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Human Resource.docx

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QUESTION
Without implementing HRM theories and best practices organizations would not achieve their
desired goals and obje...
organizations to understand that optimizing the productivity of the employees, the employee needs to be
motivated enough. ...
words no two organizations have the same exact resources, either tangible or intangible. “If resources and
capabilities of...
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Without implementing HRM theories and best practices organizations would not achieve their desired goals and objectives. using class information and any other sources, discuss this statement giving relevant examples.

Without implementing HRM theories and best practices organizations would not achieve their desired goals and objectives. using class information and any other sources, discuss this statement giving relevant examples.

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Human Resource.docx

  1. 1. QUESTION Without implementing HRM theories and best practices organizations would not achieve their desired goals and objectives. using class information and any other sources, discuss this statement giving relevant examples. Introduction Human resource management (HRM) is a critical field of study, well-recognized, and high-value activity. HRM is the effective and efficient use of workers to accomplish the organization's objectives, and it is about handling coworkers, being the human side of business administration with strategies, practices, laws and processes that influence the organization's workers (Arulrajah & Opatha, 2016, p. 153). A theory is a collection of interrelated concepts, factors, interpretations and premises which presents a systematic view of phenomena by defining the relationship between variables in order to explain a natural phenomenon. Explained below, are the Human Resource theories that organizations implement to achieve their goals and objectives and reasons why they do so: Organization Behavior Theory The study of organizational behavior (OB) is applied to HRM functions and its related subjects helps us understand what people in organizational environments think, feel and do. This knowledge helps to anticipate, recognize and monitor organizational events for HR and, realistically all employees. Organizational behavior study includes research areas dedicated to improving performance at work, increasing job stability, fostering creativity, and fostering leadership. A focus on organizational behavior helps to explain why certain different behaviors impact workers ' efficiency and discretionary effort, as well as how to consider and forecast the effects of different policies on managing human resources (Pfeffer, 2007, p.126-127). Motivation Theory Motivation is a way to create a high amount of passion in order to achieve organizational goals, and this condition is addressed by fulfilling certain individual needs. As Haque, Haque and Islam (2014) stated that managers within businesses or organizations are largely responsible for ensuring that the activities or roles are conducted in the right way by workers. To accomplish that, these HRM must guarantee that they have a professional team of workers to hire the best staff capable of doing the job. This theory helps
  2. 2. organizations to understand that optimizing the productivity of the employees, the employee needs to be motivated enough. At this level, one must understand human nature better understand how motivation can impact on the performance of the employee. To achieve this goal, it is important to combine the correct motivational resources with successful management and leadership in as much as motivation impacts on employee performance (Haque, Haque & Islam, 2014). AMO theory (Ability, motivation and opportunity) to participate According to AMO theory the components of Ability, Motivation, and Opportunity are the three- independent work-system elements that form employee characteristics and eventually lead to organizational success. Through these three components, organizational interests are best served due to the fact that AMO theory paves the way for line managers to use effective approaches that result in employee motivation using HR policies and practices (Bos-Nehles, Riemsdijk, & Looise, 2013, p. 3). This theory helps organizations to know those practices and policies that HR undertakes to ensure that employees have or gain the required skills, knowledge and ability to perform their tasks with minimum supervision as Yahya, Tan and Tay (2017) states that ability-enhancing HRM practices are the practices that increase the employee’s abilities and competencies to achieve organizational goals. Human Capital Theory: Human capital is an illustration of people’s investment in themselves, in other word in their skills, that eventually increases their economic productivity. Their theory is based on the idea that human capital leads to creativity which eventually results in receiving higher personal income. This theory’s supporters believe that educated people are productive people meaning people who are educated, earn higher personal income than the rest of the population. “Human capital theory rests on the assumption that formal education is highly instrumental and even necessary to increase production capacity of a population” (Olanyan & Okemakinde, 2008, p. 479). Human capital theorists claim that productivity and efficiency of employees increases by education through raising the level of cognitive stock of economically productive human ability that is an outcome of innate capability and investment in human beings. Resource-based Theory The resource-based view is applied as a theoretical foundation in HRM that is based on the assumptions that firm resource distributed heterogeneously and remained stable over time. A firm’s resources include materials, skills, organizational processes and systems, plus information and data of the organization. This theory ties HRM with competitive advantage generation through focusing on fostering the internal resources that the organization owns which most probably are unique and special to the firm, in different
