HRM Assignment: A Comparison Between Resource Based View & Human Resource Management

Question

Task: Write an essay in which you critically discuss whether Resource Based View (RBV) HRM focuses on achieving competitive advantage rather than on the welfare of the employees

The answer should comprise a critical analysis and discussion of different HRM approaches and the correlation with overall business strategies to sustain competitive advantage. Support your answer with examples
Support your answer with relevant examples and minimum four relevant academic journal articles.
Criteria for HRM assignment
1. Identify the question being answered and demonstrate a logical structure and clear focus in the answers.
2. Is the student able to master description, analysis, criticism, and evaluation in answering the question?
3. Intelligent answering of the question demonstrated through knowledge of a particular industry/area.
4. Using relevant theories and illustrates theories by using examples.
5. Ability to communicate thoughts, spelling and language used.

Answer

Introduction:
As evident in this HRM assignment, the concept of Human resources management (HRM) is defined as the process of managing people in an organization. It includes attracting, hiring, training, and developing employees, as well as managing their performance, compensation, and departure from the organization. HRM is a strategic business process that contributes to the success of an organization by enabling it to effectively achieve its objectives. HRM can be an important task for smaller organizations, but it is the responsibility of every day in larger organizations. HRM has different elements that are used to attract and retain employees by developing their skills and knowledge, promoting beneficial behavior, rewarding loyal employees, managing appraisals or reviews for the purpose of promotion within the organization.

Explanation:
There are a variety of HRM approaches that organizations can take when it comes to managing their employees. The most popular and well-known approach is known as the Human Resources Management (HRM) approach. This approach is based on the belief that employees are a valuable resource for the organization and should be managed in order to maximize their productivity and performance. This approach can be broken down into two main categories: Traditional HRM and Resource-Based View (RBV) HRM. In this essay, I will discuss the differences between traditional HRM and RBV in an attempt to determine which one focuses on achieving competitive advantage rather than on the welfare of the employees.

Traditional HRM is an approach that was introduced in the 1950s. This approach focuses on controlling employees and maximizing their productivity by using various management strategies, such as performance reviews and coaching programs. In order to maximize employee output, organizations must not only concentrate on their current employees but also focus on finding new talent for their workforce. The reason behind this line of thinking is that the organization is seen as a collection of resources that need to be managed in order to achieve a specific goal or outcome. In other words, the organization is not focused on the individual employees themselves but on what they can do for the organization.
Resource-Based View (RBV) HRM, which was introduced in the 1980s, is a different approach to managing employees. This approach is based on the idea that an organization’s success depends on the quality and availability of its resources, which includes its employees. In other words, the employees are not seen as a resource that needs to be managed in order to achieve a specific goal but as individuals who are important to the organization’s success. This approach focuses on the development and enhancement of the employees’ skills and abilities in order to improve their productivity and performance. The main difference between traditional HRM and RBV HRM is that traditional HRM focuses on controlling employees to achieve a specific goal, while RBV HRM focuses on developing and enhancing employees’ skills and abilities to achieve a specific goal. In order to achieve competitive advantage, organizations should focus on their employees as individuals who are important to the organization’s success instead of focusing on what they can do for the organization. This is because an individual who feels valued and appreciated by his or her employer will be more likely to respond positively to company initiatives and stay loyal to the organization. On the other hand, if an individual feels that his or her employer does not value him or her as a person but only sees him or her as a resource, he or she is more likely to leave the organization for one that values its employees’ opinions. This idea would be further reinforced with the introduction of new ideas and initiatives by management that would serve as further proof that the organization only cares about its employees’ output. An individual who feels valued and appreciated by his or her employer will be more likely to respond positively to company initiatives and stay loyal to the organization. This is because he or she will feel appreciated as a person, not just a resource.

Resource Based View (RBV) is an important idea in strategic management that has been developed from the economic theory of the firm. RBV suggests that firms should focus on their resources rather than on their products or services when trying to achieve a competitive advantage. The resources of a firm can be divided into three categories: tangible resources, intangible resources and human resources.
Tangible resources are physical assets such as land, buildings, equipment and money. Intangible resources are the firm's intellectual property, such as trademarks, copyrights and patents. Human resources are the skills, knowledge and experience of the employees.
RBV suggests that firms should try to acquire or create valuable resources and use them in a way that provides a competitive advantage. The resources can be used in many ways, such as producing new products or services, entering new markets or reducing costs.

