How Hr Impacts a Company Performance

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1.0 Introduction
Human Capital is the most important resource for an organisation to succeed. The quality of the human resource and the work performance directly impact an organisation’s performance. Thus, human resource management plays an important role to ensure the efficiency in an organisation’s daily operations via efficient recruitment, training and development, and staff retention. Besides, efficient human resource management may create competitive advantage to an organisation. There are various theories explained how human resource management impacts an organisation’s performance. This essay focuses on two theories – Reinforcement Theory and Resource-Based Theory. 2.0 Reinforcement Theory and the Implementation

Reinforcement theory was proposed by BF Skinner and his associates. It focuses of shaping human behaviour by controlling the consequences of the behaviour. In reinforcement theory a combination of rewards and/or punishments is used to reinforce desired behaviour or extinguish unwanted behaviour. It has similar base as “law of effect” where it states that individual behaviour leads to different consequences. Thus if a behaviour leads to positive consequences, the individual tends to repeat the same behaviour in the future. On the other hand, if a behaviour leads to negative consequences, the individual will try to change their behaviour to avoid the unpleasant consequences. For example, employees may obey the company’s rules and regulation as they may fear of disobedience leads will lead to punishment. On the other hand, employees try to meet the target set at work as they may be rewarded. Thus, in order to change employee behavior, the consequences of the behavior must be changed. For example, an employee who is frequently late to work, may be motivated to report to work on time (change of behavior) by changing the consequences of being late. Behavior modification consists of 4 methods:

2.0.1Positive and Negative Reinforcement
This implies to remove negative behaviour of the employees by giving positive consequences to the employees. For example, a company could establish a reward system to the sales team, when certain target has been achieved, sales person would receive additional incentives. Both positive reinforcement and negative reinforcement encourage certain behaviour to be happened or repeated. The more spontaneous the reward is given, the greater the reinforcement value it has.

2.0.2 Punishment
This implies to decrease the probability of undesirable actions by enforcing some punishments or negative consequences to the employees. For example, salary deduction for employees those do not report to work punctually.

2.0.3 Extinction
The objective of extinction is to reduce the unwanted behaviour. If an employee gets praised for the promptness of his job completion for certain period of time, but receives no praise subsequently, his desirable behaviours may diminish. Thus, managers have to continue to offer positive consequences to avoid unwanted extinction of behaviour.

2.1 Reinforcement Theory impacts on organisation’s performance

The core objective of Reinforcement Theory in Human Resource Management is to change the employees’ behaviour. Increase the possibility of positive behaviour and reduce the chances of negative behaviour. Organisation performance will be boosted if there is drastic change in employees’ behaviour from negative to positive. Besides, it also ensures the positive behaviour to be maintained as a norm in an organisation. New joiners may follow the company good norms which will past through generation by generation.

Below are some of the examples how Reinforcement Theory impacts an organisation’s performance: 2.1.1 Attendance and punctuality improvements
Positive reinforcement and punishment towards employees’ punctuality may improve the punctuality to work. For example some companies provide extra allowance to employees who adheres...
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