Human Resource Management: Resource Based View and UK Labour Market

This report provides a comprehensive analysis of managing human resources, emphasizing the application of the resource-based view (RBV) to achieve competitive advantages. It explores the RBV framework, including VRIO analysis, and its implications for HR strategies. The report examines how companies can leverage their internal resources, particularly their human capital, to gain a sustainable competitive edge. Furthermore, it investigates the major threats faced by organizations in the UK labour market, such as the shortage of skilled labour and poor productivity, discussing the impact of Brexit and technological advancements. The report uses examples of Google and Amazon HR policies to illustrate practical applications and concludes with an assessment of the challenges and opportunities in the current labour environment.

Managing Human
Resources

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................4
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Human resources is an important assets and the backbone of an organisation. It is used to
describe the individuals working for the company and department which is responsible for the
management of these individual (Shields, and et.al., 2015). This is a department which is
responsible for the development and management of the employees as human resource is the
most important assets of a company which help the company in the development and getting
competitive advantages over its competitors. It is necessary for the companies to mange its
human resources as they are responsible for the revenue generation in the company and are also
known as the face of the organisation. The following report contains the detailed analysis of
managing human resources with the help of resource based view in order to take the competitive
advantage and improve its organisational success. This report also consists the analysis of the
major threats faced by the organisation working under the labour market.
TASK 1
Resource Based View: Resource Based View is a framework which is used by
strategists to determine their strategic resources which are potential for the organisation in order
to deliver the competitive advantages (Cowling and Mailer, 2013). In order to achieve the
sustainable competitive advantage organisations exploit these resources. The Resource based
view focuses the attention of managers towards their internal resources rather than external
resources which help mangers to identify those key performing assets, competency and
capability in order to deliver the superior competitive advantage. This view suggests the method
in which the company should apply its resources which can help them to crate a competitive
advantage. In order to determine the organisation's capability to take competitive advantages two
assumptions are taken into consideration such as Resource Diversity and Resource Immobility.
Resource diversity refers to the resource which a company owns should be heterogeneous
which means if other company also has the similar resource than it is not considered as a
heterogeneous resource and will not be able to provide the competitive advantage for the
company. Resource Immobility refers to the resource which are expensive and it is not possible
by the competitors to adopt the similar resources on the basis of the cost of procurement of that
resources, cost of development, than the company using that resource will take a competitive
advantage over others.
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In business company usually operates with only two components i.e., resource and the
product or service which are generated by the utilisation of that resources. As per this, company
measure its performance and the competitive advantage with in the firm which can be
determined by the company's resources (Varma and Budhwar, 2013). It uses two assumptions
first is the heterogeneity of the company's resources which is used by a company and this makes
the operational capabilities of a firm heterogeneous resulting in the competitive advantage and
the second assumption is that the heterogeneity of the resource which it uses in its production of
goods or service is persistent with in the company as strategies across the company is not mobile.
In order to gain the competitive advantage the company need to posses heterogeneous resources.
Resource based view provide the economic foundation in the evaluation of the role HR
department in managing its employees and helping the organisation to achieve sustainable
competitive advantage. For the implications of operational human resource strategy this resource
based view provides a tool of analysis in VRIO model and it also focuses on the HR executive
role as a strategic partner in the development and the sustainment of an organisation's
competitive advantages.
The VRIO framework is a tool which is used by strategists to help organisation to protect
and uncover its resources and their capabilities which can give them a competitive advantage for
a long term. VRIO consists of four question which help the company to take competitive
advantage the question are Value, Rarity, Inimitable and organisation (Cascio, 2015).
Organisation need to value its human resources as they are the most important assets of an
organisation, in order to reduce the cost company cut its human resources and introduces the
flexible working practices in the organisation. It is important for an organisation to identify the
importance of its human resource as they help the company to increase its efficiency and also
increases the company revenue with customer selection, customer referral and customer retention
which reflect the effect of Human resource contribution in an organisation by enhancing the
customer added value and customer services. The next framework stage is of Rarity which states
that it is the duty of the human resource department to identify, develop and exploit the
characteristics which is rare in its work force in order to take competitive advantages and
improve its organisational stability. In order to ensure the horizontal integration, organisations
need to encourage its employees by providing highly incentive based compensation system in
order to make its employees attend to the customer need by making excessive efforts.
