IJEMR October 2016 - Vol 6 Issue 10 - Online - ISSN 22492585 Print - ISSN 2249-8672

The Effect of Human Resource Management Practices on Corporate Performance

Organizations in Coimbatore - A Study
*Umashankar K
**Dr Barani G
*Research Scholar, Management Studies, Anna University Chennai, Tamil Nadu, India
**Professor, Anna University, Regional Centre Coimbatore, Tamil Nadu, India
Abstract: HRM practices and capacities have increased more key part in today's focused
associations. Customary faculty administration and HR administration exercises are
insufficient to contend in the testing situations. HR divisions ought to wind up key
accomplices of associations' top administration level groups and be a part of the key arranging
process. All HRM capacities ought to be outlined reliable with the methodologies and
objectives of associations. There ought to be vertical and level consistency among all HR
capacities and association's procedures. So as to build up the aptitudes of workers and
backing their creativity, HRM capacities and practices ought to be actualized by necessities of
representatives. Associations can increase upper hand by outlining their HRM capacities
methodically and support their representatives for being imaginative. In this paper, firstly the
advancement and significance of key HRM are researched. A positive relationship between
vital HRM practices and development is found in the investigation and the outcomes are
talked about in the conclusion segment.
Keywords: Strategic HRM, competitive advantage, HRM functions, innovation.
Introduction
The most ideal approach to comprehend vital HR administration is by contrasting it with
human asset administration. HRM concentrates on enlisting and contracting the best workers
and giving them the remuneration, advantages, preparing, and advancement they should be
fruitful inside an association. Be that as it may, vital human asset administration makes
these obligations one stride further by adjusting them to the objectives of different divisions
and general authoritative objectives. HR offices that practice key administration likewise
guarantee that the greater part of their targets is adjusted to the mission, vision, qualities,
and objectives of the association of which they are a section. Key human asset administration
is the act of pulling in, creating, compensating, and holding representatives for the advantage
of both the workers as people and the association all in all. HR offices that practice key
human asset administration don't work autonomously inside a storehouse; they cooperate
with different divisions inside an association keeping in mind the end goal to comprehend
their objectives and afterward make systems that adjust to those destinations, and those of
the association. Therefore, the objectives of a human asset division reflect and bolster the
objectives of whatever is left of the association. Key HRM is seen as an accomplice in
hierarchical accomplishment, instead of a need for lawful consistence or pay. Vital HRM uses
the ability and opportunity inside the HR office to make different offices more grounded and
more successful.
At the point when a human asset office deliberately builds up its arrangements for enrollment,
preparing, and remuneration in light of the objectives of the association, it is guaranteeing a
more noteworthy shot of hierarchical achievement. Key HRM characterizes the association's
expectations and arrangements on how its business objectives ought to be accomplished
through individuals. It depends on three recommendations: to begin with, that human capital
is a noteworthy wellspring of upper hand; second, that it is individuals who actualize the key
arrangement; and, third, that an orderly approach ought to be adjusted to characterizing
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IJEMR October 2016 - Vol 6 Issue 10 - Online - ISSN 22492585 Print - ISSN 2249-8672
where the association needs to go and how it ought to arrive. Vital HRM is a procedure that
includes the utilization of all-encompassing ways to deal with the advancement of HR systems,
which are coordinated vertically with the business methodology and on a level plane with each
other. These procedures characterize expectations and arrangements identified with general
hierarchical contemplations, for example, authoritative adequacy, and to more particular parts
of individuals administration, for example, resourcing, learning and improvement, prize and
worker relations.
Key HRM addresses wide authoritative issues identifying with changes in structure and
culture, hierarchical adequacy and execution, coordinating assets to future necessities, the
advancement of particular abilities, information administration, and the administration of
progress. It is worried with both human capital necessities and the advancement of procedure
capacities, that is, the capacity to complete things successfully. Generally speaking, it
manages any significant individuals issues that affect or are influenced by the vital
arrangements of the association. Vital HRM supplies a point of view in transit in which basic
issues or achievement elements identified with individuals can be tended to and vital choices
are made that have a noteworthy and long haul sway on the conduct and accomplishment of
the association. The key point of key HRM is to produce key ability by guaranteeing that the
association has the gifted, conferred and all around roused representatives it needs to
accomplish supported upper hand. Its goal is to give an ability to know east from west in a
frequently turbulent environment so that the business needs of the association and the
individual and aggregate needs of its workers can be met by the improvement and usage of
cognizant and reasonable HR strategies and projects. While considering the points of vital
HRM it is important to consider how HR methodologies will check the interests of the
considerable number of partners in the association: workers by and large and in addition
proprietors and administration. Delicate key HRM' will put more noteworthy accentuation on
the human relations part of individuals administration, focusing persistent advancement,
correspondence, inclusion, security of business, the nature of working life and work life
equalization. Moral contemplations will be vital. 'Hard vital HRM' then again will accentuate
