The Effective Human Resource Management Is Essential for Business Success – Literature review Example

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The paper "The Effective Human Resource Management Is Essential for Business Success" is a perfect example of a literature review on human resources. Numerous scholars have explored the significance of the effectiveness of human resource management (HRM) to business success (move one). HRM is the management of people within organizations (Hä rtel & 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 (Hä rtel & 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 the 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 the 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 the 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 Grø ogaard (2013, p. 47) noted, HRM plays a vital role in enhancing the 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 tasks to individuals who meet the requirements (Igwe et al. , 2014, p.

212). As Igwe et al. (2014, p. 212) explain, 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 engage 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 (Hä rtel 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). HRM facilitates employee retention through engaging in various activities that promote workers’ motivation, satisfaction, and commitment to their jobs and in the organizations they work.

One of the approaches for enhancing employee retention rate is by giving them competitive remuneration (Jain, 2011, p. 6). The second approach is giving workers rewards in recognition of excellent performance. Rewards can be extrinsic, such as bonuses, vacation, and time-off, or intrinsic, such as giving praise. Giving workers extra benefits such as contributing to their pension kitty and giving them health insurance plays a vital role in increasing employee retention rates.

Importantly, the rewards should be distributed equitably. To facilitate the retention of workers, human resource managers need to establish ways of employee development, such as training (Jain, 2011, p. 7).   Creating effective strategies for solving conflicts within organizations promptly is vital to enhancing the ability of firms to retain workers. Gooderham and Grø ogaard (2013, p. 57) explained, the employee retention rate is increased when organizations develop effective channels for workers to forward their grievances to the management, which is one of the roles of HRM.

Related to that, human resource managers have the mandate to ensure that there is effective communication among workers and between workers and managers. The effectiveness of communication influences the level of satisfaction and commitment of employees to jobs and organizations and ultimately, their inclination to leave and move to other organizations (Gooderham & Grø ogaard, 2013, p. 57). Facilitating work-life balance by giving workers enough time to rest is also an important approach that enhances the ability of firms to retain workers. Offering job security to workers helps to reduce the inclination of employees to move to other organizations.

Allowing workers to participate in decision-making and incorporating their views in changes that affect them improves their satisfaction and reduces the chances of moving to other organizations. Last, the leadership style that human resource managers adopt influences workers’ retention rates. Satisfactory and supportive leadership facilitates retention rate, whereas authoritative and unsupportive leadership, has an adverse impact on the retention rate (Gooderham & Grø ogaard, 2013, p. 58). In short, enhancing employee retention is a vital function of HRM during the 21st century since the effort enables human resource officers to undertake other functions of HRM.

In addition, increasing employee retention rate is essential as organizations need to retain the best workers to achieve and maintain a competitive edge in their industries (move 3). There are several issues facing HRM that have been affecting organizational success recently. One of the major issues is the fair and transparent recruitment of workers (move one). The issue is of significance to the HRM since it has a direct implication on business performance.

As Hä rtel and Fujimoto (2014, p. 56) explained, an organization is perceived as being socially responsible when it engages in a fair and transparent recruitment process (move 2). Today, social responsibility is one of the major factors that organizational stakeholders assess before deciding whether or not they want to be associated with particular firms. For instance, consumers are sensitive and do not wish to be associated with businesses that are deemed not to be socially responsible and thus, such perception leads to a decline in their loyalty and inclination to purchase products and services of those organizations (Hä rtel & Fujimoto, 2014, p.

56). Second, fair and transparent recruitment of workers increases the probability of selecting individuals with knowledge, experience, and/or skills that match the job requirements (Hä rtel & Fujimoto, 2014, p. 57). When human resource management officers adopt a fair and transparent approach, they concentrate on the skills, knowledge, and experience of the candidates for recruitment and do not discriminate them on factors such as religion, sex, ethnicity, and racial background. Consequently, they recruit the most qualified applicants. The approach increases the chances of hiring workers with a high potential for producing the desired or even exceeding the expected output, which enhances organizational success.

On the other hand, lack of transparency and fairness during recruitment reduces the chances of selecting the most qualified or suitable candidates, which has an adverse impact on organizational performance in the long-term (Hä rtel & Fujimoto, 2014, p. 57) (move 3). In conclusion, effective HRM is one of the vital aspects needed for business organizations to attain success in their industries. As noted in the above discussion, HRM has numerous primary functions, which include recruitment of workers, developing opportunities for employee training and development, enhancing workers’ retention rate, offering competitive remuneration, establishing ways of improving the health of employees, conducting job analysis, and design and engaging in performance management.

Enhancing employee retention is one of the major HRM functions that influence the competitiveness and success of organizations during the 21st century. Employee retention rate is increased mainly by conducting other functions of HRM. Fair and transparent recruitment of workers is one of the major issues facing HRM during recent times since it has a direct impact on organizational performance and success (move 1).

In this writer’ s opinion, all organizations, including small, medium, and large firms, should focus on developing effective HRM systems and policies to achieve and maintain a competitive edge in their industries. Owners for small organizations should not fear to adopt HRM practices as they can steer their firms to grow further (move 2).                        


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