thesis

1. Armstrong (2006) defines Human resources management as “planning, organizing,
directing, controlling of procurement, development, compensation, integration,
maintenance and separation of human resources to the end that individual,
organizational and social objectives are achieved.”
Drucker (2001) stated “Human Resources Management is concerned with the people’s
dimension in management. Since every organization is made up of people, acquiring
their services, developing their skills, motivating them to higher levels of performance &
ensuring that they continue to maintain their commitment to the organization are
essential to achieve organizational objectives. This is true, regardless of the type of
organization – government, business, education, health, recreation or social action.”
Taking a look at the world of human beings is a rewarding experience. Today, in any
organization humans are treated as precious resource. They are called as assets of the
organization as they bring success & prosperity. Human resource deals with human
resources employed in a business unit. It is an approach to the management of people
in an organization. HRM is relatively a new term for what was called as personnel
management (baidu.baike.com).
An Organizational Performance includes multiple activities that help in establishing the
goals of the organization, and monitor the progress towards the target. It is used to
make adjustments to accomplish goals more efficiently and effectively
(managementperformance.com, 2010).
Organizational Performance is what business executives and owners are usually
frustrated about. This is so because, even though the employees of the company are
hard-working, and are busy doing their tasks, their companies are unable to achieve the
planned results. Results are achieved more due to unexpected events and good fortune
rather than the efforts made by the employees (managementperformance.com, 2010).
However, for any business to be successful, functions must be defined and
accomplished. It is important for an organization to develop strategies that should be
designed around the skills that would enhance the performance of the organization.
Organization Performance can be achieved by using some of these approaches, if used
with a strong focus, comprehensively, on achieving the results of the organization, could
increase the performance of the organization. Best Practices, Quality circles and Process
control can also be used to achieve similar goals (managementperformance.com, 2010).
The purpose of this assignment is talking about how human resources management
practices will influence the performance of an organization. I am going to research some
evidences, provide literature reviews and through analysis to introduce how human
resources management practices will influence organizational performance.

2. Research Question
To what extent does human resources management practices influence the performance
of an organization?
I choose this research question because of the research will contribute to knowledge of
the effects of human resources management by testing the performance effects of
adopting human resources practices in some organizations.
More recently efforts have been made by HRM theorists to try to establish a causal link
between HRM and performance. This has led to a growing number of studies which
examine the potential contribution that good human resource policy can make to
improving organizational performance, so much so that ‘the impact of human resource
management on performance has become the dominant research issue in the field
(Guest, 1997).
Importance of Study
According to the HRM strategy theorists (Tyson, 1997), “the aims of the HRM strategy
process are typically concerned with devising ways of managing people which will assist
in the achievement of organizational objectives. In addition, one can hope to see within
the strategy-formation process the ‘official’ version of how senior management believes
these policies, practices and philosophies will contribute to organizational performance.”
With the help of our knowledge of human resource management practices and
philosophy you can avoid making many mistakes. More important, it can help ensure
that you get results-through others. you could do everything else right as a manager-lay
brilliant plans, draw clear organization charts, set up modern assembly lines, and use
sophisticated accounting controls-but still fail as a manager (by hiring the wrong people
or by not motivating subordinates, for instance) (Brewster, 2004).
On the other hand, many managers-whether presidents, generals, governors, or
supervisors have been successful even with inadequate plans, organization, or controls.
They were successful because they had the knack for hiring the right people for the right
jobs and motivating, appraising, and developing them (Brewster, 2004).
In today’s businesses, the right approach and management of the organization’s
employees can greatly affect the company’s overall performance. A strategic approach
in Human Resource Management is vital especially in growing companies. Starting from
right staffing to maintaining performing employees, human resources management is a

3. key in developing not only the employees, but the whole organization itself (Carter,
1997).
Thus, the researches of human resources management hold an importance for all
members of an organization.
Literature Review
background information
Armstrong (2006) state “Human resource management is defined as a strategic and
coherent approach to the management of an organization’s most valued assets – the
people working there who individually and collectively contribute to the achievement of
its objectives.”
Performance, in the context of organization, is not only a broad concept which has been
used synonymously with productivity, efficiency, effectiveness, and more recently
competitiveness; it has also been a subject of study for social scientists from a wide
range of disciplinary perspectives (Harrison, 1997).
It is widely accepted that human resources management can help firms improve
organizational behavior in such areas as stuff commitment, competency and flexibility,
which in turn leads to improved organizational performance. In addition, findings from a
number of empirical studies that have been conducted to research the relationship
between human resources management and organizational performance indicate that
high commitment and high involvement human resources management practices have a
positive impact on organization performance (Kaman, 2001).
Key point 1
HRM practices can improve organizational performance by increasing employee skills
and abilities (Patterson, 1997). Patterson (1997) stated that ‘HRM practices can influence
employee skills through the use of through comprehensive training to develop current
employees’. Nadler (1986) stated that training and development of employees, it has
been widely argued, is essential to organizations which seek to gain competitive
advantage through a highly skilled and flexible workforce as a major ingredient for high
productivity and quality performance.

