Impact of HRM in Creation of Sustainable Organizational Performance and Business Success

This article discusses the impact of HRM on sustainable organizational performance and business success. It covers the role of HRM in recruitment and retention of talented employees, the impact of internal and external factors on HRM decision-making, and the application of HRM in a work-related context. The article also includes information on the nature and scope of HRM, typical roles and responsibilities of HR, specific skills of HR, strategic HRM, and types of pay and reward systems.

HUMAN RESOURCE
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Impact of HRM in creation of sustainable organizational performance and business success-. .3
Contribution of HRM in recruitment and retaining the talented and skilled employees- ...........6
External and internal factors can influence HRM decision-making in relation to organizational
development...............................................................................................................................12
Applying HRM in work related context-...................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Human resource management is the strategic approach which provides knowledge, principles to
achieve the competitive advantage of the business. HRM has a very wide scope in the areas like
recruitment, performance, talent acquisition, training and development etc. Toyota is MNC and
the manufacturer of the cars. Toyota became as the first largest car manufacturer in the year
2008. This assignment will discuss the impact of the role of HRM in achieving the sustainable
growth of organization. Along with this it will also discuss the role of HRM in recruiting and
retaining the talented and skilled employees in the organization as well as the impact of external
and internal factors on HRM in decision-making. Later it will give detail discussion about how
HRM helps in improving the sustainable organizational performance.
MAIN BODY
Impact of HRM in creation of sustainable organizational performance and business success-
Nature and scope of HRM:
Definition:Human Resource management is the process of managing the people in an effective
and efficient manner of an organization. It involves training of the employees, recruiting skilled
and talented people, retaining the talented people in the organization.
The specialist area of Human resource management is to recruiting, screening, taking interview
of newly hired employees in the organization. HRM of Toyota company's specialist area will
help them to hire the skilled and talented people in the organization.
The generic competencies the HR must have is-
Design of people strategies- People strategy is used to determine that how much HR attracts ,
retains and grow the employees for accomplishment of goals and objectives of the organization.
HR of Toyota having this competence will help them to design the proper people strategy so that
the goals and objectives can be achieved(Lopez-Cabrales and Valle-Cabrera, 2020).
Employee engagement- It is the concept of HR which states the dedication towards the job by
the employees because engaged employees are more conscious about their work and contributing
for the company. HR of Toyota must ensure this so that the employees will work effectively in

the organization and the productivity will increase as they will contribute more for the
organization.
Encouraging Organizational change- It includes employment training and development,
workplace communication, connecting the talent management programs etc. HR of Toyota will
help the organization in effectively changing in the organization by training and development of
the employees etc.
Typical roles and responsibilities of HR-
HR advisor- Dealing with HR queries in overall business, updating the job descriptions,
advising the managers on recruitment process, compile the data as well as point of contact in
hiring and selection process.
HR officer- Planning and managing the talent acquisition, organizing counselling for policies,
creating and managing the on boarding plans of the organization.
People data analysts- HR analysts will collect data, compile it as well as analysing it, metrics
and statistics and applying this for recommendation of hiring process.
Specific Skills of HR-
Effective communication- As the main specialist area of the HR is to hire the skilled employees
for the organization for this they have to meet every day the new people, for taking interview
they have to interact with the new people so it very important to have this skill in the good HR.
Toyota's HR have good communication skills which will help them in effective dealing with the
new people. It will also help them in solving the conflicts in the organization.
Tenacity and proactive- Tenacity is the term which means having determination to achieve the
goals and proactive means always ready for solving and facing the circumstances instead of
giving excuses. Toyota's HR having this skill help them to face any situation in the business and
will achieve the goals by working hard.
Adaptability skills- The business environment is very dynamic in nature. So to adapt the
changes in the organization it is very important to survive and retain the employees of the
organization. HR of Toyota company should ensure about the environmental changes which are
in need to be changed in the organization for retaining the employees in the organization. As HR
actively participate in the decision-making.
Toyota's HR follow the guidelines for proper working of organization such as knowing the laws,
giving priority to professional development, being an ethical HR leader.

