What can HR and other organisational leaders do to study the link between HRM and business
performance? This �black box�, as it is often called, resists easy explanation. In the case of HR policy,
how policies are formulated, aligned with business strategy, operationalised and implemented ought to
have a significant impact on business performance. The question remains, how can this impact be
determined?
Introduction
Human resource management concerns itself with the welfare of the personnel of an
organization. Strategic human resource management plays a crucial role in ensuring that
employees are well taken care of so that they can increase their productivity. In many
organizations, human resource policies are developed without consideration of business goals.
However, over the years, business organizations have realized that there is need for alignment of
business goals and human resource policies. The two aspects must always be in tandem in order
to propel an organization forward.
Human resource management can be explored from there different perspectives namely
universalistic, configurational and contingency. Although each of these perspectives has been
found to be effective, none of them can be considered fully exclusive. As such, there is need to
find a way to combine all of them. This discussion has looked at ways of overcoming the
challenges that come with combining the three aspects.
Challenges of Assessing Impact of HR Policies
The role of HR policies in a business organization cannot be undermined. The personnel
of any organization play central roe and remain a big asset to the organization. However, despite
this crucial role of HR policies, it still remains a challenge for any business to quantify the
benefits of the same. In many cases, the HR policies are intertwined and often behind the scenes.
For instance, HR policies that ensure all employee welfare are taken care of are crucial. Yet, the
credit for such an elaborate mechanism is more likely to go to the top management as opposed to
human resource department.
HR Perspectives
Bamberger, Biron and Meshoulam (2014) have described three strategies or theories
upon which human resource strategies are founded. They include universalistic, configurational
and contingency. Universalistic is better known as best practice theory. This theory assumes that
in the business world, there are set of practices that are found to be best and universally
applicable. This theory argues that adoption of these practices by any organization will lead to
achievement of projected goals. Although there is some practicability to this argument, there are
some loopholes. This is because not all organizations have similar needs. As such, there is need
to customize certain practices to accommodate the needs of different organizations.
Contingency Theory
This theory recognizes that there is indeed not one uniform practice that can
accommodate the business needs of all organizations (Armstrong, 2009). As such, this theory
advocates for customized practices that vary from one organization to another. This theory
emphasizes or contextual approach so that every organization develop HRM practices that are
best suited for them. Further, this theory notes that strategic human resource management is not
the only determining factor to performance. Rather, alignment of SHRM to business strategies
largely determines the outcome (Porter, 2012).
Configurational approach is seen as the most sound of all the proposed HR strategies.
This theory seeks to combine both universalistic and contingency approaches. This theory note
that the two other approaches have benefits and shortcomings in equal measure (Redman
&Wilkinson, 2010). As such, for an organization to successfully perform, it ought to combine
both approaches. Therefore, of the three discussed approaches, configurational approach has
been as the best because it employs best practices in the industry while at the same time
customizing some to meet its specific business needs (Delery, 2010).
Special or Unusual Aspects
From the above HR strategies, it is expected that businesses will have a structured and
organized strategies. This is, however, not the case as organizations tend to deviate from the
normal (Barney, 2011). For instance, a company in the information technology sector is more
likely to go outside the norm. This is in order to accommodate the dynamism in the market. The
need to remain relevant with changing trends and consumer patterns will lead to special or
unusual aspects in some organizations.
The Aid of Key Stakeholders
It is highly imperative for business organizations to appreciate the role of each person in
an organization. Every stakeholder plays a significant and contributory role towards the success
of the organization (Purcell, Hutchinson, Kinnie, 2013). More often, certain areas of an
organization have been given preference to the exclusion of others. For instance, despite the
crucial role played by strategic human resource management, it has often been ignored in the
favor of other business strategies. While business strategies are crucial, so are human resource
management policies (Scholes & Johnson, 2014). None should be treated as lesser of the other.
Conclusion
There is need to bring onboard all aspects that directly or indirectly contribute to the
success of an organization. More importantly, it is necessary that all these aspects are
intertwined. Of greater importance is to ensure alignment to the business goals. All these aspects
should be geared towards achieving the projected goals of an organization. The various theories
that have been developed must all be combined to ensure that an organization gets the best. Each
of all these theories are crucial but cannot support organizational success solely. They must be
brought on board while customizing in order meet specific needs of the organization.
References
Armstrong, M.A. (2009). A Handbook of Human Resources Management. (11thed.).London:
Kogan Page.
Barney, J. (2011).Is resource-based view a useful perspective for strategic management
research? Yes. Academy of Management Review. 26(1), 41-56.
Delery, J., & Doty, H. (2010). Modes of theorizing in Strategic Human Resource Management:
Tests of universalistic, contingency and configurationally performance predictions.
Academy of Management Journal. 39(4), 802-835.
Porter, M. (2012). Competitive Advantage: Creating and Sustaining Superior Performance.
New York: Free Press.
Purcell, J., Hutchinson, S., Kinnie, S. (2013). Understanding the Role and Performance Link:
Unlocking the Black Box. London: CIPD.
Redman, T., &Wilkinson, A. (2010). Contemporary Human Resource Management: Texts and
Cases. (eds.) Harlow: Pearson Education.
Scholes, K., & Johnson, G. (2014). Explaining Corporate Strategy. Hempstead: Prentice Hall.
