Practice of human resource management (hrm) policies and its influence on employee attitudes

Chapter 1


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It is necessary for an organisation to meet the obligations towards its major stakeholders like its major shareholders, its employees, and to the wider society. In order to fulfil its obligations and in order to earn long term corporate objectives it is necessary for the management to develop an effective and good relationship between the organization and its employees that will satisfy the constantly changing necessities of both parties. On the one hand the organization expects that its employees will perform consistently the tasks assigned to them in an effective and efficient manner while fulfilling the standards set for the employees and to follow the rules and regulations that have been established to administer the organisational departments. Management often expects that the employees will take initiative, manage them, will continue to learn new skills, and be responsive to business needs. On the other hand employees have the expectations that their organizations will provide them reasonable salary and pay according to the market rates, will provide them good and safe working environment, and fair conduct without any sort of discriminations (Beer et al 1984). The organisations across the world are facing many challenges including the global completion, changes in technology and societal changes. The organisations should survive and adapt to cultural and technological changes (Kane, 2000). One of the key challenges organisations faced is high employee turnover rate. The turnover rate highest in the knowledge based industries. The human capital is very central to the organisational performance (Paauwe, and Boselie, 2005). The companies should find the ways to motivate the employee organisational commitment and retain them for long period of time. The practices of effective human resource management policies achieve the employee motivation and retention.
According to the Flynn (1998) historically majority of remuneration programs and appreciation programmes within the organisations were very ambiguous and often given in response to a manager’s perception of when an employee performed exceptionally well. In the past there were typically no fixed standards by which organisations could measure exceptional performance it means that anything from having a good attitude, assisting another department, or being consistently punctual. But this is not the case today, as Majority of the organizations recognize and give importance to the great gains derived by linking rewards and good human resource management policies to their business strategy. Across the World retaining highly talented people has become difficult due to increased completion and industry always looks for talented workforce event at higher price. There are several loses for company by loosing an employee including lost productivity, lost business opportunity, cost recruitment of new talent, training and development. It is estimated recruitment a new resource cost as much as 25% annual salary of employee. Assuming a rate of employee turnover rate of 6% for a company with 50,000 employees would cost about $18m per year (Paauwe, and Boselie, 2005). There are several developments in the human resource management practices and human resource management policies are aligned with strategic objectives of the organisation. The practice of strategic human resource management (human resource management) has shown significance results in the organisational performance. The knowledge based industries are driven by the human capital and are corner store to the organisational productivity. In the 21 century information technology (IT) playing a pivotal role to the economy. All most all of the sector are directly and/or indirectly depended or influenced by the developments in the IT sectors. The IT sector is also characterised by the high employee turn over rate across the World. Understanding of the human resource management practices in the IT industry and their influence on employees is a valuable contribution to the human resource management subject (coombs, 2009). Information technology sector plays a very significant role in our day to day life and everybody needs internet facilities to perform both its personal and professional tasks. In the current economic recession conditions it will be easy for everyone to manage and buy computer facilities therefore internet services providers proves a cost effective way to use internet and communications facilities.
The IT industry is solely depended on the human capital to develop and build the solutions and providing the services. The present study is focuses on the human resource management policies in it companies and their influence on the employee attitudes and employee retention. the study will be undertaken in the two organisations namely champ it systems and guda tech ltd. the specific objectives of the study are as follows; To critically review the Human Resource Management Practices in the Knowledge based industry, to Develop the framework for studying the human resource management practices in the it sectors, conduct a case study in the two IT organisations to evaluate the human resource management practices, analyse the study the results to establish the relationship between the human resource management practices and employee attitudes, to identify the human resource management practices which result in the employees react positively for organisational commitment and retention.
The current study has lot significance in the current global context. Organisations are having real difficulties to attract the talent and retain them. The employee attrition can be costly to companies. The present study identifies the human resource management practices which help to create positive opinion towards organisation and higher retention. A set of recommendations will be produced from the study will be useful to different organisations in the sector.
Chapter 2
Theoretical Framework
2.1 corporate strategies and the human resource management
Corporate Strategy of an organisation is the process of making decisions which represents organisations’ short term objectives and long term aims. It includes making of plans and policies to achieve objectives of the company. It sets the range of activities of each process of the organization from purchasing departments to customer departments. It also caters the non-economic needs of the company. These strategies are related to all groups related to the company like employees, shareholders, suppliers, customers etc. It is the process depends on the behaviour, structure and situation of the organization. To analyse this corporate strategy is further divided into two parts formation and implementation. Formulation involves identifying the opportunities which the company can grab and threats from which the company has to escape. It includes making policies to achieve aims but before setting policies management has to define its range, weaknesses and strengths. Implementation is the second process after formulation. Actually this mainly comes in business strategy rather than corporate strategy. It involves implementation of the policies set up by the management in the proper way to achieve annuals goals, objectives and long term aims. Human Resource strategies help the organizations in achieving organizations corporate strategy and company’s long term goals and aims. Human resource policies are in essence flexible and dynamic and may require adjustment to a variety of circumstances. Therefore its implementation will be inspired by sound judgement, compliance with local market laws and common sense, taking into accounts the specific context. Its spirit should be respected under all circumstances. Within any organisation Human Resource Management is that function that deals with various organisational issues related to people within the organisation such as hiring , training , organization development, performance evaluation of the organisational members, safety issues, employees wellness and benefits, employee motivation enhancement programs, etc. Within an organisation the Strategic Human Resource refers to the Business Strategies related to the employees of an organization and their welfare. Over the years the Human Resource Management policies shifted dramatically from the Personnel Management towards a more motivational and development based issues. Since its establishment in the first quarter of 20th century there are drastic changes in its nature and working. In Personnel Management problems like workers unrest and workers inefficiency were catered but Human Resource Strategies are the part of Business Strategies. Human resource managers always try to link the Human resources Strategies with the Business Strategies which are further linked to Corporate Strategies.
2.2 Human resource management and the organisational structure and organisational culture
an Organizational culture of an organization can be defined as an organizational concept which describes the approach and views of an organization’s creator, its approaches, , beliefs and values of organizational members both personal values and cultural values of an organization. An organisational culture is the specific set of values and norms that distinguish an organization from its competitors and that are shared by people and groups within an organization, organisational cultural factors affects the way the organisation members interacts with each other and within the organization and in the external environment of the organization. Usually the organizational structure of a company contains several actions and parts for example how the actions within the organisation will be completed. It will also explain the jobs; the hierarchy of the coordination and control, these all will help an organization to achieve organizational goals in an efficient and effective way. Organizational structure works within a broader organizational culture. For an organization the management can develop its organizational structure in various manners. It will depend on the broader organisational goals and objectives and the overall all organisational culture. For example many organizations have hierarchical structures as it allows a systematic decision making. An organization’s organizational structure allows it to allocate responsibilities for different departments and functions and then controls the outcome of these activities. An organization’ Organizational structure impacts on organizational accomplishment in various ways for example, organizational structure provides the foundation on which standard operating procedures and routines rest. Within an organisation the organizational structure also governs which individuals get to share in which decision-making processes, and thus to what extent their views shape the organization’s actions.
Within an organization’s organizational structure there will be a Human resource management function but it will work totally under the pure organizational believes and culture. Human resource management (HRM) of an organization is the combination of organizational approaches to the management about the organization’s most significant assets e.g. the employees, the people working there who individually and collectively contributes to the achievement of the objectives of the business. Today Human resource management is a very vast field it includes hiring valuable employees for the organization, providing them training and developing their abilities, exploiting employees skills, maintaining and compensating their services in tune with the job and organizational requirement. Organizational culture consists of various shared beliefs and values established by the organization’s founders. Organizational structure then communicated and reinforced through various methods, ultimately shaping employee insights, behaviours and understanding. Simply speaking, a company’s structure and design can be viewed as its physique, and its culture as its passion. Because industries and situations vary significantly, it would be difficult and risky to propose there is a “one size fits all” culture template that meets the needs of all organizations. Nonetheless, research does propose that if an organization’s culture is to improve its overall performance and effectiveness, its culture must be strong and provide a strategic competitive advantage and its beliefs and values must be widely shared and firmly upheld.
2.3 Human Resource Management Practices
In many organizations human resource management (HRM) act as a facilitator between human resource management strategy and human resource management end effect. According to Sheppeck and Militello (2000) human resource management strategy falls into four sets: these four sets are highly employment ability, effective work rules, compassionate working environment, good and efficient performance measurement and policy strengthening and implementation program and market organization.
The Guest 1997 splits the human resource management policies into three categories; differentiation on innovation, stress on quality and cost reduction. There are many descriptions for Human resource management in formerly researches on Human research management strategy but in the end all the human resource management strategies in all strategies used to achieve the same organizational goal through effective and efficient Human Resource Management practices. According to Siva Subramanian and Crock (1995) different viewpoint on human resource management can be related to the concept of organisational fit or organisational integration. Guest (1997) proposes that the different kinds of human resource management can be classified into two classes such as organisational internal fit and organisational external fit According to Guest the organisational External fit describe the human resource management and its effects on employees’ attitudes as organisational strategic integration. On the other hand the organisational internal fit can be described as an ideal set of organisational practices.
Several researchers try to inspect which organisational fit; internal or external organisational fit is appropriate for the organisation human resource management. In such a research Youndt et al. (1996) concluded that the organisational external fit shows more precise fit between the high performance of the Human resource management practices and the quality of the overall human resource strategy that will eventually impact on the employees’ attitude in a positive or negative way.
In 2005 Stavrou Costea argued that an efficient and effective human resource management can be the significant factor for the long term strategic success of an organisation. Lee and Lee (2007) supported this idea by concluded that human resource management practices in organisations on various areas like on the organisational business performance, training and development programs , cooperation between the workers and between various departments, organisational rewards and incentive, human resource planning, performance appraisal, and employees job security etc. these all issues help organisations in improving their overall business performance which also includes increased organisational employee’s productivity, enhanced product quality and organisation ability to be flexible in various situations.
