HRM AND PERFORMANCE

HRM and Business Performances

HRM and Business Performances

Efficiency in Business performance on the Basis of Human Resource Management Activities.

In the conventional corporate world, human resource management was treated as nothing more than a support function. It existed as a personnel department and assisted the operating core by taking off the burden of personnel management, hiring, firing, recruiting, training, compensations etc. Over a period of time, contemporary management theorists identified the employees as an asset to the company and the need to be managed in accordance with their value to the business. Gradually, with fresh young blood entering the corporate world, companies recognized the need to overhaul their personnel department and replace it with a more comprehensive human resource department.

The role of human resource management became even more critical when the idea of Strategic Human Resource Management (SHRM) was advocated. The theory of strategic human resource management underlines the value of an organization's human resource as a means to gain competitive advantage. The concept assets the idea that like any other asset, human resource is an asset to the business, a scare resource that demands its efficient utilization. In essence, strategic human resource management directly interlinks human resource management with the company's overall performance. It is today a whole independent field of study due to its broad spectrum and multiple dimensions. Businesses that have recognized the value are devising human resource management policies that allow them to attain higher productivity, cost efficiency, profitability and quality management.

Strategic human resource management is defined by the alignment of human resource activities and policies with the overall organization's strategic goals. It advocates the idea that each employees in the company have to work in his/ her capacity to contribute to the overall strategic objectives of the business. In modern business setting, where knowledge workers and employee retention are significant issues of concern, human resource management activities tend to have an impact on business performance to a great extent. Poor human resource management policies and activities can adversely affect a business' performance in many ways (Flamholtz and Randel, 2011, pp.51). Cost Efficiency

With the inevitable effects of globalization and the consequent international competition, businesses around the world are striving to gain and sustain a competitive advantage. Cost efficiency plays a very crucial role in sustaining that competitive advantage. The term cost efficiency refers to keeping average costs per unit low in order to be able to sell products and services at competitive prices without compromising on profit margins.

In manufacturing concerns where labour is directly involved in the production processes, quality lies in the hands of the labour. A dissatisfied labour that has grievances does not work at its full potential. They work half heartedly and produce poor quality output. Units of output that are not up to the mark get rejected and add to wastage. As a result, cost per unit of output goes up due to increased variable costs in the form of raw materials and direct labour ...