How Strategic Human Resource Management Contributes to Achieve the Competitive Ad

vantages of FedEx

Term Paper on
How Strategic Human Resource Management Contributes to Achieve the Competitive A
dvantages of FedEx
Course: Strategic Human Resource Management Course Code: HRM 416 Section: 1
Submitted to: Mr. Zahidul Karim Lecturer Department of Business Administration E
ast West University
Submitted by:
1. Moonzarin Hamid 2. Md. Rezaur Rahman 3. Farhana Ferdous 4. Shati Itminan ID:
2006-2-10-250 ID: 2008-2-10-018 ID: 2008-2-10-023 ID: 2008-2-10-121
Date of Submission: December 14, 2010

December 12, 2010 Mr. Zahidul Karim Course Instructor (HRM 416) Departmentof Busi
ness Administration East West University, Dhaka Subject: Submission of the Strat
egic Human Resource Management Term Paper Dear Sir,
Here is the term paper on How Strategic Human Resource Management Contributes to
Achieve the Competitive Advantages of FedEx that we are assigned to prepare as a
part of Management Research course curriculum.
The group intuitively studied one of the most important topics which are a vital
issue for the FedEx Express. Through this research the group has identified diffe
rent factors associated with Strategic Human Resource Management of FedEx Expres
s. A special debt is due to our instructor Mr. Zahidul Karim, our respected facu
lty for the valuable guidance in the preparation of this report. We have been im
mensely benefited from his valuable guidance in the process of understanding and
preparing this report. His advice and guidance in the work has immensely inspir
ed the team to consistently work hard.. Without his active support, continuous e
ncouragement, and constructive criticism, probably it would not be possible to w
rite an informative and objective report. We also acknowledge the contributions
of the librarian of East West University for allowing us to utilize their librar
y facilities. We also should show our gratitude to the workers of FedEx Express fo
r providing us many helps. It was a unique opportunity for the team to conduct s
uch important research that correlates course related knowledge with the real ma
nagement research problem. This research has created a scope to widen the experi
ence of the novice researchers to conduct research in future. The team hopes tha
t, despite of all the limitations, the report will give a fair idea on this issu
e and we will be available to answer to any questions or queries regarding the r
eport. Sincerely yours,
1. Moonzarin Hamid 2. Md. Rezaur Rahman 3. Farhana Ferdous 4. Shati Itminan
ID: 2006-2-10-250 ID: 2008-2-10-018 ID: 2008-2-10-023 ID: 2008-2-10-121
. . . .

Table of Contents
Content Page

Executive Summary . v 1. Introduction ..

(SHRM) ... .. 8 3.2.1 Difference between HRM & SHRM ... 9 3.3 Competitive A
le .. .. 12 4.2 FedExs Competitive Advantages . 13 5. Fe
of FedExs Practice & Standard SHRM Practice ... 20 8. Recommendation
Bibliography References ..... 24

Executive Summary
Strategic human resource management broadens the ideas of Human Resource managem
ent several steps further. Human resource management tries to improve effectiven
ess of the organization in different sectors like selection, recruitment, traini
ng, job analysis, performance appraisal etc. But strategic human resource manage
ment relates all of these moreover; it helps to identify all the internal streng
ths of an organization with the external opportunities and by matching those, de
fines competitive advantages. A number of studies suggest that strategic HRM can
contribute to firm performance. Many organizations are undergoing changes as a
consequence of globalization, new technology application and fundamental changes
of work and employment relations. There is increasing demand to transform HRM p
ractices from focusing on a functional role to a strategic role, which means to
put more emphasize in its strategic human resource management. Federal Express a
lso known as FedEx is one of the largest and prominent transportation companies
in the world. FedEx has been always stereotyped as a service of highest quality.
The competitive advantage of FedEx is its continuous concern on quality managem
ent. FedEx is also one of the renowned organizations for practicing strategic hu
man resource management. This research papers aim is to identify the competitive
advantage of FedEx and also reveal how strategic human resource management helpe
d FedEx to maintain its competitive advantages over decades.

