Impact of HRM on Organizational Success

This assignment delves into the significant influence of Human Resource Management (HRM) on an organization's overall success. It examines various HRM practices, such as recruitment, training & development, performance management, and compensation & benefits, analyzing their impact on employee attitudes, behaviors, and ultimately, organizational outcomes. The assignment also considers contemporary trends in HRM, such as green HRM and the importance of employee relations.

HUMAN RESOURCE
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Purpose and functions of HRM........................................................................................1
P2. Strengths and weaknesses of approaches of recruitment and selection...........................3
TASK 2............................................................................................................................................5
P3. Benefits of HRM practices...............................................................................................5
P4. Effectiveness of HRM practices in increasing profits and productivity..........................6
TASK 3............................................................................................................................................8
P5. Importance of employee relations to influence decision making.....................................8
P6. Key elements of employment legislation and their impact on HRM decision making....9
TASK 4..........................................................................................................................................10
P7. HRM practices in work related context..........................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Human resource management can be defined as a process of managing the employees of
the organisation. It is considered as the most important element in a firm because it helps
company to achieve its desired goals and objectives. It includes activities like recruitment,
selection, training and development of employees, improving the organisational structures and
many more. It is designed by the HR department of company. Firm which will be referred here is
ALDI that is a German brand having two global supermarket chains. It is spread around in 18
countries having approximately 10,000 stores (Alfes and et. al., 2013). They are having around
500 stores in the UK employing more than 20,000 employees there. In this report, purpose and
functions of HRM, strengths and weaknesses of different approaches of recruitment and
selection, benefits of HRM practices for employer and employee, effectiveness of different HRM
practices in increasing organisation's profit and productivity, importance of employee relations,
key elements of employee legislations and the application of HRM practices in work related
context will be explained.
TASK 1
P1. Purpose and functions of HRM
The main purpose of Human resource management is to increase the productivity of the
organisation and improving the efficiency of the employees. The various purposes of HRM are:-
 Employee relations: Maintaining relations in between the employees of the organisation
is not easy. It is the responsibility of HRM department of companies to maintain
employee relations so that no conflicts enter inside the company.
 Effective use of resources: HRM takes care that resources which are useful for the
organisation is not wasted because there is already scarcity of resources in society and if
the resources are not available then company will not be able to produce goods.
 Laws: HR department is responsible that all the employees and employer should follow
the policies and procedure assigned for company. All the laws must be properly followed
so that there is no legal issues raised in the companies.
 Culture: It is very important a good culture is maintained in the company so that
employees feel comfortable and satisfied with the work environment (Armstrong and
Taylor, 2014).
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There are various other purposes also that HRM performs like staffing. Internal
management, compensating the employees etc. the functions of HRM that are to be performed by
ALDI are:-
1. Planning: This is the first and very important function that is performed by HRM. In this,
all the activities that will be conducted in the organisation is included along with its scope
and objectives. While planning these activities, ALDI should take care that it should be
achievable.
2. Staffing: In this, company fills the vacant positions so that they can help in achieving
their objectives (Arumugam and Rouhollah, 2011). It is an important and crucial function
because employees who will be selected for a specific job must be skilled and should
have enough knowledge so that they can work efficiently.
3. Employee development: These types of programs should be regularly held in
organisations so that employees gain more knowledge and become more efficient to
perform work.
4. Employee maintenance: Various types of benefits should be given to employees so that
they would not leave the organisation. If employees are leaving organisation, there must
be some mistake that must be happening in companies.
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ALDI should also implement these functions in its organisation so that the employee who
are working feels satisfied and give better results.
(Source: - Human-resource-management, 2017)
P2. Strengths and weaknesses of approaches of recruitment and selection
There are various types of recruitment approaches that are used by the companies to
recruit people in the companies like internal recruitment, campus recruitment, employment
agencies , word of mouth etc. the strength and weaknesses of recruitment approaches are:-
Approaches Strengths Weaknesses
INTERNAL
RECRUITMENT
1. It helps in reducing the
cost of employing new
employees in the
organisation (Bloom
and Van Reenen, 2011).
2. Here, the correct view
of candidate's skills is
known to company so
there is no need to
6. The applicants who did
not get through feels bad
and dissatisfied,
7. It is generally for limited
no. of candidates so
everyone cannot grab
this opportunity.
8. It stops entry of new
talent in the organisation
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Illustration 1: Human Resource Management

further investigate
3. The employee becomes
more committed in their
work because of this
promotion,
4. Less training is required
by these employees.
5. Through this,
employee's performance
is also upgraded because
of the satisfaction they
have got after promotion
reflects in their work.
which is not good
because every company
needs new ideas.
