Human Resource Management At The Management Field - 849 Words

Introduction A broad body of literature in the management field is cantered around the idea of people as assets and emphasizes the importance of Human Resource Management (HRM) to improve firm’s performance and underpin its strategy. While there is evidence that HRM practices can improve organizational performance, a key issue is understanding if such improvement qualifies as competitive advantage or merely achieves competitive parity. Several authors agree that people are sustainable source of competitive advantage [Pfeffer, 1995]. This statement triggers several questions: do people generate competitive advantage by delivering superior performance, because they have managerial talent to conceive and implement winning strategies, or†¦show more content†¦Agency theory has been used to explain this relationship. Scientific Management practitioners were concerned with maximizing capacity utilization, and hence efficiency, of production processes securing workforce compliance via strict monitoring and incentives. Williamson [1981] analysed efficiency properties of hierarchies that promoted productive behaviours (above perfunctory compliance) in boundedly-rational and opportunist employees. Shareholders of public corporations often struggle to exert control over managers towards profitable use of corporate assets. Therefore, people within firms, both employees and managers, have often been considered as  "problematic agents†. In contrast, subsequent development of management theory emphasized the value of people as resources for the firm. Pfeffer [1995] and other authors suggested that specific HRM practices (e.g.: employment security, selective recruiting, training, incentive pay, etc†¦) are capable of improving firm’s performance by influencing employees’ behaviours and effectiveness. The so-called high-performance work practices have been associated to effectiveness measures of the organization (profitability, productivity, profit, stock price, etc†¦) in several studies