The Effects Of Human Resource Management Practices Essay

To study how HRS practices affect the level Of firm productivity, we first combined the HRS survey data with financial statement data and then estimated cross-sectional and panel data estimators for the Cob;Douglas production functions. We find that both the incidence of employee participation practices and the incidence of HRS tools have increased in the manufacturing sector from 2002 to 2005. The empirical findings support the view of a positive association with the HRS practices and the level of firm productivity.

Perhaps more importantly, however, we find that not all forms of employee financial and decision-making participation raciest have favorable productivity effects : consultative committee and profit sharing scheme has a positive effect, but other practices do not have statistically significant effects. The Effects of Human Resource Management Practices on Productivity Increasingly, firms are considering the adoption Of new work practices, such as problem-solving teams, enhanced communication with workers, employment security, flexibility in job assignments, training workers for multiple jobs, and greater reliance on incentive pay.

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This paper provides empirical evidence to address the question: do these human resource management practices improve worker productivity? For this study, we constructed our own data base through personal site visits to 26 steel plants which contained one specific stalemating process, and collected longitudinal data with precise measures on productivity, work practices, and the technology in these production lines.

The empirical results consistently support the following conclusion: the adoption of a coherent system of these new work practices, including work teams, flexible job assignments, employment security, training in multiple bobs, and extensive reliance on incentive pay, produces substantially higher levels of productivity than do more ‘traditional’ approaches involving narrow job definitions, strict work rules, and hourly pay with close supervision. In contrast, adopting individual work practice innovations in isolation has no effect on productivity.

We interpret this evidence as support for recent theoretical models which stress the importance of complementarities among a firm’s work practices. 4 External Factors that Affect Human Resource Management When it comes to human resource management there are several factors that effect day-to-day operations. Adapting in this field is important because at a moments notice new legislation can be passed with an immediate effective date or corporate polices are changed where human resources feels the brunt. A well-developed strategy for your human resources department takes into consider external factors that might affect your department. External Factors that Affect Human Resource Management Government Regulations – With the introduction of new workplace compliance standards your human resources department is constantly under pressure to stay within the law. These types of regulations influence every recess of the HRS department, including hiring, training, compensation, termination, and much more. Without adhering to such regulations a company can be fined extensively which if it was bad enough could cause the company to shut down. Economic Conditions – One of the biggest external influences is the shape Of the current economy.

Not only does it affect the talent pool, but it might affect your ability to hire anyone at all. One of the biggest ways to prepare against economic conditions is to not only know what happening in the world around your but also create a plan for when there is an economic downturn. All companies can make due in a bad economy if they have a rainy day fund or plan to combat the harsh environment. Technological Advancements – This is considered an external influence because when new technologies are introduced the HRS department can start looking at how to downsize and look for ways to save money.

A job that used to take 2-4 people could be cut to one done by a single person. Technology is revolutionize the way we do business and not just from a consumer standpoint, but from an internal cost-savings way. Workforce Demographics – As an older generation retires and a new generation enters he workforce the human resources department must look for ways to attract this new set of candidates. They must hire in a different way and offer different types of compensation packages that work for this younger generation. At the same time, they must offer a work environment contusion to how this generation works.

Those involved in human resource management does more than hiring and firing, they make sure that every type of external influence is listened to and proper procedures are followed to avoid lawsuits and sanctions. If you’re in HRS make sure that you’re paying lose attention to external influences because there is a good chance they’re affecting your job and the company you work for. So next time you talk to someone involved in the human resource management process think twice about the amount Of factors that affect their job and how important it is for them to be on top of their game.

Factors affecting the roles of human resource management In a context of continuous evolution of the environment both internally and externally, the change is being offered more as a necessity other than a luxury or a choice. ? Indeed, when the environment changes the business which deny making essential modifications both in terms of attitudes and behaviors places herself at risk on inadequacy of its context: which means that it is probable to be in phase shift with the present world? another by the development of competition that inevitably tends to condemn businesses less adapted.

That’s why companies should stay vigilant because there are increasingly external factors able to influence their futures. ? One of the functions of the Human Resource Management is to be collected and be aware of changes in the environment of the company and their consequences for this one. ? The environment being essentially in perpetual motion and constant advancement, the prediction and recognition of changes should allow companies to acclimatize and transform themselves adequately.

EXTERNAL FACTORS AFFECTING A BUSINESS There are numerous factors that affect the Company’s business and the results of its operations, Some of which are beyond the control Of the Company. The following is a description of some of the significant factors that may cause the actual results of the Company’s operations in future periods to differ materially from those actually expected. Pearce and Robinson (2002) elk about? four external forces Economic, Political, Social and Technological. Each external factors influence business strategy.

