Human Resource Practices and Employee Performance

Introduction

The discourse in “Maggie Anderson-Power of People in Organisation” is an academic work that presents research findings on the role a manager plays in seeking to apply human resource principles and practices in practical situations to model the best way to relate with and manage the people by motivating them to optimize their contributions towards improving organizational performance.

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The thinking by Overbeck, Neale, and Govan (2010) that is without much distinction on the dichotomy of the chain that links employees to organizational performance is embedded in inputs that result in outputs on excellent human resource management principles that are either coded in formal or informal contracts. Here, Kilduff, Chiaburu, and Menges (2010) argue that management principles can be used to modify behavior through informal or formal contractual agreements, which serve as the objective that crystallizes the management practice.

As with much management science that features the consistent exercise of power hierarchically within an organization, the theory of power and organization explicitly demonstrates the exercise of power on employees to reap the best benefits from them. This study provides a detailed assessment of what “Maggie Anderson-Power of People in Organisation” says on how power can be expended in an effective way to improve employee performance based on the best methods of exploiting the legally and physically binding contracts between the people and the management of an organization (Meyer, Stanley & Parfyonova 2012,).

Motivating employees to make the best contributions to the organization besides the use of appropriate business strategies and human resource management practices when adopted are the best ways that provide the formal approach for successful performance enhancement. The difference between power and authority crystalizes out.

However, the nature of the relationship established between the management and the employees results in how employees perform at the place of work. However, the investigation leads to the questions on how can human resource practices be used to positively influence employee performance? How does the psychological contract between the people and the management lead to performance enhancement? What is the connection between discretionary behavior and employee performance? How does the bath model explain the optimization problem of employees with performance? This assessment is based on the bath model that defines the link between human resource management practices and employee performance in organizations. The bath model defines the ‘why, when, and how’ an existing management problem can be solved to motivate employees to work for better performance.

Human Resource Practices and Employee Performance

According to a study by Kilduff, Chiaburu, and Menges (2010), there is no longer any doubt that the performance of employees within an organization is strongly connected with the nature of the relationship between the management of an organization and the employees. Classical management approaches tended to see the performance of employees within an organization and management approaches as a contract that entailed compensating the people for work done.

It was founded on the give and take paradigm. However, little research was conducted to establish how the nature of the relationship between the management and employees affected the performance of the employees. To fill the gap, it is imperative to consider new paradigms and approaches that have not been established as having a direct relationship between performance and employee relationships with the management.

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Fragale, Overbeck, and Neale (2011) and Overbeck, Neale, and Govan (2010) argue that employees are always subjected to work and career assumptions and the relationship with the management is intended to direct them into the right path. In so doing, better performance expectations are likely to be the result. The result of the research by Fragale, Overbeck, and Neale (2011) delineates the idea of organizational performance to employee relationships and organizational policy as opposed to Larcker, Richardson, and Tuna (2007) who see discretionary behavior as the prerequisite to better organizational performance.

However, the connection between performance and happy employees does not crystallize out well and neither do the transitional nor the relational theories play any significant role in the explanations on how happy people can do better. This is where Fragale, Overbeck, and Neale (2011) note as the start of the black box problem in the context of HRM practices that underpin the right strategies of motivating employees to achieve the best performance possible.

However, there is nothing particularly unusual in using a strategy that cultivates employee motivation to enable them to make the best contributions to the organization, but the robustness and flexibility of the HRM system and its ability to create the necessary links with the employees for the better matters a great deal. An excellent form of relationship is bound to change employee behavior to act positively for better results. The rationale is that performance is a function of the ability of the employees to do their work, exploit existing opportunities based on well-motivated employees.

While Overbeck, Neale, and Govan (2010) see the role of the manager as a paramount factor in determining the performance of employees, little is discussed about the results that happen in terms of the effects of policies and human resource practices, and the engagement of employees with the management. However, Inesi (2010) has linked policy and employee behavior with an impact on the happiness of people by alluding to the fact that when people are happier, their performance levels increase significantly. The positions held by modern researchers that happier people perform better because the value is generated from the people reinforce the ideas proposed by Inesi (2010) and their effects on performance.

Inesi (2010) denotes a situation that has an underlying theme where managers ought to give more to get more. Giving more is in terms of the human resource practices of motivating employees and embedding the practice within the organizational culture. Motivation could be in the form proposed by Inesi (2010), which acts as an organizational lever that managers use to appreciate and value good performance and adds the drive to do better and more.

This is where the management comes in terms of how to use its power to motivate employees. Inesi (2010) fails in the discourse to show the role of power in motivating employees and bonding with them but shows the role of the strategic contingencies theory of power and how it relates to employee relationship and performance. Here, either an informal or formal dichotomy of the relationship and does not show how the benefits and rewards that are offered to the employees play the role of improving organizational performance.

An exhaustive analysis of academic literature by Chiang and Hsieh (2012) among others shows that management and employee behavior are strongly interrelated. Here, the subject of management using the transactional and the relational approaches of establishing contracts with employees have not been fully researched based on developing good manager and employee relationship, which is the prerequisite to better performance.

