Literature Review of Human Resource Management, theory versus practice

Topics: Human resource management, Management, Organizational studies and human resource management Pages: 5 (2092 words) Published: September 25, 2014
Policy versus practice:

Understanding the relationship between human resource management and organizational outcomes is one of the long-standing goals of macro human resources management research. – Kaifeng Jiang et al 2011

With rapid change in the economic environment managers and scholars have been motivated to seek competitive advantages through new sources. The role of a skilled, motivated and flexible workforce has become more prominent than traditional attributes such as technology, economies of scale or natural resources. This is illustrated in the growth of Human Resource Management (HRM) literature, which focuses on strategies to stimulate economic performance by sustaining and developing core competencies within a workforce. With the aim of improving the productive contribution of individuals while simultaneously attempting to attain other societal and individual employee objectives HRM is a multi facetted approach (Schwind et al, 2010). High performance work systems developed through strategic HRM have been the focus of modern organisational theory because it is has considerable interdisciplinary application. Within this field the focal point of these studies is the extent at which HRM policy affect performance (Huselid et al, 1997) . This research analyses current literature, both academic and popular, on the implementation and effectiveness of HRM under a resource based perspective focusing on three outcomes; Human resource benefits, operational improvement and financial growth. Academic literature has generated strong empirical evidence correlating strategic HRM concepts and improved economic performance. Therefore economic rationality suggests that HRM should be a highly-involved widely used work practice. Contrary to this the adoption of such policies has been slow and sporadic. This represents a gap in awareness or application and therefore HRM needs to be analysed in two dimensions; both academically and practically. To assess the extent or limitations of HRM practice a resource-based view will utilised. RBV assumes a firm’s competitive advantage lies in the application of a bundle of tangible or intangible resources (Wernerfelt, 1984). This evaluation will be organised into three key objectives; human capital, operational efficiency and financial growth. Human capital is the stock of competencies, knowledge, habits and emotional satisfaction of a workforce. It is therefore a considerable factor in a firm’s operational outcomes such as productivity, quality of product and innovation. From these components financial goals such as sales growth, return on investment increase in capital may largely be derived. There is a clear pyramidal relationship structure between these three objectives and interactions between each layer are bilateral. Finally all three layers have multiple internal and external environmental factors which is one of the critical reasons industry has apprehension for HRM research. The goals of this paper is to investigate the disparity in HRM theory and it’s application in the workforce. Human capital is critical in both labour and service based industries, it is both a tangible and intangible resource that defines a firm’s competitive advantage. Strategic HR policy aims to motivate and train individuals to develop a qualified, experienced workforce with increased capabilities. This is commonly achieved through the attraction and retention of talent, training, management and performance reviews, reward management and work design challenges. This is often collectively referred to as parental strategic management and has a direct impact on the workforce. Indeed one indicator is the positive response to an online poll at HR Insight Blog that registered 74% of respondents found these strategies ‘directly affected their work practice’. This survey was undertaken by 1,500 candidates across a spectrum of industries. It’s validity is further supported with...

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