Running head: HRM AS A COMPETITIVE ADVANTAGE

HRM as a Competitive Advantage

Mitesh Patel
Herzing University
Human Resource Management
Dr. Jacinta Hightower
February 20, 2016

HRM AS A COMPETITIVE ADVANTAGE

HRM as a Competitive Advantage

Human resource management (HRM) can help set up an appealing business mark that
can address the diverse needs and desires of potential and existing employees, without trading off
a predictable workers, which can bring about a supported competitive advantage. HRM ought to
offer firms some assistance with attracting and hold astounding employees, in light of the fact
that by coordinating HRM rehearses into the worker esteem suggestion, they set up a one of a
kind, appealing good and honest workers. An ideal employee life cycle idea delineates how the
business brand guarantee can be conveyed to address the diverse needs and desires of potential
and existing workers (App, Merk & Buttgen, 2012).
There are two fundamental ways to think about the value of a few opportunities. To begin
with, you may believe that one employment is more essential. As an option, you could look at the
employments opportunities by concentrating on certain essential considerations between them.
They are the elements that set up how the occupations contrast with each other, and that decide
the pay for every employment. In any case, most utilize elements promoted by bundled work
assessment frameworks or by federal legislation. They choose a fundamental, compensable
element of a job, such as skills, effort, responsibility, and working conditions (Dessler, 2014).
The understanding of sustainability in Sustainable HRM, however, goes beyond the
understanding of the term in the context of a sustained (continued) competitive advantage
referring among others to aspects of resource regeneration and development. Sustainable HRM
also offers a possible solution for organizations that hope to promote themselves as highly
responsible among potential and existing employees, in their efforts to attract and retain highquality employees. To differentiate themselves from competitors in the labor market and enhance

HRM AS A COMPETITIVE ADVANTAGE

their attractiveness as employers, we suggest that organizations should establish an employer

brand that includes Sustainable HRM (App, Merk & Buttgen, 2012).
The organization functions as something that excludes the advantage, capability,
organization processes, organization attributes, information, and knowledge. And all this under
the control of the organization that can and is capable of designing and implementing strategies.
That will improve its efficiency and effectiveness (Ivanovic, Galicic & Krstevska, 2010). Thus,
resources classifies into three categories:
1. Resources of physical capital - the material technology, equipment, geographic location and
access to raw materials.
2. Resources of organization capital - consist of the structure of the organization reports,
informal and formal planning, control, coordination system, as well as informal relations among
the groups inside the organization and the relations of the organization with the environment
3. Resources of human capital - training of the employees, experience, contemplation,
intelligence, relations, values, competence.
In order to be able to evaluate a resource as important for the organization, it is first of all
necessary for it to pass some defined tests based on the external environment. so, here are the
known techniques:
1.

Imitation: It is related to how much a resource can be provided or imitated by the competition. In
cases when a resource can be copied, the profit generated by that resource is short-termed.
2.

Endurance: It is about the speed with which a resource will lose from its value. The

longer the life of a resource, the more valuable it becomes for the organization and it contributes
to providing and maintaining competitive advantages. Competition and constant innovations can
prevent the resource from its endurance erosion.

HRM AS A COMPETITIVE ADVANTAGE

3.

Suitability: It is related to the one that gets the profit generated by the resource. The more

the competitively valuable resources are static and stable, the greater possibility for the
organization to make profit through them.
4.

Sustainability: This is access to alternative resources that can undermine the value of the

organization present competitive resources. The present value of the resource in the organization
drops when a competitor develops and makes a resource-substitute that creates values based on
smaller expenses or perhaps a theory for a different value.
5.

Competitive superiority: This is a time test for a resource to prove its value. It is not a

question of "which activities we perform well" but "which activities we perform better than our
competition" (Ivanovic, Galicic & Krstevska, 2010).
Role of HR in Gaining Competitive Advantage
Albeit most CEOs refer to HR as an association's most essential resource, numerous
hierarchical choices don't mirror this conviction. Notwithstanding of these positive possibilities.
The patterns propose that business give generally low significance to both the HR of the firm and
the Human Asset Office. Pundits contend that HR is still a cost community for the associations
and a risk. Quite a bit of this can be ascribed to absence of comprehension of "business" by HR
officials. And their powerlessness to coordinate the HR exercises towards building up the
qualities of the association's HR that can influence the methodology of associations (Ahluwalia,
2012).Some important points and strategy to achieve competitive advantage for companies are as
listed below:
1.

Value

HR officials must address an essential inquiry "By what means can HR help in either
diminishing expenses or expanding incomes?" In today's opportunity when everybody is talking

HRM AS A COMPETITIVE ADVANTAGE

numbers; the HR office needs to demonstrate its value and demonstrate that it makes esteem for
the associations. HR can offer a firm some assistance with creating so as to achieve practical
upper hand esteem.
2.

