Importance of Performance Measurement and Performance Appraisal in Human Resource Development

How Performance Appraisal Contributed to the Development of Human Resources is a burning issue in the field of HR management. Performance measurement or appraisal is a core function of human resource management and has remained an imperative area of research among organizational researchers (Dulebohn and Ferris, 1999). Elmuti et al. (1992) argue that performance appraisals are used typically in organizations for two broad purposes: as an evaluative function for making decisions regarding merit pay, promotions, demotions, transfers, and retention and/or as developmental function to identify areas for employee growth and improvement and recommending ways of improving performance or the potential for performance. An effective performance appraisal enhances employees’ perceptions and understanding of job tasks and results in job satisfaction (Shen, 2004). It leads managerial career development, career progression and compensation adjustments (Schuler et al., 2002). First objective of the appraisal mechanism is to develop and build the capacity of employees by providing them formal feedback on job performance (Shen, 2004). Furthermore, performance appraisal is an instrumental tool to influence both the extrinsic and intrinsic motivations of employees and their attitudes towards organizations (Shen, 2004). Continue reading

Human Resource Management & Strategic Human Resource Management (HRM vs. SHRM)

 

Recruiting and selecting is the most important function in Human Resource Management and hiring the right person is very crucial for an organization to be succeeded as Collins (2001:13) points out that

People are not your most important asset. The right people are.

The dynamic fast paced competitive business environment requires organizations to recruit skilled and knowledgeable people who can help the businesses sustain in the long run. Bratton and Gold (2007) specified HRM as a means of achieving organizational effectiveness through deploying employees’ talent by the use of idiosyncratic HR programs and practices. Human resource management is the process that helps organizations get competitive edge over other competitors by recruiting and retaining the Continue reading

Reasons and Benefits for Incorporating Knowledge Management (KM) as a Change Strategy

The indispensability for organizational change is to direct the organization in a path where it can learn and use its capabilities to meet the expectations of its customers and other stakeholders (Moran and Brightman, 2001). It is implied that how effectively the organization is able to learn and exert knowledge in different states ensures the effectiveness of the organization (Laudon and Laudon, 2000). A number of forces are responsible for organizations to adopt Knowledge Management as a change strategy. Continue reading

Benefits of Incorporating Corporate Social Responsibility (CSR) in Business Organizations

One of the most prominent, widely discussed issues of today’s business management is Corporate Social Responsibility (CSR), which was a highly observable business fact that has been overlooked in the earlier stages (Crowther and Capaldi, eds. 2008). It has long been argued that businesses have no other responsibility apart from providing goods and services in return for maximizing profit and thereby have no societal commitment whatsoever (Friedman, 1962 and Hayek, 1969 cited in Marinetto, 1998). Continue reading

The Effect of Divisional, Multinational, Global & Transnational Organizational Structure on HR strategy and Its Practices

Final Part:

A divisional form is an organizational structure that is segregated into different divisions where each division functions independently within its own boundary as the tasks are highly distinctive due to the variety each division entails in terms of the products and services it offers to the market. Independent divisional functions mean the divisions are decentralized from the top and autonomously make their decisions to day to day functioning of their own division, which signify that middle line plays the key role. However, standardization of output that specifies the performance works as the key control mechanism for the divisions to determine their performance assessed sporadically by the top management to ensure controllability, which gives an indication of machine bureaucracy (Mintzberg, 1981).

The autonomous power of divisional managers resulting from the decentralized authority from the headquarters requires them to obtain new skills, which can be gained through supplementary training (Ingham, 1992). Versloot et al. (2001) point out that divisional form entails diversified training programs due to diversified needs of different divisions. Itoh (2003) states that divisional structure is a source of significant motivation for its employees as the division itself is able to establish internal control, self operating procedure, and make own strategic decisions, which substantially improve the performance of the division. Conversely, Kagono et al. (1985 cited in Itoh, 2003) figure out that Centralized monitoring and controlling of performance of each division in terms of their output by the headquarters affect the reward system, which can be a major discouraging factor for the divisions.

A divisional form entails diversified training programs due to diversified needs of different divisions.

Multinational Organizational Structure

They are found operating in different country contexts according to their local business frameworks with little control from their parent companies that implies a decentralized authority structure (Inkpen and Ramaswamy, 2006). This indicates that the formulation of HR strategy and HR practices are minimally controlled by the headquarters (Edwards and Rees, 2006). For example, Rosenzweig and Nohria (1994) point out that HR practices (training, rewards etc.) of the subsidiaries of multinational organizations are different from those of their parents’ practices. Paauwe and Dewe (1995 in Shen and Edwards 2004) state that operating and middle level employees are basically hired from local resources whereas Collings et al. (2007) point out that top level management employees are recruited from the parent company due to their expertise and company experience.

