Analysis of Human Resource Management and Performance Linkage

This report delves into the critical relationship between Human Resource Management (HRM) and organizational performance. It explores the positive impacts of HRM on employee attitudes, behaviors, and engagement, highlighting how effective HRM policies enhance customer service, foster a positive work environment, and boost employee orientation. The report also examines HRM's role in driving innovation and strengthening employer branding. Furthermore, it discusses the challenges in implementing HRM, such as the costs involved, the complex relationship between employee turnover and organizational performance, the impact of reward systems, and the challenges of managing diversity within the organization. The report concludes that while HRM offers significant advantages, its successful implementation requires careful consideration of these challenges to achieve optimal organizational performance.

Running head: HUMAN RESOURCE MANAGEMENT
Human resource management
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Introduction
The current business scenario is one of the most challenging and difficult phase being
faced by the business organizations. This is because; current business organizations are facing
the challenges of intense competition in the market with competing with similar players (Hartley,
Sorensen and Torfing 2013). Thus, it is very important for the modern-day business
organizations to initiate different steps in order to achieve competitive advantages in the market.
One of the key steps being initiated by the contemporary business organizations is the human
resource management (Purce 2014). Human resource management refers to the policies and
process being initiated by the business organizations in order to engage and motivate the
employees in their workplace, which will in turn enhance the effectiveness and efficiency of the
employees (Lazaroiu 2015). Thus, the more will be the productivity and effectiveness of the
employees, the more will be the competitive advantages of the business organizations.
However, in due course of the implementation of the effective policies of the human
resource management, there are various issues and challenges being faced by the business
organizations. In accordance to that, there are various effective steps are also being initiated by
the business organizations in order to overcome the challenges (Dar et al. 2014). On the other
hand, one of the key aspects of human resource management that is being still unanswered and is
debated by different authors in different point of time is the linkage between the human resource
management and organizational performance. This is due to the cause that, according to various
authors, initiation of the human resource management is having positive impact on the
organizational performance and according to some other authors; initiation of human resource
management is not having much impact on the organizational performance (Chowdhury et al.
2014).
This report will discuss about the extent to which, there is linkage between the human
resource management and the organizational performance. Moreover, the impact of the initiation
of the human resource management on the organizational performance will also be discussed in
their report along with identifying the issues to be faced by the business organizations for the
implementation of the human resource management.
Impact of the human resource management on organizational performance

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Employee attitude and behavior
As discussed earlier, there are various authors who have given the opinion regarding the
positive impact of the human resource management on the organizational performance.
According to them, the more effective will be the initiation of the policies related to the human
resource management in the organization, the more favorable will be the organizational
performance. According to Kehoe and Wright (2013), initiation of the human resource
management is having favorable impact on the employee attitude and behaviors. This is due to
the reason that, with the initiation of the effective policies regarding the management of the
employees, the employees will get more motivated in their workplace. The authors have also
stated that, the perceptions of the employees regarding the upper level management of the
organizations and of the entire workplace will be positive due to the reason that, initiation of the
human resource management will involve various benefits for the employees. Thus, the behavior
and attitude of the employees will also be positively impacted. Thus, it can be concluded that,
with having positive attitude of the employees, the customer service will be favorable along with
maintaining the positive working environment in the organization.
Employee engagement
Some other authors have given the opinion that initiation of the policies related to the
human resource management is having direct impact on the level of the engagement of the
employees in their workplace. As stated by Alfes, Shantz, Truss and Soane (2013), with the help
of the effective human resource management, the level of the employee engagement in the
organization can be enhanced. This is due to the cause that, initiation of the human resource
management involves maintaining the effective working environment along with enhancing the
health and safety standard in the organization. Thus, with having the positive working
environment in the workplace, the employees will be more engaged in the organization. Thus,
according to the authors, the more engaged will be the employees in their workplace, the more
will be their effectiveness and productivity in the organization. This concludes that, the more
productive will be the employees in their workplace, the less will be the average cost of the
operation for the business organizations. Thus, it will ultimately enhance the organizational
performance.