The subject of human resource management (HRM) is not so simple and as straightforward as it might first appears. Human resource management (HRM) includes and covers the key activities concerning the management of people for the human resource management. These activities include human resource planning within the organisation, recruitment and selection of employees from the various sources like internal and external sources, training and development, reward and motivation, career and succession planning, induction, performance appraisal, dismissal, retirement and redundancy polices etc.
The Human Resource Management encompasses functioning starting from attracting the talent, recruiting, training and development and exists from the organisation. The entire life cycle of people and their needs and aspirations are handled by Human Resource Management. Many companies focus on the needs of the people and motivate them to for organisational development (Wright and Boswell, 2002). The organisations give flexibility, required freedom and provide training, so that employees are committed to the organisation and contribute towards organisation. The various human resource management practices interact with people behaviours to influence them towards organisation (Figure 1).
Figure 1: Human Resource Development Model (adopted from (Wright and Boswell, 2002)
To develop high achievement organisations, the human resource management practices create enabling conditions in the company. In the high performance organisations people are highly committed towards organisation and its strategic goals. The modern day human resource management professes for policies for high employee commitment. The human resource management policies also should high commitment practices (huselid and Becker, 1997). In the high commitment human resource management practice have a philosophy getting more from people by giving them more (figure 2). The high commitment policies also encourage people to take more responsibility and ownership to their work. In the high commitment organisations employees are pivotal at all stages and have decision taking authority, and are self-managing.
The development of high commitment and high involvement organisations need large sums of investment for human capital development. The large investment is justified the future returns from increased productivity. The organisations invest when they see human capital is vital to the organisational success. The previous studies have indicated the high commitment increases the employee commitment, but also increases the cost of employee leaving from the company (Delery, 1998).
Figure 2: Employee interaction methods (adopted from Wright and Nishii, 2007)
With extensive study of about 1000 organisations huselid (1995) divided human resource management practices two types. The human resource management practices which results in skills development leading to employee motivation. The study has shown a high correlation between skills development (recruitment and training) and performance and retention, the employee motivation (pay and appraisal) and employee productivity. The strategic human resource management focuses on the human resource management practice resulting positive impact on the organisational productivity. In general the contingency approach tries to link human resource management with organisational goals and strategies. the configuration approach strives to fit between the human resource management practices and organisational strategy. There are seven practices identified which are of strategic importance to organisations (delery and doty, 1996). These seven practices are as follows; creating internal job opportunities, imparting training and development to employees, fair appraisal systems, performance based and profit sharing, long term job security, Job description and Employee participation
According to May-Chiun and Maw (2009) there are two components of human resource practices these two main components are; training and development and information technology. According to May-Chiun and Maw these two basic components have a direct impact on an organizational performance. In 2007 Ruwan examined the six human resource organisational practices that includes; accurate job, correct and timely information, fair job analysis, the balance between the work and family, long term career development, compensation rates and supervisor and management support. He then evaluated the six human resources practices and their likely effect on the organisational Executive Turnover especially in the marketing department. The Results of his research indicated that in various organisations the human resource practices on job analysis are strong predictors for the organisational Executive Turnover.
In 2009 Zaini, Nilufar and Syed showed that four human resource management practices like training and development, team work, Human Resource planning, and performance appraisal have a positive and significant impact on the business performance.
In 2010 Altarawmneh and al-Kilani inspect the influence of human resource management practices on organisations employees’ turnover intentions. These results indicated that an effective and efficient job analysis had a very significant impact on employees’ turnover. But they were not able to found any statistical evidence regarding the impacts of other human resource management practices on employees’ turnover aims.
Their study proposes that organisational incentive plans based on various rewards, bonuses, salaries enhancement, and performance appraisal reports could be useful organisational strategies to be reconsidered by the management of organisations. Human resource management utilizes various organisational practices in particular internal fit as a perfect set of practices. These practices identify basically three variables in human resource management namely; job supervision, job training and development, and organisational pay practices. Theses human resource management practices believed to influence employees’ job satisfaction and impact toward organisational turnover of the employees.
2.4 Human Resource management Models
Human resource management highlights that organisational employees are significant in attaining workable competitive advantage. JohnBratton and Jeffrey Gold (1999) argued that human resources policies in the organisations need to be cohesive with the overall corporate strategy of the organisation. They also argued that the human resource experts can help organisational management to meet its two basic objectives of efficiency and fairness. Both of these management experts also argued that the importance of human resources for the achievement of competitive advantage for the long term growth of the organisation,
Human resource Management experts also stresses on the relationship between human resources procedures and the organisation’s strategy. This relationship has been the centre of attention for many Human resource management researchers in recent years. Several attempts have been made to clarify it by developing explanatory models for the human resource management. They argued that human resources practices in the organisations need to be integrated with the overall corporate strategy of the organisation and that human resource experts should help organisational management in meeting both efficiency and fairness objectives. They have also stressed on the importance of human resources for the attainment of competitive advantage for the long term growth of the organisation,
Human resource Management experts also stress their concerns on the association among human resource practices and policies and the organisation’s strategy. This relationship has been the hub of courtesy for many Human resource management researchers in recent years. Several attempts have been made to clarify it by the development of explanatory models for the human resource management.
One human resource management model that explains the relationship between human resource management activities and organisational strategy is the guest model of human resource. This model was developed in 1997 by David Guest, a professor of organisational psychology and Human Resource Management at King’s College, London. The basic idea of his model is that human resource management practices should be designed to produce high-quality employees who are both flexible in their approach and who are highly committed to their organisation.
David Guest explains that employee commitment plays a vital role in human resource management aftermath. According to him human resource management is concerned with binding employees to the organisation and obtaining the behavioural outcomes of increased effort, co-operation, involvement and what he calls organisational citizenship.
According to him High-quality employees give importance to the issues of workplace learning and the need for the organisation to have an able, qualified and skilful workforce to produce high-quality services and products. The model focuses on the link between human resource management and performance of the organisational members. According to the model, there are three human resource management outcomes i.e. quality, commitment to the organisation and flexibility. When all of these three human resource management outcomes are achieved can we expect improved behavioural and performance outcomes.
According to the Guest only when a coherent strategy in an organisation directs organisational human resources policy goals that are fully integrated into business strategy and fully supported by line management at all levels. While On one hand the Guest model is a very important and useful tool for suggesting relationships between human resource management practices and the organisational strategy, there is another model developed by Mary Anne Devanna, Charles Fombrun and Noel Tichy in 1984 which emphasises on the interrelated nature of Human resource management activities.
The major strength of this model is that it shows the unity of internal human resource management policies and the importance of matching internal policies and practices to the organisation’s external business strategies. It is also a simple model that serves as a useful framework to explain the significance of key Human resource management practices. It is important to note that the overall performance of the organisation depends on the effective operation of each of the components and their co-ordination with the business’s strategy.
Useful though both of these models are in explaining the relationships between different Human resource management practices, they are limited in scope because they do not take account of factors external to the organisation or even all internal factors. External factors include industry characteristics such as the type of business, the level of union organisation, the nature of the competition, the extent of change and regional characteristics such as economic conditions, legal requirements and the socio-cultural environment. Internal factors include organisational structure, the competitive strategy employed and the organisation’s culture. Some of the more complicated models, such as the Harvard model and the Warwick model described in Human Resource Management, Theory and Practice, do take these factors into account. A third reason why human resource management is complicated is that human resource management specialists and their line management counterparts often have different approaches to it.
These have been labelled hard and soft. The hard version stresses the word “resource” and takes a rational approach to managing people i.e., aligning business strategy with strategy and viewing people as a cost to be controlled. The soft approach, on the other hand, emphasises the term “human” and advocates investment in training and the adoption of “commitment strategies” to ensure that skilled, loyal employees give the organisation a competitive advantage. It also stresses the importance of learning and enlightened leadership. Most soft human resource management models assert that human resources are assets, not a variable cost. Assumptions about the nature of human potential and the ability to tap it are based on organisational behaviour theories developed by psychologists such as Abraham Maslow.
The fourth reason why human resource management is often more complicated than is seems is because of national and regional differences. Human resource management approaches can be seen as characteristic for each nation as a result of specific historical traditions and the cultural, economic and legal environment. A major factor is the degree of state interference. In Eastern Europe, human resource management is largely determined by law, leaving little to be decided by individual organisations. In western Europe, state interference is also considerable and the European welfare and education systems strongly influence the labour market.
In Japan and the US, state interference is relatively low, but the impact of this on human resource management differs in the two countries. in japan, this lack of a legal structure is partly substituted by cultural factors, especially collectivism. this issue leads to another major factor affecting human resource management in different nations: the degree of collectivism versus individualism.
As Geert hofstede noted in culture’s consequences (1980), while the Asian nations and the socialist countries in Eastern Europe can be characterised by a high degree of collectivism, human resource management in the US by contrast is individualistic. Western European nations lie somewhere in between In such a brief article it is difficult to cover the many factors that affect the conduct of human resource management in a particular organisation in a particular country, but i hope that it gives some idea of the complexity involved
The framework to manage the human resource is called the Human resource Architectural model. In the last 30 years the human resource management has under gone several changes with downsizing and mergers across the World. These developments have transformed the human resource management models. The Atkinson flexibility model (Atkinson, 1985) suggest that organisational productivity is achieved by designing the proactively and flexibly to meet the demand. Under this flexibility model there are three types of labour modes a) flexibility in numbers, b) flexibility in functionality, and c) flexibility in cost. There are two types of labour one is “core” employees and “temporary” employees (Lepak and Shell, 1999). The temporary /contractual labour is used to adapt to the numerical flexibility depending upon the market demands and workloads. The functional flexibility is achieved by core/permanent employees. The core employees trained to handle the multiple functionalities to take care of change in the product design. In the IT sector core employees are trained multiple technologies to adopt changes in the technology. The financial flexibility is practised by companies, where the compensation is linked to performance and share in the profit.
The other human resource management model is developed by Hand (1995) which provides enough flexibility to meet its operational and productivity needs. The model contains three types of workforce a) permanent, b) temporary, and c) non-essential. The permanent employees carry out the most of the work and temporary work aid when the resources are in demand. The non-essential work is carried out companies /individual who do not have significant impact on the company. In addition to above two models Lepak and Shell (1999) proposed four compartmental human resource management architecture model (Figure 3).
