The importance of HRM

HRM
Why Human Resource Management (HRM) is important for organizations
today to make their Human Resource into a competitive advantage

1. INTRODUCTION

Day-to-day Human Resource Management is very important for the organization

to get more powerful and develop its self to be the standard and success one. So,
even nowadays economic recession but it’s not very effected to all companies in
the world only seriously in the USA and EU. However, they do not cut all staffs
but is still remain the professional, main staffs for running the companies. So now
for the individual assignment of HRM in MBA program – BBU is requires
spreading out one topic “Why HRM is important for organizations today to make
their human resources into a competitive advantage and how it can contribute to
doing this?”

The purpose of this essay is to research and more understand the academic
literature on the contributions of HRM in terms of its strategic roles and
competencies required today in distributing to the business needs and the strategic
objectives of a firm through its people in order to gain competitive advantage.

The methods to tackle the main issues asked are: (i). try to understand well what
the topic means, its terms and must be clearly in structuring of assignment. (ii).
Need to read academic literature, the lecture notes, and supplementary reading
from others references book/documents. (iii). Do further research within Internet
and library, (iv). Do thorough review the literature of the topic and (v). Make good
discussion and properly conclusion.

HRM plays an important role in assuring employee satisfaction, improving

performance and productivity. This can further an organization's competitive
advantage, and directly contribute to the organization's success. When any
organization start to vision their business, their first priority is to hire competent
work force means right person on the right job after that this man power decide
about other tangible and intangible resources, where to get? How to get? How to
manage efficiently? What modification required? Essentially, other resources
depend on human resource without which they are worthless because if there
would be no human then who will plan, organize, or monitor the other resources.
The manager is recognized as a holder of organization by his knowledge and art.

2. DISCUSSION ON WHY HRM IS IMPORTANT FOR ORGANIZATIONS

TODAY TO MAKE THEIR HR INTO A COMPETITIVE ADVANTAGE

Why HRM is important for Organization today to make their HR into a

competitive advantage. The three competitive challenges are the challenge of
sustainability, the global challenge, and the technology challenge.

(i). the Challenge of Sustainability

There are many different type of companies/organization to operated in the world

and also competed each other to gain competitive advantage and also sustainable
so they try to implement many strategic for develop their HR. Among them
sustainability is the main part that can be influence and encourage to reach
organizational goal. Anyway they also take action immediately to introduce,
orientate, prepare guideline, provide high quality products and services and
especially use the right person in the right position and on job training many time
to gain staff capacity. There are many ways that can bring the organizations to
reach goal are:

- A learning organization: This embraces a culture of lifelong learning, enabling

all employees to continually acquire & share knowledge.

- The Balanced Scorecard: The balanced scorecard gives managers an indication

of the perspective for company to satisfy internal and external customers,
employees and shareholders & it should link HRM activities to the company’s
business strategy. This include being customer-focused, improve quality,
emphasizing teamwork and managing for long time. Using the balance scorecard
to manage the human resources by communicating the scorecard to employee gives
them a framework that helps them to see the company goals and strategies and how
they influence the critical indicators. For example, Chase Mahattan bank used the
balance scorecard to change the behavior of customer services representative
would have simply met the customer’s need.

- Total Quality Management (TQM): A cooperative form of doing business that

relies on the talents and capabilities of labor and management, the ways people,
machines, and systems accomplish work to continually improve quality and
productivity. For example, quality expert W. Edwards Deming emphasized how
well the product or service meets customer needs. To ensure this TQM need to
create an environment that support innovative, creativity, and risk taking to meet
customer demands.

- Changing demographics: The workforce today is getting more diverse &

therefore need to be managed carefully.

- Legal & ethical issues: It’s increasingly important to comply with laws and
ethics concerning employee health and safety, employee pay and benefits and job
security.

- Increased value placed on intangible assets and human capital: Today, more and
more companies are interested in using intangible assets and human capital as way
to gain an advantage over competitors. A company’s value includes 3 types of
assets that are critical for the company to provide goods and services.

