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In this fast moving day and age, organizations place emphasis on having that
competitive advantage above all others in the market. The important
elements that contribute to this added advantage stem from technology,
marketing strategy, excellent customer service and many more. However,
human resource is still the most important element/asset in an organization
that links back and is the core to those elements mentioned. The success or
failure of an organization is largely dependent on the calibre of the people
working therein.

Bontis et al (1999) suggests that undeniably human

resource in the organization is the combination of knowledge, intelligence,

skills and expertise which provide each organization with its distinctive
character. Furthermore, to ensure the long-term survival of an organization, it
is through proper motivation that encourages human resource, change,
innovation and the capability to learn. We will discuss further the importance
of human resource, how it can impact an organizations performance as well
as certain strategies organizations can implement to address this issue.

The Importance of Human Resource

The abilities of human resource cant be replaced by any machine and is
largely linked to an organizations profitability. They are also regarded as the
prime asset of each organization and businesses need to invest into it to
ensure their survival and growth. Organizations have to ensure that they
obtain and retain a committed, well-motivated and skilled team. By providing
opportunities for learning and continuous development, organizations will be

able to address and grow future talent as well as develop the inherent
capacities of each individual. Armstrong and Baron (2002) states that the
many organizations are recognizing the fact the it is the people coupled with
their individual skills, knowledge and experience that play a significant part in
the involvement of providing organizations with the competitive advantage as
well as growth and success. Organizations today are now focusing on the
human factor to provide insight and contributions to improve productivity.
Consecutively, one of the key roles of an organization is strategic human
resource management. In reference to Purcell et al (2003), HRM practices
include the following:

Attracting, developing and retaining high-quality people

Talent management







leadership, work/life balance, employment security

Job and work design

Learning and development

Managing knowledge and intellectual capital

Increasing motivation, commitment and role engagement

High-performance management

Reward management

What we can see clearly is that it boils down to people human resource
which is the asset and backbone that drives the goals and directions of each
organization. Moreover, all aspects above point to facts that show how
without a doubt, human resource is associated in generating performance

Impact to an Organizations Performance

By practicing the above mentioned points effectively, organizations will be
able to match the right people based on the strategic and operational needs
of the organization. Furthermore, having the right person who fits the









performance, productivity, innovation and a higher level of personal customer

service. Research by Huselid (1995) suggests that the link between human
resource and organizational performance is shown through productivity, in
turn, this is influenced by employee motivation, an employees financial
performance is largely connected to the reward structures, motivation and
training provided. To achieve this, many successful organizations provide
individuals the flexibility and independence coupled with a stimulating and
interesting work environment.

The biggest challenge faced by organizations is retaining talent. Employees

have basic human needs and the challenge to retain valuable employees
would mean organizations taking the steps to asses and satisfy the future
needs of its people as well as providing the opportunity to develop and
enhance the natural abilities. Finding the cause and tackling them with the

right strategies would reduce employee turnover likewise create greater

commitment to the organization. One of the major causes of turnover is
dissatisfaction with career prospects and it is something that organizations
should recognize. To address this issue, organizations which provide a climate
of learning in forms of coaching, mentoring and training will essentially allow
employees to obtain new skills and develop levels of competency required.
Focusing on sharing learning opportunities as well as sharing knowledge to
both individuals and the organization will also encourage a systematic flow
and retention of information and learning within the organization. Another
way to ensure growth of human resource is by introducing a management
succession plan that identifies individuals who meet future requirements and
indicate a development or leadership plan required.








performance in areas such as levels of customer service, growth, productivity,

quality, profits, and value will empower employees to establish a trust
between managers and subordinates by associating themselves with higher
management issues. Creating opportunities to have open conversations with
employees is the key as well to have honest communication that would
address that front. Encouraging individuals to relate and carry out the core
values, willingly contribute to achieving organizational goals increases
motivation, commitment and engagement in their role. Winning the hearts
and minds of employees is a sign of commitment as they will identify with
the organization, exert themselves more on its behalf, thus ensures and
assures both the individual and organization that the investment yields
returns on both sides.

Each organization is dependent on various levels ranging from operations,
sales, marketing, accounts to management and so on to fully function. It is
clear that an organizations human resources play a major part in having a
competitive advantage. Therefore, it is the organizations responsibility to
produce a framework which encompasses a learning culture within the
organization. As suggested by Reynolds et al (2002), how a person gathers
new knowledge, skills and capabilities is by learning, whereas the way to
promote learning is the organizations part to carry out the necessary
training. That said, a healthy and productive work environment that
encourages growth in each individual will definitely impact an organizations
performance. Implementing the right strategic human resource development
strategies, policies and practices will in succession allow your human
resource to perform at its optimum level and ensure that the organization has
that competitive advantage. To conclude, I agree that human resource is the
most important asset in an organization.
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toolbox: a review of the tools available to measure and manage intangible
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Armstrong, M and Baron, A (2002) Strategic HRM: The route to improved


















(2003) Understanding the People and Performance Link: Unlocking the black
box, London: Chartered Institute of Personnel and Development
Huselid, M A (1995) The impact of human resource management practices on
turnover, productivity and corporate financial performance, Academy of
Management Journal, 38 (3), pp 63572
Reynolds, J, Caley, L and Mason, R (2002) How Do People Learn?, London:
Chartered Institute of Personnel and Development

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