4. Marchington (1996) concerning the deployment of (the maintenance) skills thus bears a
strategic importance in the competitiveness of an organization, and previous research
findings have warned us of the penalty of insufficient training.
Harrison (2005) stated that “In the field of human resource management, training and
development is the field concerned with organizational activity aimed at bettering the
performance of individuals and groups in organizational settings. It has been known by
several names, including employee development, human resource development, and
learning and development.”
Training can be used in a variety of ways, including orienting and informing employees,
developing desired skills, preventing accidents through safety training, supplying
professional and technical education, and providing supervisory training and executive
education (Cherrington, 1995).
Key point 2
Quality has been a central theme in HRM in which product or service quality is widely
seen as an important way of improving organizational performance by attracting and
retaining satisfied customers (Deming, 1986). In theory, quality management initiatives,
incorporate the values of the ‘soft’ model of HRM in which superior performance is
achieved through effective leadership (Deming, 1986)
Some writers of HRM and performance take the approach that stated that ‘organizations
adopting high-involvement management in alignment with total quality management
should outperform all other organizations and there is an interactive effect between the
adoption of high involvement management and total quality management on
performance’ (Wood, 1999).
Knight (1995) stated that “Quality management, or more accurately its managerial
plausibility, is at least in part a reflection of the necessity for large corporations to find
new and innovative ways of competing constructively, and of managing a fragmented
workforce”.
Knight (1995) stated that‘Quality … needs to be extended to all aspects of an
organization’s activities, not just the standards associated with finished products. It is
here that the distinction is said to lie between quality initiatives and total quality
management as a way of running an organization’.
Key point 3

5. Wilson (1994) points out “Human resource management strategies may be an especially
important source of sustained competitive advantage for organization.” Although
traditional sources of competitive advantage such as natural resources, technology,
economies of scale, and so forth, create value, the resource-based argument is that
these sources are increasingly easy to imitate, especially in comparison to a complex
social structure such as an employment system. If that it is, human resource
management strategies may be an especially important source of sustained competitive
advantage for organization (Wilson, 1994).
Nowadays, human resources management is a common belief in both the business and
the academic world that the human resources of an organization can be a source of
competitive advantage (Beer, 1985)
MacMillan (1983) suggested one way often overlooked is through their human resource
management practices. HRM practices enable companies to gain a competitive
advantage in two major ways: One is by helping themselves and the other is by helping
others. So there appears to be a significant benefit from having HRM considerations
represented in the strategy formulation stage rather than only in the implementation
stage.
Summary of Literature Review
In summary, different human resource practices should be coherent and complement
each other. HRM practices can improve organizational performance by increasing
employee skills and abilities. HRM can improve quality of products and productivity.
Beside, HRM strategies can be an especially important source of sustained competitive
advantage for organization.
Analysis
Analysis for point 1
HRM practices can enhance employee skills and abilities so that improve organizational
performance. Training is a management tool used to develop skills and knowledge as a
means of increasing an individual’s and ultimately an organization’s current
performance in terms of efficiency, effectiveness and productivity. Employee
development, training theorists argue, is another management tool, but the investment
is mainly made for the future performance of the individual and organization, and is
connected to organizational objectives for the future. The tool is used to enhance the

