HRM's Impact on Organizational Effectiveness: A Literature Review

This report delves into the critical role of Human Resource Management (HRM) in bolstering organizational effectiveness. It begins by highlighting HRM as a valuable asset and a base pillar of organizational structure. The literature review emphasizes the importance of having the right people in the right roles and at the right time, achieved through effective HR practices. Key elements like staffing, training, and performance evaluation are identified as vital tools. The report examines how HRM contributes to employee satisfaction, strategic planning, and competitive advantage by adapting to globalization and market changes. It stresses the importance of employee training, development, and the implementation of strategic HRM for improved organizational performance. The analysis covers various aspects such as employee satisfaction, customer relationships, stakeholder management, and the impact of HRM on an organization's financial and social performance, concluding that effective HRM is essential for long-term success and sustainable competitive advantage.

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Introduction
Land, labor, and capital are the main assets that are used by any of the business corporations for
executing the operations and functionalities and these are the factors that enable the business
entity to earn profits. These are the assets of the firm that aids the entity in earning revenue and
leads towards success and growth. Human resource is one of the most valuable assets for any of
the business corporation. Human resource is also considered as one of the base pillars of the
organizational structure. This pillar offers the varied range of strength and opportunities for
future developments and maintains a sustainable position in the business environment (Cascio,
2018). As the human resource is one of the cores and empirical factor for any of the enterprise
the business entity is required to make appropriate provisions for managing and maintain the
same. HR managers are the authorities that are considered as liable and obliged for the execution
of practices and process for managing and maintain the workforce within an organizational
structure. The HR managers are required to make provisions for motivational activities that will
inspire the individuals for working more with a greater level of dedication and that will lead in
an increase in their efficiency and effectiveness in the delivery of services. Timely motivation
provides s sense of encouragement and provides the boost to their dedication level. All of the
mentioned practices are directly connected to the effectiveness of an organization. Hence
managing human resource has been considered as one of the integral and crucial tasks for any of
the business firm. The below-presented review has been based on the reasons for which it has
been proved that the HRM is contributing to boosting and increasing the effectiveness of an
organization.
Literature review
One of core and integral factor on which organizational effectiveness is made totally dependent
is having right people in the organizational structure. Right and skilled individuals, at right time
for the right profile and right job and this all, should be done appropriately as per the changing
trends and requirements of the business organization. Ideal individuals can be gotten by playing
out the part of Human Resource (HR) practices (Derous and Fruyt, 2016). The following
presented are the core HR elements of that can be used by the business corporation and
association and also by utilizing HR exercises in a building firm. As indicated by the author, One
of the prime method for dealing and managing the business relationships which emphasizes that

utilizing capabilities and capacity of the workforce is basic to accomplishing manageable upper
hand, this being accomplished through a particular arrangement of incorporated work strategies,
software engineers, and practices."
On the basis of presented analysis, it has been clearly defined by Klimova, et al., 2016) that
human resource management ought not only to deal with enrollment, pay, and release, but rather
likewise ought to expand the use of the organization’s HR in a more prime level. For presenting
the role and obligations of HRM a business corporation, the author has described a portion of the
HRM segments. For example, Labour advocate, human capital designer, utilitarian master, key
accomplice and HR pioneer and so forth. A vital part of an association's business center and
heading towards accomplishing abnormal amounts of competency and intensity would depend
especially upon their human resource management operations.
After executing a research, Rathore, (2017) justified that that staffing, preparing, pay and
performance evaluation is fundamentally imperative instruments in the HR hones that shape the
association's part in fulfilling the requirements of its partners. Partners of an organization include
primarily of investors who will need to procure on their speculations, clients whose needs and
wants for top-notch items or administrations are met, representatives who need their employment
in the association to enthusiasm with sensible remuneration and reward framework and in
conclusion, the group who might need the organization to contribute and take an interest in
exercises and activities identifying with the ecological issues. Regular standards and systems of
human asset administration must be clung to by the association which shapes essential rules on
its practices (Dickmann, Brewster and Sparrow, 2016). Cooperation among bringing down levels
of staff and the administration ought to be made and kept up to aid different edges that would
consider fundamental in dispensing with correspondence breakdowns and encourage better
relationship among specialists. The administration ought to underline on great corporate culture
keeping in mind the end goal to create representatives and make a positive and helpful workplace
(Ekwoaba, Ikeije and Ufoma, 2015).
To improve the challenges faced by the organizations after globalization, human resource
practices have been adopted. It was believed by the company owners that only one thing can
bring organizational change is human resource management. The article by () describes as to
how human resources are effective for achieving the goals of an organization. The employees