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The stage of Inimitable in the framework states that if the human resource of the
company add value to its firms and have a rare quality than company can have a competitive
advantage over the others for a short term, but if the characteristics possessed by its employee
are imitated by other firm than the competitive advantage will turn into competitive parity. It is
an important part of Human resource department to nurture and develop the characteristics of its
employee which cannot be copied by other competitive firms. This stage also states that the
organisation should focus more on the development of team work which develop potential
synergy from their work can result in gaining the competitive advantage over other for a long
period of time (Bae, Rowley and Sohn, 2012). Characteristics such as good relationship and trust
result in the firms specific assets which provides are rare, provides the value and are difficult to
be copied by its competitors can provide a long term competitive advantage. In order to take
competitive advantage and organisational sustainability it need to be ensure that the structure
followed in an organisation are organised in order to capitalize the value addition, rarity and
inimitability. As per this framework it is important for an organisation to see that the policies and
the practices followed within the organisation are properly coherent and coordinated and are not
contradicted by the functional area of human resource. In order to achieve the competitive
advantage over time for a long period and organisational success it is important for the
organisation that function of human resource need to check that the work force working in an
organisation must provide value, rare and are difficult to be copied and it also have an
appropriate human resource system and practices in order to capitalise on these characteristics of
the employees.
Application of resource based view of Human Resource management is that if an
organisation wants to gain a competitive advantage and sustainability in the market than it has to
focus on its HR polices as they are the core in providing this as it helps the companies to build
and define the core competency and capabilities which help them to take maximum competitive
advantages over its competitors (Bonet, Cappelli and Hamori, 2013). To understand the
applicability a example of HR policy of Google is taken Google follows various innovative
policy and techniques in order to keep its employees motivated and retain their employees rare
characteristics they follow various compensation policy which is highly rewarding. It includes
the salary, bonuses and stock awards which google provide to its employees on a regular interval
of time which increase the motivation of its employees resulting in the increased efficiency
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towards their work. They try to retain its employees for as long as possible, by using various
policies in favour of its employees, as employees are the main strength of any organisation and
result in the higher revenue generation. It is important for the company to identify the needs of
its employee and should help them to achieve their individual goal along with the organisational
goal (Perez Arrau, Eades and Wilson, 2012). The another example of HR policy of the Amazon
is taken at Amazon, company only hires the highly qualified professionals in order to get the best
talent and core characteristics of its employees in order to achieve the market position. They also
use a pay to quit policy which helps Amazon in retaining its employees they offer 2000 bonus if
any of the employee decides to quit.
TASK 2
The two major threats which are currently faced by the organisation working in the
United Kingdom labour market are shortage of skilled labour and poor productivity. With the
increase in the technological advancement the companies are facing a shortage of skilled labours.
This shortage is arrived due to two different reasons the impact of Brexit and Technological
enhancement in every field of work (Blandford, 2012). Due to the impact of Brexit many labour
working in the companies are from other developing countries where there is no shortage of
skilled labour. Currently company is facing the problem of shortage in the skilled labour working
in an organisation, main reason for this threat is the Brexit i.e., exiting of United Kingdom from
European Union. This has resulted in the moving of migrants from Britain to other countries
which results in the lower number of skilled numbers in the organisation which result in the poor
productivity. When the number of skilled labours in an organisation will decrease it will hurt the
position of the company and also result in the poor productivity. Due to the shortage of skilled
labours the company are not able to deliver the desired quality of the product which result in the
lower profit margin and decreasing their position in the market and hurting their brand value.
There are various organisation working in the United Kingdom labour market who follows the
labour intensive technique in the production of its goods and services, these are affected due to
the shortage of skilled labours as they require skilled labours to complete its task and provide its
good and services.
The problem of shortage of skilled labours is face by Barratt Homes a brand under the
Barratt Development Plc is a house builders in London. The main problem which resulted in the
poor performance of the company was due the shortage of skilled labours in the field of
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construction company and due to the technological advancement the labours working are not
qualified enough to work on the latest technological enhancement in the construction sector. The
rate of shortage of skilled labour raised due to the falling migration from the European Union
(Denhardt and et.al., 2018). As per the report of the ONS it showed the estimated long term
migration from the European 27 for the year 2018 was reported at 74000. The inability to find
the employees with the required skill set can impact the organisations working in the United
Kingdom labour market in two different ways. It increase the cost of labour with the available
skills set. The cost of skilled labour with the key skills are tend to be increasing by more than the
expected growth of country which is supported by the UK's fact that wages of workers working
in an organisation are tend to rose by 3.5 % over the last years. The second impact which the
organisation faced working in a labour market is that due to the lack of skilled labour the
company this is the reason that they were not able to innovate its new technologies as soon as
possible and as what the would like. Due to this lack of skilled work force companies are
deciding that whether they should invest in the training and development of the unskilled labour
or invest more in the automation program. Investing more in the automation program the
company will be creating new roles and transform other.
The same problem of shortage of skilled set labours is faced in Tesco plc. As the
company is struggling to find a skilled workforce as the young generation are leaving the schools
without proper and basic education of English and Maths. As per the latest report the maximum
children leave their school after the age of 11 or 13 years of compulsory education which does
not have a basic skill on how to hold down on a job and to get on in life. With the leaving of
schools without the basic knowledge it has created a shortage of the skilled labours in the Europe
will result to the giving of jobs to the individual of other developing countries (Phillips, Stone
and Phillips, 2012).