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Employee orientation
Another key positive impact of the human resource management is the enhancement of
the employee orientation in the organization. According to Messersmith and Wales (2013),
commencement of the efficient policies of human resource management helps in maintaining the
employee orientation of the business organizations. This is due to the cause that, according to the
authors, human resource management is being initiated with the considerations of the interest of
the employees in mind. Thus, initiation of the human resource management policies helps the
upper level management of the organizations to maintain the interest of the employees along
with maintaining the employee orientation in the business approach. The authors have also stated
that, with having the employee approach of the business policies, the engagement of the
employees will be more in the workplace.
Human resource management and innovation
Another key advantage being discussed by the authors to be gained from the initiation of
the human resource management is the creation of the ground-breaking ideas and thinking from
the employees. This is due to the cause that, with the help of the effective policies of human
resource management, the working environment of the business organizations will be more free,
liberal and flexible for the employees. According to Sheehan (2014), initiation of the human
resource management will let the employees to have their space in the workplace to generate and
implement their innovative ideas. Moreover, it is also being stated by the author that, initiation of
the policies of the human resource management also involves the supporting role of the upper
level management for the employees. Thus, with having the scope of leveraging innovative and
out of the box thinking along with guidance of the upper level management, the generation of the
innovative ideas from the side of the employees will be more. This will also have favorable
impact on the organizational performance. The more innovation will be generated, the more will
be the chance of staying ahead in the competition.
Employer branding

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In the current business scenario, employer branding is an important element to be
considered by the modern business organizations. This is due to the cause that, with the increase
in the competition in the market, employees with having right skills and qualification is also
having more choice to choose from. Thus, business organizations with having positive employer
branding will have the upper hand in attracting the top talents. According to Shaw, Park and Kim
(2013), with the help of the effective policies of the human resource management, the impression
of the organization will be favorable and positive among the existing employees. Thus, the
chance of generation of the positive word of mouth will be more, which will in turn help the
organization to increase their talent pool. The authors have also stated that, the more positive
will be the employer branding, the less will be the rate of employee attrition. This is due to the
reason that, employees will be satisfied in their workplace. Therefore, it is being concluded by
the authors that, human resource management will help to enhance the employer branding and to
have positive image in the market.
Discussion
Thus, from the above analysis, it is being seen that, initiation of the human resource
management is having multiple benefits for the business organizations. It is being discussed in
the above sections that, the organizational performance will get further enhanced with the help of
the initiation of the human resource management (Felicio, Goncalves and da Conceicao
Goncalves 2013). On the other hand, if the policies related to the human resource management
are not being implemented effectively and properly, then organizations will fail to gain
competitive advantages in the market and to trail behind in the competition. According to the
Herzberg two factor theory, motivating factors include the recognition, reward and role in the
decision making process for the employees, which are being initiated with the help of the human
resource management (Alshmemri, Shahwan-Akl and Maude 2017). Thus, it can be concluded
that, human resource management is having direct linkage or impact on the organizational
performance.
Challenges in the initiation of the human resource management

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Apart from the advantages that are being gained from the effective implementation of the
human resource management, there are various challenges that are also to be faced by the
business organizations from the initiation of the human resources. Various authors have
discussed regarding the issues that are being originated from the initiation of the human resource
management. The following sections will discuss the opinions of these authors regarding the
issues of human resource management.
Cost involved
According to Percival, Cozzarin and Formaneck (2013), initiation of the policies related
to the human resource management involves huge cost for the business organizations. This is due
to the cause that, initiation of the human resource management involves providing training and
various benefits to the employees, which will cause of involvement of cost. Thus, according to
these authors, the initial investment required in the human resource management is huge and is
responsible for the extra cost for the organization. Thus, according to them, initiation of the
human resource management is eventually reducing the financial performance of the
organization.
Relation between employee turnover and organizational performance
In the earlier sections, it was being discussed that, with the help of the effective policies
of human resource management, the rate of employee turnover can get reduced and thus the
retention ratio will get increase. However, according to the opinion being given by Park and
Shaw (2013), there is no direct linkage between the turnover of the employees and the initiation
of the human resource management. This is due to the reason that, employees may have different
reasons to leave the particular job regardless of having effective working environment in the
organization along with employee benefits. Thus, in various cases, even though the human
resource management is being effectively implemented in the organization, still it cannot
guarantee the reduction in the rate of the employee turnover.
Reward and employee performance
It is being earlier discussed that, reward and recognition for the employees will help to
enhance the effectiveness and performance of the employees in their workplace. However,

