Introduction:
In today world when productivity, quality, efficiency and more importantly business competitiveness are the more important area of the more successful organisation. When is someone talking about the labour performance that is the meaning of labour performance /productivity in other world? In today organisation human resource management (HRM) involve the linkage of management and development of human resources to an organisation’s strategic plan, goals, and objectives. In other world, the performance of the organisation through HRM planning, personal policy and practices, HRM data, management and training is our research discussion in this paper. The HRM is regardless of the size, complexity and degree of the organisation either private or public. In this paper we discuss the impact of HRM on performance of organisation and people and how it has to link with organisation policy. Some people think that it is difficult to implement in small organisation and some think that they have negative outcome for various reasons. For example HR policy has long term impact so then why most of organisations are hesitate to incorporate and integrate with their organisation strategy. In socially and economically developed country such as in UK in which competitive strategy often based on short term policy not long term and quality enhancement. The beneficial approaches may presume that HRM policies and practices and organisational performance are linked and this relation is two way not one way and it has a long term effect. This relation has positive or negative effect. In short we have to explore the HRM strategy in an organisation whether they contribute positively to or affect adversely the organisational performance but it depends on the factors that could be internal or external.
HRM and Organisation
In today organisation to established HRM system, there are key issues that an organisation has to consider when it has to set up business strategy. These issues are as:
1. Should expand and explore the role of HRM.
2. Encourage leadership
3. Development of performance management system at organisation level.
4. Establish a comprehensive supervisory system at all level in the organisation.
5. Invest in learning and development in the organisation.
Now we will discuss the above mentioned issues in comprehensive way to explain why and what level HRM is integral part of business strategy and why most of management think that none of organisation corporate policy is complete without HRM policy in place.
Role of HRM in the organisation:
As an integral part of overall organisation management strategy should consider how HRM is beneficial and valuable for the organisation to achieve its mission and objectives. So HRM will help you to keep focus on the linkage of human resource and organisation strategies, goals and mission.
In my perception and personal experience, when had I been working in the Tough Rider Ltd Sialkot Pakistan, people often think that HRM role is very limited? They think that this administrative role is concerned with salaries, benefits, personal policies (grievance, holidays, medical policy, pension etc), job description and training and development only. This administrative role is very crucial and integral for strong HRM system and you could not restrict this role to these limited activities only. In any organisation whatever the size should be:
• Strategic partner of other organisation strategy to achieve its goals and develop its strategy.
• Act as administrative expert in developing and incorporation the administrative policies and procedures and organisational structure.
• Support and develop employees.
• A change agent for the organisation
Why HRM is a Strategic Partner of the organisation?
In any organisation top level management could use the HRM strategically by working with HR professional to establish HR system that align with other organisation practices, strategies and goals. The following are the objectives that HR policies and practice support:
1. Generate new vacancies in the organisation.
2. Revision of job description.
3. People recruitment of having diversified knowledge and skills they brought in the organisation.
4. Organising and conducting the training sessions for employees at all level in the organisation.
5. Arranging seminars for top level management.
6. Learning and development of middle level management e.g. supervisors, section managers.
Why HRM as an administrative expert in the organisation?
Because of its administrative role in the organisation structure, so it is more efficient and constructive. The administrative structure that HRM system play are to hiring or recruiting new work force, work planning and performance review. HR manager could also develop an coherent and clear job policy regarding its classification, compensation, salary, pension, disciplinary actions, grievance and labour law compliance regarding health and safety etc and maintain the employee record and information according to information acts.
How HRM support and develop the employee?
Human resource in the organisation believes that it is true representative of the employee for providing a systematic way of expressing their views and concerns regarding their job and other matter. It pleader of employees and developing their skills and knowledge and improve their commitment to the organisations.
Why HRM is a change agent?
In any organisation human resource management system play a key of training and preparing employees for identifying and implementing the new change in the organisation. The most important activities that human resource support regarding change can include analysing processes, competency and then supporting the new reformed processes and redesign the systems to help organisation to meet new target and improve the sustainability of the organisation and reach the new target with the existing staff.