9. Sometimes, the post
which is vacant is not
suitable for the
employees currently
working so internal
recruitment is not
possible (Boxall and
Purcell, 2011).
10. Nepotism and
favouritism is very
common in this method
of recruitment which
does partiality with
other employees.
EXTERNAL
RECRUITMENT
 In this, new blood enters
the company which is
very good because they
come with lots of new
ideas can be useful for
organisation's growth.
 This method is very
simple and adoptable
without any issues.
 In this type of
recruitment, large no. of
candidates can apply
which gives the
companies more options
 It demotivate the
internal employees
because they feel that
they did not get the
opportunity to grab this
job.
 It is a costly process for
organisation because
lots of activities are
conducted in this
process of recruitment.
 The company doesn't
know anything about the
employees which is a
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to choose the best
among them (Buller and
McEvoy, 2012).
 Here, generally the job
profile and type is
prescribed therefore the
candidates select and sit
in interviews as per the
profiler itself.
 It helps in avoiding
ripple effect in the
employees which means
that the employees who
are working currently
will not get promoted if
there is vacancy (Choi,
2011).
 It also helps in
expanding knowledge
base of the company
which acts as a positive
factor.
risk which the company
takes while recruiting
the person.
 It is a very long process
which takes much time
of the employer for
selecting, interviewing
and finalising the
candidate for the job.
 Candidates who are
selected sometimes
takes time in adjusting
inside the company.
TASK 2
P3 Benefits of HRM practices
The benefits of HRM practices for employer and employee are different. The various
practices of HRM are like job design, labour employee relation, training and development of
employees, performance management, incentive benefits and many more (Benefits of HRM
Practices, 2017). The benefit provided to Benefits for employer of ALDI are:-
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 Introduction of new plans: Here, recruiting the employees are very much helpful for
employers of ALDI because they have an opportunity to recruit more employees very
easily. Employee retention: It is also improved when the employer himself pays attention to all
the employee related activities in the company. Recruitment Process: The process of recruitment and selection of employees is conducted
by the employer only to recruit best candidates for the job. HRM gives this opportunity to
the employer (Daley, 2012). Employee Participation: this is very beneficial for the employer because if employees
will participate in different activities then they will feel more connected with the
organisation and feel more motivated. Incentive and reward system: - If ALDI will give rewards to its employees on their
performance then the employee will feel motivated and will not think of leaving the
organisation.
 Job analysis: - This HRM practice is a boon for the employers because here the get the
opportunity to select the employees as per their choice and which suits the best.
There are various benefits for employees of ALDI as well like:-1. Improving Skills: The training which is given to employees increases their skills and
knowledge and provides benefits to them in many ways. Employees of ALDI will feel
satisfied if this practice will be implemented in the organisation (Guest, 2011).2. Career Growth: Many companies are providing opportunities to their employees to grow
in their career while doing jobs. They are offering post-graduation courses which will
help employees to complete their studies while doing job as well. ALDI should also
introduce such policies in its practices.3. Increase Confidence: When employees participate in the activities of the company, it
gives them a confidence to do something different and motivates them simultaneousness
to become like others,
4. Benefit Plans: Plans which are made for the benefit of employees like compensations,
rewards, etc. boots self confidence in employees. All these plans are made while thinking
about the employees only.
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ALDI should try to implement all such plans in the company so that both, the employee
and the employer if happy inside the company. If the employee is happy then company will
progress very fast.
P4. Effectiveness of HRM practices in increasing profits and productivity
To increase the profits and productivity if the business, HR managers of the company
plays a very important role. They are the ones who guides employees about work and provides
them training accordingly. There are various practices that are adopted by them to raise the
profits of the company. The HR manager of ALDI should also use few techniques oh HRM
which will help them to raise their profits. The practices that will help ALDI in increasing the
productivity are like:-
 Providing training and development: Through this, HR manager gives training to the
employees and help them in learning new skills and technologies which will be useful in
performing. Training and developments are two different things ion an organisation.
Training is focussed on skill development of employees but development focuses on
overall growth of employees. But both play an important role in increasing the
productivity of the employees (Hendry, 2012).
 Reward management: in this technique, the company gives rewards to its employers in
various forms and in various occasions so that the employee feels motivated and perform
better in the organisation. Through this technique, the employer can help the employee in
monetary form also, if the employee is in need of the same. This will bring a sense of
respect about the organisation in the eyes of the employee and he will become a loyal
employee of the company. Reward management brings loyalty in employees.