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according to Rehman and Ali (2013), performance incentives sometimes have negative impact
on the performance of the employees. This is due to the cause that, the authors have stated in
some cases, employees may do not have the attraction towards the incentives. Thus, it will not be
fruitful for the organizations to initiate the reward system for these employees. Moreover, it is
also being stated by the authors that, in various cases, excessive reward and benefits to the
employees may motivate the employees to treat their job time as leisure time. Thus, it will
eventually reduce the productivity of the employees.
Diversity in the organization
The majority of the contemporary business organizations is having diversified personnel
with having employees from unlike social and cultural backgrounds. Though, it is having various
opportunities for the organizations, however, there are various challenges also being faced by the
managers in dealing with the diversity in the organization. One of the key challenges being faced
by the managers is considering the different and varied requirements and expectations of the
employees. According to Ewoh (2013), initiation of the policies of human resource management
also faces the challenges of diversity in the workplace. The author have also stated that, though
the policies of human resource management are being designed by considering the requirement
and interest of the employees, but still it cannot meet the entire demand of the diversified
employees. Thus, some sections of the workforce will still be unsatisfied with the human
resource management. Thus, according to the authors, initiation of the human resource
management is not having any direct benefits on the organizational performance rather it can
only enhance the positivity among the employees.
Discussion
Thus, from the above discussion, it is being noted that, according to various authors,
human resource management is not having any direct linkage with the organizational
performance (Haman et al. 2013). This is also being noted from the above discussion that, apart
from the positive impact of the initiation of the human resource management on the
organizational performance, there are various negative implications also to be faced by the
business organizations (Arrowsmith and Parker 2013). The authors have given the opinion that,
performance of the employees also cannot be influenced with the initiation of the human

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resource management. This is due to the reason that, there are various elements that should be
considered in meeting the requirement of the employees effectively. Thus, according to the
authors, it is not possible for the business organizations to meet all the requirements of the
employees with the initiation of the singular approach of the human resource management in the
organization.
The above discussion also noted that, some authors are having the opinion of positive
implications on the performance of the employees with the initiation of reward (Zeb et al. 2014).
On the other hand, some other authors also given the opinion that, initiation of the reward for the
employees will have negative impact on the employee performance and in some cases, the
productivity of the employees will get reduced (Cherian and Jacob 2013). Thus, it can concluded
that, initiation of the reward system is not having any direct linkage with the employee
performance, rather it will only have certain positive impression on the employees up to certain
point of time.
Conclusion
This report concludes that, it is definite that human resource management and
organizational performance is having linkage between them. However, on the other hand, it can
also be concluded that, human resource management is not the only element to be considered in
enhancing the organizational performance. This report has discussed the impact of the human
resource management on the organizational performance with the help of different opinions
being given by various authors. It is being seen in this report that, there are various requirements
and expectations of the employees, which cannot be met with the human resource management.
Thus, it can be concluded that, initiation of the human resource management is having linkage
with the organizational performance to the extent, where the basic requirements of the employees
are being met. This is the reason behind the concept that, linkage between the human resource
management and organizational performance is ultimately unanswerable. In the current business
scenario, different business organizations are operating in different business environment and
thus, some organizations will have more favorable impact of human resource management over
others. Moreover, some business organizations will have negative impacts from the initiation of
the human resource management, while some will not face any negative implications. In

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accordance to this, it is being recommended that, human resource management should be
initiated according to the internal and external environment of the organizations.

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