the respect be acquired by putting resources into HR in light of a legitimate concern for the
business.
Key HRM ought to endeavor to accomplish an appropriate harmony between the hard and
delicate components. All associations exist to accomplish a reason and they should guarantee
that they have the assets required to do as such and that they utilize them adequately. Be
that as it may, they ought to likewise check the human contemplations contained in the idea
of delicate vital HRM. Methodology, accomplishing key fit, elite administration, high-duty
administration and high-contribution administration, as depicted beneath.
A key point of asset based HR methodology, as Barney (1991) shows, is to create key capacity
accomplishing vital fit amongst assets and open doors and getting included worth from the
viable organization of assets. An asset based methodology will address strategies for
expanding the association's key ability by the advancement of supervisors and other staff who
can think and plan deliberately and who comprehend the key vital issues. In accordance with
human capital hypothesis, asset based hypothesis underlines that interest in individuals adds
to their quality in the firm. The vital objective will be to 'make firms which are more keen and
adaptable than their rivals' by contracting and growing more gifted staff and by amplifying
their abilities base. Asset based technique is along these lines worried with the upgrade of the
human or scholarly capital of the firm. 'Information has turned into a direct upper hand for
organizations offering thoughts and connections. The test to associations is to guarantee that
they have the ability to discover, absorb, remunerate and hold the gifted people they require.'
When the outside environment is in a condition of flux, the company's own assets and
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IJEMR October 2016 - Vol 6 Issue 10 - Online - ISSN 22492585 Print - ISSN 2249-8672
capacities might be an a great deal steadier premise on which to characterize its personality.
Thus, a meaning of a business as far as what it is equipped for doing may offer a more solid
premise for methodology than a definition based upon the necessities (eg markets) which the
business tries to fulfill.
HRM functions and practices are the infrastructure elements of strategic HRM process.
Organizations should strategically utilize these infrastructure requirements to gain
competitive advantage, particularly through their human resources and human resource
management practices. Infrastructure requirements consist of those functions and activities
are necessary for effective management of an organizations human resources. The major
purposes of these activities traditionally have been to attract, retain, and motivate employees.
They are referred as HRM practices and the key HRM practices include; human resource
planning, staffing including recruitment, selection and socialization, appraising,
compensation, training and development. The result of effectively managing human resources
is an enhanced ability to attract and retain qualified employees who are motivated to perform,
and the results of having the right employees motivated to perform are numerous. They
include greater profitability, low employee turnover, high product quality, lower production
costs, and more rapid acceptance and implementation of corporate strategy. Although HR
executives involvement in strategic management was not always associated with firm
performance, their involvement had a substantial effect when the firms pursued an innovation
strategy for which skilled employees were a critical source of core competence manage
innovative workforce effectively, traditional HRM practices, such as work systems, HR flows,
rewards and employee influence, have to be renewed to be in line with the innovative strategy
of the organisation. HRM innovation seeks a model that pays attention to the dynamic
character of various types of innovations not just cost reduction or quality in organizations,
that is in line with an innovation oriented organizational strategy supported by deliberately
chosen (HRM) policies and practices at all relevant levels.
Reviews
Conrad Lashley, (1999) Employee empowerment is said to benefit all organisations. The fast
moving global economy requires that organisations learn and adapt to change quickly, and
employees have a key role to play here. This is particularly true in modern service
organisations. The empowered employee is said to respond more quickly to customer service
requests, act to rectify complaints and be more engaged in service encounters. Gijs
Houtzagers, (1999) nowadays in order to contribute to the competitive strength of the
organization empowerment is seen as a useful tool. But the organization must know what it
wants to empower. Therefore it must be able to map the desired skills and competence levels
for the workforce and to compare these with the actual situation. This article gives an overview
of how to set up skills and competence management. Guvenc G. Alpander, (1991) One MNCs
attempts to develop empowerment strategies are reviewed. These strategies are based on a
crosscultural study of employee needs in the companys Australian, German and Japanese
subsidiaries. Although the need to control stands out in each of the three countries, employee
needs patterns are different. The needs for economic security, belongingness, recognition,
selfworth, and control relate with each in different configurations and patterns. Because of
significant differences in employee needs patterns, empowerment strategies enabling
employees to fulfil their need to control cannot be transferred from one culture to another
without major adjustments. In some instances very little is needed to empower an employee
while in others almost nothing works. Some light is shed on why, within an MNC, a similar
amount of control over their work and work environments empowers Japanese workers much
more than their Australian and German counterparts.
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IJEMR October 2016 - Vol 6 Issue 10 - Online - ISSN 22492585 Print - ISSN 2249-8672
Leon A. Kappelman, Thomas C. Richards, (1996) examines an innovative first step which one
organization took on the road to employee empowerment. Indicates that empowered employees
