HUMAN RESOURCE MANAGEMENT PRACTICES AND ITS EFFECTS ON THE CORPORATE PERFORMANCE OF GLAXOSMITHKLINE, OGUN STATE, NIGERIA
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- Mean and Standard Deviation
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- Recommended for : Student Researchers
- NGN 5000
BACKGROUND OF THE STUDY
Organizations in today's world are continuously under pressure to enhance service and production. The precariousness of the external working environment, along with the quick pace of technology development, necessitates new ways to improve corporate performance and gain a competitive edge. People are widely acknowledged as the most essential drivers of competitive advantage, and good personnel management is now more crucial than ever (Dietz, & Boon, 2005).
The challenge of successful human resource management in twenty-first-century enterprises has expanded beyond the HR department. Senior managers, HR experts, and line managers are now jointly responsible for maximizing the performance of an organization's personnel. The issues that today's organizations face, on the other hand, give a great opportunity for various HR approaches to demonstrate their potential to contribute to corporate performance (Bowen & Ostroff, 2004).
HR is recognized as a vital component in the maintenance and enhancement of business performance in 21st-century enterprises (Bowen & Ostroff, 2004; Ostroff & Bowen, 2000). HR is thought to influence employee knowledge, skills, talents (Schuler & Jackson, 1995), attitudes, and behavior (Guest, 1997), as well as an organization's performance (Den Hartog, Boselie, & Paauwe, 2004). According to research, the human factor in companies is an essential variable for organizations to stay ahead of the competition. HR may also play a critical impact in organizational performance, according to research (Arthur, 1994; Becker & Gerhart, 1996; Boselie, Dietz, & Boon, 2005; Guest, Michie, Conway, & Sheehan, 2003; Wood, 1999; Youndt, Snell, James, & Lepak, 1996).
Two elements are thought to play a role in understanding the relationship between HR and business performance. These two variables, according to Baron and Kreps (1999), are the alignment of HR with the organization's strategy (strategic fit) and the alignment of various HR activities inside the organization, such as career opportunities, training, and assessment (internal fit)
When HR within an organization is properly coordinated, and workers know what is expected of them, Baron and Kreps believe that they will act similarly and have uniform expectations regarding work and behavior.
I've used Som's (2006) concept of innovative HR practices for the sake of this study. He defined innovative HR practices as "any intentional introduction or change of HR program, policy, practice, or system designed to influence or adapt employee skills, behaviors, and interactions and have the potential to provide both the foundation for strategy formulation and the means for strategy implementation that is perceived to be new and creates current capabilities and competencies," and "any intentional introduction or change of HR program, policy, practice, or system designed to influence or adapt employee skills, behaviors, and interactions and have the potential to provide both the foundation for strategy formulation and the means for strategy implementation (Bowen & Ostroff, 2004).
Scholars have sought to advocate designs for various HR systems in order to fulfill corporate goals, as well as to identify the optimal collection of complementary HR practices that would really improve performance. However, various restrictions ranging from diverse degrees of analysis, company size, organizational union status, and business climate have hampered the adoption of several improvements, necessitating the necessity for a contextual research like this.
STATEMENT OF RESEARCH PROBLEM
With the growing importance of the 'human factor' in today's enterprises, HR concerns have become critical for companies that see people as their most valuable asset in attaining their objectives. In recent years, there has been a significant amount of study focus on the relationship between HR and company performance.
However, there are a number of concerns that need to be addressed more thoroughly, including the identification of strategic HR practices (Wright & Boswell, 2002). The consistency with which HR practices are classified or determined is relatively poor. An performance of the universalistic approach to understanding the HR-performancelink demonstrates that there is still much to learn about the behaviors that build high-performing work systems. According to Becker and Gerhart (1996), research differ substantially in terms of the 'best' practices discovered, and even whether an HR practice is likely to be positively or adversely associated to high performance.
Little is known about how HR practices affect company performance and how they do so (Guest, 1997; Becker, Huselid, Pickus & Spratt, 1997; Ostroff & Bowen, 2000). The 'black box' of the HR-outcome relationship refers to intermediate procedures that eventually effect performance outcomes (e.g. Wright & Gardner, 2003). Identifying HR-objects that are related to business performance is the first step in unlocking the 'black box.' This statement is about explaining the processes that relate HR practices to key dimensions of business performance, i.e. how'specific' HR practice bundles impact performance. A paucity of theoretical models to clarify this problem has been observed by several writers (Ferris et al., 1998; Guest, 1997; Peccei and Rosenthal, 2001; Truss, 2001). However, it is important to pay attention not just to traditional financial outcomes, but also to intermediate and process-related criteria that reveal how to get to the financial results (Becker and Gerhart, 1996; Becker and Huselid, 1998).
