Literature review Essay Example | Topics and Well Written Essays - 1500 words - 1

Literature review - Essay Example However, careful consideration of the research works of Vlachos (2008) and Weir (2002) reveals the fact that very few researchers ever succeeded in establishing clear route map for addressing the question â€Å"How HRM can direct performance in service driven organization?† It is evident from the above discussion that significant amount of argument exists among scholars regarding role of HRM in improving performance in service organization. Therefore, the study will try to dig deep on the topic â€Å"Establishing Equilibrium between HRM Power Index and Organizational Performance in Banking Service Industry† with the help of existing literature in order to understand whether HRM power indexes play significant role in improving service organizational performance or not? Banking sector has been selected as representative of service industry in this literature review. 2.0 Key Discussion 2.1 HRM Power Index and Organizational Performance Guthrie, Spell and Nyamori (2002), Hu ang (2001) and Gollan (2005) defined HRM power indexes as the different role performed by the human resource departments such as training and development, performance measurement, recruitment etc which can influence operational performance of organizations. Taking help of the research works of Bae and Lawler (2000) and Collins and Smith (2006) reveals the fact that high-involvement HRM practices accompanied by selective staffing, performance management, employee empowerment and extensive training might develop the employees to handle grater work responsibilities and increase sustainability in organizational environment. Although, these scholars identified four HRM power indexes such as performance management, employee empowerment, selective staffing and extensive training but these scholars never tried to highlight how HRM practices can improve organizational performance. In such context, Snape and Redman (2010) and Sun, Aryee and Law (2007) argued that organizational performance is a multidimensional term which can be effected by strategic initiatives and operational activities of companies. These scholars also argued that HRM might be used to increase employee productivity but organizational performance can not only be driven by employee productivity. In such context, Wall and Wood (2005) and Collins and Smith (2006) found it very difficult to link the integration of HRM, power indexes with the financial performance improvement in companies. Let’s take example of Company A which is performing well in terms of increase in financial revenue or capex building but it will be very difficult to separate the role of HRM in improving overall performance of the company because vertical integration of supply chain activities, business strategies, technology implementation and many others might have influence the performance. While conducting research on Arabian countries, Al-Hamadi, Budhwar and Shipton (2007) and Budhwar, Al-Yahmadi and Debrah (2002) found that there are organizations which not even consider HRM as the important vertical in improving performance of the organization. These scholars also pointed out that in case of service organization, employees frequently interact with customers and poorly managed employees might not be able to