Managing Human Resources Report

This report discusses the importance of Human Resource Management (HRM) in achieving competitive advantage through the Resource Based View (RBV) framework. It highlights the role of HRM in maximizing employee performance and outlines the major threats faced by organizations in the UK Labour Market, including skilled labor demands, work culture challenges, gender bias, and the impact of new technology. The report concludes that effective HRM practices are crucial for organizational success and sustainability.

Managing Human
Resources

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
1. Adaption of 'Resource Based View' to HRM to help getting a competitive advantage and
success ........................................................................................................................................1
2. Two major threats currently faced by organisations in UK Labour Market...........................5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Human Resource is considered as blood of any organisation as without them no company
can function efficiently. It is very crucial for a company to realise the worth of their personnel in
order to attain their goals and objectives. That is why, they implement a process namely Human
Resource Management which helps an organisation in effectively and efficiently manage human
resources (Abdelhak, Grostick and Hanken, 2014). This framework can help the organisation in
getting a competitive advantage in the market as if the people of the organisation will know their
duties, then, they would be able to complete their work early and according to the level desired.
This report will help in developing and understanding a framework, namely, Resource Based
View as how its implementation in HRM will help in getting a competitive advantage to the
business and will help in attain success through some examples. Also, what are the major threats
which organisation face while working in United Kingdom's labour market will also be
established through this report.
TASK
1. Adaption of 'Resource Based View' to HRM to help getting a competitive advantage and
success
Resource Based View is a tool used by organisations in order to get a competitive
advantage in the market by implying various strategic resources that are already possessed by the
company. The resources used by the organisation in order to obtain a competitive advantage,
company exploits the resources they have available in plenty. The very first time this concept
came into existence when Barney in 1991, showcased in his article, “Firm Resources and
Sustained Competitive Advantage” which suggested the emergence of resource based view and
how its implementation can improve the life of company (Atkinson and Storey, 2016). It also
pointed that very company have different resources and there uses are also very different, thus,
every company needs to implement different strategies in order to get competitive advantage.
The focus area of this concept is on Internal Resources.
Human Resource Management is a strategic approach used by companies in order to
effectively manage people of organisation in order to gain competitive advantage. This method
helps the employees in maximising their performance in order to grow and develop in the
company. The main motive of this method is to ensure that the organisation is able to attain
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success through the people. HRM involves many processes in order to help employees, like,
Recruitment, Selection, Training, Employee Relations, Benefits, Compensation and many more.
These functions are termed as the most important functions in an organisation.
Resource Based View plays an important role in Human Resource Management as it
focuses on internal resources that organisation have rather than external resources. Though, it
does help an organisation in assessing performance via external environment (Binder, 2016).
Resource Based View helps Human Resource Management in understanding various conditions
when human resource become scarce or are more in number, is valuable to company or not.
These factors helps in realising who are “strategic assets” of an organisation and help company
in gaining a competitive advantage in order to grow and achieve milestones. If the company is
able to achieve competitive advantage then it will help organisation in achieving success as well.
The resource based view helps HRM in identifying ways through which an organisation
can achieve competitive advantage. It order to establish a relationship between these VRIO
framework will be used.
VRIO Framework
It is a strategic tool used by organisation in order to know identify various abilities
possessed by the organisation and protecting the resources in order to gain a competitive
advantage (Bortoluzzi and et. al., 2014). VRIO Framework will help Human Resource
Management in exploring the skills and capabilities which are already available to company and
how to use it to achieve competitive advantage. VRIO consist of:
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Value: A company needs to evaluate factors that will help them in order to create Value
of their Human Resource Management. To reduce the costs of the functions derived, it can be
done by either reducing the number of people organisation has or introducing functions which
will provide flexible working hours to employees as these methods will help employees in
generating more revenues to the company (Bringezu and Bleischwitz, 2017). There are functions
in an organisation which does not add value to the organisation, so, they are referred as
Competitive Disadvantage. The functions performed by HRM which adds value in Resource
Based View is employee selection, employee retention, or employee referral. It suggests ways
that can help in improving productivity as well as performance of employees through limited
resources. These factors helps in gaining competitive advantage to the firm as if the employees
will perform efficiently it will help organisation in attaining success.
