To be a firm operating in the Twenty-first century requires an organization to continually grow and improve in order to survive in the hugely competitive business climate that exists today. As a result, it is important that a firm knows how to make effective use of all its resources and thus achieve competitive advantage against its competitors. One resource in particular proves to be immeasurable in terms of importance and can be considered a company’s greatest asset - the human resource. Focusing on company structure and culture, acknowledging the role these factors – amongst others – play in attracting, driving and retaining skilled and hardworking employees can make a huge difference for ...view middle of the document...
com (2015), human resource management “is the process of managing people in organizations in a structured and thorough manner.” This definition looks at human resource management in terms of regulatory functions involved in managing employees, such as pay, hiring procedures, performance management, amongst other activities (Gill,1999). The second definition provided by managementstudyguide.com (2015) is that human resource management is, “the management of people in organizations from a macro perspective.” What this means is that from this perspective, it looks into the importance of developing relationships with its employees and conducting activities with the goal of benefiting all stakeholders (Gill,1999). Additionally there are two distinct approaches to HRM which have been characterised by these two definitions, that is Hard HRM which centres on the strategic, calculative and quantitative aspects, and Soft HRM which centres on handling employees as valued assets (Gill,1999).
Rapid growth in industries such as technology, globalization, and economic and legal engagements all have an impact on a firm. Whether an organization encounters these changes as an opportunity or a challenge is dependent on the attitude of its employees towards the organization, and thus their willingness and drive to perform well. Without this, such changes result in absenteeism, low staff retention and job dissatisfaction (Gill,1999).
In order to encourage positive attitudes amongst employees and ultimately achieve retention, firms need to work on increasing employees’ sense of purpose and dedication. As Bal, Bozkurt, & Ertemsir (2014) state, the ‘HRM function of organizations have an important role on increasing the motivation and commitment of employees.’
Human Resource Management Models
The Harvard Model
The Harvard Model “is based on an analytical approach and provides a broad causal depiction of the 'determinants and consequences of HRM policies'” (Price, 2015). Two major considerations that influence human resource policies are discussed. The first being situational factors that exist either outside or within a firm, such as national cultures/societal values, laws, unions, and business strategies. The second factor to influence human resource policies is stakeholder interest, which is in reference to management, shareholders, employee groups, government, community and unions (Price, 2015). Without a firm giving careful consideration to each of its stakeholders when creating human resource management policies, ultimately it will be unsuccessful in satisfying the needs of these stake holders (Price, 2015).
The policies introduced such as reward systems and promotions are designed to achieve the human resource outcomes, both immediate and long term. Amongst the short term outcomes is increased competence of employees, employee commitment, increased congruence between the goals of an employee and that of the firms, and overall cost effectiveness of...