OVERVIEW THE IMPORTANCE OF HUMAN RESOURCE MANAGEMENT
The journal state that the Relationship between Human Resource Management and Firm Performance in Malaysia. To get the better knowledge about these, firstly, we need to know the definition of human resource management. Human resource management has a broad definition. As stated in the text book, human resource management is the process of acquiring, training, appraising, and compensating employees, and of attending to their labor relations, health and safety, and fairness concerns. Besides that, Cherrington (1995) mentioned that human resource management is responsible for how people are treated in organizations. It is responsible for bringing people into the organization, helping them perform their work, compensating them for their labors, and solving problems that arise.
Humans are an organization's greatest assets; without them, everyday business functions such as managing cash flow, making business transactions, communicating through all forms of media, and dealing with customers could not be completed. Humans and the potential they possess drive an organization. Today's organizations are continuously changing. Organizational change impacts not only the business but also its employees. In order to maximize organizational effectiveness, human potential—individuals' capabilities, time, and talents—must be managed. Human resource management works to ensure that employees are able to meet the organization's goals. In addition, human resource management is important to all managers for avoid some mistakes include hire the wrong person for the job, experience high turnover, commit any unfair labor practices, and let some employees think that their salaries are unfair and inequitable relative to others in the organization.
Refer to the journal; it comprehensively evaluated the links between high performance work practice and firm performance. An increasing body of work contains the argument that the use of High Performance Work Practices, including comprehensive employee recruitment and selection procedures, incentive compensation and performance management systems, and extensive employee involvement and training, can improve the knowledge, skills, and abilities of a firm's current and potential employees, increase their motivation, reduce shirking, and enhance retention of quality employees while encouraging nonperformers to leave the firm (Jones & Wright, 1992; U.S. Department of Labor, 1993).
The Human Resources Management (HRM) function includes a variety of activities, and key among them is deciding what staffing needs you have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies.
Many experts have noted that workers while on the job do not produce more simply because they are being paid more. After all, it is not expected that employees will constantly calculate the monetary value of every action they perform. Workers, for instance, do not keep a record of how much they earn every time they send out an email, approve a document or complete some other task. It’s just not human nature.
Motivation and rewards or recognition have a direct link to each other. Motivation and rewards or recognition play an important role in human resource management for employees. Employees have a motivational hope of receiving rewards and recognition from their shareholders, in particular their bosses. Once their contributions were neglected, they felt undervalued and their needs were not acknowledged by the company, the issues of low productivity and resignations will increase. This analysis also highlights style of managerial staff will directly affect the employee’s performance. For instances, factors such as recruitment or selection; training and development; appraisal; retention; empowerment and communication, are dependent on management and are aligned to performance.
A good management of human resource management included getting the best employees. Workforce planning, specify jobs and roles, recruiting, outsourcing, screening applicants and selecting new employees are the strategy that can get the best employees. Besides that, management like training employees include career development, employee orientation, leadership development, personal development, supervisorial development and training development are also very important for the human resource management in training employees. In addition, ensuring compliance to regulations likes personnel policies and records, employee laws, topics and issues, and also ethnic are playing an important role in human resource management too.
Furthermore, human resource management is including ensuring safe work environments for employees. Safe work environment can define as diversity management, dealing with drugs in the workplace, employees’ assistance programs, ergonomics (safe facilities in the workplace), personal wellness, preventing violence in the workplace, ensuring safety in the workplace, and supporting spirituality in the workplace. In addition, a good human resource management is also include of sustain high performance employees. Sustaining high-performing employees can through employee performance management, group performance management, interpersonal skills, personal productivity and retaining employees.
