MGMT5908 Strategic Human Resource Management : Theoretical HRM Factors

Answer: 

Introduction:

Human Resource Management (HRM) practices seeks to improve organizational performance and help a company to gain competitive advantage in the market. The performance of the organization cannot be improved without improvements in individual performances. Performance, in this regard, is dependent on various internal and external factors which has a direct impact on the motivation of the individual employees, as well as the entire work force, as a whole. It is the responsibility of the HRM departments to look after these motivational factors, identify the problematic areas, and bring forth necessary changes after holding discussions with the higher authorities of the company.

The scope of HRM in improving individual performance encompasses avenues of employee welfare and personnel management like services for safety, health benefits, social security, training, induction, orientation and the like (Antonacopoulou 2016). It also looks after the real-time needs of the individual employees as well as that of the company. Thus, it seeks to increase the productivity of the employees by safeguarding their interests and establishing harmonious relationships among them across the different tiers within the organization. The activities of the HRM largely circles around a model of AMO (ability, motivation, opportunity), in the context of individual performance of the employees. This paper attempts to study the various HR practices from a theoretical approach, along with the factors that determine the application of strategies and related challenges that arises both in theory and in practice.

The strategic implementation of HR policies and practices aim at certain short-term and long-term benefits. The most important ones are – profitability and financial gain, motivation of the workforce, improvement in managerial control, consistent progressive work culture, reduction in burnouts and increased employee retention capability, the needs and provision of amenities for training – all having a direct organizational impact through their relation with individual performance (Meijerink, Bondarouk and Lepak 2016).

Literature Review and Critical Analysis

Theoretical HRM Factors and Strategic Models Affecting Individual Performance 

There are various HRM policies and practices that determine the workflow and employment within an organization, and asks for related investments and choice and implementation of policies from the management and other higher executive bodies. It is a huge responsibility on the HR department to make sure that the firm make full use of its potential profitability. A company is prone to underperformance due to poor utilization of its potential resources. This often occurs due to the company’s inability to elicit the necessary discretionary effort from individual employees, which has a direct impact on the company’s costs. Adoption of proper HRM practices can bring forth these discretionary efforts, by influencing the skills and motivation of the employees and providing them with a certain amount of autonomy at work.  There are various HRM models like the ‘Harvard Model’, the ‘Guest Model’, the AMO Model, and the ‘Warwick Model’, all of which encompasses major factors of HRM concerning individual performance (Sarker 2017). Out of them, AMO – ability, motivation, and opportunity – considers these three as the predominant determining factors for individual performance (Almutawa, Muenjohn and Zhang 2016).

Ability – Ability is the determiner of how well a person is suitable for a particular job role. It takes into account both the existing set of skills which are optimum for the primary level, and the possibility of project-related skill development through trainings in future (Fu, et al. 2018). It is the proportional amalgamation of the theoretical knowledge and practical expertise a person possess for working in a chosen field.  

The acquisition and development of the human capital within a firm, based on their ability, is of paramount importance, which the HR looks after through the determination of employee skills. These skills determine the Intellectual Capital (IC) of a company, which is often assessed through the quality measurement index of VAIC (Value Added Intellectual Coefficient) (Bakhsha, Afrazeh and Esfahanipour 2017). The HR practices should include promotional measures for the employees based on their individual merit, which seeks to further enhance their individual performance. Apart from that, the practices of the HRM should also encompass Training programmes, both for the development of the primary skill-set required for the employees, as well as time to time on-job trainings for employees belonging to different tiers of the organization.

Motivation - Motivation is the primary driving force that offers emotional strength and shapes the behavioural patterns of an individual in certain ways that helps them as well as the company to fulfil their targets. The term ‘motivation’, in terms of individual performance, refers to individual goals, how individuals choose their goals, and the external impacts on their behavioural changes. Individuals are motivated when they are assured that their goal-oriented actions would be rewarded adequately such that their needs and wants are met. Locke and Schattke (2018) talks about two kinds of motivation – intrinsic and extrinsic. The first one is the motivation association with the achievement of a goal, which is independent of any other external factors. Conversely, extrinsic motivation takes into consideration the incentives and financial gains. There are widespread debates regarding the dichotomy of these two motivational yardsticks. This dichotomy and interrelation has been discussed since long ago, as is evident from Aristotle’s Nicomachean Ethics, where Aristotle discusses at length about pleasure and activity, which borders around the modern concepts of intrinsic and extrinsic motivation (Locke and Schattke 2018). Abraham Maslow provides a theoretical hierarchy of basic needs of human beings which puts self-actualization at the top. His idea on self-fulfilment and the psychological needs also relates to the features of intrinsic motivation, which, it may be said, Maslow gives more importance over extrinsic motivation (Maslow 1943).

