Essay on Human Resource Management

Write an essay on the topic "HRM works at achieving high performance by increasing employee commitment and eliciting positive attitudinal response towards the organization and its objectives. to what extent does this view apply to the commercial/retail banking industry”.


The human resource management practices, models, theories are the organizational activities that help in managing the pool of human resources, and they ensure that the resources of the company are employed towards the fulfillment of the goals of the company (Mathis, 2016). HRM is implemented in the form of a set of policies and practices that are designed and implemented for ensuring that the human capital of the company is contributing to its maximum for achieving the objectives of the business.  In terms of its strategies, policies, and processes, human resource management is universal. It has replaced the traditional personnel management. But, the management and development of human resources are considered as a central challenge.  The organizations today are going global, and it is very difficult to manage the workforce in multi-national enterprises. The concept of human resource management is theoretical as well as practical. The theoretical part can be considered as universal, but the practical part is not universal.  The theoretical part of human resource management has described the way in which the organizations must be structured, but the way they are actually structured is very different. In the banking sector, the role of HRM is very crucial because most of the business of banks is target based and they have to change things as per the changes in the environment. So, HRM helps the banks in ensuring that the employees maintain their performance and dedication during these times and their level of commitment does not fall.  
The purpose of this essay is to determine that to what extent the HRM works at achieving high performance by increasing employee commitment and eliciting the positive attitudinal response in the commercial/retail banking industry. This examination will be made using the theories of HRM that suggest how an organization should be structured.  The rhetoric and the reality in consideration of the traditional banking setup will be discussed, and then the comparisons will be made using the models of HRM in relation to the psychological underpinnings of HRM, recruitment, and selection, reward, employee voice, managing the performance, etc.
Firstly, the theories of HRM will be discussed that suggest how an organization should be structured. Several theories have been developed in the past that explain the rationale behind the formation of the structure of the organizations. Some of them are classical theories like the scientific management approach, the Bureaucratic approach by Max Weber, and the administrative theory (Troitzsch, 2013). Then, there are neo-classical theories and modern organization theory. Some of these theories form a base for HRM and for the structures of the organizations. 
One of the theories that relate to HRM is the neo-classical theory that recognized the importance of the individual and the group behavior and emphasized on human relations (Shafritz, 2015). These theories were developed from the Hawthorne experiments, and they place emphasis on the human and social relations among people. It is argued by this theory that if the relationships are considered, then the productivity can be determined and by making some changes in the working conditions of the people, the productivity can be enhanced further. The theory believes that when the people have the high level of motivation, they become more productive (Child, 2014).  Their motivation level is affected by the amount of individual, personal and the intimate attention that these workers receive. So, as per this theory, the structure of the organization should be such that the individuals are not treated as mechanical tools, but they are treated as distinct social beings. The organization where I used to work earlier, used to follow this theory as the individual differences of the employees were respected in there and were made to interact with the social and economic factors affecting the company. Also, this theory suggested that the informal structure should coincide with the formal structure. It emphasized on the concept of ‘groups’ in the organizations and the synergistic benefits (Millar, 2016). This theory of HRM is relevant and should be applied in the present organizations because it has the ability to encourage the concept of participative management in the structures of the organizations in which the workers are permitted to take part in the decision-making process. By this form of management, the increase in productivity is ensured. This neo-classical theory is very much implementable in the banking sector because here the employees are a main part of the organization.  They take care of the cash, deal with the public, grant loans, handle the clients, maintain the reserve, take care of the mortgages, etc. So, here the concept of HRM plays a very important role.  Therefore, the structure of these organizations must incorporate HRM theories.
The theories and models of HRM are particularly important in increasing the performance of the employees by ensuring they are highly committed to the organization in which they work.  One of them is the AMO theory which suggests that the independent work system consists of three components that shape the characteristics of the employees; they perform better and hence contribute to the success of the company. The interests of the organizations are best served by the HRM system when it attends to the ability of employees, their motivation and provides them the opportunity for contributing towards the company.  This view applies to the commercial/retail banking industry as the employees of the banks are compulsorily trained for a particular period of time so that they build up and improve their knowledge and skills for doing the tasks, most of the employees are given incentive-based pay for the number of sales they make for the bank and for the business that they bring to the bank which motivates them and they are also given opportunities in the form of off-site meetings, transfers, etc. so that they are able to make decisions for the banks, meet new people; propagate their abilities in front of clients, etc.  When the AMO theory is practiced in banks, they not only improve their performance, but they get the motivation to work, they become committed to the banks. This also helps in the reduction of the rate of attrition; the company saves costs of new recruitment and positivity in the banks helps in to meet its objectives on time (Zaman, 2016). 

