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Introduction: HR and Performance Management
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While examining the idea of ‘personnel management’ which includes two related concepts: Human Resource Management (HRM) and Human Capital Management, Armstrong (2019) asserts that the employees form the most important assets that an organisation has and thereby managing the workforce effectively might be the key to the attainment of organisational success. It is known that organisations consist of distinct functional departments which need to operate in a coordinated fashion in order to meet the business objectives. These departments would be necessarily manned by employees with varied specialisations depending upon what kind of work they are supposed to perform. Managing the entire workforce would therefore be a huge task and has to be accomplished by a team of managers who have to shoulder the responsibility of allocating and managing the most crucial resource of the business. Armstrong (2019) therefore conceives HRM as a ‘strategic and coherent’ approach towards the maintenance and management of the most valued resources of the company. Before beginning, it also needs to be mentioned that despite the almost ubiquitous usage of the term ‘human resource’, it has met serious contention from various scholars as equating human beings with resources might have problematic connotations (Osterby and Conster, 1992, as cited in Armstrong and Taylor, 2020).
The aim of the present assignment would be to highlight the various dimensions of HR and its linkages to other aspects of the organisation including overall performance and performance management. Specific organisational contexts have been taken up in order to understand the implications of HR practices on employee performance and well-being.
1.1 Linkages between HR and Organisational Performance
Human Resources and its management affects the organisational performance of any business. Stewart & Brown (2019) argue that the processes of HR and management can be best understood through the perspective of stakeholders of any organisation. The impact of HR practices on the organisational performance is of importance for any stakeholder as the effective allocation of resources is of primary importance for any stakeholder investing in the company. The scholars (2019) have employed the following perspectives to analyse the role of HR:
- Employees: effective HR practices reduces the gross turnover of human resources of an organisation. This puts the company at an advantage to retain the existing employees with finer experiences and arrange for smoother training approaches for future tasks. Stewart & Brown (2019) posit that the HR practices improves work engagement. Human resource management also ensures that labour laws and other regulations are maintained in the organisation.
- Customers: HR improves the company-customer relationship by directly engaging with the customers through potential human resource workers interacting with them at all fronts of transaction.
- Owners: effective HR produces effective employees for the organisation which increases the productivity of the organisation. This helps in turn the stakeholders and owners who invest in the company for growth and returns.
- Society: HR practices ensure that the organisational activities are processed on ethical standards and have transparency towards the public. This ensures the maintenance of ethical practices within the industry and a healthier and transparent market for the public. Social perspective also observes the effect of organisation on the social and ecological environment which must be transformed into a sustainable model for business operation.sustainable business model is important in this context of climate change as it covertly affects the organisation’s performance through other means of expenses which might increment eventually.
1.2 Role of HR in Contributing to Employee Performance
According to Tabiu and Nura (2013, as cited in Mira et al., 2019), employee performance is positively affected by HR practices. Other scholars (Gerhart et al., 1992; Haddock-Millar et al., 2016 as cited in Mira et al., 2019) reinforce a similar point of view. While talking of ports in Saudi Arabia, Mira et al., (2019) assert that given the present globalised market situation, HR practices contribute to competitive advantage. Their study found a significant positive correlation between effective HRM and employee performance.
Scholars have also tried to expand the traditional domain of HRM and suggested new kinds of practices that are more suited to modern contingencies. One such study that suggests an alternative approach to HRM with the aim of improving employee performance has been conducted by Guan and Frenknel (2017). The authors urge that HRM should encourage employee participation in job design. This process is also referred to as job crafting and it grants a considerable degree of autonomy to the employee in determining his/her future job role.
The above section shows how both conventional and other innovative approaches towards HR can exert a good influence over employee performance. While speaking of TESCO Mollah (2016) indicates that the organisation follows a strategic approach towards HR practices. The author (2016) further points out that strategic HRM allows TESCO to align HR policies with the business strategy and this helps in improving both employee and organisation performance. This implies that the company delivers quality products and services to its customers by integrating the demands of the business activities with the HRM of the organisation. Such an approach as Mira et al. (2019) earlier point out, impart a considerable degree of dynamism to the everyday business practices of the company.
2.1 Evaluating the Performance against Targets of an Organisation and Barriers and Blockages in Achieving Those Targets
In order to excel in performance in the given area of operation and gain competitive advantage, an organization such as TESCO needs to understand that continual evaluation of their performance is needed. In order to understand the shortcomings in the efforts and resources that are present as well as in order to gain an insight into the different opportunities that are available for improvements, performance needs to be evaluated. However, a standard model of performance needs to be set against which the performance is evaluated. For example, in a month TESCO sets its targets that it shall increase its customer base by 2%. The targets are mainly set by the company with the help of the ‘Steering Wheel’ approach for business performance growth and steering the organisational activities efficiently. Marr (2020) argues that the corporate steering wheel conveys the needs and demands of the organisation in brief one page format. The corporate steering wheel of tesco involves 20 objectives which are categorized under 5 different perspectives revolving around the central theme of ‘every little helps’ which is held by the dual maxims of ‘treat people how we like to be treated’ and ‘No one tries harder for customers’. The five perspectives are: financial perspective, customer perspective, community perspective, operations perspective, people perspective. Marr (2020) argues that performance, thus, needs to be evaluated on the following lines:
- Performance evaluation must be lucid and brief to reflect the business position in the industry.
