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Role of the HRM practices in the organizations

International HRM

Introduction

In this assignment, the discussion is based on the Human resource management elements and the role of the HRM practices in the organizations towards managing the employees and creating relevant policies within the organizations in a proper manner. This assignment mainly focuses on the HRM practices in a global context. On the other hand, it also focuses on determining and enhancing the organizational performance of International firms. This assignment also explains the aspects of performance management in order to enhance the organizational performance. It discusses about the training and development that is required in an organization for enhancing the organizational performance. There are several theories on HRM practice, which helps in the process of enhancing the performance level of the employees in the organizations. The organizations need to improve their strategies in order to enhance the performance of the employees and manage the policies of the organization.

HRM practices in a Global Context

In present day organizations, the management researchers revealed that the human resource is one of the major sources of competitive advantage for the organizations. Human resource management is said to be one of the most effective function performed in an organization (Allen et al. 2015). The human resource practices are developed in the organizations in a way so that the performances of the employees can be improved and the employees have a strong level of commitment with their organization. According to the research studies, it can be said that the strategic human resource practices need to focus on the external and internal business environment. These practices will help in enhancing the performance of the employees in the organization and increase productivity. In order to improve the performance level in the organizations performing in international level, the demand of international human resource management has increased with the increasing trend of globalization. It will also help them achieve sustainable competitive advantage. The main aim of the Human resource management is to increase the contribution of the employees in the functions of the organization in order to achieve success (Geppert et al. 2016). The major functions of the HR department in an organization includes performance appraisal, recruitment of staffs and compensation, which plays an important role in enhancing the productivity and improvement of the organizational performance.

HRM in determining organizational performance of International Firms

There are several functions included in the HR practices that are repeated frequently throughout the HRM-performance in the organizations. However, the types of performances associated with the HR practices vary. The types of performances associated with the HR practice are divided into three main categories- Financial and Market performance, Operational performance and Employee attitude and behavior.

Financial and Market performance- Financial and market performance is generally of an objective nature and can be easily obtained. This is the most frequent type of performance that is found in the literature of HRM performance (Reiche et al. 2016). Examples of financial and market performance are return on equity, market value, market share and return on assets.

Operational performance- Operational performance includes production quality, productivity, innovation and service quality. These measures are possible to achieve with the help of objective measures and subjective estimates as well. However, the operational performance is mainly achieved through objective measures. These types of performances are possible to easily break down in numbers. For example, the number of new products developed, production of the quantity of products and the number of customer complaints.

For instance, the HR department of IBM took a number of steps in order to develop organizational performance, such as,

  • Delivering the new skills IBM required at the front lines
  • The company fostered global teamwork
  • IBM created a results-focused culture

By integrating globally, IBM was able to save $6 billion from 2000 to 2005.

Employee attitudes and behaviour- Attitudes and behaviour of the employees are always neglected in the organizations. Quantifying the attitudes and behaviours of the employee’s are considered as a challenge as compared to financial and operational performance. Few examples of attitudes and behaviour of the employees that are typically measured in an organization are job satisfaction, motivation, turnover, trust in management, organizational citizenship behaviour and commitment.

Attitude and behaviour of the employees is an important factor in maintaining a organization in a proper way (Wan Hooi and Sing Ngui, 2014). Incorporating reward system in the organizations provides satisfaction to the employees. Because of reward, they will work hard in their workplace in order to get reward according to their performance. Due to this reward system, in the company of Microsoft, the employees started working hard for the company.

Role of HRM in Enhancing organizational performance of International Firms

A number of studies examined that the contribution of the human resource policy plays a major role in the improvement of the organizational performance. The Human resource management need to implement good HR practices in the organizations in order to enhance the organizational performance of International firms. There are two types of strategies that the HR department of the international firm uses, high-road HRM and low-road strategy in order to enhance organizational performance (Van Dooren et al. 2015). However, according to few researches, it is seen that, high-road HRM helps in enhancing organizational performance in an organization. The functions of human resource management plays a major role in enhancing organizational performance. Implementation of effective practices and policies are the major functions required in enhancing organizational performance. It mainly depends on the employees of an organization. Several steps need to be taken in order to enhance organizational performance, such as, increasing employee skills and expanding them, development of a psychological contract, increasing motivation and commitment, in order to make them use their skills and abilities, they need to be provided with extended responsibilities, utilization of reward management system and more. These factors can enhance organizational performance of International firms.

