HRM & FIRM PERFORMANCE LINKAGES

MEASURES OF HRM PERFORMANCE

&

SUSTAINED COMPETITVE ADVANTAGES

THROUGH INIMITABLE HR PRACTICES
 TEAM NO 8
HASHIM ALI . KP 15YACMD 055
SAHEEL AHAMMED KC 15YACMD 153
SHANEES MK 15YACMD 164
THENSEER KV 15YACMD 205
HRM & FIRM PERFORMANCE LINKAGES
MEASURES OF HRM PERFORMANCE
DO HRM PRACTICES MAKE A DIFFERENCE TO BUSINESS
RESULTS
HRM & FIRM PERFORMANCE
FIRMS ARE OFTEN ASSUMED TWO PRACTICES IN HR

SOME FIRMS ARE CONSIDERING HR IS A INVESTMENT TO

FIRM

SOME FIRMS ARE CONSIDERING HR IS AN EXPENDITURE TO

FIRM

FIRMS WILL NOT ADOPT INVESTMENT PRESPECTIVE

UNIFORMLY,BECAUSE THEIR WORK FORCE IS TYPICALLY OF
TWO TYPES :
1. CORE WORK FORCE

2. PERIPHERAL WORKFORCE
CORE WORK FORCE :

IT CONSIST OF THE FULL TIME EMPLOYEES OF A FIRM

WHO ARE PAID A REGULAR SALARY OR WAGE.

CORE WORK FORCE EMPLOYEES RECEIVE FRINGE BENEFITS ,

TRAINING , DEVELOPMENT OPPURTUNITIES, PROMOTIONS AND
PARTCIPATE IN DECISION MAKING ACTIVITIES ETC.

CORE WORK FORCE IS TYPICALLY MANAGED AS AN ASSET OR

INVESTMENT.

EXPENDITURE MADE BY WORK FORCE EMPLOYEES SHOULD BE

TREATED AS INVESTMENT BECAUSE IT RESULTED IN VALUE ADDED TO
THE BUSINESS.
PERIPHERAL WROK FORCE :

IT CONSIST OF TEMPORARY, PART TIME CONTRACTUAL

& OUT SOURCED EMPLOYEES

PERIPHERAL EMPLOYEES WILL GET FIXED WAGE OR PROJECT BASED FEE

THEY ARE PARTIALLY COVERED FOR FRINGE BENEFITS

THEY HAVE LESS PARTCIPATION IN DECISION MAKING PROCESS

EXPENDITURE ON PERIPHERAL EMPLOYEES SHOULD BE TREATED AS AN

EXPENSE ON THAT MUST BE REDUCED BY THE BUSINESS.
SIMILARITY OF BOTH PRESPECTIVE :

BOTH PRESPECTIVE SUGGEST MAXIMISING THE

RETURN ,VALUE , OVER COST.

THE BOTH PRESPECTIVE AIMING HIGHER PROFIT MARGINS

REVENUE COST = PROFIT MARGIN

LINKAGE BETWEEN HRM AND FIRM PERFORMANCE :
THE RELATIONSHIP BETWEEN HRM & BUSINESS PERFORMANCE RESTS ON LOGIC
BETTER DEPLOYMENT AND UTILIZATION OF HRM PRACTICES SHOULD RESULT IN
BETTER FIRM PERFORMANCE.
RESEARCH ON LINKAGE BETWEEN HRM & FIRM PERFORMANCE - SUMMARY

DECADE 1980s RESEARCHER LINKAGE B\W HRM & FIRM PERFORMANCE

1 NKOMO ( 1987)
2 LEWIN ET AL.( 1988
89)
3 ULRICH ET AL ( 1984)
INVESTMENT IN HRM PLANNING PROCESS DID
NOT CORRELATE WITH BUSINESS
PERFORMANCE.
NO RELATIONSHIP
SOME CORRELATION BETWEEN SPECIFIC HR
PRACTICES AND BUSINESS RESULTS OBTAINED.
BUT NO OVERALL INDICATORS OF HOW HR
PRACTICES AFFECT BUSINESS PERFORMANCE.
DECADE 1990s RESEARCHER
1 YEUNG ET AL ( 1993)
2 DELANEY ( 1996)
3 ICHNIOWSKI ET AL. (1994) RELATIONSHIP OBSERVED B/W INNOVATIVE HRM
4 ARTHUR ( 1994)
5 MAC DUFFLE ( 1995)
LINKAGE B/W HRM & FIRM PERFORMANCE
ALIGNMENT OF HR PRACTICES AND STRATEGY HAD AN
IMPACT ON BUSINESS PERFORMANCE
RELATIONSHIP OBSERVED B/W PROGRESSIVE HRM
PRACTICES AND FIRM PERFORMANCE IN
MANUFACTURING
PRACTICES & ORGANIZATIONAL PRODUCTIVITY
HR COMMITMENT SYSTEMS HAD HIGHER
PRODUCTIVITY AND LOWER TURNOVER THAN THE
CONTROL HR SYSTEMS.
BUNDLES OF INTEGRATED HRM PRACTICES
CORRELATED WITH HIGHER PRODUCTIVITY AND
QUALITY IN AUTOMOTIVE PALNTS.
 LINKAGE BETWEEN HRM & FIRM PERFORMANCE

HR PRACTICES HR CLIMATE

TRAINIG
PERFORMANCE
APPRAISAL
COMMUNICATION