1.
ARAB OPEN UNIVERSITY
HR AND COMPETITIVE ADVANTAGE
A comprehensive guide to using HR activities to boost
competitiveness
BY
_______________________
Saturday, March 10, 2018
Instructor: _______________
Course: _______________
HUMAN RESOURCE MANAGEMENT, 2018 !1

2.
HUMAN RESOURCE MANAGEMENT, 2018 !2
This page is intentionally left blank.

3.
HUMAN RESOURCE MANAGEMENT, 2018 !3
The essay is written to answer the ubiquitous organizational query; “How HRM
activities enable organizations to become more competitive in their markets?”.
With this essay organizations can gain a comprehensive, intricate, and pragmatic
knowledge on how they can use HR as a competitive advantage so that they’re
capable of making the most out of their HR activities and boost their
competitiveness to stand not just firm but sui-generis in the market.

4.
Human resources can be defined as the organizational Erudition, Experience, and
the Employee Skills and Commitment to the organization and the success thereof,
bonds with each other and with the ones outside the organization (Qehaja and
Kutllovci, 2015). Many organizations, nowadays, are in a perpetual peril of being
exposed to the ever haunting competition that can jeopardize their market state
and, ergo, the profits that keep them going, however the diurnal menace can be
obviated efficaciously or worked on if the organizations are incessantly and
zealously working on the Human side to get the desiderative results of owning
nonpareil competitive advantage. Whence organizations have started to realize the
essentiality of Human Resource Management as a source of honing their
competitive position in the market since they are well cognizant of the fact that it is
indeed people who not just heed the identification and distinguishability of
opportunities, development of the products & services, but also excogitate and
concoct strategies in order to efficiently manufacture and efficaciously supply
those products & services to the target market . As said by Lee Dyer in 1993, the
performance of the aforementioned tasks is, in actual fact, a function of the
organizational policies & programs that are used in enthralling, retaining, forging,
and stimulating the amount of employees and their ilk that an organization
necessitates.
Considering the contingency of performance levels on the organizational polices
and programs, the organizations have to heed the tasks being performed, the
performance level, and hence keep a good check on the policies and programs, on
which the later is contingent on. Organizations are, wherefore, getting more
inclined toward knowing the applications of HRM for honing the competitive
advantage and are amenable to spend quality time and efforts in ameliorating their
HR activities being practiced.
HUMAN RESOURCE MANAGEMENT, 2018 !4

5.
How HR can be used as a source to boost competitive
advantage?
It is HR that deals with the Recruitment & selection, Training & development,
Reward structure & motivation, and Retention. Howbeit, the contemporary HR is
something beyond the said background since it, now, owns two main purposes, as
said by Nina Pološki Vokić in 2008, and they are (1) Strengthening the
organizational performance and (2) acting as a backbone to achieve a “worker
competitive advantage”. It is considered rational that the HR activities including
recruiting, retaining and putting the talents of people to good use also provides a
competitive dominance in the milieu where all and every work requires erudition
and is fundamental for the economic success (Vokić, 2008). Beaucoup resource-
based researchers are essaying to supply the evidence that forging an efficacious
HR system can majorly contribute in the establishment of a workforce competitive
advantage (Vokić, 2008). In an article on HR daily advisor, Bridget Miller (2017)
has clearly delineated the ways, elucidated below, via which HR activities can be
used as a competitive advantage.
Recruitment & Selection:
Recruitment basically means looking for and luring applicants for an employer’s
open position. HR can also help in providing a good acquaintance with the
growing market rates for talents & flair and the amount of essay required to get
high calibered hires on the board. Plus HR can also peruse the competitive talent
milieu and hence determine the needed compensation strategy apropos of
company’s goals. HR can, ergo, be a great help in sourcing the apposite talent that
the organization necessitates in order to grow, prosper, and stay competitive in the
market but it can only be done with the help of “effective recruitment”. Effective
Recruitment and selection’s erudition can enlighten the organization about the way
to look on for ‘specialized talent’. This can be a massive source of enhancing
competitiveness of the organization as the organizations can only get the ones
patently dedicated and meant for their respective jobs, for example Amazon that’s a
HUMAN RESOURCE MANAGEMENT, 2018 !5

