Linkage Of SHRM With Sustainable Competitive Advantage: Role Of HRM Practices And Learning Student Name: Student ID:

It is evident that discipline of human resource management has witnessed major changes over the past two decades which have evolved and shifted the paradigm of human resource management to a new more comprehensive one that is strategic human resource management. In the era of globalisation and drastic competition, the organizations are striving hard to come up with the resources which may offer them sustainable competitive advantage. The strategic management of human resources consider workforce as the asset that can offer sustainable competitive advantage in long run.  The current essay has encompassed discussion about the linkage of strategic human resource management with sustainable competitive advantage and offered significant importance to learning perspective. The discussion has carried out about theoretical aspect of strategic human resource management and sustainable competitiveness, resource based view, HRM practices, learning and HRM strategies.

Body

Initially the paradigm of personnel management was shifted to human resource management, which has gradually evolved and shifted to a new paradigm named strategic human resource management (Becker, Huselid and Ulrich, 2001). The first paradigm has incorporated that human resources are an important asset for the organization and the systematic management can help the organizations to gain advantages (Boxall and Purcell, 2000). The second has focused on more knowledge oriented approach and stated that along with linkage between human resource management policies and needs of human resources, there is required a linkage between human resource practices and needs of the organizations (Collins and Clark, 2003). The needs of the organization resides in the strategic requirements of the firm, which have transformed the human resource management into strategic human resource management.

The human resource management is the philosophy that helps to align the planning and management of human resources with the strategic goals of the organization that are required to be achieved in long run (Bratton, 2007). The main emphasis of the strategic human resource management remains around the human capital and in broader terms it covers different aspects such as; structure of organization, culture of organization, norms, values, commitment and matching of human factors with the long term strategic objectives of the organization (Lepak and Snell, 2002). In this broader aspect, the strategic human resource management offers an increasing attention to maximization of employee value proposition by relying on structural and cultural variables. The strategic human resource management literature has been divided into two perspectives. Firstly, the identification of different features is carried out which act as the determinant of the performance of the organization, such that the causal association between the organizational capabilities and behaviour of employees is carried out (Perry, 1993). The literature on this perspective indicates that structural competencies, types of training, cultural values of organization and communication strategies implied within the organization are important for defining the level of engagement of human resources (Wade and Hulland, 2004). Secondly, the aspect of capability building and management processes that are being used for raising the commitment level of employees are important for defining the success of strategic human resource management.

For the purpose of this essay, the strategic human resource management has been defined as the achievement of long term goals of organization based on deployment of human resource management practices in the way that can foster learning and can create unique advantage (Richard and Johnson, 2001). In this way, there are two core parts of strategic human resource management concept. Firstly, the human resources are needed to be employed for achieving the strategic goals of the organization. Secondly, the unique and rare human resources require congruence among different human resources management practices with an aim of generating competitive advantage. Thirdly, the learning serves as the core aspect for using human resources as a strategic resource. Along with this, there is significant linkage between business strategy and human resources management practices being considered in this essay, such that business strategy helps in defining the way through which human resource management practices can be deployed (Lengnick-Hall, et al., 2009). For instance, the organizations whose strategies revolve around creativity and innovation need to deploy the human resource management practice of employee empowerment based on the learning culture on the organization.

It can be considered important that realization of organizational gaols through strategic human resource management practices and continual learning is the source of sustainable competitive advantage (Priem and Butler, 2001). The strategic human resource allows the integration of human resource management planning with the business planning. It helps to align the competencies of the human resources with the capabilities, mission, vision, values and strategies of the organization (Wade and Hulland, 2004). The strategies and actions of the organization are needed to be evaluated on the continual basis with an aim of moving in the right direction for achievement of strategic gaols of the organization (Wright and Boswell, 2002). In current essay, the association of strategy, human resources management practice and achievement of strategic goals in sustainable manner are studied under the resource based view of the firm.