The change incorporated in the organisation could generate the lack of cooperation and decline the performance at all level in the organisation. It is the task of human resource management to minimise the negative impact of the change on the staff and try to involve all people those are affected by the change through different ways like:
• All employees should be informed and anticipate about the change taking place.
• Provide an environment and held meeting with employees to contribute their ideas, help in developing plan, improving procedures of change and ask different question regarding change and provide the suitable answers and also discuss the impact of changes too.
• Soliciting and getting ideas from the staff about how to prepare for new changes in the organisation.
• Generate new spirit regarding change in the team to get maximum benefits of the change.
• Follow the agreed actions after involving the employees.
In the following diagram that shows how the people-centred values at the core of an organisation can guide the top level management when they have to make the decision for any kind of change in the organisation.
Organisation Values
“In addition to providing a structure and framework for strategically managing your staff, infrastructure, and processes of change, human resource management can and should play an important role in shaping the values of your organisation and dissemination them throughout the organisation. As shown in the diagram below, employee-oriented values are at the very core of the organisation. Surrounding these organisational values are the organisational objectives that guide decision making. Surrounding them in turn, are organisational strategies and practices that can change from year to year in response to changes in the internal and external environment.”(Letts et al 1999).
(Letts et al, 1999)
Furthermore here I will discuss the mores aspects of human resource (HR) regarding the employee training, and improving skill to enhance the productivity of the employees and it’s effects in the increasing organisational performance.
In House Skill Training for Increasing Organisational Productivity:
In organisation training is a management tool to use to develop skills and knowledge as mean of increasing not even an individual’s but ultimately an organisation’s current performance in terms of efficiency and effectiveness but could also increase the productivity.
Most of the research argues that the investment in training is another tool for future performance of the individual and organisation and is connected to organisational objective for the future. This tool is used not even pursue a career in line with its evolving needs of the individual skill but explore abilities to move along with the organisation.
The employee training and development has widely argued is essential to organisation which seeks to gain competitive advantage through a highly skilled and flexible workforce as a major ingredient for high performance and productivity. A highly skilled and well trained workforce may increase the productivity of greater value. They could not even cut the cost of supervision as they have skill to inspect their own work but also minimise the machinery downtime because they are able to diagnose faults on machinery and are even repair them. Because the multi-skills of the workforce they could improve the functionality flexibility. Technically competent employees enhance the management confidence of incorporating new technology and changes introduce in the production methods and product requirements. In the today intensified competitive environment, “ efficient production even of technically unsophisticated products benefits from technically advanced machinery operated by a workforce with a high level of skills” which in turn “ a pre-condition for successful selection of appropriated machinery and its efficient utilisation” (Steedman and Wagner, 1989,p133).
At last a well trained workforce not even increase the efficiency and productivity of the organisation but also maintaining the relationships with customers and suppliers, organising smooth flows of production materials and keeping correct records to ensure that the products are delivered in time and to the customer satisfaction. Training and development of the workforce not even an attempt of the top level management to improve the productivity of the organisation but also give a sign to employees that they are valuable asset of the organisation. This message is not encourage the workforce commitment to achieve organisation goals and objective but also raise the morale of them.
The training they got in the organisation give them a sense of responsibility and creativity but hence give them more satisfaction and higher motivation which will long term increase the productivity of the organisation.
However, firms are not always prepared to harness all these benefits.”Management selects, recruits and trains in accordance with its work organisation policies, perceived skill needs and with the traditions and prejudices of the society, industry, locality and firm” (Senker and Bredy, 1989, p158). The subsequent skill structure is then determined by the reorganisation of work responsibilities (Burgess, 1985). Sometime organisation underestimates the skill availability for the new technology they acquire. Some time the decisions about investing in new technology are made on the based on assumptions without considering the skill and knowledge of the available workforce skill and knowledge. But sometime the burden on the organisation regarding production could not send all employees on the training they need prior to introduce new change and technology.
