Human Resource

Management
(competitive advantage)
1
Abstract
In todays fast-paced economy competition is an issue of services
and products. Much attention has been directed to a better service
and the best product and how this can be achieved through
utilizing the human resources. This research paper identifies the
competitive advantage concepts and models, competitive
strategies and the main human resource practices that have a
significant impact on the employees performance. nderstanding
sources of competitive advantage has become a ma!or area of
research in the field of strategic management. "inally a summary
of practical criteria of best practice for competitive advantage is
presented and a general discussion and recommendations have
been drawn.
Introduction
The firm is regarded as a cohesive organism, which learns to adopt
or find better ways of doing things essentially in response to its
environment. The #uestion then is what really the firm should do to
maintain or to optimize its situation in its environment$ %hould it
focus on its financial situation, its technology, or its human
resources$ To answer this #uestion we should at first see what
other researchers have concluded. &off 1''( argues that human
assets are a )ey source of sustainable advantage because of causal
ambiguity and systematic information ma)ing them inimitable.
*uest 1''+ says that if management trust their wor)ers and give
them challenging assignments, wor)ers in return will respond with
high motivation, high commitment and high performance. *ratton
1'', identified si- factors for success. the commitment of top
management/ the motivation and aspirations of recruits/ the core
0
capabilities of the management team/ the teams aspiration/ its
ability to build and maintain alliances/ and the integration of the
business into a global networ). 1hat does that mean to us$ Its
means that sources of competitive advantage have shifted from
financial resources to technology resources and now to human
capital. In other words, success does not depend primarily on the
size of the budget or the products supporting technologies. It really
depends on employees attitudes, competencies and s)ills/ their
ability to generate commitment and trust, communicate aspirations
and wor) in comple- relationships. 2ow we )now one of the
sources of competitive advantage which is the employees, then
what do we have to do to achieve competitive advantage through
them$. The answer lies in competitive strategy and human
resource practices. Then what is the competitive strategy$ 3nd
what are the human resource practices
Competitive Advantage
1hen a firm is implementing a value creating strategy not
simultaneously being implemented by any current or potential
competitors, then we can say the firm has a Competitive
advantage. 3nd when a firm is implementing a value creating
strategy not simultaneously being implemented by any current or
potential competitors and when these other firms are unable to
duplicate the benefits of this strategy, then we can say the firm has
a sustained competitive advantage 45arney 1''16. There are two
ma!or models that have to be considered. The first one is the
position or environmental model and the second one is the
resource-based view model.
7
The Position or Environmental Model.
In order to achieve a competitive advantage, the firm is re#uired
to ma)e a choice about the type of competitive advantage it see)s
to attain and the scope within which it will attain it. &hoosing the
competitive scope or the range of the firms activities can play a
powerful role in determining competitive advantage because it
aims to establish a profitable and sustainable position against the
forces that determine your industry competition.
hat is competitive strateg!"
8orter 1'9: defines the competitive strategy as the positioning of a
company in its competitive environment. 3lso 8orter has posed
two important #uestions.
1. 1hat is the structure or the attractiveness of the industry
which the company is in$
0. 1hat is the companys position in its competitive
environment$
To answer the first #uestion a company, as an organization,
should analyze their industry by focusing on the following
points 4industrial analysis6.
5egin with understanding your industry.
"ocus attention on significant force.
1atch out for industry change.
(
To answer the second #uestion 4competitive position6, the
following #uestion should be as)ed.
;ow does a company achieve superior performance$
To be a superior performer in the engineering industry or any
industry, the company must have a sustainable competitive
advantage which its rival cannot copy or duplicate.
The competitive advantage can be sustained in one of the two
ways 48orter 1'9:6.-
1. <ither the company can be luc)y enough to come up with
something that its rivals cannot copy which is very rare, or
0. The company is improving so fast that its rivals can not catch
up.
8orter shows that there are five competitive forces which play a
ma!or role in the company success or failure
1. The entry of new competitors,
0. The threat of substitutes,
7. The bargaining power of suppliers,
(. The bargaining power of buyers, and
:. The rivalry among the e-isting competitors.
The collective strength of these five competitive forces determines
the ability of firms in an industry to earn on average, a rate of
return on investment in e-cess of the cost of the capital.
8orter also notes that a business can develop a sustainable
competitive advantage by following two strategies/ cost
leadership strategy or differentiation strategy.