- Creation of methodologies, like corporate steering wheel which can help in maintaining steady growth for the organisation
- Evaluating and keeping check on those performance statistics which matter the most in everyday operation.
2.2 Strategies and Tactics to Overcome the Barriers and Blockages
Barriers to fulfilling targets are endemic of any industry in the world. These may arise in the form of regulations and official forms or might arise in forms of social or ecological imbalance. Thus it is important for any organisation to be wary of changes in the social and ecological environment. The importance of risk management and porior presparin becomes essential while dealing with unexpected returns. Martinuzzi (2013) points out certain steps via which the company can overcome certain barriers and blockages in the industry and flourish to fetch sufficient profits for operations and stakeholders. She argues that organisation attitude of flourishment might negatively impact the performance of growth for the company. The strategies she presents contradicts the position Tesco stands on, as the company maintains a brief and lucid approach to handle managerial tasks and helps to get profits because of reasons which are compact and efficient in nature. Martinuzzi (2013) says that tactics in price determination also helps the company in the long run for growth, stability and adaptability. She says that emotional pricing affects any company negatively as new entrants feel the need to charge too high or too little and do not understand the calculations behind the production costs and expenses which they consider, according to Martinuzzzi (2013), ‘a hollow win’. Tesco’s pricing strategy on commodities is constantly reevaluated to maintain an average position in the pricing scale. The process of revelation helps the company maintain a stronghold in the industry as the pricing helps the customers to reconsider which market place to visit and why. TESCO acknowledges the need to abandon old strategies if they consider such approaches to be redundant. The constant negotiation between the old and new strategies, Martinuzzi (2013) argues, creates a new model of strategy which might help a company overcome an unprecedented situation better formulate policies for risk management. The scholar argue that the proximity between sales and marketing is important for efficient and effective business sales and profit maximisation as the products and services must be known by the employees which help in letting the company reach out to certain region sand cultural sections of the society which might not know about the availability of the existence of such commodities. This helps in bridging the gap between sales and other activities of the organisation and lets the company grow in a smooth and efficient manner which might incorporate sustainability models for overcoming certain ecological challenges in the environment.
3.1 Key HR and Employment Practices and their Impact on Employee Performance
Employment and HR practices involve strategic operations that guide the workforce of the organisation. The structure and cultural practices of an organisation says a lot about the HR and employment practises. There are various HR practises which are crucial for the proper functioning of the organisation. The seven best practices as described by Jeffery Pfeffer are: i) on job training in technical and soft skill ii) inducement and bonus for the employees based on performance iii) making acquisition of necessary information easier through a transparent code iv) providing job security of the employees v) efficient team which are self managed vi) agile and democratic leadership to construct an egalitarian organisation vii) hiring personnel who are effective through a streamlined interview. (van Vulpen, 2021), Armstrong (2019) says that there are two types of HR practices specifically foundation HR practices and emergent HR practices. In foundation HR practices include recruitment, learning and development, rewards and et cetera. In the learning and development process the employees working in the organisation seek to improve their existing skills. This will help the employees to increase their future opportunities and seek better remuneration.The emergent HR practices consist of organisation design, communication, executive leadership development and work process. Proper communication is important for every employee in the company to work in a coordinated manner. The communication also helps the employees to be well informed about the goals and objectives of the company. The companies provide incentives for employees on the basis of the performance and also provide performance appraisal and internal career opportunities.
In TESCO, the HR practises are efficient as they provide an exclusive helpful approach for the organisation to work skillfully. The HR handles the issues like grievances, managing skills and developing a healthy work environment. But the most significant part of the HR in TESCO is training and development in terms of time and money. Every year TESCO recruits a huge number of staff in the front line, shop staff. The recruiters look for high quality graduates from leading universities. The recruits’ academic background is not relevant with the training of TESCO. The company trains them “in the Tesco way” and introduces them to the corporate structure. The HR department of TESCO values every staff; it considers every staff as resources and promises them to provide the chance to develop their skills and progress through the company.
The HR has a program for employees in whom issues are brought up regarding communication and consultation. This is called “bottom up feedback”. This kind of HR practices can be seen in the companies which are globally present. Managers are also engaged in different types of communication to gather feedback from the employees to develop the company further. There are different practises in TESCO by HR which impacts the employee performance like- the use of shift work which maximises the ability for people to work as per the timetable that suits them, the employee has freedom of transfer which encourages employee retention. The HR department plays a critical role working towards the creation of a healthy work environment.