1. Introduction
Human Resource Management is considered as the philosophy, policies, procedures
and practices that are connected to the administration of the employees of an or
ganization. It is connected and related to the administration of the employees o
f a company. It has a great contribution in successful process of attracting, de
veloping, motivating as well as maintaining a high-performing workforce that hel
ps to add to the competitive advantage of the organization. Furthermore, HR has
a great impact with the institution and the implementation of the different poli
cies, programs and procedures that can affect the success and failure of the per
formance, competences as well as the loyalty of the entire workforce of the orga
nization. Because of the policies and procedures, individuals are being attracte
d, retained, motivated as well as developed in order to perform the work of the
organization. This is due to the fact that through these policies and procedures
, the organization will seek to mold as well as shape the actions of the employe
es in order to operate successfully. Thus, comply with the different public poli
cies, offer high quality of employment that will help to improve and maintain th
e position of the company in the market by the process of reinforced ability to
compete and serve. Above all, the process of incorporating the top managements go
als to the SHRM practices and policies will help to bring out as well as reward
the different types of behavior that are important in achieving the strategy of
organization. The effectiveness of the SHRM practices can help to improve the co
mpetitive advantage in creating both the cost leadership and differentiation and
focus. FedEx, one of the top transportation companies of the world has been pra
cticing Strategic Human Resource Management over years. Here in this research pa
per, we tried to identify how strategic human resource management helped to achi
eve its competitive advantages.
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2. Research Methodology
In order to carry out the research study, certain approaches and methodologies a
re required to be followed. The following approaches were followed in conducting
this term paper.
2.1 Research Design and Type: The research was basically based on descriptive me
thod. The strategic human resource practices of FedEx was gathered by different
sources and then analyzed. The uniform or standard SHRM principles were also gat
hered from different books. By comparing those two data, we got our conclusion.
2.2 Primary Sources: The report was mainly based on the data derived from primar
y sources and the primary sources of data were mainly derived from the different
articles written on FedEx by different scholars and published in the websites and
magazines. 2.3 Secondary Sources: The secondary sources that helped us to perfe
ct and enrich this term paper are given below. Text book of SHRM Newspaper Harva
rd Business Review
2.4 Limitations: 1. Time constraints: Limitation of time was one of the most imp
ortant factors that imposed restrictions on conducting the study extensively. Du
e to the time limitation many aspects could not be investigated in the present s
tudy. 2. Dearth of Secondary Data: In Bangladesh there is an acute dearth of sec
ondary data in every sector. This sector is not exception to this. The amount of
secondary data needed to thoroughly investigate the study was scarce. Thus, it
depreciated the authenticity of the findings of this study. 3. Privacy: It was n
ot possible for us to collect some information that companies/customers consider
ed to be confidential.
4. Lack of Experience: As an apprentice, it was not possible for me to apply sop
histicated
statistical tools and techniques to analyze data. Had these techniques been appl
ied, more detailed and authentic finding could have been derived.
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3. Definitions
3.1 Human Resources Management (HRM)
According to, Human Resources Management is the philosophy, policies, procedures
, and practices that are connected to the administration of the employees of an
organization. HRM is particularly linked with all the activities that contribute
to successfully attracting, developing, motivating, and maintaining a high-perf
orming workforce that adds to an organizations competitive advantage. HRM is invo
lved with the institution and implementation of policies, programs, and procedur
es that affect the performance, competences, and loyalty of the organizations wor
kforce. Through these policies and procedures, individuals are attracted, retain
ed, motivated, and developed to perform the work of the organization. It is thro
ugh these policies and procedures that the organization seeks to mold and shape
the actions of the employees to operate successfully, comply with various public
policies, provide satisfactory quality of employment, and improve its position
in the market place through strengthened ability to compete and serve.
3.2 Strategic Human Resource Management
Strategic human resource management can be defined as the linking of human resou
rces with strategic goals and objectives in order to improve business performanc
e and develop organizational culture that foster innovation, flexibility and com
petitive advantage. In an organization SHRM means accepting and involving the HR
function as a strategic partner in the formulation and implementation of the co
mpany s strategies through HR activities such as recruiting, selecting, training
and rewarding personnel. The main goal of the strategic human resource or SHRM
is the improvement of the way HR are managed in strategic manner in the organiza
tion, with the connection to the definitive goal of the improvement organization
al performance, that are judged by its influence on the corporate strategy of th
e company, and the concern of the customers and shareholders. HRM can help to de
termine the HR needs in order to support the strategic objectives as well as to
ensure that all of the employees are selected, trained, evaluated as well as rew
arded in ways that helps to achieve the objectives of the business. In addition,
the strategic HRM is a linear, balanced process that begins with the identifica
tion of the goals that will serve as guidelines in the HR practices. Above all,
the integration of the HR programs with the goals of the entire organization can
help to increase the value of the organization.
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The key features of SHRM are

