How might exemplary human resource practice enhance and strengthen a firm's value chain activities?
1. Definition of Value Chain
The value chain is a systematic approach to examining the development of competitive advantage. It was created by M. E. Porter in his book, Competitive Advantage (1980). The organization is split into 'primary activities' and 'support activities.' Primary Activities include: Inbound Logistics, Operations, Outbound Logistics, Marketing & Sales, and Service. Support Activities include: Procurement, Technology Development, Human Resource Management (HRM), and Firm Infrastructure.
The goal of these activities is to offer the customer a level of value that exceeds the cost of the activities, thereby resulting in a profit margin. The firm's profit or margin depends on its effectiveness performing in these activities efficiently, they are not isolates one another, one value chain activity often effects the cost or performance of others.
2. Human Resource Management
HRM supports individual primary and support activities and entire value chain. There are four components of HRM functions:
2.1 Effective recruiting, development, and retention mechanisms for employees
(Recruiting) HRM evaluates human capital through interview; see whether the candidate is competent to the job. Sometimes, HR ranges interview vie capability test by STAR technique (Situation, Task, Action, Result), require candidate describes a special task that he has been needed to accomplish, how did he analyzed and make solutions, what did he implement and accomplish, how did the event end and what did he learn from that etc. (http://www.quintcareers.com). So that HR could be defines the special strongpoint of this person. For example, Salespeople are required to develop and maintain excellent relationships with customers; they need communicate with customers and internal staff actively and patiently. Thus, personality test and stress test may taken by HR in interview, questions such as "are you usually walk fast ?" or "what color do you like most?"(http://www.personalitytest.net), if the person used to walk fast perhaps he is impetuous; people who likes blue may he is calmly. As stress test, HR may ask some slashing or uncomfortable questions, and then observes the reaction of candidate, see whether he can copes stress easily. If firm gathered excellent salespeople, the "marketing and sales" and "service" or even "procurement" of primary activities will spread fast and effective, because work efficiency increased, staff always know how to plan competitive marking strategy to save time and cost, and how to strive for a profitable customer till the last second.
(Development) Nowadays, economic develops rapidly, HRM continues to prove that staff added value to the firm's value chain by organizes various training, such as learning new polices and strategies that company found during each period; upgrade employees' knowledge and skills, in order to maintain more effective people who can catch up steps with company and world business trend. For instance, economy tends to globalization day by day, many of enterprises in China, HRM arranges Business English training for employees, act to brings more opportunities to their company then its competitors. Another example, in advertising company, most conflicts between designers and account executives is that account executives are not really understand the meanings of designs, because they are not too "arty", so it will be hard for them convey or sell the ad to clients; whereas, as designers, they may more concentrate on "arty" but overlook business factors, Thus, to exchange professional knowledge is important to these employees, HRM then organizes internal seminar, so staff in different department can share experiences and knowledge. Accordingly, cost minimized by less misunderstanding, staff have ability to meet critical deadline, "operation" and "service" activities improved....
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