:
Cost #eadership $trateg!% the primary focus of a cost leadership
strategy is to achieve low costs relative to competitors. =owering
costs lead to lowering prices, which can increase demand for
products or services, but if the product or services cannot be
produced at a lower cost it also reduces profit margins. To compete
based on cost, managers must address labour, materials, overheads,
and other costs, and to design a system that lowers the cost per unit
of the product or service. >ften, lowering costs re#uires additional
investment in automated facilities, e#uipment and employees s)ill.
&i''erentiation $trateg!% the primary focus of a differentiation
strategy is
&reating uni#ueness such that the organizations goods and
services are clearly
?istinguished from those of its competitors. In other words the
focus is on creativity and innovation which have long been
recognized as necessary for bringing the re#uired
change to obtain the competitive advantage
%chuler and @ac)son 1'9, have emerged from 8orter discussion of
competitive advantage three competitive advantage strategies
that organizations can use to gain competitive advantage.
Innovation strateg!% the primary focus here is developing
products or services different from those of competitors or offering
something new and different. 3 vital component of any innovation
strategy is getting employees to broaden their s)ills.
(ualit! enhancement strateg!% the primary focus here is
enhancing the product andAor services. Buality enhancement often
means changing the processes of production in ways that re#uire
wor)ers to be more involved and more fle-ible.
Cost reduction strateg!% firms typically attempt to gain
competitive advantage by being the lowest cost producer.
C
The #uestion is who brings the innovation, #uality and the cost
reduction strategy to the firm$ It comes from the right employee
who is motivated by the right human resources practices. In the
ne-t sections we will deal with the issues of how the right
employee is employed and motivated.
The Resource)*ased +ie, Model
hat are the 'irm resources"
"irm resources include all assets, capabilities, organizational
processes, firm attributes, information, )nowledge, etc. controlled
by a firm that enable the firm to conceive of and implement
strategies that improve its efficiency 4doing things right6 and
effectiveness 4doing the right things6. In the language of traditional
strategic analysis, firm resources are strengths that firms can use to
conceive of and implement their strategies. "irm resources can be
conveniently classified into three categories. physical capital
resources, human capital resources and organizational capital
resources. 8hysical capital resources include the physical
technology used in a firm, a firms plant and e#uipment, its
geographic location, and access to raw materials. ;uman capital
resources include the training, e-perience, !udgment, intelligence,
relationships and insight of individual managers and wor)ers in a
firm. The organizational capital resources include a firms formal
reporting structure, its formal and informal planning, controlling,
and coordinating systems, as well as relations among groups within
a firm and between a firm and those in its environment 45arney
1''1. 1+16.
The resource-based view of the firm is presently being touted as an
alternative theory of strategy to that developed by 8orter 1'9:.
,
Instead of focusing on positioning in the product mar)et, it argues
that firms achieve sustainable competitive advantage by
developing resources, which add uni#ue or rare value, which cant
easily be copied by others. Thus the firm with superior access to
physical resources, which others can not buy, holds a superior
advantage. "or e-ample, a manufacturing firm, which invents a
superior process technology, holds an advantage over its rivals.
.
1right, et al. 1''( has shown that the human resources can be a
source of Competitive advantage because they meet the criteria
for being a source of sustainable Competitive advantage. ;uman
resources add value to the firm, are rare and cannot be
Imitated and are not sustainable. 3lso they have characterized
human resources by uni#ue historical conditions, causal ambiguity
and social comple-ity, which means that not all firms can
successfully develop human resources as a sustain competitive
advantage through imitating the ;D practices of firms that have
successfully developed human resources.
8feiffer has issued si-teen practices of competitive advantage
through people
1. <mployment security
0. Incentive pay
7. 8articipation and empowerment
(. %ymbolic egalitarianism
:. =ong-term perspective
C. %electivity in recruiting
,. <mployee ownership
9. Teams and !ob redesign
'. 1age compression
1+. Measurement of practices
11. &ross-utilization E cross-training
9
10. ;igh wage
17. Information sharing
1(. Training and s)ill development
1:. 8romotion from within
1C. >verarching philosophy
.