 Job Design: This HRM practice helps the company in making employees learn different
types of work which is done in the company. This makes employees efficient therefore in
case of unavailability of the senior management staff, middle level managers can handle
the situation and save the company from losses. In this way the productivity of employee
is increased and company is also able to make huge profits (Jiang and et. al., 2012).
ALDI should also implement these HRM practices into their organisation bit for this the
employee and the employer both needs to cooperate. There are few small step also that the
company should take to bring effectiveness in the organisation like:-
 To produce goods by using less resources,
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 To help the company in generating revenue by introducing new ways to do the business.
 Through cost cutting, through which the company will try to make its employees use
more and more technology.
(Source: - HRM Practices, 2017)
TASK 3
P5 Importance of employee relations to influence decision making
Employee is considered as most important assets of the company. Employee relations can
be defined as a relation between employee and the employers of the company. If the company
wants to become successful in market then maintaining these relations in company is very
important (Importance of employee relations in HRM decision making, 2017). There should not
be any conflict present because it can spoil work environment of the company. The importance
of employee relations in influencing HRM decision making are:-
 Productivity: If employee relations in organisation are strong then working environment
inside organisation becomes pleasant. Companies that invest in employee relation
programs know that it helps in increasing the productivity. This will help in taking better
decisions for the organisation. ALDI’ s increased productivity will motivate the managers
to take decisions as per benefits of organisation (Kehoe and Wright, 2013).
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Illustration 2: HRM Practices

 Conflict Reduction: - If the employee relations are not going well in organisation then
there are chances that conflicts may occur. Therefore, its maintenance is very important
to reduce the conflicts because then only it will help in increasing success of company.
These activities further influence the decisions taken by HR department.
 Group Discussions: - There will be many situations when employees will have to come
together to perform various types of work and take decisions for the company. In this, if
the employees will not have good relations among them then it will create hurdles in
discussion and the work environment will also spoil. Therefore for taking decisions for
the benefit of the company collectively, employee relations are very important (Wright,
and McMahan, 2011).
While doing decision-making for ALDI, the HR manager should try to think from
employee’s point of view because then only they will be make plans and policies as per benefits
of employees and organisation. Employee relations doesn't only mean relationship between the
employees, it also means relationship between employees and the employer. The employees of
ALDI should try to maintain good relations among them because this can affect the sales of the
company as the customers will be effected by the kind of behaviour staff does. If the behaviour is
good then it will help ALDI in increasing its sales and if not then the customers may even stop
coming to the shop. Therefore employee relations play a very important role in employee
decision-making.
P6 Key elements of employment legislation and their impact on HRM decision making
In order to protect the rights of organisation, government had provided certain laws and
regulations that are to be included by all companies while determining the policies of their
company (Renwick, Redman and Maguire, 2013). There are certain acts that are made by
government which impact the activities conducted under HRM, they are:-
 Equal wage act :- This act was introduced to decrease discrimination of wage which is
done in the organisation on the basis of Gender, caste, region, post etc. This act said that
each and every worker has the right to get equal pay like their co-workers working on
same profile. ALDI has to give their staff equal payment who are working in their stores
otherwise the employees can complain against the company.
 Minimum payment Act:- Under this act, UK's government has determined the
minimum wage that employee will get as per their profile in the company and if company
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is not giving the same, then the employees can claim it against the company. ALDI has to
implement this strategy into their stores because it is related to employees and they are an
important resource for the company (Kehoe and Wright, 2013).
 Employee right act:- According to this act, it includes few rights for worker to reduce
the exploitation and unemployment of youth from the country. Here, every worker have
some rights including job and health security, life insurance etc. The employees should
be given freedom so that they are able to use their rights when they need to.
 Employee Equality act:- To avoid inequality on the basis of caste, religion, culture,
gender etc., workers can not be differentiated in the workplace. it is their right to be
treated equal as of their other colleagues. HR manager of ALDI should implement this
act to avoid inequality from the organisation.
 Disability discrimination act:- This act was facilitated for proper treatments of disables
and needy people. This acts was formed so that no one is able to harass or bully the
disables in the organisation.
TASK 4
P7 HRM practices in work related context
HRM is very important in big size organisations like ALDI because it is impossible for
them to manage so many employees without any proper management. HRM conduct various
functions like they inspect and examine all the activities that are being conducted in the
organisation. It helps organisation in maintaining a positive image in the society and also
satisfies the employees which indirectly affects the customers. HR manager of ALDI should
inculcate some good HRM practices that are effective for the organisation and increases its
efficiency (Jiang and et.al., 2012). Some of them are:-
 Recruitment and Selection Process:- HRM organise these activities by using effective
approach of hiring that assists them in attaining the competitive objectives. ADLI's HR
manager helps the employers and leaders in choosing best employee who is skilled also
and can help in increasing revenues and trade of the organisation.
