Human resource management is a very crucial function in any modern organization that seeks to achieve its objectives including the task of ensuring that employees are motivated by use of effective performance appraisal techniques such as reward schemes. This is because people are the most important asset an organization has as compared to other assets that aid in running the organization. Therefore for accomplishment of organizational effectiveness, performance appraisal is the most important critical factor that must be paid attention to by the management of any business firm wishing to remain competitive as well as remain international in scope. Human resource has the responsibility to coordinate all the activities within the organization and they have to ensure efficiency in productivity of the organization hence firms should maintain a motivated workforce (Fiddler and Atton, 1999).
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Performance Appraisal and Business Goals
The success of any organization is mainly determined by its human resources and hence there is a need for a motivated workforce. In fact human resource of any firm has to be innovative, energetic, creative and motivated in order to remain focused in scope. Indeed any company should have guiding principles which help the employees to attain set goals and objectives. Such principles define what each and employee is expected to do thus attain their goals. The principles also points out how the company promotes trust, pride, professionalism, trust, teamwork and openness in their undertakings. Such principles however, do not concentrate much more on the issue of performance appraisal such as motivation which is a key factor in organizational success. Therefore this paper will attempt to reveal the importance of a motivated workforce as well as the different methods that can be used to motivate the workforce particularly in business organizations (Hoyer, 2001).
Research indicates that skills, knowledge and experience represent capital due to the reason that they enhance productivity. Companies invest in skills training and development to be competitive, but the failure to manage the person trained could be considered a great setback. Employee retention is basically essential in grasping a complete return on investment. Based on the human capital theory, it is imperative that companies invest in skills training and development, but they should also align the performance appraisal such as compensations and benefits of the person with his or her achievements. Research reveals that in many modern business organizations there is obviously a lack in recognizing the achievements of skilled employees. Without recognition and growth, there is no reason for the employee to carry on his good performance, or worse, to continue his service to the organization (Palmer and Akin, 2006).
Motivation can be assumed as the reason or the force behind why a person does what he or she does. Sometimes, it is also a means to make the person perform better and more efficient. Basically there are three assumptions in human motivation as established in research. The first one assumes that motivation is inferred from a systematic analysis of how personal, task and environmental characteristics influence behavior and job performance. The next one infers that motivation is not a fixed trait; but rather it refers to a dynamic internal state resulting from the influence of personal and situational factors. This means that motivation as one technique of performance appraisal may change with changes in personal, social or other factors. Finally, it should further be noted that motivation affects behavior which in turn will lead to poor performance by the employees (Legge, 1995).
As social beings, basic human interaction and communication are considered as relevant needs that should be attended to in the working environment. The rational and emotional aspects of a person enable one to be participatory and reflective on certain aspects of the operations in the organization. Social interactions are necessary so as to provide for the social needs of an individual. Since people are more than a resource of an organization, their active and contemplative nature will always be open and shown. Aside from the primary needs for existence, social interaction in the form of companionship helps in shaping the character of a person as a quality individual that is capable of doing complex things and acting complicatedly (Murray and Schoonover, 1988).
Performance Appraisal in BAT Company
Research reveals that employee motivation is the key to the profitability and competitive success of BAT Company in the current business world i.e. particularly in the tobacco industry. Research has shown that BAT Company pays well its employees and thus they do their jobs well and in return the company’s performance has been greatly enhanced. In BAT Company for instance, the employer-employee relations are considered very important thus ensuring that the company realizes its mission. In fact, it has been researched and found out that well paid employees of BAT Company have translated to satisfied customers i.e. with motivated workforce they do their tasks well thus retaining and attracting more customers. Hence, with proper policies and administrative skills utilized by BAT Company, managers have indeed created a satisfied workforce through such an appraisal performance technique. BAT Company employee performance appraisal technique has taken different forms that include the following:
The first factor is of job security which is the primary driving force an employee Centres on while working; it is the ability to retain the job for as many years as possible. Personal organization and family budget go in line with job security concerns. When an employee is confident of his or her job security at the workplace, his performance is far much better than a case where he or she is not sure of being retained in the next year because he is motivated to work. With job security BAT employees will know that at the end of month he/she will be paid thus becoming motivated. This implies that less time is wasted because employees are okay and thus have enough time to work for the company (Murray and Schoonover, 1988).