Competitive advantage can best be achieved by see)ing
improvement in the management of people, in other words,
through better utilization of human resources. "rom the standpoint
of researchers interested in competitive advantage, the resource-
based view of the firm provides a framewor) for e-amining the
rule of human resources in competitive success and forces us to
thin) more clearly about the #uality of the wor)force s)ills at
various levels and the #uality of the motivation climate created by
strategic human resource management 45o-all 1''C6. The ne-t
section will focus on the strategic human resource management
and competitive advantage.
Competitive Advantage through -ob Anal!sis. -ob &escription
and -ob Evaluation
-ob Anal!sis
The !ob analysis loo)s at the behavioral needs of a particular
competitive strategy 4cost leadership or differentiation6 role
peculiar to the culture and organization of the company. It is li)e
performing a 8ersonal 8rofile 3nalysis on an imaginary person.
The goal is to define the ideal individual for the !ob position from
the perspective of the company and the employees that the
successful applicant will wor) with. @ob analysis is the process of
collecting information and ma)ing !udgments about a specific !ob.
'
"rom the stand point of researchers, that competitive advantage
only occur when employees )nowledge, s)ills and ability can add
value to the firm, are rare, cannot be imitated and are not
sustainable. In order to target employees with the re#uisite
)nowledge, s)ills and ability, the !ob has to be carefully defined.
The ;DM literature promotes careful !ob definition in the belief
that it will have two effects. "irst, it is commonly believed to assist
targeting and attraction of potential recruits. %econd, !ob analysis
helps potential recruits to ma)e up their own minds about whether
to apply or not.
-ob &escription
The !ob description is generally used to identify the
responsibilities, the ob!ectives associated with each specific tas)
and the reward that associated with good performance. In order to
accomplish the employment relationship effectively, wor) has to
be designed, programmed, costed, organized and co-coordinated.
In other words detailed !ob description, otherwise can be used by
an employee to define what sAhe is not prepared to 4Fthats not part
of my !obG or Im not paid to do thatG6. In a dynamic environment
it is impossible to have a good !ob description because anticipating
the environment changes in advance is impossible. 5ut that does
not mean we should not describe the !ob as detailed as possible.
-ob Evaluation
>nce !obs have been analyzed and described, the !ob evaluation
began by considering several !ob factors such as. wor)ing
conditions, necessary technical H%3 4Hnowledge, %)ills and
3bility6 and behavior, salaries and re#uired managerial s)ills. 3
rating of each factor is made on a standard scale, and the total
rating points can be used to ran) !obs hierarchically. The recruiting
1+
and selection model appendi- 3 can be used in the rating process
by using different criteria and weights such as the above-
mentioned !ob factors.
Competitive Advantage through the /eneric 0unction o' HRM
The aim of ;uman Desource Management is seen as the
optimization of human resources value. Desearchers suggest three
Igeneric functions of ;DM, namely, selection, appraisal and
rewards that act as independent variables, in a cycle of human
resource interventions on the dependent variable of performance.
$election
%ecurity in employment and reliance on the wor) force for
competitive success mean that one must be careful to choose the
right people, in the right way. The #uestion then is what does the
firm want$
1. <mployees with more competencies
0. <mployees who self-develop without the need for company
training
7. <mployees who have more ideas that are implemented
(. <mployees that have a lower error rate, number of discipline
incidents and 3bsenteeism rate
:. <mployees that have a higher customer satisfaction, higher
performanceJ appraisal scores, bonus rates and promotion
rates
C. <mployees that re#uire Klow maintenanceK from managers
,. <mployees that stays longer before #uitting
9. <mployees who produce more return for every dollar of
salary paid to them
%election can be regarded as the primary mechanism in enhancing
the organization capabilities. The individual behaviour and
learning ability can optimise the organizations situation in its
11
environment. The goal of selecting program is to ensure that the
firm is hiring only the highest ability individual. Then the firm
must be able to identify high ability individuals and also the firm
must be able to attract and retain those applicants deemed to be of
the highest ability. 5ut in an increasingly competitive mar)et, it
can be almost as hard to attract the right staff as to attract the right
customers.
Per'ormance Appraisal and Per'ormance Management
8erformance appraisal is defined as a process by which an
organization measures and evaluates an individual employees
behaviour and accomplishments for a finite time period.
