Thursday, June 11, 2009

HR: Relationship Between Strategic HR Management & Firm Performance

According to Ivancevich (2007), strategic human resource management is defined as the development and implementation of human resource processes to enhance and facilitate the achievement of the organization’s strategic objectives. While the objective of a human resource strategy is to manage labour and design jobs so people are effectively and efficiently utilised. This objective is to ensure that people (employees) are effeciently utilised within the constraints of other operations management decisions and also to make sure employees will have a quality of work life in great commitment and trust.

Competitive advantage is defined as having a superior marketplace position relative to competitors (Ivancevich, 2007). This require an organization to deal effective and efficiently with employees, customers, suppliers and all competitors.

The field of human resource with an organization emphasizes the importance of human resources in any business organization. In this new millennium with all those great technology achievement, it is recognizes the importance of human resources role in contributing the best manpower to the organization. It will also create a competitive advantage to the company. To do this, organization need to ensure that costs are reduce, quality is improve and product and service are different from any other competitors.

Maintaining competitive advantage forever will be an impossible mission and to maintain it for a long period will a tough job. The reason for this is, when an organization has a competitive advantage, other competitors will try to take it as copy or even as guideline to improve their product or service. This is where human resource role is important to create a competitive advantage to the organization. To do this, the role of human resource management in managing an organization’s most important resource will be the main thing. Human resource management consists of the activities managers perform to plan for, attract, develop and retain an effective workforce (Kinicki & Williams, 2006). The purpose of the strategic human resource management process is to get the optimum work performance that will help realize the company’s mission and vision. There are seven steps on the strategic human resource management process, which are: -

i. Establish the mission and the vision
ii. Establish the grand strategy
iii. Formulate the strategic plans
iv. Plan human resources needed
v. Recruit and select people
vi. Orient, train and develop
vii. Perform appraisal of people

The concepts that are important in human resource management are the human capital and social capital.

Human resource role in creating competitive advantage will include the human resource activities, according to Kinicki and Williams (2006), which are: -

i. Planning of human resources needed
This consists of developing a systematic, comprehensive strategy for understanding employee needs and in predicting future employee needs.

ii. Legal requirements of human resource management
Areas of human resource law needs to be aware of are labour relations, compensation and benefits, health and safety, and equal employment opportunity.

iii. Recruitment and selection
Qualified applicants for jobs may be recruited from inside or outside the organization. The task of choosing the best person is enhanced by reviewing candidates’ application forms, resumes and references and other kind of employment test.

iv. Training and development
Educating technical and operational employees in how to better do their current jobs and educating professionals and managers in the skills they need to do their jobs in future.

v. Performance appraisal
Assessing employee performance and providing them feedback, may be objective or subjective. Appraisal may be by peers, subordinates customers, oneself. Feedback can be in formal or informal form.

vi. Managing an effectiveness workforce
Managers must manage the employees’ compensation, which includes wages or salaries, incentives and benefits.

If all human resource roles are managed effectively and efficiently, the creation of competitive advantage among the employees will brighter. Satisfaction employees will results a great output from them to the organization. So, human resource role basically is the back bone of competitive advantage.



Nonahanim: how competitive we are as employees? A question we should have, all the time. Well, i do!!

No comments: