Analysis of HR Practices and Employee Performance in Two Organizations

This report investigates the relationship between human resource management (HRM) practices and employee performance, focusing on the Commonwealth Bank and ANZ Bank. It begins by outlining key theories of employee performance, including goal-setting and expectancy theories, and then explores the impact of various HR practices such as training, selection, performance appraisal, compensation, career planning, and employee involvement. The report analyzes the level of employee performance in each bank, comparing their respective HRM strategies. It highlights the HR practices employed by each organization, providing a comparative analysis, and examines how these practices affect employee performance. Finally, the report offers recommendations to ANZ Bank for improving its HRM practices to enhance employee performance.

Running head: HUMAN RESOURCE MANAGEMENT
HUMAN RESOURCE MANAGEMENT
Name of the Student
Name of the University
Author Note

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Executive Summary
The report is built on the study of the relationship that has been developed between the
employee performance and human resource management practices. The effect of human
resource management on employee performance has been examined in the report in detail.
The two organizations that have been taken into consideration for this study are the
Commonwealth Bank and ANZ Bank. The human resource related practices that have been
implemented by these two banks have been examined in the report in detail.
Recommendations have been provided to ANZ Bank based on effective improvement of the
human resource practices in the company.

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Table of Contents
Part A.............................................................................................................................3
Description of theories and the models based on employee performance.................3
Impact of HR practices on employee performance....................................................4
Factors of HR that have an impact on employee performance..................................4
Part B..............................................................................................................................7
Level of employee performance in each organization...............................................7
HR practices used by the organizations.....................................................................8
Comparison between the HR practices of two organizations....................................9
Effects of HR practices on the performance of employees in the organizations.......9
Part C..............................................................................................................................9
Recommendations provided to improve employee performance...............................9
References....................................................................................................................11

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Part A
Description of theories and the models based on employee performance
As discussed by Banfield, Kay and Royles (2018), the management of employee
performance is considered to be a significant part of the effective processes of diverse
business organizations in the current business environment. Performance management is an
important field or part of the human resource management based activities that are
accomplished by the firms. This method is considered to be a continuous process that is
implemented in order to identify, measure and develop the performance of the individuals for
aligning strategic goals of organization (Aguinis, Edwards and Bradley 2017). The
performance management system is based on five major elements that include, setting of the
objectives, measuring performance levels, gaining feedback of the customers, reward system
related to the performance outcomes and changes made in the activities and objectives
(Albrecht et al. 2015). The two major theories based on performance management are as
follows,
Goal setting theory – This theory had been suggested by Edwin Locke in the year
1968. The goal setting theory mainly suggests that the goals of an individual are established
by a particular employee that is able to significant role in providing him with motivation
related to superior levels of performance. This is related to the methods by which employees
are able to follow the goals in an active manner (Bird and Mendenhall 2016). The proper
achievement of goals is based either on the improvement of performance or modification of
goals in order to make the method more realistic in nature. The proper improvement of the
performance levels of the employees in a company is based on the methods by which a
performance management system can be implemented (Bratton and Gold 2017).

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Expectancy theory – This theory has been suggested by Victor Vroom in the year
1964. The theory is largely built on a hypothesis that is based on the ways by which an
individual is able to adjust the stages of behaviour in a way that is helpful for the proper
achievement of the objectives and goals (Brewster, Chung and Sparrow 2016). The
individuals tend to change their behaviour with respect to the methods that can be
implemented for proper achievement of the goals. The theory is thereby based on the
underlying concept of the ways by which performance levels can be managed as the
performance is mainly affected by expectations based in future events (Chadwick, Super and
Kwon 2015).
Impact of HR practices on employee performance
The researches that have been done based on effective human resource management
actions of the modern companies have been able to portray the performance that is provided
by the employees. The organizations that have been successful in their respective industries
have been able to link the performance levels with the human resource management
activities. The organizations need to hire the capable and highly skilled employees for the
purpose of developing a position in the modern business environment (Collings, Wood and
Szamosi 2018). The HR practices that have been implemented by the line managers are able
to impact the perceptions of employees in a affirmative manner. The skill levels of managers
are able to affect the successful implementation or the failure of different human resource
management based practices. The skill stages of the managers have an influence on the
methods by which HRM based practices are established and the organizations are able to
operate (Deery and Jago 2015).
Factors of HR that have an impact on employee performance
As opined by Guest (2017), the relationship that has been developed between the
employee performance and human resource practices have been researched in many studies

