The importance of human resources has significantly increased in various organizations, all the more so in the contemporary business world that is characterized by a high level of competition. In every organisation, human resource plays a pivotal role in determining the success of an organisation. For instance, it influences the performance of non human resources in an organisation in one way or another. For example, the machines and other equipment are controlled by people so their performance is largely determined by the human resources who direct the production process.
Besides, it is necessary to pay attention to the role of human resources while implementing innovations in an organization as change has become one of the main factors that are employed in promoting competitive advantage, and the effectiveness of any modification in an organization largely depends on people.
The importance of the human resource in an organisation can easily be seen through the concept of High Performance Work Systems. High Performance Work System entails a collection of management practices (e.g. selection, training, performance appraisal, and compensation) aimed at creating an organizational environment that fosters greater involvement and responsibility of all the employees. The main objective of HPWS is to improve performance of an organisation by promoting the productivity of employees and modifying their behaviour to be more productive and result oriented. According to Yazdani, B. et al. (2011), when employees are greatly involved in organization activities, including decision making and goal setting process, they “think about their job and work-life more meaningfully and their involvement will deal directly with continuous improvement in systems and work processes. In empowered organizations, employees with the sense of belonging, excitement, and pride, will implement their best innovations and ideas” (p.268). It also improves the performance of an organisation through the creation of effective organisational culture which is defined by Ravasi and Schultz (2006) as “a set of shared mental assumptions that guide interpretation and action in organizations by defining appropriate behavior for various situations” (p. 437). This plays a significant role in promoting the performance of every organisation.
By using the bundle of practices employed in human resource management, employees become more self managing; this increases their productivity level. For instance, they are motivated to perform their duties even with minimum supervision. This will increase the performance of an organisation in the long run. Optimum results will be achieved in case this character is reflected throughout an organisation. Some of the components of High Performance Work System include increased opportunity for the workforce to participate in decision making to implement significant changes aimed at enhancing performance and training that in turn aimed at instilling the necessary skills to the employees in an effort to help them perform better and thus assume greater responsibility in an organization. Employee’s incentive is another key component of the High Performance Work System. It can be monetary or non monetary, both aimed at encouraging hard work and good performance. It is a form of motivation. Technology is another key aspect of the HPWS. Technology helps in adding value to the above named components, involvement, training and incentives so as to achieve quality performance of an organization at large. It, for instance, provides an infrastructure for communicating and disseminating information that could be pivotal for business performance, an aspect that is very crucial.
Recent studies have revealed that there is a close relationship between the human resources practices and the outcomes in an organisation. In this case, employees play an important role in determining the effectiveness of an organization’s strategies and practices. Therefore, the High Performance Work Systems can never yield optimal results without the contribution of employees. Through different interrelationships, an organisation manages to obtain maximum results in its operations.
Effective human resource management leads to employees’ retention in an organisation. This contributes to improving the performance of an organisation (Plessis, Beaver and Nel, 2006). Through effective employees’ retention strategies and techniques, an organisation will be able to recruit, retain and engage high performing employees in organisation. As a result, the average productivity level of every employee remains high. Consequently, the overall productivity level of an organisation increases. In other words, the employees play a significant role in improving the overall performance of an organisation.
In every organisation, strategic human resource managers try to strike a balance between a company’s set strategies and human priorities. This determines the effectiveness of strategy implementation process. In other words, the human resource managers act as strategic partners and have the responsibility of ensuring the set strategies succeed as planned. The role of the human resources is even more critical in countries with high level of competition in the market. In such a market, there is need to have effective strategic plans in order to maintain a high level of competitiveness. By translating the proposed strategies into human practices, the human resources help in meeting the consumers’ demands.
According to Erstad (1997), in order for any organisation to become a market leader in a contemporary competitive business world, it is a requirement to have a competent and highly skilled workforce. Although the competitive advantage is significantly determined by organization’s ability to differentiate its product, it is also largely regulated by its ability to have maximum utilization of the available resources in order to achieve maximum results. It is the workforce that consolidates the available resources, technologies, skills and competencies in order to adapt easily in a rapidly changing environment (Perkins, 1995). In countries where the market is highly competitive, there is a need to have effective human resource practices for an organisation to survive in such environment.
In every organisation, the human resource management plays a pivotal role in determining the overall performance of employees. This is realised by increasing the employees’ knowledge, skills, and abilities. By doing so, an organisation is able to develop a competitive advantage. This increases the overall performance of a firm, especially in a competitive market.
The human resources play a major role of empowering and motivating the employees so that they can apply their knowledge, skill, and abilities in the various duties (Swift and Levin, 1987). According to Yazdani, B. et al. (2011), “because of dynamic structure and complexity of competitive environment, the needs of organizations to creativity and intellectual power of their personnel has increased. Hence it is necessary to identify new methods to motivate employees in order to maintain and enhance competitive advantage“ (p. 267). Again, this will help in increasing the overall performance of the employees within an organisation. This ensures that employees are contributing to the organisation at optimal levels.
