Human Resource Management and Competitive Advantage

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Introduction

The given journal paper review will primarily focus on three journal articles. They are related to the research topic of the interconnectedness of human resource (HR) management and the competitive advantage of an organization. One should be aware that proper HR practices can provide a substantial level of competitiveness, which is especially relevant where knowledge and its management are critical. High-tech or IT industry can be considered as an example of such an area where employees are the main value generators. The articles promote employee engagement, knowledge management, and strategic HR management as key elements for gaining competitiveness.

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Employee Engagement

It is important to understand that employee engagement plays a central role in the establishment of competitive advantage. Such an HR management practice is comprised of four main elements, which are training, performance management, socialization, and selection (Albrecht et al., 2015). In other words, a thorough implementation of these processes in the human resource management of an organization can significantly increase the overall employee engagement. The latter, in turn, boosts cooperation and workplace communication, which increases the general cohesiveness of employees and provides a competitive edge in the market. The quality and contribution of the article are high because it outlines specific steps for improving employee engagement.

Selection is the most initial step which can ensure the proper in-flow on the workforce. It is manifested in attracting high-caliber professionals with a specific set of standards for productivity and commitment (Albrecht et al., 2015). In other words, unfit candidates are eliminated in this stage, but it is critical to further improve the filtering by filling the key roles with the most suited employees. Socialization also plays a vital role in ensuring that each member of an organization is in-tune with the corporate environment. The given step is even more relevant in the case of newcomers who might not be familiar with the workplace culture and environment. organizational commitment is an emotionally positive attitude of an employee towards an organization, which implies a willingness to share its goals and values, as well as work hard in its interests. Organizing regular socialization events improves the overall employee engagement, but they need to be conducted in a meaningful manner. Newcomers should feel safe and worthwhile in order to proceed with smooth integration, whereas any form of incivility or inappropriate behavior can leave an irremovable first impression.

Performance management is an HR management practice that targets already existing employees. The process allows managers to sustain a high level of performance and track unproductive employees (Albrecht et al., 2015). However, it is important to note that extensive performance checks can have a negative effect by violating a worker’s privacy and individual freedom in completing his or her tasks. Therefore, it needs to be used with a certain level of precaution because such procedural monitoring can disrupt the overall workflow and worsen employee engagement. Similarly, training needs to be meaningful and relevant because it can become a waste of resources and time for an organization. The primary objective of the given process needs to focus on eliminating the weak points of employees. However, unnecessary training procedures can also disrupt the workflow.

In modern conditions, for managers of human resources, it is becoming the norm to promote constant professional growth in the form of various advanced training courses, master classes, or the development of additional professions. Such professional growth characterizes mainly human resources employed in production. It is necessary to maintain the achieved career positions. Professional development also affects the increase in labor efficiency and the quality of the organization’s human resources. As a rule, highly skilled production participants adapt more easily to changing technological and economic conditions.

The acquisition of additional knowledge is associated with additional financial costs, and therefore the employed population, being more solvent, has more opportunities to improve the quality of their own resources. Partly in the process of improving the quality of working human resources, employers are involved. Still, their costs are associated with the current production need for the required quality of employed personnel. They do not extend to the creation of high-quality resources in the future. Despite this, the participation of the organization in the formation of new qualities of employed human resources leads to an increase in the competitiveness of the enterprise as a result of better service or an improvement in the quality of the goods produced. At the same time, the employee gets the opportunity to expand career prospects not only in this enterprise but also outside it, as well as the chance for self-realization as a professional in the chosen field of activity.

Knowledge Management

Outstanding HR management can also provide a major competitive advantage through knowledge management capability (KMC). The concept refers to the processes of using, sharing, and creating knowledge within an organization (Mao et al., 2016). It is especially relevant in the IT industry, where employees are the main value generators, and they are required to exchange ideas for the improvement of the product or service. Correct allocation of organizational knowledge and its redistribution can significantly boost the overall competitiveness of a corporate entity (Mao et al., 2016). However, it is in the HR management department’s competence to increase its KMC in order to enhance the metrics of performance. The contribution and quality of the article are high because it provides valuable insight into the application of valid methodological frameworks.

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It is critical to note that knowledge management capability can also be influenced by the management team itself. Although HR plays a central role in imposing the practices, upper management individuals are more likely to possess all the essential knowledge. However, they can be the main barriers of distribution, which can severely hinder the employees’ understanding of the company’s vision and objectives. This, in turn, can reduce their capability to contribute and promote organizational goals. Therefore, the researchers might need to factor in the plausibility of upper management’s reluctance to share knowledge and its effect on competitiveness.

Competitive advantages are created by the unique tangible and intangible assets owned by the company, those strategically important areas of activity for this business that allow one to win the competition. Thus, the basis of competitive advantages is the unique assets of the enterprise or special competence in the areas of activity that are important for this business. Competitive advantages, as a rule, are realized at the level of strategic business units and form the basis of an enterprise’s competitive strategy.

Strategic Human Resource Management

Strategic human resource management is an approach that combines strategic management and HR management. It does not solely focus on employees to achieve competitiveness but also transforms supply and demand in order to improve mobility constraints (Delery & Roumpi, 2017). The main objective of strategic HR management is to create a sustainable competitive advantage that is generated through the merged reconceptualization of both fields. Compared to traditional HR management, which primarily focuses on compliance and the legal aspect of the matter, strategic one strives to ensure organizational success through employee management. The quality and contribution of the article are high because the researchers thoroughly analyze the aspect of competitive advantage by making correct assessments.

The main pitfall of such an approach can be the fact that an HR management department might fail to represent employees’ interests and fully adhere to a company itself. Instead of being a mediator between these two parties, strategic HR management imposes its objectives on workers. The latter might take place at the cost of employee’s interests, such as reduced compensation, elevated workload, or even layoffs. One should understand that despite the general cohesive structure of organizations, employee and employer dynamics still remains a relevant aspect within a corporate entity. Therefore, strategic HR management can severely worsen the relationship between these two groups by prioritizing one’s goals over another’s.

At the level of strategic management, human resources can be understood as labor resources that are offered by people in the labor market and interact with other types of resources. In this context, human resources are viewed as the ability to perform economic activities that exist in society at a certain point in time. The formation of human resources at the level of strategic management requires the costs of both the individual, the firm, and society as a whole, and their state is a generalizing indicator of business development. Such investments in social capital become cumulative rather than individual. At the level of an organization, strategic management can be considered as the management of its competitiveness.

Conclusion

In conclusion, an organization can achieve a competitive advantage by improving employee engagement, integrating knowledge management, and implementing a strategic human resource management approach. However, the latter two of the described methodological framework possess a number of pitfalls. In the case of knowledge management, it is important to consider the role of upper management as the primary hindrance to the improvement of knowledge management capability. In addition, strategic HR management can fail to represent employees’ interest because the HR management department stop being a mediator and sides with organizational goals.

References

Albrecht, S. L., Bakker, A. B., Gruman, J. A., Macey, W. H., & Saks, A. M. (2015). Employee engagement, human resource management practices and competitive advantage. Journal of Organizational Effectiveness: People and Performance, 2(1), 7-35.

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Delery, J. E., & Roumpi, D. (2017). Strategic human resource management, human capital and competitive advantage: is the field going in circles? Human Resource Management Journal, 27(1), 1-21.

Mao, H., Liu, S., Zhang, J., & Deng, Z. (2016). Information technology resource, knowledge management capability, and competitive advantage: The moderating role of resource commitment. International Journal of Information Management, 36(6), 1062-1074.

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