Chapter two Review of Related literatures
The objective of this chapter is to give an overview/review of the relevant literature concerning the three constructs under study. It dwelt on what has been written or published in the past about the study variables as well as on the research topic. It contained the conceptual frame work, the theoretical framework, and the empirical studies, summary of review of related literature and the critique of the literature.
The concept of Personnel Management (PM), Human Resources Management (HRM) and Strategic Human Resources Management (SHRM)
This current study is on the relationship between human resources practices and organisational citizenship behaviour with job satisfaction being a likely mediator. It is important that we include in this section the explanation of the three important concepts that originated the human resources practices/dimensions in use for this study. It is our view that understanding these concepts will be of immense help in our understanding of the HR dimensions and how they relate to various organisational outcomes.
Personnel Management (PM)
Personnel management is the progenitor of Human resources management. This means that Human resources management arose as an advancement of personnel management functions. It refers to administrative efforts to management of the workforce in organisation such as pay and salary, provision of good working environment etc. Its main concern was how to handle workforce and make them happy.
Human Resources Management (HRM)
Human resource management is defined as a strategic and coherent approach to the management of an organization’s most valued assets – the people working there who individually and collectively contribute to the achievement of its objectives. Armstrong (2006)
Human resources management goes beyond the mere administration of work force such as pay and salary to that of treating the work force as resources of the organisation that is of equal importance with other resources of materials and money. This means an upgrade for inclusion into the so called organisational 3Ms of money, material and manpower.
Armstrong (2006) stated that the aims of HRM have been distilled by Caldwell (2004) into 12 policy goals of
‘Managing people as assets that are fundamental to the competitive advantage of the organization, aligning HRM policies with business policies and corporate strategy, developing a close fit of HR policies, procedures and systems with one another, creating a flatter and more flexible organization capable of responding more, encouraging team working and co-operation across internal organizational boundaries, creating a strong customer-first philosophy throughout the organization, empowering employees to manage their own self development and learning, developing reward strategies designed to support a performance-driven culture, improving employee involvement through better internal communication, building greater employee commitment to the organization, increasing line management responsibility for HR policies, and developing the facilitating role of managers as enablers’. Armstrong (2006), Caldwell (2004)
Strategic Human Resources (SHRM)
The concept of strategic HRM is derived from the concepts of HRM and strategy. It takes the HRM model with its focus on strategy, integration and coherence. ‘It connotes all aspect of strategy, namely, strategic intent, resource-based strategy, competitive advantage, strategic capability and strategic fit’. Armstrong (2006):
According to Hendry and Pettigrew (1986), strategic HRM has four meanings as sited by Armstrong (2006) to include ‘the use of planning as the starting point of every personnel activities, coherent approach to the design and management of personnel systems based on an employment policy and manpower strategy, aligning HRM practices and policies with business strategy and taking the people of the organization as ‘strategic resource’ for the attainment of its ‘competitive advantage’. Armstrong (2006), Hendry and Pettigrew (1986)
HRM upgrade and regard as organisational resources lead to HR managers now seen as strategic partner in the business success.
Summarised comparisons of the three concepts are given below for better understanding.
Figure. 1 Comparison of PM, HRM and SHRM
Personnel Management (PM Human Resource Management (HRM) Strategic Human Resource Management (SHRM)
Basic Assumption People as commodity People as resources People as strategic resources
Goal Performance of pre- defined professional activities Individual HR behaviours Organisational effectiveness as a whole
Nature Plural, collective reactive Unitary, individual proactive Strategic proactive
Framework Lack of systematic framework Isolated HR activities which are separate from each other and not linked to the overall environment of the organisation Broad, contingency-based. An HR system designed to fit the organisational environment and mutually reinforcing or synergistic in strategic intent.
Level Lower level Middle level Top level
Context Special field within the organisation Within the organisational scope Interact with organisational factors as well as external factors
Psychological Compliance Commitment Long-term commitment/development
Evaluation Cost minimization Maximum utilization Overall business success
Status Marginal Major managerial function
Source: Yususif Keir (2016) summary from Wright & Boswell (2002), Truss & Gratton (1994), and Baker et al. (1999).
Details from the above showed that People are regarded as commodities in personnel management, regarded as Resources in human resources management, and not only as a resource but a very strategic resource needed in the realisation of the organisational goals in strategic human resources management. While personnel management is to minimize cost, that of the human resources management and strategic human resources management are cost maximization of the individual HR outcome and organisational effectiveness as a whole respectively. From the figure above, nature of PM is plural and reactive, that of HRM is unitary and more active while SHRM is strategic proactive approach .4
SHRM focused more on top level of organisation, PM focus at lower level while HRM is on lower and middle management levels. In SHRM, managers/HR professionals are seen as strategic partners in the business unlike in PM and HRM. The major actors of these three approaches, the line and HR managers, take active roles in the strategic human resources functions with that of HR managers being supportive. Contrary to the roles managers play in SHRM which is supportive, HR managers and professionals are the major actors in human resources management with only few tasks delegated to line managers. Keir (2016)
(A) Human Resources Practices
a. Recruitment and Selection
Recruitment and selection is the process by which actions are taken to ensure that an organisation employs the most suitable person for the declared position. Recruitment refers to the arrangements made to ensure that potential applicants are made to know of the intention of the organisation to make an appointment while Selection refers to the procedures used to choose the most qualified candidate based on job specification .This involves collection of application, short listing from the applications, interviewing, selection and deployment as appropriate.
