ORGANIZATIONS APPLY THEORIES FOR HR

EMPLOYEE RELATIONS | HRM DECISIONS




Human Resource theories are strategies used by business owners and managers to manage employee policies and procedures, influencing employee behavior positively or negatively. Understanding these theories can optimize productivity, reduce turnover, and foster creativity(Guest and Conway 2011).

  • IDENTIFICATION OF ISSUE: poor principles in developing and conserving HR
  • APPLIED THEORY: :Warwick models
  • PRACTICAL THEORY: understanding the strategic corporate direction
  • LINKED THEORIES:  Guest and Warwick models
  • SOLUTION: “Utilizing metrics to determine effectiveness  of a shift from perceiving HR’s role. 

To put HR theories into practice, organizations can customize their strategies based on these theories to fit their goals and unique needs. This involves training employees using theoretical insights, designing effective performance evaluations, and adapting policies for a positive work environment. Leadership development programs and regular employee feedback, guided by HR theories, also contribute to creating a motivating workplace.(Melewar and Akel 2005)

What challenges might organizations face when implementing HR theories?

When implementing HR theories, organizations may face challenges like resistance to change, trouble fitting theories into real situations, and not enough resources for new HR practices. At times, the complexity of HR theories and the time it takes to make them work can be obstacles(Keka, 2022)




Resource-based theory highlights the importance of valuable resources, especially Human resources as crucial factors for gaining a competitive edge. A company’s resources encompass materials, skills, organizational processes, systems, and information(Guest and Conway 2011).



In simpler terms, if a company effectively uses its resources through innovation and strategic positioning, it can achieve and maintain a competitive advantage in the market.

“If resources and capabilities of a firm are mixed and deployed properly, they can create a competitive advantage for the firm. Eventually, only companies themselves can achieve and sustain competitive advantage through innovation and strategic position in the market” (Mweru & Muya, 2015, p. 217)

A theory of ownership structure for the firm, drawing on property rights theory, agency theory, and finance theory. Jensen and Meckling (1976) define agency costs, investigate their nature, and demonstrate who bears these costs. They also provide a new definition of the firm and analyze factors influencing the creation and insurance of debt and equity claims.(Walker & Wing, 1999) 

The firm is not a theory of the firm, but a theory of markets in which firms are important actors. Property rights determine how costs and rewards will be allocated among participants in any organization. Agency costs are the sum of monitoring expenditures by the principal, bonding expenditures by the agent, and residual loss.  The firm's boundary is the range of exchanges over which the market system is suppressed and resource allocation is accomplished by authority and direction(Schmaltz & Tucker-Smith, 2005).  

Principles of Human Resource Management- Key Principles

Key Principles of HRM: Human Resource Principles are a fundamental truth established by research, investigation, and analysis. The following can also be considered as the key principles of Human Resource Management: 

1. Principle of Individual Development: To offer an equal opportunity to every employee to realize his/her potential and capability.

2. Principle of the Scientific Selection: To place the right individual in the job.

3. Principle of the Free Flow of Communication: To open & encourage upward, downward, formal, and informal communication.

4. Principle of Participation: To associate with employees at each and every level of decision-making.

5. Principle of a Fair Remuneration: To pay fair and equitable wages & salaries to talented employees.

6. Principle of an Incentive: To review the performances of the employees and to reward them.

7. Principle of the Dignity of Labor: To treat each and every employee with respect and dignity.

8. Principle of Labor-Management co-operation: To promote industrial relations and labor laws.

9. Principle of Team Spirit: To ensure co-operation & teamwork amongst the employees.

10. Principle of Contribution to National Prosperity: To provide a higher work purpose to all the employees and to contribute to the national prosperity and integrity.

The Human Resource Management (HR) department has evolved from a task-oriented administration to a strategy-focused extension of every firm. It focuses on three core principles: commitment, competency, and employee recruitment. Commitment ensures job security, while competency supports a company's growth and development. HRM provides training opportunities and orientation programs to improve employees' skills, knowledge, and competency.

Main functions of HR include employee recruitment, which identifies talent gaps and finds the right people to fill roles. The process includes job analysis, sourcing, screening and selection, and onboarding. Employee orientation, or onboarding, teaches new recruits the necessary skills and behaviors to transition to the company effectively. HRM conducts this process through various methods, including lectures, meetings, videos, mentoring, and team-building exercises(Meyer and Smith 2000)  


REFLECTION 

A company can achieve and maintain a competitive advantage in the market by effectively using its resources through innovation and strategic positioning. A firm's ownership structure is based on property rights theory, agency theory, and finance theory. The firm's boundary is the range of exchanges over which the market system is suppressed, and resource allocation is accomplished by authority and direction. Key principles of Human Resource Management include individual development, scientific selection, free flow of communication, participation, fair remuneration, incentive, dignity of labor, labor-management cooperation, team spirit, and contribution to national prosperity. The Human Resource Management department has evolved from a task-oriented administration to a strategy-focused extension of every firm, focusing on three core principles: commitment, competency, and employee recruitment. Commitment ensures job security, while competency supports a company's growth and development. HRM provides training opportunities and orientation programs to improve employees' skills, knowledge, and competency.