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Psychological contract and performance

According to Sun Aryee and Law (2007), the unwritten rules of engagement between employees and the management of organizations somehow drive the expectations based on the results of the subsisting relationship. That distinctly differs from the codified formal relationship between an organization and its employees. The psychological contract is distinguishable with the legal contract based on the reality of the situation which forms the environment on which organizational activities are done.

However, the level of engagement between the two parties, that is the employee vis-a-vis the organization and the resulting performance does not crystalize in the discourse by Sun Aryee and Law (2007) on organizational performance. Often, employees are made to feel that job satisfaction, which is the antecedent of employee performance falls short of their expectations because the organization appears to breach the contract between the employee and the organization. This is where the black box problem starts. Employees who feel dissatisfied always try to seek better jobs which they deem to be more satisfying and that leads to a dip in performance. Here, Fragale, Overbeck, and Neale (2011) agree with Sun Aryee and Law (2007) that establishing a high level of trust between the managers and their employees besides communicating effectively ameliorates the problem

The narrative by Buller and McEvoy (2012) on the possibility of finding organizations doing actions that challenge and often break the trust between the employee and the organization leads to the breach of the pre-formed psychological contract between the two parties. Shahzad, Luqman, Khan, and Shabbir (2012) rephrase the argument by stating that this may happen as a result of a lack of training and development programs, reduction in career opportunities, and failure to include employees in making important decisions such as job transfers. Here, Sun Aryee and Law (2007) lack the details that show the strategies and benefits of establishing a connection between the employees and the organization and the outcome in terms of performance.

The inputs due to job satisfaction on employee engagement and commitment to positive work relationships are a prerequisite to better work commitment, and performance (outputs). However, most authors have dwelt on the positive aspects of the psychological contract and failed to divulge on what happens if the contract is broken. Sun Aryee and Law (2007) note on the negative impacts is based on lack of job satisfaction, lack of commitment, and lack of employee commitment. However, the elements that the organization and their managers need to observe to uphold and create a good environment for the psychological contract to prevail includes creating opportunities for promotion, employment, feedback on performance, assigning employees interesting tasks, providing reasonable job security, providing a safe and pleasant working environment, and providing attractive job security.

Discretionary behavior and organizational performance

A longitudinal research conducted by Sun, Aryee, and Law (2007) shows that discretionary behavior is the key component that underpins better organizational performance and positive operational outcomes. The assertion that discretionally behavior defines organizational citizenship behaviors (OCBs) correctly affirms the strength of the resulting relationship between the two entities, i.e. the organization and the employees.

However, the study by Sun, Aryee, and Law (2007) ignores a significant portion of the job domain in the discussion on OCB because the study focused on the input activities an organization gets as the key factors that influence organizational performance. However, inclusive in the establishment of the contract between the employee and the organization should be the accruing benefits of improved safety, better working environment, inspirational work, a supportive environment, and better work processes. The inputs and the outputs inspire employees to work beyond their assigned roles for better organizational performance.

Besides, Fragale, Overbeck, and Neale (2011) adds that the factors that encourage discretionary behavior improve the performance of the organization through better working conditions, better working equipment, and reliable facilities, healthy working conditions, satisfactory work-life balance, attention to personal growth needs, and a clear sense of mission defines the element that reinforces strong discretionary behavior. In the domain of discretionary behavior, Fragale, Overbeck, and Neale (2011) asserts that it forms the center of the sort of choices that define the way jobs are done because of the inability of the management to control and monitor every detail and the amount of effort resulting from discretionary behavior.

Fragale, Overbeck, and Neale (2011) accurately rate contextual performance on the metrics of assistance to others, persistent enthusiasm, openly defining organizational objectives, and the ability and willingness to follow proscribed procedures. The defining attributes commonly featured in both contextual performance and OCB define the desirable characteristics that define employee behavior in either a formal or informal contract.

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Fragale, Overbeck, and Neale (2011) teach that both behaviors are strong requisites to better organizational performance. What matters most here is the type of contract established between the employee and the organization, the perceptions of the employee towards the contract, and the expected outputs from the supplied inputs. The emphasis by Fragale, Overbeck, and Neale (2011) on the reliance of OCB weakens the psychological contract between the employee and the organization because no rewards are provided based on OCB. After all, it lacks a formal engagement.

Human resource policies

The requisite levels of motivation, ability, and opportunity constitute the necessary components that serve to increase job satisfaction among the employees based on the underlying organizational policies, which are the key drivers. Communication is summarised as an element of sharing information on the effects of the policies have on organizational performance. However, the precise effects of each policy cannot accurately be estimated but the effects depend on the type of organization, the professionalism of employees, career satisfaction, and teamwork participation.

In the scenario, Fragale, Overbeck, and Neale (2011) view the role of frontline managers and team leaders who apply organizational policies as being fundamental to the success of the organization. To abstract this concept of the capacity of frontline managers as being inside the paradigm that defines better organizational performance, attention should be drawn to the policies and practices that relate to people management besides establishing the distinction between policy and practice. The ‘doing bit’ should be based on a fruitful dialogue between the employee and the manager to be assured of better performance.

