BUILDING A COMPETITIVE HUMAN RESOURCE BASE.

NAME: FLORA

COURSE:

HUMAN RESOURCE MANAGEMENT

COURSE CODE: HAD 914

LECTURER IN CHARGE: DR. UHUNMWUANGHO S. O.

INSTITUTE OF PUBLIC ADMINISTRATION AND EXTENSION SERVICES

UNIVERSITY OF BENIN, BENIN-CITY, NIGERIA

 HUMAN RESOURCE MANAGEMENT

Every business organization is essentially set up to provide superior value to the market place

which in turn enhances the profitability level of the enterprise. The market place value is a

consequence of energizing and focusing organizational employees to create and deliver value

(Maister, 2002). The organization employees constitute the human resources that drive the

business operations, contributing significantly to enterprise performance and the bottom line.

Organizations have started to realize that their success is dependent on their ability to attract,

develop, and retain talented employees (Reich, 1998). The long-term, sustained success of an

organization in today changing and challenging business environment involves top

management’s commitment to designing and implementing HRM programs geared towards

developing both high-performing employees and organizations.

Of all the resources available to the manager, that is, human, financial and materials, the most

potent, central and strategic of them all is the human resource (the people or workforce), that

gives the organization sustained competitive advantage. Perrin (1990:6) in IBM sponsored

study, notes that the “human resource is being transformed from specialized, stand-alone

function to a broad corporate competency in which HR and line managers build partnerships

to gain competitive advantage and achieve overall business goals”. “Competitive advantage is

defined as a anything that gives an organization an edge over the competitors in its market”

(Inyang, 2010:23). Porter (1985), notes that the unique talents among employees, including

flexibility, innovation, superior performance, high productivity and personal customer service

are ways employees provide a critical ingredient in developing a firm’s competitive position.

Chiavenato (2001), similarly notes that employees are purveyors of activities and knowledge

whose most important contributions in the organization are their intelligence and individual

talents. Adeyeye (2008:489), aptly notes that “structures, systems, processes, plus other

resources, are driven by the human resource (HR)”.

Human resources management is the term increasingly used to refer to the philosophy,

policies, procedures, and practices related to the management of an organization’s employees.

Human resources management is particularly concerned with all the activities that contribute

to successfully attracting, developing, motivating, and maintaining a high-performing

workforce that results in organizational success. Human resource (HR) management is also

defined as the design of formal systems in an organisation to ensure the effective and

efficient use of human talent to accomplish organisational goals (Onah, 2012:3).

HUMAN RESOURCES MANAGEMENT FUNCTIONS

Managers in all organizations recognize the importance of recruiting, selecting, training and

developing, rewarding, and compensating employees. Human resource management and

other functions must work together to achieve organizational success and compete locally and

internationally. The following are the functions of HRM.

 Strategic Human Resource Planning

Human resources management needs to be closely integrated with managerial planning and

decision-making. Increasingly, an organization’s top management is aware that the time to

consider organizational HRM strengths or limitations is when strategic organizational

decisions are being formulated, not after critical policies are decided (Onah, 2012). A closer

integration between top management’s goals and HRM practices helps to elicit and reward

the types of behaviour necessary for achieving an organization’s strategy. Strategic

management of human resources includes Human resource planning. The HRM planning

process involves forecasting HRM needs and developing programs to ensure that the right

numbers and types of individuals are available at the right time and place. Such information

enables an organization to plan its recruitment, selection, and training strategies.

 Recruiting and Selecting Employees

Once Human resource needs are determined, the next step is recruiting employees (i.e.,

interviewing, screening, and selecting the most qualified candidates, filling some positions

through transfer or promotion, and temporary employment coordination). Recruiting and

staffing is a far more complex activity than in previous times when HRM staff could rely on

recommendations from current employees or a “help wanted” sign in front of the business. In

order to plan for future selection efforts and training programs and to ensure that performance

appraisal and compensation systems are rationally based on job demands, HRM personnel

must complete careful descriptions and analysis of current jobs. The development and use of

job analysis information as part of Human resource planning and as the foundation for all

other HRM functions is indispensable. Organizations may recruit candidates internally (i.e.,

recruit current employees seeking to advance or change jobs) or externally.