Strategic HRM-
Softy and Hard models of HRM-
Hard HRM focusses mostly for workforce needs to be recruited if needed and Soft HRM
considers employees as the important part of the organization. The main features of hard models
are regular changes in the number of employees, little transparency in the business, lower wages.
The main features of Soft models are it focusses more on the long term planning of the
workforce, empowerment of the employees, democratic type of leadership.
Organizational Performance-
Impact of HRM on organizational performance-
Recruitment and selection- The effective way of recruitment and selection helps the
organization to know the suitable resources of recruitment for the organization. Hiring the skilled
and talented candidate, which are very keen to learn new things, should be hired. Toyota's good
and effective HRM department will help them to hire the best candidates for the organization.
Training and development- It is used to improve and update the skills of the existing
employees for the growth of the organization which is initiated for future success of the business.
This will lead to think for long term development for the human resources. HRM of the Toyota
company must ensure the effective training and development(Siddiqui and Sahar, 2019) of the
employees for the future growth of the business as well as solve the long term issues of the
organization.
Performance management system is the process practised by the human resource management
for the purpose to increase effectiveness of the organization. The purpose of this management
system is to increase the profit margin of the company, ensures the organization goals relate to
the individual goals. This management system will increase the efficiency of the Toyota
organization.
There are three types of methods to measure the individual employee performance-
Graphic Rating scales- This method is used to measure the performance of the employee. These
scales consist of ratings from 1 to 5. It is completed very quickly so it is very helpful for Toyota
organization as they have large number of departments.
Management by Objectives- It is generally used to measure the employee performance at the
managerial level. In this, the goals of employees are considered on the quarterly basis and
discuss the change if any.

Ranking of employees- This method is not considered as the good because in this method the
achievement between its peers is also compared and employees past performance is also
considered.
There are several methods to measure the organizational performance-
Financial Measures- This method is related to the organizational performance to its
effectiveness and profits. These financial measures are then showed in the annual report of the
organization for the shareholders.
Customer Measures- This method of measure is related to the customer attraction towards the
organization.
Types of pay and reward systems-
There are different types of pay and reward systems. The compensation and reward systems of
the Toyota organization is they provide the reward to the whole team which has improved or
performed better and not to the individual and it does not separate the top management with the
fields by suggestion boxes.
Contribution of HRM in recruitment and retaining the talented and skilled employees-
Resourcing the organization-
HRM has contribution in workplace planning and data analytics. Workforce planning is
perpetual process done to determine and understanding the needs and workforce of the
organization. Toyota HRM takes the decisions by understanding the needs of the organization
which help them to achieve the goals and objectives. Data Analytics is the process of recording
all the data of the employees of the employees who are not working as well. Toyota's HRM
keeps the data of the employees recorded so that it can be used whenever required.
HR organizes audits in the organization to evaluate the specific areas practice. This helps the
audit team in the easy understanding of the critical areas of the HR practices. HRM of Toyota
also practice this method of auditing for the evaluation of the HR practices. Talent gap analysis
or the skill gap analysis the tool used to evaluate current and projected training and requirements
of workforce in the organization. This analysis is used by HR of Toyota organization to
understand the needs and wants of the employees and the organization offers.
The business planning process involves the role of the HR in which they have to ensure that plan
has the main focus on successful achievement of the goals and objectives. The HRM function of

