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Archives of Business Research – Vol. 9, No. 5

Publication Date: May 25, 2021

DOI:10.14738/abr.95.10135.

Rajamanthri, S. (2021). Current trends of HRM towards Effectiveness of the organisation. Archives of Business Research, 9(5). 01-

10.

Services for Science and Education – United Kingdom

Current trends of HRM towards Effectiveness of the organisation

Dr. Senani Rajamanthri B.Sc(Sp.)Hons, M.Com, PhD, CAHRI

University Senior Lecturer/Senior Academic

in HRM/Management and Marketing

ABSTRACT

Human Resource Management (HRM) like many other fields in Business continues

to rely largely on trends in the practices strategic objectives in maximising the

performance of the employee while understanding them towards the effectiveness

of the organisation. The HR Management Trends is the one which is concerned with

focusing on the organizational design, system, HR and policies. It is essential that

Human Resource Management is operating appropriately and in accordance with

the latest trends impacted by ‘Covid19’ and technology to be able to deal with the

business life challenges. In the study, current trends of HRM and their implications

are identified and evaluated in understanding the present challenges towards

better performing organisational activities following the design, system, HR and

policies leading to the effectiveness of the company ensuring sustainable

competitive advantage. Methodology utilizes the reviewing the current findings on

studies coupled with a survey done with senior managers/HR managers of the

corporate sector in the world with special reference to Australia. Hence, in addition

to the literature review, this study was based on senior line managers and HR

managers, and measures a range of subjective and objective outcomes. The analysis

confirms the strong positive relationship between HR focused practices and HR

effectiveness and it is proven that more the strong HR focused practices leads to

higher range of performance outcomes. The associations are mostly stronger for

HR effectiveness. There are low levels of agreement between HR and line managers

about HR effectiveness and where agreement exists; it is not associated with

superior outcomes. According to the study it is revealed that trends including

personalisation of individual needs, work-life balance, Trusting issue of technology

and leaders, Balancing three bottom-lines via proper managing HR towards CSR and

sustainability, attitude towards Development, decreasing of the Employee

Experience, withdrawn Paternalism, People Analytics, More expectation out of less

effort (smart move), dealing with big innovative technology, HR is about People, HR

Innovation Labs mainly resulted by the trends including handling the Covid19

context. This study, therefore, confirms the importance of HR effectiveness by well

addressing these upcoming trends including handling the impact of Covid19

towards higher productivity and sustainable competitive advantage through

proper managing most valuable live resource: people. It could be safely concluded

that impact of coronavirus (Covid19) towards HRM as an accelerator for defining

the role of the corporation, remote working, re-skilling, skills based hiring, and the

transformation of corporate learning.

Keywords: Impact of covid19 towards HRM practice, HRM current trends, challenges,

sustainability, innovation, HR effectiveness

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Archives of Business Research (ABR) Vol. 9, Issue 5, May-2021

Services for Science and Education – United Kingdom

INTRODUCTION

Today more than ever, the future of work is the future of employee wellbeing. With the growth

of the digital economy, ‘always on’ way of working, the stresses in managing work-life

integration, and now dealing with the coronavirus, assisting workers with their wellbeing has

never been more important. Therefore, the proper HR practice ensures the company’s

effectiveness and sustainability in the long run ensuring ascertaining the sustainable

competitive advantage through human resource.

Reviewing the human resource (HR) – performance relationship (Boselie, Dietz & Boon 2015 &

Hall &Liu, 2016) confirm that an association between more extensive use of HR practices and

various indicators of organisational performance. However, these associations are often

modest and, as both reviews note, they leave a number of issues unresolved. Central among

these is a concern about the process whereby HR practices are linked to performance. In this

context, two issues are regularly signalled yet remain relatively under-researched. These

concern the effectiveness of HR practices and of their implementation, in addition to the mere

presence of practices, and the role of employee attitudes and behaviour, as potential mediators

of the HR – performance relationship. There is an increasing focus in research on the role of

employee attitudes and behaviour in the link between human resource management (HRM)

and performance, but the issue of the effectiveness, as opposed to the presence of practices as

a result of Covid19, remains relatively neglected. In an attempt to remedy this neglect, we

explore the impact on performance of HR practices that are judged to be more or less effective.

Further, it is highlighted the current trends of HRM that contributes to proper understanding

in designing policies, processes and systems of HRM towards higher productivity and

sustainable competitive advantage via proper management of HR.

