Over the past decades, Human Resource Management (HRM) has grown very popular, and it is now considered a very important factor and asset in many large companies and even the smaller ones. One of the reasons behind HRM is the supposition that HRM is considered to be a source of competitive advantage and may influence organisational results and have an impact on performance activity. Growth and achievements are crucial goals for any organisation. Their goals are to perform well and achieve high results. With this being said, there are many ways an organisation can achieve this, and one big factor is organisational performance. Organisations have knowledge that the companies’ human resources add an enormous value and can be considered as a unique source of competitive advantage. It was between 1970 and early 1980´s where corporations renamed the personnel department to human resources department.
This acknowledged the fact that employees are just as important assets to the organisation, rather than being in positions. It also indicated that organisations should discontinue the historical practices of considering their employees as costs, rather than sources revenues and profits (Liu, Combs, Ketchen & Ireland, 2007). Human resource management researchers have spent a considerable amount of time, trying to understand the different types of investments that the HRM can have in order to enhance organisations performance. According to Liu, Combs, Ketchen & Ireland (2007), there is a big question on whether human resources management matters, and whether HRM practices can shape the organisation’s performances. With that, Husleid (1995), has identified three key channels that they believe are the right HRM practices to improve organisational performance.
The three key practices are, 1) to enhance employee´s Knowledge, skills and abilities, also known as the (KSA´s), 2) be able to motivate employees for the organisation’s benefit and lastly 3) to empower employees to do so. The authors believe that having a high KSA is crucial for employees in order for them to perform tasks more effectively and efficiently. This enables employees to work beyond their tasks and to move from daily routine functions (Liu, Combs, Ketchen & Ireland, 2007). Organisational performance relates to the success of an organisation, which has specific purposes to perform certain functions. There is a difference between organisational performance management and individual performance management. Organisational performance compromises of the results achieved based on the goals and objectives set by the organisation.
Whereas, individual performance management only enables individual efforts to increase in the light of the organisation (REF). We have established that there are a number of different practices within the HRM practices, however, organisational performance is constantly repeated. Just like there are various types of HRM practices there are also various types of performances that are used within the organisations.