ipl-logo

The Human Resource Management Theory Of The Human Capital Theory

1387 Words6 Pages

Since 1964, when the economist Gary Becker introduced the concept of the “human capital theory”, the field of human resource management has seen an increase in interest and commitment placed towards researching more effective practices of HRM. According to Wright, McMahan, and McWilliams (1994), this increase in commitment can be seen as a result of many factors including the aim to develop employee skills, increase satisfaction, and also as a way to keep a competitive advantage over competitors (as cited in Ballesteros-Rodriguez , De Saá-Perez , & Domínguez-Falcon, 2012). Furthermore, the increased commitment towards researching more effective practices of HRM recognizes the importance that such practices have towards improving the skills and performance of employees (Wright & Boswell, 2002). Several forms of HRM practices exist including the performance-based incentive practice in which companies make an investment by providing bonuses to their employees based on employee performance. Ultimately, companies hope that this investment will result in improved employee work performance and thereby overall company success (Gerhart, Rynes, & Fulmer, 2009). The practice of rewarding employees with bonuses due to the successful completion of work goals has long been studied and is subsequently supported by several economic theories including the expectancy theory (Vroom, 1964) , and the reinforcement theory (Hamner, 1975) (as cited in Bareket-Bojmel, Hochman, & Ariely, 2014) .

Show More
Related

  • Analysis Of The Royal Bank Observation

    1114 Words  | 5 Pages

    These factors give workers the drive and direct them towards the goals they want to achieve and maintain (Greenberg, 2011). This creates emotions of achievement. Employees feel they can achieve the desired goal because they have been equipped with necessary materials and equipment and the support of their colleagues who also stand in for them when they are indisposed or absent and encourage them in the course of their work. Being commended by management also excites them as they realize their efforts are being noticed and

    Read More

  • Human Resource Management Case Study: Square International Company

    1632 Words  | 7 Pages

    As Square International Company faces a tighter budget resulting from the recession, the attractiveness of non-financial incentives increases. There are various ways of acknowledging employees’ efforts – from a private e-mail to team pizza parties in celebration of team successes. Praising a behavior immediately following it is likely to encourage its repetition. This is congruous with the reinforcement theory. Provided that managers refrain from manipulating the system and subjecting it to favoritism, employee recognition is an effective and low-cost means of stimulating performance (Robbin and Judge,

    Read More

  • Expectancy Leadership Theory

    1675 Words  | 7 Pages

    Moreover, the quality of an inclination to act certainly relies on upon the strength of an expectation that the act will be trailed by a given result and on the allure of that result to the individual. The theory concentrates on three connections: expectancy or exertion-performance relationship the apparent likelihood that applying a given amount of exertion will lead towards performance. Furthermore, instrumentality or performance reward relationship the extent to which the individual trusts that performing at a specific level will lead to a desire result and compensates individual goals relationship the extent to which organisational rewards satisfy an individual goal or needs that might encourage them to perform their part in a more appropriate manner. However, the managerial implication of expectancy theory incorporate serving as motivators, results must be desired by people, and in this manner, the managers ought to distinguish the results for which workers might want to be remunerated. The association between workers' abilities, their conduct, the encompassing environment, and the accomplishment of the occupation ought to be clarified (Goldsmith,

    Read More

  • Gig Economy Advantages And Disadvantages

    719 Words  | 3 Pages

    Devising company policies to reward, train and incentivize workers universally would be essential towards having an engaged workforce, which will translate to greater customer satisfaction and company returns in the long

    Read More

  • Gulf And Burger Case Study Essay

    851 Words  | 4 Pages

    Alternative #1: Reward System and Incentives The organization is likely to succeed when workers are motivated. A reward is a positive outcome result from an employee's performance in the organization. An effective reward system such as incentives is not necessarily expensive.

    Read More

  • Performance Philosophy Vs Entitlement

    1746 Words  | 7 Pages

    A performance-oriented philosophy is followed; no one is guaranteed compensation just for adding another year to organisational service. Instead, pay and incentives are based on performance differences among employees. Employees who perform well get larger compensation increases; those who do not perform satisfactorily receive little or no increase in compensation. Thus, employees who perform satisfactorily should keep up or advance in relation to a broad view of the labour market for their jobs, whereas poor or marginal performers should fall

    Read More

  • Advantages And Disadvantages Of Self-Determination Theory

    758 Words  | 4 Pages

    For employees, things that aren’t intrinsically interesting requires extrinsic rewards to motivate. Employees can be motivated by extrinsic rewards such as additional monetary compensation, gifts, gift cards, or other monetary rewards. These types of rewards could lead to improved performance and higher motivation. It would also motivate a worker, but only satisfies the person’s lower-level needs. The flip side to this type of motivation stimuli, employees will want the same or better reward to maintain the same level of motivation and performance outcomes.

