Critically evaluate how core HR activities can contribute to organisational

performance.

Table of Contents
Introduction 3
Strategic HRM and business performance

Core HR activities and their contribution to organizational performance

Strategy & Organization

Employee Resourcing

Employee Development

Reward Management 6
Employee Relations 6
Conclusion

Bibliography 7

Introduction

HRM is an aspect of organisational management that is concerned with the management of

an organisation's workforce. The extent to which an organisation's workforce is managed
effectively represents a critical element in improving and sustaining organisational
performance. Human resource management, as a discipline in its own right, has developed
into a distinct set of theories and practices, which range from theoretical interests, such as
motivation and efficiency studies, to the more practical requirements such as training
strategies, recruitment, and employment contracts.
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Strategic HRM and business performance

According to Gunnigle, Hearty and Morley, a companys people are one of its most valuable
resources (1). HRM activities need to be carried out in the context of the organization and
can be seen as a specialist management function, where some activities require specialists,
developing and deploying strategies, whilst also working along side line management.
What does this mean to the business? Where and how can we establish where fulfilling a
requirement of the business ends and where becoming a strategic partner, and giving a
sustained contribution the overall effectiveness, and eventually ,the success of the company
begins? Perhaps Ulrich best described the changing role of HR in 1997 Companies now are
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nding that the HR issues are, in fact, center stage to business competitiveness. The
intellectual capital, core competencies and organizational capabilities are all the pieces that
are central to success.(2)
3.1

Strategy & Organization

Businesses are constantly scanning and evaluating their environment both internally
(structure, culture and resources) and externally (task and social). All managers with HR
responsibilities need to consider the external environmental forces such as legal, political,
economic, social, cultural, and technological when addressing corporate activities. External
considerations become especially important when HR activities need to be managed
internationally.
Scanning allows us to assess our strengths and weaknesses as well as opportunities and
threats. An opportunity missed can easily become a threat if the same opportunity is taken by
a competitor. Based on the information found from scanning, businesses need to form
strategies, outlining their mission statements and their objectives, thus providing themselves
with a definitive plan of what results they want to accomplish and by when. Importantly,
from a strategic level, companies define how they plan to achieve their mission and
objectives. Once a firm strategy is formed, companies in turn begin to build their policies
around their objectives, giving them broad guidelines for decision making.
As companies implement their strategies, all relevant departments will take the required steps
and perform the necessary activities so as to successfully achieve the overall plan. Budgets
are assigned and appropriate procedures at departmental level are put in place. All activity
needs to be evaluated and controlled. This is done by evaluating performance and measuring
actual results.
The outline below illustrates how the strategic objectives of the firm are implemented
through the HR strategy and the core areas of implementation assigned.

Reference (3) Measuring Human resource managements effectiveness in improving performance (Sunji
RamLall, College of Business, University of St. Thomas)

3.2

Employee resourcing

Pfeffers 7 Key HRM Practices included targeted selection, which involved the selective
hiring, to build effectiveness and performance. HRM emphasizes that people are a valuable
resource to be managed just as much as any of the organizations other resources and that
they are an asset as opposed to a cost. All businesses experience staff turnover for various
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reasons e.g. career change, leaving the area, returning to education, a new opportunity
elsewhere. Recruiting and training new staff is very expensive and businesses will look to
keep staff turnover to a minimum. One way of doing this is for HRM to choose wisely.
HRMs role within this area would be to acquire, deploy, and retain this capital, in pursuit of
organizational outcomes such as profitability, market share, and customer satisfaction.
Recruiting needs to be done in line with the management. Amazon take recruitment very
seriously, I think about this in hiring, because our business all comes down to people . In
fact, when Im interviewing a senior job candidate, my biggest worry is how good they are at
hiring. I spend at least half the interview on that. Jeff Bezos, chief executive officer,
Amazon.com -Internet merchandising. (4)
McDonald's needs people who want to excel in delivering outstanding service. HRM has
identified essential skills and behaviors that applicants should be able to demonstrate. For
each position there is a job description outlining typical duties and responsibilities and a
person specification defining personal skills and competences. This ensures the company
recruits the right people for the right roles. (5)
3.3

Employee Development

According to Heneman, organizations are made up of both financial and human capital.
Human capital theory refers to the skill, ability and of people, and their motivation to use
these abilities successfully at work. The term workforce quality is also a way of referring
to an organizations human capital.
With the ever changing technologies, jobs are being eradicated more quickly, as new jobs are
being created. People need to retool at an ever increasing rate in order to fill those new roles.
Equipping people to be effective at new skills is paramount, and can be referred to as just in
time skills acquisition. Human capital theory shows that having the base skills and expertise
for example, industrial knowledge, along with an educational ability to apply skills and
experience to knowledge will best enable the transition to new roles. (6) A way for HRM to
contribute to the overall effectiveness of the organization would be to include job-skill in
their training and development strategy. As jobs evolve and change, ongoing retraining is
necessary to accommodate technological changes. Encouraging development of all
employees, including supervisors and managers, is necessary to prepare organizations for
future challenges. Career planning would identify paths and activities for individual
employees as they develop within the organization. Assessing how employees perform their
jobs is the focus of performance management.
Although training is a cost to a business, it is also an investment. It helps companies like
Marks & Spencer to link the people who have the right technical skills and business
competencies with the roles they are best able to do. It ensures that, as a person moves from a
post, he or she is succeeded by the best possible replacement. This is at the heart of
succession management. By acquiring technical skills and business competencies, employees
can plan their career path. This gives them responsibility for achieving their career ambitions.
It also helps to create the future leaders of the organization (7)