 Training and Development

Many companies chose to invest significant amounts on training and development in order to

promote employee advancement. Employees are taught how to conduct their current and

future jobs by training and growth (e.g., orientation, performance improvement skills

training, and productivity enhancement) . Training focuses on present jobs, whereas

development prepares employees for possible future jobs. Training and development is also a

way of motivating employees. French (1978) cited in (Onah, 2012) posited that “employees

who know and understand their jobs and feel that management values them enough to prepare

them for future assignment are more likely to demonstrate higher morale and greater interest

in their job.”

 Performance Appraisals

The HRM role in performance appraisal is one of working with other managers in the

organization to establish the appraisal process, the performance dimensions to be measured,

the procedures to ensure accuracy, and requirements for discussion of appraisal results with

employees. Performance appraisal process helps organizations measure the adequacy of their

employees’ job performance and communicates these evaluations to them. Performance

appraisals are a critical link in the HRM process, as they assess how well employees are

performing and determine appropriate rewards or remedial actions to motivate employees to

continue appropriate behaviours and correct inappropriate ones (Gbeja, 1992, Cole 2002,

cited in Onah, 2012). Performance appraisals can also be used by management to make HRM

decisions like promotions, demotions, discharges, and pay rises. Performance assessment is

crucial, and it should be completed as soon as possible and as reliably as possible.

 Career Development

organizations are increasingly concerned about the long-term interests of their employees.

However, with pressures to improve efficiency and overall effectiveness, organizations are

also expecting individuals to accept more responsibility for managing their own careers. This

means that individuals must do everything they can to grow and realize their full potential in

order to improve their value either to their current or future employer.

 Benefit and Compensation Administration

Rewards include both the direct compensation (salary and hourly wages) and the indirect

compensation (benefits) that organizations offer to employees. The aim of compensation

practices is to help organizations establish and maintain a competent and loyal workforce at

an affordable cost. Like other HRM activities, compensation practices are also affected by

legal requirements of equal pay for equal work, minimum wage and over-time provisions,

and required benefits such as Social Security.

THE CONCEPT OF COMPETITIVE ADVANTAGE

Barney (1991) describes competitive advantage as occurring “when a firm is implementing a

value creating strategy not simultaneously being implemented by any current or potential

competitors.” According to him, competitive advantage can only occur in situation of firm

resource heterogeneity and resource immobility. Firm resource heterogeneity refers to the

fact that resources vary across firms. In the traditional strategy model, resources are viewed

as homogenous across firms in the industry. Firm resource immobility refers to the inability

of competing firms to obtain resources from other firms or resource market. A competitive

advantage exists when the firm is able to deliver the same benefits as competitors but at a

lower cost (cost advantage) or deliver benefits that exceed those of competing products

(differentiation advantage). Thus, a competitive advantage enables the firm to create superior

value for its customers and superior profits for itself (Porter, 1985).

HUMAN RESOURCES AS SOURCE OF COMPETITIVE ADVANTAGE

Using the four criteria for a sustained competitive advantage, Wright et al (1992) evaluated

the conditions under which human resources meet these criteria:

First, in order for human resources to exist as a sustained competitive advantage, they must

provide value to the firm. This condition requires that there is a heterogeneous demand for

labour (i.e., firms have jobs that require different types of skills) and a heterogeneous supply

of labour (i.e., individuals differ in their skills and level of skills). Under this circumstance,

human resources can add value to a firm.

Secondly, a resource must be rare if it is to be a source of sustained competitive advantage.

Wright et al (1992) noted that due to the normal distribution of ability, human resource with

high ability levels are, by definition rare. The goal of virtually all selection programmes is to

ensure that the organization is hiring only the highest ability individuals. The issues then are

the validity of the selection system and whether or not the organization is able to attract and
retain those applicants deemed to be of the highest ability. Thus a firm could theoretically

obtain employees of superior ability through a combination of valid selection programmes

and attractive reward systems.