There is an explicit linkage between HR policy and practices and overall organiz
ational strategic aims and the organizational environment There is some organizi
ng schema linking individual HR interventions so that they are mutually supporti
ve Much of the responsibility for the management of human resources is devolved
down the line
Human Resource Management professionals are increasingly faced with the issues o
f employee participation, human resource flow, performance management, reward sy
stems and high commitment work systems in the context of globalization. Older so
lutions and recipes that worked in a local context do not work in an internation
al context. Cross-cultural issues play a major role here. These are some of the
major issues that HR professionals and top management involved in SHRM are grapp
ling with in the first decade of the 21st century:

Internationalization of market integration. Increased competition, which may not
be local or even national through free market ideology Rapid technological chan
ge. New concepts of line and general management. Constantly changing ownership a
nd resultant corporate climates. Cross-cultural issues The economic gravity shif
ting from developed to developing countries
SHRM also reflects some of the main contemporary challenges faced by Human Resou
rce Management: Aligning HR with core business strategy, demographic trends on e
mployment and the labor market, integrating soft skills in HRD and finally Knowl
edge Management.
3.2.1 Difference between HRM & SHRM
In the last two decades there has been an increasing awareness that HR functions
were like an island unto itself with softer people-centered values far away fro
m the hard world of real business. In order to justify its own existence HR func
tions had to be seen as more intimately connected with the strategy and day to d
ay running of the business side of the enterprise. Many writers in the late 1980
s started clamoring for a more strategic approach to the management of people th
an the standard practices of traditional management of people or industrial rela
tions models. Strategic human resource management focuses on human resource prog
rams with longterm objectives. Instead of focusing on internal human resource is
sues, the focus is on addressing and solving problems that affect people managem
ent programs in the long run and often globally. Therefore the primary goal of s
trategic human resources is to increase employee productivity by focusing on bus
iness obstacles that occur outside of human resources.
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The primary actions of a strategic human resource manager are to identify key HR
areas where strategies can be implemented in the long run to improve the overal
l employee motivation and productivity. Communication between HR and top managem
ent of the company is vital as without active participation no cooperation is po
ssible.
3.3 Competitive Advantages: A competitive advantage is an advantage over competit
ors
gained by offering consumers greater value, either by means of lower prices or b
y providing greater benefits and service that justifies higher prices.
Fig. 1: The model of competitive advantage a. Cost Leadership Strategy This gene
ric strategy calls for being the low cost producer in an industry for a given le
vel of quality. The firm sells its products either at average industry prices to
earn a profit higher than that of rivals, or below the average industry prices
to gain market share. In the event of a price war, the firm can maintain some pr
ofitability while the competition suffers losses. Even without a price war, as t
he industry matures and prices decline, the firms that can produce more cheaply
will remain profitable for a longer period of time. The cost leadership strategy
usually targets a broad market. Some of the ways that firms acquire cost advant
ages are by improving process efficiencies, gaining unique access to a large sou
rce of lower cost materials, making optimal outsourcing and
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vertical integration decisions, or avoiding some costs altogether. If competing

firms are unable to lower their costs by a similar amount, the firm may be able
to sustain a competitive advantage based on cost leadership. Firms that succeed
in cost leadership often have the following internal strengths:

Access to the capital required making a significant investment in production ass
ets; this investment represents a barrier to entry that many firms may not overc
ome. Skill in designing products for efficient manufacturing, for example, havin
g a small component count to shorten the assembly process. High level of experti
se in manufacturing process engineering. Efficient distribution channels.
Each generic strategy has its risks, including the low-cost strategy. For exampl
e, other firms may be able to lower their costs as well. As technology improves,
the competition may be able to leapfrog the production capabilities, thus elimi
nating the competitive advantage. Additionally, several firms following a focus
strategy and targeting various narrow markets may be able to achieve an even low
er cost within their segments and as a group gain significant market share.
b. Differentiation Strategy A differentiation strategy calls for the development
of a product or service that offers unique attributes that are valued by custom
ers and that customers perceive to be better than or different from the products
of the competition. The value added by the uniqueness of the product may allow
the firm to charge a premium price for it. The firm hopes that the higher price
will more than cover the extra costs incurred in offering the unique product. Be
cause of the product s unique attributes, if suppliers increase their prices the
firm may be able to pass along the costs to its customers who cannot find subst
itute products easily. Firms that succeed in a differentiation strategy often ha
ve the following internal strengths:

