HRM Practices in the Business

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Employee satisfaction is significant in the context of performance and efficiency, as it affects their motivation and willingness to put effort into work. Therefore, the goals of human resource management include increasing the satisfaction of workers. Also, when there are higher levels of satisfaction from a job, workers are less likely to leave the company. While some degree of attrition is inevitable due to factors such as illness, retirement, and death, it is essential to minimize the controllable aspects of it. Scientific evidence suggests that hiring from within, training and development of employees, developing favorable compensation strategies, performance management, and ensuring occupational safety are some of the ways businesses may decrease turnover rates. This essay will investigate these practices and their interactions with employee satisfaction and turnover to provide a perspective of the current human resource management practices.

Internal Recruitment

There are essentially two ways that companies may meet their human resource needs. To achieve organizational objectives and increase creative and productive capacity, businesses often refer to external human capital markets (Bratton & Gold, 2017). The second option is internal recruitment, but this approach is often neglected (Armstrong & Taylor, 2020). There are many possible reasons for this behavior, such as a lack of trust in the employees of the company. When considering an external hire, the company may try to find someone with experience in the role that it is looking for.

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On the other hand, with internal recruitment, the business will either have to promote somebody to the position or transfer a person from another department. The first action is associated with the risk that the person being promoted is not suited for the job or lacks the necessary competencies. The second implies that the person is not needed in their original position, which is not necessarily the case and can lead to hostility from the department that lost the employee.

As a result of these concerns, as well as to bring new ideas to the company, most businesses limit their internal recruitment and hire employees from outside. However, statistical evidence shows that internal hiring is positively associated with high employee satisfaction (Torrington et al., 2017). The reason is that the presence of internal recruitment practices builds a positive employer image because workers will perceive the company as a place with many opportunities for growth. Meanwhile, overactive external promotion fosters a culture where it is healthy and acceptable to move to a different company when seeking a promotion, dramatically increasing turnover. Employees do not feel attached to the company and are not willing to devote significant effort to tasks because they do not expect the company to reciprocate their commitment. As a result, their satisfaction with the company will be low, and they will be looking for opportunities to leave when they believe themselves to be sufficiently competent.

Overall, companies are affected negatively by an overreliance on external recruitment as opposed to its internal alternative. For instance, if a company always hires new employees for projects of increased complexity, an image will be created that portrays that there are no career opportunities in this company (Armstrong & Taylor, 2020). Employees are going to be replaced rather than invested in, a tendency of which they will be aware. Such an approach, in turn, will increase turnover rates and decrease employee satisfaction. On the contrary, investing in employee development, education, and presenting workers with opportunities for elevation will increase worker satisfaction (Dessler, 2017). It will also improve the employer brand image – many professionals will be willing to be hired by this company. With that said, internal recruitment involves recognizing other workers’ competencies and their development rather than a simple prioritization of internal promotions over external ones. By overusing it, companies are limiting their diversity of knowledge and ideas, and, therefore, both internal and external recruitment should be used in conjunction.

Training and Development

One of the primary responsibilities of the HR department is the training of employees. Workers need to have the necessary knowledge to be able to accomplish their professional duties in the workplace successfully. Current evidence suggests that employee perception of their competence significantly influences their satisfaction (Armstrong & Taylor, 2020). In turn, their intent to stay is impacted by their content and comfort. As such, it is the HR department’s task to provide training that improves employee competencies noticeably while maintaining comfort and not using excessive amounts of their time. Developing such methods can be complicated, but there are various advantages to the achievement of this goal. Worker performance will improve as a result of both their improved abilities and satisfaction, and they will produce enhanced results that benefit the company. Moreover, they will feel that the business has invested in them and be more motivated to reciprocate this commitment. As such, it can be worthwhile to investigate the implementation of excellent training and the benefits that it can generate.

The central purpose of training should always be to improve employee competencies and skills. Expertise is built through professional training and various development courses (Armstrong & Taylor, 2020). These can both be conducted within the company and outsourced to services that provide such training to multiple companies. Therefore, training and development opportunities within companies significantly impact employee satisfaction and turnover rates. New skills grant workers with new possibilities that may help them improve their workflow or make their work process more efficient (Torrington et al., 2017). For instance, a software engineer may feel more content when he or she acquires new skills that allow for the automation of tedious routine tasks. Such possibilities increase motivation and employee loyalty and show organizational commitment to caring for workers (Bratton & Gold, 2017). Workers in the company will have a clearly defined path to improvement and career growth that will let them evaluate their progress and provide them with specific objectives to achieve.

