Employee reactions to HRM

&
Performance in developing country
Employees are the most important assets of the organization, their reaction about HRM
function is important to ensure organization’s goals. Employee reactions mean employee
view or attitudes. HRM is the part of the organization concerned with the people dimension
and performance management means managing all elements of the organizational process
that affect how well employees perform. This is a research type article and its objective is to
examine employee reactions to Human Resource Management & Performance of the
organization. There is a lack of information regarding the dynamics of HRM in
underdeveloped countries and employee reactions are always neglected about HRM
practices. So, the authors- ‘Fitsum Ghebregiorgis and Luchien Karsten’ intended to present
fresh evidence from a fresh international angle to fill the gaps.

The research was carried out in a developing African country named Eritrea. The article
contains the research consequences and analysis with evidences from other HRM related
researches. The findings shows a positive picture of HRM practices, which include:
grievances handling procedure, promotion from within, proper staffing, quality of training,
reasonable compensation, in line with firm standards and paid vacation and sick days.

The perception of employees that management has a good attitude towards them is likely to
promote sound relationships between management and the workforce. Although the data
suggest that employees have less influence on what goes on within the organization.
(Relations at Work)

Employees indicate that management knows what competences are needed for the firm and
has a strict follow-up to asses the performance as well as the behavior of newly hired
employees. It has been revealed that management strives for good staffing in the sense that it
believes that the right people are placed in the right position. Employees also stated that
management usually favors internal recruitment. The survey’s findings also indicate that
despite their cultural heterogeneity, employees negatively react to the prevalence of nepotism
and favoritism. (Recruitment and Selection)

Employees are confident with the quality of training they had. Evidence also shows that the
organization seems to be less willing to allocate a specific budget for training. Employees
iterate that training has a great impact on job satisfaction, ability to do the job, job security, as
a motivation to work and for future employment prospects, but has small impact on
promotion and pay rise. Training was not integrated in a planned way to employee’s career
development. Research has shown that HRM practices are likely to meet with negative
employee reactions where they are incompatible with workers prior experience. (Training &
Development)
Employees stated that they get a reasonable compensation that is in line with organizational
standards and variable compensation. Employees indicated that they get payment for time not
worked such as sick days and paid vacation days, and mandatory benefits such as disability
benefits and medical expenses. (Compensation)

Employees indicated that productivity has been increasing over the period of five years, while
employee turnover, absenteeism, and grievances were low. (Organizational Performance)

The study is limited only to two industries. There might be limitations of the generalisability
of the findings. That means A research finding may be entirely valid in one setting but not in
another. It may not be applicable to all organizations in developing countries in general and
Africa in particular due to vast differences in social and cultural environments. There is a
common suspicion among Eritrean employees that any research material being circulated has
something to do with their personal life. Hence, confidence had to build in the workforce
ensuring research confidentiality.

Employee satisfaction is crucial to firm performance because satisfaction enhance employee

commitment to work better & stay longer with the organization. More specifically, how
employees respond to HRM initiatives will also play a key role in determining the impact that
such initiatives may have on organizational performance.

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 Critical Analysis:

**Importance of exploring employee reactions:

There were researches conducted in HRM from managerial perspective. One main aspect that
has been missing in these developments is the view of the workforce. How HRM policies and
practices are carried out in a given organization, can be more highlighted by exploring how
workers respond to it. The option of exploring the experience of HRM systems from the point
of view of employees on the receiving end seems to provide broader way of evaluating HRM.
The rationale for this is a dual one; on the one hand it helps analyzing the contribution of
HRM to overall firm performance; and on the other hand it sheds another light on evaluation
of HRM practices as experienced by employees. Roberts, G.E. (1998) suggests that: “the
employee attitude survey is an invaluable tool in the analysis of HRM problems, and when
used properly provides a wealth of useful information to improve HRM.”

Which Functions were discussed & why?

Four Basic HRM functions are Staffing, Training & Development, Motivation, and
Maintenance. In this Article authors surveyed some HRM functions and the survey requested
information from each employee about his or her experience with regard to HRM and
performance. Relations at work, Recruitment and selection, Training and Development,
compensation and organizational performance were survey issues. These HRM functions
were selected because; these functions include basic HRM functions and help to monitor
organizational performance. Descriptions below will help to understand why these functions
were chosen to understand HRM function and determine organizational performance.

• Relations at Work: Relations at work include terms like employee influence in the
organization, employee performance, employee rights, employee satisfaction, and
management’s attitude towards employees. Employee relation at work reveals
employee attitude about organization, which is very important as we learned in the
very beginning of this course. Employee Relations involves the body of work
concerned with maintaining employer-employee relationships that contribute to
satisfactory productivity, motivation, and morale. Essentially, Employee Relations is
concerned with preventing and resolving problems involving individuals who arise
out of or affect work situations. The perception of employees that management has a
good attitude towards them is likely to promote sound relationships between
management and the workforce.

