coulter, 2004). Human Resource and Performance Human resource has been traditionally recognized as an administrative function which was meant to help in achieving efficiency gains. It is only recently, that the function is considered as a source of value creation for organizations or in words of Hamel and Prahald (1994) ...read more.

Middle

Researchers avow that it depends on the organizational context as to what high performance HR practices should be applied, however the common set of functions that are discussed above are essential for all organizations irrespective of their organizational context in which they operate. It is important that the managers consider the implementation of these practices in an effective manner as this is imperative for organizational success (Storey, 2004; Roberts, 2001). It is important to notice that the list of these essential high performance activities varies from researcher to researcher; yet there are some that are common to all frameworks including team work, performance based evaluations and consequent pay plans, involvement of employees in decision making, open communication, rigorous recruitment and selection plan and comprehensive training and development initiatives (Pfeffer, 1994; Milgrom and Roberts, 1995). In relevance to the high performance HR practices, a framework has been developed by Georgios and colleagues (2008), which presents the relationship between these strategies or practices and organizational performance through interaction of HRM activities at the operational as well as strategic business level. Figure: Proposed "Best HR Practices" System by Theriou G. N. and Chatzoglou P. D. (2008), "Enhancing performance through best HRM practices, organizational learning and knowledge management', a conceptual framework", European Business Review, Vol. 20, No. 3. The framework focuses on the mechanism in the course of which the 'best HRM practices' tend to have an impact on the organizational performance; through enhancing the overall organizational performance. Also the framework highlights the activities that must be undertaken to achieve lasting competitive advantage for organizations (Guest, 1999). High Performance HR Strategies and Organizational Performance: A 'against' perspective Where one group of researchers avow the positive direct relationship between high performance HRM practices and organizational performance, the other group assumes that both may have a positive yet indirect link with one another (Hislop, 2003; Edwards and Wright, 2001). ...read more.

Conclusion

3, pp. 635-672. Huselid, M.A. and Becker, B.E. (1996), "Methodological issues in cross-sectional and panel estimates of the human resource-firm performance link", Industrial Relations, Vol. 35, pp. 400-422. Ichniowski, C., Kochan, T., Levine, D., Olson, C. and Strauss, G. (1996), "What works at work: overview and assessment", Industrial Relations, Vol. 35, No. 3, pp. 299-333. Jennings, P.L. and Banfield, P. (1993), "Improving competence in small firms", paper presented at the 16th National Small Firms Policy and Research Conference, The Nottingham Trent University, Nottingham. Lawler, E.E. (1986), High Involvement Management, Jossey-Bass, San Francisco, CA. Marchinton, M. and Wilkinson, A. (2003), People Management and Development: Human Resource Management at Work, CIPD, London. Milgrom, P. and Roberts, J. (1995), "Complementarities and fit: strategy, structure, and organizational change in manufacturing", Journal of Accounting and Economics, Vol. 19, No. 32. Nicole, R. and Baptiste, N. R. (2008), "Tightening the link between employee wellbeing at work and performance', A new dimension for HRM, Vol. 46, No. 2, pp. 284-309. Pfeffer, J. (1994), Competitive Advantage through People, Harvard University Press, Boston Purcell, J. and Kinnie, N. (2007), Human resource management and business Performance, Oxford: Oxford University Press. Robbins, S .P. and Coulter, M. (2004), Management, Prentice Hall. Roberts, I. (2001), Reward and performance management, Human resource management: A contemporary approach, Pearson, Edinburgh. Schuler, R.S. and Jackson, S.E. (1999), Strategic Human Resource Management: A Reader, Blackwell, London. Storey, D.J. (2004), "Exploring the link, among, small firms, between management training and firm performance: a comparison between the UK and other OECD countries", International Journal of Human Resource Management, Vol. 15, No. 1, pp. 112-130. 1. Theriou G. N. and Chatzoglou P. D. (2008), "Enhancing performance through best HRM practices, organizational learning and knowledge management', a conceptual framework", European Business Review, Vol. 20, No. 3. ...read more.

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