Access to leading scientific research. Highly skilled and creative product devel
opment team. Strong sales team with the ability to successfully communicate the
perceived strengths of the product. Corporate reputation for quality and innovat
ion.
The risks associated with a differentiation strategy include imitation by compet
itors and changes in customer tastes. Additionally, various firms pursuing focus
strategies may be able to achieve even greater differentiation in their market
segments. The example of differentiation strategy can be Apple corporations. App
le undertakes an intensive research program continuously to invent new technolog
ies. For example: Iphone, Ipad etc.
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c. Focus Strategy The focus strategy concentrates on a narrow segment and within
that segment attempts to achieve either a cost advantage or differentiation. Th
e premise is that the needs of the group can be better serviced by focusing enti
rely on it. A firm using a focus strategy often enjoys a high degree of customer
loyalty, and this entrenched loyalty discourages other firms from competing dir
ectly. Because of their narrow market focus, firms pursuing a focus strategy hav
e lower volumes and therefore less bargaining power with their suppliers. Howeve
r, firms pursuing a differentiationfocused strategy may be able to pass higher c
osts on to customers since close substitute products do not exist. Firms that su
cceed in a focus strategy are able to tailor a broad range of product developmen
t strengths to a relatively narrow market segment that they know very well. Some
risks of focus strategies include imitation and changes in the target segments.
Furthermore, it may be fairly easy for a broad-market cost leader to adapt its
product in order to compete directly. Finally, other focusers may be able to car
ve out sub-segments that they can serve even better.
4. Overview of FedEx
4.1 Company Profile
FedEx express is the worlds leading express transportation company that provides
fast and reliable delivery to every U.S. address and to more than 220 countries
and territories. FedEx Express uses a global air-and-ground network to speed del
ivery of time-sensitive shipments, usually in one to two business days with the
delivery time guaranteed. The company has in excess of one million customers, se
rved by more than 140,000 employees across approximately 50,000 drop-off locatio
ns, with 645 aircraft and approximately 42,000 motorized vehicles in its integra
l global network. FedEx Express takes its commitment to diversity seriously. The
company was built on a philosophy that puts people first. That philosophy, Peop
le-Service-Profit, maintains that when a company establishes a culture that is r
espectful and rewarding for employees, they will deliver exceptional service to
customers. Customers, in turn will reward the company with their business and lo
yalty, creating a profitable enterprise that can provide job satisfaction and jo
b security for its employees. FedEx Express is a subsidiary of FedEx Corporation
, connects areas that generate 90% of the worlds gross domestic product in 24-48
hours with door-to-door, customs-cleared service and money-back guarantee. The c
ompanys unmatched air route authorities and infrastructure make it the worlds larg
est express transportation company, providing fast, reliable and time definite t
ransportation.
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4.2 FedExs Competitive Advantage

Federal Expresss strategy is to differentiate itself from its competitors by offe
ring superior customer service and guaranteed on-time deliveries. Since the same
basic technologies are available to UPS, DHL, and FedEx other competitors, it i
s FedEx workforce its human resource who necessarily provide FedEx with a crucia
l competitive advantage.
FedExs overall HR strategy is aimed at building a committed, competent, and custo
mer-oriented workforce.
5. FedExs SHRM Practices
1. Policies built on People-Service-Profits Federal Express Corporations greatest a
sset is its people. The company aims to promote a working environment where the
employees and contractors feel respected, satisfied and appreciated. The FedEx p
hilosophy is that people are the primary link in the value chain, and thus, valu
e is created by focusing on employees first. This emphasis on employee satisfact
ion is illustrated by the organizations annual attitude survey.
At FedEx, the attitude survey forms part of the annual managerial evaluation and
reward process. FedExs philosophy has gained an increasing base of empirical sup
port. For example, one scholar hypothesized that HR practices would be related t
o employee attitudes which would be consequently related to customer satisfactio
n. They found significant relations between HR practices and customer reports of
the quality of service they received. Federal Express applies commonly known ma
nagerial concepts and effectively translates them into action through a philosop
hy they define as people, service, and profits. They point out that it is no accid
ent that people are listed first in the phrase. Federal express says that people a
re placed first because it makes good business sense.
The People, Service, Profits philosophy is implemented by asking and answering s
everal basic questions. The first is, What is expected of me, and what do you wan
t me to do? Federal Express tries to spend a lot of time answering that question
for their personnel by having an extensive orientation program that explains Fed
eral Express values. The second most important question is, What is in it for me? F
ederal Express provides tangible evidence of what is in for them. The company st
rictly adheres to a promotion from within and career progression policy. An exte
nsive job posting system keeps employees informed of opportunities. When a posit
ion is open, notices are posted throughout the company for all employees to see.
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2. Recruitment and Selection According to (2002), recruitment is an HRM process