directing is to encourage the employees of the organization so that they work effectively and
efficiently in the organization.
Workforce trends is how easily an organization adapts the dynamic changes over the period. It
includes flexible working arrangements, remote working, virtual meetings and measures for
creating safe place in the organization. These are all the roles and responsibilities of the HR.
Toyota has the good HR management which has means they easily adapts the changes in the
organization.
Type of labour-
There are two types of labour market as internal and external. Internal market is jobs and
employees in the company whereas external market jobs and employees outside the company.
Skilled shortages affects the recruitment as there is much need of the skilled employees in the
organization and there is lack of skilled employees leads to difficulty in filling the vacancies in
the organization. Lack of skilled people, data analytics skills are all these factors which affects
the recruitment process of the organization(Ahmad Azmy 2018).
Impact of relevant legislation-
Data protection act- This impacts the businesses as data protection act is very important to
follow by the organizations as it provides all the rules to how to use the personal data of the
organization. As not following the data protection the managers, directors are liable for not
following the rules as they get notice by the government.
Recruitment and selection-
Different models of recruitment and selection-
1. On Demand Recruitment- This recruitment is done only for the specific time that is for
some project.
2. Contingency hiring- This recruitment is widely used and this is based on some terms and
conditions with the candidates of the company.
3. Retained search- This recruitment is based on the contract relationship with the employee
for some search assignments and in this the employees have to pay money upfront fee.
Toyota uses the most effective model of recruitment that is contingency hiring in which they
consider both market that is internal as well as the external.
Sources of recruitment-
There are two types of recruitment sources such as

Internal sources- This sources includes:
1. Present employees- Promotions and transferring the present employees is the good source
of recruitment.
2. Employee referrals- In this, the existing employees refers the employees offer to their
family members, relatives, friends etc.
3. Previous applicants- This is the process of hiring the applicants from the application
which the organization already holds.
External sources includes:
1. Advertisement- This method of the recruitment is used for jobs such as clerical, technical
as well as managerial as its reach is very high to the people.
2. Campus recruitment- This is the process in which companies visits the educational
institutes for recruiting the candidates.
3. Deputation- This is the process in which the employee is sent to the other organization
for some specific time period like two or three years.
Achieving cultural diversity in organization-
1. Effective policy- The organization should focus on making the effective policy to
maintain good diverse culture in the organization.
2. Introducing diversity targets- After understanding the culture of the people, the targets
should be set keeping in mind the diverse culture.
3. Provide diversity training- Providing the diversity training tot the employees will help to
maintain the cultural diversity in Toyota organization.
Stages of recruitment process-
There are 5 stages in recruitment process-
1. Recruitment planning- The first step is to plan the process by evaluating the needs of
workforce in the organization.
2. Strategy Development- After knowing the needs and qualifications of the candidates,
next is to develop the strategy to recruit the candidates for the organization.
3. Candidate search- The next process is to attract the job seekers in the organization by the
internal and external recruitment sources.
4. Screening- The candidates are now screened by using the techniques like screening tests,
selection interviews etc.

5. Evaluation and monitoring- Then the employer has to give th answers to the selection
process, whether the selection process is effective etc. this comes under the evaluation
and monitoring process.
This is the same process used by the Toyota organization for selection and recruitment of the
employees.
Different types of selection method are-
Competencies based selection- It is the behavioural bases process of interview which allows the
interviewer to gain the specific information about job related behaviours based on the
experiences of the candidates.
Resume sorting process- In this process, the recruiter chooses the employees from the top
candidates from all the resumes. This shows that the company chooses only the top candidates.
Toyota company uses competence based method to select the best candidate for the organization.
The laws and regulations which can be considered while recruitment process are
Age Discrimination employment Act, Equal pay Act, Illinois Human Right Act, Immigration
Reform and Control Act.
Retention-
Factors affecting the retention of employees-
1. Organizational culture- Culture affects such as productivity, performance, self-confidence
as well as retention. Organizational culture cab increase or decrease the employee
retention rates as it affects the commitment levels of employees of the organization.
2. Appropriate selection of the employees- The organization selects the new candidates
which affects the job security of the existing employees, and they may leave the
organization.
Induction and on- boarding-
Induction and on boarding is the process that must conducted when an new employee pins the
organization. The socialization process encourages the employees to adopt the environment
change easily. On Boarding and induction provides the effective value of socialization. Toyota's
organization focuses on this process for effective work in the organization.
Role of line managers-