Figure 3: Human Resource Architecture Model (adopted from Lepak and Shell, 1999)
There can be multiple human resources architecture models in the same organisation. The models advocate varying levels of investments for different types of people. Some resources may be scarce and valuable to organisation, and whereas others may be available in abundance (Mintzberg?1983). For example companies would like to outsource the work which is of generic type and develop internal human capital for core functionality. Traditionally the organisations have been with permanent employees (Schein, 1985). During the organisational changes and downsizing, the employers made very flexible work relationship with employees increasing uncertainty and job guaranty. The market forces also demanded more flexible human resources model to adapt to changing conditions. The modern day organisations are made of following group of employees
a)Core employees, small group of people are multi-skilled to handle variety of jobs
b)Supplementary Workers, these people can be brought just-in time and removed depending upon the need
c)Outsourcing – companies outsource whole product development.
These changes made the relationship between employee and employee much weaker and creating insecurity for both employer and employee. The practices also reduced the loyalty of employees to companies and lower employee retention rates.
2.5 The human resource management and Employee Retention
The changes in the relationship between the employer and employees decreased employee retention. There are several factors which can contribute to lower employee retention rates. The companies are focusing ways to increase employee retention rates. There is a growing realisation among human resource management practitioners that human resource management practices can play a significant role in increase in the employee retention rates (yoon, 2000). The previous studies have shown that effective implementation of human resource management policies can result in increased motivation, reduced absenteeism and increased quality. The following human resources practises are found to be effective to retain the employees.
Providing training and development to all employees.
Organising the work force in project where staff is allowed to develop skills in multiple areas
Staff empowerment
Creating a balance between the personal life and work
Creating a flexible working environment
Implementing transparent performance appraisals
Compensating the employees adequately for their contribution
Understanding the personal goals and aligning with organisational goals
Developing team culture in the organisations
The practices can be implemented by organisations to increase employee commitment and decreased turnout rates. The all of the above human resource management factors can be broadly categorised into human resources factors – person and organisation fit and organisational factors. the interaction and perception of human resource management practices and employee attitudes can be analysed in the context of person and organisation fir (p-o fit) and person and job fit (p-j fit) context. The two concepts capture widely practiced human resource management policies and employee attitudes and act as mediators between human resource management and employees (gamble and huang, 2008).
As per the Kristof (1996) the P-O Fit occurs when the both share similar characteristics, one party takes care of other needs or both. The P-J is about the employee and job characteristics and performance (Kristof-Brown et al., 2004). The match between needs of organisations and employees results in the stronger P-O and P-J with high achievements and long term relationship. The Attraction-Selection-Attrition framework can explain the P-O Fit and P-J Fits. The companies attract and select the people they want to for their organisations. The people who do not fit into the organisation leave the organisation. In the long term organisation become homogenous in nature.
The human resources policies send signals to the employees. The interpretation of signals by employees varies and depends on the person needs and abilities. The perceptions have strong influence on the employee outcomes as well. As per the wright and nishi (2007) the employee attitudes are results of perception of employees rather than the human resources policies itself.
Good organisational Pay Practice plays a very important in the employees’ retention. In organisations the Pay practice is one of the human resources management practices that normally refer to wage, pay, salary and benefit etc. The good pay practice has a very significant and important role in the implementation of human resource management strategies and employees retention. A high level of organisational pay and non-cash benefits relative to the pay rate so the competitors will ensure that the company will attract and retains its high-quality employee, but perusing this policy might have an adverse impact on the organisation’s general labour costs.
According to Noe et al (2006) another bad effect of this strategy is that by tying pay to employees based on their performance, the organisation can inflame specific activities and level of performance from employee. Generally in organisations good pay practice is very important for the organizations, it could help organisations to attract effective and efficient employees to apply for the job as recruitment. On the other hand, the workers have to keep their high level of performance in order to show the organisation their quality of work, if they fail in doing so they will lose their work. Good Pay practice has correlation with the job satisfaction. Ting (1997) concluded that the important of good pay is strongly help organisation in managing the levels of job satisfaction. He explained two different types of effects of pay practices on the employees’ job satisfaction. One Job satisfaction with pay itself and secondly job satisfaction with financial prospects in the future. There is an enduring interest of two matters which are correlated with the job satisfaction.
It is clear that the stable relationship between the organisational pay policy and the employees’ job satisfaction is very critical to effect motivation of employees’ work in order to achieve higher output. Even many efficiency theories of wages confirm that sometimes paying higher wages and salaries to the employees can have a positive effect on the employees’ productivity.
According to Katz (1987) the efficient wage theories address three main ways by which wages can raise productivity. In the first way the organisation assumes that the efficient workers work the higher is the cost of being caught shirking and the higher is the probability of being caught avoidance. Therefore A higher wage increases worker effort due to the greater cost to workers of losing the job (meaning workers want to reduce the chances that they are caught shirking). In other word, the wage or pay practice is influenced employees’ work and turnover as well. Second, a higher wage increases effort by increasing workers’ loyalty to the firm (Akerlof, 1984). As this point of these theories implies that not easily for the high wage employees to turnover their job. As supported by the following in third channel of these theories, affirm that a higher wage reduces firms’ turnover and recruitment costs. In addition, if introducing employee involvement increases monitoring costs (plausible since it is harder to observe whether a worker produced a good suggestion than whether she met her production quota), increases the return to costly-to-measure effort, and/or increases employers’ return to worker skills and retention, then plants with employee involvement should pay higher wages. The relationship between pay practices and job satisfaction is ambiguous in the efficiency wage theories. However, there are some distinct studies such as Steijin (2002) examine the overall job satisfaction of Dutch public workers with respect to their pay. The results show that there is positive effect of the existence of HUMAN RESOURCE MANAGEMENT practice which refers to pay practice on the job satisfaction. Likewise, Bradley, Petrescu and Simmons (2004) observe the impact of human resource management practices and pay inequality on workers’ job satisfaction. On their study employ many HUMAN RESOURCE MANAGEMENT practices such as work organization, recruitment and pay practice as independent variables and job satisfaction as dependent variable. The results show that the pay practice is positively associated with the job satisfaction. Furthermore, on their works clarify satisfaction with pay is high where seniority and individual performance-related schemes are in place. The attractively turn to the relationship between pay practice and turnover, Katz (1987) study about the efficiency wage theories: a partial evaluation. The result on his/her study confirms that a higher wage reduces firms’ turnover and recruitment costs. In other word, the wage is negatively *related to the turnover and recruitment cost. If the employees have the higher wage the firms or organizations should have lower levels of voluntary turnover (quits
2.6 Employees work Satisfaction and the Human resource management
We can define Job satisfaction as one employee’s approaches or his state-of-mind towards the nature of their work. Employees’ Job satisfaction can be effected by a number of factors, these factors are ; pay rates , excellent standard of employees relationship with their supervisor or with higher management, the quality of the working environment in which employees have to perform their tasks and work. In an organisation where all these factors prevail employees’ turnover is always at its lowest point. We can define employees’ turnover as a rate at which organisation gains or losses or retain its employees.
For example, if in an organisation there is a high turnover it means that employees of that organisation have a shorter tenure or working contact than other organisations in that same industry or sector. We can easily relate Job satisfaction with the employees’ turnover rate. Therefore we can easily say that job satisfaction has directly positive effect on the organisational turnover rate. These two variables in the field of human resource management are very important and there is huge amount of literatures exist on this significant relationships between these two variables. Such one study was done by Pierce, Hazel, and Mion in 1996. They examined the effects of a professional organisational human resource model on the job satisfaction and turnover rates of nurses.
Pierce, Hazel, and Mion in 1996 tested the implementation of a Professional Practice Model as the basic features for the decision making process, organisational control over work practices, organizational motivational process, mutual relationships between employees and the organisation based on equality and fairness; open and unbiased communication, fair rewards and bonuses linked to professional work effectiveness and efficiency. Pierce, Hazel, and Mion in 1996 concluded that the turnover rate is significantly positively correlated with increased job satisfaction among the employees of the organisation. In fact, their study helps us and gives us an idea about the existing correlated relationship between job satisfaction and the employees’ turnover
There are generally some factors that are associated with the employee’s job satisfaction. According to Hackman & Oldham (1975) these factors are supposed to be related with the higher output of employees, lower absence rate, and lower employee turnover. In 1989 Wong concluded that the effects of the job satisfaction on the intention to change jobs among secondary school teachers in Hong Kong. He concluded that low job satisfaction tend to have low level of commitment and productivity. They said Organisational employees prepared to leave their jobs if an alternative job with a higher salary became available. So we can say that with a lower job satisfaction level in the organisations management can easily predicts about the employees intention to leave the organisation and the current job role.
According to Griffeth, Hom and Gaertner (2000) there is a negative relationship between job satisfaction and bad employee’s turnover. There is a long-lasting concern about the relationship among job satisfaction and the employees turn over. In 1997 Glance, Hogg and Huberman explained the relationship between the employees’ turnover and the productivity levels stressed that the lower turnover is positively correlated with the employees productivity levels. In 2009 Amah concluded that the job satisfaction of employees was found to have a direct negative relationship with turnover intention. The research indicated that the impact of the employees job satisfaction on turnover can be improved basically by adopting these two ways; one, when employees in the organisation find similarity between their occupation and their self-identity, and secondly when the participation in such jobs roles enhances their overall life pattern and life satisfaction. In another research by Khilji and Wang 2007 concluded that we can consider employees turnover as the cost of running a business. They concluded that the influences of labour turnover on organisation lower level employees could be categorized into direct costs and indirect costs. For any organisation the direct costs are essentially financial consequences that include administrative costs as a result of increased recruitment and training expenditure of new employees.
2.7 Various legal issues around the human resource management and human resource management policies of the organisation that will influence on the employees attitudes.