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The other factor that has enhanced success in BAT is that of pay satisfaction; research indicates that people don’t work unless they receive pay for work done as a motivator which is therefore the key to employee satisfaction. BAT Managers normally use financial rewards to improve their worker’s performance. Good salaries equally translate to better work. Every worker would want to continue working for an organization which pays him or her well which has been the case in BAT Company. Therefore BAT Company has saved time since the management does not have to spend time of hiring new employees every time because the current employees are secure and they have no reason to look for other opportunities (Baker, 1999).
Safety in the work environment is another key motivator that BAT Company has embraced in order to retain and attract its employees. People who feel safe in their working environment tend to perform better than those who don’t. Safety in BAT Company has been in the form of human-machine relations and in human-human relations. With such provisions employees have utilized their time effectively as well as minimizing hazards which might have cost the organization a lot in terms of medical expenses. Flexibility to balance life and work issue is another key factor that has been adhered to by BAT Company in the workplace. Proper coordination between the work issues and personal life is necessary to balance both which has been the case in BAT Company. Research shows that overworking and work stress usually affect human health both in social, mental and physical terms (Maund, 2001).
Another source of motivation is that of using rewards and gifts in order to inspire employees in BAT Company. Research indicates that rewards used by the company have not been very big inducements but the small gifts given to anybody thus its employees eventually feel appreciated. For example a handwritten thank you note which is also utilized in BAT Company is normally appreciated and cherished. Everybody loves chocolate, and provision of such kind of rewards especially at the weekends and special days like Christmas and Valentine days, has helped to build positive relationships between the BAT Company management and the employees. Research indicates that gift certificates such as birthday wishes are a morale booster to self-confidence of the employees. BAT Company has also offered its logo merchandizes in form of t-shirts, caps, mugs, pens, jackets and computer mouse pads thus boosting the morale of the employees because they are proud to be associated with BAT success. In addition, BAT has been utilizing motivational posters which are strategically drafted for individual recognition for job well done. In most cases, people would want to know if their work has made some difference and therefore provision of such rewards by BAT Company has encouraged them thus motivating the employees (Baker, 1999).
Another way of appraising employees by BAT company is through praising them; for instance if they have fulfilled their undersigned tasks effectively. The firms’ management has strategized by ensuring that they keep the records of the performance of employees. Any employee who shows commendable improvement is usually praised in the organizational weekly, monthly and also the annual meetings. Through this employees have always been motivated and thus improving their performance so that they can also be praised another time. However, this should not just be carried out in the formal meetings only, but managers should make time to meet with individual employees who are reported to have been performing better and praise them for the good work. This has effectively played a big role in motivating the employees in BAT Company. This implies that BAT Company employees will remain committed to the organization thus less labor turn-over rate which in the process saves valuable time and cost that could have been experienced if the company did not effectively appraise its employees (Bagley and Savage, 2006).
Effectiveness and Efficiency of Performance Appraisal to HRD
Research reveals that effective performance appraisal techniques such as good motivation systems yields overall positive reinforcement in an organization. It is widely known that positive reinforcement is a very effective tool since it acts as a stimulator to achieving the set goals. It encourages the desired behavior in organizations. It normally stimulates individuals to take positive actions since they would want to gain by getting valuable things which may either be external or internal in nature. When a performance appraisal technique such as motivation is effectively designed and managed, then it can help in the overall reinforcement of desired behavior including performance.
Another aspect is that performance appraisal stresses on the point that each reward needs to be fully earned by the performer before he or she is rewarded. This is because there are some organizations which reward employees and yet they have not fully earned the reward. For the entire performance of the employees to be improved, managers need to ensure that employees actually attain the laid down measures for them to be rewarded. When this is not effectively carried out, it works negatively on the employees’ performance.
Performance appraisal techniques such as good reward systems are very vital in every organization. This is because they play a big role in improving the performance of the staff. Organizations can use reward systems to improve the performance of their staff by praising employees who attain set targets. This can be done in organization meetings or also at individual level. Rewards have to be carried out often for then they achieve better results. Managers in organizations have to ensure that the set measures are attainable for them to motivate employees to improve their performance.
