HRM practice and firm performance

Topics: Human resource management, Human resources, Organization Pages: 8 (1804 words) Published: October 8, 2013
Resume: Human Resource Management Practice and Firm Performance By : Syndicate 2

Human resource management Practices (HRMP) to have positive influence and give impacting on organizational performance through a “high road” approach which has become a key element in HR literature. High road approach means that some HRMP are universalistic, appropriate and advantageous for all firms. According to universalistic perspective, there is a simple direct relationship between HRMP and organizational performance. Therefore, organizations from different sectors through different time periods should use HRMP. Unfortunately, researchers who assert the universality of certain HRMP are fail to agree what constitutes those practices. The multiplicity of what constitutes universalistic HRMP represents a challenge to organizational scholars.

There are three main respects in order to contribute to HR literature based on universalistic perspective discussion: First, investigates any difference in the relationship between HRMPs and organizational performance across time, stable or not. Second, uses the same instruments for measuring HRMP at different points in time, thereby extending the power of our results while limiting our ability to influence them. Third, Find out whether the positive correlation between HRMP and performance found in the US also appears in other countries.

A increased significance of human resources as part of an organization’s tangible and intangible resources having the potential for continuous organizational success because of decreasing in the magnitude of traditional sources of competitive success. New paradigm of HR views management as the primary actor in the employment relationship and relates to HRMP as good things”. There is consensus agree that HRM practices would directly influence organizational performance, independent of other external and internal organizational factors, even though some research also found that there is no direct relationship both of HRM and organizational performance. Many strategic HR practice being used by researchers to identify importance of several HRMP to organizational performance, for example: Delery and Doty (1996) used seven strategic HR practices such as internal career opportunity, formal training system, appraisal measures, profit sharing, employment security, voice mechanism, and job definition. Delaney and Huselid (1996) using a cross-sectional research design adopted seven HRMP includes selection, training, incentive compensation, and internal labor market. And also Geringer (2002) focused on hiring, training and development, performance appraisal, leadership and communication.

Other practices on HR studies also mentioned participation and sharing information as part of HRMP. Using these studies, we identify several strategic HR practices (selection, training, incentive compensation, and internal labor market) are generally used as a starting point and appear to affect firm performance under all circumstances. We can also hypothesize that strategic HR Practices and perceived organizational performance are related to each other and are not time-specific, based on: 1. Training is one of the most common practices that appear in the literature as a universal best practice and most influences perceived organizational performance. For example, based on studying 568 Taiwanese companies, Huang found that better group effectiveness training, product and service quality as well as work motivation are higher than with inferior group effectiveness training. 2. Increases organizational performance and decreases employees negative behavior is employee participation. This statement is kind of another HRM practices that being believed by many researchers. For example: Hodson (2002) said that employee involvement reduced workplace conflict and improves work life experience. Besides, Kato and Morishima also found that employee involvement led to a significant 8-9 percent...
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