Effective human resource management process also encourages innovation within an organisation. In the contemporary business world, the most successful companies are those that maintain a high level of innovation in their systems. Innovation is one of the main tools through which an organisation can develop its competitive advantage. For instance, through innovation, a company or a firm manages to make its products look unique and different from other similar goods in the same market (Stedham and Nechita, 1997). Through innovation, an organisation is also able to improve the quality of its products. This gains more customers for an organisation. Therefore, the human resources have a major contribution in determining the success of an organisation.
The human resource plays an important role in scanning the external environment in order to identify the opportunities and threats both of which have a significant impact in the company’s success (Hassan, 2007). An organisation is able to detect possible threats and, therefore, take the appropriate actions in time hence neutralizing such risks. The human resource management also supplies competitive intelligence which is very useful in the strategic planning process (Yazdani, 2011). Therefore, it is necessary to build effective human resource management structure for successful strategic management processes.
In the present-day world, organizational change has become one of the main factors that are employed in promoting competitive advantage. According to Armenakis and Harris (1993), “because of the increasingly dynamic environments, organisations are continually confronted with the need to implement changes in strategy, structure, process and culture” (p. 681). Human resource has a major role to play in facilitating organizational changes. This is because the change in an organisation usually affects employees. Since change comes along with different arrangements and new ways of doing things, it is not always welcomed and even may be rejected by employees. However, through an effective human resource management process, an organisation is able to realize the required change effectively within the required time duration. Gutierrez (1994) observed that one of the major challenges that face human resources in the change process is overcoming the opposition and dealing with employees in the organization. Majority of companies that have recorded a very good performance have also recorded an effective change process. These companies paid more attention to the modification of employees’ behaviour so that they can accommodate changes effectively.
According to Wilson (2005), human resource is the main agent in promoting an organization’s competitive advantage. In an organization, both human and non human resources are of great significance for high performance of every company. However, non human resources like machines and other equipment that are used in production largely depend on people. Their performance is mostly determined by the human resources who direct the production process.
Jansen (2004) observed that flexibility of the employees can significantly affect the performance of an organisation since it determines the reception of a certain strategy. The human resource management plays a significant role in promoting interaction among the employees. Through such interactions, employees will be able to encourage each other. However, the strategy should be applied with caution. Some forms of interactions can be harmful in an organization, for instance, when employees have opposite views (Lawler III, 2005). Constructive results can be achieved only when employees join together in support of the proposed strategies. They play a major role in determining the success of the implementation process.
Human resource also takes part in development of organizational culture. Therefore, the human resource can help in developing a supportive culture. Such culture can significantly help in promoting the success of various strategies in an organisation (Kochan, 2004). In most cases, various strategies come along with changes in the whole system. Supportive culture cultivates a sense of solidarity among employees which encourages them to face innovations in an organization. Through empowerment, individuals take an active role in the change process where they offer necessary suggestions concerning organizational modifications and improvements (Armenakis and Harris, 1993). Employees are also able to take part in setting organizational goals. This promotes the change process in an organization. However, it is also advisable for the workers to be patient during the change process otherwise little will be achieved.
The human resource management is also involved in checking on the level of employees’ absenteeism. According to Rogers and Hertin (1993), “absenteeism is a major concern of all managers and organizations, both private and public. Productivity is reduced to zero for the employee who is absent from the workplace” (p. 215). An effective communication process between employees and the human resource managers is of great importance in eliminating absenteeism in an organisation. Absenteeism among employees can have an adverse effect by reducing the productivity level of employees that increases the total production costs in an organisation. However, human resource has a major role to play in communicating with the employees and revealing them the impact of absenteeism on the performance of the whole company. By doing so, the human resource managers cultivate a sense of responsibility among the employees (Gollan, 2005). As a result, they adjust their conduct appropriately, hence having productive interaction.
The human resource managers also develop and compensate the human resources. Compensation motivates employees to work towards the realization of the organizational goals that increases the level of their performance. Moreover, the human resource managers are also involved in hiring employees. In this process, they are supposed to carry out a critical examination of the previous performance of candidates. This helps in detection of the vices like work place absenteeism among the recruits and help in elimination of candidates who have a tendency of absenteeism in the workplace. By doing so, the company will be able to hire only those employees who have a good record of job attendance. This will also help in creation of positive organizational culture.
From the above discussion, it is clear that human resource is the most valuable asset in every organisation. The success of a company is significantly determined by the effectiveness of the human resource. Human resource improves an organization’s competitiveness. It converts the proposed strategies into useful practices. The most successful organizations are the ones which built an effective HR system. Such companies and firms managed to increase profits by maximization of the overall level of employees’ level of performance. The implementation of various strategies in an organisation is also determined by the human resource. Employees may be affected by a certain strategy, and, therefore, their reception will determine the success of such strategies. Thus, it is advisable for every organisation to ensure that it employs effective human resource management practices in order to maximize its returns by increasing its competitive levels.
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