develop better strategies to compete in the market. The financial resources, sales and marketing
and other functional areas of an organization are effectively managed by using the principles of
human resource management (Goldstein and Passmore, 2017). The author says that HRM
practices bring remarkable improvements in the competitive advantage of an organization. There
are various threats in the market which can only be handled by human resources. The author
concludes by describing the importance of employees in an organization. Companies are able to
make social relations and to enhance the customer relationships. Companies should choose best
HRM practices to increase their economic value within the market.
Shen and Benson, (this journal describes about the role played by the HRM in increasing
effectiveness of an organization. A company can gain profits by managing their resources with a
proper sequence, therefore, using human resource practices, companies can create buyer persona
which helps them to know the requirements of a customer. It is not easy to handle the customers.
But considering accomplishment of long-term goals, companies have to build better relationships
with customers. This journey begins with identifying stakeholders for a project, and then
interviews are taken to know the specific needs of customers. Another key issue that rise in the
companies is the proper management of suppliers. Most of the suppliers cheat organizations by
contracting with higher expenses for bringing leads. Efficient human resources are capable of
identifying such fraud cases and they could make the suitable business strategy to connect with
various customers.
The most convenient option for the organizations is to choose social media as their
communication channels. Companies can directly connect with the high-level executives of some
another company by using LinkedIn. This is the place which can bring more and better leads for
an organization (Guo, Rammal and Dowling, 2016).
Next key issue is the price of product or service. Customers are very much affected by the prices.
They do not like to bargain more often which in turn creates the loss to the companies. Human
resources make strategies which benefit the customers as well companies also. This is done by
providing discount and offers to the customers. Services with affordable prices are what liked by
a customer. Therefore, the role of human resource management is vital for an organization to
maintain its effectiveness and also contributes to its growth and development.

Employee satisfaction is also one of the key issues of human resource management. This is
important because the employees who are not satisfied with the workplace or business process
tends to make mistakes which the companies are not able to afford. In general, employees are
affected by the salary package they are receiving from the company. Talented and skilled
employees require better package despite their experience (Hjartardóttir and Lundeborg, 2017).
Companies have to manage this critical issue as it affects the business procedures. Unsatisfied
employees are the threat to the organization as they continuously make mistakes in their work
like inefficiency and errors. The human resource managers have to be conscious enough when
they perform recruitments. Fixed criteria should be adopted so that employees get satisfaction
from the work they do and could effectively accomplish company’s objectives.
According to the author, the prime criteria to have efficient employees is making provision of
professional training sessions to the newly hired employees. Training and development practices
for employees enhance the productivity of the organization (Kang and Sung, 2017). This
motivates the employees to work with dedication and increases their enthusiasm to achieve the
various targets of an organization. The training procedures also assure that each of the employees
can manage task at their own level. Although the tea leaders and managers help them to resolve
their issues, the employees can represent their skills after their training is completed. But this
strategy does not work for every organization as they are not able to afford a trainee and the
required resources to provide training for the employees. This limitation creates complexity in
the work processes because it is difficult to trust the new employees for handling clientele.
Training helps employees to know the dos and donts of managing clientele for an organization.
Training plays a vital role in the process of human resource management (Rudolph, Toomey and
Baltes, 2017). It enhances the skills of employees and sometimes employees can explore new
ways of doing business.
After training and development come the organizational performance which is largely affected
the kind workforce an organization has (Ramdhani, Ramdhani and Ainissyifa, 2017). Goals of an
organization include the addition of more number of customers, increased sales, and increased
profit and to attain a higher rate of competitive advantage in the market. The technological,
social and political changes affect the organizational performance. Human resources are said to
be those assets of an organization who contributes to meeting expectations. The cooperation

between employees and teamwork contributes effectively in process of decision-making. The
efficient human resources of an organization deliver success for the company’s vision and
mission statements. This also improves the culture and ethics of an organization. The attitude and
behavior of an employee affect the business strategies developed by the employees. The term
strategic human resource management provides a path which can be adopted by the
organizations to manage the employee behavior. The representation of a company is by the set of
employees working in an organization. Poor organizational staff leads to the loss of financial
resources and the decrement in the competitive value (Li, 2015). However, this issue can be
managed by implementing principles of strategic human resource management for an
organization. Researchers have proved that this is the feasible solution to detect the key issues
occurring in an organization and thereby finding a reliable solution. Strategic HRM is used to
distinguish between the different organizations according to the products and services they give
to the customers. It can be analyzed what kind of business strategies those companies are using
and then construct new strategies for the organization. When developing a business strategy, the
activities of competitors is considered to know and understand how they are capable enough to
attain success in the market. It is because most of the companies sell same products and services
but only a few of them are capable to achieve a better business value in the market (Nasurdin,
Ahmad and Tan, 2016). Strategic HRM provides different tools and strategies for the
organizations that focus on making the employees satisfied with their work. This also provides
various policies that improve quality and productivity of an organization. Performance is not
only limited to the employees of an organization but with also the upper-level management that
is team leaders, managers, and other high-level executives.
Benefits of improving organizational performance are that it builds the competitive strength of
an organization (McCarthy et al., 2017). The potential risks of an organization can be resolved
by implementing business strategies. This also trains the employees to handle critical projects
and to efficiently deal with customers. Organizational performance represents the work culture
of an organization and attracts number of customers to actively participate in purchasing the
products or services from that organization. As the customers believe in purchasing services or
products at reasonable prices with better quality, companies should enhance their organizational
performance.

References
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