The use of human resource models and practices to improve organisational and employee performance


The use of human resource models and practices to improve organisational and employee performance

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Positive outcomes in an organisation are the objective of any managerial team. In the contemporary business world, human resource has a strategic role that has seen a rise its importance in the achievement of organisational objectives. Human resource practices also known as High Performance Work Practices that intend to enhance employees’ abilities, skills, knowledge, and motivation et cetera often achieve positive outcomes, such as greater commitment, in an organisation (Jiang et al., 2012). In addition, Human resource, through capital accumulation, is seen as a source of competitive advantage and therefore organisations are integrating wider fields of human resource management as a way of developing sustainable competition (Shaw, Park and Kim, 2012). In this view, in this essay I seek to evaluate the human resource strategies, models and practices that a human resource director can use to solve for employee performance and consequently organisational performance issues.

Performance improvement at the strategic level

Every organisation engages in HR activities of which include HR policies. In some organisations the policies are merely statements of expectations and aspirations while in others they are actually guidelines that are observed on a day to day basis. Practicing HR policies (aligning them to practices) on a daily basis results in an effective organisation. For starters, an organisation needs to adopt relevant and effective HR policies. Some of the HR policies include job analysis and competency modeling, recruitment and retention policies, performance management, performance-based reward and compensation, HR planning for alignment and change, promoting safety, health and well being among others (Jackson, Werne and Schuler, 2011).

As mentioned above, though the HR policies may exist, they effect on performance only if they are implemented. This is majorly true for policies that directly contribute to employee satisfaction. For example, creating flexible work environments and fair pay policies directed at employee satisfaction lead to improved performance. The case of Wegman’s Food Market Inc justifies this. The firm achieved a remarkable improvement in its performance when it shaped policies to address employee satisfaction. Although the problem being addressed was the customer service; the firm was pursuing differentiation in its rather competitive market by offering excellent customer service. Moreover, the firm included policies addressing social responsibility and this improved performance (Ezzedeen, Hyde and Laurin, 2006).

Performance management is about effective strategic and integrated management of individuals and teams. Performance management incorporates integrated HR activities that include valuing people, involving people, paying people and developing people (Armstrong, 2000). In order to achieve better ways to managing people there are various models of human resource that are directed at managing teams and individuals. These include the Universalist approach (best practices approach),   best-fit approach and the resource-based approach (Lucas, Mathieson and Lupton, 2006).

The first model is the contingent (best fit model) which posits that effective human resource management requires a set of policies and people management guidelines that, firstly, supports the firm’s external environment and competitive strategy and, secondly, supports the firm’s culture, internal structures and employee capabilities (Armstrong, 2009). To this end this model has been considered as superior for its ability to address a firm’s issues with an idiosyncratic perspective. Some researchers have preferred it over the best practices approach (Al-Karim and Parbudyal, 2011). A case sample of the application of the strategic fit is Thomas Cook, a travel giant in the UK and worldwide. The firm has internal issues that are concerned with employees being stressed at work and the lack of job security. It also has external issues that include fierce competition from other operators and that have forced it to incorporate a different strategic intent (Hiscott, 2014). This firm can thus apply the contingency model to deal with the internal and external issues simultaneously.

On the internal issues, the contingency models provides that effective HR is about creating guidelines that support employees with reference to the company’s structures, culture and capabilities. Since the specific issue at Thomas Cook is that employees feel the management is forcing rules on them beyond their capabilities (Hiscott, 2014), then applying the model can be crucial in aligning the firm’s rules with employee capabilities. On the external issues, the model posits that the firm’s strategic intent be aligned to HR practices. Thomas Cook follows more than a single strategic intent which is a common trend in companies (Shields, 2007). The firm can thus achieve better performance by creating a match between HR practices and the strategic intent. For example, on differentiation, the firm can achieve unique flight service provisions by conducting exclusive training and development for the flight attendants. These provisions of the contingency model can be complemented using the resource-based view model.

The resource-based view model advocates for a firm to use the available tangible and intangible resources to achieve a competitive advantage (Armstrong, 2009). According to Buller and McEvoy (2012), human capital and social capital are the most crucial resources in creating and sustaining superior organisational performance. Essentially, the concept behind the resource-based view is exploiting a particular resource that is unique to a firm and cannot be imitated by competitors (it imitation creates diseconomies to the competitor) (Shaw, Park and Kim, 2012). In this particular case, a HR manager can endeavor to develop a workforce that possesses organisation-specific capabilities.

Taking an example of Costa Coffee, the firm is a service provision type and thus more focus lies in the process involved in achieving the final product- coffee. The organisation-specific HR development would be to create proper induction programs for new Baristas to help them observe the distinct firm’s taste over their stay. This is in light with the firms issues in training and development where some employees have had to train themselves on the Job (Benedictus, 2013). However the resource based view is coupled with the challenge of retaining talent due to inter-organisational mobility of human capital. This has been identified as contemporary issue by research (Harpaz and Meshoulam, 2010; Jackson, Werne and Schuler, 2011).

