CHAPTER 12

Managing Human Resources

Human Resource Management (HRM) is an important function within organizations, and it can
provide several benefits to the organization. One of these benefits is that it can be a significant
source of competitive advantage. Let me explain this further.

Competitive advantage refers to the ability of an organization to create more value for its
customers or stakeholders than its competitors. HRM can help organizations achieve this
competitive advantage in several ways:

Attracting and retaining top talent: By implementing effective recruitment and retention
strategies, organizations can attract and retain top talent who have the skills, knowledge, and
experience necessary to create value for the organization. This can give the organization an
advantage over competitors who may not have access to the same level of talent.

Developing employee skills and knowledge: By investing in employee training and

development, organizations can improve the skills and knowledge of their employees, making
them more effective in their roles. This can lead to increased productivity, innovation, and
quality, which can provide a competitive advantage.

Creating a positive organizational culture: By fostering a positive organizational culture that

supports employee well-being, collaboration, and innovation, organizations can create a
workplace that attracts and retains top talent. This can also lead to increased employee
satisfaction and engagement, which can improve performance and productivity.

In addition to being a source of competitive advantage, HRM is also an important part of

organizational strategies and can significantly impact organizational performance. To achieve
these objectives, managers rely on eight activities that make up the HRM process. These
activities are:

1. Human resource planning: This involves forecasting the organization's future

workforce needs and developing strategies to meet those needs.
2. Job analysis and design: This involves analyzing jobs within the organization and
designing them to meet the organization's needs.
3. Recruitment: This involves attracting and selecting candidates to fill open positions
within the organization.
4. Selection: This involves assessing candidates to determine their suitability for open
positions within the organization.
5. Training and development: This involves developing employee skills and knowledge to
improve performance and productivity.
6. Performance management: This involves setting performance expectations, providing
feedback, and evaluating employee performance.
7. Compensation and benefits: This involves designing and administering compensation
and benefits programs to attract and retain top talent.
8. Employee relations: This involves managing employee relations, including addressing
employee concerns and resolving disputes.
By effectively managing these activities, HRM can support the organization's goals and
objectives, create a positive workplace culture, and improve organizational performance.

Overall, HRM can be a key driver of competitive advantage, as it can help organizations to
attract and retain top talent, develop employee skills and knowledge, and create a positive
organizational culture. By doing so, organizations can create more value for their customers or
stakeholders, and differentiate themselves from their competitors.