Various legal and regulatory issues surrounding the human resource management of an organisation are as follows; disability issues, discriminations issues, employment and labour laws, training issues of the organisational members. As many organisations are operating on a worldwide basis, it is essential for them that local legislation and practices are to be respected everywhere. Also to be considered is the degree of development of each market and its capacity to advance in the management of their human resources
2.8 Concept of Business Partnership and its impact on Human Recourse policies and employees attitudes
Organisations use the concept of Business Partnership. Acting as business partners, the Human resource managers, advises and offers solutions which results in positive impact on the organisation’s effectiveness During the last few years many organisations have created various centres of knowledge in their various Human resource issues like; Recruitment Services department, Talent Management programme and International Human Resource issues, Learning and Development programme, Information and Administration, Rewards and Employee Relations.Organisations then sent its Human resource Business Partners out in to the various departments at all the operational levels, so that they will be able to go and focus on business partnership with its employees as a team and will also help to improve the efficiency of the employees as an individual. Since 2000 Human resource management Have comes a long way. Organisations have contributed an enormous amount to the business.
Organisations Relationship with Unions and other legal and regulatory associations also plays an important part in employees’ attitudes and satisfaction
Organisation that uphold the freedom of association of its employees and the effective recognition of the right to collective bargaining. Gain much needed higher satisfaction level. Organisations wishes, also through their relationship with unions and other representative associations, to sustain the long-term development of the Company, both to the benefit of the employees and of the Company, by maintaining a level of competitiveness adapted to its economic environment. Industrial relations are a clear responsibility of local management and will be handled at the appropriate level: first at site level (factories, warehouse) subsequently at regional or national level, according to local law and practices. Organisational management will ensure that direct and frequent communication is established with its employees, both union members and non-members, as mentioned in the organisation Management and Leadership Principles. Relations with unions will be established under strict observation of national law, local practices as well as those international recommendations to which the organisation has adhered to on a voluntary basis as stated in the Corporate Business Principles. In The good organisations Human Resources Policy Contacts with union delegates should create further opportunity to provide information allowing their members and other representative associations to acquire a full understanding of the business activities and the goals of the organisation.
Organisations and the local legislations regarding employees’ rights
In accordance with local legislation, organisations will refrain from any action restricting the employee’s right to be or not to be affiliated to a union. Organisations will not engage with any union or other representative association in activities or discussions other than those relating to employment and working conditions as well as issues relating to the workplace. Whenever negotiations take place, they will be duly prepared with the full involvement of line management and take into account both the Company’s and the employees’ legitimate interest. In dealings with unions, it will be ensured that management prerogatives be properly maintained
Employees’ attitudes about the policy of long term employment
Many organisations favour a policy of long-term employment. Whenever, an operation/ activity cannot be maintained within the organisational sphere, reasonable steps will be undertaken to avoid overall loss of employment by identifying an external business willing to take over activity from the organisation, whenever this is possible
Human resource management and the policies regarding Discriminations and Harassment
Organisations consider that it is not enough to avoid discrimination or harassment. It is essential to build a relationship based on trust and respect of employees at all levels. Therefore, it is indispensable for each manager to know how her/his employees feel in their work. In larger units it may be necessary to organise such feedback on a regular basis, using internal surveys or other valuable approaches
Health and welfare issues in the organisations
Many organisations provide a working environment which protects the health and welfare of the employees according to the highest affordable standards of safety, hygiene and security. Each employee should not only care for her/his own safety but also that of her/his colleagues. Therefore, suggestions for improvement are welcome and will be given prime consideration
Fair remuneration and attractive compensation according to the market
Successful organisations favour competitive, stimulating and fair remuneration structures offering an overall competitive and attractive compensation package. Remuneration includes salary, any variable part of remuneration as well as social, pension and other benefits. Each operating company will establish a compensation practice taking into account relevant external compensation levels as well as the requirement of internal fairness. It is recommended to undertake regular surveys so as to gather relevant information on the remuneration levels practised at a local or national level.
Therefore organisations policy is to strive to position it as an employer offering remuneration levels above the average of the relevant benchmark. Organisations review regularly its competitive position with other companies so as to keep in line with the market trends. However, the evolution of remuneration is in the first instance determined by the capacity of the Company to improve its productivity. Wage and salary structures should be kept simple and avoid unnecessary complexity so as to provide effective compensation and reward. Remuneration structures should specifically facilitate the implementation of flat organisational structures and be flexible so as to be able to adapt to the evolution of the market conditions. This means broad ps allowing sufficient flexibility to effectively reward high professional insight and performances as well as individual potential. It is the responsibility of each manager to propose, within the framework of the company policy, the remuneration of her/his employees, taking into account the local market, individual performance, skills and potential for development.
Free communication flow within the organisations
It is also the responsibility of each manager, if needed with the support of Human resource management, to communicate properly, clearly and with sufficient transparency, the individual remuneration of each staff member taking into account her/his professional performance and her/his specific responsibilities. The quality of communication in these matters is an essential part of the dialogue that each manager will have with her/his employees on remuneration matters. Specifically at management level, the variable part of the remuneration may be substantial. This part will be linked to a combination of group, business and or team target achievements. The higher the remuneration level, the more important will become the variable part. It should be realised that, however important remuneration is for each employee, it is not remuneration alone that will stimulate the motivation of the staff. The human resource management sees to it that the implementation of the remuneration policy is fair throughout the organisation and that its spirit is duly reflected Therefore In order to remain competitive and attractive in the market place an organisation needs to develop its long term corporate strategy and then work with all of its strengths to achieve its goals. For any organisation its human resources play a very significant and important part in achieving its corporate goals. Organisations tend to develop its human resource policies in such a way that it will not only satisfy the basic legal and regulatory requirements but also satisfy the significant workforce and organisational members. Various legal and regulatory requirements for the human resources like; polices regarding fair hiring, discriminations, harassments during work, health and safety issues, etc., are there to make sure that both the organisations and their workforces enjoy a much coordinated relationship that will benefits both in terms of financial profits but also in term of a prosper society.
2.9 Human resource management in the Information Technology Sector
The Information Technology is very dynamic sector with rapid changes. The industry is knowledge based industry primarily driven by the Human Capital. The IT industry across the World has high employee turnover rate (Morello and Claps, 2000). The turnover rates in this sector were about 30% during 19905 and about 15% during early 200s (Coombs, 2009). The recruitment and retention of talented people in the IT sector is one of the top 5 challenges faced by the Management. The major drivers for high attrition rates are higher salaries, personal development and career growth. The companies are always innovating to reduce the employee turnover rate. The present study also focuses on the same direction (Coombs, 2009, (Luftman and Kempaiah, 2007).
The term Human resource management is a flexible one, it is not fixed to some fixed concepts we can find a range of definitions and terms for Human resource management. There is no single definition of the human resource management (Storey 1989). Human resource management can be referred as a management system with human management activities in organisations or it can be referred as a strategic approach to the people’s management. According to Beer (1984) human resource management includes all those actions and organisational decisions that will affect the relationship between the organisation and its employees. Keenoy (1990) elaborated that for nay organisation the human resource management is a way of increasing and maximising its returns from its labour resources, according to Keenoy (1990) organisations can maximise their returns by integrating their human resource management policies into their overall corporate strategy. Armstrong (1992) described the human resource management as a strategic and broad approach to the management and development of organisations human resources. According to Armstrong (1992) Human resource management is an n integrated management process with an organisation’s overall strategic corporate strategy. He described human resource management as an ideology for the organisation. A later study by the Armstrong (1994) concluded that human resource management is a simple concept of “how people can be managed in the best interests of the organisation”. Storey (2001) described human resource management as a distinctive methodology of management that helps an organisation to achieve competitive advantage through the development of an effective and efficient workforce. A study carried out by Cascio (1998) described that human resource management of any organisation consists of various policies of attracting the workforce, selection processes, retention policies, training and development of the workforce. These all policies and processes help organisation and individuals in achieving their personal and organisational goals. The American management association (2000) described the human resources management and a set of organisation functions that are responsible for the attracting, retention and maintaining qualified workforce. This major function enables organisations in fulfilling their corporate goals and objectives. Watson (2003) further elaborated this concept by explaining that the human resource management policies enables an organisation to interact with its social, economic and political environment in a more effective and efficient way. Within any organisation the human resource management consists of various policies, practices, and systems that influence employees’ attitude and behaviour and thus have a significant impact on employees performance and career growth (Noe et al. 2007).
In the research of human resource management the relationship of the human resource practices and job satisfaction are studied at a large scale all over the world. It is widely assumed that the human resource management practices are related with employees’ job satisfaction. Many researchers believe that sound and effective human resource practices result in improved level of job satisfaction which results in higher organizational performance. Steijn (2004) described that human resource management policies and practices has positive effect on job satisfaction of an organisational employees.
According to the Byars and Rue (1997) and Moorhead and Griffin (1999) for an organisation the main factors of employees job satisfaction include employee’ s needs and desires, employees and organisation social relationships, organisational and management style, quality of management decisions , job pattern, financial benefits ,organisational working conditions, market conditions of similar jobs . Employees Job satisfaction has a very important effect on employees’ organizational commitment, per employee turnover, absenteeism, delay, organisational social responsibility etc.
In organisational behaviour the basic research focus on two very significant aspects; these are the relations between employee attitudes and organisational performance and the human resource policies and its effect on employees’ attitudes. According to Koys (2001) and Park et al. (2003) the foundation for a connection between employees’ attitudes and organizational level performance is that employees with positive attitudes such as high job satisfaction and high job commitment could have a positive impact on the organisation performance. Employee’s positive attitude can affect an organisation in two ways: first, employees with positive attitudes are more likely to work for the betterment of their organisation. Second, their positive attitudes would lead to better customer services, better customer satisfaction and higher level of customer loyalty. Which in turn have a positive effect on organisation profitabilityThis will help an organisation in achieving its organisational goals.
David Guest (1997) described the relationship between human resource management activities and organisational strategy in his famous the Guest model of human resourcesin his model he explained that human resource policies should be designed in order to produce highly productive and high quality employees who are flexible and motivated and committed to their organisations. Guest (2002) concluded the suitable human resource management practices in organisations lead to the higher level of commitment from their employees. He argued that highly committed and motivated employees as a result of effective human resource policies could achieve two significant benefits; they can function effectively alone or groups and at the same time to be able to work without little or no supervision. But this could happen only if the employees have all the essential knowledge and skills gained from training and development programs.