High-performance work practices are a set of HR practices that are linked to high-performance work systems (HPWS) and are basically instrumental in performance improvement in general. Sung and Ashton (2006) identify some of the HPWPs as annual review of employees’ training needs, a structured induction training, training to perform multiple jobs, a mentorship program for employees and a formal performance feedback from the supervisors and clients. The adoption of HPWSs in a study done by Foley, Ngo and Loi (2012) on their adoption of by foreign subsidiaries of multinational corporations reveals that they are positively related to the subsidiaries’ performance. Moreover a practice such as the incorporation of contingent labour as opposed to mere focus standard labour has shown that a firm can cut payoffs related to generating productivity from the standard labour (Stirpe, Bonache and Revilla, 2014).

The contingency and resource-based view are offer effective guidelines to performance improvement but they are bound by certain weaknesses that a human resource manager needs to address. The contingency model proposes a fit between the strategic intent and HR practices. A HR manager can thus adopt HPWPs that properly optimize HR practices of the firm. For example, the use of induction training under which the HR manager involves the line-manager in ensuring new employees are well induced. Moreover, the manager needs to make decisions after incorporating the feedback from employees to ensure their voice in given enough attention on issues such as job flexibility. The resource-based view fails to address external issues such as changes in industrial trends (Rugman and Verbeke, 2002). This a HR manager can address by studying the industry and suggesting changes to the management in regard to the strategic intent. As mentioned earlier, strategic intent is addressed by HPWPs related to the contingency model. However external factors can be better addressed by the top management because in the case of Nokia, the HR may have been performing exemplarily but failure by the management to address external issues led to its phasing out.

Employee engagement and its impact on HR performance management

Employee engagement is about creating possibilities for employees to interact with their colleagues, the managers and the greater organisation and also creating an environment where the employee is motivated to perform well. It encompasses flexibility, change and continuous improvements (CIPD, 2009). Getting employees engaged – socially, intellectually and emotionally – is the critical in developing a responsive workforce (CIPD, 2010). There are also numerous benefits that will accrue to a firm as a result of employee engagement. The benefits to be expected, as per CIPD (2010), include better performance, more innovativeness, and better feedback from employees, greater personal well-being, and overall commitment to work among others.

In order to achieve employee engagement, various stakeholders are involved; line-managers, HR professionals and employees. Each has a role to play; for example, the manager ensures practices are consistent with HR policies, HR professionals offer current know-how on policies and practices and how to implement them while employees maintain flexibility and adaptability to suggested change (Jackson, Werne and Schuler, 2011). Macleod and Clarke in their concept of employee engagement offer some fundamental enablers that are supposed to be part of any employee engagement strategy. They include leadership, integrity, engaging line managers and recognising employee’s voice (Dromey, 2014).

Employee engagement has seen a rise in its importance over the years as managers continue to recognise its positive impact on performance (Dromey, 2014). In the contemporary business world research shows that only 13% of the employees feel engaged (Bersin, 2014a). Bersin (2014a) also notes a challenge whereby almost twice this employee percentage is disengaged and likely to negatively influence their colleagues.  Employee engagement has also faced other challenges because as Bersin (2014b) explains, hiring the wrong people can lead do disengagement regardless of what the HR manager does. Other issues include questions regarding what to change about how people are managed, changing the work environment and changing who to hire (the questions here being are the right people for the mission and culture being hired? Are they assessed well?). These issues have not been entirely addressed by engagement surveys (Bersin, 2014b).

The equity theory of motivation offers a solution regarding the use of rewards to foster motivation. The fundamental point in this theory is that employee will only be comfortable with the rewards structure if they deem it as fair in comparison to the input that is being done. It solely relies on an individual’s subjective judgment (Koontz, 2010). However, mostly rewards from firms are external and employees in general are not only after monetary compensation but also internal motivation factors (Bersin, 2014a). Borrowing from the equity theory, the aim should be in creating fair rewards intrinsically since the current structures focus more on extrinsic rewards. Intrinsic motivating factors are superior to extrinsic factors which are mostly fueled by coercion or external rewards (ILM, 2013; Armstrong, 2009).

A critical analysis of the intrinsic motivating factors shows that they are centralised around the personal needs of an individual. Abraham Maslow, in his model, has classified personal needs in categories as physiological, safety, social, self-esteem and self-actualization (Schwalbe, 2010). However the challenge with implementing these needs is that each of these needs when catered for opens up room for the next tier of needs. Frederick Herzberg in his two factor theory on motivation has highlighted practices (referred to as satisfiers) that can be essential in solving issues on intrinsic motivation (Schermerhorn, 2010).

In order to achieve an effective engagement model, the HR director needs to address the issue of hiring the right people. As noted above, research shows that nothing a HR does can engage an employee who does not relate to the mission and culture of an organisation (Bersin, 2014b). Secondly, it is imperative to motivate employee based on rewards and compensation but again, as research shows, extrinsic compensation is not entirely effective. Therefore, a HR manager needs to cater for intrinsic motivation which seems as the contemporary way of engaging the workforce. Intrinsic motivation can be effected through an understanding of models presented by Maslow and Herzberg. The main satisfiers a manager should focus on are achievement, recognition, the work itself, responsibility, advancement and growth.


The main task of every HR manager is to foster productivity by aligning HR policies and practices. This is supposed to contribute to the overall performance of a firm. In order to achieve this, a manager needs to address arising – such as disengagement – issues at the strategic level and employee level. To assist a HR performance management at the strategic level are HR policies, models such as the contingency model, best practices and resource based view model and at the employee level are theories such as the equity theory, Maslow’s theory and Herzberg’s theory. A manager has to balance these strategies and models and apply them as part of effective people management framework.


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