For instance, IBM after implementing new policies and strategies that are effective for enhancing organizational performance. The employees are able to get feedback on their progress and received short-term goals at least once a year.

Role of Performance management in enhancing organizational performance

Performance management plays a major role in the development of organizational performance in an organization. Performance management is considered as a concept in the field of human resource management. According to Aguinis in 2009, Performance management is said to be a continuous process, which includes identification, measurement and development of the performances of the individuals and aligning them with the organizational goals. Performance appraisal is considered as a part of the Performance management.

Experts tried to explain the concept of performance management in their own ways, since there is no single universally accepted model of performance management (Cooke, 2014). They prescribed the model of performance management system in the form of performance management cycle. The performance management cycle has 5 elements that explains how an organization need to implement the cycle, the elements are-

  • Setting of the objectives
  • Measurement of the performances
  • Feedback of performance results
  • System of rewards on the basis of performance outcomes and
  • Amendments to objectives and activities

Fig- Performance management system

Source: (Klaudy and Karoly, 2017)

However, according to Salaman, there are two theories that explains the concept of performance management-

  • The Goal Setting Theory and
  • Expectancy Theory

According to the Goal setting theory, as proposed by Edwin Locke, the individual goals established by the employees play a major role in motivating the individuals for better performance as the employees will always follow their goals while performing the functions in the organization. Drawing insight from this theory, it can be said that this theory motivates the employees in reaching their goals in order to achieve success. The employees focus on improving their performances and modifying their goals in order to make them more rational. Therefore, incorporating the theory of goal setting in the organizations will enhance the performance management of the organization. The effectiveness of the application of this theory is observed in the systematic elevation of the performance standards of the employees in the organization (Kiatkawsin and Han, 2017). These goals often are aligned with obtaining valuable rewards, for instance, increase in income, recognition and promotion which can effectively bring the necessary motivation among the employees concerning their job satisfaction and job security. For instance, the global firm Microsoft carries out annual International summit through mutual dialogue sessions between the employers including the management and the ownership with the employees in an attempt to get the measure of the employee motivation levels through the summit (Barakat and Moussa, 2017). The summit primarily is found to make use of the Goal setting Theory where the employers set the goals and objectives post the summit for the next financial year as a regular Employee Welfare program.

In addition, drawing insights from the Expectancy Theory proposed by Victor Vroom, which is mainly based on the hypothesis that in the organizations the behaviors of the employees are adjusted based on the anticipated satisfaction of valued goals that are actually set by the employees of the organization. The employees in the organization behave in such a way that it leads them to achieve the goals (Geary and Aguzzoli, 2016). According to this theory, expectations regarding the future events influence the organizational performance. This theory can be applied to the organizations in order to enhance the organizational performance because, the employees put effort in order to perform well in the organization, which is aligned with earning rewards in the workplace. In order to obtain the organizational objectives and make the employees productive, reward system is considered as one of the most vital way of motivating the employees. The American multinational company Apple is committed in bringing the best electronic communication device to the customers through their innovation. The company has given many rewards and motivation to their employees and the staffs (Ford, 2014). It provides more confidence to the employees in order to perform well in the company. The company uses Expectancy theory in order to motivate the employees, which helps them to achieve the goals and objectives that are specific, measurable and attainable. The employees mainly focus on increasing their job performance level in order to get the valued rewards.

Application in Industry

There are several industries where the above-mentioned theories are applied for the enhancement of performance management. For instance, the performance management system of the Deloitte company is complex. However, the company identified two key failings in its old management system-

  • The company relied on a process of evaluation, which annually consumed 2 million work hours.
  • The company often used to rely on the ratings of the performances that were inconsistent.

The Deloitte company transformed its model of performance management incorporating the following ideas-

  • The performance management always needs to focus on the recognition of good performances.
  • The reviews of the performance need to be focused on the future and not on the past.
  • The reviews of the performances need to be prioritized direct from the employee’s supervisors and peers.