(ii). The Global Challenge

Increasingly, organizations are finding that to survive they must cooperate with
organizations around the world. Companies/organizations must both defends their
domestic markets from foreign competitor and broaden their scope to encompass
global markets. In order to reach the goal of organizations/companies HRM play
the important role to run the business and make the good business environment to
create smoothly work and also compete with the other to gain competitive
advantage by expansion to the global area/broaden, integration of cultures &
values, got and received the feedback from the consumers to develop the product
and service, training staff many time and encourage getting high competencies.

While many large firms such as Exxon, Ford, and Procter & Gamble are already
multinational corporations that span the globe, many medium-sized and small
businesses are becoming increasingly international. To succeed in the global
marketplace, the challenge for all business is to understand culture and invest in
human resources. For example, U.S. company must be willing to train and develop
foreign employees to win foreign business. Several companies (such as Boeing and
CSX Corporation) bring foreign workers to the United States for training and then
return them to their home countries. Another, Boeing brings workers from India
and Poland to the Unites States. They return home with needed knowledge in
aircraft design and manufacturing.

(iii). The technology Challenge

This challenge is also very important that organizations/companies should be

consider and prepare strategic plan to up-date it on time and saving the cost also.
New technology cause change in basic skill requirements and work roles and often
results in combining job. For example, U.S. Company to compete with foreign
competitors, they have to learn to better utilize employees’ talents and skills and
new technology. Like computer integrated manufacturing uses robots and
computer to automate the manufacturing process. The computer allows the creation
of different product to meet market demands simply by reprogramming the
computer. As a result, laborer, material handler, operator-assembler, and
maintenance job may be merged into one position. Technology also has made
human resource information databases more available and accessible and has
created a need to develop HRM practices that integrate technology with people
also increase the production speed to meet the demand of customer more
effectively.

3. HRM CONTRIBUTES IN MAKING HUMAN RESOURCE INTO A

COMPETITIVE ADVANTAGE

HRM is the main department which push the organization to meet the goal because
it work with line manager, have a good communication with all department in
organization, know clear about organization’s goal and objective. So HRM is very
important to gain success and can be making Human Resource a competitive
advantage through understand clearly about:

-Function of HRM in the Organization

-The New Role of HRM in the Organization

-The Competencies are Require by HR in the new Role Enabling Organization.

Function of HRM in the Organization

The Human Resources Management (HRM) function includes a variety of

activities, and key among them is deciding what staffing needs and whether to use
independent contractors or hire employees to fill these needs, recruiting and
training the best employees, ensuring they are high performers, dealing with
performance issues, and ensuring your personnel and management practices
conform to various regulations. Activities also include managing your approach to
employee benefits and compensation, employee records and personnel policies.
Usually HRM is related to:

(i). Managing the HR Environment

Manager has to create a positive environment both internal and external

environment for human resources involve:

- Linking HRM practices to the company’s business objectives, i.e., strategic

HRM.

- Ensuring that HRM practices comply with the law & ethics.

- Designing work that motivates & satisfies the employee as well as maximizes
customer service, quality & productivity.

(ii). Acquiring and Preparing HR

Managers need to predict the number and type of employees who are need to meet
customer demands for products and services. Manager must also identify current or
potential employees who can successfully deliver products and services. This area
of human resources management deals with:

- Identifying HR requirements, i.e., HR planning, recruiting employees, &

selecting employees.

- Training employees to have the skills needed to perform their jobs effectively.
(iii). Assessment and Development of HR

Company need to create a work environment that supports employees’ work and
non work activities as follow:

- Measuring employees’ performance

- Preparing employees for future work roles & identifying employees’ work
interests, goals, values, & other career issues

- Creating an employment relationship & work environment that benefits both the
company & the employee.