There are very few research studies that have observed the relations between human resource practices and prospective or current employee’s perception about the organization. In a study Greening & Turban (2000) concluded that job candidates and employee perceptions of an organisation’s human resource policies and Corporate Social Responsibility determines their attractiveness towards the organizations. According to Cropanzano et al. (2001) in organisation employees attitudes and behaviours are greatly influenced by organizational decisions and human resource policies. The attractiveness of an organization as a desirable workplace to work in is mainly effected by the way the employees are treated within the organisation and the quality of its products and services. Zappala and Cronin (2002) described that having worthy relations with organisational members allows an organisation to gain some very important benefits including increasing employee self-esteem, improving public image, and enhanced support from the society. Therefore the human resource function in organisations must recognise that effective human resource policies means incorporating respect for different cultural, differences, values, philosophies and beliefs when establishing human resource policies. For the last two decades it has been recognised that within organisations employees are the most valuable resources in order to achieve the organisational objectives. For example (Accenture 2011) famous phrase reflected this thing by saying ‘people are our most important assets’.
Effective implementation of Human resource management practices needs an effective and efficient management commitment. Effective human resource planning need to incorporate various tasks ranging from planning and selection to orientation, to training and development, to employees performance appraisal, promotions and retention, and retention.It is clear from the findings of different researchers that academic researchers and organisational professionals recognise the importance of effective human resource management policies of employee’s involvement in any organisational success. But still human resource experts are not sure about the question of that how the internalization of corporate social responsibility culture can occur with the help of human resource department that will impact on the motivational level and attitudes of the employees.
In the last two decades it has been recognised that people are most valuable resources to achieve the organisational objectives. It has been in now accepted that people are the most important assets to the knowledge based industry sector like Information Technology (IT) (Accenture 2001). It has been showed compared invested in the people (Truss, 2001) and like to achieve competitive advantage. As per the industry studies people are leaving the companies within two years. Many of the organisations are trying to increase the retentions rates with offering higher salaries and bonuses. In recent years it has been understood that employee retention should be dealt with strategically not by piece-meal approach (Coombs, 2009).
In organisations and in real life everyone has gone through the processes of recruitment and selection in some form or another, everyone has experienced some sort training and development and therefore everyone is familiar with the idea of using rewards systems to mitivate the prople. This idea is not bad as because the subject matter is something to which we can all relate. The term Human resource management is really about employees with in the organisations, but the word resource is potentially confusing. It suggests that human resources are similar to other resources, such as plant, equipment and buildings, and should be managed accordingly. While it’s true that labour in the form of people is required in the production process, it’s also clear that people are not like any other resource. It’s stating the obvious, but we need to remind ourselves that the human resources in any organisation consist of individuals like ourselves. They can be motivated or demotivated; they can co-operate with the management or resist it; and they can think, create, imagine, plan, learn, feel emotion and perform a huge number of activities. The second reason for the complexity of human resource management is the extent to which its activities relate both to each other and to the organisation more generally. Before considering these relationships in more detail, it is useful to review the overall purpose of HUMAN RESOURCE MANAGEMENT.
JohnBratton and Jeffrey Gold (1999) arguedthat within organisations Human Resource Management consists of that portion of the managementprocess that focuses on the managementof individuals in work environments. Human resource management policies emphasise on the point that organisational employees are significant in attaining workable competitive advantage. JohnBratton and Jeffrey Gold (1999) argued that human resources policies in the organisations need to be cohesive with the overall corporate strategy of the organisation. They also argued that the human resource experts can help organisational management to meet its two basic objectives of efficiency and fairness.
Both of these management experts also argued that the importance of human resources for the achievement of competitive advantage for the long term growth of the organisation, Human resource Management experts also stresses on the relationship between human resources procedures and the organisation’s strategy. This relationship has been the centre of attention for many Human resource management researchers in recent years. Several attempts have been made to clarify it by developing explanatory models for the human resource management. Over the years human resource experts and researchers have reasoned that Human Resource policies and practices in the organisations have a very significant impact on the organisational employee productivity and obligation because the way employees are treated directly effects organizational long term and short term performance.
Huselid (1995) argued that human resource policies and practices impacts on the organisational revenue, productivity and corporate financial performance. This all will help the organisations to better payoff the employees in terms of their salaries and other benefits. Delaney and Huselid (1996) concluded that human resource practices impact on the perceptions of organizational performance. Pfeffer (1998) and Pfeffer and Veiga (1999) argued that organizational success is based on how employees are fairly treated and that there are seven Human resource practices that together lead to employees satisfaction, organizational success, profitability and survival. Barney and
Wright (1998) argue one way to gain a sustained competitive advantage is to find exclusive ways to attract, retain and motivate effective and efficient organisation employees; thus, their argument focuses on specific human resource practices in order to obtain organizational competitive advantage. Yoon and Thye (2002) concluded that organizational human resource practices are connected to employee emotions and cognitions that shape an employee’s organizational commitment, suggesting that employees carefully process organizational actions concerning employee matters. Very few studies, however, have looked at the connection between HR practices and employee perception of the organization in the aftermath of an economic bad phase.
5.1 Research Methodology
There are several research methods available to study the problem. The research methods are exploratory, descriptive, analytical and predictive research. The type of the research method chosen depends on the nature of the problem and the previous understanding of subject. The exploratory research is used when the problem is not well understood. The human behaviouralissues best studied by the exploratory research, using the case study approach (Tsui, 1997).
The case study is best available to establishing the casual relationships and answering questions like how and why. This approach gives an opportunity to observe the events and individuals involved can be interacted regarding some certain decisions and actions (Miles and Huberman, 1994). The data collected from the case study can be used to formulating the theories and testing them as well. The case study data can be combined other sources of data to get a deeper understanding of the problem and have more reliable analysis of problem. However, the case study approach some times lacks global picture. The case study can be single case or multiple cases approach. The single case approach gives an opportunity for deep understanding of the problem, to establish and casual effect relationships. In the multiple cases approach can improve the results with cross comparison of the results. The multiple case approaches can show up the potential similarities and/or differences between different cases. The multiple case approaches can be used for lateral analysis of results and results can be more acceptable (Miles & Huberman, 1994). In the present study we have chosen multiple case study approach to collect, synthesise and understand various human resource management practices in the organisation and their influence on the employees towards motivation and employee retention.
5.2 Selection of Companies
We have chosen two Information technology (IT) services companies which are doing business. The Champ IT systems is IT services company which provides IT services to cargo Industry with clients from all over the World. The company has operations UK and with global customer base. The company has about 300 employees and practices the Strategic human resource management. The Guda Tech. Ltd has operations in UK and India with global workforce about 400 employees. The company attracts talent from different cultural backgrounds. With studying the human resource management practices in these two companies gives a good understanding of human resource management practices in IT sector, similarities and differences between both companies (Watosn, 2001).
Today Nestle is really proud to be recognised as one of the most advanced Human resource functions within the industry. Human resources managers and their staff are there to provide professional support in handling people matters but should not substitute themselves to the responsible manager. Their prime responsibility is to contribute actively to the quality of human resource management throughout the organisation by proposing adequate policies, ensuring their consistent application and coherent implementation with fairness
Nestle Recruitment and Human resource policies in the United Kingdom
Nestle consider its employees as one of its Human resource Business Partners, Nestle expects from its members that they will need to be able to get to the bottom of the business issue . It is also expecting from its human resource team to research the issue properly rather than only giving an ordinary Human resource solution. Nestle encourages its human resource teams that instead of Rather than charging in with opinions at the ready, intuitively listen to the employees problems, review and question the matter properly before giving any final decision or before making organisational decisions. Within the Human resource department employees will need substantial experience in good Human resource practice but the most significant point is that the employees have focused more on people and organisation strategies. In return the Nestle provides its employees such operating environment where the Business Partner model has never before been executed with such unnerving commitment, company wide support and individual empowerment. The Recruitment Services team in the United Kingdom is recognised within Nestle globally as the benchmark in leading recruitment practice. The Recruitment Services team do not just fill the jobs. Instead, The Recruitment Services team work with the business to proactively identify and fill their talent gaps. The Recruitment Services team constantly stand back and work out new ways to attract the very best and keep ahead of the competition, but it isn’t always easy. Predominantly based in Croydon and York, The Recruitment Services team provide a service to Nestle, Purina Pet Care and Nestle Waters, managing the full recruitment cycle for management, staff and some factory roles. Acting as internal consultants, The Recruitment Services team responsibility is comprehensive initially taking the vacancy briefing, defining the attraction strategy, designing the selection process and managing the offer. The communication skills of the Human resource staff must be appropriate to deal with all delicate matters as they occur frequently in human relations issues. They gain their credibility not only from their professional contribution but also through the care and the excellence of their communication skills.
This project covers a short term period. For the testing of various variables only two companies in the Information Technology sector were selected. These companies are; The Guda tech limited and the Cham IT systems. This project uses the historical data of the employees satisfaction based on the human resources management policies of the organisations over the sample period. The related data were acquired through questionnaires from the employees of the organisation with the help of their human resource department.
5.3 Sample Size Selection
The sample size for the study should be representative and valid. For the present study sample of employees will be selected representing all aspects of the employees. The sample will be selected representing different employee types from permanent, temporary and non-functional. The sample will include broad spectrum of different qualifications, age, gender, job level and cultural background. The sample size should be large enough to conduct meaning statistical analysis for establishing cause-effect relationships.
Currently India is one of the most important emerging markets in the world especially in the Information technology sector. In global competition India is providing huge amount of IT skilled managerial and technical manpower. This huge supply of manpower will match the best available manpower in the world. In today’s competitive market environment organizations are competing head to head with their rival organisations for the control of their consumers and customers, their market share and their revenue in order to achieve a significant leadership position in their chosen sector. For this study the target population consist of the employees in the information technology industry. I have selected the companies who are doing their businesses in India and in United Kingdom.
The structure of the sample for this study comprised of various employees in two information technology firms in India namely The Champ IT systems and The Guda Tech. The employees who took part in this study were in the various units of the organization. All the employees working in the two organizations were asked to participate in the questionnaire. Employees who took part in this research included a range of staff from business analysts, managers, and assistant managers’ team leaders to supervisors, programmers, project leaders, to finance consultants etc.
