Importance of Human Resource Management

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Human resource is the most valuable asset of an organisation as it is the source of operational performance and competitive advantage in an organisation. An asset, by definition, is a useful or valuable thing or person. An organisation comprises of three types of assets, namely; financial assets, physical assets (infrastructure and equipment), intangible assets. Intangible assets include intellectual capital (patents, copyrights and trademarks), social capital and human capital. The creative thinking potential of an organisation’s current employees (Bolton, 1996), is the organisation’s most valuable asset, as people are the driving force within companies seeking to differentiate themselves in these competitive markets.

Business in the 21st century is highly competitive. The rise of Internet has made the world more connected, allowing fast exchange of knowledge, making it easier for businesses to understand and enter new markets across the globe. The Internet has also provided a open-knowledge framework and creative landscape that have contributed to numerous significant technological breakthroughs in the recent years, making it extremely challenging to generate the next big idea in the marketplace. Thus, it has become essential for business leaders to build organisational capabilities that support the innovation, collaboration and continuous learning imperative for success in a complex, fast-changing world (Serino, 2013), that is to effectively leverage human resource as human capital. As stated by Bolton (1996):
Human capital is the knowledge, skills and capability of the work force. Don't think of people as a liability. They are the key to the future.

The skills and knowledge of people, add acumen and insight to other resourc...

... middle of paper ...

...n resource to be the most important asset of an organisation.

Works Cited

Becker, B., Huselid, M. & Ulrich, D. 2001, The link between people and strategy Companies often treat workers as a cost, rather than as a source of competitive advantage. Brian Becker, Mark Huselid and Dave Ulrich suggest a way of valuing the most important intangible asset, London (UK).

Bolton, N. 1996, "Your organization's most important asset", The Canadian Manager, vol. 21, no. 4, pp. 25-26.

Castaneda, D. & Toulson, P. 2012, "The Value of Human Resources in Intellectual Capital and Knowledge Management", Academic Conferences International Limited, Kidmore End, 10, pp. 52.

Serino, M. 2013. Making Human Capital the Creative Core of Strategic Execution. [e-book] New York: Cornell University ILR School. pp. 1-5. Available through: http://www.ilr.cornell.edu/hcd/ [Accessed: 15 Nov 2013].

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