* Academy o/ Managetnenl Journal 1994, Vol. 37. No. 3. 670-687. EFFECTS OF HUMAN RESOURCE SYSTEMS ON MANUFACTURING PERFORMANCE AND TURNOVER JEFFREY B. ARTHUR Purdue University Using an empirical taxonomy identifying two types of human resource systems, "control" and "commitmeni," this study tested the strategic human resource proposition that specific combinations of policies and practices are useful in predicting differences in performance and turnover across steel "minimills." The mills with commitment systems had higher productivity, lower scrap rates, and lower employee turnover than those with control systems. In addition, human resource system moderated the relationship between turnover and manufacturing performance. Long a …show more content…
These objectives, often stated in terms of desired employee characteristics, attitudes, and behaviors, are [or should be) derived from a firm 's overall business goals and may he moderated by factors internal and external to the organization (Schuler, 1992; Wright & McMahan. 1992). However, because these typologies have not been consistently measured, their validity and predictive power have not been assessed. Control and Commitment Human Resource Systems My earlier research (Arthur, 1992) is one of the first puhlished attempts to develop an empirical classification of firms based on human resource system characteristics. Applying a cluster analysis technique to data from human resource managers, I found that the variety of human resource policies and practices in 30 U.S. steel minimills could be meaningfully described by six clusters, or systems. Further, I grouped those systems into two broad categories hased on their characteristics and the functions they served and labeled them "cost reducers" and "commitment maximizers." To maintain consistency with previous research on human resource strategy (Lawler, ^ Minimills are relatively small steel-producing facilities in which metal scrap is melted in electric furnaces and continuously cast into a variety of shapes and grades of steel. Detailed discussion of minimills can be found in Barnett and Grandall (1986) and Hogan (1987). 672 Academy of ManagemenI
Human resource departments today have a more distinct, calculated position within organizations, and human resource strategy influences the bottom line. “One of the challenges for HR leaders is convincing executive leadership teams that human capital is one of the most important resources in which the company can invest” (Mayhew, 2014, p.). Subsequently, “this return on investment is an essential part of the argument for including HR as part of an overall business strategy” (Mayhew, 2014, p.). Human resource departments utilize the information given to them from company executives and leaders, coupled with their respective expertise on all things personnel, and they plan and implement staffing concerns for the betterment of the organization. From preparing job analysis, to comparing inventory and forecasting, it is the responsibility of human resources to consider the objectives of an organization and fulfill those goals while operating the specific planning relative to HR.
Gómez-Mejía, L. R., Balkin, D. B., & Cardy, R. L. (2016). Managing human resources (7th ed.). Harlow: Pearson.
Contemporary globalization of businesses and growing global market competition has made effective human resource planning as one of the major strategies to forge ahead and remain proactive. It can be said that an organization 's success lies to a great extent to the knowledge, skills, creativity, and dedication of its workforce. Every aspect of an organization needs human capital to drive its activities or operations to achieve individual strategic goals and objectives towards its purpose of existence, growth, and competitive status. Companies can compete at all levels of the marketplace through improved commitment not only through creativity, innovation, and research, but also human resource development (Truong, Heijden, & Rowley, 2010). In this regard, the human resource planning is needed to ensure a systematic analysis of human resource needs so that the right quantity and quality of employees are always available when required. Fundamentally, organizations are looking for the best people that would help drive them to their desired destination of achieving their missions. Therefore, it is important to develop human resource strategies to support organizational strategies, through measures such as forecasting human resource requirements, and effective strategic staffing. Technically, an organization 's mission, goals, and objectives drive its strategy and human resource (HR) and staffing strategy in an interactive manner. The purpose of this
Today 's fast-paced, competitive business environment has resulted in "rediscovery" of the human resource management function as a group that may be able to enhance firm competitiveness and performance by being "strategic" (Dyer & Kochan, 1995; Ulrich, 1997). Strategic Human Resource Management is a term describing an integrated approach to the development of Human Resource Strategy that will enable the organization to achieve its goals (Armstrong, 2005). Whiles strategy is an action that managers take to attain one or more of the organization’s goals. Strategy presents a general direction set for the company and its various components to achieve a desired state in the future. This results from the detailed
Lehigh Hanson is the company I chose as my business case. Lehigh Hanson has been supplying cement, aggregates, ready-mixed concrete, asphalt, and other building materials throughout the United States, Canada, and Germany. The high demands on performance and being open minded is what HR and management hold at high demands and they lead by example. To transition the Human Resource department in becoming an innovative and driving force of the organizations to become a driving force of the 21st century, the HR department needs some assistance. This paper covers the human resource management strategy
Martell and Carroll (1995) stated that there are two types of human resources: strategic and operative. They went on to describe four characteristics of human resource initiatives: (1) They are long-term oriented; (2) They are connected with the corporate strategies; (3) They are connected with the organizational performance; and (4) The line managers are involved in the details of decisions regarding human resource management. Too often, both operations managers and human resource mangers forget that they are working toward the same goal. Often, human resources will adopt policies and procedures that are hard for line managers to implement, and line managers expect human resources to have an inherent understanding of the processes taking place on the plant floor. The relationship between the best human resource practices and organizational performance must always
Human Resources often begins as very tactical policies, records, compliance, discipline, compensation, benefits, job descriptions, hiring, performance management (). Taken to the next level, HR becomes strategic, connecting employees to the business mission, values, and vision, in order to drive business results (). Employee goals and metrics align to the business strategy and rewards tie into results. Additionally, careful consideration is given to developing talent pipelines, employee succession plans, and career planning in order to respond flexibly to the inevitable work flow and staffing changes that all businesses experience ().