The theory of resources based view has widely served as the basis of explaining strategic human resource management concept (Priem and Butler, 2001). The resource based view has its roots in economics and strategic management literature which has recently been borrowed by the researchers of human resource management to explain the strategic importance of human resources (Barney, 2001). The resources based view has maintained that each organization has some set of distinctive competencies that are immobile and inimitable by the competitors, therefore offering sustainable competitive advantage to businesses. The resources based view has helped the researchers to embrace the soft view of human resource management. The Truss, Mankin and Kelliher (2012) has divided the sources of competitiveness into physical and human factors and offered an important insight of the knowledge management and learning environment. In the research of Collins and Clark (2003) the concept of heterogeneity of organizations was revealed which has fostered that competitiveness does not come from outside. By contrast, the competitiveness can be enhanced based on the internal capabilities and competencies of the business organizations, which are hard by the competitors to copy (Wright and McMahan, 1992). Thus offering a considerable importance to the strategic value of internal strengths of the organizations, the resource based view have unveiled a new paradigm and changed the way organizations can seek competitive advantage.

In the light of this perspective, it is note able that human resource is one of the core strategic strength of the organization that can be exploited against opportunities with an aim of generating competitive advantage in long run (Agarwala, 2008). Along with this, it has been offered in the research of Perry (1993) that there are four aspects of resources and capabilities of the organization that can offer sustainable competitive advantage including; value, rarity, inimitability and substitutability. In order to use human resources for sustainability of competitive advantage, it is important to consider that resources must be able to offer value to the organization (Bratton, 2007). The value comes from the skills and capabilities of the human resources that constitutes to define the human capital of the organization. The increased human capital of the organization has stronger linkage with strategic abilities and capability to realize strategic goals of business.

The rarity of the human resources refers to the extent to which capabilities, skills and knowledge of employees are unique across the organization. The rarity of human resources is based on the high ability of individuals and therefore, the organizations are striving hard to hire the humans who have highest abilities. It is crucial for the organization to rely on an effective recruitment mechanism that can help them to assure that they are hiring extremely talented and able workforce. Along with this, the ability of organization to attract the highly talented employees can be enhanced through attractive reward systems. The valid selection procedures can then help to recruit individuals with superior ability, which creates rarity of human resources. The rarity can then offer sustainable competitive advantage to organizations, which is the essence of strategic gaols of organization.

Thirdly, the inimitability of human resource offers that knowledge, skills and capabilities of the human resources are inimitable by the competitors across the industry. In order to define the inimitability aspect of human resources, there are three facets that can be considered, including; unique historical conditions, causal ambiguity and social complexity (Aragon-Correa and Sharma, 2003). The unique historical conditions are mainly associated with the historical events that can shape the culture policies and procedures of the organization. The historical value and culture of competitiveness of the organization are non-imitable by the competitors and they may offer unique position to the organization with regard to other significant players within industry (Richard and Johnson, 2001). The causal ambiguity refers to the notion when there exist highly complexed causal patterns behind the competitiveness of the organization (Srivastava, Fahey and Christensen, 2001). These causal patterns are neither understandable nor imitable by the competitors and thus they offer a unique and sustainable competitive advantage. The phenomenon of social complexity provides that competitive advantage can stem from unique social capital and social relationships underlying an organization. It can be clarified by the aspect of collaboration that forms the basis of team centred working culture of the organization. The prior research has readily offered that the competitive advantage of human resources is mainly based the historical conditions, casual ambiguity and social complexity, thus making it hard for competitors to imitate this advantage (Priem and Butler, 2001).

Finally, the attributes of sustainable competitive advantage offer that there is no substitute to the underlying resources, which in current case are human resources that cannot be substituted easily (Lengnick-Hal et al., 2009). It can be justified by the instance that the emergence of new production technology that increase the productivity level of organization can be easily substituted by purchasing and installing that new technology (Khilji and Wang, 2006). However, when the advantage is based on the capabilities of individuals who operate that technology for increasing productivity of organization, then that cannot be substituted and the competitive advantage remains with the strategic human resources (Harris and Ogbonna, 2001). Thus, it is reasonable to consider that in order to offer competitive advantage, the human resources are an important strategic resource and they posse all attributes that can enhance sustainability of these competitiveness.

