HRM - GLOBAL CONTEXT

COMPETITIVE ADVANTAGE THROUGH PEOPLE

“People”have  always been central to the organizational functions. Once, Thomas J. Watson (Chairman and CEO – IBM from 1914 to 1956) said “You can take capital and erect building, but it takes people to do a business”. Competitive advantage is the leverage that a business has over its competitors where inside people's competencies anchorage of organizations to achieve greater success among competitors.

Figure 2 - Based on Armstrong  & Taylor (2014),
Armstrong's Handbook of Human Resource Management.

The competitive advantage is more important due to competitive challenges like, globalization, entrants of new technologies, change management, human capital development, market responding and cost reduction in current global context. Majority of the executives globally, are agreed that expenditure made on people have become a strategic investment rather than a cost (Snell, Morris and Bohlander, 2014) because, employee competencies are the most renewable and distinctive resource that drew the strategic management more important than ever.According to Macey et al.(2011), human engagement determines the organizational culture by channeling the energy in to the competitive advantage through spotlighting the strategic objectives of the organization such as amenity, reorganizing and efficiency. 

Competencies are the fundamental characteristics of a person which result in exclusive performance and developing employees to gain competitive advantage and it is also a managing strategy in Organization Development (OD) strategy (Armstrong and Taylor, 2014). Competencies are also known as integrated knowledge sets, which facilitates the central force - i.e. people resource, to distinguish the organization from it's competitors (Snell, Morris and Bohlander, 2014).

Required standards in competitive advantage?

Organizations, through their operational activity are strive to deliver value to their customers at cost. In this high competitive market environment, people (customers) have number of opportunities to select who is providing best value enhancement to their lives. Therefore, organizations have to maintain the best quality accompanied by highest efficiency in delivering the value to end consumer  (Jeffrey, 1994).To be sustained in the competitive advantage following standards have to be adopted in selection, recruitment and training process of the employees.

Figure 3 - Based on:Snell. Morris and Bohlander (2014), Managing Human Resource. 

Conclusion;

Today, most of the companies are highly concern about employee engagement as it determines the fact :employees who are engaged in their work and committed to their organizations give companies crucial competitive advantages. 

Randstad is a Dutch multinational human resource consulting firm headquartered in Diemen, Netherlands.They says " The true value of any company comes from its people. We truly believe that. We see it in the people we partner with— our clients, our candidates—and work to maximize the value they bring to their companies by understanding and identifying what a good match means to them. The better the fit, the better the results, we’re always ready to help you build winning teams that work in the short term—but can contribute to results in the long-term."(SHRM Foundation Executive Briefing Employee Engagement: Your Competitive Advantage, 2012).

References;

1. Armstrong M. and Taylor S., (2014),  Armstrong's Handbook of Human Resource Management Practice, 13th ed.,Philadelphia, PA:Kogan Page,pp.1-49.
2. Jeffrey P., (1994), The Competitive Advantage Through People, California Management Review, 36,9-28, 10.2307/41165742.
3. Macey W., Schneider B., Barbera K. and Young S. (2011), Employee Engagement,Tools for Analysis, Practice, and Competitive Advantage, Hoboken,John Wiley & Sons,pp.1-100.
4. SHRM Foundation Executive Briefing Employee Engagement: Your Competitive Advantage. (2012). Sponsored by Randstad. [online] Alexandria, Virginia, 22314-3499 USA: SHRM Foundation, pp.1-6. Available at: https://www.shrm.org/resourcesandtools/business-solutions/documents/engagement%20briefing-final.pdf [Accessed 4 Jul. 2018].
5. Snell S., Morris S. and Bohlander G., (2015), Managing Human Resources, 17th ed., Canada,Cengage Learning, pp.4-100.