A line manager is mainly responsible for managing the employees in achievement of the
organizational goals and objectives. They are main mediators between the management and the
staff of the organization(Guest, 2021).
Managing attrition can be done such as-
1. Work environment – This is the place where the employees full fill the job
responsibilities. When the environment is pleasant professionals will feel excited to work
in the organization.
2. Appointing the right leadership in the organization
3. Giving employees the creative freedom to work in the organization.
4. Prioritizing the professional growth.
Restructuring and redeployment
Re-employment is the most important process of restructuring process. Redeployment is the
process of moving from one job role to another.
Redundancy of employment is the process where the employer reduces the workforce when the
specific jobs are not in need.
Handling employee discipline and misconduct cases-
1. Acting quickly over the misconduct
2. Investigation of the misconduct occurred
3. Evaluating the behaviour of the employees
4. Deciding on the consequences happened
External and internal factors can influence HRM decision-making in relation to organizational
development
External and internal factors:
External factors refers to which factors affects on business activities or culture from the
external forces like environmental issues, variation in government rules regulations, changes in
cultural activities, tax policies etc.
Internal factors is mainly refers to factors which affects on internal business activities like human
activities, employee performance, financial activities, staffing, corporate culture etc. (Pate and
et.al., 2018).
External factors affects on organization HRM decision-making

Political Toyota's industry provide their services at worldwide level. So its HRM
duty to recruit new employee but throughout the tax rates, government
policies affects on employee involvement process. Because different
country has their different economy and rules of business culture so affects
on employee involvement process.
Economic It mainly affects on talent involvement into business because throughout
the inflation rate different country audience has different requirement so
Toyota industry HRM when decide to set their business on new country
they do have duty involve different form of salary distribution.
Social HRM decision process mainly refers from the social culture activities of
different industry because when Toyota industry develop new set-up on
new are they do have duty to analyse their emotional values of people
when they hire new employee for business. Because it affects on
reputation of business when they ask question related to religion and other
also communication, language barriers is the biggest issue for HRM
practices.
Technology It includes effective recruiting process, different technology
understanding, new management process and many more terms which
influences activities of HRM practices (Cooke, Xiao and Xiao, 2020).
HRM has major responsibility to involve new employee for business
effectiveness.
Environment Employee demand and supply, motivational factors and many more
includes into environmental factors in context of HR practices.
Legal Different place has their laws in term of recruitment process. Thus, human
resource management has duty to develop higher consideration that they
follow legislation which develop by government in terms of recruitment
process and management of business sustainability.
Impact of external factors on organizational performance, including the skills gaps and
labour force trends

Organization performance influences from the various aspects. Human resource manger
when develop concern for new employee involvement for organization effectiveness they do
have duty to analyse labour trend which means individual when decide to participate into
business they only do work for their needs and wants satisfaction, so its important that company
provide specific amount on the basis of country or area expenses, also includes with extra
benefits development (Stankevičiūtė and Savanevičienė, 2018). Individual has multiple options
in job so HR has duty to engage some extra practices like when they provide application into
market for that they recruit new members. Its important term that they engage new individual
they specified some essential aspects like salary, extra benefits, requires skills for work etc. So
its useful for skill gapes satisfaction and labour force trends management.
Impact of globalization on HR policies for equality, diversity and raising cultural awareness
and sensitivity within the workplace
Expansion of business in new area its important that HR management develop higher
focuses towards with the diverse policy because it makes better recruitment and it attracts people
attraction towards with business with positive manner. Also, implement equality in recruitment
and selection of employee because this term provides change to individual ad useful for
individual who really interested in performing work for Toyota company.
Impact of legal and regulatory frameworks
Anti discrimination law: This law includes that government prohibited on employee
involvement in business on the basis or their age, gender, cast, religion, background
identification. Human resource management when recruit employee in different place they do
have duty to variate their decisions as per the view of country regulations in context of employee
engagement (Lopez-Cabrales and Valle-Cabrera, 2020).
Safety and security law: safety and security law application by HRM they do have authority
when they engage new employee provide then safety and secure environment in interview
process, provide them comfort environment and many more. Without consideration of safety and
security influence overall business growth and involvement of new employees.

