Strategic Hr Practices and Organizational Performance
Summary – Chapter 6 The assumption underpinning the practice of HRM is that people are the organization’s key resource and organizational performance largely depends on them. If, therefore, an appropriate range of HR policies and processes is developed and implemented effectively in the alliance of organizational strategy, then HR will make a substantial impact on firm performance and developing people in order to get competitive advantage.
Much of the research over the last two decades has attempted to answer two basic questions: ‘Do HR practices make a positive impact on organizational performance? ; ‘If so, how is the impact achieved? ‘ The second question is the more important one. It is not enough to justify HRM by proving that it is a good thing. What counts is what can be done to ensure that it is a good thing. Financial performance of an organization depends to a large extent on effective operational performance and the operational performance of an organization is a function of people, process and technology. For effective integration of people with technology, strategy and process, the people in the organization have to be competent enough, with the required knowledge, skill and abilities.competence of the individual is an important factor that decides operational effectiveness in terms of providing quality products and services within a short time. The all stakeholder group in the organization should well-aware about the HR practices and fully owned and integrated at crafting and execution progress as well as the sufficient understanding on working environment, quality of service at the grading and rewarding of high performers.The way an organization manages its HR has a significant relationship with the organization’s results, a revelation that supports the resource-based view, where business competitiveness is related, at least in part, to the investments in company specific assets backup by the commitment-oriented culture. Although the published research generally reports positive statistical relationships between the greater adoption of HR practices and business performance, the significance of the culture should also be kept in mind besides HR practices could influence organizational performance.Also, it is possible that there are complex relationships between HR practices and other resources of the firm.
The causal linkage between HR and organizational performance will enable the HR managers to design programs that will bring forth better operational results to attain higher organizational performance. The focus of the HR management should be to understand organizational performance processes and design HR practices from job design to success planning in order to influence process and outcome variables.