Essay: HRM, Organizational Performance, and Strategic Impact

This essay delves into the critical relationship between Human Resource Management (HRM) and organizational performance. It explores various aspects of HRM, including job analysis, recruitment, training, and employee relations, highlighting their strategic roles in shaping workplace culture and contributing to overall business goals. The essay examines key theories like the resource-based view, AMO theory, and contingency theory to explain how HRM practices influence organizational outcomes. It discusses how HRM professionals establish systems for career development, performance enhancement, and employee engagement, emphasizing the importance of employee motivation, satisfaction, and commitment. The essay analyzes research findings and practical implications for HR practitioners, offering guidance on managing employee performance, implementing reward systems, and fostering a participative management style to achieve optimal organizational results. The importance of feedback mechanisms and employee engagement in aligning individual and organizational goals is also addressed, concluding with recommendations for HR practitioners to enhance organizational performance through strategic HRM initiatives.

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Human Resource Management
Name of the Student
Name of the University
Author Note

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Topic- Human Resource Management
The human resource management is a department in the organizations which controls
and looks after various employee related aspects such as the job analysis, the human resource
planning, recruitment and the job interview conduction, the selection of the human resources,
training, benefits and incentives, the licensing, career planning and may others. Under the
responsibilities of this department, the sexual harassments, the employee discipline, work –
life balance, maintenance of the industrial relationships, the human resource auditing are also
included (Paauwe & Farndale, 2017). It plays strategic roles in the management of people
along with the workplace cultures and environment. The human resource management can
also contribute hugely to the entire direction of the company and its accomplishments of the
goals and the objectives. In this essay, theories and researches will be used (Paauwe &
Boselie, 2003). There has been many research related to the link of HRM with the
organizational performance..
Almost all the organizations seek for the outsourcing services of the Human Resource
recruitment organizations. The concentration on HRM is dependent on the strategic
utilization of the employees along with the measurable effects of employee programs in a
business. These days, it has been found that organizations must be adaptive, customer
centred, resilient and fast in changing the directions (Beer, Boselie & Brewster, 2015). In
such an environment, the HRM’ effectiveness is extremely crucial to succeed in the
businesses. The HR professionals establish various systems for the career succession,
performance development and the employee development. It helps in keeping people
motivated, personally engaged, happy and contributing to the success of the organization.
Moreover, the HR professional helps the organization to maintain the culture with the
employees and have the competency, commitment and concern to serve the customers too.

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The organizational performance consists of the total result of an organization that
captures the operations of the organization, the production, its’ accomplishments for different
constituencies of interactions. There are many specialists who are concerned with the
organizational performance. The performance of an organization is always compared to the
objectives and goals of the organization and usually measured on the basis of financial,
shareholder value and market performances (Clinton & Guest, 2013). There are close relation
of the HRM. The HR management is seen as the input and the organizational performance is
seen as the output. On the other hand, the HRM policies are well influenced by the
contingencies as the business strategies. It is also assumed that the HRM policies are well
influenced by the strategies of the business.
In order to discuss the linking theories need to be properly elaborated and discussed
about. The resource-based theory, the AMO theory and the contingency theory will be
discussed to elaborate the link of HRM with the organizational performance.
The resource based theory- As far as the resource-based theory of the organizational
performance is concerned, the Resource –based view or the RBV model helps to see the
resources as a key to optimize the performance of the organization. As per this model, when a
resource exhibits the attributes of VRIO, the resource helps the organization to gain the
competitive advantages. It is rather an approach which helps in achieving the competitive
advantages after being emerged in the 1980s and the 1990s. Those who support this view are
well aware that the firms must look inside of the organization in order to find the resources of
competitive advantage in place of looking at the competitive environment for gain it
(Demortier, Delobbe & El Akremi, 2014). The key points of the RBV model are as follows:

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As per the RBV theory, an organization can achieve sustained competitive advantage easily
through exploiting the internal factors instead of the external factors when compared to the
industrial organization view. The VRIO framework is the most important part of the resource
–based view model. According to the views of Barney (1991), the VRIN framework
examines whether the resources are valuable, costly to imitate, rare and non-substitutable.
The capabilities and the resources which are positive to these questions are considered as
having the competitive advantages. This framework was later improved to VRIO having
added the question of whether the organization is organized enough to exploit the resources.
This framework has been adoptee from the strategic management of Rothaermel (2013).

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The AMO theory
According to this theory, there are three of the independent work system components
which shape the employee characteristics and contribute in the organization’s success. The
line managers are found to be extremely important in implementing HRM effectively. Based
on the AMO theory, it can be predicted that the performance of the managers depends on the
ability to apply the practices of HRM along with the motivation and the opportunity to

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enhance the effects. It also has been found that opportunity enhances the ability on
effectiveness of HRM implementation. Therefore, the HR departments of the organization
must focus on the ability of the line managers to provide adequate opportunities in order to
carry out the expected duties of HRM (Wadongo & Abdel-Kader, 2014). The AMO theory
further suggests that the three independent components shape the characteristics of the
employees for contributing to the success of the organization. As per the theory, the
organizational interests help to attend the Ability, Motivation and Opportunities of the
employees.
In the study of Juan A. Marin-Garcia and Juan Martinez Tomas (2016), there has been
conducted a systematic review of identifying the investigations which have tested this AMO
model along with the approaches which are used by them. It identifies the AMO framework
to be establishing linkage between the organizational performance and the human resource
practices. The findings of the study suggests that whereas the skilled and trained employees
can perform better, the motivated ones can “ go the extra mile”. Along with the contextual
factors, the individual factors, personal circumstances might leave greater impact on the
implementation of the subsequent outcomes.
On the other hand, the study of Anne-Lise Demortier, Nathalie Delobbe and Assâad El
Akremi (2015) aims at going beyond the classical investigation on the relationship between
organizational performance and HRM. This study tries to go beyond the AMO theory and
puts forward another perspective. It has been found that in the strategic human resource
management, AMO is a common trend. The authors of this article reveal that AMO is not
completely empirically tested and they pose a strongly and theoretically developed
perspective. The study further empirically tests the AMO theoretical model having mediated
the effects of business unit-level staff AMO features along with collective human capital. It
further conducted a survey on 341 staffs in 46 business units where the authors found support