Impact and influence of leadership styles on organizational transformation, culture and
employee experience
Leadership influences the organization's culture heavily. Leader encourages the organizational
values by helping the organization grow and development. Leaders when actively respond to the
organization changes then employees feel motivated and work effectively.
learning and development:
Learning and development is the term which explains everything the organizations do to
encourage the employees. Impact of digital learning has much on the learning as it provides the
content learning more complete and efficiently.
The relationship between organizational culture and strategic planning and development-
Organizational structure and strategic planning are much related to each other. Strategical
planning is bout ingenuity and intent while organizational culture is the desire and engagement
of the employee in the organization.
Impact of motivation upon performance-
There is positive impact of motivation on performance as it helps them to achievement of
personal goals, greater satisfaction, heightened performance and willingness to succeed.
Organizational development-
Changing environment is the major element of the organizational development. As this will help
the organization in finding new business ideas. It is very important to provide the flexible
workplace to the employees as well as the new skills and competencies of the employees as it
will help in achievement of goals and objectives of the organization. Toyota company is adapting
the changing environment so it always the leading company.
Characteristics of agile organizations-
1. Inverted management pyramid
2. High level of liberty and freedom to complete the task
3. Regular learning, creating knowledge
4. The high quality of life
Applying HRM in work related context-
Job descriptions and person specification-
HR is highly responsible for preparing different types of job description as well as designing the
person specification for the job chosen. He is also responsible for evaluating the workforce

requirements in the organization. Competence based job description generally focuses on more
of the knowledge and the ability. Task based analysis mainly focus on the duties of the job.
According to the job role, HR selects the appropriate candidate for the organization, They design
the job specification for the candidates in which all the detailed information is given about the
job role. Toyota company also uses this practice when they have vacancies.
Recruitment and selection in practice-
Selection is the best practice of the HR as they are only responsible for hiring the skilled
employees. After the evaluation of job requirements in the organization they design the job
specification and advertise it to reach it to the people. After receiving resumes they shortlist them
and do further process for these applications. Further this they call the candidates for the
interview and screening for selecting the best candidate for the specifies role in the organization.
Toyota's selects the best skilled employees because of which they are very successful.
Performance management-
Managing the performance of the organization is very important to achieve the goals and
objectives of the organization. HR of the company is responsible for this which can be done by
providing training and development to the employees. Proper training and development will help
to enhance the productivity of the employees which will directly contribute to the high level of
performance. Providing them the rewards will be the best way to increase the level of
performance of the employee. Financial rewards are the financial incentives earned by the
employee by performing well while non financial rewards can e such as extra leave, flexible
working, providing time for volunteer work etc. This overall contributes for the successful
organization. Toyota company has good performance management which helps in achievement
of goals and objectives.
Employee relationship-
It is the connectivity between the employers and its employees. Phycological contract is also the
relationship between its employers and employees and mutual understanding of the inputs and
outcomes. Employee voice is very important to have their engagement in the organization. This
helps them to raise their voice for any problem in the organization. Managing the performance of
means to provide them utmost training and knowledge, providing safe workplace to achieve the
organizational goals. Job satisfaction among the employees by providing them rewards for

contributing best for the company will be maintained. Toyota has the best employee relationship
which helps them to achieve the goals.
CONCLUSION
The above assignment discussed the impacts of HRM in creating sustainable environment in the
organization. IT has also discussed he role of HRM in recruiting and retaining the skills and
talented employees in the organization as well as the internal and external factors influencing the
HRM decisions. Further, it has discussed the HRM practices in the work related context of the
company.

REFERENCES
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Management. 32(1). pp.183-224.
Guest, D.E., 2021. The role of line managers in the HRM process. In Handbook on HR
process research. Edward Elgar Publishing.
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relationships as drivers of the triple bottom line. Human resource management
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Patel, P., and et.al., 2018. The transfer of HRM practices from emerging Indian it mnes to their
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Younas, W., Farooq, M., Khalil-Ur-Rehman, F. and Zreen, A., 2018. The impact of
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