A convenience sampling was used in this research In order to obtain a broad relationship of Human resource management policies and practices, and their impact on the employees’ attitudes and their motivational level and their intent to leave. Selection error may occur when the chance of being chosen is greater, and it was controlled by crossing out list of duplication. Before the research the human resource management department checked thoroughly that checked all the employees that took part in the research. In the research Frame error occurs when the list of the participants are not up to date. For the research the research I got the updated list of employees from the Human resource managers.
The organisational survey questionnaires were distributed to around 183 employees working in the various departments in the two organisations. Out of 183 employees only 131 employees have submitted the fully filled questionnaires. This was good as I was able to get around a response rate of 71.60%. Out of theses 131 completed responses 91 questionnaires were fully complete; therefore I was able to attain a usable response rate of 50%. This further suggests that the consequences of this study will not be conditional, or generalized to a greater population so sampling error was not controlled in this study as it occurs when an attempt is made to generalize to a larger population in spite of using non-representative and non-probabilistic sampling.
According to the Hair et al. (1998) the research sample size is very critical in any research as it has a direct influence on the power of statistical analysis and the generalizability of results. According to Hair et al. the small sample size increases the chance of the Type II error or the chances of the higher beta (?). The higher beta reduces the chance of obtaining lowering statistical power. In the statistics the term poweris refer to that probability that explains that the statistical significance will be showed if the data shows the statistical significance (Hair et al., 1998, p. 11).
We can calculate the statistical power by subtracting the Type II error from the type one error. We can define the Type II error as “the probability of failing to reject the null hypothesis when it is actually false” (Hair et al., 1998, p. 11). In the research with small samples, we need greater R2 is required. A greater R2 is needed to be significant for the multiple regression analysis. But on the contrary if there is a very large sample size, then it will be very sensitive as it will detects almost any smaller or greater relationship that is statistically significant.
In research The Sample size also has a very direct effect on generalizability of results. As per Hair et al the suggested ratio of the observations in relation to the independent variables is greater than 5 to 1. Hair et al. (1998) explained that this ratio should never fall below that this limit which is 5 to 1. Hair et al. (1998) concluded that a lower ratio then 5 to 1 will results in an absence of generalization of findings. It is because the research results will be too specific to the sample of the population. Although the minimum acceptable ratio is 5 to 1 at the same time the anticipated level is between 15 to 20 observations for each independent variable. As I explained before the he total number of variables in this study was eighth Human resource management practices and two dependent variables that is intention to leave and includes six demographic variables.
Although in this research the sample size meets the minimum eligibility requirement, the sample may not be fully representative of the entire population. So, the outcomes of this study may not be comprehensive to the population. Thus it is suggested to select the small sample size when results are explained.
5.4 Data Collection Methods
For this research Data were originally collected through a questionnaire survey. Ary et al. (2002) explained that questionnaire surveys offer advantages such as advantages to researchers to contact large number of subjects in various locations and at a lower cost. Furthermore other advantages of using this method is the accessibility to reach certain data populations and offer them confidentiality and or anonymity over the data collection.
According to Dillman (2007) surveys have the following advantages over the over data collection methods like prompter returns from the subjects, lower rate of survey non responses and higher percentage of complete answers to open ended questions. Therefore in an effort to take advantage of this aspect I have utilized a survey data collection method through the help of a well devised questionnaire. But one disadvantage of using questionnaires for the collection of primary data might be the fact that some employees may not be able to properly interpret the questions in the questionnaire. Therefore in order To resolve this problem I have included very simple and easy to understand questions were included in the questionnaire.
Another vital drawback of the questionnaires method of data collection is that it has the low return rate in some situations. In order To resolve this problem I have selected the convenience sampling. For this reason the human resource managers of the Champ IT systems and The Guda Tech. Ltd organization was first contacted in an effort to convince them to encourage their organisations to participate in the research. I have explained them the implication and the importance of the research in hand and explained that how the results can be beneficial for the two organizations.
As part of the data collection process I have devise a survey questionnaire. This survey questionnaire was developed and sends to the human resource manager of both the organisation; The Champ IT systems and The Guda Tech. Ltd for the final approval and then distribution in their respective organisations.
The human resource managers in The Champ IT systems and The Guda Tech. Ltd have provided this questionnaire randomly to various employees. The human resource managers distributed theses questionnaires along with the detailed letter explaining the purpose of the survey, the confirmation that this data will not be used in any way and I will not pass on this data to any third party or source, confidentiality issues and the survey return dat. The human resource department in two organisations have distributed this data to all 183 employees randomly.
During the first week of sending the data I have received 51 employees responded; of the 51, there were 33 completed questionnaires. During the second week I have received 41 responses. Out of theses 41 responses 30 employees completed the survey questionnaire. At this time a reminder was sent to the all employees the organisations to encouraged employees so that they will be able to respond to the survey. Therefore During the third week, I got 39 responses from the employees. Out of these 39 responses 28 respondents completed the survey questionnaire in full.
There at the end of three weeks there is a total of one hundred thirty one (131) employees responded out of 183. This yields approximately a 72% of response rate which is quite good. Out of theses 131 responses only 91 respondents were found with a fully usable response of survey which generated a usable response rate of 50%.
The data for exploratory research can be gathered from direct and indirect methods. The organisations collect and store the data about the employees. The possible sources of the data are human resources department files, and company annual reports and strategy documents. The direct methods collect the data during the study period. The data can be collected using the interviews and questionnaire using structured and semi-structured questions. The structured questions are pre-pared and responses to questions are crisp, in the form of multiple choices and rating scale. In the case of semi-structured questions, the responded can give his/her responses. The interviews can capture the verbal and non-verbal responses and attributes from the respondent. The questionnaire can be distributed large sample size and can be administered even people work remotely. The questionnaire is anonymous in nature and employees can answer without any fear. The present study both interviewing and questionnaire methods will be employed to collect the data.
As the part of research we have sent the questionnaires to the relevant human resource departments of both the organisations who assign a team of four members to distribute the questionnaires to employees about the human resource practices and policies and their impact on the employees of their organizations and about the organisations employees attitudes toward their employers, as well as their perceptions of organizational justice, trust and commitment. Using traditional qualitative analytic methods, we have found strong, consistent relationships between variables. Findings suggest that organizations may benefit from treating all employees fairly including low-income employees, as valuable human capital so that employees may feel more committed to helping the organization in achieving long term benefits.
5.4 Design of Questionnaire
For this particular research a self-administrate questionnaire was developed to study the element consisting of two components. The first component of this tool comprised of several type scale items. The questions in the questionnaire are attempting to get answers and to assess Human resource management policies and practices and their impact on the organisational employees attitudes and their intention to leave. The first part of the questionnaire tries to identified employees data like employees demographic data such data on employees as age, employees gender, their education level, their current job position, employees tenure with the organisation and within the current job role, and data about the job turnover rate. The questionnaire and the research instruments were subject to some sort of measurement error. Therefore In order to confirm the righteousness of the data collected has addressed both validity issues and the reliability issues.
According to Ary et al. (2002) the validity process of the research process is defined as follows “the extent to which a measure actually taps the underlying concept that it purports to measure”. In this study the tools used was assessed for the face validity and for the content validity. This face and content validity will be conducted by the human resource department who formed panel of experts. This panel comprised of individuals with significant experience with the questionnaire learning content, composition and statistics.
It included two human resource department members of both the organisation The Champ IT systems and The Guda Tech. the members of the panel were asked to individually analysis the questionnaire components, their clarity, questionnaire format and its length, the wording of the questionnaire and the overall appearance of the questionnaire.
Furthermore the members of the panels were asked to check whether the items involved in the questionnaire in reality are able to measure the proposed outcomes. They were also asked to give response on whether the contents of the questionnaire are fully understandable. After their validity check they gave me some suggestions in order to make some improvements in the questionnaires. Based on their suggestions I have made some of the questions simplified so that it will be easier for me to get a more understandable and clear and understandable questionnaires. Even though the questions comprised in the questionnaire were from developed studies with established reliability score, the members suggested that leading a reliability test. Finally, the members also compared the items included in the questionnaire with the research objectives
The questionnaire will be designed to capture human resource management practices and the employee attitudes and retention. Based on the previous research there are about 38 human resource management related practices to study (Ten Brink, 2004). The participants will be asked to rate the perception on 5-point Likert scale. The topics covered in the human resource management policies include recruitment, selection training and development, teamwork, leadership, benefits. The study also captures the needs of the employees and their perception about how far they are met, and factors of satisfaction and dissatisfaction, reasons for leaving. The questions will be based on following hypotheses:
the high performance human resources policies positively contributes to person-organisation and person-job fit
the high performance human resources policies positively contributes employee commitment, productivity and negatively towards attrition
person-organisation fit acts a as bridge between human resources policies and employee motivation
person – job fit mediates between the human resources policies and employee job satisfaction
The full structure and contents of the questionnaire is as follows;
This questionnaire will focus on nine dimensions that will focus on employees’ satisfaction and motivation.
Q. Are you Male /female?
Q. How old are you?
Age band18-2526-3536-5050-60>60
What is your educational background
Vocational trainingA levelsBachelorsMSc/MBAPhD
Regarding your current job, do you agree, or disagree, with the following statementsPlease tick one box.
Strongly agreeAgreeNeither agree or disagreeDisagreeStrongly disagree
My job is very demanding
I have always less time to get my work done
I have an secure job
I am not sure about my job progress
How satisfied are you with the various aspects of your present jobplease tick one
Very satisfiedsatisfiedNeither satisfied or satisfiedDissatisfiedVery dissatisfied
Your influence on the job
Your pay level
The respect level from mangers
The respect level from subordinates
Sense of achievement
Have you ever discussed with your manager. please select all that apply
Progress on the jobPromotion opportunityTraining needsSalaryNone
During the last 1 year, how much training (paid or unpaid) the organisation had provided youPlease select one.
10 days or more5 to 9 days2 to 4 days1 dayNone
Q. Would you be able to obtain any of the followingPlease select all applicable
Flexible working hoursParental leave2 to 4 daysSharing job arrangementsNone
Q. How often in your organisation employees are asked by higher management to take part in the following activitiesPlease select one box per row.
