Academic journal article Asian Social Science

Balancing Performance by Human Resource Management Practices

Academic journal article Asian Social Science

Balancing Performance by Human Resource Management Practices

Article excerpt

Abstract

One of the most famous concepts in strategic human resource management (SHRM) is human resource management (HRM) practices. Various researches by famous scholars have shown that HRM practices have the potential to affect organizational performance. Besides, performance of an organization has different aspects for example balanced scorecard (BSC) considers four perspectives for performance and they are Financial, Customer, Internal Process and Learning and Growth.

However, companies aim to balance performance of the HRM practices based on their goals, so they need to know the intensity of implementing each practice. In this regard, this study attempts to forecast the impact of each group of practices on organizational performance (BSC's perspectives) before implementation. For this purpose, Artificial Neural Networks (ANN), Analytic Hierarchy Process (AHP) and Fuzzy Logic will be used in combination. In other words, this combination will highlight the most proper group of HRM practices for the desired performance.

Keywords: HRM practices, organizational performance, BSC, neural networks, AHP, fuzzy logic

(ProQuest: ... denotes formulae omitted.)

1. Overview

Strategic human resource management (SHRM) has advanced greatly since the 1980s (Lepak & Shaw, 2008). Research into this area has demonstrated and proved the connection linking human resource management (HRM) techniques and accomplishment in different areas (Dyer & Reeves, 1995). Some examples showing the positive effects of HRM techniques have contributed to employee retention (Huselid, 1995; Guthrie, 2001; Batt, 2002; Sun et al., 2007), increased stock returns (Collins & Clark, 2003), better organizational citizenship behavior (Sun, Aryee, & Law, 2007), higher labour productivity (Huselid, Jackson, & Schuler, 1997; Youndt, Snell, Dean, & Lepak, 1996; Huselid, 1995; Guthire, 2001; Sun et al., 2007), higher sales growth (Collins & Clark, 2003),better financial performance (Huselid et al., 1997; Huselid, 1995) more efficient operational performance (Youndt et al., 1996, Batt, 2002; Colins & Smith, 2006), and higher revenue from new products and services (Collins & Smith, 2006).

Notably, academics looking into this area have demonstrated that an HR system is an appropriate level of theory and analysis. In the meta-analysis by Combs, Liu, Hall, & Ketchen (2006), HRM practice systems were shown to produce greater improvements on organizational-level performance than individual HRM practices. Combining multiple HRM practices into a coordinated system is acknowledged as a methodology to assess the cumulative or synergistic effects among the interrelated HRM practices (Combs et al., 2006; Delery, 1998; Huselid, 1995; MacDuffie, 1995).

In addition to the ever-increasing substantiation of the direct linkages between HRM practices and organizational performance, academics looking into HRM have frequently looked more and more at the ways HR system practices boost organizational performance. Research in this area has highlighted various transitional results. As just one example, it is realized that turnover (Huselid, 1995; Batt, 2002), organizational corporate behavior (Sun et al., 2007), group human capital (Takeuchi, Lepak, Wang, & Takeuchi, 2007), environments for cooperation, trust, senior managers' social networks (Collins & Clark, 2003) and shared codes (Collins & Smith, 2006) mediate a relationship that is positive between HRM practices and performance at the organization-level. Boxell, Purcell, and Wright (2007) divided human resource management into three distinct secondary classifications namely micro human resource (MHRM), strategic human resource (SHRM), and international human resource (IHRM). HR strategies should be more concentrated as it deals with the measurement of the impacts on the performance level of organizations and since it is associated with SHRM, it is also being used by businesses in their organizations. …

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