A direct link between the rigour of the process for attracting and selecting the most appropriate employees and overall employee productivity was reported in Huselid (1995)
b. Training and Development.
McGhee and Thayer (1965) defined training as the formal programme or procedures which a company uses to facilitate employees learning so that their resultant behaviour contributes to the attainment of the company’s goals and objectives. McGhee and Thayer (1965). Ubeku(1975) sitting Seymour and Humble defines operative training as the process of transforming skills from those who posses them to those who do not and management training as the process of developing managers’ knowledge, skills and attitudes to meet the present and future needs of the business. Attempts have been made by authors to differentiate training and development efforts. Maxwell and Roberts (1969) stated that training refers to the means used to improve employees on the job while development is any method used to prepare a manager for his intended job. He went further to explain that their difference anchored majorly on the fact that one prepares employee for his present job and the other prepares him for his future job. The above definitions have been supported by others like Nadler (1981), Evans (1981), and Johnson (1975). The important of training and development in organisation has been highlighted by authors. Lall (1990) wrote that shortages of managerial capabilities appear to have significant negative effect on the operating efficiency of most companies who lack trained personnel. Ubeku (1983) noted that the major problem of developing nations of which Nigeria is one, is their inability to manage their resources effectively orchestrated by the fact that they lack trained managers. Some authors see the need for training emanating from changes in organisation, individual and societal needs. Ajuogu (1980) said that the need for training and development is reflected in the fact that the people and the institution which affects managerial actions in organisations and which makes demand on it are continuously changing: the sub-system within the organisation whose needs are to be considered are also changing: the output by the organisation which affect the society are also changing continuously. Agathon() wrote that the need for manpower development arose from the fact that the ways of doing business is becoming extremely complex in terms of product lines, changing technology, and services. Competitions within the business community are becoming more intense. Organisation characters and structures are in constant flux as companies live through radical swings in business practices. Ubeku (1988) saw the need for efficient training in terms of the need to reduce cost in labour and overheads through reduction in time, reduction in losses, reduction in personnel costs, absenteeism, and accidents as well as reduction in administrative cost. Mbanugo (1985) on his part saw the need for training as just to develop an individual to perform his job well for the realisation of organisational objectives by increasing his skills, attitudes and his knowledge. On the individual level, authors argue that through training employee acquire needed skills and knowledge he needs to survive on the job which in turn has direct link with employee productivity , job satisfaction, commitment to the organisation and turn-over intention Huselid(1995), Noe et al(2004) and Johnson (1967). McGhee and Thayer (1965) outlined the ways of determining the existence of training need of any organisation to include
Analysis of the activity in a logical step (process, job and operation),
Analysis of equipment especially availability of new equipment,
Analysis of the problems facing the organisation,
Analysis of behaviour of workers in terms of chronic absenteeism carelessness, accident rate etc.
Analysis of the organisation. (Confused planning, weak discipline, unclear goals and other action that may affect employee morale and lead to organisational performance may reveal the need for training), and
Analysis of performance appraisal reports. McGhee and Thayer (1965).
Pigor and Meyer (1977) succinctly outlined various method of imparting training to include
1. Classroom training.
2. On-the-job training. This is the type on training the trainee is shown what to do while the supervisor watches. The supervisor first demonstrates the job and watch the trainee do it. He then makes correction as and when due
3. Vestibule training. This is where the training takes place in a place that mimics the actual working place. This kind of training is desirable where the job is difficult where mistakes will impair production schedule and where special coaching is needed.
4. Apprenticeship training. This is where the trainee is sent to training under guidance and supervision of an expert for longer period of time.
5. Programmed instruction. Programmed test materials are utilized for training. All principles of learning, reinforcement, feedback, involvement and repetition are applied in this kind of training. Pigor and Meyer (1977)
Thomson(1978) classified development programmes into three; internal development programme inside and outside the company including on –the- job, job rotation and counselling, formal development programme mainly within the company including various types of formal courses of instruction , and external formal courses making use of courses at universities, colleges and industrial training institute. Thomson (1978).