6.
big giant when it comes to e-com sites went to acquire “Zappos” because it was
actually interested in its personnel and their respective eruditions. Furthermore, the
Job analysis data can also be used here to apprise people of the duties that a
particular job entails or necessitates and of the human characteristics crucial for
that job to be done efficiently and efficaciously, this can in turn help the managers
in deciding the type of people that should be recruited and selected. Moreover, HR
can also bring organizational structures, of other organizations within the industry,
to the cognizance of the company that can help in determining the positions that
need to be generated or filled so that the company never loses its competitive edge.
Training & Development:
Moreover, by keeping a good track of employees, HR can also pinpoint the high
achievers/high performers and apprise the management of the worthy assets and
how can those assets get honing to elevate the business. Hence the data can be
used by the HR for the performance evaluations and ergo for training and
development, so that the management is capable of taking the cognizance and
equal care of the employee skills evolving over time. Employee development
pathways can also be developed via HR that take strategic and the long term
organizational needs in to their genuine consideration. Pivotal is the constituent of
ensuring the level of training that their employees are getting, or if they are even
getting one or not, for an organization that covets competitiveness via improving
not just retention but employee skill sets in the organization and hence ensures a
proactive frame of reference being used to address the prodigious and gigantesque
competitive issues.
Reward Structure and Motivation:
HR can also use the data to take cognizance of the potential employee issues
before they become complicated and rebarbative. For this organizations tend to
keep a good track of employee engagement scores over time so they are cognizant
of the time when engagement levels are warning and worth taking a serious notice/
action on so that the organization takes action at the right time and on the right
HUMAN RESOURCE MANAGEMENT, 2018 !6

7.
employee. The apposite example to quote here would be FedEx, one of the most
successful companies that credits its success to their employee efficient
performance levels and believes that well-treated employees are always the top-
producing and top-contributing ones to elevate the company and keep it on the
competitive edge. FedEx even developed its “People-Service-Profit” that it still
loves to practice since it denotes wondrous employee care. It also tracks employee
satisfaction with the annual survey-feedback-action (SFA) Program after which
management and employees gather to broach the survey results, and talk about the
problems and ways of resolving them (Reynolds, 2018).
Retention:
It is stated by Plessis et al. (2013) that recruitment is always not enough for an HR
practice to be efficacious enough to endow the firm with the coveted competitive
advantage, but it also needs to take a heed of the retention procedures that a firm
undertakes. These procedures as defined by Plessis et al. include managing
employees as an essential asset and treating them well since they are the “lifeblood
of the organizations”. Employees are indeed the most effective and powerfully
valuable resources whence it is an essentiality for the firms to efficaciously manage
the workforce in order to boost the sustaining organizational performance (Plessis
et al.). Since the performance evaluations can help in gaining the cognizance of the
high achievers and performers, it becomes easier for the firm to focus on their
retention by providing them the needed benefits, keeping them satiated and
beatific. Howbeit, Retention has become increasingly difficult in the contemporary
world of competitive market ready to lure your assets with the differentiating
offers. Ergo, Organizations need to endow their assets not just with apposite
working conditions but also with a heed paid to keeping them rewarded and
equally motivated to reduce the turnover rates to the minuscule levels. This can be
done by analyzing the turnover rates using the HR data which can help in
determining the root cause thereof, for example if the problem is skewed at the
new hires end then the root cause can be determined to eradicate it. This data can
HUMAN RESOURCE MANAGEMENT, 2018 !7