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previously. The process of attraction and retention of the employees and shareholders of the
organization is built on the methods by which human resource management practices are
implemented. Value is considered to be a major part of the ways by which human resource
management based processes in an organization can be managed. Organizations can achieve
high levels of competitive advantage with the support of proper human resource based
practices (Kianto, Vanhala and Heilmann 2016). The competitors are never able to imitate the
human resources that have been possessed by an organization. The human resource
management based process of an organization mainly composes of policies, systems and
practices which are able to affect the performance, attitude and behaviour of the employees as
well (Mone and London 2018). Employee satisfaction - the levels of employee satisfaction
are mainly based on the relationships between the employees and the management of the
company. The significance of human resources or HR has started increasing as they are based
on the intangible, un-imitable and irreplaceable resources that have been gained an
organization. The human resource based practices are able to affect the different
organizational aspects in a massive way (Nankervis et al. 2016). Employee performance –
The performance of employees can be measured with the implementation of three types of
factors that include, customer complaints and the number of errors, financial indicators and
number of customers served and the units produced. The employee performance can be
measured with the proper implementation of different metrics that are linked to the human
resource management based practices in an organization. Human resources have been able to
gain the highest levels of significance based on the methods by which it has been able to
become a great asset for the business organizations (Noe et al. 2017). Training – Training is
able to influence the performance stages of the employees with the help of proper
improvement of the abilities and skills that are considered to be relevant to employee
development and the tasks that are provided to employees (Shen and Benson 2016).

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Selection – The HR based system of an organization is considered to be a major division of
the jobs that have been designed and labour who are a part of the organization as well. The
participation of employees is able to play a main part in the methods by which organizations
are able to grow the compensation and career progression based process. The employees have
the ability to improve the levels of efficiency or further provide their contribution to the
growth of revenues as well (Stone and Deadrick 2015). Performance Appraisal – The
employees are able to develop and depict positive attitude if they receive positive outcomes
from their work process. The human resource management related practices are able to
influence the performance of employees in a positive manner and the pay raises that have
been received are also based on the policies that have been designed as a portion of the
human resource management based method (Stone et al. 2015). Compensation – This is
considered to be a process that is able to provide high levels of monetary value to the
employees based on their performance levels. Effective compensation can be used for the
purpose of hiring the skilled employees, rewarding their performance and encouraging the
loyalty of organizations by reduction of turnover. The proper implementation of
compensation strategies has started growing in the last few years due to the methods by
which employees are able to depict their performance types (Vomberg, Homburg and
Bornemann 2015). Career planning – The method based on career planning is able to
provide support related to the methods by which career goals can be set and identified in
order to formulate ways that can help in the attainment of goals. The tool based on career
planning is used for the purpose of motivating the employees in order to achieve their
objectives and goals in an active way (Stone et al. 2015). Employee involvement – The
process of employee involvement is helpful for proper creation of an environment that is able
to influence the methods by which a firm is able to achieve the goals and objectives within
the set period of time. The high levels of employee engagement are able to ensure the