3.4

Reward Management
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An organization must reward employees because in return, they are looking for certain kind
of behavior. Companies require need competent individuals, who agree to work with a high
level of performance and loyalty. Individual employees, in return for their commitment,
expect certain tangible rewards in the form of salary, promotion, fringe benefits, bonuses or
stock or share options. Individuals also seek intangible rewards such as feelings of
achievement, competence, responsibility, influence, significance, personal growth, and
feeling of meaningful contribution. Employees judge the adequacy of their exchange with the
organization by assessing both set of rewards.
A way that HRM can facilitate reward management contribution to performance
enhancement is by ensuring it is appropriate to the characteristics and needs of the
organization as well as giving scope for rewarding high level performance and significant
inputs while still providing appropriate rewards and recognition for the effective and reliable
core employees who form majority in most organizations. (9)
Whilst realizing that people have completely different needs, and therefore see rewards
differently, PWC in the UK offers its staff a range of choices in benefits in such areas as
lifestyle, health and risk. Childcare vouchers may be preferred by some whilst others, at a
different stage in lives, may prefer additional contributions towards their pension or life
insurance.(10)
Reward management has been proven to be an important instigator in the development of
organizational cultures in which individuals and teams take on responsibility for continuous
improvement. It affects organizational performance as it has an impact it has on peoples
expectations as to how they will be rewarded.

3.5

Employee Relations

Employee relations incorporate a range of ideas, practices and policies, which are concerned
with employees collectively and also individually. At a fundamental level, employee
relations is about creating a two-way group dynamic in the workplace rather than an us
against them mentality that makes employees feel apart from managers and the companies
they work for. Employee relations also includes HRM compensation decisions such as
raises, promotions and bonuses, as well as the workplace environment, company culture and
employee development programs, such as college tuition reimbursement. Recognizing
employees' accomplishments and contribution
The physical and mental health and safety of employees are vital concerns in employee
relations. The traditional concern for safety, as illustrated by Maslows Hierarchy of needs,
focused initially on eliminating accidents and injuries at work. Additional concerns are health
issues arising from hazardous work with certain chemicals and newer technologies. Through
a broader focus on health, HR management has the ability assist employees other problems
through for example their employee assistance programs (EAP). Also, Employee wellness
programs have been initiated to promote good health and exercise are becoming more
popular.

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Accenture is a fortune 500 company. What might surprise, however, is Working Mother
magazine has included Accenture in its 100 Best Companies for Working Mothers for the
past 11 consecutive years (2003-2013). This highlights Accentures value for and
commitment towards professional development of women within its organisation, with 32%
female managers and executives. Accentures employees feel that they can build a solid and
long-term career with the company. (11)

Conclusion

According to Fisher: Human resource management involves all management decisions and
practices that directly affect or influence those who work for the organization. (12) Human
resource management is a strategic and comprehensive approach to the management of an
organizations most valued assets- the people working there who individually and collectively
support the overall performance.
Human resource management is, therefore, part of the process that helps the organization
achieve its objectives. And provides a significant opportunity which should not be passed
when seeking to enhance performance.
5

Bibliography

1.

Human Resource management in Ireland, Third Edition, Patrick Gunnigle, Noreen

Hearty, Michael J Morley.
ULRICH HUMAN RESOURCE CHAMPIONS, HARVARD PRESS, 1997.
Measuring Human resource managements effectiveness in improving performance
(Sunji RamLall, College of Business, University of St. Thomas)
The Nature of Staffing; Part 1, McGraw Hill.

2.
3.
4.
5.

Recruiting, selecting and training for success - A McDonald's Restaurants case study;
Business case studies UK http://businesscasestudies.co.uk/mcdonaldsrestaurants/recruiting-selecting-and-training-for-success/the-importance-ofrecruitment.html#axzz2kA9hEiGI

6.

Staffing Organizations By Heneman and Judge (7th Edition), McGraw Hill.

7.

The Education and Human Capital Requirements Roundtable Published on 17 May

2012
The McGraw-Hill Research Foundation and United States Council Foundation Issued
a White Paper Exploring New Approaches to Lifelong Learning for the 21st Century
http://www.youtube.com/watch?v=hnvokzRkyu4
http://www.workingmother.com/best-companies

8.
9.
10.
11.
12.

Human Resource Accellerator; issues and trends in reward management

http://peoplecyclotron.wordpress.com/articles/issues-and-trends-in-rewardmanagement
PWC Benefits web page. http://www.pwc.co.uk/careers/experienced/benefits.jhtml
http://www.workingmother.com/best-companies
3-Fisher, Cynthia D. and Lyle F. Schoenfeldt and James B.Shaw (1997) Human
Resource management, Third Edition, Houghton Mifflin Company. Boston, USA, p.5.

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