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Abstract:
Many authors have kept up that strategic human resources management specifically
connected to organisational performance. Nonetheless, in spite of the increasing
popularity of SHRM; there have been not very many systematic evaluations of the cases
that it is connected to performance and questions stay as to its theoretical foundations.
This research is conducted to study human resource management (HRM) practice in the
public sector and investigate or explore the impact of HRM practices on the operational
performance. For this reason, primary data has been gathered through questionnaire
from 60 representatives working in a state owned entity (SOE) to be specific Hindustan
Zinc Ltd. of Rajasthan. Simple random sampling was utilized to choose respondents from
Hindustan zinc Ltd. Correlation analysis, regression analysis and T-test were completed
or carried out to look at the relationship between the chose HRM practice and
operational performance of HZL. The investigation of the opinion and perception
gathered from the respondents revealed that, there is a positive and significant
relationship between effective SHRM practices (particularly recruitment and selection,
performance appraisal, involvement and communication and employee relationship) on
the operational performance of HZL. Thusly, the reason for this research is to analyze
the impact of SHRM implementation on the organizational performance. Empirical data
will be gathered from Hindustan Zinc Lit. of Rajasthan.
1.1 INTRODUCTION
Recent hypothetical work in business system has given a help to the noticeable quality of
HR in generating sustained competitive advantage. As per the resource based
perspective of the firm (e.g., Barney, 1986, 1991, 1995), firms can create sustained
competitive advantage just by making esteem in a way that is uncommon and
troublesome for competitors to imitate. Albeit traditional sources of competitive
advantage , for example, natural resources, innovation, economies of scale, et cetera,
create value, the resources based contention is that these sources are progressively simple
to imitate, particularly in contrast with a complex social structure, for example, a
employment system. On the off chance that is along these lines, human resources
strategies might be a particularly imperative source of sustained competitive advantage
(Lado & Wilson, 1994; Pfeffer, 1994; Wright and McMahan, 1992).
The idea or concept of the HR system as a strategic resource has suggestions for both the
attributes and the impacts of such a system. Strategic assets are "the set of difficult to
exchange, trade and emulate, rare, appropriable, and particular or specialized resources
and abilities that offer the company's competitive advantage" (Amit & Shoemaker,
1993). Not at all like capital investments, economic scale, or patents, an appropriately
developed HR framework is an " invisible asset" (Itami, 1987) that makes esteem when
it is so implanted in the operational system of an organisation that it upgrades or enhance
the company's capacities. This interpretation is additionally predictable with the emphasis
on "center abilities" created by Prahalad and Hamel (1990), who contended that
conventional measures of financial leases, for example, the difference between the
market and book value of assets reflect "core capability individuals exemplified skills"
(Hamel & Prahalad ) Why may it be particularly difficult to imitate human resource
strategies that are profoundly implanted in an organisation? Two of the key elements are
causal uncertainty and path dependency (Barney, 1991; Collis and Montgomery, 1995).
To begin with, it is hard to get a handle on the exact instruments by which the interaction
of human resources practices and policies generate value. To imitate a complex system, it
is important to see how the components interact. Are the impacts added substance or
multiplicative, or do they include complex nonlinearities? As our later discourse of fit
and synergy indicates, analysts are far from understanding the exact way of these
interactions. Without having the capacity to see how a HR system works, it is unrealistic
to impersonate it (by, for example, " reverse engineering " it). It is even troublesome for
a contending firm to copy a profitable HR system by procuring ceaselessly one or a
couple beat officials in light of the fact that the understanding of the framework is a
organizational capability that is spread crosswise over many (not only a couple)
individuals in the firm.
Second, these HR system are way reliant. They comprise of policies that are produced
after some time and can't be essentially acquired in the market by contenders. A
competitor can comprehend that a framework is valuable yet is blocked from prompt
impersonation when required to completely execute the strategy (accepting the
framework could be understood) Further, there may be limits on management's
ability to successfully replicate socially complex elements such as culture and
interpersonal relationships.