Role of Training and development in enhancing organizational performance

Training and development

Training and development is considered as a vital part of the human resource management that emphasize on the improvement of the performances of the employees within the organization in order to achieve goals and objectives of the company. It raises the expectations of the customer’s regarding the service and quality and a requirement of decreasing the cost. On the other hand, it is also important in terms of preparing the new employees for their job roles and training them for doing the job properly. Training provides the employees to sharpen their concepts, skills and changes in the attitude of the workers, which eventually helps in the betterment of the company (Sung and Choi, 2014). The main objective of training is to meet the present requirement of an employee and the objective of development is to meet the future requirement of an employee. The management takes the initiative in training the employees and in case of development; an individual needs to take the initiative. It generally helps the employees in developing new skills, which will increase their knowledge and will help in the development of the organization (Natek and Zwilling, 2014). Training and development helps in motivating the employees. Training is required for the employees in order to make them understand their job roles in the organization.

Knowledge Management System

The system of knowledge management is a kind of IT system, which in order to improve understanding it stores and retrieves knowledge, process alignment and collaboration. It is generally said that knowledge is information, which is believed to be the key sources of competitive advantage. It is based on the experience of the individuals. There are two types of knowledge, exploit knowledge and tacit knowledge (Klaudy and Karoly, 2017). The transfer of knowledge is mainly dependent on the activities regarding training and development. The knowledge management systems mainly focus on the use of technology and do not consider social system as an effective factor. There are several barriers to knowledge sharing that involves, culture, lack of understanding of the business strategy, lack of appropriate organizational culture, lack of management support, etc. The system of knowledge management is generally used for the purpose of achieving their task in the best possible way. Few positive aspects of the knowledge management system is said to be best practices that are available to the customers. The business value concerned with the knowledge management system is true. However, it is said that, if the customer is satisfied, then it is a success for the business. Therefore, in order to achieve success in business, the organizations are required to incorporate the knowledge management system in their organization.

Organizing Training Function

Training function is considered to be one of the important functions associated with the human resource management of an organization. Training function helps in providing training to the new employees in order to make them understand about their job role in the organization. It plays an important role in achieving success of an organization. One of the most important part of this training function is the orientation process, which is involved with the new employee orientation, which is considered as one of the most important process of hiring staffs. Training functions help the employees to perform in their new role in the organization, it makes them feel more dedicated towards their work. Training is important for the leaders as well. The leaders are also need to be trained for performing their job role properly.

Application in Industry

Drawing insight from the theories regarding the role of training and development in enhancing organizational performance, it can be said that, in order to motivate the employees in order to perform effectively in the organization they need to incorporate the theories of organizational performance. The organizations are required to have the facility to provide proper training to the employees so that they can work well and are able to achieve success for the company. Providing proper training to the employees is the only way of achieving success in the organization. In addition to this, another important point is knowledge management system, this helps the employees to gain knowledge and sharpen their skills regarding their job role and thus will be able to perform properly in their job role. For instance, the American multinational company Apple, motivates their employees in order to increase innovation and productivity in their work through their products (Akter et al. 2016). Reward system is the best way of motivating the employees of an organization.

Strategies to improve Organizational performance

There are several strategies that need to be incorporated in the organizations in order to enhance the organizational performance by providing proper training to the employees and improving the policies of the organization. The HRM is responsible for the human recourses which are prominent element in an organization. In an organization the development of the performance depends upon the employees’ effort. The performance of the company is linked to the HRM. As the HRM is responsible for the employees’ benefits, skills and development and other require factors. The employees in an organization will give their full effort for development of the company. The effort of the employees depend upon the motivation provided them. The employee motivation is very much require in the organizational performance the employee motivation depends on the HRM functions. The HR department of the company looks after the benefits and demand of the employees. The employees expect rewards and appreciation on the good performance. The appreciation of the employee can be fulfilled with the rewards given to them. It will help in providing motivation to the employees. The appraisal, leave and payroll responsibility falls under the HRM. The HRM needs to monitor the employee’s effort which will provide a clear idea for the assessment of the employee’s capacity. The skilled employee is also require in the organization which will be again after the provision of training and development to them. The training program enhance their working capacity. Microsoft has well renowned for the employee benefits