Performance appraisal techniques such as motivational drives play an important role in achievement of goals by employees in a work place. David McClelland identified four drives of motivation; power, affiliation, achievement and competence motivation drives (Thomson and Rampton, 2003). Achievement motivation is said to a drive some individuals have to follow in order to achieve their set objectives. Under this drive individuals will always be concerned with accomplishing their tasks and actually progressing to higher levels. Achievement oriented workers always work very hard when they are sure that they will be compensated for their hard work. Many scholars have linked achievement drives to cultural value adopted by the Japanese in the past known as Kaizen. Kaizen emphasizes industrial achievement n Japan is through improvement of surroundings around the employees in organizations.
Affiliation motivation is a force to relate with persons on a social foundation in the workplace; individuals with affiliation motives perform well when they are praised for their positive attitude and teamwork. Competence motivation is a force to be first-rate at doing something; in essence it is a drive that allows a person to perform superior work. Those with this kind of drive always seek occupation mystery, utilize their skills for solving problems and enjoy such use of such skills and always try their best to be creative and innovative in their undertakings. Power motivation on the other hand is a force that influences employees and actually leads to altering situations. Always power motivated employees have the desire to generate a force on their firms and are always risk takers. Excellent leaders can be found in this category only if such individuals use their drives for organizational purposes.
Organizations need to move away from the issue of compensating employees once a year or a month. Even the praises don’t just need to be carried out once in a year. When the rewards are often, employee’s performance is greatly improved as compared to having the rewards only once in a year. This is because when the reward is carried out often, employees tend to easily relate it to the performance than when managers wait to reward them later on. This is normally more effective (Debra and Perry, 1997).
For compensation to be effective and to improve the performance of employees, then managers need to put in place meaningful measures and realistic ones. This is because when the measures are not attainable then the employees’ performance will not improve. Managers have to be sure that that the measures are very realistic this helps employees to strive to achieve them. But once they realize that the laid down measures for them to get the reward are just not attainable and realistic, then it just doesn’t become effective. Another aspect is that the performers or employees always need to see that that the reward opportunities in the organization are directly linked to the effort that they make. When the rewards are directly linked to the effort then the performance is bound to improve.
Personalizing the compensation is another way that many organizations utilize through which we find that there is the anchoring of the meaning of achievement more deeply than if it is treated as an administrative task that is mechanical. Managers need to carry out research on the employees in the organization and know the compensation that would motivate the workers to improve their performance. When this is effectively carried out then the employee performance will automatically increase.
At the same time organizations can use compensation to improve the performance of employees by incorporating appraisal or promotion for employees who have a good record of performance. This can be done by the managers being on the look out for employees who perform well. For instance cleaners who always arrive at work in good time and who carry out their responsibilities well without supervision can be promoted to become leaders of the entire staff in charge of sanitation. This makes the rest of the staff to improve their performance knowing that they would be rewarded by being promoted also. This plays a big role in improving the performance in an organization (Mark, 2001).
Performance Appraisal and Human Resource Management
The main aspects of human resource strategies are; employee motivation and retention strategies, employee selection strategies and employee management strategies which in one encompass performance appraisal measures. This strategy if implemented simultaneously in an organization creates a family-like community and environment in the organization.
Human resource management in business terms is the coherent and strategic approach to the management of the working force of an organization. It combines academic, social and business practices in the application of techniques to manage a particular workforce. These practices are designed to go inline with the company’s goals, objectives, vision and mission with specific emphasis on growth and development. An organization needs to attract, maintain and also manage its employees effectively. There is an assumption that employees are just business assets in an organization, but human resource development professionals explain that, these employees have varying goals and needs in life which can be utilized by the organization to meet its targets while assisting the individual persons succeed in their careers (Hook, 2005).
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The following are some of the core functions of human resource management in an organization; workforce planning, recruitment and staffing, promoting industrial relations, personnel development and performance monitoring as well as training, compensation and benefit management. It is considered that the human resource practices used in strategic human resource management enhances techniques, systems and polices developed in line with the performance appraisal management of the organization’s tasks. This performance appraisal promotes strategic planning and thinking in all aspects of employee assessment, problem solving and counseling. Good knowledge of employee behaviors, performance and needs helps the organization to deal squarely with diversity issues e.g. culture, religion, race etc. in fact; studies have shown that, certain human resource practices have contributed positively to firm performance through workforce alignment. It is also related to employee outcomes including; trust in management co-operation, higher commitment in workplaces as well as better employee efforts and involvement among other factors (Baker, 1999).