Human Resource Management (HRM) has been developed into Strategic Human
Resource Management (SHRM) by researchers looking for to emphasize the
significance of the concept to the effective functioning of organizations. To this end,
numerous authors have maintained that SHRM is straight forwardly linked to
organizational performance and there is a pre-ponderous of view or opinion that high-
performing work organizations pay special attention to adopting particular HRM
policies and linking these to the strategies of their organizations. However, regardless
softherising popularity of SHRM, there has been very few methodical evaluations of the
claims that it is connected to performance and doubts remain as to its theoretical
foundations (Harris & Ogbonna2001).
1.4 IMPORTANCE AND JUSTIFICATIONS OF THE STUDY
The importance and justification for conducting this study by the researcher is as
follows:
1- As the writing shows, such a review has not beforehand so much been directed in
HZL, particularly what is identified with strategic human resource management
implementation in the Hindustan zinc Ltd. The research goal is to investigate the
impact of SHRM implementation on the hierarchical execution of the Zinc area in
Rajasthan, which is considered as one of the main development parts in the
economy.
Within the last two decades, there has been a various essential and important
contributions in the literature dealing with issues pertaining to the management of
individuals. Significant attention has been directed towards human resource
management(HRM),which many have seen as speaking to an unmistakable way to
managing individuals (Guest,1997). Interestingly, in spite of the fact that analysts have
highlighted the holistic nature of HRM, much of the initial research into the concept
concentrated on a limited range of issues and has been criticized as `micro analytic'
(Delery and Doty, 1996). Nonetheless, in the last decade, researchers have looked to
show the significance of HRM in influencing organizational performance and it is from
this premise that the current enthusiasm in SHRM has developed (Cappelli and
Crocker-Hefter,1996).
The reported evidance for the US (Gerhart, 2005) recommends that work efficiency or
potentially hierarchical execution are decidedly identified with differing elements of
HR management system, for example, recruitment and selection (Koch McGrath,
1996); training programs (Bartel, 1994); performance evaluation (McDonald and
Smith, 1995); compensation and benefits (Gerhart and Trevor, 1996; Gómez-Mejía,
1992); and innovative practices (Delaney and Huselid, 1996; Huselid, 1995).
Likewise, some research has demonstrated that organizations described by the
utilization of the above practices outperform those that show resolute HR strategies
within the same economic sector (Barton, 2004; Black and Lynch, 2001; 2004;
Ichniowski et al., 1997; among others), even in the case of small and medium-size
units (Way, 2002). Becker and Gerhart (1996), Boxall and Purcell (2003), and
Gerhart (2005; 2007) have made comprehensive reviews of the seminal work on the
relationship between HRM practices and firm performance as done by Arthur (1994),
MacDuffie (1995), and Ichniowski et al. (1997) in manufacturing and by Batt (2002)
in the service sector. Huselid (1995), thusly, conducted an early and powerful review
that presented the concept of complementarities as applied to HRM practices (Milgrom
and Roberts 1990). The presence of positive linkages between no less than one
particular measurement of firms' economic performance and certain HRM practice has
likewise been found in little and medium size units (Way, 2002).
Ichniowski et al. (1997) clarify that when HRM practices are consolidated in various
structures, the effects on organizational performance are much more prominent than
when practices are investigated individually. In fact, Mac Duffie (1995) contends that
the appropriate unit of analysis for studying the strategic link between different HRM
practices to performance does not include singular activities as much as interrelated
and internally consistent practices, called “bundles.” He clarifies that a "bundle"
makes the numerous, strengthening conditions that support employee motivation.
Similarly of argumentation, Perry-Smith and Blum (2000) recommend that HR
bundles catch more extensive and larger amount impacts than those caught by
concentrating on individual strategies and are especially fitting for researching firm-
level impacts.
HR managerial strategies showed by firms trying to enhance organizational
performance have been characterized in two broad type relying upon their inherent
character being focused towards the expansion of HR's skill levels or else of the level
of contribution of workers in the hierarchical system and the execution of the firm.
These two classifications are examined in the writing under various groups, for
example, "control" and “commitment-oriented” practices (Walton, 1985); " efficiency’
and ‘strategy’" related HRM activities (Fombrun, 1984); or "calculative" and
"community" HR activities (Gooderham et al., 1999). The subsets of practices with
the highest weight in a specific bundle worked by Factor Analysis are by and large of it
is possible that one write or the other and in this manner the relating group is classified
in accordance. However, it is at times the case that the bundle has a mixed and/or
ambiguous character due to the fact that efficiency and strategically oriented HRM
activities are both key components of the resulting construct. Gooderham (2008)
propose to denote these configurations as ‘intermediary’ bundles.
