How a Firm's HR Strategy Could Be Its Source of Competitive Advantage - Essay Example

Critically examine how a firm's HR strategy could be its source of competitive advantage Human resource management or HRM takes its basis from the humanity regimes. It means that the empathy and understanding of the needs and requirements of the workers is significant for the people at the helm of affairs within the said organization. Also it gives rise to the notion of understanding employee activities, undertakings and tactics on a consistent basis. HRM has come about as a feature within the modern day organization which has changed its face upside down. It has turned the tide in the favor of recruitment and selection policies, made aspects like performance management rewarding, focused more on incentives and bonuses, relied on the importance of having a proper hiring and firing regime and many other initiatives are also in line when one thinks of HRM in the truest sense. The single most basic aspect that HRM brings to the fore is its ability to make the employees and workers feel counted for their actions and they realize that their voice is also getting heard within the midst of any company, firm or entity so to speak. Competitive advantage is important to understand because it dictates the manner in which HRM brings in the much touted for value of the organization. The differing stance of the organization in terms of its human resources is manifested through the competitive advantage which is documented in a number of varied ways. It must be remembered here that competitive advantage works to the benefit of the HRM regimes and thus building up of the same would mean incentives for the organization in the long run. (Fahy, 1996) It must be understood that competitive advantage and HRM work hand in hand, in order to bolster the organization in different ways – all of which build value at the end of the day. The origin of HRM thus emanates from the auspices of a single department taking care of all the management concerns. This would include finance people handling recruitment and selection duties as well as top management taking care of each other’s dealings and duties. What HRM has changed is to provide the employees a department for their own selves and now they know they could make themselves feel heard when it comes to drafting policies, amending proposals and strategies and changing the course of action as per the employee undertakings and similar avenues of employee scope is concerned. Thus the most basic definition of HRM is to devise means for getting to the employees in a direct manner – taking care of their concerns, rewarding them for their works, listening to their demands and getting work done out of them. The last aspect is all the more important because it suggests that since the HRM division and indeed the organization is doing its best to understand these workers, the workers and employees have a duty to give back what is needed from them towards the long term growth of the said organization as well. (Boddy, 2005) This will create a much needed two-way relationship between the relevant ranks as well as have a fair dealing when it comes to handling employees within the tenets of an organization. This indeed is the competitive advantage that one talks of here as it is bringing about a change for the better and a competitive tilt within the whole related industry. This two-way relationship would mean that the organization is better placed than its competitors and knows what it is delivering to the target audiences, and more so the internal publics which are indeed the employees – working towards the growth regimes of the company itself. Thus a firm’s HR strategy would become its biggest source of competitive advantage if it knows that it exists to serve the people who make a difference, bring about certain actions which are important for the well-being of the business fraternity and in the end, ask of them to give in their very best – time and time again. Human resource management within an organization is for the company’s own benefit – and that too in the long run. The absence of such an entity could come back and haunt the regimes of the organization for all the different reasons that could be thought of. HRM has brought to fore the aspects related with employees and workers which were remarked to be unknown and trivial in the yesteryears. The aspect of competitive advantage has hit the organization in a very realistic sense and this is one positive tenet that can be derived from the relevant scheme of things. With the advent of age and time and more so the changing organizational settings, having an HRM regime in place is indeed the need of the hour since absence of the same within a company could be understood through leaving a huge gap when it comes to composing all the relevant parts necessary for the adequate functioning of the organization in one wholesome unit. HRM is indeed a very significant unit which needs to be given proper weight and its acceptance is thus pertinent towards the functioning of other departments present within the organization. It would not be wrong here to suggest that HRM is in fact the central working authority within the organization or the heart that receives and sends blood to the whole body – the organization in entirety. The quintessential aspect under realization here is that as to how this heart could work in a manner which will make the other body parts function to their optimum levels at all possible times, without any hiccups whatsoever. The proactive move is to have competitive advantage built consistently and thus enable the different stakeholders to realize the potential of the organization. The HRM would facilitate this positive formulation of the competitive advantage, a fact that has been evidenced through research and practice in the modern times. (Sims, 2002) There are some questions that need to be addressed to the critics who seem to outnumber the realists no matter how important the sheer existence and functioning of HRM would be within the present day organizational infrastructures. One must not doubt and question the integrity of the HRM units within the organizations since their absence leaves a void which could be easily visible by just about everyone – both inside and outside the organization. Thus HRM regimes have to take into consideration the role played by building up the competitive advantage and that too from a long term perspective. The responsibilities that the HRM unit has on its shoulders are immense and hence it would be fitting if the required resources are used in a very cost-effective manner. The duties of the HRM department are spread across a number of fields and avenues. The need is to realize that the HRM department does its best to carry out these tasks in a proactive manner since it demands a lot of time, patience and empathy to come on board with the feelings, sentiments, grievances and motivation levels of the employees and workers. Recruiting the right mix of people is the first and foremost task of any organization and thus it needs to do with an eye to recognize talent and skill which comes to the interview table. (Handy, 1993) Then again having interviews and the whole selection process could be marred with references from the top management and which need to be discarded off since the HRM unit has the responsibility to select and recruit the people who are deserving of the required posts. No favors at any cost should be entertained since this destroys the workplace culture and creates animosity amongst employees when they get recruited in such a manner. There is a lot of ‘excess baggage’ when it comes to these employees and they are always looked down upon with an eye of skepticism when it comes to delivery of tasks and work procedures. There must be a balance between the good and the bad in such a dictum and thus the need is to have a