are more able to adapt to change and less likely to resist it, and their need for control is being
met through their empowerment, rather than by their resistance. Manuela Pardo del
Val, Bruce Lloyd, (2003) this paper aims to contribute to the empowerment literature by
providing a concrete definition of the topic and thus a way of measuring
the empowerment level in organisations. The tool designed to measure empowerment resulting
from the previous theoretical definition has been proved to be a scale, fulfilling the necessary
properties: reliability and validity. Measuring empowerment not only serves to know how
many companies use empowerment practices but also can be used to delve deeper into
relationships between empowerment levels and other managerial concepts, such as the effects
of empowerment on organisational change, on quality, or even on organisational performance.
Martin Dufficy, (1998) examines the development of the empowerment audit (EA) as a
quantitative tool to measure the degree to which employees within an organisation
are empowered. Analyses how what is, in effect, a twoyear survey of 100plus sites of large
and mediumsized manufacturers shows a correlation between the extent of
empowerment within companies and the improvement in business performance over time.
Norma DAnnunzioGreen, John Macandrew, (1999) Evidence to date shows a divergence in
the methods and approaches used by companies to introduce empowerment and indeed a
wide debate as to the meaning and appropriateness of the term itself. The popularity of the
concept has led many organisations to dive in at the deep end, wanting to experience the
benefits of empowerment without perhaps stopping to consider the wider implications and
consequences. It provides an insight into differing perceptions of the meaning of
empowerment between employees and managers; the positive and negative experiences of
those working in an empowerment culture and the changes required for a renewed attempt at
introducing empowerment to be successful. The authors conclude that quick fix strategies
will rarely be successful and urge the development of a longerterm, more sustainable,
approach.
Nurdan zaralli, (2003) the purpose of this article is to investigate transformational leadership
in relation to empowerment and team effectiveness. As part of an integrative model of
leadership, transformational leadership style of superiors is proposed to be related to the
strength of subordinate empowerment and team effectiveness. Shauna L. Meyerson and
Theresa J.B. Kline, (2008) results supported the proposition that empowerment should be
separated into its behavioral and psychological components. The dimensions
of empowerment also differentially predicted job outcomes.
Methods
The reason for the study is to decide the relationship between key HR administration practices
and development. Another reason for the study is to uncover the view of organizations on vital
HR administration practices and advancement and clarify the improvement needs. Likewise it
is examined that whether the impression of key HR administration practices and development
show distinction or not as per representative number, organization age and capital structure.
The study is critical to demonstrate the relationship between key HR administration practices
and development. With the aftereffects of the exploration, it is conceivable to give significant a
bit of knowledge about the impact of vital HRM rehearses on advancement. There is an
absence of experimental study in the related writing about the relationship between vital HRM
and advancement discernment. By considering the need of experimental studies in this field,
clearly both the hypothetical and exact aftereffects of this examination will give a vital
commitment to the related writing.
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IJEMR October 2016 - Vol 6 Issue 10 - Online - ISSN 22492585 Print - ISSN 2249-8672
Sample and Data Collection
Distinctive organizations from different areas partook to the exploration (n=160) between
November 2015-February 2016. The technique for the examination testing is "comfort
inspecting". Two scales were utilized as a part of the surveys as estimation instrument of the
exploration. 7 measurements that measure key HRM rehearse. The scale was meant Turkish
by the scientists and one measurement was wiped out by considering the structure of Turkish
organizations so the key HRM scale was utilized as with measurements (preparing and
improvement, support to choices, employer stability, work recognizable proof, execution
assessment and vocation administration) and 24 things in the examination as indicated by
face legitimacy. The inquiries regarding social demographic capabilities, for example, sexual
orientation, training, status, position and age were incorporated to the things and the survey
structure was produced. The polls were sent to workers by means of email and gathered by
the same way. Polls were sent to HR representatives who are working in various segments. HR
workers answered the surveys from these segments.
Data Analysis
The items of strategic HRM scale were presented using Yes or No. If the company had this
HRM practice, the answer was 1: Yes and if the company did not have this HRM practice, the
answer was 0: No. Then the total index score of strategic HRM practices was computed. This
scoring had an advantage of determining the existence of strategic HRM practices in the
companies and integrating organizational level analysis. The items of innovation scale were
presented using a five-point Likert item as 1: strongly disagree and 5: strongly agree. Data
was analyzed by IBM SPSS 20. Cronbach alpha reliability value was computed in order to find
the reliability of the scale. The reliability values are 0.870 for strategic HRM scale and 0.890
for innovation scale. The reliability values of both scales are high for researches in social
sciences Descriptive statistical analysis (arithmetic mean and standard deviation) and Pearson
correlation test were used to determine the relationship between strategic HRM and
innovation perceptions.
Findings and Results
According to descriptive statistics results, it can be seen that most of the companies support
their employees to participate decision making process but they do not reflect this to career
management processes.
Table 1: Mean and SD of SHRM
Mean

