Scientific Research Design: What Are the Effects Essay

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Scientific Research Design: What are the effects of human resources outsourcing on leadership performance and employee commitment?

There is speculation that an outsourced human resources (HR) department will have a negative impact on a company's performance. Furthermore, the researcher believes that this impact will be more significant in larger companies. To test this hypothesis, the researcher will perform case studies of two companies, a large one and a small one, that have recently transitioned from outsourced HR to in-house HR. The goal of the research will be to ascertain how HR impacts leadership performance and employee commitment.

Outsourcing of functions that have traditionally been done in-house is one of the most significant changes to impact modern business. In many ways, outsourcing provides opportunities for organizations to increase their functionality and decrease their costs. However, it is critical to recognize that outsourcing can have negative consequences for a business, and that these negative consequences may not be apparent in a financial overview of the organization. Many firms have transitioned towards the outsourcing of human resource functions. However, many of them have done so without a thorough understanding of the true extent of the impact of human resources outsourcing on leadership performance and employee commitment. A review of the literature reveals that outsourcing can have negative impacts on an organization if the outsourced function is considered a core function of the organization. Therefore, the size of the organization and the importance of human resources in the organization should help determine how outsourcing those functions impacts leadership performance and employee commitment.

Literature Review

Human resources outsourcing is one of the more interesting concepts in today's business world. The human resources department is a critical component of the modern business. However, the reality is that the human resources department does not have to act as a functioning unit for the business to operate smoothly. Instead, as long as human resources professionals are able to interact with employees and management when they are needed, HR can perform its functions from practically any location. There is a difference between the ability to perform a job and performing a job well, however. This research will attempt to demonstrate whether outsourcing human resources has an impact, positive or negative, on leadership performance and employee commitment.

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In 2003, Harmon et al. sought to investigate the relationship between a very active and involved HR department and employee satisfaction in a medical office environment. The role of HR in a medical office is to reduce costs and to attract and retain patient care and support employees. The investigators looked to see if there was something HR could to in order to accomplish both objectives at the same time. What they found is that high-involvement works systems (HIWS), which are largely driven by HR, can improve functionality and satisfaction in the workplace. HIWS are characterized by involvement, empowerment, development, trust, openness, teamwork, and performance-based rewards. HIWS are linked to greater employee satisfaction and lower costs to the consumer, which satisfy the dual mandate of an HR department. Taking a resource-based view of an organization means that the organization will only be successful if its human resources department is successful (Harmon et al., 2003). This would make HR a core function of the organization, not a peripheral function, and important consideration when examining other research in the subject area.

In fact, one of the issues that may have consistently hampered firm performance is a failure to treat human resources as an integral part of the firm's organizational and functional structure. In 1997, Barney and Wright looked at how human resources could help organizations gain a competitive advantage. What they uncovered was a disconnect between a corporation's stated opinion about the importance of HR and the actual importance that many firms gave to the HR department. Barney and Wright used the VRIO (value, rareness, imitability, and organization) framework to look at the role of HR in developing a sustainable competitive advantage. Their results suggested the organizations were underutilizing the potential of HR to drive competitive advantage (1997). This would support the notion of HR as a core function, even if the firm treats it like a peripheral function, suggesting that outsourcing it would ultimately not be beneficial to the organization.

Martinez-Sanchez et al. engaged in a study that examined workplace flexibility and how it impacted managers' perceptions of the….....

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