While Locke and Schattke attempts to present a distinction between the two motivational areas, other studies, like those by Cerasoli, Nicklin and Ford (2014) presents the interrelation between these two proponents. Self-determination theory (SDT) further problematizes the debate by attempting to define the two with respect to their source of origin and area of functioning – either within or outside of the human psyche, or sometimes may be both (Olafsen, et al. 2015).  

Therefore, the HR department of a company must indulge in strategic motivational practices keeping in mind the aforementioned theoretical evaluations. A company should put substantial efforts to motivate employee behaviour and workflow through performance appraisals and linking them with systems of incentive compensation.

Opportunity – Opportunity refers to a certain amount of autonomy, whereby the works are not structured in a way that hinders the performance of a highly skilled individual who is aware of the nuances of the concerned work.  Thus, HRM practices can improve organizational performance by providing work structures that are fluid and encourage employee participation, by granting them the opportunity to mould the structure for better work (Vermeeren 2015). Examples of such practices involve cross-functional teams, rotation of jobs, and implementation of quality circles which seeks to asses and improve on the performativity of the individual employees. Looking after adequate execution of these practice falls under the jurisdiction of the HRM departments. Thus, enhancement of the opportunity quotient means increasing employee engagement through involving them more into the schematic structure of the work.

However, there are conflicting debates about this particular feature of HRM practices. One group holds that it refers to the delegation of decision-making powers across hierarchical boundaries through communication and information sharing. Another group considers opportunity enhancement as practices which seeks to motivate themselves by participating in modifications of the job design (Tay, Tan and Yahya 2017). The first offers a high-brow suspicion into the execution of the employee’s decision-making powers, while the second group is more accepting of these changes. An excess of neither is good for the betterment of the company in the long run. As such, a balance needs to be established by the HRM which should give the employees a certain amount of opportunity to mould their working patterns, at the same time, keeping a check against the misuse of this power.  Thus, the implementation and coordination individual opportunity-based practices of the HRM contributes to the achievement of organizational goals. It helps in building trust among the employees and with the authorities. It helps in bringing out the talents which can be beneficial for the company in the long run.

Major HRM Theories and Their Application on Individual Performance 

Universalistic Theory – This theory focuses on the application of the best practices to attain highest grade of performance. HRM practices conforming to this theory follow a unidirectional approach in terms of individual as well as organizational performance, which the theory considers to have a universal dimension (Kaufman 2016). As such, it shuns the path of new opportunities and risks the company of failure to integrate changes with respect to the evolving market trends. The stringent policies act as a barrier against improvement of employee performance. This is chiefly because it gives more importance to the financial transactions, almost disregarding the individual efforts that goes in to the attainment of the same.

Contingency Theory – As opposed to the Universalistic theory, the Contingency Theory promotes sustainable changes within the organization with respect to the market demands. As such it provides more opportunities to individual employees to improve their performance by moulding their work design. This theory assumes a situational perspective for efficiency in work (Saridakis, Lai and Cooper 2017). Thus, it facilitates motivation among the employees and allows their abilities to have a full play.

Configurational Theory – This theory acts more as a validation for other HRM theories. It provides a holistic approach for the integration of theoretical assumptions to practicality for attaining better performance, and consequently, a better productivity and profitability (Ruži? 2015). A significant portion of this theory concentrates on the interests of individual employees. It proposes a three-dimensional measures of motivation – the first deals with self-motivation, the second focuses on the motivation of an individual through his/her interactions with the organization, and the third focuses on the psychological bearing which these motivational interactions have on the individual.

Limitations and Challenges

The HR practices and decisions related to the enhancement of individual performance is subject to several challenges, which has a direct impact on the organizational culture. The major challenges faced during implementation of such changes are mainly in the fields of Productivity, Empowerment, Burnouts, Job Insecurity, Ethics and Social Responsibility, all of which are inter-connected. Poor motivational practices affect the ability, and consequently the productivity of a company. Provision of autonomy by adhering to the Contingency Theory empowers the employees and yields better production, whereas failure to do so results in burnouts. The HRM is significantly responsible for the company’s inability to retain employees. Burnouts are often caused due to job insecurity among the employees due to the stringency of the existing policies (Mihail and Kloutsiniotis 2016). It is the duty of the HRM to ensure that a certain code of conduct is maintained by all the employees both internally as well as externally. Failure to do so may hamper individual performance.