Global Organizational Structure

Such structure focuses on standardizing output to achieve economies of scale in order to enjoy global efficacy (Bartlett and Ghoshal, 1998; Xu et al., 2006) and this is done through decentralized implementation of the major strategic decisions formulated in the parent company (Inkpen and Ramaswamy, 2006). This results in a reproduction parent company’s HR practices and policies to a certain degree (Edwards and Rees, 2006).

Transnational Organizational Structure

Transnational organization is defined as a blend of multinational and global organizational forms (Bartlett and Ghoshal, 1998), which seeks to achieve global efficacy through encompassing positive characteristics from these two organizations (Inkpen and Ramaswamy, 2006). Such organizational structures standardize their output and process to achieve success in global arena (Snell et al., 1998). They show the HR implications by stating that recruitment and selection (polycentric and geocentric), training and development (expand skill base, professional culture, continuous learning, negotiation and interpersonal skills), and reward and appraisals (local appraisal, appraisal base on others input, evaluation based on learning, frequent feedback) take a mixture of HR roles (p. 150).

 

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The effect of Professional Bureaucracy & Adhocracy on HR strategy and Its Practices

Part 4:

Professional Bureaucracy

Professional Bureaucracy is defined as a bureaucratic structure with little formalization, which entails a large operating core that is highly autonomous and controlled by trained expertise due to the complex nature of tasks. This indicates that the environmental contingency in which professional bureaucracy works is stable but complex in nature where standardization of skill performs as the prime coordinating mechanism, where the works necessitate great knowledge and skill to create output form input that clearly depict the authority originates from experts’ expertise and lies in their hands to control their works. Abernethy and Stoelwinder (1990) stated that as the autonomous and dominant characteristics of operating core diminish the influence of technostructure, top and middle line over it and the result is a flat organizational configuration. Continue reading

The effect of Machine Bureaucracy on HR strategy and Its Practices

Part 3:

Machine Bureaucracy can be expressed as a large hierarchical, elaborated, rigid structure, which is highly centralized, rule bound and is operated in a simple, stable and predictable environmental contingency. This ensures that the tasks are simple, routine, and repetitive and of highly specialized nature, which are designed by the techno structure –the key part of the organization and require the employees at the operating level have minimal skills to perform the task assigned. Employees’ behavior is highly regulated in terms of job contents that are spelled out in every step of the process, which means that standardization of work process plays as the key coordinating mechanism that gives employees at the operating core very little discretion for judgment. The simplicity of work makes mutual adjustment ineffective and direct supervision of employees by first line managers is limited due to the elaborated size of the operating core and their role to play as contacts with technocrats, immediate superiors and subordinates. Continue reading

The effect of Simple Organizational Structure on HR strategy and Its Practices

Part 2:

The Simple Structure is the simplest form of structural configuration with small managerial hierarchy and low degree of departmentalization. Key part of this structure is strategic apex with operating core at the base and an insignificant middle line, which defines that the flow of authority is top down, the decision making process is centralized and the span of control is wide. In Simple Structure, behavior is least regulated, jobs are least specialized, and there is hardly any use of pre-planned procedure to determine what to do, when and how to do it, how training will be shaped and how liaison will be maintained (Mintzberg, 1979, 1983). Woodward (1965 cited in Mintzberg, 1983) describes that this structure can be visible as a single-purpose firm with no formal planning, little staff, organic relationships and the tasks of which are coordinated by the chief executive. Continue reading

The Implications of Organizational Structure on HR strategies and Its Practices

Part 1:

McCourt and Eldridge (2003:2) define Human Resources Management (HRM) as The way an organization manages its staff and helps them to develop. Bratton and Gold (2007) state HRM as a means of achieving organizational effectiveness through deploying employees’ talent by the use of idiosyncratic HR programs and practices while Thompson and Richardson (2000:58) point out that Human resources (HR) strategies are everywhere measured by HR policies and practices. To help achieve organizational efficacy, HR strategy coordinates and applies HR policies and practices, hence influences the behavior of people of the organization (Wang and Shyu, 2008). Jackson and Schuler (1995) provide an idea of how different organizational structures are shaped by HRM. Continue reading

The Need for Organizational Change & Development

Organizations are –

constantly working and persistently searching for ways to improve their effectiveness and efficiency and applying and implementing different kinds of strategies and practices in order to be well competitive and outwit in local, national, international and above all, global arena in this extremely competitive business environment (Basu, 2001). The way organizations plan, formulate strategies and make decisions has an extremely profound impact on their competitiveness as Coulson-Thomas (1997) illustrates that the necessity of being fit and effective in the rapidly changing business environment demand organizations’ to make changes in the approach they put forward their plans, create their strategies and make their decisions. The indispensability for organizational change is to direct an in a path where it can learn and use its capabilities to meet the expectations of its customers and other stakeholders (Moran and Brightman, 2001).

Continue reading