The RBV approach has been criticized because it is difficult to measure the value of intangible resources and it is not always clear how they can be used to create a competitive advantage. However, the RBV approach has been very influential and many firms now use it as a basis for their strategy. The traditional perspective of HRM is based on the assumption that employees are a cost to be managed. According to this view, firms should focus on trying to reduce costs such as wages and benefits. In other words, firms try to maximize shareholder wealth by optimizing profits as much as possible. This means that firms focus on how to reduce costs while trying to achieve the same level of output. For example, if a firm has two options for increasing output (e.g., creating new products or hiring more workers), they will choose the option that reduces costs (e.g., by using fewer workers). The traditional perspective on HRM focuses on how to manage the employees. HR managers need to focus on pay levels, benefits and training. However, there is a lot of evidence that the traditional perspective has led to some negative consequences for employees and businesses. Critics have suggested that this approach may jeopardize long-term success because it encourages short-term strategies and neglects the employees.

Intangible resources are so-called "capabilities", which can generate value for customers. It includes brand names, patents or knowhow. Human resources refer to the employees who contribute their skills and knowledge to create and produce the organization's resources and capabilities. Many researchers support this argument by using empirical studies to show that firms with a higher degree of intangible resources tend to achieve better business performance than those without such resources.

In addition, some researchers also suggest that human resources are the most important resources of a firm. This is because intangible resources, such as knowledge and skills, are embedded in people and employees can create new intangible resources or improve on old ones. Moreover, human resources are the only renewable resource in a firm.Therefore, human resources can give firms a sustainable competitive advantage over their competitors. For example, the founder of Apple Inc., Steve Jobs is recognized as a master in identifying and attracting talents with creative abilities. During his first tenure at Apple from 1997 to 2011, he recruited many talented employees who contributed to the development of iPod and iPhone series. These devices have created new markets for Apple and have helped the company achieve excellent business results.

These ideas are also supported by empirical research findings, which suggest that human resources are more important than other types of resources in predicting organizational performance. However, many researchers argue that employees' satisfaction is not an independent variable which directly affects organizational performance, but is rather mediated by other variables, such as firm strategy and structure.

There are a variety of different HRM approaches that a company can take. The four most common HRM approaches are the traditional, human capital, resource-based, and competency-based models. Each of these HRM approaches has its own benefits and drawbacks depending on the company’s current state and overall business strategy. It is important for companies to be mindful of how the different approaches can influence their business. Let’s start by looking into the traditional approach, which has been the standard for companies for over half a century. The traditional model consists of hiring employees who have obtained degrees in their respective field, human resource management being no exception. The company then spends a significant amount of time and money training these employees in order to ensure that they meet the company’s standards. Once the employee is fully trained, they are put to work performing their assigned tasks.

The traditional model has been successful for many companies because it allows them to have a large pool of qualified employees to choose from. The training that a company puts its employees through makes them more likely to perform better at their jobs, as they have been taught the specific skills and knowledge needed for success. In traditional model companies, the emphasis is on making sure that the employee meets the company’s standards before they can be put to work. This often results in a slower hiring process, as the company wants to make sure that the employee is the right fit for the job. The traditional model also tends to be more bureaucratic, as there are more layers of management and employees need to go through multiple channels before their concerns can be addressed.

The human capital approach is very similar to the traditional model, with the primary difference being that human capital emphasizes gaining and retaining talented employees rather than hiring individuals who have obtained degrees in their respective field. The idea of this approach is that a company does not need to invest as much time and money into training an employee if they already possess the skills needed to perform their job well. Human capital companies want to make sure that they are hiring the best possible employees, as this will allow them to save on training costs in the long run. They also place a greater emphasis on retaining talented employees, as losing them can be costly. This often leads to companies offering their employees better benefits and working conditions in order to keep them happy and productive.

The resource-based approach is different from the traditional and human capital models in that it focuses on the company’s resources, rather than its employees. In order for a company to take advantage of this approach, it needs to have a strong competitive advantage in the market. This could be something like a valuable asset, such as a large pool of customer data, or a special relationship with a supplier. In order to utilize this resource, the company must have talented individuals who understand how to take advantage of it.
This approach has been successful for companies that rely on their employees’ knowledge and creativity in order to succeed. Unlike the traditional and human capital approaches, where the emphasis is placed on hiring and training employees to perform a specific task, resource-based companies want their employees to be adaptable and able to handle a variety of tasks. The competency model is the last of the four primary approaches to human resources management. This approach emphasizes differentiating roles in order for them to become more individualized and fit with the company’s overall business strategy. The goal of this approach is to increase employee satisfaction by allowing them to have more control over their work, along with the ability to progress in their careers without being held back by bureaucratic processes or strict standards. Since competency models focus on individualized roles, they are very useful for companies that need employees who are adaptable and creative. The competency model also allows for more creativity in the hiring process, as companies can look for employees who have the skills and knowledge needed to succeed in their specific field.

While all four of these approaches to human resources management are useful in their own way, the best approach for a company depends on its overall business strategy. If a company is looking to save on training costs, the human capital approach may be the best option. If a company wants to focus on its resources, the resource-based approach may be a better choice. And if a company wants to differentiate its roles and improve employee satisfaction, the competency model may be the best option.

