Effective utilisation of human resources is a strategic issue for organisations

The competitive nature of the global market place and business environment has made effective utilisation and retention of human resources a strategic issue for organisations.

There is a growing realisation that traditional hierarchical ‘command and control’ organisations are struggling to meet the increasing demands for flexibility and quality in order to meet customer demands and employee retention.

Thus, within the context of intense global competition, organisations are compelled to constantly seek out new sources of competitive advantage to make them better from other competitor organisations.

Leaders now need to pay attention to Strategic Human Resource Management (SHRM) theory, which highlights that an organisation’s only sustainable competitive advantage is its people (Peters & Waterman, 1982; du Gay and Salaman, 1998; Huselid, 1998; Schuler and Jackson, 1999; Walton, 1999; Siegall and Gardner, 2000; Beirne, 2006) and empowering them puts organisations in an advantageous position.

There is strong agreement that the human resources of an organisation is a source of competitive advantage. Hence, if organisations are going down the route of empowering employees then it needs to have congruence between its policies and SHRM goals.

The argument in the domain of SHRM is organisations that pursue an employee empowerment strategy actually enable their employees to build up ‘distinctive skills’ and ‘competencies’, such as innovation, creative thinking, decision-making, problem-solving, taking responsibility. These ‘distinctive skills’ of employees in turn help the organisation to compete and cope with the changes in the market place and meet customer demands and expectations.

SHRM has an important role to play. It can improve the function of human resource department, enabling it to link with the strategic objectives of the organisation in order to improve employees’ performance and be effective, thus, a radical move away from viewing ‘employees’ as costs to viewing them as ‘assets’.

Referring to the major organisation-wide changes and initiatives that are taking place, Walton (1999: 3) observes that, ‘ … people are the only truly sustainable resource providing long-term competitive and customer advantage. Any organisation can quickly access the elements of new technology … what is scarcer are the distinctive skills or competencies which individuals bring to, and acquire, during their stay with a given enterprise’. In line with this, Barney (1992) emphasises that the purpose of SHRM is to create a sustainable competitive advantage, and this can be achieved through the talents of people. Thus, it is essential to develop human resource skills and competencies and one of the ways is through empowering employees (Huq, 2010).

It is important to understand that SHRM is not just about hiring people, it is a planned approach to achieve a competitive edge through people, who are willing to work in an empowered way and take decisions and responsibility.

However, just having a brilliant SHRM strategy is not going to give results, training and educating all of the work force is vital, because employees cannot be effective if they do not have knowledge and the right skills and understand what it means to work within an empowerment culture (Huq, 2010).

Through SHRM strategies, the uniqueness of the skills and talents of people (this includes people in non-management and management positions, leaders and CEOs) can flourish. People are enabled not only to feel empowered, but psychologically empowered as well. This helps to create meaning and positive attitude to work. An attitude that enables employee retention, that is, employees view the organisation a place where they choose to work and feel that it is a ‘great’ place to work.

© Copyright Dr Rozana Ahmad Huq.  February, 2015.

Thank you for reading, until the next Huq Post ….

Dr Rozana Huq

Organisational Behaviourist

https://rozanahuq.com

Motivational Speaker, Leadership Educator, Management Author, Life Coach.

1-1 online sessions available with Dr Rozana Huq

References:

Barney, J. (1991); Firm Resources and Sustained Competitive Advantage. Journal of Management, 17, 1, pp. 99-120

Beirne, M. (2006); Empowerment and Innovation. Managers, Principles and Reflective Practice, UK, Edward Elgar Publishing Ltd.

Peters, T; and Waterman R.H. (1982); In Search of Excellence, New York, Harper and Row.

du Gay P. and Salaman G. (1998); The Cult[ure] of the Customer. In Mabey, C., Salaman G. and Storey J. (Editors), Strategic Human Resource Management, London, Sage Publications Ltd.

Huselid, M.A. (1998); The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance. In Mabey, C., Salaman, G. and Storey J. (Editors), Strategic Human Resource Management, London, Sage Publications Ltd.

Schuler, S.R. and Jackson, S.E. (1999); Strategic Human Resource Management, Oxford, Blackwell Publishers Ltd.

Siegall, G. and Gardner, S. (2000), Contextual Factors of Psychological Empowerment, Personnel Review, 29, 5/6, pp. 703-722.

Walton, J. (1999); Strategic Human Resource Development, England, Pearson Education Ltd.

Please read my other posts on LinkedIn

  • Employee Empowerment
  • Does the rhetoric of empowerment drop on your head at every turn like ‘confetti’?
  • People are the most important assets of an organisation
  • Would you trust or allow your employees to take decisions at work?

Publications:

Huq, R. “Employee Empowerment the rhetoric & reality”, (2010). Triarchy Press, Devon, UK.

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