Importance of Human Resource Management Essay - 1177 Words

Human resource is the most valuable asset of an organisation as it is the source of operational performance and competitive advantage in an organisation. An asset, by definition, is a useful or valuable thing or person. An organisation comprises of three types of assets, namely; financial assets, physical assets (infrastructure and equipment), intangible assets. Intangible assets include intellectual capital (patents, copyrights and trademarks), social capital and human capital. The creative thinking potential of an organisation’s current employees (Bolton, 1996), is the organisation’s most valuable asset, as people are the driving force within companies seeking to differentiate themselves in these competitive markets. Business in the†¦show more content†¦Human capital is the most abundant, adaptive and accessible resource, making it cost-effective and efficient for organisations to survive and prosper in the process of globalisation, international competition and technology (Sondhi and Nirmal, 2013). Therefore, the most distinguishing asset necessary to an organisation for bringing new and improved offerings to the marketplace and increasing productivity, is human capital. Innovation demands a robust human capital that is fully engaged, thoroughly developed and skillfully deployed (Serino, 2013). The human resource function plays a critical role in an effective human capital as an organisational strategic asset. By aligning the human resource function with business strategies, the ability to execute strategy well is a source of competitive advantage and people are the lynchpin of strategy execution (Becker, 2001). Strategic human resource management consists of the coordination of various human resource management practices, such as HR planning, recruitment, selection, training and development, compensation and performance management. To streamline and organise these practices to leverage on a strong human capital, emphasis on well-thought human capital development plan is crucial. To quote Serino (2013): Comprehensive human capital development integrates three essential elements: †¢ Talent Optimization †¢ Learning Agility †¢ Innovation Capabilities Talent optimisation is achievedShow MoreRelatedThe Importance of Human Resources Management1233 Words   |  5 PagesThe economic environment in nowadays dynamic, it is fairly important for organisations and managers to recognise the curtail of Human Resource Management. It is clear that Human Resource Management (HRM) has become one of the most recommend management strategy in the modern business (Leopold and Harris, 2009). 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