FrequentlyRegularlySometimeHardly evernever
Future strategic plans
Future operational plans
Hiring and staffing needs
Bringing change in the work place
Health and safety issues
Salary review
Other benefits
Evaluation of other staff members
Q. According to your point of view what is the best manamnent quality in your organisation please select one box per row
ExcellentVery goodGoodPoorDon’t know
Dealing fairly with employees
Dealing with work based problems
Taking employees point of views
Communication proposed or planed changed
Motivating employees
Q. How would you describe the working relationships between employees and management?
Very goodGoodNeither good or badPoorVery poor
Regarding your current job, do you agree, or disagree, with the following statementsPlease tick one box.
Strongly agreeAgreeNeither agree or disagreeDisagreeStrongly disagree
I share organisational values
Staff encourage me to develop skills
I like to tell people about my workplace
Managers provide up to date information
Providing chances everyone to commit on changes
Organisation treat employees equally
The relationship between mangers and employ are very good
Q. what key organisational factor motivates you to achieve success in your job career with that organisation?
Q. Is employee turnover (employees who left their jobs, who were fired are made redundant) a problem at your company?
Q. What are major section methods in your organisations, please select all applicable.
Recruitment methodsYesNo
Application form
Interview (one on one)
Group interview
On job evaluation
Assessment of technical skills
Q. Is there a standard induction program designed to introduce new employees to the company?
Yes /n
5.6 Data Analysis
The data will be analysed using qualitative and quantitative methods. The qualitative methods are more descriptive in nature and used when the there is not sufficient data to analyse using the mathematical analysis. The conclusions drawn from qualitative methods can attract criticism from peers. The quantitative methods are used when there is sufficient data to under take the statistical analysis. In the present stud the test will be tested for reliability. The methods will be used are coefficient analysis, regression analysis and factor analysis.
The methodology
The methodology for this study charted some basic qualitative research and logical techniques. This methodology has followed the techniques as defined by Berg (1998) and Locke (2001). Employees from the Champ IT systems and The Guda Tech. limited were the subjects of this study. Interviews through questionnaires were conducted with the help of releventat human resource department to whom I have sent the questionnaires.
Employees in The Champ IT systems and The Guda Tech were approached randomly as they are working in their respective departments. The employees were asked by their human resource management department officials on my behalf that if the employees are willing to give their responses on the questionnaires.
Therefore we can concluded that Human resource management practices like good supervision, job training and good pay will positively affect job satisfaction among the organisational employees and their attitudes in a positive way that will results in slow down the employees turnover rates and enhanced employees productivity etc.
The employees were also told that they their responses will be totally anonymous and as part of a study about the effects on their attitudes and motivational levels by various human resource management practices and policies.
According to data approximately two thirds of those employees approached were agreed to answer the interviewer’s questions. In this research there are basically Eight Human resource management policies and practices are involved as independent variables. There are two dependent variables in this research that will judge the employees responses and the effects of organisational human resource management policies on the employees attitudes. These are Organizational commitment and employees intention to leave due to the organisational policies. These eight independent factors are as follows; employees training, employees performance appraisal, staffing policies, rewards policies , employees non pay benefits, employees working conditions, unbiased and equal employment opportunity and the level of information sharing within the organisation. In this research there are basically two mediators. These are namely employees’ perceived organizational support and psychological contracts. For this purpose of the data analysis before conducting an analysis to test the hypotheses. The data was examined for its linearity, normality, and outliers. High level of intercorrelation among the independent variables creates Multicollinearity in regression analysis.
For this Research the one objective sought by describing the employees of two information technology organisations in the India; by age sex, current job position, number of jobs quit in five years, job tenure with their current company and education level. As the following table shows that there are 91 employees who were able to complete the demographic section of the survey. It was found from the survey that majority of the respondents were male. Total n = 53 which is 58.25%. It further explained that the average age of the employees was 28.70 years, with a median of 28 years and the mode of 26 years.
Table 2. Demographic Characteristics of Subjects
Characteristicsn%MeanMedianModeStandard deviationRange
SexMale employees
On training33
Higher managers00
Others staff4347
Numbers of job positions quitNerve quit
Once quit1718.7
Twin times1617
Three times1415
Four times44
More than four times22
Job periodOne to two years
Less than six months1213
6 months to I year1920
1 to 2 years2224
2 to 3 years1314
3 to 4 years44
More than 4 years2123.1
Educational levelsbachelors
High school11
With respect to the employees’ current job positions in the two organizations; the results shows that the majority of the employees are categorised them sets as staff members n = 17 which is 18.7%, followed by employees categorised them self as supervisors, whereas n = 13 i.e. 14.3% employees categorised themselves as managers, at the same time n = 3 i.e. 3.3% employees are categorised themselves as trainee, no employees from the higher managerial level was participated in the survey the largest set of employees n = 43 i.e. 47.2% categorised them self as other category that includes staff members such as team leaders, business analyst, assistant manager, project leader, senior executive, junior assistant manager, finance consultant etc., and the modal category being staff. With regards to the number of job quits in the last five years,
From the survey it was concluded that the bulk of the employees reported that they have never changed their jobs over the period of last five years n = 38 i.e. 41.8% , followed by employees who have changed their jobs role one time in the last five years n = 17 i.e. 18.7% , employees who have changed their job twice in the last five years are n = 1 i.e. 17.6%, employees who have changed their job three times over the last five years are n = 14 i.e. 15.4%, employees who have changed their job four times in the last five years are n = 4 i.e. 4.4%, and employees who have changed their job more than four times are n = 2; 2.2%. In this survey n = 22 i.e. 24.2% of employees specified that they had worked in the organisation for the last one-two years, n = 21i.e. 23.1% of employees specified that they had worked in the organisation for the last more than four years,
n = 19 i.e. 20.9% of employees specified that they had worked in the organisation for six months to one year, n = 13i.e. 14.3% of employees specified that they had worked in the organisation for the last two to three years, n = 12 i.e. 13.2% of employees specified that they had worked in the organisation for the last less than six months
n = 4 i.e. 4.4% of employees specified that they had worked in the organisation for the last Three to four years. The results of the survey shows that majority of the employees have a Bachelor’s degree n = 47 i.e. 51.6%, n = 26 i.e. 28.6% of employees have a Master’s degree. As the following Table shows, the reliability of the survey variables values have ranged from 0.69 for staffing to 0.94 intention to leave these results have satisfied the required minimum level of reliability for the qualitative survey methods.
Table 3. Mean, Standard Deviations, and Reliabilities of Variables
Performance appraisal984.71.510.79
Working conditions985.011.260.75
Equal job opportunity984.921.320.78
Information sharing984.631.390.86
Intention to leave914.021.4000.93
As explained in the above table it was found that training had an median score of 4.90 it has a standard deviation of 1.45,the results shows that the performance appraisal had an median score of 4.70 and has a standard deviation of 1.51, the results shows that the staffing has an median score of 4.17 with a standard deviation of 1.43, the results showed that rewards had an median score of 4.02 and it has a standard deviation of 1.50, the category benefits had an average score of 4.13 and has a standard deviation of 1.25, the category working condition had an median score of 5.01 and has a standard deviation of 1.26, equal employment opportunity has median score of 4.92 and has a standard deviation of 1.32, the category good information sharing has median score of 4.63 with a range of standard deviation of 1.39.The research showed that intention to leave had an average median score of 4.01 and had a standard deviation of 1.47.
5.7. Summary
The Human resource management is a pivotal component of organisational management. There are rapid changes in the human resource management practices to adapt changing global market markets. In the recent years the companies are moving towards aligning the human resource management policies with strategic objective of the organisations. The knowledge based industries like Information Technology are driven by the human capital. One of the key challenges of human resource management practitioners and organisations is to recruit talented people and retain for long period of time to achieve organisational growth. The IT industry is faced by high employee attrition rates all over the World. The attrition rates highest as compared to other industry sectors. The most important factors influencing people to leave the organisations are higher salaries, career growth and personal development. The human resource management practices by organisations and perceived notions by the employee greatly influence employee motivation, organisational commitment and retention. The present study focuses on understanding the human resource management practices in the 2 UK based IT companies and their influence on the employee motivation and retention. The case study approach will be used collect the data. The relationships between human resource management practices and employee retention will be developed. Based on the study results, factors which positively contribute to organisational commitment retention will be identified. The recommendations from the study will help to improve the human resource management practices in the IT organisations.
Limitations and Directions for Future Research
This report is very limited in its scope; as this report uses a short period data related to only two Information Technology (IT) sector firms. This study is not free from the limitations. The limitations of this study include a lack of variety in terms of employees’ income, their social background and about their perceptions. In the sample there is a weak measure of severity of job loss or retention by the organisation, and there are no moderating variables. This sample was almost exclusively covers employees from lower to middle class income and employees on per hourly basis. In this study although a few management personnel took part but still thestudy sample does not reflect the general population
The sample is likely to be representative of those most impacted by the human resources policies and practices. Therefore , it is possible that a more broad and diverse sample of the population would have resulted in a different manner regarding the variables and questions in the research. Thus, for the future research I am suggested that it should be based on a Broad sample . It should also include large sample and include various ethnic and socioeconomic backgrounds of employees we were surprised that some of the variable had almost no impact upon the other variables. However, we questioned no respondents whose low motivation could be regarded as anything less than severe.
These limitations suggest that one direction for future research is to test the human resource policies and procedures and models under conditions of less motivation. Finally, it is possible that certain arbiters may affect the influence of some or all of the variables. The subject’s coping skills and ability to manage stress may impact the respondent’s attitude toward the employer and perception of organizational justice.
In addition, the availability of alternative sources of support may moderate the severity of impact of the catastrophe upon the respondent. Others variables, such as personality traits or cultural differences (particularly between individualistic versus collectivistic cultures) might be important moderators to consider as well. Perhaps the most fruitful direction for further research is to ascertain whether the model which seems to emerge from the data analysis holds empirically. If it is supported, businesses will have a better understanding of the contribution HR policies make toward employee commitment. This project covers a short term period. For the testing of various variables only two companies in the Information Technology sector were selected. These companies are; this project uses the historical data of the employees satisfaction based on the human resources management policies of the organisations over the sample period. The related data were acquired through questionnaires from the employees if the organisation with the help of their human resource department.
