Introduction
The business environment is highly dynamic. High stakes in management have been raised rendering the traditional management theories ineffective and compelling new revitalized approach to organizational management. The human capital is the most important agent of change, innovation, and excellence in service in today’s business environment (Burns, 1979, p. 56).
Thus, human resource management is no longer regarded as a factor of production but a business partner in the pursuit of the goals and objectives of organizations. This research proposal highlights the change in human resource management required given the current trends in business. Transformational leadership is the required ingredient to human resource management for effective realization of organizational goals.
Discussion
Organizations have realized that human capital is the most important driver for change to the extent that it facilitates the creation and maintenance of sustainable competitive advantage in an organization. Leadership style adopted by an organization is an important people management factor that the style of leadership as indicated by Bass et al. (2003, p. 102) sets the tone in every aspect of people management from performance management to organizational culture adopted and practiced everyday in the workplace.
A study by Hay Foundation as explained in Berman et al. (2006, p. 99) examined over 75 components that promote employee satisfaction. It identified trust and confidence in leadership as the most important factors of promoting employee satisfaction and job commitment. The study also showed that effective communication was the most important leadership vehicle for winning workers’ loyalty, trust and confidence.
The classical theories are no longer applicable in the management of people and specifically employees in organizations. These theories were autocratic and failed to realize that human capital has an important role to play in the performance and growth of an organization. Many organizations have embarked on using a modern theory of transformational leadership in managing their employees.
According to Inkson & Kolb (2002, p. 69), one of the theories that successful organizations have adopted in the recent past is transformational theory. Transformational theory makes possible for individuals to redefinition of vision and mission, and refocuses on their pledge and the reformation of their systems for objective achievement. “A relationship of mutual stimulation and elevation converts followers into leaders and may convert leaders into moral agents” (Samson & Raft, 2008, p. 79).
It is a process where leaders and followers create a mutual and collective approach to management by emphasizing upon one philosophy, vision, high standards of morality and performance. Transformational leadership style essentially transforms every worker into a leader; it is squarely pegged on egalitarian culture, empathy and self – management.
The use of this type of leadership inhuman resource management will guide organizations to higher levels of performance. The modern organization employing transformational type of leadership usually applies its four components to their management styles to produce excellent out come for the organizations. According to Samson & Raft (2009, p. 80), transformational leadership can be applied in the top management of the organization. To begin with, the management should act as role models to inspire and motivate the employees.
Through the application of charisma, the management will depict admirable behavior towards employees. They can also inspire and motivate their employees by coming up with vision and mission for the organization that include employees. By making the employees internalize the goals of the company, the human resource management can match the goals of organization and employees’ goals therefore making them achievable (Burns, 1979, p. 121).
Human resource management ensures that there is a good compensation package for employees. According to Berman, (2006), when a company is doing well financially by generating more revenue, it commits a substantial part of it to improve the working conditions of its employees as well as raising their salaries.
It also employs the best human resource personnel that manage the employee welfare well. Additionally, they improve working conditions so that employees find no reason to complain again. Through promotion strategies, employees gain a sense of belonging and they feel they are valued hence better performance of an organization.
The employment of an effective human resource management team is very important. Best performing organizations have efficient and effective human resource management skills. This has enabled increased communication in such organizations thus reducing the cases of employee-employer misunderstanding. According to Samson & Raft (2009), an effective human resource management is vital for the dealing with case of collective bargaining.
An organization with an effective human resource management rarely experiences strike. The effective management takes into consideration core values like putting the employee first. This is because the employee is a factor of production like capital and the output of the firm is because of the employees’ hard work. Therefore, the employees’ needs and values should be seriously handled (Samson & Raft, 2009).
The human resource management should challenge employees’ assumptions while stimulating and encouraging creativity at the work place. Above all, the employees should be appreciated for their achievements. The human resource management should come up with mechanisms to recognize, appreciate, and reward extraordinary employee efforts at the work place. This will encourage more productivity and lead to higher performance of the organization.
Winkler (2009, p. 145) argues that through the employment of the four major components of transformational leadership in the organization, employees will be transformed to leaders in their respective fields of work and all parties will benefit the organization, the management and the employees. The organization will increase its competitive advantage and therefore become more profitable. Higher profits will translate to higher rewards to employees and the management in terms of better compensation packages.
Conclusion
The world has changed with globalization and technology transforming the business environment. Many organizations have now turned to transformational management for human resource management. This is because the use of this type of leadership enables organizations to change their employees into leaders in their field of specialization and therefore increasing the competitiveness of the organization.
The four components of transformational leadership are applied in shaping the employees and matching their goals to those of the organization. The management acts as role models and employees follow, as the competitive advantage is increase leading to the benefit of all parties (the employees, the management, and the organization).
References
Bass, B. et al. (2003). Predicting unit performance by assessing transformational and transactional leadership. Journal of Applied Psychology, 88 (2), 207-218.
Berman, M., James, S., Jonathan, P. & Montgomery, W. (2006). Human Resource Management in Public Service: Paradoxes, Processes, and Problems. New York, NY: Sage Publications.
Burns, J. (1979). Leadership. New York, NY: Prentice Hall.
Inkson, K. & Kolb, D. (2002). Management: perspectives for New Zealand. 3rd Ed. New York, NY: Prentice Hall.
Samson, D. & Raft, R. (2009). Management: Asia pacific edition. 3rd Ed. Victoria: Cengage.
Winkler, I. (2009). Contemporary leadership theories: Enhancing the understanding of the complexity, subjectivity, and dynamic of leadership. Philadelphia, PL: WB Saunders Press.