Human resource management is considered as cross-functional procedures in a company; the human resource department collects responses, ideas, internal information regarding courses and best practices. Human resource plays a crucial part in improving the overall performance of employees in corporations; it is the procedure of linking human resources activities with the corporate goals of an enterprise. Effectiveness and efficiency of the business procedure of an organisation are crucial for its growth; it has an enormous influence on the productivity of a company which assists in obtaining higher investment prospects which development the opportunities for employees. This essay will focus on analysing the role of human resource management over efficiency and effectiveness of the corporations. Further, the article will evaluate various HRM theories to understand different functions of HR department from the perspective of companies.
The primary objective of human resource management is to ensure that an organisation’s requirement regarding skilled, dedicated and inspired employees are fulfilled, to accomplish sustained competitive advantage. According to Wang & Shyu (2008), the human resource department develops a number of policies which for achieving the organisational objectives and improving the productivity of employees. The function of human resources department has evolved according to today's environment, such evaluation being various new challenges in front of corporations such as the restructuring of company’s structure, margin tightening, international expansion of processes, competitive market, and mobile employees. Modern enterprises are more dependable upon complicated systems and skills of their employees. The importance of financial capital and assets are still required, but soft assets such as HRM are influencing the success and failure of firms. Many corporations are reconsidering their human resource functions to achieve the goals of a company. In recent times, the human resource department is viewed as strategic context, which assists in improving the effectiveness of enterprises (Bondarouk, Ruel & van der Heijden 2009).
As per Parry (2011), the efficiency of the organisational process means performing the right function for the improvement of operations and sales processes. Effectiveness means performing the business activities in the best possible way, which helps in faster achievement of company’s objectives. The human resource department contributes to achieving efficiency and effectiveness in the processes of a corporation. The sales number or trading activities are not related to efficiency or effectiveness in a firm; they are just a part of them. The most efficient corporations are not the companies with the highest resources; instead, they are the enterprises which efficiently utilise their resources. The efficiency and effectiveness are directly related to the people management in a corporation; employees play a crucial part in the growth of an enterprise. The HRM is associated with the supervision and control of workforce in an organization. As per the research conducted by Lawler (2012), modern human resource department has augmented their time in strategic business planning which was 15 percent 1993.
The human resource management includes various practices which influence the company’s performance, such as information system, job analysis, recruitment, industries relationship and many more. Manzoor (2012) provided that by establishing an efficient information system, the HRM ensure that executives and employees do not have to invest their time in non-creative or mundane tasks. By job analysis and design, the human resource department ascertain the number of skilled employees or workers required in an organisation. Job analysis provides information such as specific qualification or skills required to perform certain tasks. All such information is used by human resource department in recruitment procedure. The recruitment and selection procedure is directly influence the effectiveness of enterprises, therefore, the human resource department is requires to carefully formulating policies according to their job requirements.
Parry and Tyson (2011) provided that the efficiency in the working of an enterprise can be achieved by maintaining healthy industrial relationships which provide several benefits such as better future opportunities, reduction in cost and employee exchange programs. Modern organisation prefers to hire talented employees from all over the world, due to which diversity became an issue in the maintaining organisational efficiency and effectiveness. The human resource department is responsible for formulating policies that can manage the difference of employees in a corporation. The theoretical perspectives of human resource department include three critical views which are behavioral, resource-based and politically influenced. Human resource department can evaluate these views in order to implement efficiency and effectiveness in their strategies.
According to Tan & Nasurdin (2011), there are several strategies that human resource department can apply to improve the efficiency and effectiveness of the organisation. The human resource department is related to the employee management, such as attracting, analysing, choosing and retaining qualified employees. The productivity of employees is direct to the effectiveness of a company’s performance; the human resource department can improve that by attracting, employing and retaining eligible candidates. In the organisational sector, the ability to manage talent is considered as one of the priorities for human resource management. Due to globalisation, the competition between corporations is significantly high which increases the demand for qualified employees. The companies pay considerably high salary and incentive packages to talented employees for attracting and retaining them in the business. For example, in software industry the requirement of experienced and talented programmers are significantly high, the large players in the industry such as Google, Microsoft and Amazon pay insanely high salary packages to attract and retain the best talent in the industry which helps them improve their effectiveness (Dishman 2017). Organisations adopt various strategies such as monetary incentives, personalised career policies, training programs and flexible working hours to attract and retain qualified employees.