Interestingly, the growing interest in SHRM has not been matched by the development of
appropriate theoretical constructs for the thought (Guest,1997). Certainly, researchers
have criticized the underpinning theoretical foundations of SHRM and many have called
for the formulation of a theory of SHRM. Two major reasons account for this criticism.
The first is that the concept of HRM, from which SHRM originated, has itself been
subjected to extensive criticisms for its poor theoretical framework (Legge,1994). The
second, and maybe more essential reason, is that analysts have moved toward the field of
SHRM from an assortment of points of view with little affirmation of the distinctions
inside them and no endeavor has been made to distinguish the consistent themes in the
viewpoints (Delery and Doty,1996). Suchan comprehension is critical to empower an
appraisal of the suitability and selection of the idea. A brief discussion is proffered in
what takes after.
In a widespread of the literature, Delery and Doty (1996) distinguish three classes of
specialists and the points of view that they have received in theorizing SHRM. They tag
the first group of specialists `universalists' to a great extent in view of their enthusiasm
for recognizing `best practice' SHRM policies. Delery and Doty (1996) note that
``these researchers...posit that some human resource practices a real ways better than
others and that all organizations should adopt these best practices.'' It is within this
perspective of theorizing in SHRM that the present interest in developing `high
performance work practices' is located (Osterman, 1994).Thus, the assumption is that
the adoption of certain SHRM policies is likely to result in increased organizational
performance (Kochan and Dyer,1993).
These obliged of conjecturing distinguished by Delery and Doty(1996) contains those
analysts adopting a contingency approach. With regards to the early foundation of the
possibility point of view within organizational theory, these researcher contend that the
accomplishment of HRM policies is dependent upon the accomplishment of a match
between human resource policies and different parts of the organisation. For instance,
analysts receiving this point of view have shown that diverse human resources policies
might be required at various stages in an organisation's life cycle (Bird and
Beecher,1995).
Delery and Doty (1996) identified a third group of SHRM theorists as adopting a
`configurational' approach. Delery and Doty (1996) renowned that this approach is
more difficult, complex and consists of researchers who seek to``.. .identify
configurations or distinctive patterns of factors which are posited to be maximally
effectual. ''This class of researchers are also said to approach their subject from a more
theoretical point of view and many of the phenomena they make out may not of
necessity be empirically observable (Doty and Glick,1994).
A consistent theme in all three theoretical perspectives of SHRM is the assumption that
SHRM is linked to organizational performance. In any case, while the literature is rich
with cases that both HRM and SHRM are connected to operational performance, there
is minimal empirical evaluation of this and the theoretical foundations whereupon these
connections are based have been portrayed as insufficient (Guest,1997)
Taking everything into account, the examination for this study involves looking at SHRM
approach. It looks at the hypothesis that organisations that implement SHRM approach
accomplish higher performance than organisation that don't. This research will
concentrate on this issue and will add to the body of knowledge about the impact or effect
of strategic human resource on firm performance.
Though, the value of Cronbach’s alpha (shown in the table-2) for all the items of
questionnaire is 0.920. The Cronbach’s alpha for individual items of recruitment and
selection (0.806); training and development (0.712); employee relations (0.742) and
operational performance (0.835) are found above acceptable level showing good
internal consistency. However, Cronbach’s alpha for the items of performance
appraisal (0.676); compensation and reward (0.610) and Involvement and
Communication (0.623) are found below acceptable level (0.7). The different
perception of respondents regarding HRM practices such as Compensation and
Reward and Involvement and Communication may cause the lower value of
Cronbach’s Alpha showing lower reliability.
Research Hypotheses
This review is undertaken to examine six major SHRM practices in HZL namely;
recruitment and selection, performance appraisal, compensation and reward, training
and development, involvement and communication, employee relationship etc. and
examine the effect of the abovementioned practices on non-financial as well as
operational measures of organizational performance such as innovation for products
and process, effectiveness, productivity, efficiency, development, stakeholders
satisfaction, product quality, comparative market share and overall performance
compared to industry average.