Conclusion: 

Therefore, it may be concluded by saying that the Human Resources Management must work in tandem with the Operations Management and the Board of Directors to implement sustainable policies that seeks to encourage and enhance the performance of individual employees. There are several markers which determine the adoption of successful HR strategies. The theoretical literature provided above clearly suggests that the behavioural patterns of the employees within an organization has a significant bearing on individual, and consequently, organizational performance. It also shows the key areas through which Human Resources Management practices can impact individual performance through their influence over the skills and motivational factors of the employees, and thorough changes in the existing organizational structure and the prevalent work culture which benefits the employees in terms of performativity. Increase in the employees’ discretionary powers has a direct impact on the intermediate outcomes like the company’s turnover and productivity, on which the employees would have direct control. It the implementations of the new HR practices results in high financial yield for the company, in that case corporate financial performance is enhanced. The use of Contingency Theory over Universal, and its application in real-life individual performances, as suggested in Configurational Theory, keeping in mind the AMO model, would help HRM departments to induce long-term benefits for the company.

Reference:

Almutawa, Z., Muenjohn, N. and Zhang, J., 2016. The effect of human resource management system on employees' commitment: The mediating role of the AMO model. The Journal of Developing Areas, 50(6), pp.17-29.

Antonacopoulou, E., 2016. Practising Innovating through Learning-in-Crisis: Realising the Impact of Man-Agement in HRM Practice. In Human Resource Management, Innovation and Performance (pp. 266-281). Palgrave Macmillan, London.

Bakhsha, A., Afrazeh, A. and Esfahanipour, A., 2017. A Criticism on Value Added Intellectual Coefficient (VAIC) Model. IJCSNS, 17(6), p.59.

Cerasoli, C.P., Nicklin, J.M. and Ford, M.T., 2014. Intrinsic motivation and extrinsic incentives jointly predict performance: A 40-year meta-analysis. Psychological bulletin, 140(4), p.980.

Fu, N., Flood, P.C., Rousseau, D.M. and Morris, T., 2018. Line Managers as Paradox Navigators: Balancing Consistency and Individual Responsiveness in HRM Implementation.

Kaufman, B.E., 2016. Globalization and convergence–divergence of HRM across nations: New measures, explanatory theory, and non-standard predictions from bringing in economics. Human Resource Management Review, 26(4), pp.338-351.

Locke, E.A. and Schattke, K., 2018. Intrinsic and Extrinsic Motivation: Time for Expansion and Clarification.

Maslow, A.H., 1943. A theory of human motivation. Psychological review, 50(4), p.370.

Meijerink, J.G., Bondarouk, T. and Lepak, D.P., 2016. Employees as active consumers of HRM: Linking employees’ HRM competences with their perceptions of HRM service value. Human resource management, 55(2), pp.219-240.

Mihail, D.M. and Kloutsiniotis, P.V., 2016. The effects of high-performance work systems on hospital employees' work-related well-being: Evidence from Greece. European Management Journal, 34(4), pp.424-438.

Olafsen, A.H., Halvari, H., Forest, J. and Deci, E.L., 2015. Show them the money? The role of pay, managerial need support, and justice in a self?determination theory model of intrinsic work motivation. Scandinavian journal of psychology, 56(4), pp.447-457.

Ruži?, M.D., 2015. Direct and indirect contribution of HRM practice to hotel company performance. International Journal of Hospitality Management, 49, pp.56-65.

Saridakis, G., Lai, Y. and Cooper, C.L., 2017. Exploring the relationship between HRM and firm performance: A meta-analysis of longitudinal studies. Human Resource Management Review, 27(1), pp.87-96.

Sarker, A.S., 2017. Journal of HUMAN RESOURCE MANAGEMENT. Journal of HUmAN rESOUrCE mANAGEmENT, 20(1).

Tay, L.C., Tan, F.Y. and Yahya, K.K., 2017. THE POWER OF ABILITY-MOTIVATION-OPPORTUNITY ENHANCING HUMAN RESOURCE MANAGEMENT PRACTICES ON ORGANIZATIONAL ETHICAL CLIMATE. International Journal of Business and Society, 18(3), pp.547-562.

Vermeeren, B., 2015. Influencing Public Sector Performance: Studying the Impact of AMO-enhancing HR Practices on Various Performance Outcomes in the Public Sector. International Review of Administrative Sciences. doi, 10, p.0020852315591642.

Bibliography: 

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