The Importance of Human Resource Management

1287 Words6 Pages
Human resource management (HRM) is undoubtedly being considered as an indivisible element of the organisations from the outset. From recruitment to employee retention, HRM has always committed to assist company to search and retain talents that have values toward the sustainable development. In view of the fact that, there are several studies with evidences presented to prove that there is a relationship between HRM and organizational performance, in which some HRM theorists also suggested that there is a causal link between them (Cooke, 2000). Though Gerhart (2005) stated that their relationship is regarded as a ‘black box’ that it lacked of clarity concerning what leads to what; it can be both performance leaded to HRM and vice versa.…show more content…
The effective training of problem solving skills, social communications skills and technical skills can help employees to tackle with issues and remove bottlenecks that emerge from the changing market. Research showed for companies that put forward formal training programs are 19% increased in productivity than those who did not (Kling, 1995). The extensive recruitment and selection as well as effective trainings on different skills enhanced KSA for employees according to resource-based view, which eventually lead to the increased in productivity and standard of products guaranteed. Besides enhance employees’ KSA, the application of HPWPs allows them to increase their motivation and actively participate via business strategy. The AMO-model from Appelbaum et al.’s (2000) showed that employees’ ability, motivation and opportunity in the workplace will reflect on the operational profits. Employees’ motivation can be enhanced through compensation policy such as profit sharing, performance appraisal and promotion (Huselid, 1995). For profit sharing, it is a direct way for employees to optimize their skills and abilities to work hard for their companies since they realize that their workforce is correspond to their own profits. Similarly, compensation policies can attract employees to maximize their performance if they can see promotion prospect or incentive systems operating in their companies. As HPWPs provide
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