** What will happen if there is a negative relation with the employees at work?

• Negative relation reflects negative attitude which will effect on the output of
employee work.

• Employee commitment and loyalty towards management will decrease.

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 • Lack of communication will lead to lack of information regarding internal
audit.

• What makes employees work? What makes employees not work? That
depends on how well their needs are met. So if there needs are not met then
they are likely to stop working.

• Recruitment & Selection: Herzberg said “If you want people motivated to do a good
job, give them a good job to do.”

Recruitment is an important part of an organization’s human resource planning and

their competitive strength. The objective of the recruitment process is to obtain the
number and quality of employees that can be selected in order to help the organization
to achieve its goals and objectives. Recruitment helps to create a pool of prospective
employees for the organization, so that the management can select the right candidate
for the right job from this pool. Recruitment can be internal or external. Internal
recruitment practice may boost employee morale because it gives them a feeling that
management cares about the advancement of its employees whenever an opportunity
is created and there are chances of career development.
Selection then consists of the processes involved in choosing from applicants a
suitable candidate to fill a post. Here is an example of selection process:

Recruiting people who are wrong for the organization can lead to increased labor
turnover, increased costs for the organization, and lowering of morale in the existing
workforce. In order to be truly effective it is essential that a business has the right
kind of personnel. Finding the right staff means that recruitment and selection
processes are a key factor in the success of any business.

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 ** Why organization needs sound recruitment & selection process?

• Organizational performance always depends in part on subordinates having

the right skills and attributes.

• Recruiting and hiring employees is costly.

• To ensure Equal Employment Opportunity (EEO)

• Recruiting people who are wrong for the organization can lead to

- increased labor turnover,

- increased costs for the organization,

- And lowering of morale in the existing workforce.

• Training & Development: Training refers to the process of imparting specific skills. It
is a learning process that involves the acquisition of knowledge, sharpening of skills,
concepts, rules, or changing of attitudes and behaviors to enhance the performance of
employees. Development refers to those learning opportunities designed to help
employees grow. Development is not primarily skill-oriented. Instead, it provides
general knowledge and attitude which will be helpful to employees in higher
positions.
Knowledge about business environment, management principles and techniques,
human relations, specific industry analysis, and the like is useful for better
management of the company.
The need for training & development is determined by the employee’s deficiency,
computed as follows:
Training & Development need= Standard performance – Actual performance
Aim/Objectives of Training & Development:
The fundamental aim of training is to help the organization achieve its purpose by
adding value to its key resource- the people it employees. The particular objectives
are to:
1. Develop the competences of employees and improve their performance.
2. Help people to grow within the organization in order that, as far as it’s possible,
its future needs for human resources can be met form within.
3. Reduce the learning time for employees starting in new jobs on appointment,
transfers or promotion, and ensure that they become fully competent as quickly
and economically as possible.

The basic difference between training and development is:

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 Training helps to make the employee of a company to be more effective and efficient
in the present role and responsibilities of the job i.e. fulfill short term needs of any
company but development helps to improve the overall personality dimensions of an
employee to take up any future assignments if any and better equipped to handle any
critical situations might occur i.e. fulfill long term needs of any company.

** What impact training & development has on organizational performance?

Training and Development-

• Helps in optimizing the utilization of human resource that further helps the
employee to achieve the organizational goals as well as their individual goals.
• Provide an opportunity and broad structure for the development of human
resources’ technical and behavioral skills in an organization.

• Helps in increasing the productivity of the employees that helps the

organization further to achieve its long-term goal.
• Helps in improving upon the quality of work and work-life.

• Helps in improving the morale of the work force and creating a

better corporate image.

• Training and Development helps in developing leadership skills,

motivation, loyalty, better attitudes, and other aspects that
successful workers and managers usually display.

• Compensation: Compensation is the methods and practices of maintaining balance

between interests of operating the company within the fiscal budget and attracting,
developing, retaining, and rewarding high quality staff through wages and salaries
which are competitive with the prevailing rates for similar employment in the labor
markets.

Compensation is a tool used by management for a variety of purposes to further the

existence of the company. Compensation may be adjusted according the business
needs, goals, and available resources.

Different types of compensation include:

• Base Pay (salary, Wages)

• Commissions
• Overtime Pay
• Bonuses, Profit Sharing, Merit Pay
• Stock Options
• Travel/Meal/Housing Allowance
• Benefits including: dental, insurance, medical, vacation, leaves, retirement,
taxes etc.

**Why does organization need a sound Compensation policy?

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 • Recruit and retain qualified employees.
• Increase or maintain morale/satisfaction.
• Reward and encourage peak performance.
• Achieve internal and external equity.
• Reduce turnover and encourage company loyalty.
• Modify (through negotiations) practices of unions.

