HR Practices and Business Unit Performance: A Detailed Report

This report examines the significant relationship between HR practices and organizational performance, drawing on the provided article and related research. The analysis highlights how effective HR management, including practices that foster employee commitment and high-performance ...Read More

Relationship Between Organisational
Performance and effective HR
management and development

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Contents
Summarisation of the main finding............................................................................................1
Persuasiveness of the findings...................................................................................................1
Ways in which HPW and investment in human capital impacts organisational practice..........2
References..................................................................................................................................2

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Summarisation of the main finding
From the literature review conducted in the article there have been many examples given that
illustrates about the way in which HR practices have an influence on large impact on
performance of the workers and hence has a critical influence on the performance of the firm.
In the research that is illustrated in the article shows the way in which relationship among
commitment of people towards organisation and HR practices. This research also illustrates
about the way in which HR has on the financial performances (Wright, Gardner and
Moynihan, 2003). This research also illustrated that utilising workers as a source of the HR
practice measures confirms that the measure illustrates the actual practices other than
business’s espoused policies. Measures of practices along with the attitude of the workers
were strong predictor of measures related to operational performance which is utilised inside
the firm for tracking the performance of the business units. It was also found through the
research that employee’s commitment towards their work along with the HR practices have a
significant impact on the profitability and the operating expenses.
At the corporate level and establishment levels, the relationship among profitability and HR
practices has been demonstrated especially at the business unit’s level (Crook, et al. 2011).
From the responses that were collected from different employees it was found that when the
workers were managed through the help of progressive HR practices, they become highly
dedicated to their firm. Such higher commitments can lead them to showcase suitable role
behaviour hence lower worker’s compensation costs as well as higher productivity and
quality as well as at the same time not engaging in the dysfunctional behaviour which would
have resulted in the shrinkage. Such operational performance outcomes result in higher
profitability along with lower operating expenses. It was also found through the results that
workers are less vulnerable to get engaged in counter-productive behaviour and hence are
highly likely to showcase both discretionary behaviour as well as in-role behaviour (Noe, et
al. 2017). This result also illustrates the fact that businesses which manages employees with
the help of progressive HR practices can expect to look higher operational performance as an
outcome. In order to measure the performance firm needs to find out the major performance
deficiencies and hence providing information on the practices that they might implement that
might assists in enhancing their performance on the basis of the performance measures.

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Persuasiveness of the findings
The finding of the results illustrated that a firm needs to work towards development of the
HR practices that can actually lift the commitment of the employees. This commitment has a
greater role to play in the way an organisations such as ADNOC deals with different kinds of
challenges. This was also essential for the firms in terms of the fact that there is an
enhancement in the way an organisation deals with the challenges that confronts their
business model and cause restrictions for the employees to perform. Since the employee
needs have increased in today’s time hence it has become critical for them to maintain their
HR practices in a manner that employees commitment can be ensured at the highest of levels
(Kehoe and Wright, 2013). Commitment has a direct relation with the way in which an
organisation deals with their employees. For instance an organisation that has developed an
employee appraisal system that satisfies the needs of the employee is more likely to achieve
the desired benefits from it and is able to keep the commitment of the employees towards the
organisation on the higher side.
The finding also presented the fact that employee’s behaviour and attitude can be moulded as
per the requirement if the HR practices are according to the requirement of the business units.
Employee’s behaviour has a direct impact on the way they deal with the tasks that is provided
to them. More than the business’s policies, it is the practices of the HR in the favour of the
employees that takes out desired behaviour from them (Hameed and Waheed, 2011). It is also
essential that firm designs out HR setting more according to the employee’s problems. A
more descriptive performance measures needs to be used so that clear identification of
variables that has impact on the performance of the employees can be found out. Firms need
to incorporate practice that improves the knowledge base of the employees and hence can
turn them into a source of competitive advantage (Kooij, et al. 2013).
Ways in which HPW and investment in human capital impacts organisational practice
High performance working helps the companies such as ADNOC (Abu Dhabi National Oil
Company)to ensure that they have an excellent environment in which everyone motivates
others to perform in a better manner. For instance skill development programs helps in
building the skills of the employees so that they can optimise the overall performance. High
performance working model allows the ADNOC to provide flexibility to their employees
which is very much critical for the enhancing the commitment of the employees and also for
changing the attitude of the employees (Cascio, 2015). Due to this the activities such as HRM

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changes for instance the way in which an ADNOC provides training to its employees. It also
changes the initiatives related to the pay and incentives as high performance employees will
demand for high pay which when provided to the employees their commitment remains on
the higher side.
A firm doing investments in the employees changes the organisational practices in terms of
the fact that an organisation have to make policies that can convert the skills of the employees
into the values of the product. Investment in the areas such as promoting individual’s talent
can change the practices such as team work. This is because everyone will contribute to their
best and ADNOC will also want that maximum contribution should be put by each
individual. Investment in the technology related trainings will improve the technological
skills of the individuals which will bring more technology related practices in different
departments of the organisation (Elnaga and Imran, 2013). Both High performance working
and investment in the human capital will change the practices such as approach to
management and practices like decision making. This is because skilled employees always
contribute to the decision making.

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References
Cascio, W.F., 2015. Managing human resources. McGraw-Hill.
Crook, T.R., Todd, S.Y., Combs, J.G., Woehr, D.J. and Ketchen Jr, D.J., 2011. Does human
capital matter? A meta-analysis of the relationship between human capital and firm
performance. Journal of applied psychology, 96(3), p.443.
Elnaga, A. and Imran, A., 2013. The effect of training on employee performance. European
Journal of Business and Management, 5(4), pp.137-147.
Hameed, A. and Waheed, A., 2011. Employee development and its affect on employee
performance a conceptual framework. International journal of business and social
science, 2(13).
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.
Kooij, D.T., Guest, D.E., Clinton, M., Knight, T., Jansen, P.G. and Dikkers, J.S., 2013. How
the impact of HR practices on employee well‐being and performance changes with
age. Human Resource Management Journal, 23(1), pp.18-35.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Wright, P.M., Gardner, T.M. and Moynihan, L.M., 2003. The impact of HR practices on the
performance of business units. Human resource management journal, 13(3), pp.21-36.