Rarity: Here, it suggests the role of Human Resource manager in order to create and
establish rare quality of Human Resource Management that will help the company in order to
obtain competitive advantage also in achieving success in the market environment. This strategy
is usually applied in high competitive industry as it will provide strategies to the firm in order to
stand out in the market. But, here, it suggests that the organisation needs to train and educate
their Human Resources in such a way that it helps them in creating a rare quality to the firm. It
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Illustration 1: VRIO Model
(Source- VRIO Analysis, 2019)

can be done through creating a high incentive compensation system which will motivate the
employees to work efficiently in order to achieve their personal goals and objectives as well as of
company. Companies needs to invest more in HRM as it will always be a differentiated
technique because no companies personnels will work in a same way (Bryson, 2017).
Inimitability: If a company's human resources adds value to the system as well as is rare
in the market, then, it will able to attain their short term goals and objectives effectively. But, in
order to carry that success for the long run, then, company needs to establish a new technique
which will be used in the long run to maintain that competitive advantage. The third element of
VRIO Model suggests that an organisation needs to impair and develop characteristics that
cannot be copied by competitors and will be with the company for long run. Some of the
characteristics of Human Resources of an organisation that can be termed as inimitable are trust
and good relationship. If employees have faith in company and have a cordial relationship with
the organisation that will help them in attaining competitive advantage for the long run. Through
this, an organisation will able to sustain skills and abilities that cannot be imitated by anybody
else will be sustained in the long run.
Organisation: The last step of VRIO Framework is used in order to establish Resource
Based View in Human Resource Management which suggests that an organisation needs to
implement above specified characteristics in their process so that they can gain a competitive
advantage in the market place to achieve success (Ghapanchi, Wohlin and Aurum, 2014). It says
that an organisation needs to be organized so that can create value for their human resources,
identify rare elements which will give them competitive advantage and sustain it for long period
of time. It can be done through by keeping check that all practices and policies of the HR are in
order and effective so that functions are coordinated. This can be explained further with the help
of real life examples of organisations, working in the industry of United Kingdom who have
established Resource Based View in the functions of their Human Resource Management. They
are:
John Lewis Partnership. It is a British Company which deals in supermarkets, financial
services and many operations in retail industry. The company have more than 83,000 employees
working under them who tries to attain goals and objectives of the company. It has headquarters
in London, United Kingdom. John Lewis is known for their effective approaches on building a
competitive advantage through their Human Resource management. It is said that they use
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Resource Based View and VRIO Framework in their operations to obtain competitive advantage.
They are using this approach in internal environment so that there company can reduce the
competition and imitation in the industry from their competitors that can hamper their growth
and market share. Also, through the VRIO Framework they are able to input creativity and
innovation in their operations (Goetsch and Davis, 2014).
Vodafone Group Plc is a British telecommunication who provides internet facilities, data
facilities, mobile phones, broadband and IPTV services to its customers. Its reach is in 47
countries and is listed on London Stock Exchange. It is headquartered in London and they are
global mobile operators. They have around 111,000 under them and are able to sustain in the
world because of the support available to them via their employees. Vodafone Plc as well has
used Resource Based View in their Human Resource Functions. They are able to achieve success
through the competitive advantage build by their personnels for them. The Functions of their HR
is very rare in nature and thus, cannot be copied by their competitors. It is helping them in
capturing major market share in the industry (Wright, Coff and Moliterno, 2014).
So, it can be established vis VRIO Model that if an organisation needs to have a
competitive advantage that will be sustained by them in the long run, they need to make sure that
HR Functions are rare, difficult to copy and have appropriate HR functions, systems and
practices in order to stand out in the market. To further establish the role of Resource Based
View in context of Human Resource Management and organisation performance, it is important
to attain the value possessed by Human Resource in the respective organisation (Jensen, 2017).
2. Two major threats currently faced by organisations in UK Labour Market
Labour Market refers to a place where labourers and employers come together and
interact with one another. It is a place where competition is continuously going on between
labourers in order to show employers that they are best and need to be hired by the company.
