Importance Of HRM

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Human resource management (HRM) means the management of anything related to employment relationship of a firm. Although, from many perspectives, there is not much of differences between HRM and SHRM, strategic human resource management (SHRM) takes organizational goals and operation into the consideration of HRM (Boxall and Purcell 2000). For example, for a High-tech company Amazon or Facebook, HR department is responsible for selecting employees with high level of expertise and team spirit due to lots of team based projects. The incentive plan should not encourage individual behavior. Not only high selective recruitment, companies’ SHRM also includes incentive scheme, training, development and so on. The system of SHRM should be effective…show more content…
Stakeholders are shareholders, management, employees, government and trade unions. Workforce, business, management style, market, union and laws build up situational factors (Beer et al. 1984). HRM should formulate its policies under the influences of both factors in order to get the commitment, capability, consistency and cost reduction. In long run, these HR outcomes leads to prosperity of individual, company and society. In turn, society well-being affects stakeholders and situational factors. The management methods of Harvard model align with the best fit perspective, but the outcomes fit the best…show more content…
Contrary to best fit perspective, resource based view (RBV) pays less attention on HR practices and policies, but values human capital as a vital resources of a company. Internal resources play a key role in productivity and performance of the company. To compete a leadership in industry, company has to manage valuable and rare resources that company owns well. In order to create and sustain competitive advantages, RBV prime action are resources improvement and competencies development. Because theses organization competencies come from internal, they are exclusive and immobile which opponents can hardly copy. The differentiation can compose a strong comparative advantage. The example is the case study UK road haulage industry conducted by Marchington, Carroll and Boxall in 2003. The major obstacle of family business growth in this industry was lacking of good drivers. Other companies offered higher wages and working hours to attract qualified drivers. Final solution was RBV HR practices, because good drivers were rare and valuable resources to the companies. In order to hire, retain and develop the most important resource, companies provided consistent HR policies and management model including better working condition, effective incentive plan, team building and promising career path. This HRM system made companies distinct from
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