Introduction
In the article “Strategic HR system differentiation between jobs: The effects on firm performance and employee outcomes,” the authors examine the effects of premeditated HR management system differentiation on employee outcomes and business performance. The authors seek to inform managers and the firm’s top managerial team to consider the effects of differentiation on organizational performance because operational strategies are needed in today’s competitive business environment. In much of the article, the author’s main motive is driven by the need to understand how investments in HR systems affect organizational performance. As a result of this study, the authors propose that the firm’s top management team should comprehend how HR differentiation impacts employee-level and firm-level outcomes because organizational performance depends on the strategies used. Understanding HR differentiation may, to some extent, help the firm’s management to put in place strategically valuable jobs that improve organizational performance and employee outcomes.
Key Constructs/Terminology
A firm’s pivotal talent – Pivotal talent is an individual’s specific talents that determine their competitive position in a firm. For firms, pivotal talent is about recognizing and maximizing customer value.
Star employee – A star employee is someone a firm considers ethical, innovative, accountable, and results-driven.
Extrinsic incentives – These are rewards used to motivate employees to achieve a specific target.
Trade-off – Involves balancing of factors that may not be attainable at the same time.
Turnover intention – Worker intends to change their positions or leave their jobs.
Practical Implications of the Article
The discussions from this research study reveal several practical applications worthy of future use for managers and employees. For instance, the article advises managers to consider the benefits and resourcefulness of HR practices. Considering the monetary returns of HR systems such as selection, hiring, and other valuable programs is crucial for determining organizational performance for managers and the firm’s top managerial team. Similarly, understanding employee attitudes, including job performance, turnover, and employee engagement, which are deemed challenging to quantify, can help assess the workers’ potential benefits in the firm (Schmidt et al. 2018). At the core of this article is the impact of strategic HR system differentiation. Imperatively, evaluating the overall high-performance work systems investments can help generate value for the firm, including assessing how the financial benefit on the well-being of employees affects organizational performance. It is important to consider some models that ensure employee benefits, such as the group engagement approach that focuses on the social backgrounds of fairness. The firm’s top management team should ensure all employees feel they are high-status shareholders.
My Opinion
The article offers insightful information about the importance of high-performance systems, organizational citizenship behavior, and human resource management. Most importantly, Schmidt et al. (2018) indicate that labor costs related to various HR systems decide whether the firm’s investment will produce the desired returns. I think the article’s explanation of planned differentiation in human capital and how it is connected to higher organizational performance is crucial for managers. I find it interesting that the article suggests that managers consider psychological costs as a crucial tool for managing the employment relationship to achieve higher organizational performance. Perhaps, organizations consider psychological contracts when hiring an employee. The authors indicate that HR system investments should enhance fairness perceptions among workers with fewer benefits. With this, managers will transparently link workers’ goals to the organization’s priorities and ensure a strong element of flexibility. After all, fairness makes employees respond to a firm’s demands in a volatile competitive environment.
Conclusion
From the readings, the authors suggest that organizations should provide positive messages about workers’ status, particularly those who receive fewer investments due to less work or impact on the organization. I wonder if this will improve their performance. I think the future of the workplace should incorporate inclusivity and foster organization. In particular, organizations, especially those that manage large-scale organizational transactions and transformation, should embrace management philosophy and adopt appropriate HR differentiation strategies to strengthen the firm’s performance.
Reference
Schmidt, J. A., Pohler, D., & Willness, C. R. (2018). Strategic HR system differentiation between jobs: The effects on firm performance and employee outcomes. Human Resource Management, 57(1), 65-81.