4.1 Various Systems Central to Performance Management
Performance management, according to Demartini (2014), came into being in the 1980s when academicians on management control started to abandon their focus on short term financial gains to the development of performance measures more amenable to long-term success. Therefore, it can be observed that in matters relating to the evaluation and sustenance of employee output, the stress has shifted from the idea of ‘control’ to that of ‘performance’. However, despite the burgeoning interest in academia in the field of performance management, the picture may be a bit discouraging in a practical organisational scenario.
As Ewenstein et al., (2016) indicate, in most instances, both managers and staff assume that the exercise of performance management is redundant. However, certain modern organisations have developed innovative methodologies towards performance management that unlike traditional approaches, do not aim at merely evaluation of employee performance. Ewenstein et al., (2016) refer to companies like Netflix, Microsoft etc. to point out that the performance management practices at these organisations focus on the performance of employees whose contribution to the total work falls outside the average boundaries of high and low. This allows these organisations to offer incentives to the deserving staff and devise training and development programmes that might help in improving the output of the workers who might fall behind. The above authors also emphasize that technology plays a key role in modern performance management processes as it allows the management to elicit objective data related to employee performance through an automated real-time basis. Technology thus helps the management to collect accurate data regarding the degree of contribution of an individual employee.
On the other hand Mone et al., (2018) assert that performance management is a ‘continuous process’ rather than being a fixed set of principles. Therefore, Mone et al. (2018) conceives performance management as a dynamic process which has the ability to incorporate changes depending upon the situations that might arise in the external or internal environment of an organisation. Also given the diversity in the ways in which organisations operate according to the nature of their businesses, there can be no singular approach to performance management that would prove productive in all kinds of organisations.
4.2 Ways to Integrate these Systems
The preceding section illustrates the various systems that form an important part of the performance management apparatus in an organisation. It is evident from the research of the various scholars cited above that there are several dimensions of performance management that need to be considered simultaneously in order to ensure that the processes that it entails are running effectively. For example, an efficient performance management system would have to use technology and at the same time define parameters of acceptable performance among the employees in order to establish the standard criteria of evaluation within the workplace. Moreover, given the changing conditions of the global market scenario, it would also be necessary for the management to carry out relevant research in order to determine what the most appropriate approach to performance management would be so that the organisation's aims and objectives can be obtained successfully.
It can thereby be argued that an efficient performance management system would have the ability to combine all the aspects that had been previously mentioned. If there is no concrete idea regarding what is expected of the employees there would not exist an objective standard of evaluation of the degree of employee output. Therefore, these standards have to be formulated first by considering the goals that the organisation has. The technology would then have to be integrated into the organisational framework so that it can monitor whether the requisite standards of performance are met.
TESCO adheres to an integrated approach to performance management that aims at fostering teamwork within the workplace. The management of TESCO understands that focusing only on individual performance would not increase the overall output of the organisation. Therefore, the pay and rewards system at TESCO is formulated in such a manner that the interests of the entire team are safeguarded. TESCO also evaluates the performance of the team as a whole and accordingly offers various kinds of incentives in order to boost their overall output. Here it can be observed that the reward and incentive system has also been integrated with performance management and the latter allows the organisation to make more productive investments in employees.
This assignment aims to present to the readers the role of Human Resource and its management and how such an activity, along with other departments of the organization, affects the overall performance of the organization. The paper asserts that HR and management positively affect the performance if done in the correct fashion. The paper starts off by evaluating the role of HR and its relationship with organizational performance. It moves on to study the various aspects of organizational performance and the major strategies and tactics organizations employ to overcome certain business risks and blockages. The paper also looks into the employment practices of the organisation in the performative aspects of employment and management and the various systems central to performance management. Lastly the paper draws attention to the ways in which these ideas can be integrated for a pragmatic application in a business organisation.
Armstrong, M. and Taylor, S., 2020. Armstrong's handbook of human resource management practice. Kogan Page Publishers.
Armstrong, M., 2019. A handbook of human resource management practice. Kogan Page Publishers.
Demartini, C., 2014. Performance management systems. Contributions to Management Science,© Springer-Verlag Berlin Heidelberg.
Ewenstein, B., Hancock, B. and Komm, A., 2016. Ahead of the curve: The future of performance management. McKinsey Quarterly, 2, pp.64-73.
Guan, X. and Frenkel, S.J., 2017. How HR Practice, Work Engagement and Job Crafting Influence Employee Performance. In Academy of Management Proceedings (Vol. 2017, No. 1, p. 10547). Briarcliff Manor, NY 10510: Academy of Management.
Mira, M., Choong, Y. and Thim, C., 2019. The effect of HRM practices and employees’ job satisfaction on employee performance. Management Science Letters, 9(6), pp.771-786.
Mone, E.M., London, M. and Mone, E.M., 2018. Employee engagement through effective performance management: A practical guide for managers. Routledge.
Stewart, G.L. and Brown, K.G., 2019. Human resource management. John Wiley & Sons.