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What Are The Effects Of Human Resource Management On Corporate Performance And Employees?

2916 words - 12 pages

This essay is to discuss what the effects of Human Resource Management are on both corporate performance and employees. In order to do that I will first define what Human Resource Management is by looking at some of the existing definitions. I will then look at the relationship of HRM and performance using Paauwe's and Richardson's model. I will introduce the theoretical framework of the HRM and its effects on employees and corporate performance by briefly discussing different approached to strategic HRM starting with best-practice approach and moving to resource-based and fit views. I will then look for the evidence of effects of HRM by discussing some of the available studies that were conducted by scholars in real life business settings. I will try to identify the limitations of the various studies and assess the overall evidence of the relationship of HRM and organisational and employees performance. Finally, I will look at the suggestions of many specialists in the field of HRM and try to identify the necessary conditions that would lead to an irrefutable proof of the relationship of HRM on performance and the nature of such relationship.To be able to discuss effects of HRM on corporate performance and employees it is first essential to define what the term means. Despite the fact that the word HRM is being widely used in both academic and business worlds there is no single, agreed definition of human resource management. The numerous available definitions vary greatly and in the broadest approach, "HRM refers to all aspects of managing people in the workplace" (Boddy, 2005, p.339). This definition however, does not say much about what HRM is about and how does it differ from personnel management. Other writers suggested more specific definitions. Bratt and Gold defined HRM as "a strategic approach to managing employment relations which emphasizes that leveraging people's capabilities is critical to achieving competitive advantage, this being achieved through a distinctive set of integrated employment policies, programmes and practices" (2007, p. 7). Whereas Buchanan and Huczynski, see HRM as "a managerial perspective which argues the need to establish an integrated series of personnel policies to support organisational strategy (2004, cited in Beardwell and Claydon, 2007, p.5). The first definition stresses the importance of human element in the organisation. It sees employees as a one of the most important asset, a strategic resource of an organisation that is critical to its success. Both definitions emphasize the strategic view of human resource management to the organisation. By using certain employment policies and practices employees may not only support organisational strategy but become a source of company's competitive advantage. Both Bratt and Gold and Buchanan and Huczynski describe HRM practices as "integrated sets" or "integrated series". This implies that in order for HRM to affect the performance it is not enough to use...

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