HR and Organizational Performance

Running head: HR AND ORGANIZATIONAL PERFORMANCE 1
HR and Organizational performance
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HR AND ORGANISATIONAL PERFORMANCE 2
HR and Organizational performance
According to Dhanabhakyam and Kokilambal (2014), indicates that managing a
company’s human resources is one of the numerous means to progress and survive. Eniola and
Ektebang (2014) claim that unlike the other assets, human resources assist a company in gaining
a competitive edge as it is unique and hardness copy. It has been alleged that the HR supports
the organization performances as the HR practices assist to back the workers’ motivations, which
then inspires the personnel’s to do even better resulting to the company’s productivity. Contrary
to the above opinion, firms are diversifying the venture on novel technologies rather than relying
fully on the HRM routines. As the support of HR actions to the company’s output is not
measurable, researchers find it hard to have conclusive proofs linking the HRM and the
organization’s productivity. This essay aims to draw a theoretical concept to connect
organizations performances and HRM routine. Furthermore, the article discusses the empirical
evidence and how it links the HRM and output.
HR-Performance Link
Boxall and Purcell (2015) argue that human resource management involves handling
human resources with confidence, which influences the productivity of an organization.
Additionally, Osman, Ho, and Galang (2011) allege that HRM practices are deliberated as a
positive contribution to the Organizational performance. There a numerous study establishing
the link of the organization’s performance with human resource practices. Even though AMO
theory is a best and well-used framework, several approaches exist such as RBV and
contingency theory which links the organization’s performances and HRM routines.
Business approaches of the company are the most critical aspects that the HRM system
requires to reflect (Hassan, 2016); the latter mentions that all the HR-connected jobs need to

HR AND ORGANISATIONAL PERFORMANCE 3
supplement the firm’s business plan. Klychova, Zakirova, Zakirov, and Valieva (2015) argues
that the contingency theory is all about shaping the HRM structure to house the background to
realize the best outcomes for the company. It denotes that the company’s output is contingents
on both internal and external states of the HR structure of the specific company.
Resource-based view theory also connects the organization's performance and HRM.
Competitive edge can be achieved by using rare and precious assets that rivals cannot
imitate. According to this theory, a company’s workforce becomes a reliable resource, and the
HR purposes would exploit human resource powers by assisting the workers to grow their
behavior, which is an advantage of the company. Marin-Garcia & Tomas (2016) alleges that the
company would surpass the rivals if it has rare, precious, distinctive and indispensable assets.
The core of RBV theory shows that HR action takes a crucial part in creating a pool of human
resources which are rare, precious, distinctive and indispensable (Katou, and Budhwar, 2010).
AMO theory is another concept linking HRM and Organizational performance. The theory
proposes that productivity can be impacted by the effectiveness of the actions of the HRM in
influencing the worker’s motivations, capabilities, and choices to partake. According to Eniola
and Ektebang (2014), the AMO theory proposes that the performance take part in decision-
making actions. The concepts advocate that HR actions must initiate the knowledge, skills, and
abilities (KSA), inspire to arouse KSA of the workers and finally, offer prospects for the expert
development in the organizations.
The initials aspects of the AMO model focus on well-read knowledge, which assists
individuals from performing specific jobs (Kim, Pathak & Werner, 2015). HR professionals take
caution of the skill of workers by enticing, hiring and choosing the applicants with needed talents
after which they train and teach the staff and lastly assess and evaluate the worker’s output.

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According to Kim, Pathak & Werner (2015) “motivation” is the willingness and keenness of
individuals to engage in specific occupations. Here, the intrinsic stimulus is triggered by
elements such as desire, gratification, readiness, and happiness to learns and perform. Marin &
Tomas (2016) proposes that extrinsic “motivation” is generated by tangible or physical aspects
such as recognition, promotion, and job security.
The authors describe that HR offers a chance to its workers by having them engage in
the decision making routine. The researchers go ahead to state that the AMO theory can be
evaluated by considering at the monitory results such as market shares, returns; functional
outcomes such as productivity, customer fulfillment, and organization performances, and lastly
the HR results like the employee turnover, job satisfaction, and absenteeism. The study also
argues that by using the AMO framework, it assists individuals to open the “black box” in
having a clear image of the connections between the organization performances and HRM.
The HR professional can use the concept in the field of enticing, enlisting and picking;
and to drill, grow and hold the personnel primarily for the vast and medium organization. This
would also assist the organization progress the human resources to enjoy a competitive edge and
improved returns. However, small companies may not be capable of using the AMO concept due
to lack of monetary resources. Due to many mediating elements, exertions to ascertain the
connection between the performances and human resources structure of the firm stay uncertain.
Validating the link in one study is impossible.
This part of the paper will highlight some proof of the positive impact of performance
and HR practices. Broad studies have been done to establish the connection between
performance and HR. Sánchez, Marín & Morales (2015) shows that the high-performance work
structure results in considerable improvement of performances of the market and financial area