1.7.3
Methedology
A study technique will be used. It is a standout amongst the most well-known used
strategies for data collection using standardized measurement tools. To differentiate the
SHRM implementation level in the targeted on firms, a questionnaire will be planned in
view of the meaning of strategic human resource management. Furthermore, objective
and subjective factors (variables) will be utilized to measure the operational performance.
1.7.4 Data Analysis Method
The researcher will use the suitable or appropriate data analysis tool, which is:
Descriptive statistics (e. g. mean, standard deviation), ANOVA, multivariate analysis,
and other analysis tools will be applied.
Correlation Analysis
The Karl Pearson’s coefficient of correlation has been calculated with the total scores
of individual HRM practices considered under this study (recruitment and selection,
performance appraisal, compensation and reward, training and development,
involvement and communication and employee relationship) and Operational
Performance of Hindustan zinc industry of Rajasthan. The values found in correlation
matrix (shown in the table-) indicates the significant relationship of participation and
communication and employee relationship) with operational performance of zinc
industry.
Table-3: Correlation Matrix
RS.Total PA.Total CR.Total TD.Total IC.Total ER.Total OP.Total
RS.Total Pearson 1 .613** .565** .414** .523** .382** .263*
Correlation
Sig.(2tailed) .000 .000 .001 .000 .002 .039
PA.Total Pearson .613** 1 .584** 1.568** .463** .281* .302*
Correlation
Sig.(2tailed) .000 .000 .000 .000 .027 .017
CR.Total Pearson .565** .584** 1 .572** .546** .127 .147
Correlation
Sig.(2tailed) .000 .000 .000 .000 .327 .254
TD.Total Pearson .414** .568** .572** 1 .448** .159 .097
Correlation
Sig.(2tailed) .001 .000 .000 .000 .216 .453
IC.Total Pearson .523** .463** .546** .448** 1 .436** .450**
Correlation
Sig.(2tailed) .000 .000 .000 .000 .000 .000
ER.Total Pearson .382 .281 .127 .159 .436 1 .738
Correlation
Sig.(2tailed) .002 .027 .327 .216 .000 .000
OP.Total Pearson .263* .302* .147 .097 .450** .738** 1
Correlation
Sig.(2tailed) .039 .017 .254 .453 .000 .000
N 60 60 60 60 60 60 60
**. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed).
The coefficient of regression (shown in the table-4) indicates that recruitment and
selection practice contributes 6.9% and performance appraisal practice contributes
9.1% to the operational performance of HZL, whereas the contribution of involvement
and communication practice is 45% and employee relationship practice is 73.8%. The
regression analysis exposed that the operational performance is significantly affected
by involvement and communication and employee relationship.
Recommendations
As per the finding of this study, effective HRM practices especially recruitment and
selection practice, performance appraisal, involvement and communication and employee
relationship can be considered a set of determinants of Hindustan zinc industry’s
operational performance. The literature review showed research has established that
although the value of a company’s human resource assets are not reported on its financial
statements; it nevertheless, has significant impact on an organization’s performance. In any
case, training and development and compensation and rewards are not found significant for
the operational performance of zinc sector. The evidence suggests that these HRM practices
are relied upon to have mere contribution positively towards zinc industry’s operational
performance, as perceived by the respondents. In light of the discoveries of this review, it is
suggested that zinc industry management ought to guarantee that the HRM standards and
policies is successfully defined and implemented to accomplish outstanding performance
consistently. In addition, the organizational HRM policy should be clearly communicated
to all the employees of zinc companies to ensure widespread dissemination and application
of the policies. However, zinc companies management also should set specific and
effective standard and policy for each HRM practices affecting operational performance.
Conclusion
Lastly, the finding of this review is relied upon to offer significant knowledge to the
management of the state owned organisations particularly Hindustan zinc in Rajasthan
about the vital significance of HRM practices for superior and sustainable operational
performance. However, finding of this study could be adequately summed up to all the
state owned Hindustan zinc ltd. of Rajasthan. Additionally, future research could likewise
be recreated to other sector, including an examination between the private companies.
The research structure and speculation created for this review could be extended to
incorporate the impact of other factor on the operational performance.
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