By Aaron S. Robertson
The following is a paper submitted by the author on December 21, 2011 for a class assignment. The author is currently pursuing a master of science in management degree from Cardinal Stritch University in Milwaukee.
This student addresses why the human resource management practice areas of managing the human resource environment and the assessment and development of human resources best contributes to a company’s gaining of competitive advantage. He then discusses why acquiring and preparing human resources has the potential to be the least effective at helping a company achieve competitive advantage.
Human Resource Practice Areas That Best Contribute to Competitive Advantage
The human resource practice area of managing the human resource environment includes, according to Noe, Hollenbeck, Gerhart, and Wright (2010), “Linking HRM practices to the company’s business objectives” and, “Designing work that motivates and satisfies the employee as well as maximizes customer service, quality, and productivity” (p. 56).
Similarly, but with some additions, the practice area of assessment and development of human resources entails, “Measuring employees’ performance; Preparing employees for future work roles and identifying employees’ work interests, goals, values, and other career issues; Creating an employment relationship and work environment that benefits both the company and the employee” (Noe et. al., 2010, p. 58).
In many respects, given the similar definitions of these two practice areas of human resources management, it is difficult for this student to outright separate them as stand-alone areas. That is why, this student argues, the result of both areas working harmoniously with one another creates a company’s best chance of attaining a competitive advantage.
The world of business, including the realm of human resources, is rapidly changing. Noe et. al. (2010) found that the function of human resources management finds itself increasingly devoting less time and effort to routine administrative tasks, largely due to advancements in technology, and is instead increasing its roles as a “…strategic business partner, change agent, and employee advocate” (p. 9). One of the ways companies fulfill this new direction in human resources is by turning to the use of intangible assets and human capital. These non-financial, non-physical holdings include, “…human capital, customer capital, social capital, and intellectual capital” (Noe et. al., 2010, p. 19). In terms of value, they can prove to be equal or even greater than their physical and financial counterparts, and research has confirmed their role in creating competitive advantage for companies (Noe et. al., 2010, pp. 19-20).
That said, it is crucial then that companies develop policies that embrace mutually beneficial employment relationships between employees and management (the company). When employees feel empowered, respected, trusted, supported, valued, and that their work is meaningful and dignified, the synergy generated by such a work environment will naturally spill over into the customer service side of a company’s operations. Employees are intrinsically motivated to carry out the functions of superior customer service. If they choose not to do so, they risk losing employment with a company that treated them, as much as possible in the context of an employment relationship, as equals – as a valued member of a team. That is a risk with too high a price to pay.
The Human Resource Practice Area That Can Contribute Least to Competitive Advantage
This student respectfully submits that the human resource practice area of acquiring and preparing human resources does not necessarily always prove to be the least effective at helping a company achieve competitive advantage, but it has the potential to be. The practice area involves, according to Noe et. al. (2010), “Identifying human resource requirements – that is, human resource planning, recruiting employees, and selecting employees; Training employees to have the skills needed to perform their jobs” (p. 58).
The potential for this practice area in being the least effective in aiding companies in their quest for competitive advantage stems from the high amount of guesswork that goes into it on the part of managers. For example, Noe et. al. (2010) points out that “Managers need to predict the number of and type of employees who are needed to meet customer demands for products and services” (p. 57). Managers can make predictions that prove to be wrong, whether in full or in part.
But in addition to merely predicting wrongly when it concerns adequate quantities and types of employees to have on staff, managers can have personal biases, whether they are cognizant of them or not, that impact the recruiting process – what might appear to be the best candidate in the eyes of the hiring manager among a pool of multiple candidates may not necessarily be. The same can hold true when managers elevate or transfer employees to new positions from within their company.
Furthermore, the process of training employees, a process determined by managers, may not always be as thorough and complete as it should. Poor or inadequate training can undoubtedly hamper productivity and efficiency. It can lead to more time spent on the clock, the need to repeat tasks over, and even pose safety threats.
In short, there appear to be a number of risky variables at play in this particular practice area that can severely hinder a company’s quest to achieve a competitive advantage, all based on the skills, knowledge, emotional intelligence, and any potential biases of the appropriate managers.
In the preceding paper, this student discussed why the human resource management practice areas of managing the human resource environment and the assessment and development of human resources, when working cohesively, provide the environment that best contributes to a company’s gaining of competitive advantage. He went on to explain his assertion that the practice area of acquiring and preparing human resources has the potential to be the least effective when it comes to a company’s bid to attain a competitive advantage.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright P. M. (2010). Human resource management (7th ed.). New York: McGraw-Hill/Irwin.