MeasuringAreviewing and evaluating the performance of
employees is arguably one of the most important tas)s for any
manager, since critical decisions rely on the accurate assessment of
an employees behaviour. ;istorically, organizations tended to
develop a performance appraisal instrument and forms
administrated on an annual basis. <ven though managers have been
repeatedly told that performance review should be more than !ust
an annual event, they do not always do it. <mployees are often not
coached and counseled throughout the year, so when review time
arrives, they do not )now what to e-pect. This leads only to
confusion and resentment. The #uestion then is how performance
appraisal can be done better and more effectively$ The answer may
be in the approach to managing )nown as performance
management. 8erformance Management has three basic
components. planning, managing and appraising performance
Re,ards
10
Dewards, both financial and otherwise, send a powerful message to
employees of an organization as to what )ind of organization
management see)s to create and maintain, and what )ind of
behaviour and attitudes management see)s from its employees.
3ccording to a report by the 3merican &ompensation
3ssociations, 3ugust 1''C. F1hen it comes to reinforcing team
behaviour, the reward system is one of the most effective and
influential tools available to the organizationG
hat is the purpose o' re,ard s!stems"
Deward system is intended to motivate certain performance. 5ut
under what conditions will rewards actually motivate employees$
To be useful, rewards must be seen as timely and tied to effective
performance.
1. <mployees must believe effective performance will lead to
certain rewards. "or e-ample attaining certain results will lead to a
bonus or approval from others.
0. <mployees must feel that the rewards offered are attractive.
%ome employees may desire promotions because they see) power,
but others want a fringe benefit, such as a pension, because they
are older and want retirement security.
7. <mployees must believe a certain level of individual effort will
lead to achieving the &orporations standards of performance.
3s indicated, motivation to e-ert effort is triggered by the prospect
of desired rewards. money or recognition which may ta)e the form
of annual award ceremonies and e-pensive accommodation and
entertainment, promotion, and so forth.
17
Competitive Advantage through #eadership
The core strength of any organization comes from its employees.
To develop and strengthen them will lead to a solid foundation for
the organizations future. *ood ;DM does not happen by accident.
It ta)es strong e-ecutive leadership to bring about positive patterns
of employment relationships. The manager must continue to
develop himself and also have a commitment to help his
employees develop their full potential. The employees depend on
the managers, and the organization depends on them for its
success. Many researchers believe that for organizations to
maintain a competitive advantage they must focus on enhancing
performance through a process of continual learning. 3lso they
believe that by focusing on sound and effective leadership s)ills at
every level can provide the catalyst to motivate individuals, teams
and human networ)s to achieve pea) performance.
Top managers Re1uirement
The manager ta)es responsibility for planning, monitoring, and
controlling the business performance. sual first tas)s are to set
the goals and ob!ectives to prepare a preliminary budget, schedule
and select the group members, setting a training program if
re#uired, ensure re#uired supplies are available and generally try to
do whatever is needed to ma-imise the group performance in order
to )eep the business moving. To do this the manager has to have
certain s)ills and characteristics.
Personal characteristics%
The personal characteristics are necessary to manage the group.
%uch personal attributes include aggressiveness, confidence, poise,
decisiveness, resolution, toughness, integrity, versatility and #uic)
thin)ing.
$2ills%
The most important s)ills for successful managers are.
1(
a. &ommunication s)ills i.e. being a good communicator
is an essential management s)ill.
b. >rganizational s)ills are vital to good management.
&haracteristics included in this s)ill are planning and
goal-setting abilities, along with the ability to be
analytical.
c. *roup or team building s)ills involve developing
empathetic relationships with other members of the
group, being sensitive to the needs of others, motivating
people, and building a strong sense of team spirit. The
best team leaders use a lot of FweG statements in
describing the relevant sub!ects to the pro!ect.
d. =eadership s)ills- %everal different attributes and
behaviours can be catalogued under leadership s)ills.
These included setting a good e-ample, seeing the big
picture, being enthusiastic, having a positive outloo),
ta)ing initiative, and trusting people.
e. &oping %)ills- %uccessful managers re#uire coping or
stress-management s)ills. Despondents indicated that
both fle-ibility and creativity were involved in
effectively coping with change, as were patience and
persistence.
f. Technical s)ills- %uccessful managers re#uire a good
bac)ground in their field.
