Human Resource Management Practices
Human resource practices can be an integral part of a successful strategy to obtain, maintain, and sustain competitive advantage. Human resource management systems influence employee skills through the acquisition and development of a firm’s human capital. Hatch and Dyer (2004) reported that the selection of human capital is significantly important and critical to the performance of an organization. Recruiting procedures that provide a large pool of qualified applicants along with a reliable and valid selection process will have a substantial influence over the quality and type of skills new employees posses.
Providing formal and informal training experiences (basic skills training, on-the-job training, coaching, mentoring, and management development) can further influence employee development and organizational performance (Huselid, 1995). In fact, firms that have the highest skilled workforce, other factors held constant, will be the most productive and produce the best products or services at the lowest costs, earn the highest profits, and dominate the market (Den Hartog and Verburg, 2004).
Unlike more conventional assets, when human resources are used as organizational capital they may not be accurately represented on a firm’s financial balance sheet. They are found in a skilled, motivated, and adaptable workforce and in the human resource management system that develops and sustains it (Karami, Analoui, & Cusworth, 2004). Therefore, human resources, and the management practices used to develop them, may be a priority for government, business, and researchers. Traditionally, human resource management practices have been viewed from practical, theoretical, and empirical standpoints, at the individual practice level.
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In the evolution of human resource management practices, theoretical and empirical research has examined the impact of single human resource practices (work force planning or staffing selection) in isolation without consideration of other human resource management practices such as incentive compensation, individual development, or employee relations (Choo and Bontis, 2002). Many studies have been conducted concerning single human resource management practices and productivity and most have revealed positive relationships.
Some representative studies dealing with productivity and single human resource management practices have included labor relations practices and their relationship to grievances, discipline, labor efficiency, and product quality; training, goal setting, and socio-technical systems and their relationship to quantity, quality, and production cost; gain sharing and its relationship to labor cost; and participative work decisions on their relationship to productivity; and strategic selection and staffing on performance(Huselid, 1995).