Manpower planning within an organization is very critical in that, cases of either overstaffing or understaffing is detrimental in one way or another. The economies of scale for the business together with specialization orders are lost if the organization is understaffed. On the other hand, if overstaffing is sustained, it becomes a waste and also expensive for the organization. These factors are therefore part of the planning process being carried out by human resource development officers. They ensure that the organization’s workforce is certainly enough to meet the general duty requirement
Human resource management is referred to in a layman’s language as the management of the people who are working in an institution or an organization. This is done because employee performance affects how far or how successful an organization can be. Human resource management also involves the managers clarifying to the employees the organization’s goals and objectives. Studies have shown that, there is a unique relationship between the human resource management practices and techniques for a company and its overall performance.
Modern organizations passed by the guild structures and as organizations grew larger, skills become increasingly fragmented and specialized and positions become more functionally differentiated. As such organizations should stress on people approaches which includes alterations in attitudes, motivation and behavioral skills through new training programs, selection procedures, and performance appraisal schemes. Indeed, making a business successful in a particular setting demands crucial and detailed studies and examination of the factors that will generate the best results that will serve the aims and objectives of the company (Dyer, 1984).
Ensuring employee performance requires establishing a level of competence which the employee should be aware of as a target to be achieved. This is the measure to be used by managers in determining compliance with the standard and in identifying problems met by the employees in meeting the standard. In developing a training program to enhance the productivity of employees the manager will look at the competency problems of the employees and fashion the program to enable the employees to reach and even exceed the competency standard established for their work. This requires a great amount of perceptiveness on the part of the manager in determining what method of training will be most effective in improving employee competence. Some of the training includes computer software training, internet-based training and self teaching by encouraging innovativeness in the workplace.
A considerable number of companies have developed into an essential part of the period of global competition, increasing development, improved business paradigms, and corporate re-organization. The continuing transformation from the traditional industrial framework with its hierarchical companies to a worldwide, knowledge-founded financial system and intelligent corporations, altering ideas regarding the social contract involving employers and employees, an progressively more adaptable pool of talent and a body of workforce, necessitates human resource (HR) purposes to realign and relocate itself in the vicinity of these drivers. Leavitt (1964) had defined three approaches to organization, which includes structure, technology and people. New formal guidelines and procedures like organization chart, budgeting methods, rules and regulations can also be structural approaches on inducing change (Debra and Perry, 1997). On the other hand, rearrangements in work flow through new physical layouts, work methods, job descriptions and work standards can be done as technological approaches.
Job Descriptions and Performance Appraisal
Job description is all about the relative ranking of an individual job in relation to other jobs that exist within the group. This also refers to technique used in ranking of jobs in an organization. This is normally carried out on the basis of various responsibilities and duties that are assigned to the specific job or task. The results of the job description process include the job being assigned a specific range of payment.
The range normally includes a maximum pay rate that the specific job can attract and also the minimum rate of payment that can be given to a person holding such a position. Job description as a management tool has been used by employers and managers for approximately more than seventy five years. This management tool has been used both in the private and in the public sector. Basing on some generic factors, the value of each job is well defined in the job description process (Harzing and Ruysseveldt, 2004).
Job description is very important to employers and managers. The reason as to why job description as a management tool never goes out of fashion is because it plays a big role in reducing employee turnover. One of the steps involved in job description is bench marking the jobs. This is done in relation to the jobs that have been evaluated before. In this case the bench mark jobs are those that are commonly included in salary surveys found in most organizations. In this process the bench mark jobs of internal pay structures are related to the external structure’s existing in the labor market.
This greatly helps in reducing employee turnover in the various organizations. This is because job description carried out will enable the organization’s pay grades to be at per with competitor organizations. In this case employees will not see the need of looking for greener pastures since their pay grades will be similar to what their colleagues in the same positions are paid in other organizations. This is really important to employers and managers because they will not be worried about losing employees to better paying organization. This generally plays a big role to stability in the organization.