Competitive Advantage through Emplo!ment Relationships
<mployment relationship has been recognised as a socio-economic
e-change process which involves the mediation of different
interests- the interest of employer to minimise the labour cost and
the interest of the employee to ma-imise the labour price. ;ence,
employment relations engender bargaining which can either
1:
individual or collective and mobilisation the power in order to
protect or advance such interest. ;ere a #uestion emergesL ;ow
can the power be mobilised$. 1e must first begin by analysing the
employment relationship drives L conflict or co-operation. &onflict
occurs in the employment relationship for the following reasons.
sharing the economic returns in other words the fair wage, lay-offs
4!ob security6, and the authority 4power6. The contemporary
fashion of employment relationship tends to increase the
participation and involvement as a mediate and control such
conflict. Management )new that in order to control the conflict
have to cope with the parado- of what might be called the
Fmotivation-control e#uationG. >ne side is the need to ensure the
active and positive participation of the wor)force in the pursuit of
business ob!ectives- something which may be critical where the
#uality of the product or service is directly dependent on employee
performance. This implies treating employees with respect,
rewarding them fairly or even generously and, perhaps, see)ing to
elicit responsibility and trust. >n the other side is the need to
control wor)-behaviour in the light of the economic realities of
competition and the profit-motive. These imply treating the
employee as an economic resource to be made as economically
efficient as possible. in the practice this may re#uire e-tracting
additional productivity for no additional cost, minimising wages
and rewards and declaring redundancies 4Heenoy 1''06. 3s
;yman 1'9, observes of this contradiction, Femployers re#uire
wor)ers to be both dependable and disposableG.
&o-operation can be brought to the organization by )eeping
commitment, fair reward system and motivation and employees
should have a voice in management and should have more decision
power over wor) conditions.
1C
Competitive Advantage through $trategic Management
0rame,or2
nderstanding sources of competitive advantage has become a
ma!or area of research in the field of strategic management. %ince
the 1'C+s organizational framewor) has been used to structure
much of the research in this field. This framewor) suggests that
organizations obtain sustained competitive advantages by
implementing strategies that e-ploit their internal strengths,
through responding to environmental opportunities, while
neutralising e-ternal threats and avoiding internal wea)nesses.
The idea of ;arvard framewor) is that human resource strategy
should be lin)ed to business strategy but the need for consideration
of, and compromise with, wor)force and union aspirations is also
recognised.
/uest3s 0rame,or2 (/uest. 4567)
?avid *uest pic)s up the implicit theory in the ;arvard framewor)
and operationalises ;DM as a particular employee relations
strategy in which management simultaneously pursues goals of
Fhigh commitment, high #uality, fle-ibility and strategic
integration
*o8all3s 0rame,or2 (*o8all. 4559)
5o-all 1''C defines strategy as a firms framewor) of critical ends
and means.
This definition helps to ma)e the point that means do not flow
unproblematically from ends. Dather, the historically developed
1,
means to shape what ends are conceivable and possible. 3 firm
may aspire to mar)et leadership but unless it has built the
organizational and human resources to ma)e this achievable, its
e-ecutives would be wise to revise its goals accordingly. 3s an
e-ample an organization can not bid for a pro!ect unless it has the
right e#uipment and talented operators re#uired for doing the !ob
effectively and efficiently. The organization should follow these
loo)s when formulating and implementing the strategy.
$uperstars
3s in almost every area, there are business superstars.
organizations that are perceived as e-traordinarily successful based
on their ma!or accomplishments. >ne common superstar
denominator is the recognition of the people factor. <-ecutives at
superstar organizations give recognition to the people who have
demonstrated outstanding performance.
a. (ualcomm% 1ith a distinguished reputation in technology
innovation, B3=&>MM is a continuous learning
organization dedicated to promoting the growth of its
employees and the development of the surrounding
community.
b. /eneral Electric% @ac) 1elch, former chairman and &<> of
*<, transformed the company from an aging manufacturing
bureaucracy into one of the worlds largest, most valuable
global multinationals through the implementation of his
conviction that behavior is driven by a fundamental core
belief. The desire and ability of an organization to
continuously learn from any source, anywhere, and to rapidly
19
convert this learning into action is its ultimate competitive
advantage.
c. JHonda% ;aving had a manufacturing presence in the nited
%tates for more than (+ years, ;ondas growth and e-pansion
has a significant impact on the .%. economy in terms of both
dollars and numbers of employees. Much of ;ondas success
turns on the companys respect for individual employees.