Last but not least, and also the most important part in human resource management, which is paying employees. Benefit and compensation are the main paying for the employees. Normally, benefit and the compensation are the main reason for an employee to choose the organization. Employee benefits typically refers to retirement plans, health life insurance, life insurance, disability insurance, vacation, employee stock ownership plans, etc. Benefits are increasingly expensive for businesses to provide to employees, so the range and options of benefits are changing rapidly to include, for example, flexible benefit plans. While compensation includes topics in regard to wage and/or salary programs and structures, for example, salary ranges for job descriptions, merit-based programs, bonus-based programs, and also commission-based programs.
Human resource management also has a direct effect to employees’ turnover. A good human resource management can provide the above requirement for employees. These can let the employees feel satisfied in their job. This is directly link to the turnover of the employees. A good human resource management can recruit and also can retain the best employees of organization. As refer as above, humans are an organization's greatest assets. To achieve a good performance of a firm should have the greatest assets, which are good employees in the organization. When the employees are satisfied with the job environment, the allowance, the benefit, then they will try to put all of their effort in their job. For putting all the effort in the job, so that, directly the firm can achieve good performance.
Increasingly, firms are considering the adoption of new work practices, such as problem-solving teams, enhanced communication with workers, employment security, flexibility in job assignments, training workers for multiple jobs, and greater reliance on incentive pay. This paper provides empirical evidence to address the question: do these human resource management practices improve worker productivity? The answer is definitely yes.
Progressive and innovative managers realize the importance of increasing motivation and satisfaction among employees to boost their output. More than just pay incentives, worker output can be increased by providing tailor-fit benefits to meet their needs and motivating them with the quality of work life. Increasing worker motivation and satisfaction can promote better productivity, produce effective, efficient and loyal workers, boost higher quality of work and make them stay longer in the business. The nature of motivation and effectiveness among employees is the way by which modern human resource management is done. In fact, there is a direct relationship between progressive human resource management and effective management, which includes a work environment that is conducive towards achieving the goals of the company as well as the employees.
Moreover, the success of your management is determined by your knowledge and skill in evaluating and identifying issues and concerns affecting employees as well as your ability to handle and resolve them with the help and satisfaction of workers. Several factors need to be considered such as whether your workers know how you gauge and judge their performance; educational and training programs to encourage and promote personal development; trust and confidence on the knowledge and capabilities of your employees; opportunity to allow your employees to make decisions and an open, honest and free communication with them.
Not only can these factors promote worker productivity, it can also help address or avoid problems with the management and employees as well. Achieving good, quality employee performance depends on how much opportunity you provide them for their individual growth and achievement as well as recognition, responsibility and reward.
Remuneration is a primary reward you can give to your employees. Once the pay and benefits are properly established, it is important to use other ways to further boost your workers' output. Increasing employee productivity is mainly based on recognizing their desire to perform better on the job, assume responsibility as well as to aim higher and succeed. Moreover, the quality of work life also includes making your employees a part of the decision-making process.
However, there are instances when productivity may lower among employees who enjoy higher pay and more benefits. And not all worker productivity and motivation issues are solved by fat paychecks and promotions. Workers may even become more efficient with fair pay commensurate to performance.
Providing tailor-fit benefits to meet the needs of employees is an important part in boosting the quality of work life among employees. Doing so can maximize labor costs that go to the worker as well as the return without necessarily increasing overhead and operating expenses. For instance, instead of recruiting, hiring and training new employees, who can involve more time and money, you can motivate your existing employees by giving them opportunities for career growth and development such as training and enhancement. Efforts to satisfy individual needs in your employees with flexible benefits help reinforce motivation. It may even be more valuable to an employee than just a mere pay raise.
As conclusion, human resource management plays an important role in firm performance. There is significant relationship develops between HRM and firm performance. This is not surprising in view of the fact that incentives are a vital part of remuneration which practically influenced a firm’s performance. The current attempts in the literature to assess the organizational performance impacts of HR practices appear to be a more potent and more direct approach for reaching out to top managers with the message that HR practices do make a difference. If this message gets through, we can expect to see an increase in both the adoption of effective HR practices and the support for research to identify such practices.