As part of my initial assignment in HRM 530, I have been tasked to present a thoughtful and on various aspects of Human Resource Strategy as it aligns with Business strategies. So as a result of this assignment, I will attempt to address the following issues in the order listed herein. The company that I have selected to explore these areas is The FORD Motor Company. I chose Ford primarily based on the current events that have reported that Ford will be opening more plants in the US. Ford Motor Co. announced it would cancel plans to spend $1.6 billion in a new production plant in Mexico and instead invest $700 million into the Flat Rock Assembly Plant south of Detroit, which will add 700 jobs. (Slate magazine, 2017)
The practise of Human Resources is moving from the traditional forms of managing people to a more strategic form whereby the Human Resources function is closely linked with organisational performance and success. This strategic form of human resources has increased the need for the Human Resource professional to understand the linkages between Corporate Strategy, Human Resource Strategy and Employee Integration.
This paper intends to define, firstly, the Human Resource management, functions and then, broadly, the System in terms of General System Theory. Strategic Human Resource Management has been defined in various ways and by various scholars. Following are the most precise definitions: “Designing and implementing a set of internally consistent policies and practices that ensure a firm’s human capital (employees’ collective knowledge, skills and abilities) contributes to the achievement of its business objectives” (Huselid, Jackson, Schuler and Randoll, 1997: 171) “It is the pattern of planned human resource deployments and activities intended to enable a firm to achieve its goals” (Wright, 1998: 187). First, the Human Resource System, consists
Strategic Human Resource Management has been developed to give companies a competitive edge over other companies. Since widespread access to and the use of technology have resulted in tighter margins for maintaining a competitive edge,
Human Resource management has a high impact on the overall organization being managed. HR management makes certain that human talent is used successfully and resourcefully to accomplish organizational goals. As an organization core competency, human resources has distinctive competencies that generates high value and sets apart an organization from competitors in areas such as productivity, quality and service, employee skills, and innovative changes. HR management activities can be grouped into categories which include strategic HR management; equal employment opportunity; staffing and talent management; compensation and benefits; and employee and industry relations. This paper will
Whether an organization consists of five or 25,000 employees, human resources management is vital to the success of the organization. HR is important to all managers because it provides managers with the resources – the employees – necessary to produce the work for the managers and the organization. Beyond this role, HR is capable of becoming a strong strategic partner when it comes to “establishing the overall direction and objectives of key areas of human resource management in order to ensure that they not only are consistent with but also support the achievement of business goals.” (Massey, 1994, p. 27)
Instead, human resource practices of ‘best fit’ are more effective when they are designed to fit certain contingencies in the organization’s specific context. Consequently, ‘best practice’ is perceived to improve performance within an organization when a select bundle of policies is implemented and the employees are managed more efficiently. Jeffrey Pfeffer’s (1994) work under this conception offers a list of seven practices assumed to be most beneficial to an organization for achieving competitive advantage ‘through people’. (1) The importance of employment security is emphasized because it is unrealistic to expect such hard work and commitment from employees without some expectation of security on their part. (2) Selective hiring is a source of sustainable competitive advantage through its “capturing” of particularly exceptional human talent (human capital). (3) Self-managed teams require efficient teamwork, and are seen as a route to achievement of more creative solutions. Employees deserve to be rewarded for
The field of human resources (HR) plays a critical role in the performance and success of organizations. As organizations have become increasingly more complex, the effective management of HR has become even more important. The traditional perception of HR as only an administrative office is no longer valid. Instead, contemporary HR is directly involved with the internal organizational structure, business operations, and variety of functions carried out by employees on a daily basis (Reed & Bogardus, 2012). HR functions impact the organization’s strategic planning, improvement processes, and goal achievement. Six core bodies of knowledge provide the foundation for all of these HR functions. These areas are: strategic