Based on this explanation of attributes (value, rarity, inimitability and substitutability) that can offer competitive advantage in long run, the organizations need to invest mainly in creation of these unique attributes. It has highlighted in the prior research that integration of diverse knowledge and skills of management is important for strategically exploiting the human resources (Daley, 2006). The organizations who become able to exploit these resources in appropriate manner based on the learning aspects, are able to realize their gaols in highly effective manner. Furthermore, it has been asserted by Evans and Davis (2005) that organizations cannot buy competitive advantage that has the ability to sustain in long run, they can only rely on valuable, rare, inimitable and non-substitutable resources (in case of current research, human resources) with an aim of generating sustainable competitive advantage (Collins and Smith, 2006). The resource based view of the strategic human resources is the most diverse model that has shifted the interest from external sources of competitiveness to internal sources and thus has served as an important paradigm for explaining the association of strategic human resources in defining the sustainable competitive advantage (Combs, Liu, Hall and Ketchen, 2006). Thus, the resource based view has offered a new insight of considering human resources as pool of skills that are high valuable for executing a well formulated strategy with an aim of gaining sustainable competitive advantage.

The second part of definition of strategic human resource management that is considered as important for achieving the long term strategic gaols of the organization is deployment of human resources management practices (Holton, Bates and Ruona, 2000). The resource based view has explained readily the ways through which strategic advantage can be obtained based on human resource management.  The next important step to align the human resource management practices such that they may enhance the value, inimitability, rarity and non-substitutability of human resources (Guest, Michie, Conway and Sheehan, 2003). The humans are the unique internal resource (as stated in resources based view) and without reliance on effective strategic human resource management practices, the organization cannot successfully increase engagement level of employees (Heneman, Ledford and Gresham, 2002). The commitment, and motivation of human resources can be strengthen by relying on most appropriate set of strategic practices for manging individuals.

In terms of human resource management practices, the organizations need to rely on highly effective recruitment methods that can help them to hire employees with unique set of knowledge, skills and abilities (KSAs) (Boxall and Purcell, 2011). The KSAs combine to formulate human capital which is the important strategic resource. The selection of individuals with superior abilities is needed to be supplemented with the practice of articulating vision, mission and values (VMV) of the organization (Gomez-Mejia, Balkin and Cardy, 2004). The articulation of VMV requires the businesses to engage in effective communication with the newly hired employees and discussing the VMV in clearly possible manner (Billett, 2001). The sense of ownership is needed to be generated among employees, so that their commitment can be achieved. The employees are then offered the training in order to match their skills, knowledge and abilities with the VMV of organization (Aycan et al., 2010). The VMV are mostly embedded into the culture of the organization and an understanding of VMV helps the new hires to understand the cultural aspect of the organization. It is important to consider here that vision, mission and values form the basis of all strategic gaols of the organization and the articulation of VMV allows the organizations to take step towards accomplishment of strategic gaols.

Likewise, the strategic management of human resources require reliance on HRM practices of employee involvement (Cassell, Nadin, Gray and Clegg, 2002). The highly competitive business environment requires the business to empower the employees by offering the discretion to participate in decision making (Bebchuk, 2009). The participation of human resources in decision making can foster flexibility within organization and thus employees become more creativity and innovative (Cappelli and Neumark, 2001). The innovation is the considerable capability of the businesses that can help them to realize their strategic gaols.  Along with this, the employee involvement has the potential to foster commitment and motivation of workforce which are the key ingredients for gaining sustainable advantage through human resources (Becker, Huselid and Ulrich, 2001). The motivated human resources can serve effectively in execution of human resource management strategies and the improvement of employee related outcomes are the way towards realization of organisational gaols (long term strategic gaols).