In order to get sustainability within competition market the company needs to develop the quality strategy and its implementation within the company. There are various strategies which helps the company to improve their performance such as the proper management strategy, developing the skill of the employees and effective decision making skill of the employees and quality work environment within the workplace. The digital technology implementation within the business organization also helps the company to develop their performance and helps to enhance the performance. According to the annual report of the TESCO it has observed the company face the various problems regarding the employee’s skill work with the digital equipments. In order to resolving the problems the TESCO Company provide the functional training to the employees of the company through which the company develop their performance (Mithas and Rust, 2016). The employees are the key elements of the company the employees’ only can develop the performance of the company. Therefore, it is important to provide the training to the employees of the company. The numbers of the company loss the productivity due to the improper knowledge of the employees towards the working operation. For example the Amazon company has face the huge los due to the improper shipping the order to the employees. Therefore in order to improve the company’s performance the company provides the property training and development to the employees to resolve all this problems and enhance the customer’s satisfaction. Moreover, it is important to provide the motivation to the employees and improve the communication with the employees as it helps the company to retain their skilled employees and enhance the performance. It has been found that most of the company failed to retain the skill and qualify employees due to improper work environments. Therefore, it sis important top provide the rewards system which helps the company to retain their employees. Moreover, the rewards helps to increase the confidents of the employee’s trough which the employees can provide the best afford towards the work and enhance the performance. In regarding this most of the establish company has the rewards policy within the organization which helps the company enhance their performance.

Conclusion

From the above illustration it can be concluded that, Human resource management plays a vital role in the management of employees and the policies in an organization. There is a separate department of human resource management in every organization, generally termed as the HR department. This assignment sheds light on the matters that enhances the organizational profit and motivate the employees in performing well in the workplace. There are various theories on development of organizational performance in the organizations. From this assignment, it can be said that, providing motivation to the employees is an important factor for the achievement of success in an organization.

Reference list

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Allen, D., Lee, Y.T. and Reiche, S., 2015. Global work in the multinational enterprise: New avenues and challenges for strategically managing human capital across borders. Journal of Management, 41(7), pp.2032-2035.

Barakat, A. and Moussa, F., 2017. Using the Expectancy Theory Framework to Explain the Motivation to Participate in a Consumer Boycott 1. Journal of Marketing Development and Competitiveness, 11(3), pp.32-46.

Cooke, F.L., 2014. Chinese multinational firms in Asia and Africa: Relationships with institutional actors and patterns of HRM practices. Human Resource Management, 53(6), pp.877-896.

Ford, J.K. ed., 2014. Improving training effectiveness in work organizations. Psychology Press.

Geary, J. and Aguzzoli, R., 2016. Miners, politics and institutional caryatids: Accounting for the transfer of HRM practices in the Brazilian multinational enterprise. Journal of International Business Studies, 47(8), pp.968-996.

Geppert, M., Matten, D. and Williams, K. eds., 2016. Challenges for European management in a global context: Experiences from Britain and Germany. Springer.

Kiatkawsin, K. and Han, H., 2017. Young travelers' intention to behave pro-environmentally: Merging the value-belief-norm theory and the expectancy theory. Tourism Management, 59, pp.76-88.

Klaudy, K. and Karoly, K., 2017. 10 The Text-organizing Function of Lexical Repetition in Translation. Intercultural Faultlines: Research Models in Translation Studies: v. 1: Textual and Cognitive Aspects, p.143.

Mithas, S. and Rust, R.T., 2016. HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM PERFORMANCE: CONJECTURE AND EMPIRICAL EVIDENCE1. Mis Quarterly, 40(1).

Natek, S. and Zwilling, M., 2014. Student data mining solution–knowledge management system related to higher education institutions. Expert systems with applications, 41(14), pp.6400-6407.

Reiche, B.S., Stahl, G.K., Mendenhall, M.E. and Oddou, G.R. eds., 2016. Readings and cases in international human resource management. Taylor & Francis.

Sung, S.Y. and Choi, J.N., 2014. Do organizations spend wisely on employees? Effects of training and development investments on learning and innovation in organizations. Journal of organizational behavior, 35(3), pp.393-412.

Van Dooren, W., Bouckaert, G. and Halligan, J., 2015. Performance management in the public sector. Routledge.

Wan Hooi, L. and Sing Ngui, K., 2014. Enhancing organizational performance of Malaysian SMEs: the role of HRM and organizational learning capability. International Journal of Manpower, 35(7), pp.973-995.

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