Human Resources and Competitive Advantage - Coursework Example

Human Resources and Competitive Advantage Name Institution Human Resources and Competitive Advantage Introduction Competition within the market is increasingly affecting the profitability and market scope of many businesses; thus, employers are focusing on developing and implementing effective management strategies. The main factor that stands across these organizations is the power of the employees. Employees are the greatest organizational assets and when effectively managed, the business has the ability of competing efficiently and acquiring the required competitive advantage (Analoui, 2007). Relying on the human resource departments in recruiting the best employees, designing proper training programs, and institutionalizing successful programs to retain the best employees are also gaining popularity in giving businesses competitive advantage. Even though the competitors often struggle to maintain experienced and motivated employees, for reliable and sustainable competitive advantage, the business could focus on productivity and increasing the sales. These plans can be successful if human resource plays a significant role in the workforce development. Traditionally, businesses acquired competitive advantage through factors through production capacities, financial resources, economies of scale, and research laboratories. Even though these factors have remained relevant but they are insufficient in the modern business environment (Noe, 2013). Generally, it is accepted that employees are the major assets within the new world market and other assets continue to remain nothing rather than which can be purchased depending on the market prices. Human resources have the potential to learn, growth, and contribute to organizational success. Human Resource Management and Competitive Advantage The level of competition is becoming very stiff in almost all the sectors. Hence, businesses are keen on strengthening their market base through employing competitive advantage strategy. In the current error of competition, all businesses are keen to achieve their desired competitive advantage through improving the level of technologies and adoption of various methods. Some of the methods are cost leadership, quality improvement, and cost reduction. However, these activities can only improve organizational performance to certain level. To move beyond such point, businesses need to focus on important resources such as human resources (Mazini & Ulian, 2011). Businesses often enjoy competitive advantage through implementation of value creating strategies, which have not been implemented by the competitors. Committed and competent employees act as the source of organizational competitive advantage contributing to the development of the business’ competitiveness and sustenance. To such end, there are two clear things: both the business is instinctive enough to develop something that is beyond the competitors to imitate, and the business is fast enough compared to the competitors to keep the pace. Among the resources at the disposal of the business, the human resources meet two conditions: being the source of sustainable competitive advantage that adds value to the business and cannot be imitated. Hence, it is important that businesses continually invests in the knowledge, skills, retention, selection, motivation, recruitment, and constantly strive to improve and implement the most appropriate HR practices. With the right people within the organization, the business does not need anything else while having the wrong people in the job, the consequences are likely to be bad (Kramar, 2013). Therefore, the more the business focuses on the employees, the more competent and committed and satisfied its employees will be. This will improve organizational performance and development of organizational competitive advantage. However, few firms have the ability of evolving successfully the human resource practices for sustainable competitive edge. Some of the best practices include selection of highly skilled employees, effective training and development, inculcation of the right skills, attitude, and knowledge establishing a congenial working environment. Businesses use different methods to influence the performance of their human resources. The commonly used strategies are fair compensation and fringe benefits, maintenance of good employee relationships, better succession, and career planning, and ensuring strong respect to the dignity of individuals. If the business follows effectively human resource activities, then it is bound to have committed employees, which is competent enough to ensure sustainability of organizational performance within the highly competitive environment. Therefore, such business will evolve a sustained competitive edge since it will take several years for the competitors to produce similar levels of commitment and trust among the employees (Deadrick & Stone, 2014). Nonetheless, there is need to match the competitive advantage of the business and human process advantages such as cooperation and learning. With increased satisfaction of committed and committed workers through enhanced processes, the business is likely to experience few accidents, reduced labor turnover, improved efficiency and productivity, and improved customer service and satisfaction. Hence, it is important to study and investigate various aspects of competitive business environment. HRM Influence on Competitive Advantage HRM plays significant role in influencing organizational competitive advantage. however, there is need to have professionals with experience. Human resources seem to vary in skills and experience which they bring into the job. In most organizations, most of the administrators are proficient in processing payroll and execution of the benefit programs; nonetheless, they have little leadership skills that the normal clerical employees. Businesses can upgrade their human resources department to include the specialist with recruitment skills who also should understand organizational strategic roles and contribute significantly in shaping the business process (Ambrosini, 2003). Moreover, the executive-level human resources can assist the business in designing the job descriptions and various training and development programs. Moreover, the human resource managers can as well assist in finding the best candidates and participate in the definition of salary levels that result in the best hires. With the business environment increasingly becoming dynamic and competitive, innovation continues to hold an important position