Rareness

Only value alone cannot help the HR department to achieve sustainable competitive
advantage for organizations. HR executives must examine how to develop and exploit rare
characteristics of the firms human resources to gain competitive advantage. If the same
characteristic of human resources is found in many competing firms, then that characteristic
cannot be a source of competitive advantage for any one of them. In order to drive the strategic
decisions, HR executives should being the rare factor in the talent they recruit.
3.

Imitability

If the competitors in the business can easily imitate what you offer, then you are at loss!
The HR executives must attempt to develop and nurture characteristics of the firms human
resources that cannot easily be imitated by competitors. This essentially means leveraging on
organizations unique history or culture that helps in gaining competitive advantage. In any
organization, the culture is nurtured and developed via the HR Department. Hence, by restricting
and developing unique culture, executives can help firms in gaining competitive advantage.
4.

Organization

In order for any characteristic of a firms human resources to provide a source of

sustained competitive advantage, the firm must be organized to exploit the resource.
Organization requires developing the systems and practices that allow human resources
characteristics to bear the fruit of their competitive advantages (Ahluwalia, 2012).
The Human Resource Management as a Source of Competitive Advantage

HRM AS A COMPETITIVE ADVANTAGE

Nowadays, the business world has shifted its focus from physical assets to knowledge
and information i.e. human capital. This is the most valuable asset as it guides the organization
into a correct path, to be on time and to meet the right person, at a right place (Saha, Jircikova, &
Bialic-Davendra, 2011). According to various management experts, there are different HR
strategies such as:
1. Building and guiding coalition,
2. Imaging the future,
3. Understanding current capabilities and identifying the gap between business strategy and
corporate strategy,
4. Creating a map of the whole management system,
5. Modelling the dynamic of the vision,
6. Developing network into action (Saha, Jircikova, & Bialic-Davendra, 2011).
Regarding this new challenge of the HRM seeks to identify whether the HRM can really
enhance the competitive advantage of a firm. Human assets are a key source of sustainable
advantage due to their usual efforts and systematic information, which are making them
inimitable. Fitz-Enz highlighted that people are the lifeblood of any business enterprise, which
cannot be compared with material things like: cash, buildings, or equipment. According to
resource (Saha, Jircikova, & Bialic-Davendra, 2011) a firm strives for superior financial
performance by enabling its resources to capture a position of a competitive advantage in a
certain market or a market segment. This position is captured if two conditions are satisfied
including:
(1) If the firm can create more customer value than competitors do, and
(2) If the firm has lower investment costs than competitors (Saha, Jircikova, & BialicDavendra, 2011).
Challenges for HR

HRM AS A COMPETITIVE ADVANTAGE

1) The challenge for HR managers is to clarify the competencies required to deliver the
company's strategy, as well as to cope with changing competitive circumstances. Success will
depend on identifying the most effective means of building these competencies, whether through
formal training programs, mentoring, peer-to-peer learning, or involvement in community
programs.
2) Employees are motivated by a complex mix of rewards. These range from financial
security and bonuses to promotion and peer recognition and from taking on new challenges to
making a difference to the things they care about. The challenge for HR managers is to create the
opportunities and incentives that maximize employee contributions to corporate performance - to
help the company make the most of its people's talents.
3) A sustainable development perspective encourages employees to make a productive
contribution to their company. Companies can only succeed in the long-term if they recruit and
motivate people who are able to respond to and shape the challenges of the future. These are the
individuals with the capacity to create competitive advantage from the opportunities presented by
changing markets, with the desire to learn from customers, consumers, suppliers and colleagues,
and who possess the ability to build and influence long-lasting and effective partnerships (Gupta,
2014).

References
Ahluwalia, R. (2012). Academia's role in the total quality management movement. International
Conference on Engineering Management, Gaining the Competitive Advantage.

HRM AS A COMPETITIVE ADVANTAGE

App, S., Merk, J., & Bttgen, M. (2012). Employer branding: Sustainable HRM as a competitive
advantage in the market for high-quality employees**. (). Mering: Rainer Hampp Verlag.
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Dessler, G. (2014). Human resource management (14th Ed.). [Vital Source Bookshelf Online].
Retrieved from https://bookshelf.vitalsource.com/#/books/9781323016763/
Gupta, S. (2014). Sustainability as a competitive advantage: An outcome of strategic HRM.
Review of HRM, 3, 129-139. Retrieved from
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Ivanovic, S., Galicic, V., & Krstevska, G. (2010). Transformation of human resources into human
capital base for acquiring competitive advantage. Tourism & Hospitality Industry, 917924. Retrieved from http://search.proquest.com/docview/763422398?accountid=167104
Saha, N., Jirckov, E., & Bialic-Davendra, M. (2011). The power of clustering and HRM as a
source of competitive advantage: Evidence from clusters from poland, slovakia, the czech
republic, india and developed countries. Journal of Competitiveness, 3(4) Retrieved from
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