Development and training can have a significant positive effect on the satisfaction of current employees and reduce turnover, but they can also enhance its external image in the long term. The presence of robust training and development capacities implies the prevalence of internal promotion in the company, improving its prospects as a permanent place of employment. Potential candidates become more interested when they are sure that the company will provide them with opportunities for professional growth (Dessler, 2017). On the other hand, a lack of training and development within a company will decrease motivation and increase dissatisfaction. Employees will struggle to recognize their progress in the company and fail to develop the competencies necessary for their promotion. As a result, their performance will be worse, and they will not be promoted at a rate that they consider satisfactory. Ultimately, most will leave for companies with more robust development capacities when they have the opportunity, especially the people with the highest capabilities who can recognize them and have high expectations.

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Compensation

The contemporary job market has little differences from ordinary commodity markets – price plays a significant role. Employees will demand a higher wage while companies will try to decrease the rate to cut costs. When there are more favorable economic opportunities, employees often leave their current workplaces in search of higher wages (Dessler, 2017). Therefore, the compensation strategy is one of the most significant elements of human resource management. The primary component of a compensation strategy is a fixed salary (Torrington et al., 2017). It is the amount of pay that an employee receives regardless of his or her performance and economic situation of the company. The most significant advantage of a fixed salary is its stability, which enables employees to plan under the assumption that they will have a set amount of money available. However, this stability also creates complacency, as the employee knows that they do not have to put in any more effort than strictly necessary to receive the money.

Research suggests that fixed pay does not generate a significant impact on employee motivation. In turn, if the wage is fixed, workers may not demonstrate exceptional productivity (Armstrong & Taylor, 2020). Therefore, many companies today employ compensation strategies that have variable pays. With this approach, the employee’s salary is partially or entirely dependent on specific criteria, such as their performance or that of the team. Variable pay systems motivate employees to excel to improve the compensation that they receive. Through the introduction of specific incentives, it is possible to drive them to achieve particular goals, including the improvement of their competencies (Armstrong & Taylor, 2020). However, variable pay systems have the disadvantage of only working when employees believe that the reward justifies the effort that they have to put in. Most salary systems will have a significant fixed component to ensure financial stability, as mentioned above, and some employees may be satisfied with it. As such, they would have no interest in seeking additional compensation that requires what they see as excessive effort.

The amount of variable pay is usually dependent on individual performance and whether or not the company is meeting its organizational objectives. When an employee believes that input impacts output, he or she will be more productive because of the desire to earn more (Bratton & Gold, 2017). When there is no cap on what a worker may receive, the employee will be more intending to stay and grow. The increased income may also improve their perception of the job, as it will be able to satisfy their financial needs even if they increase due to a crisis or a planned purchase. The most valuable workers, those who have useful competencies and are willing to put in considerable effort, will benefit the most from the system, as well. Their motivation to leave will be low because their distinguishing characteristics will be recognized and adequately compensated. With that said, HR professionals have to design such systems carefully, as they tend to be complicated and expensive to manage (Bratton & Gold, 2017). Due to the potential weaknesses of variable pay, the framework may not warrant its cost.

Performance Management

The concepts of compensation strategy and employee motivation cannot function without a well-structured and transparent performance management system. It should be noted that performance management is not only about measuring productivity. It defines company goals and reflects the interests of both employees and stakeholders (Bratton & Gold, 2017). It also lists what competencies an employee must hold to accomplish a particular task (Armstrong & Taylor, 2020). The last piece is significant in the context of motivation, as workers will typically be less motivated to accomplish tasks that they do not understand. If given a list of specific skills that they would need to attain a position and complete its tasks, workers would likely be ready to devote more effort to the task. They would feel that their work is productive and be more willing to engage in it as a result. Moreover, they would develop professionally to become more capable and eventually qualify for a promotion, benefiting the company in the short as well as long term.

A worker should have an understanding of how his or her skills may be used, and what new abilities should be acquired to perform more efficiently. Effective performance management provides necessary knowledge about these items (Dessler, 2017). In other words, workers will not be willing to improve if they do not know in what areas they should develop (Torrington et al., 2017). As such, human resource management professionals should create frameworks that enable them to accurately assess the competencies required for each position and task in the company. They should then process this information and communicate it to employees effectively to improve their understanding and motivation. Moreover, they should understand each worker’s abilities and be able to evaluate both their current skills and the deficiencies in them. In doing so, they would be able to recommend a course for improvement to the employee using the competencies in development that are described above. In general, a robust performance management system is necessary for the operation of other aspects of human resource management.

