Armstrong (2006) defines Human resources management as “planning, organizing, directing, controlling of procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organizational and social objectives are achieved.”

Drucker (2001) stated “Human Resources Management is concerned with the people’s dimension in management. Since every organization is made up of people, acquiring their services, developing their skills, motivating them to higher levels of performance & ensuring that they continue to maintain their commitment to the organization are essential to achieve organizational objectives. This is true, regardless of the type of organization – government, business, education, health, recreation or social action.”

Taking a look at the world of human beings is a rewarding experience. Today, in any organization humans are treated as precious resource. They are called as assets of the organization as they bring success & prosperity. Human resource deals with human resources employed in a business unit. It is an approach to the management of people in an organization. HRM is relatively a new term for what was called as personnel management (baidu.baike.com).

An Organizational Performance includes multiple activities that help in establishing the goals of the organization, and monitor the progress towards the target. It is used to make adjustments to accomplish goals more efficiently and effectively (managementperformance.com, 2010).

Organizational Performance is what business executives and owners are usually frustrated about. This is so because, even though the employees of the company are hard-working, and are busy doing their tasks, their companies are unable to achieve the planned results. Results are achieved more due to unexpected events and good fortune rather than the efforts made by the employees (managementperformance.com, 2010). However, for any business to be successful, functions must be defined and accomplished. It is important for an organization to develop strategies that should be designed around the skills that would enhance the performance of the organization. Organization Performance can be achieved by using some of these approaches, if used with a strong focus, comprehensively, on achieving the results of the organization, could increase the performance of the organization. Best Practices, Quality circles and Process control can also be used to achieve similar goals (managementperformance.com, 2010).

The purpose of this assignment is talking about how human resources management practices will influence the performance of an organization. I am going to research some evidences, provide literature reviews and through analysis to introduce how human resources management practices will influence organizational performance.

Research Question

To what extent does human resources management practices influence the performance of an organization?

I choose this research question because of the research will contribute to knowledge of the effects of human resources management by testing the performance effects of adopting human resources practices in some organizations.

More recently efforts have been made by HRM theorists to try to establish a causal link between HRM and performance. This has led to a growing number of studies which examine the potential contribution that good human resource policy can make to improving organizational performance, so much so that ‘the impact of human resource management on performance has become the dominant research issue in the field (Guest, 1997).

Importance of Study

According to the HRM strategy theorists (Tyson, 1997), “the aims of the HRM strategy process are typically concerned with devising ways of managing people which will assist in the achievement of organizational objectives. In addition, one can hope to see within the strategy-formation process the ‘official’ version of how senior management believes these policies, practices and philosophies will contribute to organizational performance.”

With the help of our knowledge of human resource management practices and philosophy you can avoid making many mistakes. More important, it can help ensure that you get results-through others. you could do everything else right as a manager-lay brilliant plans, draw clear organization charts, set up modern assembly lines, and use sophisticated accounting controls-but still fail as a manager (by hiring the wrong people or by not motivating subordinates, for instance) (Brewster, 2004).

On the other hand, many managers-whether presidents, generals, governors, or supervisors have been successful even with inadequate plans, organization, or controls. They were successful because they had the knack for hiring the right people for the right jobs and motivating, appraising, and developing them (Brewster, 2004).

In today’s businesses, the right approach and management of the organization’s employees can greatly affect the company’s overall performance. A strategic approach in Human Resource Management is vital especially in growing companies. Starting from right staffing to maintaining performing employees, human resources management is a key in developing not only the employees, but the whole organization itself (Carter, 1997).

Thus, the researches of human resources management hold an importance for all members of an organization.

Literature Review

Background Information

Armstrong (2006) state “Human resource management is defined as a strategic and coherent approach to the management of an organization’s most valued assets – the people working there who individually and collectively contribute to the achievement of its objectives.”

Performance, in the context of organization, is not only a broad concept which has been used synonymously with productivity, efficiency, effectiveness, and more recently competitiveness; it has also been a subject of study for social scientists from a wide range of disciplinary perspectives (Harrison, 1997).

It is widely accepted that human resources management can help firms improve organizational behavior in such areas as stuff commitment, competency and flexibility, which in turn leads to improved organizational performance. In addition, findings from a number of empirical studies that have been conducted to research the relationship between human resources management and organizational performance indicate that high commitment and high involvement human resources management practices have a positive impact on organization performance (Kaman, 2001).

Key point 1

HRM practices can improve organizational performance by increasing employee skills and abilities (Patterson, 1997). Patterson (1997) stated that ‘HRM practices can influence employee skills through the use of through comprehensive training to develop current employees’. Nadler (1986) stated that training and development of employees, it has been widely argued, is essential to organizations which seek to gain competitive advantage through a highly skilled and flexible workforce as a major ingredient for high productivity and quality performance.

Marchington (1996) concerning t