that is involve in the discovery, development, seeking, and attracting the right
people to fill actual or anticipated job vacancies. Selection is the process of
obtaining and using information about job applicants in order to determine who
should be hired for short or long-term positions. Placement involves matching in
dividuals to jobs, based on the demands of the job and the competencies, prefere
nces, interests, and personality of the individual. Selection and placement yiel
d a match between the organizations needs for specific qualified individuals and
different needs of employees that determine the type of work that is satisfying
for them.
The core philosophy of FedEx that governs its every activity is People-Service-P
rofit (PSP): Take care of the people; they will in turn deliver impeccable servi
ce demanded by the customers, who will reward the company with the profitability
necessary to secure FedExs competitive advantage. FedEx is dedicated to the prin
ciple that stresses the importance of its people as assets of the company. The c
ompany believes that motivated and diligent people provide indispensable profess
ional service to ensure profits and continued growth. The company also makes sel
ection regardless of race, religion, gender, national origin, citizenship, disab
ility, or age.
3. Career Development/ Advancement Career development is an ongoing, formalized
effort by an organization that focuses on developing and enriching the organizat
ions human resources in light of both the employees and the organizations needs. Ca
reer planning is the process by which an individual formulates career goals and
develops a plan for reaching those goals. Career development looks at individual
careers from the viewpoint of the organization, whereas career planning looks a
t careers through the eyes of individual employees.
Every FedEx office and worksite strives to cultivate an open, supportive environ
ment where each employee can reach their full potential and freely contribute to
the companys success. The companys founding philosophy, People-Service-Profit, su
pports the fair treatment of its people as the most valued asset and cornerstone
of FedExs success.
There is ample opportunity for all employees to advance within the company. Anot
her popular career advancement tool is a tuition refund program, where the compa
ny reimburses employees for their tuition costs.
4. Incentives and Benefits Career Advancement is not the only incentive used to
increase the retention of employees. One approach that works well is the awards
program, which is designed to reinforce desired behavior such as quality work an
d customer focus. Federal Express believes this and other incentive
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programs help them deliver high-quality service and keep their people motivated.
Federal Express knows that acknowledging efforts is essential for a motivated a
nd satisfied work force, and that such acknowledgement stimulates new ideas and
encourages better performance and team spirit. One of the nice things about the
Federal Express incentive is that the customers are left out of this reward proc
ess. Customers have a voice in selecting outstanding service.
The Golden Falcon Award is given to full-time employees who have demonstrated se
rvice to their customers that goes above and beyond the call of duty. Nomination
s for these awards are usually based on unsolicited internal, as well as externa
l, customer letters citing outstanding performance. Winners of these awards are
announced monthly, usually through company publications and video programs. Winn
ers receive an award and, most important, shares of stock.
Federal Express highest award is the Five Star Award, given to individuals for
outstanding performance which has materially helped the corporation enhance serv
ice, profitability, and teamwork. Several categories of employees are eligible f
or the award including non-managerial employees, managers or senior managers, an
d managing directors and officers.
The company offers an active work environment that supports its employees in bui
lding their career, and a broad compensation and progressive benefits program th
at rewards every employees contributions to the business.
FedEx Corporation offers its employees with outstanding benefits and an extremel
y competitive salary. In addition, the company also provides rewards that go wel
l beyond financial compensation and fringe benefits. Each employee has opportuni
ty to grow, succeed and be recognized for his or her contributions. The company
is also aware that employees have unique and diverse needs. That is the reason w
hy it created a benefits package that provides flexible, customized coverage so
that the employees can choose the options that best address their benefit needs.
Among the benefit options offered are medical, dental and vision care, disabili
ty protection, medical absence pay, short- and long-term disability and workers c
ompensation. Basic life insurance programs are company-paid with supplemental op
tions available at a cost.
The company also provides two plans, a pension plan and a retirement savings pla
n, designed to help the employees obtain their long-term savings goals and help
prepare for retirement. In addition to tuition assistance programs, everyone can
participate in the companys employee stock purchase plan, receive reduced rate s
hipping, global travel opportunities and participate in its credit association.
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4. Communication Federal Express success with employee relations and retention de