Thirdly, in order for a resource to be considered a source of sustained competitive advantage,

human resources must be inimitable. Wright et al (1992) use the concepts of unique historical

conditions, causal ambiguity, and social complexity to demonstrate the inimitability of

competitive advantages stemming from human resources. Unique historical condition refers

to the particular historical events that have shaped a firm’s practices, policies, and culture.

Causal ambiguity describes the situation where the causal source of the competitive

advantage is not easily identified. Social complexity recognizes that in many situations (e.g.,

team production) competitive advantage stems from unique social relationships that cannot

be duplicated. Thus, Wright et al argue that due to the fact that many competitive advantages

that might be based in a firm’s human resources are characterized by unique historical

conditions, causal ambiguity, and social complexity, it is highly unlikely that well developed

human resources could be easily duplicated.

Finally, a resource must not have substitute if it is to be considered a sustained competitive

advantage. This raises the question of whether or not other firms’ resources such as

technology have the potential for offsetting any competitive advantage that human resources

are one of the few firm resources that have the potential to: (a) not become obsolete, and (b)

be transferable across a variety of technologies, products, and markets. Although the rapid

pace of technological change has resulted in new technologies that make former technical

skills obsolete. Many human capital resources are quite generalizable. Thus, if a firm has

obtained individual with high levels of cognitive ability, then constant training in the state-of-

the-art technological knowledge ensure that the resource does not become obsolete.
Therefore, it might be possible to substitute other resources in the short term, but it is highly

unlikely that such substitutions could result in sustained competitive advantage. This stems

from the fact that to the extent that the resource offsetting the advantages of human resources

is not rare, inimitable, or non-substitutable, then it will be imitated and human resources will

once again constitute a competitive advantage.

TOWARDS ACHIEVING COMPETITIVE ADVANTAGE THROUGH HUMAN

RESOURCES IN NIGERIAN PUBLIC ORGANISATION

Globalization can have a positive or negative impact on an organization’s human resource

management depending on the strategy and practice employed by the organization. An

organization with a highly skilled and competent human resources stand a better chance to

withstand the intense competition engendered by globalization and can exploit the benefit

accruing from the global economy than an organization that lacks the right mix of human

resources. The quality of human resources at the disposal of the Nigerian public sector will

determine its effectiveness and efficiency in the rendition of services.

To ensure sustained competitive advantage through human resources in the public sector the

following strategies are advocated:

 Effective Talent Management

Knowledge management focuses on identification of employees with intellects and expertise

and how to channel it towards organizational effectiveness. In the information age,

knowledge rather than physical assets or financial resources is the key to competitiveness. As

pointed out by Mecklenberg et al (1999) knowledge management allows companies to

capture, apply, and generate value from their employees’ creativity and expertise. It is

broadly defined as a company's ability to attract, retain and motivate employees. With the

change in worker’s demographics and market forces, there is the urgency for organization to
cultivate a workforce that can compete in the global market. Organisations are now putting

tremendous effort in the recruitment process with a strong commitment for the continuous

development of their employees. Any business that base its recruitment policy on sentiments,

favouritism and ethnic consideration rather than objective criteria of merit, competence,

experience and qualification will struggle to compete. Our public service must endeavour to

get it right in its hiring even while adhering to the quota system without compromising merit.

HR practitioners in public organisations must ensure that their organization have the

intellectual capital it needs in the right proportion and at the appropriate time. Programmes

must be created to enhance knowledge management initiatives and to elicit management’s

support.

 Reputation Management And Corporate Ethics:

Reputation management relates to stakeholders’ view or the impression they hold about the

operational conduct or integrity of an organization. Top management and the HR

practitioners currently pay high-level attention to reputation management and ethics (Schultz,

et al., 2003). Due to cases of corruption scandals and other vices in organizations, the HR

practitioners should take the responsibility of facilitating the training of employees in

sustaining and protecting their organization’s reputation. Besides, HR professionals could

monitor reputation and ethics in the organization and this would assist management to assess

its reputation management efforts.