In the above mentioned study of maintenance craftsmen (Cooke, 1999), the managers interviewed expressed their awareness that the maintenance staff should have been more involved in the installation and commissioning of the new equipment. But it is very difficult sometimes, because at the end of the day, the main job is to achieve the production target. And if you are limited with staff, you cannot just take people off to go on a training course or to walk around with the commissioning engineers’ ( a maintenance supervisor, 1999). Rapid technological change and shorter product life cycle make it expensive and difficult for firms to invest in skill training of its own workforce. Under a dominant culture of short term cost saving rather than long term development (Atkinson and Meager, 1986), out sourcing is increasingly being used in order to cheapen the immediate labour and hence production cost. According to a recent study on large companies in the recession period of the early 1990s, ‘focus on core business’ was an action considered very important by 54% of the firems surveyed (Geroski and Gregg, 1997, p74).
HR policies and improving production:
Job satisfaction, employee commitment and motivation have often been regarded as important HR dimensions to organisational performance. Employees, enthusiasts of the ‘soft’ model of HRM argue, should be treated as valued assets, a source of competitive advantage through their commitment, adaptability and high quality (of skills, performance and so on )(Guest, 1987). The stress is therefore on generation commitment via ‘communication, motivation and leadership’ (Storey, 1989,p6), ‘if employees commitment will yield better economic performance ‘(Storey, 1995,p35).
In British firms in now a day’s making great effort to cultivate employee job satisfaction and commitment and use the employee involvement to implement new policies and improve their performance and commitment. In contrast, productivity and efficiency in production are achieved through the following factors:
• Flexibility
• Work satisfaction
• Exploitation of the labour factors such as climate of job insecurity.
Flexibility: O’Reilly draws a distinction between flexibility ‘used in an ad hoc manner to meet shortages and intensify work and flexibility ‘accompanied by an increase in training and upgrading’ (O’Reilly, 1992, p370). For example, Geary (1995) argues that changes in work organisation have been in the direction of removing boundaries and demarcations rather than investing in the up skilling of the workforce. It has also been argued that functional flexibility does not necessarily have to be secured through the acquisition of very high levels of skill by core workers in the way that the Atkinson model describes (e.g. Ackroyd and Procter, 1998).
Work Intensification: The more critical factor organisations can use for improving productivity is through work intensification, partly as a result f downsizing and/or increased quantity of production. For example, the rising profit in a printing company (Cooke, 1999) was mainly achieved by successive reduction of manning level per press (from the original 17 men per press 15 year ago to currently 4men per press) and at the same time doubling the amount of production. It has been argued that there has been a productivity ‘miracle’ in the 1980s owing, in large part, to successive governmental legislation to curb the trade union power ( e.g. Metcalf, 1989; Nolan and Marginson, 1990).
Management is now far more aware of the need to use labour resources efficiently in production;’ restrictive practices’ have diminished; strikes have fallen off; and the closed shop is less of a problem. The performance gains of recent years owe more to workers’ ‘fear and the enhanced power of management than to a new spirit of co-operation. Nolan et al (e.g. 1989,1990) argues that the productivity gains in British industry in the 1980s can be attributed to three aspects: increased work intensify, the sharp recovery of output with a significantly reduced industrial workforce after 1982, and piecemeal changes in the technical and organisational structure of production.
Job Insecurity and Pay: the most attractive factor that plays a key role of improving the employee’s motivation is pay factor. Pay has long and for reaching factor that management could use this tool. Organisation could attract new skilled and well trained workforce by paying them a salary higher than the average going rate available in the currently market. The introduction of agency or out sourcing is job insecurity for the permanent employee that could generate the less commitment and work hard to achieve the organisation objective. This factor could be overcome by providing job security and better job rate to increase employee commitment and flexibility is secured by playing the labour market factors effectively.
