CHAPTER II

LITERATURE RIVIEW

2.1 Human Resource Management Defined

Human resource management is the process of acquiring, training,

apprising, and compensating employees, and attending to their labor relations,

health and safety and fairness concerns (Dessler, …). Dessler thought that, human

resource management is important to all managers, because manager don’t want

to:

1. Hire the wrong person for the job

2. Experience high turnover

3. Find his/her people not doing their best

4. Waste time with useless interviews

5. Have his/her company taken to court because of discriminatory actions

6. Have his/her company cited under federal occupational safety laws for

unsafe practices

7. Have some employees think his/her salaries are unfair and inequitable

relative to others in the organization

8. Allow a lack of training to undermine his/her department effectiveness

9. Commit any unfair labor practices

 Understanding those issues will help manager to avoid mistake like that.

And, more important, it can help ensure that manager get the right result.

Remember that manager can do everything else right as manager; lay brilliant

plans, draw organization charts, set up modern assembly lines, and use

sophisticated accounting controls, but still fail as a manager if hiring the

wrong people or by not motivating subordinates, for instance.

2.1.1 Strategic Human Resource Management

According to Dessler, …., If a firm’s competitiveness depends on its

employee, then the business function responsible for acquiring, training,

appraising, and compensating those employees has to play a bigger role in the

firm success. The notion of employee as competitive advantage has therefore

led to a new field of study known as strategic human resource management,

the linking of HRM with strategic goals and objectives in order to improve

business performance and develop organization culture that foster innovation

and flexibility. This should produce the employee competencies and behavior

that in turn should help the business implement its business strategy and

realize its goals.

Human resource strategies are the course of action human resource

uses to help the company achieve its strategic aims. Human resource strategies

use mechanisms (such as special grievance procedure) to build healthy two

way communication; its screens out potential managers whose values are not

people oriented; it provides highly competitive salaries and pay for

performance incentives; it provides for fair treatment and employee security

 for all employees; and it uses promotion from within and developmental

activities to give employees every opportunity to use their skill and gifts at

work.

2.1.2 Human Resource Role as a Strategic Partner

Unfortunately, HR’s long history as a staff or advisory function has

left with a somewhat impoverished reputation – some still tend to view it as

less than it is. For example, one view is that HR is strictly operational and that

HR activities are not strategic at all.

2.3 Performance Appraisal

Performance appraisal is often described as a vital organizational activity

in the human resource management literature. Barlow|3| argues that performance

appraisal systems serve to reassure important factors, such as senior managers,

shareholders and government, that economic rationality is being pursued. He

suggests appraisal systems may signal to the outside world that the organization is

acting in a "proper manner". Failure to adopt performance appraisal would invite

not only the questioning of organizational legitimacy but would also risk being

seen as "capricious, negligent and irrational".

2.3 individual performance objectives can only be defined in

terms of organizational objectives, and so it would be a mistake to assume that

in general individual performance can be defined and measured in terms of

``productivity'' or ``quality' (Hempel, 2001)'.