HR Theories: What Are They?
Organizations use human resource (HR) theories as a guidance when it comes to managing employees. It is a collection of concepts and tactics for managing staff in order to improve output and support business expansion.
These theories help HR managers comprehend how employee behavior might be impacted by a company’s management. Because they can increase worker motivation, job satisfaction, and overall productivity, HR theories are essential for businesses.
The set of broad guidelines that managers use to run an organization is known as the theories of management. Theories also serve as a rationale for motivating employees to successfully respond to company objectives and integrate effective strategies for accomplishing them.
Which kinds of HR theories are there?
When taken as a whole, HR theories offer a deep comprehension of human resource management and insights into how businesses can best use and manage their staff. HR theories come in nine different varieties. Below is a detailed discussion of them.
- Theory of Organizational Behavior
The goal of organizational behavior theory, or OB Theory, is to comprehend how individuals act in work settings. For HR and every employee, it aids in anticipating, identifying, and tracking organizational events.
This approach focuses on why and how employees act rather than just what they do. Organizations can evaluate and manage workplace dynamics, communication, and culture by analyzing employee behavior.
- Theory of Motivation
The goal of motivation theory is to energize workers to accomplish company objectives. It investigates what motivates workers to perform effectively and attends to individual requirements to maximize productivity.
Above all, it acknowledges that motivated workers are more likely to successfully support company objectives.
- The Ability, Motivation, and Opportunity (AMO) Theory
The three elements that make up employee characteristics—ability, motivation, and opportunity—make up the AMO Theory. It highlights how these factors contribute to the success of the organization.
The notion emphasizes that having the proper abilities, motivation, and opportunity to use them are all necessary for employee success. It is true that any employee can demonstrate their full potential when these factors work in perfect harmony.
- Theory of Human Capital
According to the human capital hypothesis, workers are important resources. It emphasizes how investing in human capital may help firms achieve their goals and objectives.
It is based on the idea that workers are resources who are in charge of adding to the worth of the company. To improve workers’ abilities and expertise, the notion promotes spending on education, training, and development.
- Theory Based on Resources
According to resource-based theory, having valuable resources—particularly human resources—is essential to obtaining a competitive advantage. Materials, expertise, organizational procedures, systems, and information are all considered a company’s resources.
Put more simply, a business can gain and hold a competitive edge in the market if it innovates and strategically positions itself to make efficient use of its resources.
“A company can get a competitive edge if its resources and competencies are properly deployed and combined. In the end, only businesses themselves can use innovation and a strategic positioning in the market to gain and maintain a competitive advantage. (Page 217, Mweru & Muya, 2015)
- Theory of Institutions
The study of institutional theory explores how businesses adjust to societal norms, expectations, and outside pressures. It looks at how businesses conform their practices and organizational structures to social standards.
This theory clarifies how businesses modify their conduct in response to society expectations by recognizing the impact of outside variables.
- Theory of Transaction Costs
The analysis of costs associated with different transactions within organizational operations is the focus of transaction costs theory. It helps businesses choose the most economical and effective financial arrangements for maximum gain.
The idea seeks to assist companies in selecting procedures and frameworks that reduce transaction costs, fostering productivity and efficient use of resources.
- Theory of Agency
The relationship between an organization’s principals (owners or shareholders) and agents (managers or employees) is examined by agency theory. In order to reduce disputes, it focuses on bringing these two groups’ interests into alignment.
The inherent conflicts of interest between an organization’s owners and employees are acknowledged by the theory. The purpose of comprehending and handling these disputes is to strike a balance that guarantees all sides contribute to the organization’s success.
- Theory of Contingencies
Contingency theory acknowledges that there isn’t a management strategy that works for everyone. It makes it necessary to modify management techniques to suit particular and unusual circumstances.
This theory promotes adaptability in management strategies according to the unique requirements and difficulties that an organization faces. Organizations can customize their structures and strategies with this method to operate at their best in a variety of dynamic settings.
What distinguishes HR models from HR theories?
The goal of human resource (HR) theories is to improve performance and organizational growth by providing guiding principles for managing people. The Human Resource (HR) model, on the other hand, is the organized framework for carrying out all HR-related tasks. While models give the structured framework for HR operations, theories offer the guiding concepts.
A foundation for long-term success and employee well-being is established by comprehending and putting HR ideas into practice inside the model. By bridging the gap between theory and actual HR procedures, this integration promotes a vibrant and adaptable workplace culture.
