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Unit 1
An Overview of Human Resource Management
Prereading questions:
1 . What are the features of employment that you value most ?
2. How can Human Resource Management activities contribute to the presence of these features ?
3 . How is Personnel Management different from Human Resource Management ?
4 . Human Resource is not a department — it is the department. How do you interpret this saying ?
Text
Organizations require a number of things to be effective: physical resources, financial resources, marketing capability and human resources. While all these are important to organizational effectiveness, the factor that is most likely to provide potential competitive advantage is human resources and how these resources are managed. The production technology, financing, and customer connections ( marketing) can all be copied. The basics of managing people also can be copied , but the most effective organizations find unique ways to attract, retain and motivate employees — a strategy that is harder to imitate.
In a superb article , Competitive Advantage through People, Jeffrey Pfeffer gave Southwest Airlines as an example.
Consider . . . Southwest Airlines, whose stock had the best return from 1972 to early 1992. It certainly did not achieve that success from economies of scale. In 1992, Southwest had revenues of $1.31 billion and a mere 2.6 percent of the U.S. passenger market . . . Southwest ( has not ) succeeded because it has had more access to lower-cost capital — indeed, it is one of the least leveraged airlines in the United States. Southwest’s planes, Boeing737s, are obviously available to all its competitors. It isn’t a member of any of the big computerized reservation systems; it uses no unique process technology and sells essentially a commodity product — low-cost, low-frills air-line service at prices its competitors have difficulty matching.
Most of Southwest’s cost advantage comes from its very productive, ve
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