Human Resources Management Processes: Workforce Planning; Recruitment,

¶ … Human resources management processes: workforce planning; recruitment, attraction selection employees; training, development managers subordinates; personnel administration; compensation; payroll; employee benefits, performance appraisal, labor relations,

Competitive advantage: Four requirements

For a firm to thrive, it must offer a unique product so it can ensure that it can deliver a sustained competitive advantage that cannot easily be undercut by price or substituted by a similar product offered by a firm within the same industry. The following four criteria to establish a competitive advantage are as follows: "(a) the resource must add positive value to the firm, (b) the resource must be unique or rare among current and potential competitors, (c) the resource must be imperfectly imitable, and (d) the resource cannot be substituted with another resource by competing firms" (Wright & McMahan 1992). Finding a physical good or service that meets all of these criteria can be challenging, but Wright & McMahan (1992) argue that the human resources of a firm can also satisfy these criteria.

Today, human beings, through their service and expertise, particularly in the Internet-driven economy where knowledge, particularly technical knowledge, is power, can provide an important value-added service. Certain human skills and attributes are prized and relatively rare, and behavioral systems and human skill sets are often more difficult to imitate than physical goods. These principles can be said to be embodied at many of the most successful companies in the world today. Google and Apple have the reputations for attracting the most qualified engineers and visionaries to design and bring their products to market. More so than saving upon labor costs, advertising, or market segmentation, the uniqueness of the service they offer to consumers is what drives corporate profitability. The credit for design of the products lies squarely in the hands of the engineers, or the human resources of the organization.

However, even in non-technological industries, as in my own organization, I have seen human capital being deployed in a unique fashion to generate value. When workers are well-trained to interact with consumers in a positive fashion, this can encourage repeat business at a firm and generate positive word-of-mouth advertising by loyal consumer. Sales and advertising staff members that are able to use their ability and intelligence to understand consumer needs and increase sales also add value to the firm. These interpersonal qualities are not necessarily easily imitated by competitors, if workers are chosen well so that their personality suits the needs of their job description. From many customers' points-of-view, a friendly person who is willing to listen and to work through their issues or respond to their needs is a resource that is rare and valuable. When workers make a personal connection with a customer, such as a sales person who regularly deals with the same clientele, or a call center staff member who calls a customer back, the customer is also more likely to see the product of the firm as not easily imitated by competitors. When customers feel a sense of human warmth, this makes the idea of 'substituting' with another good or service less palatable. Quality of service is often just as important to consumers as a physical good.