Human Resource Is the Most Important Assets in an Organization Essay

Assets give the sack be defined as glaring and intangible resources of a firm which can be drawn upon by a the firm when required to achieve its objective(s) (Ray and Ramakrishnan, 2006). Tangible assets include fiscal and physical assets such as machineries and manufacturing plants while examples of intangible assets are branding, come with reputation, technological know-how and man resource (Noe et al., 2012). Human resource is the most master(prenominal) asset of an organisation. Using studies which showed that effective use of homo resources contributed to better bodied performance and/or productivity, this essay attempts to show that this intangible asset is a spot driver in the survival and competitiveness of an organisation.For organisations to be advantageful, they deal to survive and obtain an advantage all over their competitors. There are umpteen ways to attain a competitive advantage, including patented product and put to work technologies, protection and re gulation of domestic markets and access to financial resources (Pfeffer, 1994). How eer, the aforementioned readers of success are deemed to be less relevant in at presents societies because technologies can be imitated, markets are improverly globalised and global capital of the United States markets ever more opened for worldwide movement of financial resources (Pfeffer, 1994). Instead, in todays organisations, it is widely accepted that employees are key strategic resources for companies because their knowledge, expertise, ideas and service drive innovations, steer product developments and get relationships with clients.This in turn join on companies performances through multiple means such as driving profits, increasing productivity and building large customer bases. For example, Sears, a multinational US social club, attributed its transformational success through its believe in the 3Cs of have Place to Work, make Place to Shop and followed by Compelling Place to Inve st (Yeung and Berman, 1997). The senior perplexity at Sears believed that by optimising its human resources (through shaping of employees stances, increasing motivation and skills), it will become an kind venue for customers to shop with high level of satisfaction.Consequently, it will be a good investment option due to strong financial results (through increase in customer expenditure) and productivity (through optimisation of human resources) (Yeung and Berman, 1997). Strategically important resources whitethorn give companies a competitive edge. Bartlett and Ghoshal (2002) argued that in that location is an evolving somatic strategy from one that competes for markets and products, to one that compete for resources and competencies, to the current strategy of competing for talents and dreams.Resources are deemed to be valuable when they can non be easily imitated, their value depreciate slowly, they cannot be easily substituted and they are relatively better than competitors with similar resources (Collis and Montgomery, 2008). While these resources may be tangible or acquired capabilities, it is the view of this author that it is people that top hat fit the described characteristics of valuable resources. Creativity and expertise of an employee may not be easily duplicated. It takes time to groom talents, and their experiences and competencies cannot be easily replaced. Thus, to stimulate a competitive edge, companies need to invest in the hearts and minds of the key success factor human resource.Many studies have shown that effective HRM (such as investments in schooling and strategic HRM) had led to increase in order performances, through proxy indicators such as increased profits return, repel productivity, and service eccentric. In the employee-customer-profit chain model devised by senior management at Sears, they predicted that a 5 unit increase in employee attitude will drive 1.3 unit increase in customer movie that will in turn increas e revenue growth by 0.5% (Rucci et al, 1998). When put into context, in 1998, a 4% rise in employee and customer satisfaction translated to an increase in more than $200 million of revenues over a 12-month period (Rucci et al, 1998). Other than the example on Sears, Choudhury (2010) showed that there is a positive relationship between investment in human capital and company performance in Indias information applied science sector. sympathetic positive correlation can also be ob coiffed from studies analysing quality of human capital and sales revenue per employee in Romanian bundle companies (Camelia, 2012) and perceived effectiveness of rewards on corporate performance in Nigerian Banks (Ojo, 2011).As an important asset of the organisation, human resources need to be managed properly. HRM encompasses a multitude of responsibilities including recruitment, training and development, benefits, health and services (Noe et al., 2012). There are legion(predicate) case studies that hav e demonstrated that a highly-skilled workforce and appropriate training of employees play a key role in increased company performances. A survey done on 62 retail stores showed that parting of personnel trained in their designed training programme match with the stores performances (Russell et al., 1985).Another study done in 15 manufacturing sectors of seven European Union countries suggested that intermediate- and highly-skilled workers increases labour productivity, which is a proxy for companies performances (Corvers, 1997). It is envisioned that with training, employees will be equipped with job-related skill sets and competencies. A company with cutting edge technology needs employees with the know-how to operate the machineries. A retail shop may distinguishes itself from another(prenominal) shop that sells similar merchandise through quality services that helps build a brand name and large clientele. Employees may learn how to serve customers through training programmes. A study of 2003-2006 Training Top coke survey report published by the Training Magazine showed that there is a positive correlation between training expenditure and operate performances (Liao et al., 2011). This supports the general perception that training is an important HRM tool for companies to survive in the increasingly competitive market.Human resource is a key contributor to the success of organisations today. Examples used in this essay reinforced the argument that human resource is likely to the most important corporate asset as it is a unique resource that drives companies performance. In order to effectively court on this valuable resource, companies need to train employees so that their potential can be harnessed.