SD

Innovation

3.31

0.96

Training-Development

3.71

0.97

Participation to Decisions

3.76

1.02

Job Security

3.31

1.09

Job Identification

3.61

1.14

Performance Evaluation

3.54

1.12

Career Management

3.57

1.09

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IJEMR October 2016 - Vol 6 Issue 10 - Online - ISSN 22492585 Print - ISSN 2249-8672
Table 2: Correlations Analysis of SHRM

Career
Management

Performanc Job
Job
e
Identificatio
Security
Evaluation n

Participatio Trainingto Developme Innovation SHRM

n
Decisions nt

Pearson
Correlation
Sig.
tailed)

SHR
M

Innov
ation

Traini
ngDevel
opme
nt

.173*

.320**

.363**

.029

.000

.000

.211**

.287**

.007

.000

.334**

(2-

Pearson
Correlation

.173*

Sig.
tailed)

.029

(2-

Pearson
Correlation
Sig.
tailed)

(2-

Pearson
Correlation
Sig.
tailed)

(2-

Pearson
Correlation
Sig.
tailed)

(2-

Pearson
Correlation
Sig.
tailed)

(2-

Pearson
Correlation
Sig.
tailed)

(2-

Pearson
Correlation
Sig.
tailed)
N

(2-

.320*
*

.211**

.000

.007

.363*

Partici
pation
to
Decisio
ns

.000

.287**

.334**

.000

.000

.000

.328**

.243**

.482**

.000

.000

.002

.000

.372**

.410**

.395**

.000

.000

.000

.000

.061

.382**

.267**

.000

.447

.000

.001

.294**

.332**

.306**

.000

.000

.000

160

160

160

.459*

.432*

.452*

.657*

Job
Identifi
cation

Perfor
mance
Evalua
tion

Career
Manag
ement

**

.432**

.452**

.657**

.000

.000

.000

.000

**

.372**

.061

.294**

.000

.000

.447

.000

**

.410**

.382**

.332**

.002

.000

.000

.000

**

.395**

.267**

.306**

.000

.000

.001

.000

.611**

.382**

.437**

.000

.000

.000

.380**

.498**

.000

.000

.483**

Job
Sec
urity
.459

.328

.243

.482

.611
**

.000
.382
**

.380**

.000

.000

.437

.000

**

.498**

.483**

.000

.000

.000

.000

160

160

160

160

160
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IJEMR October 2016 - Vol 6 Issue 10 - Online - ISSN 22492585 Print - ISSN 2249-8672
*. Correlation is significant at the 0.05 level (2-tailed).
**. Correlation is significant at the 0.01 level (2-tailed).
There is a strong positive relationship between HRM practices and innovation as a result we
can say that strategic HRM practices support innovative opinions of employees.
Figure 1: Proprieties Information of SHRM

Figure 1: Proprieties Information of Innovation

Conclusion
HR is the important and interesting resources of associations for increasing upper hand in
today's difficult surroundings. The associations which can choose and hold qualified workers
with the required abilities can be effective today. HRM practices are imperative for selecting
and holding these qualified workers. Outlining these HRM capacities and practices
deliberately and as indicated by the necessities of representatives can help associations to pull
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IJEMR October 2016 - Vol 6 Issue 10 - Online - ISSN 22492585 Print - ISSN 2249-8672
in and hold these work powers. Vital HRM hones likewise have essential part in supporting
advancement in associations. HRM practices, for example, preparing and advancement
exercises, cooperation to basic leadership procedure and strengthening can bolster workers'
imaginative thoughts and urge them to be dynamic in development process. Accordingly, a
positive and solid relationship has been found amongst advancement and HRM practices, for
example, preparing improvement, support to basic leadership, work examination, work
distinguishing proof, and execution assessment and profession administration. Additionally it
is seen that associations that took an interest to the examination have been utilizing these key
HRM rehearses as a part of a medium level.
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