    Read More

  • Chern's Staffing Strategy Case Study

    1144 Words  | 5 Pages

    Employees that meet quotas and perform well are rewarded with bonuses based on customer service and sales, in addition to advancement within the company. These procedures and guidelines reinforce the idea that your company desires quality employees that are willing to improve the company and themselves. After a talent philosophy has been developed, a Human Resources strategy must be developed. A Human Resources strategy links the company’s business strategy and goals with the functions of Human Resources. Chern’s Human Resources strategy fits the following description: Human Resources desires to

    Read More

  • Walmart Human Resource Management Analysis

    1275 Words  | 6 Pages

    INTRODUCTION Human resource management is the strategic approach to the management of an organization 's most valued assets - the people working there who individually and collectively contribute to the achievement of the goals of the business (Armstrong, M., 2006). In other words, human resource management is a to work with employees, and for the employees, to help them solve their problems. Therefore, human resource is a complicate department, as they deal with people who already work there, they also deal with several issues which happen among new employees, such as recruitment, selection and so on. Nowadays, employee retention becomes one of the most significant issue in the organizations, and managers are aiming to find the best employees

    Read More

  • The Harvard Model Of HRM

    983 Words  | 4 Pages

    The Harvard Model of HRM: Back in 1984, Beer et al developed the Harvard model of the HRM. Beer et al believe that the human resource is passes many of pressures nowadays, therefore, eliminating the pressures is required. These pressures could be eliminating by having a long-term perspective in terms of controlling people and potential assets rather than just variable costs. As a result, Beer et al approach the Harvard Model of the HRM. The purpose of this model is to solve the pressures that may occur in the HR of any organizations; these pressures include all management decisions that will affect the relationship between the organizations and their workers, in addition to a clear plan for the HRM policies and procedures by the manager of

    Read More

  • Literature Review On Employee Performance

    1158 Words  | 5 Pages

    1.4.1 Literature Review HRM practices are a process of engaging, motivating, and maintaining employees to ensure the organizational survival (Schuler and Jackson, 1987). According to (Delery and Doty, 1996) HRM practices are prepared and implemented in a way that human capital plays important role in achieving the goals and objectives of the organization. The appropriate use of HRM practices strongly influence the standard of employer and the degree of employee commitment (Purcell, 2003). HRM practices like, training and development, performance appraisal allow the employees to do better in order to enhance the organizational performance (Snell and Dean, 1992; Pfeffer, 1998).

    Read More

  • Coworker Support Theory: A Case Study

    708 Words  | 3 Pages

    In exchange for their loyalty towards the orgnization and their effect for their work, employees form expectations. To improve the quality of their work, to realize their career goals and to ensure that they work efficiently, the organization has to mobilize various incentive mechanism. Organizations can support their employees by establishing properly working human resources procedures and performance evaluation systems, concentrating on career management activities and improving the employees’ physical working conditions. Organizational support theory explain the psychological process underlying POS as follows: Firstly, POS in the basis of reciprocity norm creates a feeling of necessity concerning the organization working towards its goals and considering the

    Read More

  • Theories of Motivation

    884 Words  | 4 Pages

    A person achieves his goals in order to satisfy his feelings and these goals make him behave and act in a way. This goal directed behavior and performance lead to effects or comments. Also, each goal may be difficult and challenging and the person needs to show goal commitment in order to reach that goal (Mullins, 2010, p.277). The choice of incentives depends on the way an employee thinks, on productivity and other factors in order to be beneficial both for the employees and the organisation.

    Read More

  • Swot Analysis Of Hospital

    2253 Words  | 10 Pages

    CHAPTER 1 INTRODUCTION: 1.1 Industry Profile: The health care industry is also called as medical industry or health sector. The health care industries are one of the fast-developing industries in the world. It is one of the economical segment, which offers medicines, drugs and various other services for treating the patients. This sector is considered as the social sector and is monitored by the State and Central Government.

    Read More

  • Disadvantages Of Reward System

    797 Words  | 4 Pages

    As per Brickley, the reward system must encourage the employees to stick to the organisation for longer periods as well as increase the motivation and commitment to the company therefore lead to the increase in productivity and profit maximising. [ct. Brickley 2002, pp.172]. On the contrary, Holmes stated that, there are many negative significances lead by reward system if not used properly. Sometimes,

    Read More

More about The Human Resource Management Theory Of The Human Capital Theory

Open Document