One particular example of the synergy between performance management and other HR mechanisms is the interaction between it and pay schemes. Compensation mechanisms become more transparent when the performance management system is in place (Torrington et al., 2017). Workers will understand how they are being compensated and for what tasks or goals, which will enable them to focus their efforts on productive tasks. They will become aware of the requirements that are associated with different positions and pay levels, as well as their success or failure in matching them. It would also be beneficial for them to be able to provide feedback and have it considered and used to adjust the system to be acceptable to both parties. As a result, the workplace environment will be perceived as well-organized, and the employer brand image will be improved (Gomez-Meija et al., 2007). The knowledge of what workers need to adjust to succeed will motivate them to seek to stay at the company and improve instead of leaving. Such a favorable situation is likely to decrease turnover rates and augment the satisfaction of employees.

Occupational Health and Safety

Human health and safety are much more significant than achieving economic objectives. When a company does not show concern for employees’ safety, accidents may occur that often lead to unfavorable health outcomes. While it is not possible to predict all disasters, companies often can prevent the majority of them (Ekowati & Amin, 2018). They can achieve this goal through the combination of various interventions, including the provision of safety equipment, the construction of accommodations, and the introduction of safety guidelines and training. However, the business needs to commit to the target earnestly and ensure that employees follow all of its rules and practices. Ekowati and Amin (2018) find that occupational health improvement efforts do not improve employee performance and associate the finding with the claim that employees do not use the protective equipment issued by the business. As such, the human resources department needs to ensure compliance with its rules by workers to succeed in its endeavors.

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Therefore, businesses should be concerned with safety and provide the necessary information and tools so that workers are aware of potential risks. Research suggests that employees perform much more effectively when they know that they are cared for (Ekowati & Amin, 2018). Along with the reduction in the numbers of the employees who have been hurt, the decrease in the overall number of accidents should be noticeable after significant occupational health improvements. The employees who avoid accidents will also not generate negative impressions associated with the company as a result. Additionally, the environment at the business will improve, and workers will be free to devote more effort to their work without worrying about being hurt. Provided that compliance with the rules is observed, the performance of the company may improve despite the findings highlighted above. Moreover, employee satisfaction is likely to grow, and turnover rates will probably become lower than they were before.

Employee opinions are informed by the reality of the situation as well as worker perceptions of the environment around them. Although there is no direct connection between occupational safety and job performance, employee health is positively associated with work satisfaction (Ekowati & Amin, 2018). Therefore, by establishing safety procedures, businesses may increase the comfort of employees. In turn, their performance levels will increase, benefitting the company as a whole. Moreover, turnover rates will likely become lower than before, both voluntary and involuntary. If there are fewer injuries, there should also be fewer severe injuries that force the worker to leave the company. Moreover, the safer environment will lead to less employee concern about their health, which might have convinced them to seek a company with lower expectations of danger otherwise. As a result, fewer workers will choose to leave or be forced to do so, improving employee retention and, consequently, the company’s performance.

Conclusion

This paper described some of the ways various human resource management practices might influence employee satisfaction. In summary, companies should search for talent among current employees, compensate them well, and ensure their safety. Workers should have a feeling that their voices are being heard. In such a case, their productivity will improve because they will receive more satisfaction from their work. Also, companies should invest in the professional development of their employees. Their compensation has to be considered carefully, preferably alongside the introduction of a robust performance management system. Lastly, worker health has to be considered carefully, both in terms of formulating safety provisions and ensuring that employees follow them.

References

  1. Armstrong, M., & Taylor, S. (2020). Armstrong’s handbook of human resource management practice. Kogan Page Publishers.
  2. Bratton, J., & Gold, J. (2017). Human resource management: Theory and practice. Palgrave.
  3. Dessler, G. (2017). Human resource management, global edition. Pearson.
  4. Ekowati, V. M., & Amin, F. M. (2018). The effects of occupational health and safety on employee performance through work satisfaction. Advances in Economics, Business and Management Research, 101(1), 242-245.
  5. Gomez-Meija, L. R., Balkin, D. B., & Cardy, R. L. (2007). Managing human resources (4th ed.). Prentice-Hall.
  6. Torrington, D., Hall, L., Taylor, S., & Atkinson, C. (2017). Human resource management. Pearson.

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BusinessEssay. 2022. "HRM Practices in the Business." January 10, 2022. https://business-essay.com/hrm-practices-in-the-business/.

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BusinessEssay. "HRM Practices in the Business." January 10, 2022. https://business-essay.com/hrm-practices-in-the-business/.