 Acquiring of Experts:- ALDI' s HR builds a creative workplace which contains so many
selected people who are selected through recruitment and section process. Through this
procedure they select most qualified employee for the jobs profile of enterprise so they
can helps in accomplishing the organisational goal and objectives.
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 Resolve Conflicts:- It is the responsibility of HR manager of ALDI that there are no
conflicts inside the organisation and if there are any then it should be sorted out as soon
as possible and make sure that it doesn't disturb the functioning of company.
 Grooming and Training:- For introducing the employee new technologies and methods
which is trending in the market, ALDI organise training and development programmes
for their worker which build a fresh environment of work (Hendry, 2012).
 Flexible Workplace:- If the environment which is provided to the employee is good
then they will be able to perform well in the organisation therefore it is the duty of HR
manager of ALDI to provide a friendly environment to the employees so that they feel
comfortable.
CONCLUSION
It can be concluded from the above report that human resource management is important
for organisation because it conducts all the activities that are necessary for survival of
organisation like recruiting, selecting. Training and development performance appraisal etc. it is
the HR manager who organises all these activities inside the organisation and are responsible for
recruiting the best employees. It is their responsibility to know that method which they are
selecting for recruitment is appropriate or not. By conducting these HR activities, the employer
and employee is always benefited because if all functions are performed nicely then they
employees will get good environment to work and eventually they will give good results which
will benefit the employer. Also, in order to remove the conflicts which are related to policies of
organisation, collective bargaining process and negotiation strategy is used by the organisation
which will help in increasing the profit and productivity of the organisation. To maintain a good
working environment, it is very important to analyse that whether employees are having good
relations amongst them and with the employer or not because employee relations have an impact
on HRM decision making and good relations are important. Therefore, HRM is considered as an
integral part of all organisation.
REFERENCES
Books and Journals
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Alfes, K. and et.al., 2013. The link between perceived human resource management practices,
engagement and employee behaviour: a moderated mediation model. The international
journal of human resource management. 24(2). pp.330-351.
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Arumugam, V. C. and Rouhollah, M., 2011. The impact of human resource management
practices on financial performance of Malaysian industries. Australian Journal of Basic
and Applied Sciences. 5(10). pp.951-955.
Bloom, N. and Van Reenen, J., 2011. Human resource management and productivity. Handbook
of labor economics. 4. pp.1697-1767.
Boxall, P. and Purcell, J., 2011. Strategy and human resource management. Palgrave Macmillan.
Buller, P. F. and McEvoy, G. M., 2012. Strategy, human resource management and performance:
Sharpening line of sight. Human resource management review. 22(1). pp.43-56.
Choi, M., 2011. Employees' attitudes toward organizational change: A literature review. Human
Resource Management. 50(4). pp.479-500.
Daley, D. M., 2012. Strategic human resources management. Public Personnel Management,
pp.120-125.
Guest, D. E., 2011. Human resource management and performance: still searching for some
answers. Human resource management journal. 21(1). pp.3-13.
Hendry, C., 2012. Human resource management. Routledge.
Jiang, K. and et.al., 2012. How does human resource management influence organizational
outcomes? A meta-analytic investigation of mediating mechanisms. Academy of
management Journal. 55(6). pp.1264-1294.
Kehoe, R. R. and Wright, P. M., 2013. The impact of high-performance human resource
practices on employees’ attitudes and behaviors. Journal of management. 39(2). pp.366-
391.
Lengnick-Hall, C. A., Beck, T. E. and Lengnick-Hall, M. L., 2011. Developing a capacity for
organizational resilience through strategic human resource management. Human
Resource Management Review. 21(3). pp.243-255.
Renwick, D. W., Redman, T. and Maguire, S., 2013. Green human resource management: A
review and research agenda. International Journal of Management Reviews. 15(1).
pp.1-14.
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Wright, P. M. and McMahan, G. C., 2011. Exploring human capital: putting ‘human’back into
strategic human resource management. Human Resource Management Journal. 21(2).
pp.93-104.
Online
Importance of employee relations in HRM decision making. 2017. [Online].Available through:
<http://www.business2community.com/strategy/strong-employeeemployer-relationship-
important-achieve-0876781#uiOcp2dFrGOaPAxV.97>. [Accessed on 28th September
2017].
Benefits of HRM Practices. 2017. [Online]. Available through:
<http://hrdailyadvisor.blr.com/2013/01/27/top-10-best-practices-in-hr-management-for-
2013/>. [Accessed on 28th September 2017].
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