Job description process as management tool is very important to employers. This is because; research shows that job description helps in minimizing conflicts in the organization. Job description process results in the various jobs in an organization being given a pay rate. This is normally clear to employees in the organization. When job description is carried out in an organization, it results in fairness in terms of payment rates given to various jobs in the organization (Brewster, 1995).
Job descriptions help employers and managers to easily explain the reason as to why some employees earn more and others less. Job description helps in the lessening of employee grievances over relative wages. Managers and employees find it easier to solve any problems that arise concerning relative wages. This plays a big role in minimizing conflicts related to salary payment in the organization. This is because it plays a big role in establishing a grading and a basic pay structure which all employees will regard as fair. This explains why job description as a management tool refuses to go out of fashion.
The job description process as a management tool refuses to go out of fashion for so many reasons. According to research carried out in the private and public sector, employers say that this tool is very fundamental in management. This is because it helps them to come up with pay structures that are simple and very easy to understand. This is because most of the organizations have diverse classes of employees. Some are professionals while others are not. It makes it easy for employees who are not so learned to understand the different pay rates. It is less stressing to come up with pay rates for specific jobs using job description method than if other means are used.
According to employers and managers in both the private and public sector, job structures have made their work far much simpler. This is because, once an organization has carried out job description, it becomes simpler to fit new jobs into the previously set pay structures. It is understood that in every organization, new posts and vacancies always come up which were not existing in the organization. In this case employers just use the existing structures to slot in the new pay rate for the created post (Cullen and Parboteeah, 2005).
Job description and evaluation also helps in encouraging healthy competition within organizations. That is why this management tool is still in practice since it was initiated. When job description is being carried out by employers and managers, there are various factors that they normally consider. For instance the level of education of the employees is a factor that is really put into consideration. The experience one has in performing the task is also considered. These factors are normally well spelt out to employees in the organization. This normally acts as a motivation structure for employees in the organizations. Research shows that in organizations where job description is carried out, it resulted in employees striving to further their studies.
Employees strived to gain more experience in their specific jobs. This helps managers and employers to accrue qualified personnel in the organization. This is because job description normally goes hand in hand with employee appraisal. That is why employees strive to climb up the ladder in the organization. They desire to outdo or have a pay rate like that of their colleagues. This explains why job description as a management tool refuses to go out of fashion despite the period that it has existed in the business sector.
One of the steps that are encompassed in the job description process is determining the relative worthiness of the job in the organization. In this case various jobs in the organization are evaluated to determine how important they are to the organization. This is important because it helps employers and managers to do away with positions that are not very fundamental in the organization. This includes positions that the organization can do without. This is very important to many business organizations because many of them lose large lump sums of money paying employees that they do not actually need in the first place. This helps organizations to save large sums of money that is normally paid to these employees. This also helps employers to create posts in the organization that are fundamental or those that are needed most. This results in the general success of organization (John and Keith, 1997).
Job description as a method of determining pay grades is very effective. The entire process bases on various factors like education and experience of the employees. Pay grades can also be designed basing on the general performance of the employees. This however is very subjective since there are some jobs that performance cannot be measured. In jobs like sales, the performance of the employee can be measured basing on the amount of sales. In this case pay grades can be determined in relation to the employees’ general performance.
Job description encompasses ranking jobs in an organization. This management tool refuses to go out of fashion for various reasons. This is because job description greatly helps in reducing employee turnover in organizations. Job description helps organizations to reduce grievances that are wage related. This process helps managers to come up with simple pay structures that are easily understood by all employees. Job description also helps in creating healthy competition among employees (Harrington, Esseling and Van Nimwegen, 1997).
Performance Appraisal and Corporate and HR Strategies
Corporate strategy is a plan of action that determines the way forward for the whole organization and it is usually a long term strategy for an organization and its start with mission statement. This strategy takes 3-5 years to be implemented though duration may vary from one organization to the other. Many organizations over the past few years have been dedicated to examining their corporate strategy every year with the hope of nonstop enhancements. In order to be aligned with its mission and vision statements, the corporate strategies of the corporation are founded on the basis of being ethical, truthful, and dependable which boosts the morale of the workforce. On the other hand, Human Resource strategy is a plan of action that is set to guide the HR department in major staffing decisions pertinent to business level strategy which obviously includes performance appraisal issues. In essence it focuses on total HR needs, training needs, rewards system, and employee relations in order to motivate the workers to accept and support the business and corporate strategies. Any modern business organization should be accredited with; payment of fair salaries and wages, provision of house allowances and medical coverage, other fringe benefits, good promotional systems, good communication and motivational structures. In general the HR department should do its best in motivating the employees of the organization to being committed to their work which in turn will lead to effectiveness and efficiency of the firm. The organizations for instance should provide training needs to their employees which will aid them to cope with the ever increasing changes in technologies (Maund, 2001).
