GOOD HUMAN RESOURCE MANAGEMENT PRACTICES EQUAL GOOD

BUSINESS-DISCUSS
Introduction
The statement that good human resource management practices equal good business may be
true to a large extent provided those human resource practices are derived from the strategic
objective of the ogranisation.

Thus, an alignment between the strategic objective of the

organisation and the strategic plans of the human resources unit may increase the chances of
meeting the business objective of the organisation. This is consistent with the view of Braton
and Gold (2000) who argue that an alignment between business strategy and human resource
practices will improve organizational performance and competitiveness.
However, for us to be able to provide a critical evaluation of the statement, it is important to
understand what human resource management means and particularly what really constitutes
good human resource practices. We would then analyse the relationship between each human
resource practice and the strategic objective of the organisation. It is the opinion of this writer
that human resource practices should be business lead.
Meaning and purpose of Human resource management
Many people find human resource management to be vague and elusive concept, not least
because it seems to have a variety of meanings. Pinning down an acceptable definition can seem
like trying to hit a moving target in a fog (Price 2004 p.32). Different interpretations have been
found in books and articles about human resource management. As a result of this it is being
described as elastic (Storey, 1989 p.8)
For the purpose of

this discuss the following textbook definition of

human resource

management will be used: Human resource management is a distinctive approach to

employment management which seeks to achieve competitive advantage through the strategic

development of a highly committed and capable workforce, using an integrated array of cultural,
structural and personnel techniques(Storey,2001,p.6)
The general purpose of human resource management is to ensure that an organization is able to
achieve its objectives through people. As remarked by Ulrich and Lake (1990) Human resource
systems can be the source of organizational capabilities that allow firms to learn and capitalize
on new opportunities. For this objective to be realized there must be clearly defined human
resource practices that is understood and agreed to by both top management and employees.
Some of these human resource practices are discussed in the next section.
Human resource practices
Human resource practices vary from organisation to organisation. Pfeiffer (1994; 1998) for
instance, asserts that there are seven human resource practices which successful organizations
should employ. These are the provision of employment security, the selective hiring of recruits,
and decentralized decision making, high compensation contingent on organizational
performance, extensive training, minimal status distinctions and barriers, and the extensive
sharing of financial and performance information throughout the firm. However, for the purpose
of this discussion we would concentrate on the following human resource practices:

Recruitment and selection

Training and development

Appraisal and rewards management

Employee maintenance and

Employee relations

As good human resource practices are business lead, it is expected that if an organisation decides
to outsource a particular business unit, the human resource unit must redefine its skills and
competencies to reflect such business strategy. There will be no recruitment of certain skills and
competencies relating to the outsourced business unit. Therefore, the hiring strategy might
change in favour of re-training staff whose unit has been outsourced so that they can be
redeployed in other units of the organisation.

According to Schuler and Jackson (1987b) business competitive strategies can be classified into
cost-reduction, innovation and quality-enhancement.
Cost-reduction strategy involves lowering the price of products or services. To encourage
behavior that is consistent with a costreduction strategy, the human resource strategy should
follow the steps of recruiting chiefly from external labor market. Thus selection will be focused
on the ability to work immediately and with minimal training, well-defined job content, career
development based on specification; performance evaluation that is short term and individual,
and payments based on external equity, with or without limited bonuses and incentives.
However, firms pursuing the strategy of innovation imply an emphasis on the development of
products and services that are different from their competitors. To encourage behavior required in
order to be consistent with innovation strategies, the human resource strategy would adopt the
following key steps,

providing job specifications that emphasize a close interaction and

coordination between groups of individuals, performance appraisals based on long-term and

group-based achievement, broad skills development matched to the individuals career path
within the organization, and compensation systems based on internal equity rather than external
or market-based pay.
Finally, those businesses adopting a quality-enhancement strategy upgrade their service or
products continuously. An accumulation human resource strategy is devised to be consistent with
a quality-enhancement business strategy. To foster this type of behavior, human resource
management practices can include fixed and explicit job descriptions,

high levels of

participation and decision-making related to the job, performance appraisal that is short-term
and result-orientated using a mix of individuals and group criteria, job security, and extensive
and continuous training and development.
Recruitment and selection represent the entry point activities. Watson (1994, p.185) refers to
recruitment and selection as: the processes by which organizations solicit, contract and interest
potential appointees, and then establish whether it would be appropriate to appoint any of them.

There is also a second perspective to the proposition that good human resource management
practices equal good business This perspective argues that firms should create and adopt a high
degree of internal consistency among innovative work practices(Arthur,1992;1994;Huselid,1995)
or

high

involvement(Lawler,1992),or

progressive

human

resource

management

practices(Delaney and Huselid,1996) or a high commitment human resource management

practices(MacDuffie,1995) that can lead to productivity gains for organizations.
In the light of the above discussions, one can therefore conclude that human resource practices
that are crafted out of the business strategy can facilitate the achievement of the strategic
objective of the organisation.

For this to be truly realized, human resource management must

develop other supportive policies that will equally guarantee the achievement of employees
goals as they strive to improve organisational performance. As suggested by Cooke and
Armstrong (1990), to achieve a link in rigorous terms requires a means of quantifying the
additional resources allocated to human resources overall, and at level of each element of human
resource strategy, and measuring and comparing the marginal turn on investing in each element.
But this approach is unlikely to be practicable. The link must therefore be judgmental, but it can
still be rigorous.