Human Resources Managers Increasing Productivity
As people are considered the human capital of all organizations, the management of human resources comes out as a vital component that could spell the successful performance and productivity of any firm. Cascio (2002) insisted on the fact that “organizations and managed by people” and that “without people, organizations cannot exist”.
In this case, when a manager is good at harnessing the potentials of its human resources, then the organization can easily reach its productivity and performance goals. For example, Cascio (2002) mentioned a study that surveyed over 700 publicly-held firms in all major industries and examined the use of human resources “best practices” in areas like personnel selection, job design, information sharing, performance appraisal, promotion systems, attitude assessment, incentive systems, grievance procedures and labor-management participation. In this large-scale study, the researchers found that “firms using more progressive policies in these areas were generally found to have superior financial performance”. According to the index of the prevalence of “best practices”, the top 25 percent of firms using the largest number of “best practices” had an annual shareholder return of 9.4 percent versus 6.5 percent for firms in the bottom 25 percent.
Firms in the top 25 percent also had 9.3 percent gross rate of return on capital, more than twice as high as that of the remaining firms. In this case, the study concluded that the adoption of high-performance human resources work practices “can have an economically significant effect on the market value of a firm”. Productivity and performance are important measures in determining the market value of any firm and these can be made significantly superior if the human resources are properly utilized. Thus, the effectiveness in managing resources can later be translated into the profitability of the business as a whole.
There are many policies and practices that can be instituted to maximize the performance and effectiveness of any organization. The type of organization will actually determine the applicability of these policies and practices. However, one of the highly successful policies and practices that can improve the effectiveness and performance of any organization is the Total Quality Management (TQM) approach. Cascio (2002) informed that TQM are a “set of principles and practices whose core ideas include understanding customer needs, doing things right the first time, and striving for continuous improvement”.
TQM is both a management philosophy and a strategic management process that focuses on delivering the optimum level of quality to customers by building quality into every organizational activity. Total quality management draws its ideas, principles, and tools from psychology, sociology, statistics, management, and marketing. The goal of TQM is to create an environment that encourages people to grow as individuals and to learn to bring about continuous and breakthrough improvements. It is actually the “group problem-solving focus of TQM” that “encourages employee empowerment by using the job-related expertise and ingenuity of the workforce”.
On the contrary, one difficult obstacle that can be faced in using TQM is that it needs a strong organizational culture in order to become effective. Cascio (2002) emphasized that the “adoption of TQM generally requires cultural change within the organization as management reexamines its past methods and practices in light of the demands of the new philosophy”. Adopting cultural change can be quite difficult to achieve, but it is not impossible. Working as teams are vital in TQM. In the work environment, teams materialize to focus on tasks or solve problems that are beyond the capacity of one individual.
By setting up small teams in the organization, this allow creative and innovative juices to flow through the constant sharing of information and people could appropriate division of labor among the members of the team so that it can lead to more effective, more efficient and less stressful workplace. Their high levels of performance with regards to quantity, quality, and timeliness of work results can contribute to their sense of satisfaction, addressing a psychological and motivational need. Thus, the obstacle of culture can be overcome by using team work to make TQM applicable in improving performance and effectiveness of an organization.