RESEARCH OBJECTIVES
This study is aimed at furthering research on the HR-Firm Performance link by providing answers to the identified conceptual flaws.
- The study examines the contribution of consistency among HR practices to corporate performance.
- This study seeks to evaluate the combinations of Human Resource Management practices that influence a high performance system in an organization.
SIGNIFICANCE OF THE STUDY
Many scholars have asserted that the human resources of the organization are potentially one of the most potent sources of continuous competitive advantage for organizations and have tried to reveal the positive relationship between HR and corporate performance (Ferris, et al, 1999). Nevertheless, there has been imprecision as to which of the many “high performance” HR practices (Delaney et al., 1989) that have been identified aid better performance (Collins and Smith, 2006; Ferris, et al, 1999).
The results derived from the study will enable HR managers understand the impact of the strategies employed on employee productivity. Many a time top management considers a single approach towards achieving corporate goals, they engage practices that they consider best fit to realizing set targets; however, this study shows that the combination of complementing HR practices can best align employee attitudes and behaviours towards achieving corporate agenda.
RESEARCH QUESTIONS
The central inquiry in this study is centered on the linkage between HR Practices and Corporate performance as can be explained by the effect of the internal fit on the supportive activities of employees towards their colleagues and employer. However, further specific inquiries are posed below:
What is the relationship between HR practices and corporate performance?
What combinations of HR practices determine a high performance work system?
RESEARCH HYPOTHESES
Using longitudinal data from 30 steel plants, Ichniowski et al (1993), found the impact of ‘cooperative and innovative’ HR practices to have a positive and considerable effect on firm efficiency. Similarly, Arthur (1994) found in 30 steel ‘minimills’ that those with ‘collaborative’ HR systems had lower turnover rates and higher productivity than firms with ‘calculative’ systems whose emphasis is
efficiency and the reduction of labour costs. MacDuffie (1995) found that ‘combinations’ of internally consistent HR practices were linked with greater productivity and quality in 62 automotive plants. Delaney and Huselid (1996) established that the extensive utilization of innovative HR practices have a strong and negative effect on corporate turnover in the manufacturing sector.
Each of these studies has focused on the impact of high performance work practices on employee turnover or productivity. Although a growing empirical literature focuses generally on the impact of High performance work practices, prior work has been limited in terms of the range of practices evaluated. It could thus be hypothesized that:
H1: Systems of high-performance HR practices will not boost productivity.
Baird and Meshoulam (1988) asserted that corporate performance will be improved to the degree that organizations engage HR practices that support one another (the internal fit). Similarly, Osterman (1987) argued that an underlying logic to a firm’s system of HR practices be put in place. He holds that certain HR policies and practices should fit together. Osterman (1994) found that organizations that place high value on employee commitment, for example, are not likely to use term employees rather they are likely to invest in innovative work practices such as skills training and incentive compensation. Huselid (1995) posits that the effectiveness of employee participation systems will be improved if employees are aware of their efforts that will be rewarded and has the tendency to ensure their advancement. Based on these arguments a testable proposition is therefore set out thus:
H2: Complementing high-performance HR practices will not boost productivity.
RESEARCH METHODOLOGY
Welman & Kruger (1997) describes methodology as the use of diverse methods, techniques and principles to create scientifically based knowledge. It is constrained to objective methods and procedures that are relevant within a particular discipline. The focus of methodology is on exact ways and methods that can be useful to better comprehend the field and scope of study. This study shall engage a non-experimental research design with the use of survey method. The principal advantage of survey studies is that they provide information on large groups of people, with very little effort, and in a cost effective manner. Surveys allow researchers to assess a wider variety of behaviors and other phenomena than can be studied in a typical naturalistic observation study. This study can also be referred to as a correlation study because it tries to determine the relationship between HR practices and corporate performance. Data will be analysed using descriptive statistics, analysis of variance, multiple regression and Pearson’s product-moment correlation coefficient since this study intends to establish a relationship between HR practices and employees performance as well as determine the degree of contribution of independent variables to dependent variables.
SOURCES OF DATA
The data collecting method for this study is the questionnaire. This will present us with the primary data required for the research study.
SCOPE OF STUDY
This study will focus on two indicators of operational performance in the organization – voluntary employee turnover and productivity. High performance HR practices that will be adopted for this study have been categorized as either calculative HR practice or collaborative HR practice. Hence, the practices under study will be limited to training, performance appraisal, career planning, employee participation, job definition, compensation and selection.
1.10. OPERATIONALISATION
Operationalisation is the distinction between dependent and independent variables in a research study. The independent variable is the factor that is manipulated or controlled by the researcher. The dependent variable is a measure of the effect (if any) of the independent variable. Most researchers are interested in probing the effects of the independent variable on something, and that something is the dependentvariable (Isaac & Michael, 1997).
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