Management practices are employed in order to enhance the effectiveness of the performance appraisal utilized by a firm, and these management activities are planning, organizing, leading, and controlling. The management of any firm through the planning function is responsible in coming with a schedule of business activities that will result to attainment of the set goals. The planning managers outline what to be done and the expected output from the employees. The organizing function of any organization should deal with the issue of allocating the tasks to the employees respectively according to their competence. Resistance by the workers may be experienced if the allocating process used is viewed to be inappropriate and oppressing which always leads to poor organization performance. So they have to convince the employees that everything will be okay and there interests will be taken care of i.e. by use of appraising techniques. The leading/directing function of any firm is faced with the tasks of demonstrating to employees how to do various activities and also involves the employment of charismatic leaders who can influence the employees towards positive attitude of performing their work. The Controlling management practice is responsible for monitoring the results of any undertakings and thus can make any corrections or adjustments if need to do so arise particularly when appraising the employees (Michael, 2006).
Conclusion and Recommendations
From this study we can conclude that performance appraisal is a key factor to success of an organization. It should be noted that as a manager, your impact on employee satisfaction is great and immeasurable; therefore the management of any firm should look for convenient, cost-conscious and appreciated ways of performance appraisal such as excellent motivation structures in order to build a motivated, dynamic and committed workforce that will result in better productivity and profitability of the firm.
The most critical factor that results to poor management of many organizations is that of the inability of senior managers to provide necessary support for the accomplishment of organizations goals through utilization of effective performance appraisal techniques. It is substantiated that the behavior of many senior managers has contributed immensely to poor success of the organizations. This is explicitly witnessed in the performance appraisal process. Senior managers have adopted behavior of self centeredness and they always think that they are the only one who makes viable decisions in relation to goals being attained hence resulting to low morale by existing workforce (Ann, 2003).
This has resulted to lower level managers and employees not to perform quality work because they are always not motivated when carrying out their respective duties. No matter how well the organization’s values and culture is drafted it requires the will of senior managers to maintain such performance appraisal values and cultures. The senior managers can change the attitude of their employees if only they can lead by example which will lead to good motivation and thus successful attainment of set objectives. Human resource is the most vital asset in any organization and senior managers have to concentrate their management efforts in their staff development in order to boost their morale and thus increase in productivity. Employees’ satisfaction strategies should be formulated in an organization in order to ensure smooth running of the firm. It is the key to the economic success of any company. Research has shown that a satisfied employee does his job well and in return the company’s performance is greatly improved.
The HR department of any organization should formulate corporate strategies that incorporate performance appraisal analysis and clarification of the corporation mission statement. The department should also offer guidelines to the rest of the management when considering how business should develop and in what direction it should be directed to. In this line the HR department should clearly ensure that the strategies developed in the organization should be the ones that direct efforts towards accomplishing the organizational basic mission or purpose.
In order to enhance the activities of the corporation, the HR department should redesign the following areas in order to remain competitive in the market place and to respond to any changes in the market place; Firstly, the department should consider product scope, which will involve the current and future products to be produced by the organization. This will ensure that they meet the needs of consumers. The second dimension is the market scope, which will involve the HR department cooperating with marketing department in order to identify the customers served and any changes that may be anticipated. The third scope is the technological aspect and it involves decision regarding to products produced and the anticipated technologies. More importantly proper training should be carried out to ensure that the employees are equipped with skills and competence regarding to technologies introduced (Armstrong, 2006).
Also strategic objectives that encompass performance appraisal measures of the organization should be formulated; this implies that the HR department should turn the mission statement in to supporting objectives for each level of management in the corporation. The objectives formulated should be directed to key result areas in the corporation where performance is necessary for business survival. The corporation key result areas that should be considered include; marketing, finance, production, human resources, physical resources, social responsibility, and profit requirement.
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