The impact of human capital management on operational performance at the gambia national water and
Human Capital Management and Operational Performance
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Human Capital Management and Operational Performance The link between human capital and performance is based on two theoretical strands. The first, as we have discussed, is the resource-based view of the firm. The second is the expectancy theory of motivation which is composed of three elements: the valence or value attached to rewards, the instrumentality, or the belief that the employee will receive the reward upon reaching a certain level of performance, and the expectancy, the belief that the employee can actually achieve the performance level required. (Marchington and Wilkinson, 2005). HRM practices that encourage high skills and abilities - e.g. careful selection and high investment in training - can be specified to make the link between human capital management and performance. The work of Ho et al. (2001) cited in Chen et al (2010) established that there exists a positive link between human resource practices and product quality which goes further to affect customer satisfaction and profitability. It is therefore inferred from the findings that human resources practices can lead to operational efficiency which in turn bring quality products. 25 Analyzing the links between high commitment HRM and performance is now a major area of interest for research and policy. Originally, this stemmed from work in the USA, but there have now been several studies in the UK, most notably by David Guest and his colleagues. Before reviewing some of this work in more detail, it is worth reminding readers of some of the earlier studies that claimed to establish a link between HRM and performance. Huselid, (1995) drew his conclusions from a survey of nearly 1000 US organizations. He divided high commitment work practices into two broad groupings: employee skills and organizational structures, and employee motivation. The former included items concerned with the proportion of workers taking part in attitude surveys, the number of hours training received in the previous year and the proportion of workers required taking an employment test as part of the selection process. The latter included items such as the proportion of workforce with performance appraisals linked to compensation and the number of applicants for those posts where recruitment took place most frequently. Output measures included labour turnover, productivity and corporate financial performance. Huselid, (p. 667) concludes that “the magnitude of the returns for investments in what he calls high performance work practices is substantial. A one percent standard deviation increase in such practices is associated with a 7.05 % decrease in labour turnover and, on a per employee basis, 27,044 US dollars more in sales and 18,641 US dollars and 3,814 US dollars more in market value and profit respectively”. The results from the survey by Patterson et al (1997) published by the Institute of personnel and development (Now CIBD), were coated widely by the media and put forward as evidence for the importance of HRM as driver of, and contributor to, improved performance. The research was based on longitudinal studies of 37 UK 26 manufacturing companies that were predominantly single side and single product operations. It has been claimed on the basis of this research- that HRM had a greater impact on productivity and profit than a range of other factors including strategy, R&D and quality. For example, it was argued that 17 % of the variation in the company profitability could be explained by HRM practices and job design, as opposed to just 8 percent from research and development, 2 percent from strategy and 1 percent from both quality and technology. Similar results were indicated for productivity. Below we examine in more details four of the studies undertaken in the UK by Guest et al (2000a, 2000b), West et al (2002), Guest et al (2003) and Purcell (2003) and withdraw on some in-depth reviews of the HRM- performance link. Some of the best known studies are outlined in the table 1. On the basis of the study some forceful claims have been made about the impact of HCM sometimes referred to as high commitment HR and performance. Two CIPD reports (2001a, 2001b) argue that the economic and business case for good management has now been proven. The CIPD report (2001a, p4) notes that ‘more than 30 studies carried out in the UK and the US since the early 1990s leave no room to doubt that there is correlation between people management and business performance, that the relationship is positive, and that it is emulative’. Since it is argued, senior personnel practitioners now agree that the case for HCM impacting on operational performance is not in dispute, the key question is how to make it happen. From US perspective, Pfeffer (1998, p306) agrees that best practice HRM has the potential to have a positive impact on all organizations, irrespective of sector, size or country. Organizations only need leaders possessing both insight and courage to generate the large economic returns that are available from high commitment HRM. Many of the studies have been focused on manufacturing but Batt and Doellgast (2003, 27 p306) also suggest that a growing number of studies show collaborative forms of work organizations that predict better performance in the service sector’. tải về 1.26 Mb. Chia sẻ với bạn bè của bạn:
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