No matter which approach a company chooses, it is important to make sure that its employees are aligned with its business strategy. By doing so, a company can create a competitive advantage in the market and sustain long-term success.
The human capital approach is very similar to the traditional model, with the primary difference being that human capital emphasizes gaining and retaining talented employees rather than hiring individuals who are skilled in a specific task. The human capital approach is useful for companies that want to save on training costs in the long run. By hiring employees who are already skilled in the tasks needed to perform their job, the company does not need to invest as much time and money into training them. This can be especially beneficial for companies that are expanding or have a limited budget. Another benefit of the human capital approach is that it allows for more creativity in the hiring process. By focusing on hiring employees who are talented and adaptable, the company can find individuals who are a good fit for its specific needs. This can help to improve employee satisfaction and reduce turnover rates.

The human capital approach is not suitable for all types of companies. For example, it would be difficult for a company that deals with seasonal or temporary work to rely on the human capital approach, as they will need employees who are already skilled in specific tasks and may only need them for a short period of time. This type of approach is commonly used by banks and other large companies that have a lot of bureaucratic processes. The traditional model allows companies to control their employees through these processes and ensure that they are meeting the specific standards set by the company.

While the traditional model does have some benefits, such as allowing for more creativity in the hiring process, it can also be restrictive for employees. By setting strict standards and rules, companies can limit employee growth and progression. Furthermore, this type of approach is not suitable for all types of businesses. Companies that are expanding or have a limited budget may not be able to afford to hire employees who are already skilled in the tasks needed to perform their job.
The resource-based approach is very different from the other three approaches, as it focuses on a company's resources instead of its employees.
The resource-based approach is beneficial for companies that want to improve their competitive advantage. By analyzing and understanding the resources that a company has, it can find ways to use them in a way that is unique and different from its competitors.

For example, a company can use its workforce as a resource to gain additional revenue by having employees sell products or work on other side projects during their free time. This type of approach allows companies to maximize their resources and create new opportunities for success.
Despite this flexibility, the resource-based model is not always applicable in all types of businesses. For example, service-oriented companies may not be able to use their workforce as a valuable resource because they do not have many valuable physical assets.
One benefit of the human capital approach is that it aligns HRM practices with overall business strategies to sustain competitive advantage. This can provide long-term success for companies and improve their overall performance. An example of this is a company that wants to expand its operations into new markets. By using the human capital approach, the company can hire employees who are already skilled in the tasks needed to perform their job in the new market. This can help to reduce training costs and ensure that the company is able to quickly ramp up its operations in the new market. Alternatively, a company may want to focus on cost-cutting measures. In this case, the human capital approach would not be suitable, and the company would need to use a different HRM approach. The traditional model is another approach that can be used by companies to align their HRM practices with their overall business strategies.

The traditional model is focused on hiring employees who are talented and adaptable. By doing this, the company can find individuals who are a good fit for its specific needs. This can help to improve employee satisfaction and reduce turnover rates.

One benefit of using the traditional model is that it allows for more creativity in the hiring process. By taking an individualized approach to human capital, companies can find employees that are a good fit for their specific needs. This not only helps to improve the quality of the hire, but it can also lead to increased productivity and morale within the company.
On the other hand, this model is not suitable for all types of businesses. For example, companies that are expanding or have a limited budget may not be able to afford to hire employees who are already skilled in the tasks needed to perform their job. The human capital approach is another option that companies can use when aligning their HRM practices with their overall business strategies.

The human capital approach focuses on hiring employees who are talented and adaptable. By doing this, the company can find individuals who are a good fit for its specific needs. This can help to improve employee satisfaction and reduce turnover rates.

One benefit of using the human capital approach is that it allows for more creativity in the hiring process. By taking an individualized approach to human capital, companies can find employees that are a good fit for their specific needs. This not only helps to improve the quality of the hire, but it can also lead to increased productivity and morale within the company.

On the other hand, this model is not suitable for all types of businesses. For example, companies that are expanding or have a limited budget may not be able to afford to hire employees who are already skilled in the tasks needed to perform their job.

Conclusion:
There are a number of different HRM approaches that companies can use to align their HRM practices with their overall business strategies. Each approach has its own benefits and drawbacks, so it is important to choose the approach that is most suitable for the company's specific needs. By using an appropriate HRM approach, companies can improve their performance and sustain competitive advantage.

References:
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7 Human Resource Best Practices | A Mini-Guide to HRM. (2018, June 13). AIHR. https://www.aihr.com/blog/human-resource-best-practices/.
The Importance of Human Resource Management. HRM assignment(2021, November 26). en. https://www.gisma.com/blog/the-importance-of-human-resource-management.
Boxall, P., Purcell, J., & Wright, P. M. (2008, June 1). Human Resource Management. Oxford Handbooks Online. https://www.oxfordhandbooks.com/view/10.1093/oxfordhb/9780199547029.001.0001/oxfordhb-9780199547029-e-1.