Fragale, Overbeck, and Neale (2011) dispensed thoughts that do not reflect on the wider aspect of policy inclusive of the organizational culture, performance appraisal, and respect but dwell on the way the policies are applied to employees. However, the chief component is how to differentiate between enacted and espoused policies. The departure in thought ends up in the arguments presented by Buller and McEvoy (2012) who note that discretionary behavior is fundamental to influencing the type of influence desired by the line managers.

What a manager is allowed to do and not to do is reflected in the way one deals with the employees. That leads to the question by Buller and McEvoy (2012) on what should a manager prioritize based on a well-balanced scorecard. The link between discretionary behavior and the AMO (ability, motivation, and opportunity) are strong points of concern that specify the nature and effect of the relationship between the organization and the employees and their effects on the resulting outputs. If the opportunity to show discretionary behavior is presented, the employees feel invited to be part of the performance enhancement process.

The Bath model and the employee optimization problem

Central to the Bath Model of the influence of management on the performance of the organization is derived from the commitment of people that defines the Bath model. The Bath model rephrases opportunity, behavior, and the ability of employees as the underlying elements for determining how to work hard and improve the performance of the organization. However, the emphasis is on the need to find out the impact of discretionary behavior on the performance of the organization.

The discourse by Buller and McEvoy (2012) that confines the Bath model to the ability, opportunity, and motivation without links to the principles of management leaves out such elements as job satisfaction and commitment besides the other defining elements of success. However, Buller and McEvoy (2012) use of terms such as the sufficient number of skilled employees with the necessary experience and knowledge qualifies the thinking on the relationship between people and performance.

Conclusion

In conclusion, the Bath model is premised on employee motivation that underpins enhanced performance through financial motivation along with other social benefits such as the recognition for outstanding employee contributions. According to Overbeck, Neale, and Govan (2010), the importance of the job cycle as delineated in the opportunity to engage in discretionary behavior is interpreted in the sense of cultivating an environment that fosters employee involvement either from the inside of a job or from the outside of the job. In distinction to this view is that which emphasizes on teamwork (Overbeck, Neale & Govan 2010).

The idea is a presupposition of a locus dominated by employee involvement, a wider space of participation, maximization of strategic human resources, the contribution of knowledge and ideas, and the ability to positively respond to change.

The overall concern is to improve performance as explained in either the transactional model or theory and the relationship theory. A formal or informal relationship between the employees and the organization based on the drivers of performance, which include policies, discretionary behavior, and other elements underpin the nature of performance and the level of success achieved in organizations. The rationale is those factors such as opportunity to engage, employee abilities, motivation, discretionary behavior, job satisfaction, problem-solving abilities, and the psychological contract are the antecedents that define the factors that drive employees to perform better.

References

Buller, P F & McEvoy, G M 2012, Strategy, human resource management and performance: Sharpening line of sight. Human resource management review, vol. 1, no. 22, pp. 43-56.

Chiang, C F & Hsieh, T S 2012, The impacts of perceived organizational support and psychological empowerment on job performance: The mediating effects of organizational citizenship behavior. International Journal of Hospitality Management, vol. 1, no. 31, pp. 180-190.

Fragale, A R, Overbeck, J R & Neale, M A 2011, Resources versus respect: Social judgments based on targets’ power and status positions. Journal of Experimental Social Psychology, vol. 4, no. 47, pp. 767-775.

Inesi, M E 2010, Power and loss aversion. Organizational Behavior and Human Decision Processes, vol. 1, no. 112, pp. 58-69.

Kilduff, M, Chiaburu, D S & Menges, J I 2010, Strategic use of emotional intelligence in organizational settings: Exploring the dark side. Research in organizational behavior, vol. 1, no. 30, pp. 129-152.

Larcker, D F, Richardson, S.A & Tuna, I 2007, Corporate governance, accounting outcomes, and organizational performance. The Accounting Review, vol. 4, no. 82, pp. 963-1008.

Meyer, J P, Stanley, L J. & Parfyonova, N M 2012, Employee commitment in context: The nature and implication of commitment profiles. Journal of Vocational Behavior, vol. 1, no. 80, pp. 1-16.

Overbeck, J R, Neale, M A & Govan, C L 2010, I feel, therefore you act: Intrapersonal and interpersonal effects of emotion on negotiation as a function of social power. Organizational Behavior and Human Decision Processes, vol. 2, no.112, pp. 126-139.

Shahzad, F, Luqman, R.A, Khan, A R & Shabbir, L 2012, Impact of organizational culture on organizational performance: an overview. Interdisciplinary journal of contemporary research in business, vol. 9, no. 3, pp. 975.

Sun, L Y, Aryee, S & Law, K S 2007, High-performance human resource practices, citizenship behavior, and organizational performance: A relational perspective. Academy of Management Journal, vol. 3, no. 50, pp. 558-577.

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