Human Resource Management

Link between HRM and Organizational Performance

The overall performance in the context of organization is not only concerned as a broad concept which has been used synonymously with productivity, efficiency, effectiveness and most recently competitiveness.

Due to the rapidly changing economic environment that has been heavily characterized by phenomena as the globalization and the deregulations of international markets, with constantly changing customer preferences and their mindsets companies are now becoming more and more competitive in order to survive in the global market. In order to compete in the global market they have to constantly improve their performance by reducing their costs, putting more efforts in improving their products, making investments in R&D departments and improve quality, productivity, and overall speed to the market. In organizational performance Human Resource plays a very important and significant role, they are the key for organizations (Duane. R, 2007). Majority of the executives normally prefer to see their organization perform better, and in most of the cases, they use different tools to make their performance better. Specifically, in analyzing the impact of HRM on organizational performance, each of the HRM-performance linkage models developed complements the others by adding constructs, variables or relationships (Alcazar, Fernandez, & Gardey, 2005)

“People, not buildings, make a company successful” (DeCenzo, 2005, p. 35)

Various HRM policies may also play a significant role in building the overall organisation human capital pool by developing its rare, inimitable and other non-substitutable internal resources (resource-based view). According to the resource-based view, HRM policies can have a direct impact on the overall employee attributes such as their skills, attitudes and behaviours, the so-called HRM outcomes, which are subsequently translated into improved organisational performance (Boxal & Steeneveld,...