Hrm Gives a Competitive Edge

HRM gives a competitive edge

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One of the aims of HRM is to give an organization a competitive edge.

1.0 INTRODUCTION

As we enter the new millennium more and more companies are recognizing the importance of managing their human resources as effectively as possible. They are also recognizing that doing so, however, cannot be done without recognition and incorporation of the global context. It is virtually impossible to read a business periodical or newspaper anywhere in the world without seeing stories detailing the success of a company due to how effectively it manages its people. As the environment becomes more global, managing people also becomes more challenging, more unpredictable and uncertain and more subject to rapid change and surprise. The importance of managing people effectively, many companies are devoting a great deal more time, attention, skill and effort to have a competitive edge. Researchers indicate that the competency levels of HR managers in high performing firms are significantly higher than those of HR managers in low performing firms. (Stone 2005 pp 9-10).

Within the context of the business, this report will discuss the three areas of study regarding managing human resource in a competitive environment: Strategic human resource management; Recruitment and selection and motivation.

1.1 STRATEGIC HUMAN RESOURCE MANAGEMENT

Business strategy is concerned with achieving competitive advantage. The effective development and implementation of strategy depend on the strategic capability of the organization, which will include the ability not only to formulate strategic goals, but also to develop and implement strategic plans through the process of strategic management. (Sparrow 1994)

1.1.2 Strategic HRM models

Strategy is about implementation, which includes the management of change, as well as planning. (Sizani 2000). Three models are used in this process. Firstly, high performance management (high performance working), this is achieved by 'enhancing the skills and engaging the enthusiasm of employees'. High commitment management aims at eliciting a commitment so that behaviour is primarily self-regulated rather than controlled by sanctions and pressures external to the individual, and relations within the organization are based on high levels of trust! In addition, high involvement management creates a climate in which there is a continuing dialogue between managers and the members of their teams in order to define expectations and share information on the organization's mission, values and objectives. Within the framework of the concept of strategic HRM, these describe various approaches to its development and implementation. (Storey 1989)

1.1.3 Implementing HR Strategies

Strategies tend to be expressed as abstractions are translated into

programmes with clearly stated objectives and deliverables.Obtaining strategies

into action is not easy. Barriers can be met by HR strategists when attempting to implement strategic initiatives often result from a failure to understand the strategic needs of the business, with the result that HR strategic initiatives are seen as irrelevant, even counter productive. (Storey 1992) This problem is compounded if there has not been an adequate assessment of the environmental and cultural factors that affect the content of the strategies. HR practice ensure that a coherent, holistic approach is adopted. (Storey1992 p219)

To overcome these barriers it is necessary to conduct a rigorous initial analysis, which covers business needs, corporate culture, and internal and external environmental factors. The framework could be a SWOT of the organization. Secondly, to formulate strategy, the formulation should set out the rationale for the strategy and spell out its aims, cost and benefits. (Stoyanova 2005 p219-220)

1.2 RECRUITMENT AND SELECTION

The process of staff recruitment and selection is becoming increasingly complex and Human Resource (HR) strategies means that the successful outcome of these processes is vital for job performance and organizational success. The importance of the recruitment and selection process is vital for organizational competitiveness and a failure to approach this function effectively will have consequences for future job performance. Jobs change accordingly as organizations respond to economic and technological pressures (Nankervis, Compton &