While these descriptions are generally unquestionable, they may give the false effect? that the constituents and factors are easily recognized, mutually exclusive, and equally applicable in all positions (Pearce & Robinson, 1985, p 121). In fact, forces in the external environment are so dynamic and interactive that the influence of any single element cannot be disassociated from the impact of other elements. Economic factor Businesses require making money to continue to exist. The economy has an important? influence? on the viability of a business strategy.

For example in house? market, because of the recession, prices of houses are now declining in London. So, it’s an understatement to say that the present recession is hurting business owners. To remedial this situation the successful businessman visualizes the external? factors? affecting? the business, anticipating the prospective market situations and makes suitable to get the maximum with minimize cost. Political factor The present political climate can influence the kinds of legislation that can effect tariffs on goods and a service which means political factors can be restrictive or beneficial.

Restrictive components are those factors that limit profits; such as tax laws, minimum wage legislation or pollution laws as cited in Pearce and Robinson, (1985). Governmental influences are particular interest for those enterprises that operate in foreign countries. Social factor The social dimension of a nation determines the value scheme of the society which affects the functioning of the business: in others words, changes in the structure of the population, and in? consumer? lifestyles and behaviors. CERT. (1997, p. ) defines social responsibility as a managerial responsibility to take actions that protects and improves both the welfare of society and the interests of the organization. ? Technological factor The development of new technology has directly influenced the function of the organization. Technology factors are the scientific advances, which influence the competitive position of the enterprise. Maintaining awareness of new technologies decreases the probability of becoming obsolete and help to promote innovations.

In summary, the external environment of a business plays a principal role in determining the opportunities that a firm faces. Consequently, the Human Resources Managers have a important role to play to be sure that the company take into consideration the external environmental factors. HUMAN RESOURCE MANAGEMENT FOR SUSTAINABLE COMPETITIVE ADVANTAGE The role of the Human Resource Manager is evolving with the change in competitive market environment and the fact that Human Resource Management must play a more strategic role in the success of an organization.

Human Resource practitioners must have the capacity to identify business opportunities, and to understand how their HUMAN RESOURCE roles can help to differentiate the company to the others and anally achieve the company’s business objectives. With the boost of the competition, in small or big areas, organizations should become more adaptable, resilient, agile and customer -focused to succeed. In order to do well, Human Resource must be able to influence key decisions and policies. The question then is to know what firms should really do to maintain and optimize their situation in this environment.

Should them focus on the financial situation, technological ,or human resources plan? To answer this question we would first compares researchers’ conclusions: Coif 1 994 argues hat human assets are a key source of sustainable advantage because of causal ambiguity and systematic information making them inimitable. Guest 1990 says that if management trust their workers and give them challenging assignments, workers in return will respond with high motivation, high commitment and high performance.

Grafton 1997 identified six factors or success: the commitment of top management, the motivation and aspirations of recruits , the core capabilities of the management team , the team s aspiration, its ability to build and maintain alliances and the integration of the business into a global network. It means that sources of competitive advantage have shifted from financial resources to technology resources and now to human capital. Now that we know that employees are one of the sources of competitive advantage, what do we have to do to achieve competitive advantage through them?

In other words, what are the human resources practices to gain sustainable competitive advantages? According to the answer is simple and consist of two actions: Cost Leadership Strategy: the primary focus of a cost leadership strategy is to? accomplish? reduced? charges to competitors. Lowering costs lead to erring prices, which can increase demand for products or services. This is the case of SAD supermarket in London which believes to have a policy of prices more cheaply than all of their competitors.

However if the product cannot be produced at a lower cost it also decreases? earnings? margins. To compete on cost, managers must address other costs and design a system that lowers the cost per unit of the product or service. Differentiation Strategy: the primary focus of a differentiation strategy is creating uniqueness that the organizations goods and services are clearly distinguished from those of its competitors. In other words the focus is on creativity and innovation which have long been recognized as necessary for bringing the required change to obtain the competitive advantage.

Quality enhancement strategy: the aim is enhancing the product and means changing the processes of production in ways that require workers to e more involved and more flexible. Cost reduction strategy: firms typically attempt to gain competitive advantage but being the lowest cost producer.

The role of the HRS manager must follow the needs of the changing organization. Successful organizations are becoming more adaptable, resilient, quick to change directions, and customer-centered. The primary function of human resources today is to ensure the effective and efficient use of human talent to accomplish an organization goal and objectives. Using human resource as a competitive advantage means analyzing what factors are necessary for the organization long term success.