8.
also be used to formulate the best ways to motivate the employees in order to keep
them retained so they keep on contributing in the organizational success. Retention
is, hence, very crucial to every firm’s competitive strength because when the firms
are retaining their high achievers/performers they not only increase their
motivation to work and contribute in the firm’s success but also saves firm’s time
and cost spent on recruiting the right people for the right job and enabling it to own
the ones who better understand the organizational culture and context. However the
contemporary HR, now, takes in to consideration the organizational strategic goals
by putting together the succession plans. With this being followed, organizations
can manage to remain competitive even when the turnover is high.
Organizations, hence, need to heed the benefits HR can endow them with via
which they can become more diverse than they’d ever been, and ensure that the
quality HR system is flexible enough to change along with the business. Plus it is
also crucial to consider the possibility that employees can sometimes feel
dissatisfied & even annoyed with the need of an incessant training due to the
system upgrades etc. ergo it is essential to make them feel the benefits of such
upgrades and how can they help employees in efficiently & efficaciously complete
the work (Alharthey & Rasli, 2012). Moreover a systematic linkage between the
HRM practices can provide a great help in granting a potential competitive
advantage to the firm but apportioning the resources in order to induce a well-
established commitment of the employees is indeed considered crucial, form an
institutional and corporate perspective, to allow the training and development
practices to work efficaciously in the integrated HRM system of the firm (Takeuchi
Wakabayashi & Chen, 2003). Recruitment & Selection, Retention, Training and
Development, Motivation, are hence the HR activities that are crucial to the firm’s
competitiveness and , if handled strategically, can not just be the source of
competitive advantage but for enhancing employee-organizational relationship,
strengthening the culture in order to harvest more efficiency in productivity and
HUMAN RESOURCE MANAGEMENT, 2018 !8

9.
efficaciousness in dealings in order to get an increased ROI. (Chadwick and Dabu,
2009).
HUMAN RESOURCE MANAGEMENT, 2018 !9

10.
References
Pološki Vokić, N. and Vidović, M. (2008). HRM as a Significant Factor for
Achieving Competitiveness through People: The Croatian Case. International
Advances in Economic Research, 14(3), pp.303-315.
Alharthey, B. and Rasli, A. (2012). The use of Human Resource Management
Systems in the Saudi market. Asian Journal of Business Ethics, 1(2), pp.163-176.
Takeuchi, N., Wakabayashi, M. and Chen, Z. (2003). The strategic HRM
configuration for competitive advantage: Evidence from Japanese Firms in China
& Taiwan. Asia Pacific Journal of Management, (20), pp.447-480.
Qehaja, A. and Kutllovci, E. (2015). THE ROLE OF HUMAN RESOURCES IN
GAINING COMPETITIVE ADVANTAGE. HRM, 11(5), pp.47-61.
Chadwick, C. and Dabu, A. (2009). Human Resources, Human Resource
Management, and the Competitive Advantage of Firms: Toward a More
Comprehensive Model of Causal Linkages. Organization Science, 20(1), pp.
253-272.
PLESSIS, A. J. D. U., SUMPHONPHAKDY, S., OLDFIELD, J., & BOTHA, C. (2013).
COMPETITIVE ADVANTAGE: RECRUITMENT AND RETENTION OF SENIOR
MANAGERS IN FINANCIAL SECTORS IN LAOS. Journal of Community Positive
Practices, XIII(2013), 41–52.
Miller, B. (2017). Using HR as a competitive advantage. [online] http://
hrdailyadvisor.blr.com/category/strategic-hr/. Available at: http://
hrdailyadvisor.blr.com/2017/08/21/using-hr-competitive-advantage/ [Accessed 27
Feb. 2018].
Bibliography
TimelessTime. (2018). Achieving Competitive Advantage Through People: a
practical model of 'how to' underpinned by theory - TimelessTime. [online]
Available at: https://timelesstime.co.uk/knowledgebase/competitive-advantage-
through-people [Accessed 27 Feb. 2018].
McGrath, R. (2008). Connecting HR with Competitive Advantage. [online]
Harvard Business Review. Available at: https://hbr.org/2008/06/connecting-hr-
with-competitive [Accessed 27 Feb. 2018].
HUMAN RESOURCE MANAGEMENT, 2018 !10