HRM Practices and Organisational Performance.
| Autor | Achimugu |
I Introduction
The relevance of human resources in an organisation explains the increasing literature that has sprung up in this area of management (Kundu & Gahlawat, 2016; Wright & Gardner, 2003). Human resources are fundamental resources that contribute significantly to the entire organisation's processes and operation. However, managing this resource is quite demanding owing to the complexity and unpredictability of human behaviour (Subramony, 2009). This explains the need to manage this resource effectively in order to attain organisational goals and objectives. To achieve this, an organisation must ensure the existence of a distinct strategy that helps define how to manage and effectively deploy this resource in the organisation's interest (Jiang & Messersmith, 2018).
Several academic studies have been conducted on HRM practices (Chadwick, 2010; Delery, 1998; Wright & Gardner, 2003). However, because of the existence of theoretical controversies, multiple conceptualisations of HRM and a lack of clarity in the HRM system construct (Boon, Hartog, & Lepak, 2019; Guthrie, 2001; Jiang, Lepak, Hu, & Bear, 2012), we adopted the AMO model to measure HRM practices. This is because the AMO (Ability, Motivation and Opportunity) model is a more robust model that provides an easier measure of HRM practices when assessed in terms of their influence on organisational performance (Bello-Pintado, 2015; Boselie, Dietz, & Boon, 2005) and it allows for the categorisation of HRM practices into bundles (Gardner, Moynihan, Park, & Wright, 2001; Subramony, 2009).
Scholars have opined that HRM practices as bundles have a more impactful effect on performance than HRM practices in isolation (Batt, 2002; Bello-Pintado, 2015; Chowhan, 2016; Huselid, 1995; Lepak, Liao, Chung, & Harden, 2006; Laursen & Foss 2003). Also, it has been argued that there is a need to measure HRM as a bundle that captures the varying practices in an organisation, especially when the focus is on the meso level of HRM practices (Gardner et al., 2001). This allows varying practices to be combined and the strength of the HR system to be assessed (Becker & Huselid, 1998). However, of more concern is the inability to explain the role of the individual interaction in ensuring increased performance (Jiang et al., 2012).
There seems to be a widely acknowledged view that HRM practices are vital to organisational success, as some studies have shown that HRM practices have a direct relationship with organisational performance (Jiang et al., 2012; Subramony, 2009). However, there are several others that have shown that HRM practices have a weak influence on organisational outcomes (Guthrie, 2000; Wall & Wood, 2005; Wright & Gardner, 2003), and as such, there are other factors that account for the relationship. This justifies the need to assess the mediating effect of strategy alignment on HRM practices and organisational performance.
Furthermore, previous studies have referred to the inconsistencies in the results as a "black box" (Beltran-Martin & Bou-Llusar, 2018), which is believed to be the variable that accounts for the unclear relationship between HRM practices and organisational performance (Fey, Morgulis-Yakushev, Park, & Bjorkman, 2009; Gerhart, 2005). However, while some studies have made use of variables such as job satisfaction and organisational commitment (Gardner et al., 2001) and strategic activities (Chowhan, 2016), among others, there are limited studies that have considered strategy alignment as the black box that explains the relationship between HRM and organisational performance.
Every organisation is defined by its strategy and Christiansen and Higgs (2008) stated that the suitability of an organisation's strategy is evident in terms of its fit or alignment with the organisation's internal and external contingencies. Strategy alignment is simply creating a fit between an organisation's strategy and its overall objective. Thus, given that HRM practices are also an organisational strategy that is dependent on other interrelated factors in the organisation, it is likely that aligning HRM practices to other strategies in the organisation could better explain the influence of HRM practices in driving increased organisational outcomes.