(iv). Compensating HR

Besides interesting work, pay and benefits are the most important incentives that
company can offer employees in exchange to make them satisfy to fulfill their
work performance. This includes:

- Creating pay systems

- Rewarding employee contributions

- Providing employees with benefits.

The New Role of HRM in the Organization

(i). Change Leader

The role associated with facilitating, driving and leading change for organization
creativities, productivity and quality to reach the goal and competitive advantages
over competitor.

(ii). Human Resources Strategist

The role associated with integrating HR activities and result in achieving the
strategic objectives of the organization. Human resources strategist thing of the
pattern of planning human resources development and activities intended to enable
organization to achieve the goals.
(iii). Business Strategist

The role associated with participating in strategy formulation and developing

possible solution to challenges facing the organization to lead business to
competitive success. Good business strategy formulation leads the organization
success in all aspect of business regarding customers’ satisfaction, providing
quality products and customer services.

(iv). Human Resources Function Alignment

HR function must be integrally involved in the organization’s strategic process.

HR managers should have input into the strategic plan, both inter of people-related
issues and in term of the ability of the human resource pool to implement particular
strategic alternative; have specific of the organization goal; know what type of
employee skill, behaviors, and attitudes; and develop programs to ensure that
employees have those skills, behaviors and attitudes.

(v). Partner to General Manager

HR plays an important role for organization to survive, overcome competitor

challenge and to pave the way for organization to get success in business. HR also
closely related to line manager to set up strategy plan and strategy implement and
work design. Line managers helping HRM to managing and controlling
employees’ performance whether they should be promoted, raising salary, transfer
to other job or need more training. etc.

(vi). Problem Solve and Consultant

The role associated with troubleshooting or averting, human performance

problems.

The Competencies are Require by HR in the new Role Enabling Organization

The competencies HRM executive needs to become a strategic partner for

organization to make human resources a competitive advantage. List of the
competencies are below:
(i). Creditable Activist

Deliver results with integrity, share information, building trusting relationships,

influencing others, providing candid observation, taking appropriate risks

(ii). Culture Steward

Facilities change, developing and valuing the culture, helping employees navigate
the culture (find meaning in their work, manage work/life balance, and encourage
motivation).

(iii). Talent Manager

Develop talent, design reward systems, and shape the organization.

(iv). Strategic Architect

Recognize business trends and their impact on the business, evidence-base HR and
develop people strategies that contribute to the business strategy.

(v). Business Ally

Understanding how the businesses makes money and understand language of

business.

(vi). Operational Executor

Implementing workplace policies, advancing HR technology and administer day-

to-day work of managing people

4. CONCLUSION

In conclusion, an effective HRM system allows organizations to address human

resource issues strategically. This helps the workforce deliver high quality health
services, despite internal and external challenges to the organization. HRM helps
attract and retain competent employees, assists employees and managers in
adapting to organizational change, and facilitates the use of technology to
determine how and where work is done.

Human resources management play an important role for organizations to manage

employees to work effective, creative, quality and productivity to reach the
competitive advantages over competitor and achieve organization goals and
objectives. For gain competitive advantages today organization face three main
competitive challenges, i.e. challenge of sustainability is ability to deal with
changing for all business environment; global challenge is a challenge that
organization must both defend their domestic markets from foreigner competitor
and broaden their scope to encompass global market; and for technology challenge
organization should design work for employees to comply with new technology
updated. All aspects of human resources management including how organization
manages the human resource environment, acquiring and preparing, assessment
and development, compensating human resources, new role of human resources
management and its competencies can help organization meeting their competitive
challenges and create value. Meeting organization challenges is necessary to create
value ant to gain a competitive advantage.

Human resources management is very crucial for organization without it they can
not reach their goal and objective. Human resources management helps
organization to design employees work, recruit and select right person for right
job, training and develop employees to be a knowledge worker and empowerment
for working environment. So if organizations that have not considered effective of
human resources management they will not manage their staff at work effective
and can not examine what they will do to make working people more productive
and effective.