Followed by this, the effectiveness of performance management of employees and reliance on attractive reward system is an important antecedent for generating competitive advantage through people (Kuvaas, 2006). The performance appraisal mainly forms the basis of compensation and benefits. Both the tangible and non-tangible benefits that are offered through well aligned performance evaluation system are important for defining the level of employee participation in realization of organizational gaols (Cleveland, Murphy and Williams, 1989). Along with this, the results of performance evaluation also serve as the basis for identifying training needs of the employees (Armstrong and Baron, 2000). The training and development programs serve significantly in realization of organizational gaols by improving the knowledge, skills and abilities of human resources (Laird, Holton and Naquin, 2003). Along with is, when the employees feel that their developmental needs are addressed appropriately by the management then they feel more engaged and aligned with the strategic gaols of the organization (Ahmad and Schroeder, 2003). Thus, the employees put significant level of efforts for achieving these goals and the result comes in the form of sustainable strategic advantage (based on unique and inimitable human resources).  In similar way, the provision of high quality work experience and maintaining a balance between the personal and professional life of the human resources serve as an important aspect of human resource management policies (Appelbaum, 2000). The balance of work and life can increase satisfaction among human resources and it can improve the performance level of human resources. The improvement in performance level of employees will help the businesses to gain competitive advantage.

Moving further to the third part of the strategic management aspect being incorporated in current study, the learning acts as an important source of gaining strategic competitive advantage (Judge, Thoresen, Bono and Patton, 2001). The learning perspective of the organizations is defined as the reliance on activities that can contribute to enhancement of skills and capabilities through emergence of knowledge from both internal as well as external sources. In this way the learning organizations have a comprehensive system that encourages development of an organization’s knowledge. Moreover, according to Man, Lau and Chan (2002) the learning is considered as the process that is established to improve the stock of knowledge, skills and abilities of the human assets within an organization. The learning increases the value of intellectual assets of the company to foster the improvement of innovation capital through acquisition of knowledge (Kuvaas, 2006). The organization who is readily engaged in improving the learning of its human resources is said to have knowledge management orientation.

The investment in workplace learning serves as a powerful resource for developing the knowledge, skills and capabilities of the organization (Lepak and Snell, 2002). The learning comes under the soft skills as represented in the resource based model of strategic human resource management. Both the formal as well as informal learning are important management perspectives that can act as the level of offering sustainable competitive advantage.  The researchers have considered that the workplace learning acts as the source of workplace flexibility which helps in creation of sustainable competitive advantage (Paul and Anantharaman, 2003). The workplace flexibility enables the human resources of the company to learn faster than the competitors, which acts as the source of increasing competence. The workplace learning is the best form of investment in human capital. The reliance on mutual commitment strategy is important for fostering lifelong learning that can serve as the foundation of gaining competitive advantage in long run (Ramsay, Scholarios and Harley, 2000).  The learning aligned with VMV helps in achievement of strategic objectives of the organization and the supports the gaols of the organization.

In order to achieve sustainable competitive advantage through deployment of human resource management practices based on organizational learning capabilities, it is also important for businesses to generate set of human resource management strategies (Lepak and Snell, 2002). In order to meet the strategic gaols of the organization, there are five important human resource management strategies that are needed to be formulated by the organizations to create sustainable competitive advantage. These strategies encompass the following; restructuring strategies, training and development strategies, outsourcing strategies and collaboration strategies (Way, 2002).

Firstly, the restructuring strategies for management of human resources is highly important as the organizational restructuring mainly leads to number of changes within structure and strategic position of the organization (Whitener, 2001). The alignment of staff with the new strategies that emerge as the result of restructuring is considered as crucial for smoothly managing the operations of organization. The restructuring also comes with reduction of staff which can cause demotivation among remaining employees, which requires a well-established method of motivating employees (Seibert, Silver and Randolph, 2004). Along with this, the redesigning of the tasks is also required to cope up with the changing needs of the organization and reorganization of work groups is also considered as important (Storey, 2007). All of these aspects are needed to be considered while devising restructuring strategies for managing human resources of the organization.