The economy functions of this market is the demand and supply of labour. The fluctuations takes
places in accordance with the bargaining power as if the labour are more in number, then,
employers become choosers and if labourers are less in number, then, employers become
beggars. The United Kingdom labour market is quite different in many aspects including work,
jobs and employment. The key points of UK's labour market consist of:
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 Earnings: There are three estimates of earning in UK labour market, namely, basic pay,
overtime and bonuses. It does not include any means provided to the employee, like,
share of the company, compensation, expenses, etc. Employment: The measurement of UK labour task force is measured through Labour
Force Survey. It states that people more than age of 16 and has encountered pay one hour
per week will qualify as labourers (Labour market overview, UK: April 2019, 2019). Hours of Work: It consist of paid and unpaid working hours fulfilled by labourer to the
employers. It counts actual working hours summoned by labourers. Currently, estimation
of actual working hours available in UK is from 1971. Actual working hours referred to
the actual hours in which work is done. Labour Disputes: It refers to the information collected regarding the days on which work
was not done due to any labour strike on monthly basis. Economic Inactivity: It refers to people aged more than 16 and is not involved or
working in any job from last four weeks and will not be able to work in next two weeks.
 Unemployment Rate: The people marked as unemployed are the one who is not working
from last four weeks and will not be able to start in next two weeks are termed as
unemployed.
Current position of United Kingdom labour market:
 UK Employment rate estimates to 76.1% which is higher from last year.
 Unemployment rate is estimated at 3.9%
 UK economic activity was estimated at 20.7% which is lower than previous year.
 Average weekly earnings for employees in Britain has increased by 3.5% which included
bonuses as well, whereas, if we exclude bonuses, then, rate is increased 3.4%.
From the context of this information, it can be identified that labour market of United Kingdom
is very effective and people of United Kingdom is getting jobs at a nice pay. But, there are some
threats whose existence may lead to hindrance of growth and developing of labour market
(Kavanagh and Johnson, 2017). Some of these threats are:
Pay demanded by Skilled Labourers: It suggested that labourers in United Kingdom are
very talented, skilled and educated and because of that the pay demanded by them is very, which
cannot be meet by organisations for any small work. So, it works as a threat for organisations
working in labour market of United Kingdom. Companies needs to effectively build a system
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which will allow small labourers as a part of their team which will help them in getting a regular
pay in the market as they are difficult to find and high skilled labourer charge more. So, it will
maximise the profit build by them.
Companies like Tesco, keeps an account of their low wage labourers as they can come in
the need whenever require. They also implemented a system which made them a part of the
system by creating jobs in their system. The HRM also ensures that they are part of every
compensation scheme as it helps Tesco in overall development.
Work Culture: Work Culture of United Kingdom is quite different from any other
country. So, the immigrants who are looking for jobs in the country needs to create a channel of
adapting these labourers in the system by updating them in the culture of the country. Also, they
demand low prices than that of other labourers in United Kingdom (Pedersen and Thibault,
2014). The threat that is encountered here to an organisation is backleash that can come if any
war or difference takes place in the countries, then, the organisation will not only loose their
reputation in the market of United Kingdom but at the same time will also not get supported by
the people of the company.
The example of this can be taken from the Deloitte. It is famous in the market due to the
diversify work force it has which provides them with new inputs and new solutions to common
problems. Till now, it does not encounter any problem regarding their work force. But, it is a
possibility that whenever a riot has been came into different countries, company will have to
stand back and face the problem (Seddon, 2014). It is necessary for the company to establish a
work culture which is free from any country or culture diffreence.
Gender Biasedness: It has been observed that male labourers are paid more than that of
female labourers in United Kingdom. It is a threat to the companies as they should work in order
to provide and support equal incentives to the people working at the same level. The threat
encountered here is that when this issued would come in the market and it has been found that
the company is not treating their male and female employees equally, then, there would be
repercussions of the same, which will be paid by the company later on. So, it is necessary for the
company that they treat their male and female employees equally.
