Introduction/Literature ReviewNumerous scholars have explored the significance of effectiveness of human resource management (HRM) to business success (move one). HRM is the management of people within organizations (Härtel & Fujimoto, 2014, p. 12). All previous studies have supported the fact that effective management of people within organizations plays a significant role in enhancing organizational performance and success. On the other hand, ineffective management of employees has an adverse impact on organizational success and performance (Härtel & Fujimoto, 2014, p. 12). A theoretical review conducted by Igwe, Onwumere, & Egbo (2014, p.
210) indicated that HRM is one of the vital inputs that influence the performance of production matrix within organizations. Caldwell et al. (2011) noted that the effectiveness of HRM policies and systems has a direct impact on organizational success. Although owners of most small organizations deem HRM system as unnecessary for their organizations, previous studies have shown that HRM influences performance of all business organizations, including small commercial enterprises (Sujlana, Shetty & Mathew, 2013). According to Wendt (2014, p. 1), the effectiveness of HRM is a major differentiator of levels of success in organizations (move 2).
The intention of this discussion is to explore the role that HRM effectiveness plays in facilitating business performance and success (move 3). HRM has numerous functions and purposes that play a significant role in influencing success of enterprises (move 1). One of the primary functions of HRM is to select and recruit qualified workers (Igwe et al. (2014, p. 212). The second primary function is to provide opportunities for training and development of employees (Compton & McManus, 2015, p. 33). Another important function of HRM is performance management, which involves HRM activities that ensure that workers carry out the assigned roles efficiently and effectively, and they consistently meet organizational goals (Jain, 2014, p.
41). As Gooderham and Grøogaard (2013, p. 47) noted, HRM plays a vital role in enhancing retention of workers (move 2). Additionally, human resource managers engage in job analysis and design, which involves analyzing jobs to determine the knowledge, skills and experience required to undertake particular tasks and then assigning the tasks to individuals who meet the requirements (Igwe et al. , 2014, p.
212). As Igwe et al. (2014, p. 212) explains, HRM determines the compensation of workers and engages in activities that help to improve employees’ health. Lastly, HRM manages the relationship between organizations, workers, and workers unions, which has a direct influence on labor productivity (Igwe et al. , 2014, p. 212) (move 3). Of the numerous functions of HRM, one of the most important functions is to engaging in activities that facilitate employee retention (move one). Employee retention is relevant to all business organizations during the 21st century as it is one of the major determinants of success.
As Jain (2014, p. 41) explained, enhancing employee retention in organizations encompasses undertaking most of the primary functions of HRM efficiently and effectively. The significance of employee retention is that it prevents organizations from losing workers with valuable knowledge, skills and experience after they move to other organizations (Härtel and Fujimoto 2014, p. 56). When a firm loses such workers, it faces difficulty finding other workers with similar knowledge, experience and skills to replace them (Jain, 2014, p. 41).
Workers who give high-quality output and meet or exceed the required level of output play a significant role in enhancing the ability of organizations to meet their goals and achieve success. As such, losing such workers implies that the capacity to succeed or even meet the set goals declines (Jain, 2014, p. 41). On the other hand, retaining such workers implies that a firm retains its ability to succeed (move 2).