These are the function of HRM on which a survey was conducted to find out employee
attitude in an organization. Now we are about to find out how these function affect
Organizational Performance and how managers monitor and deal with it.

Organizational Performance: Organizational performance refers to the actual output or results

of an organization as measured against its intended outputs (or goals and objectives).

 In all organizations, performance relates to organizational purpose.

 Performance also needs to reflect achievements relative to the resources used by the
organization.
 Performance must be considered within the environment in which the institution does
its work.

The first component reflects the organization's mission (goals & objectives); the second
component reflects how well the organization manages its resources (employee, capital,
information), and the third, its adaptability within the context of external forces.

In this article organizational performance were evaluated by employees on these variable:-

1. Productivity of the organization

2. Employee turnover
3. Employee grievances
4. Absenteeism.

Employee respond were taken to furnish information regarding performance was that
managers may exaggerate (conceal the weaknesses) in their report of performance. Hence,
the views of non-managerial employees were sought irrespective of management practices.

Implications for managers from research: Managers need to analyze the need for training and
it should be provided in light of its impact in bringing change in both – the organization and
the individual employee. There should be goal congruence because if the firm is to develop
and prosper, then the employee should also be trained and developed. The absence of
advancement opportunities could discourage hard work. Firms should take into account the
specific circumstances of their employees while designing and implementing HRM practices.
Second, there is a need to cohere compensation with training and employee development.
HRM practices must also be aligned with one another if they are eventually to have an effect
on firm performance.

Effectiveness of the research:

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Present Scenario of HRM in Bangladesh & Relation with Research
Context

HRM practices in Bangladesh are better than the past. In the past, HR role was concentrated
to hiring firing and letter issuance-dispatching-filing stage. Now it has started to perform
more than that. Employers have started to understand that the more they invest in human
resources the more output is likely which lead them to emphasize on employee capability
development. Whereas, in Eritrea, the dynamics of HRM derive fundamentally from the
establishment of firms with foreign interest during colonial times, as well as through the
exposure to the British/American oriented curricula of the country’s education system.

Like Eritrean economy, Bangladeshi economy is also largely based on agriculture and the
manufacturing industries. There are cultural diversities between Bangladeshi and Eritrean
setting. Supporting and loyalty to the family is one of the most cherished values in both
societies.

Employee rights and benefits are protected through NCEW (National Confederation of
Eritrean Workers) in Eritrea. In Bangladesh there are labor unions who act on behalf of their
members by negotiating contracts with management. Some HR actions have legal
implications. But in Bangladeshi context legal explanation does not seem to be adequate.
There is lack of uniformity of the interpretation of law that lead to practice by organizations
in different way. There is also ambiguity of existing legal policy or detailed policy
framework on HR actions seems to be incomplete.

Employer - Employee relationships in Bangladesh is better than the past. Employers now
recognize the importance of employee’s participation in business planning, major decision
making and organizational change process. Many organizations now conduct employee
opinion surveys for collecting employee feedback and improve employer- employee
relationships.

Eritrean managers mentioned that they are committed to “equal opportunity” employment
(EEO) for men, women, and physically handicapped members of the Eritrean society, giving
due consideration to ability, experience and education. Firm has a recruitment committee
composed of people from different departments in the organization including representatives
from the company-based trade unions. Consequently, the manager has no absolute power to
appoint his/her relatives. Thus, one may conclude that recruitment procedures are carried out
in a fair and consistent manner. Having members from several departments may serve as a
powerful control mechanism for unfair work practices. However, this doesn’t mean
necessarily that the employment practices in Eritrea are perfect; instead, at least there exists a
control mechanism such as the involvement of unions and members of other departments.

In Bangladesh, the EEO is not followed by the organization as it should be. In the past, most
organization had no proper employment function. Manager or people in power used their
power in employment through nepotism and favoritism. Nowadays, things have changed a
little. Still political power or nepotism is destroying Equal Employment Opportunity. Gender
discrimination is still an issue in our organizations. Physically handicapped members are
merely counted in term of employment.

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 Training & Development
Evidence shows that the Eritrean organizations seem to be less willing to allocate a specific
budget for training. Managers cite several reasons. First, in some of the firms training is
limited to a few individuals (mostly in managerial positions) due to financial constraints. One
of the biggest issues of Eritrean firms is lack of financial investment in skill formation.
Second, there is a shortage of training providing institutions in Eritrea to accommodate all
training needs and it is expensive to send several employees off-the-job training abroad.

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Reference:

http://www.emeraldinsight.com/
http://www.ehow.com
http://recruitment.naukrihub.com/
http://www.businessdictionary.com
http://www.hr-guide.com
Roberts, G.E. (1998), “Designing and conducting employee attitude surveys”, in Condrey,
S.E. and Perry, J.L. (Eds), Handbook of Human Resource Management in Government,
Jossey-Bass, San Francisco, CA.

Herzberg

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