Asda, a supermarket chain in United Kingdom is known for the system they established
in order to treat their employees is remarkable. As the employees are given pay in Asda
according to the work done by them and not according to the gender. It also can be seen by the
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fact that there are more female employees in Asda then that of male. It is possible because of the
equal opportunity given to them.
New Technology: Whenever a new technology is implemented by an organisation in the
system, it is observed that knowledge is first about the same is given to labour force as they are
the one using it. It takes a lots of time, effort and resources to train them which is not very
beneficial (Thompson and Smith, 2017). These new technology may cut down a lot of cost of the
company, but, at the same time it increase efforts that needs to be made in order to train and
develop the employees. Also, it do help the company in improvising innovation but at the same
time it will do the work of some labourers. So, there are many positive attributes of
implementation of new technology, but, at the same time, it has negative attributes as well.
There are certain companies who give importance to labour intensive work rather than
machinery intensive work as these work contains more quality. These companies main aim is to
provide efficient products that are easy to differentiated rather than the one who all looks the
same. The companies using this are more creative in nature. For Example, Lush. It is a cosmetic
brand in United Kingdom whose products are differentiated in the market as all the products
made by the company are labour intensive rather machine. The work in the company suggests
minimal usage of machinery and more usage of Labour, which differentiates them from their
competitors (Truyens and et. al., 2014).
CONCLUSION
From the above study, it can be concluded that all the major decisions that takes place in
an organisation are due to the work force of that company. They are one of the major reason for
the success of any organisation or failure of any organisation, as if an organisation have effective
work force then they would be able to attain their objectives and goals efficiently. Not only that,
it also helps an organisation in building a competitive advantage in the market against their
competitors, which can be established with the help of Resource Based View and VRIO Model.
Also, the labour market of United Kingdom faces lots of threats which can be showcased with
the help of various examples is also established in this report.
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REFERENCES
Books and Journals
Abdelhak, M., Grostick, S. and Hanken, M. A., 2014. Health information-e-book: Management
of a strategic resource. Elsevier Health Sciences.
Atkinson, J. and Storey, D. J., 2016. Employment, the small firm and the labour market.
Routledge.
Binder, J., 2016. Global project management: communication, collaboration and management
across borders. Routledge.
Bortoluzzi, G. and et. al., 2014. Exporters moving toward emerging markets: a resource-based
approach. International Marketing Review. 31(5). pp.506-525.'
Bringezu, S. and Bleischwitz, R., 2017. Sustainable resource management: global trends,
visions and policies. Routledge.
Bryson, J., 2017. Effective library and information centre management. Routledge.
Ghapanchi, A. H., Wohlin, C. and Aurum, A., 2014. Resources contributing to gaining
competitive advantage for open source software projects: An application of resource-
based theory. International Journal of Project Management. 32(1). pp.139-152.
Goetsch, D. L. and Davis, S. B., 2014. Quality management for organizational excellence. Upper
Saddle River, NJ: pearson.
Jensen, R. S., 2017. Pilot judgment and crew resource management. Routledge.
Kavanagh, M. J. and Johnson, R. D. eds., 2017. Human resource information systems: Basics,
applications, and future directions. Sage Publications.
Pedersen, P. M. and Thibault, L. eds., 2014. Contemporary sport management, 5E. Human
Kinetics.
Seddon, P. B., 2014. Implications for strategic IS research of the resource-based theory of the
firm: A reflection. The Journal of Strategic Information Systems. 23(4). pp.257-269.
Thompson, P. and Smith, C. eds., 2017. Working life: renewing labour process analysis.
Palgrave Macmillan.
Truyens, J. and et. al., 2014. A resource-based perspective on countries’ competitive advantage
in elite athletics. International journal of sport policy and politics. 6(3). pp.459-489.
Wright, P. M., Coff, R. and Moliterno, T. P., 2014. Strategic human capital: Crossing the great
divide. Journal of Management. 40(2). pp.353-370.
Online
Labour market overview, UK: April 2019, 2019. [Online]. Available Through:
<https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentande
mployeetypes/bulletins/uklabourmarket/april2019>
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