An organization’s resources can be classified into three categories: physical resources, human capital resources and organizational capital resources. Physical capital refers to non-human assets such as, machinery, infrastructure and other raw materials that are used within an organization’s production process. Human capital resources include the skill sets, knowledge, work experience and insights of each individual employed in the business. Organizational capital resources consist of an organization’s formal reporting structure, the planning, controlling and coordinating of systems, and interpersonal relationships formed within the work community (Barney, 1991, p.102).
As civilization progresses rapidly into the age of globalization, technology and competition, an inevitable shift in organizational paradigm is to be expected. In a fast-paced business environment, the fierce competition between businesses challenges products’ life cycles. As competition increases, a product’s life cycle shortens, and is faced with the threat of premature elimination. Today, much emphasis is placed on overall cost efficiency to maintain business sustainability and competitive edge. To achieve cost efficiency, a business must look at its resources and determine the correct strategy to deployment, which will help the business attain its business goals. One of the strategic moves to keeping a business cost effective is to implement a strategic approach to human resource management (Sondhi and Nirmal, 2013, p.4).
While it is still important for businesses to develop external competitiveness through introduction of new services, products or innovations, the business must prioritize its development of internal human assets as it is through the employe...
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Resources are organization’s productive assets and capabilities are what an organization is capable of doing. The relationship between resources and capabilities of a company forms a competitive advantage. Capabilities and resources help in gaining value and competitive advantage over competitors.
Pitts and Koufopoulos (2012) argue that resources and capability are highly important internal factors that should be taken into account by the organization in order to obtain the successful performance in the long run.
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However you define the activities of management, and whatever the organisational processes are, an essential part of the process of management is that proper attention be given to the Human Resource function. The human element provides a major part in the overall success of the organisation. Therefore there must be an effective human resource function. In the past, most organisations viewed Human Resource Management (HRM) as an element function, that is an activity that is supportive of the task functions and does not normally have any accountability for the performance of a specific end task. Because of the emphasis on analysis and precision there is a tendency for strategists to concentrate on economic data and ignore the way in which human elements and values can influence the implementation of a strategy. 'Economic analysis of strategy fails to recognise the complex role which people play in the evolution of strategy - strategy is also a product of what people want an organisation to do or what they feel the organisation should be like.?(1).
Human Resources Management (HRM) Interventions relates to the idea of improving an organizations overall performance and efficiency by improving the members (individuals and groups) performances, commitment, and flexibility. According to Beer et al. (1984), this is often a relevant intervention technique when organizations are facing increased international competition. They see the value of HR investments as a way to improve organizations competitive advantages. Further, they establish that HRM policies have long-term consequences and immediate organizational outcomes. These policies should include the overall competence of employees, the commitment of employees, the cost effectiveness of HRM practices,
In the fields of management and business, Strategic Human Resource Management (SHRM) has been a powerful and influential tool in order to motivate employees to perform productively. (Ejim, Esther, 2013). According to Armstrong (2011), SHRM refers to the way that the company use to approach their strategic goals through people with a combination of human resource policy and practices. The purpose of SHRM is to produce strategic capability that the organisation must ensure such that employees are skilled, committed, and well-motivated in order to achieve a sustainable competitive advantage, (Armstrong, 2011). Particularly, the organisation must be able to carefully plan strategic human resource ideas, aimed to increase the productivity.
Human resource management is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business. The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations. Human Resource management is evolving rapidly. Human resource management is both an academic theory and a business practice that addresses the theoretical and practical techniques of managing a workforce. (1)
Noe, Raymond A., John R. Hollenbeck, Barry Gerhart, and Patrick M. Wright. Human Resource Management: Gaining a Competitive Advantage. 7th ed. Boston: McGraw-Hill Irwin, 2010. Print.
Whether an organization consists of five or 25,000 employees, human resources management is vital to the success of the organization. HR is important to all managers because it provides managers with the resources – the employees – necessary to produce the work for the managers and the organization. Beyond this role, HR is capable of becoming a strong strategic partner when it comes to “establishing the overall direction and objectives of key areas of human resource management in order to ensure that they not only are consistent with but also support the achievement of business goals.” (Massey, 1994, p. 27)