Secondly, the training and development strategies are important in order to align the skills of the workforce with the underlying strategies of the organization (Ulrich, 2013). The training and development strategies acts as the cushion against the incorporation and newness and they are aligned well with the knowledge orientation of the organization. The learning and development is fostered through training and development strategies and it help the businesses to polish the skills and knowledge of the human resources in the way that it can be differentiated from the competitors (Way, 2002). The well differentiated and unique skills from the competitors help in establishment of inimitable and heterogeneous human capital and can consequently lead to generation of sustainable competitive advantage (Vives, 2006). Along with this, the formulation of new strategies within organization can require the employees to adjust with changing roles aligned with changing job responsibilities (Ugboro and Obeng, 2000). Thus, the training and development strategies are required to address these new needs in order to use human capital for attaining strategic gaols of the organization.

Thirdly, the outsourcing strategies of the organization are also important for reaching to the talented and well qualified individuals with superior abilities that resides outside of the organization (Wright and Boswell, 2002). These strategies are crucial for gaining advantage based on heterogeneous capabilities of the human resources that are not hired but exist outside of the organization. The outsourcing strategies gain a unique position in the strategic human resource management as they can help in fulfilment of requirements of the organization in run in cost effective manner (Way, 2002).

Finally, the collaboration strategies are considered as important as they allow the members of organization to collaborate for attaining the specific tasks of the organization (Wright, Gardner and Moynihan, 2003). The collaboration strategies form the foundation of team based working culture of the organization and they play an important role in creation of inimitable resources of the organization. It has been highlighted by Yew Wong (2005) that a team based workplace is considered to be linked with situational complexity that is difficult to imitate by the competitors. Thus, the collaboration strategies are also relevant in creation of sustainable competitive advantage through an active reliance on non-substitutable and inimitable strategies. Generation of all these underlying strategies for management of human resources can increase the ability of organizational members to gain competence.

The research issue that has addressed in the present study has implications for the practice and theory. The practitioners can rely on the aspect of strategic human resource management by aligning with the knowledge management perspective. Likewise, they may carefully devise strategies being highlighted in current essay for gaining maximum benefits of the human resources. In terms of theoretical implications, the aspect of learning and knowledge management has not been readily included by the prior researchers. The current study has offered attention to integrate human resource management practices and learning management with strategic human resource management in order to generate sustainable competitive advantage. The future researchers might focus on linking transformational leadership and ethics with the strategic human resource management.

Conclusion

All of the aspects being highlighted in the current essay have emphasized that strategic human resource management is a noteworthy source of sustainable competitive advantage. The strategic human resource management is the most recent paradigm of the human resource management. The current study has considered the strategic human resource management in the light of theory of resource based view and offered that human resources are heterogeneous and immobile across the organization. There are four attributes that are crucial for creation of sustainable competitive advantage through human resources including; value rarity, inimitability and non-substitutability. Along with this, the human resource management practices are considered as important for linking the workforce with the gaols and strategies of the organization. The well designed recruitment system of the organization has considered as crucial for hiring employees high in KSAs. The articulation of VMV and employees involvement has been delineated important for fostering employees’ involvement with strategic gaols of the organization. Likewise, the performance management, training and development, reward system and work life balance has also been discussed in relation with involvement of strategies management for offering sustainable competitive advantage. The learning and management of knowledge is also crucial for levering sustainable competitive advantage through strategic human resources. Finally, there are four strategies that are required to be designed for gaining maximum benefits of strategic human resource management including; restructuring strategies, training and development strategies, outsourcing strategies and collaboration strategies.

 

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Appendices

Appendix A. Mind Mapping