Human Resource Management and Organizational Performance

Introduction

The study of HRM has come a long way in a relatively short period of existence. In a society that has become increasingly dependent on knowledge and skills it is clear that the companies training perform an important role in overall organization performance. This training comes from Human Resource Management practices. HRM practices are defined as the activities intend to enhance the performance of organizations and employees ability to achieve the goals of organization. HRM practices raise the outcomes of HRM to influence the organization performance

This study focus on the relationship between HRM practices variables and organizational performance, impact of HRM practices on organizational performance and productivity. The performance of an organization depends on many factors and employees contribution. Impact of combined performance of employees on organization performance is greater than individuals. Explanation, importance of relationship and the impact of the HRM practices on the performance of organization. Different approaches of HRM practices and business strategy. It reflects the approach and different factors of the HRM practices. Effect of the individual and shared climate levels of organization

Different Studies have emphasized the contribution of Human Resource Management practices to the organizational performance. These studies focused on HRM practices. There is shared idea that HR practices are only effective when bundles are considered including incentive system, training, flexible job assignment, high selectivity and performance management. These practices contribute to increase employee and organization performance by increasing the level of productivity and financial performance. HRM practices have an effect of motivating employees to adopt the required behaviours, it links to the organizational climate, service environment and customer satisfaction. Outcome of investment on employees training each year, this finding is generally shown to be stronger when an organization provides employees with opportunities for the involvement in decision making and organises work in ways that allows employees a higher level of discretionary efforts in the way work is done

HRM practices and Organizational performance

According to studies of Boselie, Paauwe and Jansen (2000), that relationship between relevant dependant and independent variable will vary according to such influences as technology, unionization, industry, company ownership and location, capital intensity, company age and size. Contingency arguments imply potentially complex interactions between HRM variable, between performance and contingency factors, between HRM variables and performance indicators and contingency factors. Commitment HR practices are based on the idea that the closer an organization's HR practices resembled the correct prototypical system, the greater the performance gain

Nicolai and Dana (2009), focus on the impact of individual and bundles of HRM practices. The focus of the empirical research has been divergent and it is clear that reward and training have attracted disproportionate. These are important HRM practices, but it is hard to argue on a priori grounds that positive impact of, for example job design variables. They found that practices such as the use of selective hiring, the extent of training and active participation of the employee in decision making were conducive to organization learning, while group performance-based compensation was not found to be significant for organization learning

A number of HRM researchers have argued that synergies are likely to exist among individual HRM practices. These studies indicate that when HRM practices are applied as coherent systems, they have greater effects on organization productivity than the sum of the individual effects from each practice alone

Cristina (2007), explain the relationship and impact of HRM practices in organizational performance. People management should be matter of discussion and investment on the part of companies. As for as the theoretical approaches are concerned, the conceptualization of the relationship among HRM practices and business strategy has given birth to three main approaches, named universalistic, contingent and configurational. Under the common relationship among HR Practices and organization performance or outcome, these models hypothesize different set s of variable and relations among them eventually influence corporate results

In the view of Peter and Donna (2008), firstly approach which reflects the early work examining the impact of HRM practices implicitly assumed a universalistic, rational model of work organization yielded significant performance dividend. This has been closely associated with a best practice model of HRM. Secondly HR practices are required to have consistency with other organizational factors to be effective. These factors include the nature of market and legislative change. Climate of organization both as individual level attribute and as a set of shared beliefs and values - have effect of motivating employee to adopt desired attitudes and behaviour that in the collection, help to achieve organization's goals. HRM system can be read as communication between employer to employee. The effectiveness of HRM system as communication to employee will depend on those features that define HRM system strength. These features are distinctiveness, consistency and consensus.

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