There are number of potential stakeholders who are likely to have a view on the effectiveness

of HR practices (Tsui, 2017). These include HR specialists who are responsible for designing

and administering the practices, line managers who have to implement them and especially

senior line managers who not only have to implement them but also make judgment about

future investment in HRM, and employees on the receiving end of HR practices. There is, a

strong case for a stakeholder perspective in judging the effectiveness of HR practices. Recent

research has increasingly sought information from employees about HR practices and their

reactions to them (Nishii, Lepak & Schneider, 2018). In this paper, it is explored the perceptions

of HR effectiveness among a group of senior line managers, a key stakeholder group, and

compare them with the perceptions of HR managers.

Bowen and Ostroff (2014) argued that the HRM – performance linkage – is likely to be greater

where what they describe as a ‘strong’ HR system is in place. Core characteristics of their

‘strong’ system are high levels of distinctiveness, consistency and consensus. In cases where

these are present, they argue that there will be an organisational climate that supports HR

implementation. A core feature of consensus is “agreement among the principal HR decision

makers” (p. 212, Bowen and Ostroff, 2014). Research is emerging on the impact of consensus

among employees and between management and employees (Liao, Toya, Lepak & Hong 2019).

However, there has been little research exploring the consensus among senior managers.

Therefore, it needs to explore the agreement among the principal HR decision makers referred

to by Bowen and Ostroff. A further aim of this paper is to test whether higher levels of

agreement between HR managers and senior line managers about the effectiveness of HR

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Rajamanthri, S. (2021). Current trends of HRM towards Effectiveness of the organisation. Archives of Business Research, 9(5). 01-10.

URL: http://dx.doi.org/10.14738/abr.95.10135

practices are associated with more positive outcomes. This would be one way of beginning to

assess the impact of consensus in determining the ‘strength’ of the HR system.

One of the concerns rose in the reviews of HRM and performance is that a wide range of

indicators of performance is used. Models that explore the linkage between HRM and

performance (Becker, Huselid, Pickus & Spratt, 2017) distinguish between proximal outcomes

such as employee attitudes and behaviour, which might be reflected, inter alia, in labour

turnover and absence levels, and distal outcomes such as sales and financial performance. It is

argued that the impact of HRM should be greater on the proximal outcomes that can be more

strongly linked to HR policy and practice. The key research questions explored in this paper

are: what is the impact of HR effectiveness on a range of proximal and distal outcomes; and in

particular, is this impact greater if there is consensus on (high) effectiveness between senior

line managers and HR managers, as proposed by Bowen and Ostroff (2014).

Guest and Peccei (2014) noted that HR effectiveness can be defined in different ways including

the use of organisational performance as a proxy for HR effectiveness, a range of proximal

quantitative, workforce-related measures such as labour retention and absence, the

achievement of specific goals such as meeting employee development targets, or a political

perspective, which emphasises stakeholder judgements of effectiveness in accepting that the

stakeholder perspective is the most appropriate one because it allows for the interpretation of,

and attribution for the various outcomes subsumed under the other three approaches.

From a different perspective, Khilji and Wang (2016) have emphasised the importance of the

effectiveness of HR implementation, distinguishing between intended and implemented HR

practices. Khilji and Wang found a gap between these which they attributed to the poor quality

and communication of the intended HR practices, to the lack of support for implementation

from senior line managers, reflecting a ‘weak’ HR system, and to the lack of competence and

reluctance to implement them among local line managers. They suggested that the key factor

affecting HR implementation is likely to be senior managers' views on the role and effectiveness

of HR practices.

Only a few studies have examined the association between HR effectiveness and performance.

Huselid, Jackson and Schuler (2014) explored the effectiveness of technical HR, which they

viewed as the traditional approach, and strategic HR, which they considered to be more

developmental and commitment oriented. They found a relationship between effectiveness in

strategic HR and business performance, but no association between technical HR effectiveness

and business outcomes.

Richard and Johnson (2018) found an association between HR managers' satisfaction with the

effectiveness of HR practices and lower labour turnover. When they interacted effectiveness

with capital intensity, they additionally found an association with return on equity and a more

tentative association with productivity. Using the same data set, Richard and Johnson found no

association between high performance work practices and subjective performance, but they

did find an association between effectiveness of these practices and performance. When they

interacted HR practices and effectiveness, there was a positive association with both

performance and innovation. This second study reported by Richard and Johnson is one of the

very few that looks at both HR practices and HR effectiveness; there are limitations to this study