 Strategic Hr Planning

It is the careful analysis of existing workforce and job requirement and developing people

who will man the structure of an organisation in the future in order to ensure the attainment

of objective. It predicts the future human resources needs of an organisation after analysing

the organisation's current human resources, the external labour market, and the future HR
environment that the organisation will be operating in. Its main objective is to ensure that an

organization has the right people with the right skills at the right time. One phrase that has

become associated to globalization is the "War for Talent." Organisations are in a serious

competition to attract the best brains to their establishment. There is no better way to win this

war than to have a good human resource plan. Public organisations should draw up such

plans so that they do not get workers that other competitors have deemed not good enough.

 Training and Development

This is vital consequent on the fact that human resources are the only resource that possesses

cognitive ability. This implies that despite being obsolete in skills as a result of innovation,

they possess the capability to acquire a new knowledge after undergoing a specific designed

training programme. Thus, this demonstrates for the umpteenth time the uniqueness of human

resources in promoting competitive advantage. The importance of continuous learning cannot

be overemphasized. In an era where information and knowledge is power, there must always

be avenue to train to acquire current ideas and skills. It is necessary to improve knowledge,

expertise, skills, confidence and performance level of workers. Training ensures higher

productivity and efficiency. Organisations that want to compete favourably in the global

market must prioritize the training and development of its staff. The business world is in a

constant flux. Technologies and information of today can become obsolete and irrelevant the

next day. Public organisations should not downplay the importance of workplace learning. It

should not be seen as too expensive to undertake.

 Proper Deployment and Placement

One of the frustrations in public organisations today is faulty deployment of staff. Employees

are deployed after training without regard to the skills they have acquired. This is responsible

for the gross inefficiency and frustration apparent in public organisations. It is an indictment
on the human resource strategies of these organisations. Of course, when you put a square

peg in a round hole, it just cannot fit.

 Safe and Healthy Work Environment

There are increasing legal, social and political pressure on organisations to ensure that the

health and safety of their employees are guaranteed. It is no rocket science that a safe and

healthy work environment has a positive psychological impact on employees’ performance. It

engenders job satisfaction, commitment, optimum performance and keeps employees

engaged. Public organisations must not neglect this function because only a healthy worker

can be productive. This brings to mind the television bulletin of one television station about

the messy state of the federal Secretariat in Abuja earlier this year. It was reported that water

supply was cut off for months and the stench from the public convenience was endangering

the health of workers and making it impossible for them to work. Such situation should not

be allowed to occur in a workplace. Organisations should protect the health of their staff to

get the best from them.

 Adopting Information Communication Technology

In the last few years, new communication technology such as email, Smartphone, web and

videoconferencing has not only facilitated closer contact with clients, but as well, reduced

cost, increased efficiency and productivity. Digital filling systems save space, paper and

printing costs. Information technology has made the world smaller and faster through

internet. Ideas and large amount of information now move freely and constantly. The

challenge for the HR Managers is to make good use of what information technology offers

and to make it to be a viable productive part of work setting and tool. New information

technology has opened up possibility of greater strategic control in companies. The

possibilities from such technological innovations will provide continued strategic

opportunities for companies (Lynch, 2006). Technology in workplace practically eliminates

space and time making the world a global village. It has enabled businesses to establish a

global presence through social media platforms and apps at a fraction of the cost. All these

technological innovations drive the global economy. Today organisations need to leverage

these innovations to compete favourably in the global economy. What better way to achieve

this than having tech savvy employees? Public organisations must embrace ICT.

 COMPETITIVE REWARD SYSTEM

Organisations must be ready to reward their best talent handsomely. Pay should be

commensurate to talent, skills and work done. Fairness and equity should be incorporated

into wage structure. The world is now a village so worker’s mobility is unprecedented. Any

Organisation that wants to attract and retain the best talents must have a competitive reward

system.

Conclusion

In order to build a workforce that can perform favourably in the global market, organizations

should incorporate best practices in recruiting and selection, HR preparation, training and

growth, reward administration, safe and healthy work environments, and ICT into their HR

policies. It is undeniable that globalization is a worldwide phenomenon with far-reaching

consequences in almost every aspect of human life. Despite the difficulties that companies

face today as a result of globalization, human capital continue to be the most valuable

resource in gaining a competitive edge.

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