References

AIHR. (2023, March 11). Academy to innovate HR . Retrieved from learning-and-development: https://www.aihr.com/blog/learning-and-development/

Keka. (2022, August 2). Glossary Keka.com. Retrieved from HR Theories: https://www.keka.com/glossary/hr-theories

 Guest, D. and Conway, N. (2011) “The Impact of HR Practices, HR Effectiveness and a ‘Strong HR System’ on Organisational Outcomes: A Stakeholder Perspective”. International Journal of Human Resource Management [online] 22 (8), 1686–1702. available from <https://doi.org/10.1080/09585192.2011.565657>

 Melewar, T.C. and Akel, S. (2005) “The Role of Corporate Identity in the Higher Education Sector”. Corporate Communications [online] 10 (1), 41–57. available from <https://doi.org/10.1108/13563280510578196>

 Schmaltz, M., & Tucker-Smith, D. (2005). LITTLE HIGGS THEORIES. Annual Review of Nuclear and Particle Science55(1), 229–270. https://doi.org/10.1146/annurev.nucl.55.090704.151502

 Wright, P.M., McMahan, G.C., Snell, S.A., and Gerhart, B. (2001) “Comparing Line and HR Executives’ Perceptions of HR Effectiveness: Services, Roles, and Contributions”. Human Resource Management [online] 40 (2), 111–123. available from <https://doi.org/10.1002/hrm.1002>  

Walker, A., & Wing, C. K. (1999). The relationship between construction project management theory and transaction cost economics. Engineering Construction and Architectural Management6(2), 166–176. https://doi.org/10.1108/eb021109

Comments

  1. Impressive insights Amesha! Resource-based theory highlights human resources' pivotal role in gaining a competitive edge. However, leveraging it effectively demands a deep understanding of internal capabilities and market dynamics. How can organizations align HR strategies with resource-based theory for sustainable advantage? Excited for your thoughts!

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    1. The strategies will be implemented by the HRM by Crucial identification if the correct capability

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    2. Employee relations theories encompass various perspectives, including Unitarist, Pluralist, and Marxist, which assume common goals, recognize diverse interests and values, and address various aspects of employee relations.

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  2. To adapt strategies for achieving organizational goals, this blog highlights the importance of applying HR theory into practice. It addresses problems such as lack of resources and opposition to change. It also explains resource-based theology, stressing the need to use human resources to gain a competitive edge through innovation and strategic placement.

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    Replies
    1. Yes we can clearly understand that the issues are because of the lack of change ...

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    2. Employees can increase their bargaining power through voluntary action, with the state supporting them. Trade unions provide bargaining power, promoting employee rights and ensuring satisfaction, ultimately improving employment relations and organizational productivity.

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  3. Adding somethings to the post..
    Embracing the philosophy of treating business like war while leading like a peace is akin to mastering the delicate balance between strategy & empathy. As discussed in the blog in the battlefield of commerce, it's essential to be strategic, agile and decisive, just as in war.

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    Replies
    1. Yes you have understood the concept and every business mind should understand the value of strategies being played in organizations

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  4. This article effectively highlights the importance of applying HR theories in practice and the challenges organizations may face in implementation. Additionally, it simplifies the concept of resource-based theory and its relevance in gaining a competitive edge. Well-explained!

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    1. The pluralist theory views organizations as powerful subgroups with legitimate loyalties, objectives, and leaders. Management and trade unions are the predominant subgroups, with management focusing on enforcing organizational laws and persuading employees. Trade unions represent employees and resolve conflicts through collective bargaining. The state has developed protective laws and dispute settlement mechanisms to protect employees' interests and maintain a positive image in the labor market.

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  5. The importance of theories should be deeply understood by the concept of individual implementation

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  6. Applying HR theories in practice helps organizations optimize their human capital management practices, mitigate risks, enhance employee engagement and performance, and achieve strategic objectives effectively. Highly informative article of applying HR theories in practical and the challenges. Nice work done.

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    1. Yes that is right! The results of the correlation analysis showed that there were significant positive correlations between work engagement, job performance, and psychological capital, and this indicated that there may also be positive relationships between work engagement, job performance and psychological capital.Its a challenge

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  7. thikhina rajapakshe11 April 2024 at 18:14

    This article actually features the significance of applying HR speculations by and by and the difficulties associations might look in execution. Furthermore, it improves on the idea of asset based hypothesis and its significance in acquiring an upper hand. All around made sense of!

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    1. Yes and also This type of environment is built on critical thinking, experimentation and problem-solving. Much of the work in this environment involves gathering evidence, studying information and learning as well as making conclusions. Employees who are “thinkers” can thrive in these environments, which are often found in careers like healthcare, engineering and technology.

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  8. Agree. Organizations use theories like human capital theory and contingency theory in their HR procedures to maximize the value of their staff for long-term success, optimize performance, and adjust to changing conditions. Organizations can tailor their tactics based on HR theories to meet their own objectives and goals in order to put these theories into effect.

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    1. Yes and to understand further it measures the knowledge, skills, education, abilities, and attributes of the workforce that people acquire through education, training, and experience. It is a key driver of economic growth and development. The more human capital a country has, the more productive its workforce will likely be.

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