d. J$outh,est Airlines% &reating a culture of accountability and
preserving and promoting the organizations core values,
)nown collectively as F%8IDIT,G %outhwest has sustained
growth and profitability when most airlines struggle to avoid
ban)ruptcy.
e. $AP% 1hile some technology companies pin their potential
on developing the latest, greatest techno-innovation, %38,
according to =es ;ayman, chief officer of global human
resources, )nows that Fyou need a good strategyMnot a
brilliant one, but one you can e-ecute. 3nd you need a
performance-driven culture and people who are emotionally
engaged. If you have all those things, youll create the right
product.G
Ho, can the organi:ation identi'! Human
Resources"
To identify the human resources, an organization should be able to
balance a highly focused performance management process which
1'
successfully lin)s strategic to individual ob!ectives, with a set of
values that places concern and respect for individuals at the centre.
>nce this balance is reached, then organization employees will be
highly committed. 3lso the organization should gain the employees
trust through )eeping its commitments in respect to training and
career development made at the selection interviews. 1ill the level
of wor) pressure be increased over time without any renegotiation
of rewards, will the competitive environment of the organization
or technology change in important ways that effect the nature of
the !ob.
Ho, can the organi:ation de'end its Human Resources"
To defend the human resource an organization should create a
complete model of ;DM and employment relationships. It also
should support long-term thin)ing, building Icore competencies
and also develop FsensingG capabilities. The future is essentially
unpredictable, but the organization develops the capacity to sense
the change. 3 central role of the personnel function to develop this
capability is to collect information about future trends in labour
mar)ets and s)ill sets, and in lin)ing changes in aspirations, wor)
practice and motivations without this insight, it is leading blind an
organization into the future.
The organization can also defend the human resource through
building high commitment pride and trust which will bring a
sustained competitive advantage because it will ta)e years for
competitors to reproduce the same level of commitment and trust.
This also applies to employment security, along with constant
informal and formal training programs and team development. The
most important elements of the team development are the
performance report which provides feedbac) to the !ob team about
0+
performance against the !ob plan, the reward and recognition
systems, such a system
must ma)e the lin) between performance and reward clear,
e-plicit, and achievable in order to be effective, training which
includes all activities designed to enhance the s)ills, )nowledge,
and capabilities of the pro!ect team.
The primary aim of team development is to improve the
productivity performance. Improvements can come from many
sources and can affect many areas of !ob performance, for e-ample
48MI 1''C6
a. Improvements in individual s)ills may allow specific
staff members to perform their assignment more
effectively.
b. JImprovement in team behaviours may allow team
members to devote a greater percentage of their effort
to technical activities.
c. Improvement in either individual s)ills or team
capabilities may facilitate identifying and developing
better ways of doing design wor).
Ho, can the organi:ation gain a competitive Advantage
Through its Emplo!ees"
To answer this #uestion the organization must ma)e the distinction
between resource stoc) and process capabilities. It may be helpful
to ma)e an analytical distinction between Fhuman capital
advantageG and Fhuman process advantageG. The organization
can have the possibility of generating human capital advantage
through recruiting and retaining outstanding employees, through
capturing a stoc) of e-ceptional human talent, talent with
productive possibilities. ;uman process advantage may be
understood as a function of causally ambiguous, socially comple-
01
historically evolved process such as learning, co-operation and
innovation, which are very difficult to imitate. %ome firms may
have highly intelligent managers but may fail to ma-imize the
interplay of their talents as a result of e-cessive infighting between
departments. ;uman resource advantage, then the superiority of
one firms labour management over others might be conceived as
the product of its human capital advantage and human resource
advantage. Advantage, as it were, can be traced to better
employee employed in organization with better processes. 3lso the
organization must distinguish between the competitive advantage
and sustained competitive advantage. Competitive advantage
can occur only in situations of organization resource heterogeneity
and organization resource immobility, whereas sustained
competitive advantage e-ists only when other organizations are
incapable of duplicating the benefits of a competitive advantage.
Practical criteria o' *est Practice 'or Competitive
Advantage
It summarizes a practical criterion that is seen to be important to
create a competitive advantage.
4. /oals;ob<ectives
This contains a detailed statement of the general goals and
their relationship to the companys ob!ectives. 1hen the
pro!ect goals are not clear, it is difficult to initiateAformulate
the planning efficiently. The lac) of planning contributes
directly to unrealistic resource allocations and schedules.
