The role of human resource management in an organization cannot be undervalued. The decisions that come from human resource management cannot be undervalued and is hard to measure although it has a great impact in an organization. This paper will focus on the argument that it is hard to measure the impact that human resource management on the performance of an organization. This research is undertaken with the hope that there will be clear relationship and clear understanding of whether it will be possible to measure the impact of human resource management on the performance of a given organization. There are few organizations that are able to leverage and attach their performance by the contribution that the human resource function brings to the organization. Organizations usually determine their performance basing on the performance of decision-making units. These are the groupings of functional units within an organization. This includes such units like departments, branches, retail units, and teams.
Before discussing further the argument of this statement, it is important to research on the impact that human resource management has on the performance of organization(B Becker & Gerhart 1996).
Role of human resource management on organizations
Organizations are facing a changing economic climate which is characterized by such factors like globalization, changing demands of the customers, changing demands of investors, and increasing competition in product development. One of the ways that organizations use to compete effectively is to improve their performance. This is undertaken by reducing costs, having innovative products and services, enhancing the quality process, and speed to undertake the marketing process. The human resource management plays a crucial role in ensuring that this is achieved. Despite the role that decision making units have on the performance of employees on an organization, there has been research regarding the role that psychology has on individual employees on the performance of the organization. The measures that have been taken in such researches include the attitude and performance of these individuals. There has not been any research regarding the role that individual on the performance of decision making units(Guest 2011).
For high performance to be achieved, there are factors that need to be assessed and looked into. These factors include high skills that are required, the opportunity to participate, or effective communications. There is also the issue of incentives that is given to the employees. These factors have been seen to affect the productivity of employees. The better these factors are shown and undertaken well, the better the performance of the business decision unit. This affects the performance of the business unit which will affect the overall performance of the organization.
Most organizations emphasize on having effective human resource management in organization. This will improve the performance and the working of the employees in that business decision unit(Kehoe & Wright 2013).
Human resource management contribution to organizational performance cannot be measured
It is becoming evident that human resource management’s contribution to the organizational performance is hard to measure. This is because the performance of organizations is measured from the performance of the contributions of the decision making units. This makes it hard to know the role that the individual employees played in those decision making units. From time to time, the performance has been measured as a whole decision making unit. An example is that if the accounting department is working effectively, it is hard to find the effort that individual employees in the accounting department contributed to the success of the accounting department. For this reason, these employees are not included to the overall success of the department or the organization. This is so even though it is hard to measure the success of a given business unit without having the input of the human resource management(BE Becker & Huselid 1998).
The human resource management could also be the reason for improved organizational performance but it would be hard to measure the contribution of human resource processes that have been improved. An example would be that if there are new employees who have been hired to a business unit and they come with new expertise and knowledge, if there is improved performance of the organization, it will be hard to know the extent in which the new recruits brought to the organization. This is because there are two factors that might have contributed to the success of the business. There are new technologies that shall have been introduced and new human resource that possess these skills. It will be hard to measure which of the two have contributed to the success of the organization. It could also be the attitude of the new employees but the attitude alone with obsolete technologies would be hard to achieve the success.
It is also hard to measure the contribution of human resource management to the success of a business because of the fact that there are business processes that are constantly being improved by organizations. It would be hard to measure the role that these business processes will have contributed to the success of the company. It is important to understand the contribution of the various factors to the success and better performance of an organization. For the staff to achieve their success in the organization there should be effective processes in that organization. The performance of an organization is an amalgamation of good and well trained staff and improved business processes. It would be hard to know exactly the extent in which the human resource management functions contributed to the success of the organization.
It is also hard to measure the performance of human resource management because of the fact that for an effective human resource management, there are many components that are involved. There are recruiting processes, retention strategy, incentive programs, and inspirational programs among other programs. For a human resource management program to be said to be effective, it have taken all these processes to come up with a working plan. All these contribute to a better performing organization. From the human resource management program and perspective, it would be hard to understand the contribution of these human resource management programs to the overall success of the organization. It is evident that the programs that are devised by the human resource department of an organization will end up enhancing the performance of the organization. Although this is the case, it is hard to measure the contribution of the specific programs that have been devised by the human resource management.
Many of the human resource management programs that are seen to enhance the performance of an organization are intangible. One of them is attitude enhancement. There are programs that are devised by the human resource department that are geared at improving the attitude of the staff towards their jobs. The attitude would be hard to measure in the long run. It has been researched that a good attitude of the employees towards their jobs helps improve the performance an organization. If the employees are upbeat and have the right attitude, then it would be simpler and easier to achieve a better performance of an organization.
The performance of an organization is as a result of many other factors. There are technology issues, accounting, financial, management, and procurement among others. All these are the factors that contribute to better performance of a given organization. It is, therefore, hard to know the contribution of an individual unit of the business. There are contributions that each of the departments work in order to have the organization perform better. Measuring these individual contributions is hard and would be difficult. The human resource department is the hardest because most of the programs that are stated in this department are not measurable by any financial attachment. It will be hard to understand the contribution for such a department to the overall working of the organization.
There are also counterarguments towards this statement. It cannot be argued that it is hard to measure the contribution that human resource management has on the performance. There is a way in which this can be achieved, although not fully. It will be partial measurement. Partial because it hard to measure non-tangible factors in this management function. The various programs that have been rolled up in the human resource management function can be measured basing on the financial cost of the programs. This will be achieved by measuring the budget that was allocated to the human resource department to achieve this function. It would not be hard to achieve this given the fact that departments are allocated funds according to the programs that these departments have put in place. The measurement of the success of the human resource management function can be attributed to the funds that were allocated for the running of the various programs. This way, there would be some form of measurement of the function(Delaney & Huselid 1996).
The human resource management would also be measured by undertaking a costing of all the programs that were rolled in order to improve employee attitude and strengths towards a specific program. All the training that have been undertaken can be measured by the organization through the human resource management function. The individual employees can also be asked to give the value of the education they acquired. If the education they acquired was done internally, the cost of these internal trainings can be measured(Delaney & Huselid 1996).
In conclusion, it is evident that most programs that are found in human resource management are intangible. The programs that are found to enhance performance of an organization are those that are intrinsic to the employees. These are hard to measure because it is hard to measure the intrinsic values of the human resource. There is, however, some way in which this measurement can be achieved. This is through getting the value and the financial value of the programs that have been rolled out in relation to the human resource management. This would be achieved easily and the measurement achieved. Most of the programs that are rolled out in the human resource management have a financial attachment.
Becker, B & Gerhart, B., 1996. The impact of human resource management on organizational performance: Progress and prospects. Academy of management journal.
Becker, BE & Huselid, M., 1998. High performance work systems and firm performance: A synthesis of research and managerial implications. In Research in personnel and human resource management.
Delaney, J. & Huselid, M., 1996. The impact of human resource management practices on perceptions of organizational performance. Academy of Management journal.
Guest, D., 2011. Human resource management and performance: still searching for some answers. Human Resource Management Journal.
Kehoe, R. & Wright, P., 2013. The impact of high-performance human resource practices on employees’ attitudes and behaviors. Journal of Management.