HRM Practices and Organizational Performance

This assignment examines the crucial role of Human Resource Management (HRM) in organizational success. It analyzes HRM practices at Toyota and Tata Motors, contrasting their approaches and highlighting how effective HRM contributes to a high-quality workforce and improved company performance. The report emphasizes the significance of work-life balance, employee retention strategies, and aligning HRM practices with overall business objectives.

Running head: HRM 0
HUMAN RESOURCE MANAGEMENT

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Table of Contents
Introduction: Company overview................................................................................................................2
Subsystem that needs to be developed:.....................................................................................................3
Comparison:................................................................................................................................................3
Effect of one subsystem on another:...........................................................................................................4
Practices to being the changes:...................................................................................................................5
Conclusion:..................................................................................................................................................6
References:..................................................................................................................................................7

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Introduction: Company overview
Human resource management is an essential system that functions in the organization in order to
manage the employees work there. It is required by the company that they need to conduct
effective HR practices at the workplace so that the employees can be retained in the organization.
Toyota Motors is one of the companies operating in the automobile industry. It is the firm that
aces several issues in the department of HR system. HR basically has 3 subsystems (Liker &
Hoseus, 2009).
 Training and development
 Hiring
 Performance assessment
First is performance assessment subsystem that deals with the evaluating the performance of the
employees to provide them with the relevant rewards and pay. Another subsystem is training
and development (Noe, Hollenbeck, Gerhart & Wright, 2007). It is the most important subsystem
that allows the employees to get trained regarding the processes they need to work in. The last
one is hiring which is another important part of HR system.
Various stakeholders of the company that gets affected by its functioning are:
 Employees: These are the basic asses of the company as employees are the one who
performs all the task and functions.
 Shareholders: Shareholders are the stakeholders who invest in the company and earn the
shares.
 Customers: Customers are the most important stakeholders because they are the one from
whom the company exists and performs.
The company like Toyota Motors has been selected to understand the issues in HR subsystem
and their impact on the other systems of the company. There was a time when Toyota was
known for its quality products (Yang, Yeh & Yang, 2012). When the recall of the Toyota
vehicle started, it was a shock to all. Everyone was thinking that what has happened that resulted

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in such a recall. Slowly and steadily, it has been identified that it is not only the bas quality of the
process but the critical HR issues that generated in the company was the reason of such recalls.
Subsystem that needs to be developed:
The major system that needs to be developed in Toyota is performance assessment. It has been
analysed that increasing amount of dollar and decree in export demand resulted in the
retrenchment of the company (Koplyay, Lloyd & Mako, 2014). The company started downsizing
and assessing the work of the employees with the average performance level. This has resulted in
firing of many employees. To maintain the balance, the company has increased the pressure of
performance benchmarks. This resulted in increased work pressure and decreasing quality of the
products manufactured. This is because work load of the people have increased and they were
not getting the pay according to that (Liker & Hoseus, 2009). It is required by the company to
bring some of the changes in the organizational processes and HR practices are that the
workforce can be retained in the organization. It has been analysed that quality workforces very
important for the organization as it not only affect the HR practices but affect the overall
functioning of the organization. All the workings of the organizations depend on its workforce
only. If the workforce of the company is not effective then it is impossible for the company to
achieve its organizational goals.
Comparison:
TATA motor is the company that operates in the similar industry as Toyota motors. Both the
companies have different HR practices. On one hand, where Toyota has been criticized for its
HR practices and especially the performance assessment and appraisal function, TATA motors
has been analysed to have best HR practices in the industry. This is because the company focuses
on maintaining the quality amongst the workforce and provide them appropriate pay so that they
can be retained (Tata.com, 2017). As far as the performance management and appraisal system
TATA motors is concerned, it focuses on half yearly appraisal system that allow the employees
to be appraised two times a year according to their performance. Self-assessment system for the
employees has also been introduced in the company. In this system the employees themselves set
their own goals and assess so as to rate their own performance. It has been analysed that this
practice develop the individuals and make them realize that where they stand and what is their