  3. 3. words no two organizations have the same exact resources, either tangible or intangible. “If resources and capabilities of a firm are mixed and deployed in a proper way, they can create competitive advantage for the firm. Institution theory Institution theory suggests that the environment inside the organization has a direct impact on formal organizational structure development. The organizational environment features such as cultural elements, symbols, normative beliefs, and other shape institutional structure. Through the Institutional theory we get to know the logic of organizational fields and organizational norms and argue that after conforming these norms, organizations become optimal and prolong their survival by putting these norms into practice finally grantees organizational survival. Transaction Cost Theory Transaction cost theory is one of the important organizational theories for the analysis strategy and organizational issue and recently it has been applied to the HRM functions for controlling employee’s behavior, which focuses on examining the problem of human exchange (contract) based on finance and economics. For the HR department this theory is about understanding the employee’s contract (Wright & McMahan, 1992, p. 308). Transaction cost theory is used for solving opportunism and rationality in the contract. Firstly, Opportunism means a contract between parties behave as self- interest, a firm must provide safeguards in the contract as guarantee to be sure that the parties will not tend to act in self-interest. Secondly, rationality means that the contract has no enough information and disable company to make the right decision because the lack of adequate information (Williamson, 1994, P. 81). Agency Theory Agency theory uses to understand situations in which a principal (owner) delegate tasks to an agent (employees) on his behalf include some decision-making authority. This theory is applied to HRM by reducing the conflicts of interest between principal and agents when responsibility delegated by controlling behaviors and build employee relations. As Welbourne and Cyr (1996) noted that agency cost will reduce when the firm is controlled by the owner and conflict of interest eliminated and establish proper incentives to ensure that the agent will not take harmful action toward principal. Agency cost includes monitoring cost which directly related to the actions of the agent. Firms managing and monitoring by owner required low agency cost, but when the firm grows and more agents involve, the monitoring cost increase because owner becomes less efficient. Contingency Theory
  4. 4. This theory suggested that in order for firms to be effective, HRM functions must fit with the organization or external environment aspects to achieve organizational goals. According to Harney (2016) said that contingency theory within HRM is based on external and internal fit. External fit means HR practices must fit with the organizational strategy and environment conditions. Internal fits mean HR practices must work together to deliver the same message and the desired outcome. By using contingency theory, firms can promote employee behaviors that are matched with business strategy because behavior is the impact of an employee’s ability and motivation, therefore by implementing HR practices such as promoting policies which motivate the employee, an organization can influence behavior. Conclusion In conclusion, HRM is the ability to use employee’s effectively and efficiency to achieve the organization’s goal and HRM theories helps HR to achieve this purpose and increase the motivation and commitment of workers. In this paper discussed nine theories which support HRM functions. The organizational behavior theory helps HRM to understand of employee’s behavior and explain why certain different behaviors impact employee’s performance. Motivation theory is about creating a high amount of passion between employees to obtain the desire goals and address individual needs. The AMO theory paves the way for line managers to use effective approaches that result in employee motivation using HR policies and practices. Human capital theory claim that employee education is a key important point for raising productivity. The resource-based theory is about HRM must know about the company’s sources and capabilities that can be used for competitive advantage. Institution theory helps HRM to anticipate about environmental dimensions that has direct impact over organizational structure development. The transaction costs theory focuses on examining the problem of human exchange based on finance and economics. The agency theory is important for HRM for solving the conflict between principal and agents. The last theory, contingency theory focuses of HRM functions must fit with the organization or external environment aspects to achieve organizational goals References Almaaitah, F. M., Harada, Y., Sakdan, M., & Almaaitah, A. (2017), Integrating Herzberg and Social Exchange Theories to Underpinned Human Resource Practices, Leadership Style and Employee Retention in Health Sector. World Journal of Business and Management, 3(1), 16- 34. Available at: http://dx.doi.org/10.5296/wjbm.v3i1.10880
  5. 5. Arulrajah, A. & Opatha, H., (2016), Analytical and Theoretical Perspectives on Green Human Resource Management: A Simplified Underpinning. International business research, 9(12), 153- 164. Available at: http://dx.doi.org/10.5539/ibr.v9n12p153 Bos-Nehles, A. C., Riemsdijk, M., & Looise, J., (2013). Employee Perceptions of Line Management Performance: Applying the AMO Theory to Explain the Effectiveness of Line Managers' HRM Implementation, Human Resource Management, 52(6), 1–17. Delery, J. and D. Doty (1996), Models of theorizing in strategic human resource management: tests of universalistic, contingency and configurational performance prediction, Academy of Management Journal, 39(4), 802–835. Evans, S., & Tourish, D., (2016), Agency theory and performance appraisal: How bad theory damages learning and contributes to bad management practice, An Article in Management Learning, 1- 21. https://www.researchgate.net/publication/309471081 Fix, B., (2018), The Trouble with Human Capital Theory, Real-World Economics Review, World Economics Association, Bristol, Issue no. 86, Pp. 15-32. http://bnarchives.yorku.ca/568

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