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Measuring

Organizational
Performance In
Strategic Resource
Management:
Problems and
Group Members: (Thursday 6-9
Prospect
Mohsin Imran - 14062

Muhammad Waqas Ahmedani -139


Joseph Rangel - 14021
Umer Ahmed Khan - 13931

INTRODUCTION
The initial role of HR includes Hiring, firing, Payroll and other
practices related to management of employees in the firm.
HR have become an element in firm profit equation that
minimize cost & maximizes profit. And aligns task with firm
strategy.
Empirical Research linked HR practices like training,
selection, compensation and appraisal to firm financial
performance.
HR Researcher and practices have linked firm performance
with accounting and financial measures, time frames and
goal value.

Problem
How firm performance is defined and measured.
Because without a clear an consistent definition of
performance researcher are left to define the dependant
variable.

Purpose
To review the measures of firm performance used in SHRM
research
Provide recommendation for how the come expand and up
with a conceptual definition of
performance.
Broaden Measures to measure Organizational Performance.

Construct Validity
Construct is conceptual definition of a variable
Construct validity is the relationship between two variables and
ability to measure that construct. That is the extent to which the
conceptual definitions match the operational definitions.

HRM
HR
activities,
Policies
and
practices

Construct
validation

Organizatio
nal
performanc
e

Construct
validation

Indicators
of
Performan
ce

Measurement Of Organizational
Performance
4
possible
types
of
organizational performance.

measurement

for

1. HR
Outcome
(turnover,
absenteeism,
job
satisfaction)
2. Organizational Outcomes (productivity, quality,
services)
3. Financial
Accounting
Outcomes
(ROA,
profitability)
4. Capital Market outcomes (stock price, growth ,
returns)

Questions To Be Answered In
Research Depending On Passed
Published Studies
1. What kinds of measures are being used?
(Human resource, organizational, financial and market outcomes)
2. What level of analysis was used?
(3 level of analysis was coded as Firm, Business Unit and Plant)
Most preference was given to firm level of performance and least to
Business
level of performance
3. What source of information is taken?
(Survey, Company and Public data Base)
Most source of information was noted from public date base and
least from company itself.
4. What control variable is most often used in the research?
(Work Organization, HPWS, SHRM, Participation & motivation,
Training & Selecting and Compensation)
Fair distribution is controlled variables that have control on HR
performance.
Analysis was based on empirical results of 29 studies containing 80
distinct observation.

Expanding the Model Of Organizational


Performance And suggestion for Future
Research
Level Of Analysis:
More research is to be done at Business Unit level of analysis in
respect to organizational performance.
As Production strategies are most relevant to plant level of analysis.
And corporate level strategies at firm (corporate) level of analysis.
Efficiency and Effectiveness Measure:
Effectiveness mean achievement of objective and efficiency refers
to rate of resources used on achieving objective.
There must be a balance of these two dimension specifies
performance.
Since organization have different goal in effectiveness and
efficiency, there must be a mechanism to measures these
differences.

Expanding the Model Of Organizational


Performance And suggestion for Future
Research
Organizational Purpose and Stakeholders:
Performance and effectiveness can be measured when the
purpose of the organization (i.e. goals) is clearly specified.
Purpose of the organization brings the stakeholders model in
pictures, because organization have to set their goals in the
interest of the stakeholder.
Stakeholders (shareholders, employees, customers) are people
who have interest in the existence , outcomes, reputation and
processes of the Organization.
So performance is dependant on purpose and purpose is
dependant on stakeholders interest. And stakeholders have
expectation and standards for assessing performance.

Organizational Performance Information Markets


( Model)
Financial/
Accounting

Organizational
goals

Consumer/
Product
Social/
Political

Stakeholder
Goals

Labor/
employees

4 distinct performance information market are proposed. And


organizations compete all 4 market with different weights of
importance.
Depending on organizational purpose and structure weighting in the
PIM`s will vary, and these weighting change in time and circumstance.
Organizations have to align their goals in interest and demands of the
multiple stakeholders, and achieve them efficiently and effectively.

Conclusion
More research is to be done in formulating a clear definition
of performance that incorporates the stakeholder markets
with respect to time, the PIM`s model will help in doing so.
Individual HR activities has to be determined in HRM that
play a major role organizational performance.
Future research should be developed in Macro HRM in all
types of Organization.

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