in ensuring business success. At least, it is important to adapt though innovation is better. However, the most potent sources of innovation are normally the ideas that come from within the company and more so in connection with those working with the customers (Barney & Clark, 2007). Therefore, a strategically minded human resource manager need to design the jobs, create an effective connection among the employees, and provide adequate training that assists each person within the business be part of the innovation team. As business environment become dynamic, it is more important that senior organizational leaders become flexible, externally focused, and properly prepared. Businesses may choose to compete through offering the lowest prices within the market. To do so, the business needs to ensure that its operational expenses are very to maximize the profit. Through derivation of human capital from the wide poll of contractors or being able to reduce the human resources expenses which through combining with other methods to reduce the expenses of the business may assist the business achieve significant prices. Highly skilled workers assist the business in offering superior products, which it has the ability to charge a premium. The case is applicable in the luxury products and services and businesses competing based on quality (Ivancevich & Konopaske, 2013). Even it may be costly recruiting, training, and retailing highly skilled employees adding value to organizational offerings, such costs are transferable to the consumers through premium pricing. Organizational source of competitive advantage can be operational effectiveness. The skilled workers with the ability to reduce the internal cost can increase the operating margins. Moreover, having a strong internal culture characterized by high employee morale and engagement, the business has a chance to increase productivity and business profit. Improving Employee Productivity through HR Practices Job satisfaction, motivation, and commitment of the employees are considered critical dimensions of organizational performance. Researchers on soft model of HRM cite that the employees need to be considered as valued assets, which is a source of organizational competitive advantage through commitment, accountability, and high quality performance and skills of the employees. The employees need to be considered as proactive instead of passive inputs involved in the productive process since they are able to develop trust and collaboration achievable through informed choice and participation (Ziółkowska, 2014). Therefore, businesses need to focus on achieving competitive advantage through effective communication, leadership, and motivation. HRM practices and policies influence the performance, behavior, and attitude of the workers. These practices focus on various important practices that consequently impact organizational performance positively. The affected HRM practices are employee relations, compensation, training and development, selection, performance management, selection, and recruitment. Traditional concepts proposed that evaluation of effectiveness need to be based on financial measures in assessing that existing relationship between individual and business personalities. However, for many years, human resource issues have secondary to these measures. Currently, most managers agree that it is difficult to hold employees with enthusiasm and loyalties based on profits. HRM practices improve organizational effectiveness and performance through attraction, identification, and retaining of the knowledgeable, skilled, and abilities to make them behave in a manner that supports organizational mission and objectives (Kongpichayanond, 2009). Therefore, the effectiveness of the HRM practices depends on the manner in which it engenders the appropriate attitudes and behaviors of employees. In the modern business environment, human resource managements are expected to deliver successful organizational performance. Furthermore, most organizations believe that business strategic management process depends on the level to the functions of HR is involved. Conclusion The market is increasingly diversifying with competition level becoming unsustainable to most business. It is the aim of every business to achieve competitive advantage; however, some of methods used in achieving competitive advantage are poor. From the analysis, the paper noted that forward-thinking entities are increasing dramatically the significance, weight, and strategic role within their human resource departments. One of the ways used in making the business run efficiently is through putting the leaders and non-human resource professionals within the role of running the groups, which is a refreshing development and considered long overdue. Businesses often enjoy competitive advantage through the implementation of value creating strategies, which have not been implemented by the competitors. Committed and competent employees act as the source of organizational competitive advantage contributing to the development of the business’ competitiveness and sustenance. References Ambrosini, V. (2003). Revealing Tacit Routines as a Source of Organisational Success: The Process. Tacit and Ambiguous Resources as Sources of Competitive Advantage, 3(7), 46-55. Analoui, F. (2007). Strategic human resource management. London: Thomson. Barney, J. B., & Clark, D. N. (2007). Resource-based theory: Creating and sustaining competitive advantage. Oxford: Oxford University Press. Deadrick, D. L., & Stone, D. L. (2014). Human resource management: Past, present, and future. Human Resource Management Review, 24(3), 193-195. Ivancevich, J. M., & Konopaske, R. (2013). Human resource management. New York, NY: McGraw-Hill Irwin. Kongpichayanond, P. (2009). Knowledge Management for Sustained Competitive Advantage in Mergers and Acquisitions. Advances in Developing Human Resources, 11(3), 375-387. Kramar, R. (2013). Beyond strategic human resource management: is sustainable human resource management the next approach? The International Journal of Human Resource Management, 25(8), 1069-1089. Mazini, S. R., & Ulian, E. (2011). Influences of Factors of Human Resources for Innovation in Services Companies. Knowledge Management for Competitive Advantage During Economic Crisis, 5(2), 271-281. Noe, R. A. (2013). Human resource management: Gaining a competitive advantage. New York: McGraw-Hill/Irwin. Ziółkowska, M. (2014). Relational Resources Management as Source of Company‟s Innovativeness and Competitive Advantage. Journal of Economics, Business and Management, 5(3), 202-208. Read More