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position in the company. This helps them to realise the gap between their set goals and their
actual performance level so that the improvement can be done in their performance. The
company timely review the performance of the employees and try to develop the performance so
that more and more incentives can be earned by the employees.
Effect of one subsystem on another:
It has been analysed that all the subsystem of any of the department of the company is reacted to
each other. Changes in one of the department or the subsystem bring about some of the changes
in another related subsystem as well. As far as HR department of the company is considered, it
has majorly three subsystems. One of the subsystems of HR department is training and
development (Storey, 2007). If the company bring changes in this system them the quality of the
workforce increase thus affects the practice of target setting and performance appraisal and also
set the standards for hiring the employees. As per the above case, changes need to be
implemented in the system of performance assessment. If the performance needs to be measured
timely and the people realize their gaps then this develops requirement of training and
development department. According to the gaps identified, the training session needs to be
designed, this justifies that change in performance appraisal system affect the training and
development system as well (Bratton & Gold, 2012). improvements in the performance appraisal
techniques and system also attracts more and more people towards the company and makes it
easy for the HR hiring department to hire the employees.
Stakeholder satisfaction:
It has been analysed that changes in the performance appraisal method and system directly affect
the employees of the company. This brings positive changes and outcomes for them. Other
stakeholders like customers can get quality products if the efficient workers are employed in the
company (Boxall & Purcell, 2011). As far as shareholders are considered, it has been analysed
that effective performance management system helps in efficient workforce and thus
achievement of organizational gaols. One of the gaols of every organization is to earn profits and
thus shareholders of the company also get their part.

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Practices to being the changes:
In order to attract the quality workforce:
Recruiting and hiring effective and quality workforce, it is required by the company to attract the
candidates first. The effective HR policies of the company attract the candidates to work for that
company (Losey, Meisinger & Ulrich, 2007). HR planning is the basic practice that needs to be
conducted in the company so that proper system and practices can be planned to attract and
recruit the employees. HR planning results in identifying the requirement of the company in
terms of number of employees and the type of skills required in them (Dowling, 2008).
In order to develop the quality workforce:
Development of the workforce is directly related to the training and development practice of HR
department (Armstrong & Taylor, 2014). It has been analysed that provision of training to the
employees according to the gap analysed in their performance is very necessary in order to
develop the workforce and make the efficient in their work. Training and development
department works closely with the system of performance assessment. This is because
performance assessment system analysed the gap between the actual and the expected
performance level of the employees. The gap that has been identified act as the basis to frame the
training programs for the employees. It has been analysed that conduction of training programs
results in better quality workforce.
In order to improve the quality of workforce:
Quality of the workforce is the basic requirement of any of the company. It has been analysed
that various methods can be implemented in the company in order to maintain the quality of the
workforce and retain them. The first method that can be used is work life balance. This is the
basic need of any of the employee these days (Daley, 2012). This is because it is required by the
employees to maintain the balance between their personal as well as professional life. The
company needs to provide some of the flexibility to the employee such as flexi hours, work from
home, casual leaves etc.

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Conclusion:
As per the report, it has been concluded that HRM is the basic function of any of the
organization. It is very much required for the companies like Toyota to improve their HR
practices because fault in these practices affect the overall functioning of the company. As per
the case it has been analysed that bad HR practices of the company resulted in ineffective
performance of the company whereas TATA motors have better HR practices and thus having
quality workforce in their company.

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References:
Armstrong, M., & Taylor, S. (2014). Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Boxall, P., & Purcell, J. (2011). Strategy and human resource management. Palgrave Macmillan.
Bratton, J., & Gold, J. (2012). Human resource management: theory and practice. Palgrave
Macmillan.
Daley, D. M. (2012). Strategic human resources management. Public Personnel Management,
120-125.
Dowling, P. (2008). International human resource management: Managing people in a
multinational context. Cengage Learning.
Koplyay, T., Lloyd, D., & Mako, C. (2014). HR issues evolution along the market lifecycle and
the value chain: case of the hi-tech industry. Psychosociological Issues in Human
Resource Management, 2(1), 7-33.
Liker, J. K., & Hoseus, M. (2009). Human resource development in Toyota culture. International
Journal of Human Resources Development and Management, 10(1), 34-50.
Losey, M., Meisinger, S., & Ulrich, D. (2007). The future of human resource management: 64
thought leaders explore the critical HR issues of today and tomorrow. John Wiley &
Sons.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2007). Fundamentals of human
resource management. Boston, MA: McGraw-Hill/Irwin.
Storey, J. (2007). Human resource management: A critical text. Cengage Learning EMEA.
Tata.com. (2017). Tatacompanies. Employees are our capital and our job is to grow that’ via
Retrieved 1 September 2017, from http://www.tata.in/article/inside/Employees-are-our-
capital-and-our-job-is-to-grow-that

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Yang, C. C., Yeh, T. M., & Yang, K. J. (2012). The implementation of technical practices and
human factors of the Toyota production system in different industries. Human Factors
and Ergonomics in Manufacturing & Service Industries, 22(6), 541-555.