HRM1 Essay Example | Topics and Well Written Essays - 1250 words

HRM1 - Essay Example The human resources comprising the firm, has in recent years become strategic to decision-making in a strong way. Strategic Human Resource Management (HRM) researchers have devoted considerable effort toward demonstrating that the ways that people are managed, particularly through HR practices, have strong empirical relationships with organizational performance.(Huselid, 2005) The theory of close relationship between HRM and economic success has grown significantly in the last fifteen years. This theoretical progress can be seen in two different arenas: meta-theories describing broad rationales for why HRM and economic success should be linked, and middle level process theories describing how this linkage takes place. The firm's strategy determines the design of the HR system. The HR system impacts the employee skills and motivation, which in turn results in creativity, productivity and discretionary behavior. And, employees' behavior influences the firms operating performance, which leads to profitability, growth and market value. (Wright & Haggerty ) The development of the meta-theory which emphasizes the new process theory of the relationship between HRM and economic success reveals the current trend to identify some of the key variables which are indicators of this relationship. This includes the consideration of three important concepts: time, cause and individuals in the determination of the relationship of HRM with the economic success in the functioning and the operation of the SME's in this era pf globalization. The experience of working in advanced and growing economy of Australia, and the developing economy of Vietnam can be good background for initiating a developmental and strategic plan for the focus of the expansion in China which is the fastest growing developing economy in Asia. Meta theories such as the resource based view indirectly consider time, usually suggesting that competitive advantages stemming from HRM evolve over long periods of time. In which time comes into play with regard to "sustainable" competitive advantages as suggested by Barney (1990) suggesting that the concept requires an advantage that is held over time, it is important to specify both the amount of time and the process through which this evolution occurs to really understand the impact of these practices on the economic success. Another very significant consequence is the relationship between which explores the causal relationship between HRM and the economic success as the temporal precedence serves as a precondition to inferring cause. They propose three criteria for the inferring cause: co variation between the resumed cause and effect, the temporal precedence of the cause, and the ability to control or rule out alternative explanations for a possible cause and effect connection. The final area of the future theoretical attention emerges from the role played by the individuals adding complexity to the phenomena within models of the relationship between HRM and economic success. This considers the emphasis on the different levels of analysis tension inherent in research on people in organization. At the organization and the unit level, theories seek to explain how variation in one level variable relates to variation in