The human resource management can adopt development strategy which assists them in increasing the efficiency and effectiveness of the business operations, such as compensation strategy, performance policy, and learning and development policies. As per Fowler (2013), for ensuring efficiency in the activities, it is necessary that qualified candidates are employed in the organisation. The human resource department can attract talented employees by implementing compensation strategy. In compensation policy, the company provide higher salary packages and benefit to qualified employees which attract them in their organisation. These employees assist the company in achieving efficiency and effectiveness in the operations. Performance policy includes goal setting, for both job and growth of the employees based upon initiatives that are directly linked to the strategic objectives.
According to Shen et al. (2009), the top-level management can ensure that mid-level managers monitor the daily performance of employees by analysing their track records, workload, deadline issues and ensuring that adequate resources provided to the employees. The performance appraisal is one of the human resource management strategies which improve the overall performance of a company by enhancing the productivity of workers. The performance of a corporation is directly linked to the organisations efficiency and effectiveness. The performance appraisal strategy involved assessment of employees work in an organisation which provides necessary information to human resource department that can be utilised by them at the time of recruitment, selections, motivation, and training the staff.
Another role of human resource department in organisation efficiency and effectiveness is related to learning and development of the employees. As per Kuo & Chen (2008), the efficiency of employees is considered as the level of their productivity which eventually benefits the company by enhancing their profit-making ability. The effectiveness of employees is determined by the situation in which the employees provide intended or higher results in their performance. To achieve either efficiency or effectiveness, the human resource department can incorporate organisational learning or training strategy. As per Olaniyan & Ojo (2008), by providing training to their employees, the human resource department can achieve the desired or even better result from their workers. The training policy also develops personality and skills of employees, which are beneficial for their growth as well. The company can achieve desired profit rates by efficiently implementing the organisational training strategy.
Cameron (2010) provided in his book that one of the critical problems in modern corporations is related to the attitude and culture of an organisation, which adversely influences their efficiency and effectiveness. Traditionally, the human resource department focuses on the credential and skills of the candidates in the selection procedure, but modern companies have increased the role of their human resource management. Other than finding the right person for the right job, the human resource department also focuses on cultural fit and behaviour of the candidates. In the selection process, the candidates are assessed based on their personality traits and values which help HRM determine whether they are fit according to the culture of the organisation. It is not always beneficial to hire employees just based on their qualification, the job performance and skills can be learned by the candidates by values and behaviour are difficult to changes. A positive and cooperative working culture ensures efficiency and effectiveness in an organisation. The employees are requiring having the right skill set, friendly behaviour, and positive attitude (Lopez-Cabrales, Valle & Herrero 2006).
The above mentions HRM policies assist the company in enhancing their performance which helps them operate with efficiency and effectiveness. According to Yilmaz & Ergun (2008), for contributing to the effectiveness, the human resource department reduces the time and effort invested in the daily activities and administrative practices. For example, human resource delivery system is another strategy which improves the communication between different levels of management. Effective implementation of modern technologies, procedure improvements, outsourcing secondary tasks and commitment of employees towards work can contribute to the effectiveness of an organisation. For influencing efficiency, the human resource department forces on two primary practices. The first is proper allocation of scarce resources which help the company gain a competitive advantage. The second is providing insight into the employee’s value creation activity which contributes to the success of the business. The efficient work procedures and intelligent utilisation of capital combined with talented employees in the formula for organisational efficiency (Zheng, Yang & McLean 2010).
From the above observations, it can be concluded that HRM plays a significant role in organisational efficiency and effectiveness. Modern organisation considered the human resource department in a strategic context which formulates policies for the growth of an enterprise. Various practices of human resource management directly affect the performance of a firm, which is linked to its efficiency and effectiveness such as job analysis, information system, recruitment & selections, industrial relation, supervising diversity and implementing training & compensation policies. The human resource department is required to attract, analyse, hire and retain qualified employees which influence the profit earning ability of an enterprise. Various strategies are applied by human resource department which improves the productivity of employees such as compensations policies, performance assessment, organisations training and working environment. By efficiently implementing these strategies, the HRM can contribute to the organisational efficiency and effectiveness.
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