pends on candid communication. Federal Express spends enormous time on their int
ernal employee response program. The heart of this program is an open door proce
dure where employees are encouraged to find answers to situations they find disa
greeable, controversial, or contrary to existing policy. Open doors, especially
the way Federal Express uses them, can be effective, but perhaps the companys mos
t successful communication tool is their renowned Guaranteed Fair Treatment Proc
edure (GFTP). This procedure which they believe is the cornerstone of their peopl
e philosophy, gives each Federal Express employee the right to have any eligible
issue go through a systematic review by progressively higher levels of managemen
t. Their GFTP helps ensure that personnel have a right to discuss complaints wit
hout fear of retaliation.
The company also believes it helps them maintain an open atmosphere as well as k
eep their complaint handling process fair and equitable. The Federal Express sur
vey/feedback/action program compliments the GFTP and other communication tools.
It is an annual survey of employee attitudes. Management uses the survey to lear
n what they need to do to improve in specific departments and with the company i
n general.
5. Employee Motivation Higher employee motivation leads to greater creativity, p
roductivity and discretionary effort, which in turn lead to improved company per
formance.
6. Employee Training Top management at FedEx Express has always believed that tr
aining is a key factor in a successful business. FedEx Express values training;
it is a policy that management members join in 40 hours of training every year.
The company attempts to achieve 100% customer satisfaction and believes that onl
y committed workforce can achieve this standard. FedEx Express corporate culture
emphasizes the importance of treating its people with dignity and respect. This
includes giving employees the liberty to do their jobs and the tools they need i
ncluding training, to perform at their highest level with appropriate recognitio
n and rewards for a job well done.
FedEx Express believes that effective and timely training plays a critical role
in not only attracting and retaining a highly motivated and productive workforce
but also is an important factor in its ability to deliver superior value for th
e shareholders and service to the customers.
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The major characteristics that FedEx have can be expressed in the short list giv
en below.
Skilled Workforce selection Recruits skilled and competent workforce at all leve
ls and institutes various promotion from within activities aimed at giving emplo
yees every opportunity to fully utilize their skills gifts at work. The company
follows no lay-off policy. Communication Strategy Uses various mechanisms to build
healthy two-way communication. All the employees and senior managers routinely
participate in interactive discussion and question-answer programs.

Compensation Strategy Provides highly competitive salaries and pay-for-performance

incentives. Gives guarantee of greatest possible fair treatment and employee se
curity for all employees. Training and Development Strategy Training is one of the
most important events at FedEx to meet the goal of 100 percent customer satisfa
ction. FedEx follows promotion from within policy. For this, FedEx undertakes and
arranges extensive training for all employees and managers covering quality mana
gement, leadership concepts, and company philosophy.

Employee Retention FedEx Express, with a turnover rate of about 1 percent, is one
of the companies that have found effective ways of keeping their employees. One
of the reasons it is successful is that employees have career opportunities. Fed
eral express has a policy of strictly promoting from within. It also recognizes
the efforts of its people through awards, open communication, and other incentiv
es.Employee retention is interrelated with recruitment and employee relations. Ea
ch impact the other and all three is related. Federal Express begins its retenti
on efforts by centralizing its recruitment efforts. Federal express retains empl
oyees as well as improves their skills, by making sure its employees receive pro
per training in job performance skills.
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6. Competitive Advantages through SHRM

Strategic human resource management aims at the improvement of the way human res
ources are managed strategically within organizations, with the definitive goal
of improving organizational performance, as judged by its impact on the organiza
tions declared corporate strategy, the customer or shareholders. Strategic human
resource management (SHRM) is a philosophy of people management based on the bel
ief that human resources are uniquely important to sustain the success of a busi
ness. SHRM can be defined as the process of linking the human resource functions
with the strategic objectives of the organization in order to improve performan
ce. Strategic human resource management involves the linking of HRM with the str
ategic goals and objectives of the organization in order to achieve a progressiv
e business performance and achieve an organizational structure that promotes inn
ovation and flexibility. Strategic HRM according to has emerged as a major approac
h to improving the competitive advantage of the firm.The goals and objectives of
HRM are aligned with the strategic objectives and plans of the organization. The
role of HRM is to determine the human resources needed to support strategic obj
ectives and to ensure that employees are selected, trained, evaluated, and rewar
ded in ways that further the achievement of business objectives.Strategic HRM is
frequently described as a linear, balanced process that begins with the identifi
cation of goals that will guide human resource practices.The integration of the H
R programs with the goals of the organization will result to the organizations in
creased value. The recruitment, compensation,performance appraisal, promotion, tr
aining and other functions are designed and managed so that they work towards th
e strategic objectives of the firm.