Jones (1980) was more succinct in his classification of training by grouping them into off-the-job training by way of formal courses run outside the company and on-the-job training for courses run within the company with or without a coach. All this group of training take the form of methods of lecture, case study, role playing, business games or programmed learning in a typical management programme. Jones (1980)
C. Contingent Pay and Reward Schemes (Compensation System)
Compensation system is an important consideration if organisation intends to procure, maintain and retain quality staff. Organisations must develop reward system and strategy that is clear enough in terms of how it is determined and paid. Within public sector institutions in Nigeria, this is determined nationally by the national wages and pay system unlike the private sector where there is flexibility on the part of the organisation in fixing their wages and pay which may incorporate other options like bonuses and incentives, employee benefits or performance-related pay. Organisations in the private sector in Nigeria develop its own framework for compensation with a set of basic principles guiding such compensation system. Contingent pay and reward schemes are essentially designed in such way that will attract and retain desired employees. For a chosen pay system to be effective, it must fulfil the condition of the equity theory .Equity in compensation calls for the fulfilment of two basic principles to avoid disequilibrium in pay system. First, what is paid to individual employee must be at per or commensurate with his input or service to the organisation i.e. input=output. Secondly, what is paid to individual employee must be at par with what is paid to colleague in similar organisation in the industry doing the same job. When any of these principles is violated, there is going to be disequilibrium which may lead to dissatisfaction on the part of employees. Adams (1965). Based on this, pay system should accurately reflect the importance of the job role within the organisation.
Incentives are pay systems that reward employees for exceptional performance such as Merit pay provided to employees for their individual behaviour or performance contributions to an organisation, Skill based pay which may take the form of pay increases based on employee’s achievement of particular skills. Incentives could be provided through gain sharing, profit sharing, stock sharing or executive pay system. However, most of these are not applicable in teaching hospitals whose pay system aligns with that of the public service in Nigeria.
d. Performance Appraisal
All the formal process involved in monitoring and improving the productivity of workers is called performance appraisal (Brown and Heywood, 2005). It is the process that includes determining and communicating to employees how they are performing their jobs and establishing a plan for improvement. Ezigbo (2011). Appraisal system begins with job analysis and specification, setting of expectations or targets, performance management , measurement of performance in line with set targets, provision of feedback and subsequent management of the under performers Armstrong(2006). It is a compulsory requirement in university teaching hospitals in Nigeria in line with the public service rules. Mullins (1999) observed that effective performance management should be an ongoing process to appraise the behaviour and performance of staff. He further stated that the key aspect of the process of monitoring performance is ensuring that employees are provided with what is expected of him and the parameters by which his performance will be assessed. Dressler (2008) argued that this has to be agreed with the employee.
Systematic appraisal systems can help in the identification of training needs, employee weaknesses (which may need to be addressed), employee useful strength (that can be utilised for organisational success, employee promotability), and kind of rewarding system to be instituted. Keir (2016). Performance appraisal must be accompanied by complementary HRM practices like formal training, incentive pay and a robust disciplinary system for appraisal system to be effective .(Brown ; Heywood, 2005). Authors have shown that performance appraisal is vital for the organisation success and outcomes such as job satisfaction Ellickson (2002), employee perception of unfairness in treatment. Daily and Kirk (1992), and turn -over intention. Dailey and Kirk (1992). Dailey and Kirk (1992) warned that “ineffective performance appraisal and planning systems contributed to employees’ perceptions of unfairness”. Managers should therefore ensure that whatever appraisal system adopted must be fair and just in the eyes of stakeholders
e. Industrial relation/Employee Relations
Industrial relation is the regulation of employment relation in an employment situation by the employer/management or their organisations, the workers organisation and a third party, private and or government acting as an umpire, or controller. Akpala (1982).The purpose of industrial relation is to establish job rules and co-operation of man power resources toward attaining the objective of the employee, the organisation and the state through collective bargaining as a process whereby representatives of two parties meet and try to negotiate an agreement which states the nature of future relationship between them. Akpala (1982). Industrial relations play a great role fostering and sustaining industrial democracy. Monappa (2004). Well managed industrial relations creates peaceful and appropriate working environment for employees, good enough for them to have job satisfaction. Khan and Jahe, (2008).Employee relations on the other hand consist of human resource management practices that involve relationships with employees either directly or through collective agreements where trade unions are recognized. Employee relations are concerned generally with managing the employment relationship. Armstrong (2006). These relationships have to do with the agreement of terms and conditions of employment and with issues arising from employment. Armstrong (2006). An .Employee relation is broader in coverage than industrial relations, which are essentially about dealings between managements and trade unions.
Studies have indicated a number of HR practices that could be tested in connection with employee organizational outcomes. Eleven human resources practices were used by Huselid in 1995. They were selection, appraisal, compensation, job design, information sharing, grievance procedures, and assessment of attitude, labour relations, and recruitment, training and promotion criteria. Huselid (1995) .Eight HR practices of training practices, compensation practices, employee performance evaluation practices, promotion practices, governance procedures and social security were used by Teseema and Soeters (2006)
In this study, we are going to use recruitment and selection, training and development, compensation system, performance appraisal, and employee relations/involvement. They are selected since they form the major functions of human resources management commonly used for research studies of this type.