The second problem which is face by the organisation in the United Kingdom labour
market is the poor productivity. The workforce which do no have a qualified skills and
knowledge about the production process will result in the poor productivity of the company.
With the lack of skilled work force the companies are now more dependable on the technological
advancement and the staff working in the companies does not have proper skill set and
knowledge about the machinery which increase the cost of production for the company. In order
to train its employees working on those new machines which result in the higher prices charged
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by the companies to provide the goods or services. The organisation has to increase its efforts
and technique in the training and development program of its employees. There are many
industries which work on the labour intensive techniques and requires labours irrespective of any
technological advancements (Huxham and Vangen, 2013). In order to improve its productivity
companies has bring in the new technology or out sources their work from other countries. After
the Brexit the companies working in the London has to shift their business due to the
unavailability of the skilled labours and migrants from the UK many countries like Honda will
remove its business from United Kingdom to other countries in order to maintain the cost of
product cheaper with good quality.
In order to understand the result of productivity face by the organisation in United
Kingdom labour market example of Barratt Homes is taken, it faces a loss of poor production
which results in the poor profitably of the company. As per the report issued by PWD the GDP is
expected to grow in the year 2020 by at least 11% to 13% from the construction industry sector.
The problems which are faced buy the company is in the performance level of its employees,
productivity of their labours as well as their employees. In order to over come the problem of
low productivity the managers of the company implement new strategies to identify the problem
and over come these problems to increase the productivity. Due to the shortage of skilled labours
and technological advancements workers lack the knowledge of understanding the ability to
work on new and modern machines resulting in the delay in delivery of homes which shows that
the performance of the company is poor and is not able to survive in the market. With out the
proper knowledge company will have to incur additional charges on the training and
development of its employees to work on the latest technological advancement brought by the
companies to improve its productivity (Langford and et.al., 2014).
Tesco has been experiencing productivity issues in recent years due to two factors. One
relates to the growing competition in its business environment that has resulted in focussing
more on the profit maximization rather than wealth building. On the other hand, a more direct
affecting factor is that related to labour market. From an HR perspective, the labour market in
UK as a whole has seen quite some decline in terms of supply and demand. This comes as a
result of growing dependability on artificial intelligence. Skilled as well as Unskilled labour
market has seen quite some imbalances as more of unskilled labour has become prominent.
Tesco struggles to keep up with growing demand and expansion activities so as to retain its place
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in the retailing industry. Therefore, human capital has been given a second priority and profit
maximization has become of paramount importance (Carley and Christie, 2017).
CONCLUSION
From the above report it has been determined that managing human resources is a very
significant part of an organisation. It basically deals with the all the internal functions of the
organisation that include whole selection cycle, allocation of resources and help the company to
cope up with the challenges ( Turner, Swart and Maylor, 2013). Among all the resources
manpower are considered as the centre of the organisation as they help to achieve short as well
as long term objective of an organisation. Thus, the manager of HR make sure they influence
their personnel in such a manner they remain motivated to achieve the target of business.
Further, being labour as an essential resource the UK market experience huge problem regarding
skilled labour as well as at cheaper rates. In such case it is the responsibility of HR manger to
train as well as develop labour in such a manner they knowledge gets enhanced.
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REFERENCES
Books and Journals
Shields, J., and et.al., 2015. Managing employee performance & reward: Concepts, practices,
strategies. Cambridge University Press.
Cowling, A. and Mailer, C., 2013. Managing human resources. Routledge.
Varma, A. and Budhwar, P. S., 2013. Managing human resources in Asia-Pacific. Routledge.
Cascio, W. F., 2015. Managing human resources. McGraw-Hill.
Bae, J., Rowley, C. and Sohn, T. W., 2012. Managing Korean business: Organization, culture,
human resources and change. Routledge.
Perez Arrau, G., Eades, E. and Wilson, J., 2012. Managing human resources in the Latin
American context: the case of Chile. The International Journal of Human Resource
Management. 23(15). pp.3133-3150.
Blandford, S., 2012. Managing professional development in schools. Routledge.
Denhardt, R. B., and et.al., 2018. Managing human behavior in public and nonprofit
organizations. CQ Press.
Phillips, J. J., Stone, R. and Phillips, P., 2012. The human resources scorecard. Routledge.
Huxham, C. and Vangen, S., 2013. Managing to collaborate: The theory and practice of
collaborative advantage. Routledge.
Langford, D., and et.al., 2014. Human resources management in construction. Routledge.
Carley, M. and Christie, I., 2017. Managing sustainable development. Routledge.
Turner, N., Swart, J. and Maylor, H., 2013. Mechanisms for managing ambidexterity: A review
and research agenda. International Journal of Management Reviews. 15(3). pp.317-332.
Bonet, R., Cappelli, P. and Hamori, M., 2013. Labor market intermediaries and the new
paradigm for human resources. Academy of Management Annals. 7(1). pp.341-392.
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