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There has been an assumption that all organisations in an industry have the same internal organisation plan, however, a growing research base has shown that there are many exceptions to this pattern and most organisations, even those within the same industry or producing the same goods. These differences are not only in form of size, but other factors also contribute to these differences. The purpose of this paper is to determine to what extent understanding of internal context of organisation helps human resource experts in building alliances with key managerial players in the organisations and demonstrate the added value of human resource contribution to organizational efficiency and performance.
Human resource and internal organizational variables
Internal organizational variables include, size, strategy, technology and the business environment within the organisation, these variables have been identified in several studies as determinants of human resource practises (Jackson, Schuler & Werner, 2011, p124)
Human resource management can be defined as the process of attracting, motivating and retaining a gifted pool of employees who work to support the realisation of the organisation’s goal and objectives (Lussier & Hendon, 2013, p 154). Effective human resource practises are becoming a necessity in the current organizational environment as the economies become ‘knowledge based’ and the challenge of finding and retaining highly qualified employees increases due to shortage of skilled labour.
Determinants of internal human resource management practises in internal organisational environment
The way organisations are run, either formally or informally will also determine the how human resource activities are conducted. For instance in small businesses, human resource activities are more likely to be carried out in an informal and more flexible manner, while in large organisations, human resource activities will be more formal and rigid (Mathis & Jackson, 2011, p123). The size of the organisation will determine the level of sophistication in human resource with large organizations being more sophisticated than the smaller firms are. In small firms, executives are more likely not to get proper education; in addition, they are also less likely to have performance appraisals and bonuses that are present in large companies.
The competitiveness of an organisation depends on the resources that help it to differentiate the company’s products from those of its rivals in the long run. Of great importance is the human resources, which are constrained by shortage of labour, which reduces a company’s potential for growth (Chen & Mohamed, 2008, p73). While some authors argue that long run, competitive advantage can be realised through human resources themselves and not the processes that were used to get the human resource (Guest, 2011, p12). Other authors argue that the human resources themselves can be seen as contributing to a firm’s competitive advantage; such practices include the potential to motivate employees, how organisations handle internal conflicts among other practises.
Technology, which is the process for transforming the inputs in the organisations in to finished products usable by the consumers vary in many perspectives, which have an effect on human resource perspectives. For instance, the level of continuity in the manufacturing procedure, the level of knowledge that is required in using the technology, the predictability of tasks and the level of interdependence of various tasks within the course of manufacturing (CHUANG & Liao, 2010, p177). Using human capital theory to show the relationship between human resource and technology, firms that use modern and up to date technology are more likely to engage in selective hiring, inclusive training, performance appraisal and fair remuneration evaluation. Understanding the technology usage in organisations has the implication of helping human resource experts to determine the training needs of the management and the employees. Some technologies require certain skills for optimal usage, getting a clear understanding of the technological environment in an organisation will help in recruiting and maintaining of highly skilled workers to use the technology. In addition, technology has a remuneration perspective since the more sophisticate technology is in an organisation, the higher the remuneration that the experts of the technology will require.
The organisational structure, which describes the allocation of tasks and responsibilities among individuals and departments, therefore determines the relationship and formal reporting structures within the organisation also affects human resource management practises within the organisation. This division of an organisation may be based on functions, geographical location, product based and matrix departmentalisation, which has a dual reporting structure. These different forms of departmentalisation result from diverse internal and external factors, for human resource management, these different forms have varied challenges that need to be tackled. Human resource as a field is also thought to have evolved from departmentalisation of organisations since people working in different departments needed to be managed differently (Grobler & Warnich, 2006, p101). The greatest impact of organisational structure in human resource management is more pronounced in multinationals where the structure spans across several boundaries with each structure posing an alternative solution to the problems facing these multinationals such as risk management, uncertainty and integration in a global platform (Dowling, Festing & Engle sr, 2008, p158). Human resource experts argue that large organisations should adopt more comprehensive and socially responsive human resource management practises in order for them to gain legitimacy, as they are more noticeable, however due to the cost implications of such HRM practises, a certain threshold of economies of scale should be reached before they can be adopted.
Life cycle stage that an organisation is determines what priorities the management have for the organisation. For instance, companies in start up, growth, maturity, decline and revival stages have different priorities, which will in turn affect the human resource practises in the company (Armstrong, 2012, p108). At each stage of development, a company changes its priorities, which has an implication on human resource management activities, these changes, may include the role of managers and heads of departments and how their performance will be accessed. Due to the requirements in each stage, it is likely that externa.............
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