6. skills and abilities which the individual needs to be able to move along with the
organization and to pursue a career in line with its evolving needs (Steedman and
Wagner, 1990).
A more highly skilled workforce may increase productivity by producing a higher level of
output or by producing output of greater value. A skilled workforce can also improve
the firm’s functional flexibility since they are much easier to retrain due to their relatively
broad knowledge base of multi-skills. A technically competent workforce will also give
management confidence in utilizing new technology and provide employers with more
scope for rapid adjustment to changes in production methods, product requirements
and technology. In today’s intensified international competitive climate, ‘efficient
production even of technically unsophisticated products benefits from technically
advanced machinery operated by a workforce with a high level of skills’ which is in turn
‘a pre-condition for successful selection of appropriate machinery and its efficient
utilization’ (Steedman and Wagner, 1990). Finally, a force of well-trained and responsible
office workers can improve their company’s productive efficiency through maintaining
good relationships with customers and suppliers, organizing smooth flows of
production materials and keeping correct records to ensure that the products are
delivered in time and to the customers’ satisfaction.
Analysis for point 2
Now days, HRM’ s central theme that product or service quality is widely seen as an
important way of improving organizational performance by attracting and retaining
satisfied customers.
HRM practices can bring the better quality of products for organization. The truth is,
quality initiatives are essentially competitiveness driven. The real test of it is its ability to
satisfy customers in the market-place. The emphasis upon responsibility is not
infrequently ‘directly concerned with the elimination of waste and removing the
duplication of effort through changes in job design and work process. It does not
necessarily extend to the enhancement of working conditions or greater control over
key decisions about investment, the fundamentally hierarchical division of labor, or the
organization of work (Wilkinson, 1995)
Storey (1995) stated that Quality initiatives in this sense appear to line up more closely
with the ‘hard’ model of HRM which emphasizes the quantitative, calculative and
business strategic aspects of managing the headcount resource in as ‘rational’ a way as
for any other economic factor. Its focus is ultimately human resource management.

7. HRM practices improve the quality of products and productivity. Quality initiatives of
HRM will enhance that effectiveness of organization and the productivity. It must be
important in contributing to the performance and competitive advantage of the
organization as a whole.
Analysis for point 3
Human resources management strategies is this will help ensure that a competitive
advantage through HRM practices is gained and sustained. In addition to using their
HRM practices on themselves, companies can also gain a competitive advantage
through using their HRM practices on others. Specifically, companies can gain a
competitive advantage by helping their suppliers, customers, or servicers/distributors
with their practices. In this way they can secure a differential position in the eyes of their
stakeholders and this is often all that is needed to get priority of attention and support
in times when this is critical.
Once the strategy is formulated and the appropriate HRM thrust identified, specific
HRM practices need to be developed. These practices, such as staffing and
compensation, are the ones that actually create the competitive advantage for the
company. In addition, selection of the most appropriate practices should be appropriate
to the strategy and lead to behaviors that are supportive of the strategy; for example, if
cooperative behaviors are needed among employees, then group or organizational level
compensation incentives should be provided rather than an individual-level incentive
system (Carter, 1997).
Currently, many companies recognize the growing importance of their human resources,
but few are conceptualizing them in strategic terms-in ways to gain a competitive
advantage. As a result, many companies forego the opportunity to seize competitive
advantage through human resource practice initiatives. The result of effectively
managing human resources is an enhanced ability to attract and retain qualified
employees who are motivated to perform, and the results of having the right employees
motivated to perform are numerous. They include greater profitability, low employee
turnover, high product quality, lower production costs, and more rapid acceptance and
implementation of corporate strategy (Carter, 1997).
Summary of analyses
In a word, HRM is a key to success business of an organization.

8. Combining human resource practices, all with a focus on the achievement of
organizational goals and objectives, can have a substantial affect on the ultimate
success of the organization. HRM practices can bring the better quality of products for
organization. HRM practices can bring the better quality of products for organization. It
also can bring the better quality of products for organization. Besides, human resources
management strategies is this will help ensure that a competitive advantage through
HRM practices is gained and sustained.
Conclusion & Recommendation
Conclusion
Human resources management should play an important role in the success of an
organization. HRM practices can also identify the processes and the proper staffing for
each of these activities, and in effect, the systems and approach in terms of the
organizational front line operations can be improved to decrease manpower hours,
improve quality, streamline processes, and elevate standards.
Developing not only HRM but also its employees is significant. To keep up with
competition, employees should be given with a number of reasons to stay with the
organization, and do their jobs exemplary well. Their continuous growth, the right
compensation and benefits, and work-life balance are just some of the things that
motivate employees to perform better, producing better results for the customers and
ultimately, the organization.
In today’s businesses, the right approach and management of the company’s employees
can greatly affect the company’s overall performance. A strategic approach in Human
Resource Management is vital especially in growing organizations. Starting from right
staffing to maintaining performing employees, HR management is a key in developing
not only the employees, but the whole organization itself.
Recommendation
For a company that is already recognized in the industry and is eyeing on expansion,
their status and reliability should be maintained. The leaders of the company can now
focus on the products itself and expansion, and let the HR Department handle the
development of the organization. Keeping an eye on the company’s long-term goals,
mission and vision, the development of performance standards is essential to identify
potential problems, non-performing employees and compliance to tasks and standards.

9. Minor employee and performance problems should be seen immediately to avoid any
future inconvenience and potential problems to the customers and thus become a
liability to the company (Michael, 2007).