2otably the )ey personnel should be actively involved in
defining the specific wor) to be performed, the timing, the
00
resources, the responsibilities, and positive participation in
the pursuit of the goal Aob!ectives.
=. Recruitment
The argument is how the management can recruit the right
employees.
Most of management uses a detailed !ob analysis and !ob
description and some of them use one of the selection models
to insure they are employing the right employees.
>. Commitment
&ommitment is defined by Hline E 8eters as a process by
which people become psychologically bound to their action in
such a way that feel a personal obligation to follow through on
the implications of those actions. >btain commitment from all
)ey personnel regarding the problem plan, its measures and
results. This commitment can be enhanced and maintained by
high participation of employees in definition of results,
measuring criteria and schedules. It is through this involvement
that the employee gain a detailed understanding of the wor) to
be performed, a feeling of importance, develops professional
interests in the wor) and desires to succeed, and eventually
ma)es a firm commitment toward the specific tas) and the
overall pro!ect ob!ectives.
?. Trac2ing;coaching
?efine and implement a proper trac)ingAcoaching system
which captures and processes wor) performance data
conveniently summarised for reviews and management
actions.
9. Measurabilit!
3ssure accurate measurements of performance data,
especially technical progress against schedule and budget.
07
@. $igning ) An
The process of signing on employees during the initial phases
of the !ob or each tas) seems to be very important to a proper
understanding of the tas) ob!ectives, the specific tas) and
personal commitment.
7. Interesting or2
The managers should try to accommodate the professional
interests and desires of supporting employees when
negotiating their tas)s. The effectiveness of the wor) depends
on the managers ability to provide professionally stimulating
and interesting wor). This leads to increase involvement,
better communications, lower conflict, and stronger
commitment.
6. Communication
*ood communication is essential for effective wor). It is the
responsibility of the tas) leaders and ultimately the manager
to provide the appropriate communication tools, techni#ues,
and systems. These tools are not the status meeting, reviews,
schedules, and reporting systems, but also the ob!ective
statements, specifications.
5. Minimi:e Threats
Managers must foster a wor) environment that is low on
personal conflict, power struggles, surprises, and unrealistic
demands. 3n atmosphere of mutual trust is necessary for the
personnel to communicate problems and concerns candidly
and at an early point in time.
4B. &esign a Personal Appraisal and Re,ard $!stem
This should be consistent with the responsibilities of the
employee and implies treating employees with respect,
rewarding them fairly or even generously and, perhaps,
see)ing to elicit responsibility and trust.
0(
Recommendations
"or achieving a competitive advantage through the employees the
following recommendations can be made.
1. The firm should use an analytical framewor) for strategic
management because it provides identification of the
relationship between )ey variables that should be analyzed
and assistance of the practitioners to analyze and initiate
appropriate policy in their own conte-t.
0. 3s mentioned earlier technology is an important factor in
achieving competitive advantage but is worthless without the
)nowledge and talent of the operators using it.
7. The management should trust their wor)ers and give them
responsible and challenging assignments, wor)ers in return
will respond with high motivation, high commitment and
high performance
(. &hoosing the right leaders. >ne feature of leadership style is
its emphasis on the ability to generate commitment and
enthuse others to innovate, to change and indeed to con#uer
new frontiers in the mar)etplace or on the shop floor.
:. 8roviding good !ob descriptions and realistic targets and all
re#uired resources to achieve those targets.
C. ?esigning an effective rewards system and annual increases.
0:
,. Ma)ing communication system effective and wide and easy
procedures for individuals to raise grievances and receive
reply.
9. Management commitment to full employment means that if
the !ob disappears through technological change or shutting
down then the company will offer alternative employment or
helping them to find another one.
'. 3n annual statement of each employees performance against
set of ob!ectives. this would include an assessment of
progress, career ambitions and consideration of possible
training.
1+. The organization effectiveness can be increased by
improving the matching between what the organization
re#uires of its employees and what they re#uire of it.
11. Therefore the organization should be able to lin) its
strategy to individual ob!ectives.
10. The employer strategy should focus on creating
competitive advantage through the employees and using the
practices that support this strategy which include.
a. &reating an attractive wor) environment
b. >ptimising people resource levels
c. %haring information
d. ?eveloping capability
e. ?esigning optimal wor) systems
f. 3ligning reward and recognition systems
17. "inally )eep in mind the following five goals which
provide a framewor) for identifying areas of human resource
policy.-
a. ;D should be integrated to strategic plans.