Strategic HRM has the purpose of improving the way that human resources are mana
ged within firms. The main objective of strategic HRM is to improve organization
al performance as judged by its impact on the organizations declared corporate st
rategy.Strategic human resources management means accepting the HRM function as a
strategic partner in both the formulation of the organizations strategies and th
e implementation of those strategies through activities such as recruiting, sele
cting, training, and rewarding personnel. The enhanced value of innovation in de
termining competitive advantage requires organizations to attract, train and dev
elop, and retain employees of the highest quality.
Over time and throughout rapidly changing circumstances, organizations must be a
ble to sustain the competitive advantage that the knowledge and skills of these
employees provide. In the past, competitive advantage could be gained through fi
nding better, cheaper access to financial capital, or marketing a new product, o
r inventing some new technologies. While cheap and ready access to capital, high
-quality products, and new technology remain important components of any organiz
ations competitive advantage, todays business environment requires a greater focus
on the human resources element in business. Out of this realization has come SH
RM.
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Fig. 2: How SHRM helps to achieve competitive advantages

Effective SHRM planning aids in creating a competitive advantage for an organiza
tion. SHRM planning when done correctly provides a number of direct and indirect
benefits for an organization.

Identification of gaps between an organizations current situation and desired fut
ure Explicit communication of organizational goals Encouragement of proactive in
stead of reactive behavior Stimulation of critical thinking Creation of common b
onds and a sense of shared values and expectations Identification of the potenti
al problems and opportunities HRM costs may be lower because management can anti
cipate imbalances before they become unmanageable and expensive More time is ava
ilable to locate talent because needs are anticipated and identified before the
actual staffing is required Better opportunities exist to include women and mino
rity groups in future growth plans. Development of managers can be better planne
d.
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7. Comparison of FedExs Practice & Standard SHRM Practice