Place Order For A Top Grade Assignment Now

We have some amazing discount offers running for the students

Place Your Order

Then, another important model of HRM is the soft HRM model which in my opinion helps the banks in achieving high performance by increasing employee commitment and eliciting positive attitudinal responses towards the bank and its objectives. The model of soft HRM treats the employees of the company as their most important and valuable resource, and in this, the people are viewed as the source of competitive advantage. In the banks, the long term goals and planning play a very important role because they have to plan as per the forecasted changes in the external environment as the rate of inflation, change in government policies, etc. (Farouk, 2016). So, accordingly, they focus on the long-term workforce planning strategically, they maintain strong and regular two-way communication; they design their pay structure competitively, and they add suitable performance-related rewards in it. This ensures that people perform as per the plans, remained motivated and committed to their work. 
Bath gave a model of people and performance which suggests that when the managers of the company and the organization itself invest in the people of the company, they listen to the concerns that people face and make efforts to address those concerns in a timely manner, then the possibility that the employees care about and focus on the organization and its goals increases (Bratton, 2012). I think that the managers should continuously take care of the employees by focusing on the things that lead to the increase of the performance of employees, their level of motivation, etc. The success of the managers of the company should be linked to the success of the people of the company and vice-versa. This helps in creating a positive difference to an individual, and the people get rewarded along with the manager. In the banking industry, this model is applicable because, in every branch, there is a branch manager who is the head of the branch and if he takes care of his employees, then only he can run the operations of that branch successfully, otherwise he may have to face problems in meeting the targets at the end of the month. So, the performance of the entire branch is based on the linkage between the manager and its employees and when the performance is good, both are appreciated. 
The rhetoric and the reality in consideration of the traditional banking setup will now be discussed in this section. The strategy of human resource management is an integrative approach that helps in managing the people so that the goals of the organization are achieved on time and in an efficient manner (Nankervis, 2012). For this, it is important that the employees are understanding, accepting and implementing the strategy of human resource management at the tactic level as well as the explicit level. Only this can make it effective otherwise, it may fail.  When the strategy is not appreciated at both these levels, the gap comes between the strategy that is proposed and the strategy that is actually put into practice. This is the gap between rhetoric and reality (Talukder, 2014). 
In the banking set up, the adoption of soft HRM is organizational rhetoric. The mission statements that the banks have to relate to and suggest that the bank will stay committed to the direct communication with the customers, with its employees who are often described as the ‘most valuable assets' in their mission statement. Also, the banks commit to experimenting with their quality circles, and they focus on performance-related pay. They reconsider and revise their procedures of selection and declare their commitment to training. But, these ideas of the HRM in the banks fall short of reality.  The surveys of practice along with the organizational behavior do not match the rhetoric of human resource management (Mathivanan, 2013). The findings of these gaps as well as the observations in this industry have found that there is no dominance of the participative management styles in the banks which are important theories that shape the structure of banks. Also, the sophisticated policies related to human resource management were also not found. Instead of this, the aggressive resistance to the unions and the harsh policies related to personnel were found to prevail (Masum, 2015). This puts a convincing argument that the progressive policies of personnel have not been able to get diffused broadly across the employment settings. 
In the rhetoric of human resource management, there is an attractive image in which the people are found to trust each other, sharing risks and rewards and they are also found to be united by a strong feeling of identity. But, this does not give the sense of impersonal economic rationalism that characterizes the management thinking in the real world (Armstrong, 2014). The empowerment of people is unseen. The power of human resource management cannot be felt in the banks. Instead, it is considered as a manipulative thing. The vocabulary of human resource management has led to surpassing of the conceptual and the empirical foundations, and its rhetoric has outstripped the reality. Thus, a gap has occurred, and the reality of the banking sector is away from the rhetoric. 
So now I can say that in the banking sector, the rhetoric is soft and the reality is hard.  The banks that have adopted some of the variables of soft HRM are found to be within the limits of the hard framework of HRM. Despite the rhetoric empowerment, the style adopted by banks for the human resource management appears to be aligned with the hard HRM practices and it involves the intensification of the processes of work and reduction in the autonomy of the workers using the close surveillance.  
These comparisons can be made using the models in relation to the psychological underpinnings of HRM, recruitment, and selection, reward, employee voice, managing the performance, etc. The different people in the company have different views related to the HRM practices in the company. In the banking industry, the executives and the senior managers along with the HR professionals feels that the performance management systems that they have installed help in enshrining their vision and the cardinal values.  But, the line managers did not support this belief. They feel that the alignment between the performance management system and the vision and mission statements of their organization is weak. The rhetoric of this alignment is not operationalized in a proper way in reality. Also, there is the difference in opinion between the line managers and the HR professional related to the linkage between the high-performance cultures, performance management systems and the desired outcomes of the organization. 
Though the rhetoric is different from the reality but it is true that HRM works at achieving high performance by increasing employee commitment and eliciting positive attitudinal response towards the organization and its objectives. The human resources of a company have the ability to improve the total ability of an organization, the society, country, and the nation. There are rapid changes that hit the banking industry because the influence of the external environment on the operations of the bank is too much. Also, the pace of technological development is very fast in the economy which affects the activities and the processes at the banks. The technology has transformed the way in which the traditional banking activities were performed. With the introduction of the ATMs, ALPMs, the way of doing the banking business has changed. Even the way in which people were recruited in the banks has changed.  Earlier the people who had knowledge of the economy and the external environment entered this sector. But now, people with a high level of computer literacy and skills are in demand. They are also offered higher pay as compared to other people. The banking industry is based on knowledge. To operate this industry, the people who are knowledgeable and well-equipped are required so that they can operate the business. To implement the human resource practices in these banks, it is required by the HR practitioners and professionals that they take part in the various organizational activities. the practices and policies of HRM require that the individuals should be managed and developed using the specific HR initiatives. There is an important aspect of HRM which is the HR planning and it confirms that the organization has right people in the right number for the correct position and at the correct time. when the people are placed in right positions,  they are able to do their job in a better way, they fit the job profile, they do not take long to adapt to the work that they have been given, they are comfortable in the work they do and the work is as per their skills and specialization. This automatically leads to higher performance because they do the job better than any other person and when they are happy to do it, their level of commitment rises as they see the work in a positive way.  
Then, the HRM practices involve the aspect of compensation which is one of the major concerns and priorities of the people. The HRM practices aim to design their compensation structure in a fair manner, based on the market trends and specifications.  The system aims to provide equal and fair pay to all as per the work that they do. Also, the career prospects of a person, his well-being, and his standard of living depend on the compensation structure of an organization. Thus, when this structure is apt, people get motivated to work, and they develop positivity towards their work.  In a similar fashion, their level of commitment increases and they feel good in the company. 
Training and development are the systematic processes of the human resource practices that relate to facilitation and acquisition of the skills, attitudes, and knowledge of the people that lead to an improvement in the performance of the organization. This also helps in fulfilling the personal goals of the people. When they feel that they are being developed, they feel motivated, commitment rises and performance improves. 
From the above discussion, I can conclude that the HRM works at achieving high performance by increasing employee commitment and eliciting positive attitudinal response towards the organization and its objectives. There are various theories of HRM that have helped in the development of the structures of the organizations. Also, there are gaps in the rhetoric and the reality of the practices of human resource management in organizations especially the banking sector that leads to the devaluation of the importance of human resource management in companies. Therefore, these gaps must be filled so that people do not face issues, work in a collaborative environment and remain happy in their workplace.  


Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management practice. Kogan Page Publishers.
Bratton, J. and Gold, J., 2012. Human resource management: theory and practice. Palgrave Macmillan.
Child, J., 2014. Hierarchy and Organisation: Toward a General Theory of Hierarchical Social Systems.
Mathis, R.L., Jackson, J.H., Valentine, S.R. and Meglich, P., 2016. Human resource management. Nelson Education.
Mathivanan, B., 2013. A study on HRM practices in public sector banks in Krishnagiri district. IOSR Journal of Dental and Medical Sciences (IOSR-JDMS), 1(12), pp.1-14.
Masum, A.K.M., Azad, M.A.K., Hoque, K.E. and Beh, L.S., 2015. Domestic Banks in Bangladesh Could Ensure Efficiency by Improving Human Resource Management Practices. PloS one, 10(7), p.e0121017.
Millar, C.C., Chen, S. and Waller, L., 2016. Leadership, knowledge and people in knowledge-intensive organisations: implications for HRM theory and practice. The International Journal of Human Resource Management, pp.1-15.
Nankervis, A.R., Stanton, P. and Foley, P., 2012. Exploring the rhetoric and reality of performance management systems and organisational effectiveness-Evidence from Australia. Research & Practice in Human Resource Management, 20(1), p.1.
Farouk, S., Abu Elanain, H.M., Obeidat, S.M. and Al-Nahyan, M., 2016. HRM Practices and Organizational Performance in the UAE Banking Sector: the Mediating Role of Organizational Innovation. International Journal of Productivity and Performance Management, 65(6).
Shafritz, J.M., Ott, J.S. and Jang, Y.S., 2015. Classics of organization theory. Cengage Learning.
Talukder, M.F.H., Hossain, M.Y. and Hossain, M.N., 2014. HRM practice in commercial banks: A case study of Bangladesh. IOSR Journal of Business and Management 16: 29, 36.
Troitzsch, K.G., 2013. Theory reconstruction of several versions of modern organisation theories. In Ontology, Epistemology, and Teleology for Modeling and Simulation (pp. 121-140). Springer Berlin Heidelberg.
Zaman, M., Hasan, M., Sabrin Sultana, M. and Muntasir Obaid, S., 2016. How HRM Practice Affects on Organizational Performance in Banal Financial Banking Industry Measuring Labile Marketing Strategy in South Asian Country, Bangladesh. Global Journal of Management And Business Research, 16(8).

Get Quality Assignment Without Paying Upfront

Hire World's #1 Assignment Help Company

Place Your Order