The strategy of deploying external temporary labour to cheapen cost and to reduce the bargaining power of the in-house workforce is perhaps somewhat characteristic of the British practice. According to Goold and Campbell (1986), mangy British manufacturing firms like ‘The Park Cake Bakeries Ltd’ organisation adopt the financial control’ type of management style in which control is exerted predominantly in response to the short term performance and profit target. This policy pointed the low-trust relation between management and labour.
Organisational Performance Management System:
The most important factor after investing in training and people development there should be HR system that could measured the performance of organisation and its overall effect on the organisation development and achieving its objectives and goals.
The HR management leader task is to establish performance management system that connects strategic and operational plans with performance measures for organisational units and for individual employee. This system not even help the individual to measure his/her work contributions to the success of the organisation but help them to feel more committed and motivated and productive. If organisation implements the system in a systematic way then it has potential way to improve the individual performance but contribute the organisation success.
The performance management system must consider the following factors regarding performance:
• Job description for each job in the organisation.
• Clear supervisory relationships with employee should be there.
• Period held meeting for supervisor and employee.
• Periodic performance review regularly.
• Generate opportunity for staff learning and development.
For effective performance management system need a regular planning that play key role in any competitive organisation? For a good planning need a supervisor and employee should together develop the work plan that could be effective for organisation to achieve the desired goals. After agreed on the plan developed there should be regular meeting after three or six month time periods to consider the performance objectives and before considering any lacks is the current plans and consider these issues in developing next plan. So achieving agreed upon work objectives accountability is an important element in any organisation. The people centred approach does not mean that spare the employee about accountability but human resource management should provide a system that provide for assessing employee performance in an objective and constructive way and holds employees accountable for work planning objectives.
How HRM Improve Organisation Performance:
So in any organisation wages alone could not improve the employee performance but dealing employee fairly without any prejudice or any other factor that could make the organisational environment chaotic. The effect of pay rise has very limited but providing the individual new opportunity and to provide better chance to get better job in the organisation that could improve the employee performance. Today successful organisations make sure that human resource management system integrates with organisational performance management to achieved the organisation goals and objective and employee understand his/her work relate to and contribute to the organisation pre designed mission statement.
Today most top level management/more efficient management to enhance the workforce performance they tried to address their concern/issues. Most of research agreed that following could be the issues, if any organisation addressed could grow faster as compared with others that do not. The most important issues that need to address are as:
• Are employee treated fairly and equally?
• What is my job responsibility?
• Am doing well that should I have to do?
• Is my work is contributed in the organisation?
• How could i develop myself in the organisation?
If organisations addressed these issues hope could become more productive and competent in today competitive environment.
Discussion and Conclusions:
At last researcher argue that to improve performance organisation should adopt a well fitted HR policies to increase performance and competitiveness. Amongst other things, functional flexibility through investment in training and development, pay rise, employee involvement in planning and commitment, quality initiative are seen central issues for sustained organisation economic performance. In Britain most of organisations are adopting a comprehensive HRM system in place. Some think because of its quality policy, pragmatic, incoherent and inconsistence outcomes at times which is not necessary in the best interest of their employees and/or organisational performance in the long-term. The major concern these days’ organisations are keeping their operating cost down rather than investing for the future because of credit crunch. For long term improvements, organisations require assets in term of finance and human skills and a conductive working environment. ‘Capabilities are built up over relatively long periods and need constant replenishment. This implies an orientation toward encouraging learning. As much of this is firm-specific ‘know how’, it depends on long-term commitment as well as identification with firm objectives. This requires continuity of employment for trained and knowledgeable personnel, to keep the ‘know how’ and ‘know –why’ inside the organisation. Skills are difficult to acquire ‘off the shelf or change quickly’ (Swann, 1993,p38-39).
At last HRM systems should be the responsibility of leading player in the organisation that have administrative role. The partnership between supervisor, section manager, senior manager and HR professional makes the HRM system more constructively that really work in systematic ways.
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