Essay on Human Resource Management in Business

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Human Resource Management in Business

Human Resource Management (HRM) is no longer a personnel office that is simply a record-keeping and maintenance function. Huselid (1995) points out that there is a positive correlation that has developed between HRM as a strategic ally and company performance. HRM research has grown from an atheoretical origin to view organizational activities from an interdisciplinary perspective (Jennings, 1994) that is concerned with a movement toward methodological and theoretical development (Ferris & Judge, 1991). This review will look at the different ways HRM plays into the overall scheme of providing an organization with a more sustainable competitive edge.

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Additionally, McNamara (1999) points out three other activities that fall within the realm of HRM—managing the approach to employee benefits and compensation, employee records, and personnel policies.

Several HRM practices may influence individual performance by providing incentives that bring out appropriate behaviors (Minbaeva et al., 2003). Such incentive systems may include performance-based compensation and the use of internal promotion systems that focus on employee merit and help employees overcome barriers to career growth (Huselid, 1995). Previous research has shown that employees are more motivated when they are informed about the organization. Sharing of information on strategy and company performance tells the employees that they are trusted. Additionally, it is important that employees are kept current on company performance so that they can use the knowledge that resides in the organization to its fullest potential (Pfeffer, 1998). And by factor-analyzing HRM practices, Huselid’s (1995) influential study of the impact of ‘high performance work practices’ points out the importance of HRM as it relates to organizational turnover, productivity, and
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