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for a path model having connected business unit performances and HR skill enhancing
practices through the ability of the human capital. They also found no support for the
opportunity and motivation paths. Therefore, this study points out the integrative research
perspectives to take the black box investigation further.
The paper of Vlad Vaimn and Chris Brewster (2014) is another piece of work on this
topic. It is rather a conceptual paper arguing that national differences in the human resource
management can become explained by the institutional and cultural theories. The authors of
this article discuss about the nature of each of the theories along with some critiques which
have been made of them. The authors further argue that the differences in HRM between
various countries are well determined by the institutional factors. The management of an
organization has greater impact on the effects of national cultural differences more than the
institutional differences. Hence, in most of the cases, the most accurate test would be tests
against the institutional differences.
The contingency
According to the views of Billy Wadongo and Magdy Abdel –Kader (2014), a
modified performance management and the control framework could be well used for
identifying the performance management in the third sector. The organizational effectiveness
can be further measured by the four dimensions suggested in this article. In this study, the
authors have adopted a two stage process for developing a theoretical framework which
explains the way performance management leave impact on the organizational effectiveness
in the third sector specifically. This conceptual paper provides an opportunity for the
empirical research for future to cross-validate the particular model in a large survey.
On the other hand, the study of Michael Clinton and David E. Guest (2013) suggests
that those employees who have a greater number of the HR practices. The study findings also

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indicate that the connections between the outcomes and the HR practices are invariant across
the job level and support the universalistic ideas of the HRM across the levels of job. The
authors of this study have built on the evidence of HRM differentiation in the organization.
This article studies the experienced HR practices across the level of job and also the impacts
of HR practices on commitment. This is best explained by the contingency and universalistic
claims. As far as the research implications are concerned, this study limits the casual
inferences. There is also a need for the better understanding of the HR differentiation in
organizations.
When the study of Beer et al., (2015) is examined from a closer view, it can be seen
that the authors have examined the way the subject has developed throughout. They have also
offered a normative view, and critiqued the assumptions that the responsibility of HRM is to
only improve the returns to the shareholders and owners. The authors also have identified the
significance of a wider view of stakeholders and the way HRM is adopting this view. The
authors also argue that HRM studies have given a wider, contextual and multilayered
approach based on the long term requirements of the relevant stakeholders. The model
developed by Beer et al. has been considered as a valuable guide in the field of HRM
research.
After evaluating the studies and the theories related to the impact of HRM on the
organizational performance, it can be recommended to the HR practitioners as practical
guidance:
The HR practitioner should manage the business and the workers along with their
work for achieving the standards of organizational performance. They should always manage
by objectives to keep the organizational performance at the optimum level. They should
further adopt the performance evaluation along with the career progression which is a

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motivating factor for the employee. It helps in the enhancing the organizational performance.
The HR practitioner should also be active in terms of the reward systems and the
performance management. Since the organizational performance is directly related with the
employee motivation and the job satisfaction, these factors should be addressed by the HR
practitioner. The job satisfaction can be affected through many reasons such as recognition,
rewards, social relationships, quality of supervision and many others. On a concluding note it
can be said that this is the responsibility of the HR practitioners to keep the organizational
promises and maintain the reward systems for managing the performance of the employees.
The HR practitioners should also engage in the feedback mechanism and the participative
style of management. When the employees receive feedback on their performance, they
understand the performance level and try to improve on it accordingly. Since the people
engagement is extremely important, the HR practitioners are suggested to engage the
employee to mission of the organizations.

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References
Beer, M., Boselie, P., & Brewster, C. (2015). Back to the future: Implications for the field of
HRM of the multistakeholder perspective proposed 30 years ago. Human Resource
Management, 54(3), 427-438.
Clinton, M., & Guest, D. E. (2013). Testing universalistic and contingency HRM
assumptions across job levels. Personnel Review, 42(5), 529-551.
Demortier, A. L. P., Delobbe, N., & El Akremi, A. (2014). Opening the black box of hr
practices-performance relationship: Testing a three pathways AMO model. In Academy of
Management Proceedings (Vol. 2014, No. 1, p. 14932). Briarcliff Manor, NY 10510:
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Jang, S. H. (2013). The offensive framework of resource based view (RBV): Inhibiting others
from pursuing their own values. Journal of Management and Strategy, 4(1), 62.
Marin-Garcia, J. A., & Tomas, J. M. (2016). Deconstructing AMO framework: A systematic
review. Intangible Capital, 12(4), 1040-1087.
Paauwe, J., & Boselie, P. (2003). Challenging ‘strategic HRM’and the relevance of the
institutional setting. Human Resource Management Journal, 13(3), 56-70.
Paauwe, J., & Farndale, E. (2017). Best Practice VS Best Fit. [online] Available at:
https://hrm024209.wordpress.com/2016/03/18/2/ [Accessed 9 Sep. 2019].
Rothaermel, F. T. (2013). Strategic management: concepts. New York, NY: McGraw-Hill
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Vaiman, V., & Brewster, C. (2015). How far do cultural differences explain the differences
between nations? Implications for HRM. The International Journal of Human Resource
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Wadongo, B., & Abdel-Kader, M. (2014). Contingency theory, performance management
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