The Impact Of Strategic Human Resource Management On Corporate Performance

Project and Seminar Material for Business Administration and Management BAM

Chapter One

Introduction

1.1 Background To The Study

Organizations are seeking to create much competition between them, taking more market, more customers, more sales, etc. Rapid changes stemming from globalization, advancement of information systems and other factors have caused higher competition. Many organizations are driven by the market to set their goals in their corporate performance (Hendry & Pettigrew, 1990). Some of the goals are: cost reduction, achieving sales levels, increasing the number of customers, increasing the market percentage, improving productivity and quality, innovative products. The realization of these goals will be achieved through the human resources management in organizations. Workforce, as the key to success, will enable the achievement of organizational performance. Human resources are regarded as one of the most important sources of today’s firms (Lance, 1994). To sustain competitive advantage, companies must reassess their corporate mission and reset their strategic goals. Programs organized to boost corporate performance explores the powerful performance management systems that successful organizations use to compete successfully in a rapidly-changing global economy (Boxall & Purcell, 2003). With a deeper understanding of how to analyze and communicate business strategy, employees can learn how to manage operational and strategic risk while driving breakthrough innovation and performance.

Human resources management is more important than other competitive sources because these people use other assets in organization, create competitiveness and realize objectives. Thus firstly, organizations must understand the expectations of their workforce in order to achieve the desired corporate performance. The realization of the expectations of employees will enable the desired behavior of employees in the organization (Guest, 1987).

Some of the desired outcomes of the organization in managing their workforce are: competence, cooperation of employees with managers, cooperation of employees between them, showing the capabilities of employees; motivation, commitment and satisfaction; attitude and presence; employee behaviors. The overall goal of corporate performance management is to create a culture as high performance in which individuals and teams to take responsibility for the continuous improvement of business processes and their skills and contribute in achieving the targets set by managers. In particular, management performance can be expressed as the approximation of individual objectives of employees with organizational objectives provided that employees support the culture of the organization. It provides for expectations to be defined and agreed in terms of role responsibilities and accountabilities (expected to do), skills (expected to have) and behaviors (expected to be)(Armstrong, 2006). Strategic human resource management (SHRM) represents a relatively new transformation in the field of human resource management. Strategic human resource management is concerned with the role human resource management systems play in firm performance, particularly focusing on the alignment of human resources as a means of gaining competitive advantage.

1.2 Statement Of The Problem

The purpose of strategic human resource management is to improve corporate performance through people management. The organizations need to manage their human resources effectively and efficiently to achieve the desired goals and objectives. The achievement the goals and objectives translate also in better performance (corporate, financial etc). So, the issues raised in this study is the approach used by organizations to manage their human resources and whether strategic human resource management help to meet the needs, the goals and objectives of the business organization.

1.3 Objectives Of The Study

The main objectives of the study are:

To examine the impact of strategic human resource management on organizational corporate performance.
To examine the level of use of strategic human resource management by organizations.
To identify the importance of strategic human resource management in an organization.

1.4 Research Questions

What is the impact of strategic human resource management on organizational corporate performance?
What is the level of use of strategic human resource management by organizations?
What is the importance of strategic human resource management in an organization?

1.5 Hypothesis

HO: There is no significant relationship between strategic human resource management and organizational corporate performance.

HA: There is significant relationship between strategic human resource management and organizational corporate performance.

1.6 Significance Of The Study

The following are the significance of this study:

The finding from this study will educate management of organization and the general public on the importance of strategic human resource management and its impact on corporate performance.
This research will also serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently, if applied will go to an extent to provide new explanation to the topic

1.7 Scope/Limitations Of The Study

This study on the impact of strategic human resource management on organizational corporate performance will cover strategies involved in successful human resource management.

Limitation Of Study

Financial constraint

Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint

The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.