sound comprehension as to what exactly is the method behind selecting and hiring the right kind of individuals at the workplace. Providing equal opportunities is another aspect that comes under the auspices of the HRM which it has to take care of under strenuous guidelines. In fact it needs to establish such policies which order the compliance with the equality within the opportunities (both job wise and salary) and gender, race or age differences must not be entertained at any cost. Organizations which are ready to upgrade their HRM regimes are thus the ones who have found success in all relevant quarters of their business. Essentially competitive advantage is built in a fair capacity through the upgrading of the HRM units, in line with the benchmarks of the present times. With this necessary incorporation in terms of organizational strategy, they have been able to look at the ethical side of things as well since the moral grounds have been set in a proper manner and there are as such no apprehensions to state the least in the present times. A business can move from a position of stability to one of a complete unstable stance as it acquires different means of gathering the market and its driving factors that come along with it. (Chang, 2001) The organization needs to change its position with the changing times otherwise it will disappear in the thick of things when it comes to competitors and more so the customers, for which it actually exists. It must bring about technological innovations so as to meet the ethical guidelines and best practices which are geared up to make it sound, look and eventually feel different from the rest of the lot and in the long run, have a selling proposition in it and in its products that help it in winning the customers time and time again. The work culture within the employees can be developed in a manner which suits the interests of the organization in the best form possible. For this to happen, it is necessary to understand that HRM department has got an immense role to play in the related equation. We must understand that we live in a global world where HRM has of late been instrumental at dramatically changing the way we perceive the way in which people think, act and feel on the job. The basic dogma on which the dot com companies work is to reach out to the greatest amount of people and make those people as their clients within a short duration of time. This would be on the expense of not being at concern related with the loss in the stock prices. The culture which was adopted by these companies was of get large or get lost in the whole frame of things. Only the technological basis makes the very same possible and a work culture of this regime is necessary to put things into perspective. Factually speaking, HRM regimes take care of the disputes and minor tussles which happen between the management and the employees. A conflict within an organization can take place due to differing personalities of the employee and the manager or in their attitudes that lead in their linkage with each other. This could also happen due to their norms and behaviors which might not be liked by any one party (person) and thus lead to a conflict of thoughts, ideas, actions and eventual behaviors towards each other. There is a degree of power when we speak of the manager in terms of the same over his subordinate or the employee who is working under him in a direct or an indirect capacity. The five sources of power include the coercive power which speaks of the power that the manager has over the employee and the manager can use this power to punish the subordinate/employee and also form as a measure of consequence for the latter. Legitimate power takes into consideration the difference in position or grades between the employee and the manager. The more the difference is, the greater the extent of the power he has over the subordinate/employee and thus can use the conflict to his best advantage. Reward is another form of power which speaks of the ability of the manager to reward a certain employee for his deeds but can lead to serious problems for the employee if there is a conflict between the two and hence the power of reward can take a back seat in this whole equation. Expert power can play a huge role when there is an expertise in either the manager or the employee and the same can form up as a bone of contention between the two where one party (person) would start feeling jealous due to the expertise available and thus lead himself to a conflicting situation with the other one. The last form of power that can take its place in a conflict is that of referent. This power can just wipe away in a conflict since this is the power given to a subordinate by the manager on the level of latter’s liking but as there is a tension situation between the two, this power diminishes off instantly. Even though knowledge is a widely recognized source of achieving competitive advantage there seems to be very little and at times unsanctioned understanding of how organizations actually create and manage knowledge in a resolute manner. In this, the role of the top management employees is quintessential as their astuteness is chalked out with respect to the company’s mission and vision on a long-term basis. (Dunn, 2001) Middle management levels also hold significant position in this as they are the real “knowledge producers” and hence any new knowledge that a company looks for is produced courtesy through these people. Competitive success is basically commanded by the company's capability to harness and indeed develop new forms of knowledge which can be called as assets that in turn create the required “core competencies” of the said company. While these competencies do exist in many forms, learning on the part of a particular company plays a pivotal role, which eventually ventures into other resources of knowledge to generate high-class and exceptional showing from the company’s employees. Core competencies, which usually flow out of a company, provide characteristic benefits to both the customers as well as any other individuals attached with it. These are generally espied as being the foundation of forming a competitive advantage within the said company. (Stonehouse & Pemberton, 1999) In the end, one must understand that the HRM department does not require a single line manager to make its activities dependent on his thinking mindset. In fact the HRM department must be guarded by individuals who know what to expect from employees under tough times as well as the ones in which the organization is involved in a money-making exercise. The HRM department needs to comprehend the fact that the line needs to be drawn between the incentives and the lack thereof. (Beardwell & Claydon, 2007) A line manager might not deliver perfectly in sync with the laid down objectives of the HRM unit and thus there is a dire need to understand that individuals with empathy and a need to understand the basic human psyche are the most apt within such HRM divisions of an organization. Bibliography BEARDWELL, Julie & Claydon, Tim. (2007). Human Resource Management, 5th Edition, FT Press BODDY, D. (2005). Management – An Introduction, 3rd Edition CHANG, Richard. (2001). Turning into Organizational Performance. T&D, Vol. 55 DUNN, Rita. (2001). Knowledge Management and Learning Styles: Prescriptions for Future Teachers. College Student Journal, Vol. 35 FAHY, John. (1996). Competitive Advantage in International Services: A Resource-Based View. International Studies of Management & Organization, Vol. 26 HANDY, Charles. (1993). Understanding Organizations. Penguin Publishers SIMS, Ronald R. (2002). Organizational Success through Effective Human Resources Management. Quorum Books STONEHOUSE & Pemberton. (1999). Learning and Knowledge Management in the Intelligent Organization, Participation and Empowerment: An International Journal Word Count: 2,567 Read More