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satisfaction that they gain from the jobs and the contribution that can be provided to the
decision making process as well (Noe et al. 2017).
Part B
Level of employee performance in each organization
Commonwealth Bank – The Commonwealth Bank of Australia or CBA is a global
banking organization that has its processes in different countries like, New Zealand, the
United States, Asia and the UK. The organization is also able to provide variety of the
financial services that include, business, retail and institutional banking as well. The
Commonwealth has also gained its position as the biggest listed organization on Australian
Securities Exchange. The bank has been able to maintain its leadership position in the
financial industry for many years due to the services that are offered to the consumers
(Commbank.com.au 2019).
The performance management of employees have been delivered with high levels of
significance by the firm. The resources and budget levels of the organization have been able
to play a key part in the methods by which employees can be managed (Bird and Mendenhall
2016). Commonwealth Bank has been able to gain a leadership place in the financial industry
with the help of an efficient employee base and boosting the performance levels of the staff
as well. The organization has been able to reach its full potential with the support of services
that have been presented by the staff (Vomberg, Homburg and Bornemann 2015).
ANZ Bank – The Australia and New Zealand Banking Group Limited or ANZ Bank
has gained the position of third biggest in Australia with respect to the levels of market
capitalisation. The operations that the bank has n Australia are able to offer the extreme levels
of revenues to the organization. ANZ Bank had received the recognition for gaining the
highest levels of sustainability in the year 2008. ANZ Bank had been established in the year

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1951 when two major banks namely, Union Bank of Australia Limited and Bank of
Australasia merged together (Anz.com.au 2019).
The practice of employee rating that had been earlier followed by ANZ Bank was
based on the ranks that were provided to employees based on their performance levels. The
“forced ranking” based system implemented in the organization had a major negative
influence on the performance levels of the employees in their respective positions (Banfield,
Kay and Royles 2018). The bank had faced major issues based on the performance
management systems and the methods by which the employees are able to get involve in the
process of decision making in the organization. The proper implementation of new processes
has been able to act as the most important part of the ways by which ANZ Bank has
performed in the financial industry (Nankervis et al. 2016).
HR practices used by the organizations
The human resource practices that have been established by the Commonwealth Bank
are mainly based the activities and policies that have been developed with respect to the
processes of performance management, compensation management and succession
management. The performance management based activities have been considered to be
significant part of the human resource management systems of the organizations (Banfield,
Kay and Royles 2018). The compensation management process developed by ANZ Bank is
also considered to be an significant aspect of the human resource management developed in
the organization. The human resource managers are able to develop the compensation levels
that can be provided to the employees and the ways by which their performance can be
affected. The levels of employee engagement are also increased with the help of effective
performance management (Kianto, Vanhala and Heilmann 2016).

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ANZ Bank had applied the process of digital hiring in order to recruit the employees
in different places in the organization. The organization had however faced major failures in
this implementation and had further aimed at implementing new and improved human
resource practices in order to develop the organizational procedures in an active way
(Collings, Wood and Szamosi 2018). The ranking process that was used by the organization
has also not been able to offer key support to ANZ Bank in this case. The company has not
been able to bring variations in the human resource management process with respect to
changes that have taken place in the external environment (Brewster, Chung and Sparrow
2016).
Comparison between the HR practices of two organizations
The Commonwealth Bank has been successful in developing the topmost positon in
Australian financial industry with the help of its efficient human resources or employees. On
the other hand, ANZ Bank had been implementing inappropriate human resource methods in
the human resource management based activities. The HR practices of Commonwealth Bank
are more effective in comparison to that of ANZ Bank (Collings, Wood and Szamosi 2018).
Effects of HR practices on the performance of employees in the organizations
The performance of employees in the Commonwealth Bank and ANZ Bank have been
influenced in a huge way by the HR practices of the organization. The employees have
always been able to play a major role in the methods by which revenues can be increased and
productivity of the organization can be increased as well (Mone and London 2018).
Part C
Recommendations provided to improve employee performance
The major recommendations that can be provided to ANZ Bank based on
improvement of employee performance are as follows,

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The improvement of levels of employee engagement in the organization.
Development of performance management systems that are not based on
inappropriate ratings.
Formation of policies that are built on future development of the career and
work process of the employees in the organizations.

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References
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engagement, human resource management practices and competitive advantage: An
integrated approach. Journal of Organizational Effectiveness: People and Performance, 2(1),
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Anz.com.au 2019. ANZ Personal Banking | Accounts, credit cards, loans, insurance | ANZ.
[online] Anz.com.au. Available at: https://www.anz.com.au/personal/ [Accessed 29 Apr.
2019].
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