We have seen earlier that, FedEx has been practicing the High Quality dimension to
achieve competitive advantage. The set standard characteristics of practicing q
uality enhancement strategy are given below. For firms pursuing a strategy of qu
ality enhancement the role of behaviors include: A high concern for quality A hi
gh concern for process how goods and services are made or delivered. Low risk ta
king activity High level of commitment
The key HR practice includes: Relatively fixed and explicit job descriptions Rel
atively egalitarian treatment of employees and some guarantees of employment sec
urity High levels of employee participation on work issues Extensive and continu
ous training.
Over the last twenty years, protagonists of the resource-based view of competiti
ve advantage have produced an increasing amount of empirical research substantia
ting their espoused theories that the resources and capabilities of the firm are
the foundation for its long-term strategy because of two premises. First, inter
nal resources and capabilities are viewed as the key competitive sources of a fi
rms strategy; and secondly, the majority of the firms superior returns are derived
from these. The resource-based view defines competitive advantage as when a fir
m is implementing a value creating strategy not simultaneously being implemented
by any current or potential competitors. This assumes a firms competition includ
es all current competitors, but also, potential competitors. Within this definit
ion, a firm can create short run competitive advantage or firstmover advantage.
However, it is not sustainable because other competitors may be able to imitate
or purchase the sources of the advantage. Thus, from a resource-based perspectiv
e, firms desiring competitive advantage cannot expect to purchase or imitate sus
tained competitive advantages through the acquisition of a universalistic set of
best practices. A firm must take a configurationally perspective and create a s
ystem of HR practices that are customized to suit a particular firms competitive
strategies, and internal practices, policies, and resources provide both vertica
l and horizontal fit. That way, advantages may be found in the rare, imperfectly
imitable, and non-substitutable resources already controlled by the firm.
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Wright et al. (1994) conclude that the role of the HR manager then, is to recogn
ize, develop and exploit the resources within the firm through the application o
f HR systems that develop the human capital pool and elicit employee behavior su
pportive of a firms competitive strategy.
The table given here compares and contrasts the FedExs practicing policies with s
tandard SHRM principle.
Dimension Quality
FedExs Policy Standard Principle Comment One of the best A high concern for FedEx
follows the quality. standard principle. service providers
Commitment
FedEx is highly committed for both its internal and external customers. Risk Tak
ing FedEx doesnt take any kind of risks with its service. Job Description All the
employees in FedEx have relatively fixed job descriptions and a formal delegati
on of authority. Training and FedEx undertakes Development intensive training pr
ogram according to the need of employees. Motivation and Higher employee Partici
pation motivation leads to greater creativity, productivity and discretionary ef
fort, which in turn lead to improved company performance. Employment Security Fe
dEx has highest employment security with turnover rate of only 1 percent.
High level commitment
of FedEx follows the standard principle.
Low risk activity
taking FedEx follows the standard principle.
Relatively explicit job FedEx follows the description standard principle.
Continuous and FedEx follows the extensive training standard principle.
High level of FedEx has a concern employee for this principle. participation on
work issues
Relatively egalitarian FedEx has a concern treatment and for this principle. emp
loyment security.
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8. Recommendations
It had been showed that FedEx has a strong relationship with the most important
entity or stakeholder, the employees or human resource. The company had been abl
e to retain their talents that helped them to maintain productivity, thus mainta
in competitive advantage of FedEx. There are different aspects that must be main
tain and done such as the career development. This is an ongoing, formalized eff
ort of the organization that aims on the development and enrichment of the human
resource of the company that will target both the needs of the employees as wel
l as the entire organization. Another important thing that must be considered is
the internal communications. By doing this, the company will be able to maintai
n their direct and sound relationship and communication with the employees that
will enable them to know what are the employees needs and demands that will help
and push motivation. The following steps should be considered and implemented. 1
. Make available and promote customers completing pre-visit activities including
applications and practice tests. 2. Improve labor efficiency 3. Develop communic
ations methodology and operating policies to steer customers to the desired deli
very channel. 4. Prepare simple brochure(s) that can be located within station l
obbies and other public buildings, outlining the services, channels, and require
ments. 5. Conduct a comprehensive customer Focused service surveys/interviews ev
ery 2 years to reassess/confirm requirements. 6. Expand customer reach through s
elf service channels, meeting customer requirements while reducing station traff
ic. 7. Educate the public about available services, requirements, and delivery o
ptions.
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9. Conclusion
Strategic Human Resources Management aims to attract, develop, motivate and main
tain highperforming employees that add to the organizations competitive advantage
. The Strategic Human Resource Management is now considered as a strategic partn
er of a companys management. The policies and strategies of the HR department mus
t be aligned to those of the company in order to achieve a favorable standing in
the market place. Strategic HRM aims to improve the organizations performance th
rough the improvement of the way the human resources (workforce) are being manag
ed. The changes in the external environment of the business over the years have
focused on the importance of the human resources in the achievement of the organ
izations goals and objectives.
FedEx Express values its people and believes that a motivated and satisfied work
force is essential in providing quality service. The company believes that its p
eople are one of its competitive advantages. FedEx Express talented, skilled and
motivated employees set them apart from their competition. The companys Human Res
ources Management strategies are specifically tailor-made to fit the companys obj
ectives and goals. The company promotes a working environment that is built on t
he People-Service-Profits principle. The HR policies and practices at FedEx Expres
s are designed to focus on the well-being of its workforce by providing equal op
portunities, competitive salaries and benefits, extensive training and career de
velopment programs, effective training programs and others. The workforce is a s
ource of competitive advantage for FedEx Express.
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References
Book References:
1. Ahmed, F, M H Ullah, & M K Uddin 2006, Strategic Human Resources Management: L
inking HR Practices with the Business Strategy, vol. 34, no. 3, pp. 15-30.
2. Denton, K 1992, Keeping Employees: The Federal Express Approach, SAM Advanced M
anagement Journal, vol. 57, no. 3, pp. 10 13
3. Recommendation and summary report; February 2006; page 6-9
4. Hamish G. H. Elliott, SHRM Best-Practices & Sustainable Competitive Advantage:
A Resource-Based View, page 17-19
Web References:
1. Human resource managementbest practice at FedEx http://www.icmrindia.org/casest
udies/catalogue/Human%20Resource%20and%20Organi zation%20Behavior/HROB034.htm 2.
HR Best Practices at FedEx, a Best Company to Work For http://www.casestudyinc.co
m/hr-bestpractices-at-fedex-best-company.php 3. Guide to Services http://fedex.com
/us/services/packageshipment/index.html
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