0C
b. >rganizational commitment, combined with !ob
commitment will result in high Jemployee satisfaction,
high performance, longer tenure and willingness to
acceptJ change.
c. "le-ible organization together with fle-ible !ob content
and fle-ible employees will Jresult in a capacity to
respond swiftly and effectively to changes and ensure
theJ continuing high utilization of human and other
resources.
d. J;igh commitment, trust and motivation are to be
maintained, then it is particularly Jimportant that
management policy and practice is perceived to be
high #uality by Jlower grade employees.
e. The pursuit of policies designed to ensure the
recruitment and retention of high J#uality staff to
underta)e demanding !obs, supported by component
management will Jresult in high performance levels.
Conclusion
>ne factor that can set an organization apart from its competitors
whether in services or products, in the private or public sector is its
employees. The #uality of the organizations employees, their
enthusiasm, and their satisfaction with their !obs and the company
all have a significant impact on the organizations productivity,
level of customer service, reputation and survival. In other words,
in a competitive environment, people ma)e the difference. ;uman
resources are a critical component in every area of the
organization, from finance to sales to customer service to line
management. Managers and supervisors in every department
confront human resource issues every day and are responsible not
only for interactions within their own department, but also
0,
interactions between departments. The primary function of human
resources today is to ensure the effective and efficient use of
human talent to accomplish an organizations goals and ob!ectives.
sing human resources as a competitive advantage means
analysing what factors are necessary for the organizations long-
term success. Delevant areas to review include. organizational
design, )ey wor) processes, teams, hiring effective employees,
promotion strategies, defining competencies and performance
measures, training and development programs for current !ob and
preparation for future positions, reward and recognition systems,
motivation and retention, employee perceptions and customer
perception of the organization and employees. In order to
formulate appropriate competitive advantage through the
employees program for an organization, it is first necessary to
analyse the firmNs competitive strategy or business strategy and
organizational human resource practices. The organization should
create a complete model of ;DM and employment relationship,
also it should support long-term thin)ing, building Icore
competencies and also develop FsensingG capabilities. The future
is essentially unpredictable, but the organization develops the
capacity to sense the change. 3 central role of the personnel
function to develop this capability to collect information about
future trends in labour mar)ets and s)ill sets, and in lin)ing
changes in aspirations, wor) practice and motivations without this
insight, is leading the blind organization into the future. %uccessful
companies )now that there is a direct lin) between employee
satisfaction and customer satisfaction. It is the responsibility of
managers and supervisors to ensure those employees are
motivated, productive and positive-if not enthusiastic-about their
wor). This means integrating human resources practices with core
business practices. encouraging all departments to wor) together
on KpeopleK programs that bring value to the organization and
improve productivity and #uality in products and services. 8ositive
human resources business programs translate into a positive
financial impact on the organization. There are many
09
organizations where the emphasis on human resources has made a
difference in the performance of the organization. These
organizations ac)nowledge the significance of their employees in
ma)ing a difference in the company and providing the essential
ingredient for its competitive advantage. %uccessful organizations
do not isolate their Kpeople programsK. They consider them an
integral part of their business strategy.
0'
Re'erences
1. 5arney, @. 1''1,G"irm resources and sustained competitive
advantageG @ournal of Management, Ool. 1,, 2o 1
0. 5eer, M. and 1alton, <. D. 1''+ FDeward %ystems and the
Dole of &ompensationG Manage 8eople, 2ot 8ersonnel.
Motivation and performance 3ppraisal. 3 ;arvard 5usiness
Deview 5oo).
7. 5o-all, 8. 1''C, FThe strategic ;uman Desource
Management debate and the resource-based view of the firmG
;uman Desource Management @ournal
(. M.5riner, 1., ;astings, &., *eddes, M. 1''C,F8ro!ect
=eadershipG, *ower, <ngland
:. &arr, ?. H. and ;. @. @ohansson 1'':, F5est 8ractices in
DeengineeringG
C. &hild, @. 1',0G >rganisation structure, environment and
performance. the role of strategic choiceG, %ociology.
,. &off, D.1., 1''(,G;uman 3ssets and organization control.
implication of the resource- based viewG @ohn M. >lin
%chool of 5usiness 1ashington niversity.
*ibliograph!
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pdf
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