Also, there are a growing number of theories built around the black box and the increasing inability to explain in exact terms how these variables act as an intermediary mechanism between HRM and performance. Thus, in line with the configurational approach in HRM, we propose that achieving a fit between HRM practices and other clusters of interrelated structures, processes, and mutually dependent practices in the organisation would better improve the organisation's performance (Ruzic, 2015; Stavrou & Brewster, 2005; Wright, Gardner, Moynihan, & Allen, 2005). We advance the theoretical position that a fit between HRM practices, organisations strategy and other institutional factors would lead to increased organisational performance.
Studies related to the HRM black box and organisational performance are mostly from developed economies and there are only a few from developing ones. There are limited studies from Africa, especially Nigeria, thus indicating a gap that this study aims to fill. The advanced nature of human value and organisational development in developed economies cannot be compared with developing economies, especially in Africa in countries such as Nigeria, where labour is cheap and little attention is paid to HRM activities.
HRM practices and performance have been studied in various sectors of the economy, such as manufacturing, service firms and construction, with varying outcomes (Bello-Pintado & Garces-Galdeanom, 2017; Chowhan, 2016; Kuipers & Giurge, 2016). However, there have been limited or no studies to the best of the researchers' knowledge that have attempted to assess HRM practices and performance in the identity management sector. Young (2004) denoted the relevance of human resources in identity management and Hoogervorst, Koopman and Flier (2002) also highlighted the relevance of HRM in the ICT driven sector. However Blom, Kruyen, Heijden and Thiel (2018) made a call for studies on HRM in other sectors, given that the sectoral context is fundamental in providing new insights on the link between HRM practices and performance.
The identity management sector is technology driven and encompasses firms that handle a broad range of activities such as identification, authentication, access and system networks for both private and public institutions. One would expect that given the scarcity of talent in this sector in developing economies, managers of firms in the sector would engage in appropriate HRM practices that would ensure high work performance that will lead to improved performance in the organisation. In Nigeria, that has not been the case as the sector is bedevilled with high employee turnover, poor salaries and compensation plans, and poor employee engagement, among others, especially at the National Identity Management Commission. This could explain the poor performance of the Commission in delivering on its mandate, thus justifying the call for this research to better the performance of the identity management sector in Nigeria in general.
The central objective of this study is to assess the influence of HRM practices on organisational performance in the identity management sector. The data collected from employees and HR managers formed the basis for the study analysis. The next section introduces the extant literature on the study construct, followed by the methodology, analysis and results, discussion, conclusions and recommendations, and finally the limitations and suggestions for future studies.
2 Literature Review: theoretical Framework and Hypothesis Development
2.1 Resource based view
According to the resource based view, resources at the disposal of an organisation serve as a source of returns and determine the course of action it will undertake. The importance of resources is acknowledged on the premise that some organisations achieve more and get ahead of the competition as a result of the variety and distinctiveness of the resources at their disposal (Peteraf & Barney 2003). However, if there is the potential to limit the transfer of these resources from one organisation to another, this will automatically boost the competitive advantage of one organisation over the other (Ramon-Jeronimo, Florez-Lopez, & Araujo-Pinzon, 2019). Therefore, if one organisation has unique assets that are not readily available, expensive and cannot be easily imitated, the organisation in possession of these resources will have an edge over its competitors and it is likely to perform better compared to others (Barney & Hesterly 2012).
Barney and Arikan (2001) opined that the assets within an organisation can only be considered valuable when they can reduce expenses incurred during production and improve the organisation's returns compared to if these assets were not available. Consequently, the bulk of responsibility rests on management, as it is their responsibility to ensure that the assets at their disposal are well utilised to maximise outcomes. Invariably, inappropriate initiatives, actions and routines can hinder the prospects of an organisation's assets being a strategy for maintaining an edge over its closest rivals (Barney & Clark 2007).
Relating the theory to this study, employees are a critical resource of any organisation. The roles they play determine the level of organisational performance. Although diverse talents, skills and expertise are inherent to human resources, the ability of an organisation to attract and engage suitable talents that fit the nature of the organisation will affect its competitive advantage and performance.
2.2 Conceptual clarification: HRM practices
HRM practices are the wide range of activities of organisations that are tasked with effectively...
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