Managing The Human Resource Environment


Human resource is highly essential for an organization’s growth and development. However, for positive reinforcement of laws, proper design processes, policies and procedures are designed. There are four common dimensions of HR practices that were identified. These dimensions help companies deal with competitive challenges and tough situations with much ease (Dowling, 1994).

This essay focuses on four dimensions of human resource management practices along with relevant examples to highlight each of them.

The Four Dimensions

According to Noe (2011), the four dimensions of human resource management practices are:

  1. Managing the human resource environment
  2. Acquisition and preparation of human resources
  3. Assessment and development of human resources
  4. Compensation of human resources

Employee commitment is an important goal of Human resource management. These dimensions are designed to understand how various HRM policies and practices influence commitment in various organizations (Juyal, 2006).

Managing The Human Resource Environment

Managing The Human Resource EnvironmentThe human resources are managed using General systems theory. In this theory, skills and abilities are treated as inputs from the environment, employee behaviours are treated as throughputs and employee satisfaction and performance is the output. This open systems model is highly essential for utilizing and retaining resources (Jackson, 1995).

The second theory that forms a concrete basis is the transactions costs theory. This theory takes into consideration that for setting up a business enterprise, governance structures associated with evaluating, establishing, and monitoring are paid keen attention. To further employ this, implicit and explicit contracts are established with government organizations and the business enterprise.

Another theory that guides management is the Institutional theory, which states that there are variously internal and external factors guiding an organization. Internally, the pressure arises from formalized structure and processes while externally; the pressure includes state laws and regulations, license and certificate professions, and other competitors (Jackson, 2007). Therefore, the HR department should design laws, policies, and procedures considering both internal and external factors for the betterment of the company and the employees.

For example, a company can retain maximum employees by designing harsh rules based on caste, color, and creed. If a company has strict laws against racism and obscene behavior, it is easy to retain many international, national, and female employees.

Acquisition and Preparation Of Human Resources

This dimension majorly includes recruitment and selection. It also ensures a good, healthy, and safe work environment for employee’s growth. After recruitment, the HR department then focuses on employee’s systematic competence acquisitions and continuous learning using training and development programs (Demo, 2012). This dimension is based on Resource dependence theory. This theory states that resource exchange is the main feature linking the organization and constituencies.

For example, the personnel department supplies resources to every other department in the organization. By doing this, the personnel department has acquired power over other departments to the extent that other departments are dependant on HR.

The other theory that is considered here is the Organisational learning theory. This theory focuses on the ability of an organization to learn from changing times and new knowledge. Also, by implementing the new wave in the present organizational culture, employees and procedures will further help in retaining employees (Itika, 2011).

Assessment and Development of Human Resources

This dimension focuses on evaluating the employee’s performance and competence that is highly essential for deciding promotions and career planning and development. This dimension is dependant on human capital theory and agency theory. The agency theory is based on contracts that are built between parties who delegate work to the other (Boxall, 2007).

For example, the recruiting agencies and employment firms look for employees and recruit them for a bigger organization. The employment policies and procedures are built to satisfy both organization and the recruiting firm.

The other theory is human capital theory. This theory focuses on the productive capacities of humans like skills, experience, and knowledge. These take into account all costs that are utilized for motivating, monitoring, and training the employees. Collectively, they are termed as human capital investments. The HR department needs to make sure that whatever is spend on retaining employees should be incurred as a profit. Now, human capital can be increased in two ways. First is external capital where the HR team spends money to employ the best talent in the market. However, over-dependence on external resources is considered risky at times. The other is internal where the organization hires resources on less compensation but trains and develops them during the course (Itika, 2011).

For example, in the restaurant business, people with normal high school degrees are hired but they gain experience with on-the-job training, which is a win-win situation for the hotel and the employee.

Compensation of Human Resources

This includes an organizationally articulated proposal that values and rewards the employee’s performance with different remunerations and incentives. The Human Resource department needs to make sure that compensation is fair, meets industry standards, and is high enough to allure the employee to stay in the present organization. The compensation is usually decided based on education, years of education, and skills acquired. Compensation and reward may sound similar to few but actually have different root meanings. While compensation is the return for an employee’s work, the reward is a motivation for good and outstanding work. It motivates the employee to further demonstrate high quality and efficient work ethics. This dimension also takes care of the payroll, taxes, pension, and other benefits (Kanungo, 2000).

For example, the HR team needs to make sure that employees are hired at competitive market prices based on the highest degree of education and acquired skills. They should be open to negotiation in the form of benefits or remuneration. If an employee is getting a higher pay scale in the competitor firm for the same work profile, its will be hard to retain that employee.


Organizational commitment is very important for retaining employees in an organization because only committed employees can feel the organization to be a part of their lives. Factors like recruitment, participation in decision-making, training and development, and compensation management can result in good working conditions (Senyucel, 2009).


Boxall, P., Purcell J. & Wright, P. (2007) Human Resource Management. New York, Oxford Press.

Demo, G., Neiva, E. & Nunes, I. (2012) Human Resources Management Policies and Practices Scale: Explanatory and confirmatory Factor Analysis. Brazilian Administration Review. Vol 9, Is. 4, pp. 395-420.

Dowling, P., Schuler R. & Welch, D. (1994) International Dimensions of Human Resource Management. USA, Wadsworth Publications.

Itika, J. (2011) Fundamentals of Human Resource Management: Emerging Experiences from Africa. Leiden, African Studies Centre.

Jackson, S. & Schuler, R. (2007) Strategic Human Resource Management. UK, Blackwell Publishing.

Jackson, S. & Schuler, R. (1995) Understanding Human Resource Management in the context of organizations and their environments. UK, Annual Reviews Inc.

Juyal, R. & Shahnawaz, M. (2006) Human Resource Management Practices and Organizational Commitment in different organizations. Journal of the Indian Academy of Applied Psychology. Vol 32, no.3, pp. 171-178.

Kanungo, R. & Aycan, Z. (2000) Impact of Culture on Human Resource Management Practices: A 10-country comparison. Applied Psychology: An International Review. 49(1), 192-221.

Noe, R. (2011) Fundamentals of Human Resource Management. USA, McGraw-Hill.

Senyucel, Z. (2009) Managing the Human Resource in the 21st Century. UK, Ventus Publishing.

Maddox Smith

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