Although this study made several contributions to HUMAN RESOURCE MANAGEMENT research and the hospitality industry, it has several limitations. First, survey questionnaires were distributed to 183 respondents, 131 respondents returned the survey questionnaires but 91 respondents completed the survey questionnaires. Of 131, 40 respondents submitted incomplete questionnaires. Although, the sample size in this study meets the minimum requirement for regression analysis, the sample size may not be representative of the population. Therefore, a small sample size is one of the major limitations of this study Data was collected from 183 employees working in a hospitality organization in India. Therefore, it is necessary to re-examine the conceptual model developed in this study with a larger sample size for future study so that the outcomes can be generalized to a larger population.
Second, data was collected only from one hospitality organization in India. A convenience sampling was adopted. Therefore, the findings of this study were not generalizable to the population. The findings were limited to the sample studied. This gives scope for future studies to conduct random sampling and conduct the tests with a larger sample size, so that the findings could be generalized to the population.
Third, the main objective of this study was to examine two relationships. First, the study intended to examine the influence of HUMAN RESOURCE MANAGEMENT practices on POS, followed by the influence of POS on OC, and finally the influence of OC on intention to leave. Second, the study intended to examine the influence of HUMAN RESOURCE MANAGEMENT practices on PC fulfilment, followed by the influence of PC fulfilment on OC, and finally the influence of OC on intention to leave. Therefore, SEM would have been a better tool to test the hypothesis.
The study examined multicollinearity by tolerance values. Although the tolerance values were over the cut off value but most of the tolerance values were in the range of .2 to .3 which is low, and it indicates that multicollinearity exists (Table 2). This gives scope for future studies to examine whether the tolerance values increases by excluding some independent variables. An increase in tolerance values would indicate independence from
The human resource management activities provide a vital link between an organisation and its objectives and goals. It involves such employees that will be fulfilling the customers’ requirements in terms of time, quality and quantity. A proper Human resource management system will help organisation to optimize design, and planning about the hiring such people that will be the best match according to the organisational structure. The chain system by virtue of its policies, structure, physical delays, and information delays, tends to amplify retail sales changes to which the system is sensitive. Any tendency of amplification is because of its internal inclination toward alternation. An increased demand rate from the downstream chain requires a corresponding increase in the placing of orders in the upper-stream chain, if inventory is to be maintained. In addition, the higher level of demand requires more orders in transit in the supply pipeline. The Effective Human Resource management system is one of the factors that helped organisations to emerge as a market leader in the retailing industry in the United Kingdom.
It is clear from the various organisations success that organisational culture plays a very important role in the creation of the organisational structure in the organisations that govern all the allocation of responsibilities at various levels within the organisation . Human resource management is undoutablly the most significant part of both the organisational culture and the structure of the organisation. As this function is dealing with the organization’s most significant assets e.g. the employees , the people working there who individually and collectively contribute to the achievement of the objectives of the business. Today Human resource management is a very vast field it includes hiring valuable employees for the organization, providing them training and developing their abilities, exploiting employees skills, maintaining and compensating their services in tune with the job and organizational requirement
So the main obligation of any company is to increase the wealth of its shareholders and to obtain the higher productivity levels. On the other hand employees play an important part in helping organisation to achieve this goal by functioning effectively and efficiently in the organizational systems.
It is proved that highly motivated and highly committed organisational employees are the backbone for the organisational long term and short term success. And their role is vital condition for completing the organizational goal in the short and long term. The human resource management practices in organisations have to be devise in such a manner that will examine the employees behaviour and the performance of the employees over various periods of their contract. This research explains that the certain human resource management practices within the organisations create the favourable approach on the job satisfaction which will be clarified reversely on the turnover.
In influencing the attitudes of the employees the three key components of organisational Human Resource Management practices namely job supervision, job training and development and pay and salary practices play a very critical role. The organizations can motivate its employees and can influence their attitudes positively to work efficiently and efficiently with the help of the existing strong positive correlation between the human resource management practices and the overall job satisfaction.
Furthered more for the organisation the significance of providing a good human resource management, training and development opportunities , and the significance of good pay practice in order to lower the turnover rates of employees highlight the adverse relationship between good Human Resource Management practice and the organisational turnover. Moreover, the job satisfaction of the employees is directly effected on employees’ turnover with an adverse correlation. In other words in any organisation the job satisfaction can lower the turnover of employee when there is high job satisfaction and at the same time the job dissatisfaction can increase the turnover rate of employees when there is lower job satisfaction.
Therefore every organization needs to take an attention about employees’ attitudes and job satisfaction and try to apply human resource management practices in the workplace in order to decrease employees’ turnover and achieve the organizational goals.
This project investigated the effects of human resource management practices on employees’ attitudes and their organizational commitment ,this study also investigated the effects of employees’ commitment level with their organisations on their intention to leave the organisation. The important reason of this study was to investigate the impact of human resource management practices of the organisations as a significant instrument to make employees of an organization more committed to the organization. This will in turn would decline employee goal to leave the organization.
There were four key goals in this study. The first objective was to examine the effects of the human resource management policies and practices on employees attitudes to find whether employees give importance to the Human resource management practices as backing from the organization. Whether employees believe that their employers prompt their pledge to them through its human resource management policies and practices. The second objective was to study the arbitrating effect the relationship between human resource management practices and employees organisational commitments and attitudes to find that when employees trust that the organization aims to support them and expresses its commitment to its employees through its human resource management policies and practices. Employees views towards the organisation makes the employees more committed to the organization. Many organisations tend to practice a set of varied human resource management policies and practices instead of a single human resource policies and practice, and hence human resource management practices in organizations tend to be related, particularly when they are a part of a coordinated system (Huselid 1995).
Thus it is more vital to learn the effect of various human resource management policies and practices together rather than focus on individual human resource management policies as has been the case in most previous studies. Employees overall perceptions about the Human Resource Management policies and practices Has a very significant and important effect on the organizations.
This research study can only specify the effect of general employees perceptions about the human resource management policies and practices in their organization on the employees attitudes. Good human resource management policies and practices are very important and which make the employees believe that the organization is supporting them.
All Human resource management practices do not work for all organizations management should alter their human resource policies according to their needs and significance. Therefore this study fixed these issues by including a set of varied human resource management practices. Eight human resource management practices were included in this researching order to examine the relationship of each human resource management practice with the employees attitudes.
The third goal was to examine the influence of HUMAN RESOURCE MANAGEMENT practices on psychological contracts in order to find whether employees consider HUMAN RESOURCE MANAGEMENT practices as an important tool in building their psychological contracts. Guzzo and Noonan (1994) considered HUMAN RESOURCE MANAGEMENT practices as a communication channel between employer and employees. Scholars have argued that HUMAN RESOURCE MANAGEMENT practices can send strong messages to individuals regarding what an organization expects of them and what they can expect in return, and hence HUMAN RESOURCE MANAGEMENT practices are seen to play an important role as message senders, shaping terms of the psychological contracts (Rousseau & Wade-Benzoni, 1994). Therefore, several studies proposed HUMAN RESOURCE MANAGEMENT practices as critical influencing factors on PCs but this research area lacks empirical work.
The fourth goal was to examine the mediating effect of PCs on the relationship between HUMAN RESOURCE MANAGEMENT practices and OC, to find that when employees believe that their employers have fulfilled all its promised obligations and the psychological contract is fulfilled, whether it makes the employees more committed to the organization. Employees develop psychological contracts based on the contributions they believe they owe to the organization and the inducements they believe are owed in return (Rousseau, 1989). HUMAN RESOURCE MANAGEMENT practices play an important role as message senders, shaping terms of the psychological contracts (Rousseau & Wade-Benzoni, 1994). Based on their PCsemployees tend to hold beliefs regarding the inducements the organization is obligated to provide and to what extent the organization has actually fulfilled their obligations (Robinson et al., 1994). When employees believe that the organization has fulfilled their obligations, they become more committed to the organization (Coyle-Shapiro & Kessler, 2000). Therefore, based on propositions made in prior studies, there is evidence of PCs mediation on HUMAN RESOURCE MANAGEMENT practices and OC. Therefore, PCs may mediate the relationship between HUMAN RESOURCE MANAGEMENT practices and OC. There has been no empirical research considering PCs to mediate the relationship between HUMAN RESOURCE MANAGEMENT practices and OC.
Eight HUMAN RESOURCE MANAGEMENT practices were included to study the influence of each HUMAN RESOURCE MANAGEMENT practice on POS and PC fulfilment, instead of using HUMAN RESOURCE MANAGEMENT practices as a whole or using some specific HUMAN RESOURCE MANAGEMENT practices as used in previous studies: training, performance appraisal, staffing, benefits, rewards, working condition, equal employment opportunity and information sharing. The HUMAN RESOURCE MANAGEMENT practices were included based on thorough literature review, and based on their impact on organizational commitment, intention to leave, POS and PCs. Staffing, training, equal employment opportunities, and good and safe working conditions were included from Edgar and Geare’s (2005) study of the influence of HUMAN RESOURCE MANAGEMENT practices on OC. It was found that all four HUMAN RESOURCE MANAGEMENT practices had a significant positive relationship with OC. Performance appraisal effectiveness was included from Chang’s (2005) study of the influence of employees’ overall perception about the organization’s HUMAN RESOURCE MANAGEMENT practices on OC. Information sharing was included because a study by Kinicki et al. (1992) proposed the influence of information sharing on POS. Benefits was included because a conceptual study by Lucero and Allen (1994) proposed benefits as influencing factors reducing employee-employer conflicts. Rewards was included in this study based on the support from prior studies, which proposed that performance rewards like promotion, profit sharing, benefits and opportunities results in positive attitudes and behaviour (Landau & Hammer, 1986; Coyle-Shapiro et al., 2002). A total of eight hypotheses were developed in this study. Hierarchical linear regression analysis was employed to test the hypotheses
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