CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
Organizations are increasingly looking at human resources as a unique asset that can provide sustained competitive advantage. The changes in the business environment with increasing globalization, changing demographics of the workforce, increased focus profitability through growth, technological changes, intellectual capital and the never-ending changes that organizations are undergoing, have led to increased importance of managing human resources. Devanna, Fombrun and Tichy 1981; Wright (1998).
The impact of human resources management in an organization’s strategic management planning is extremely important in helping firm to find ways to compete effectively in the domestic and foreign market.
However to improve the quality and productivity in organizations most executive employs human resources management such as employees motivation programs, employees training and education, and changing the organization’s culture, including other resources in order to achieve results.
According to Jack Pitz-enz (2000:7) “people are the only element with the inherent power to generate value”. All other components offer only inert potentials. By their nature, they add nothing, and they cannot add anything until some human beings be it the lowest – level laborers, the most ingenious professional or the loftiest executive leverage that potential by putting it into action.
The increasing significant role of human resource management in achieving objectives is evident in the transformation functions. It has evolved from concentration on employee welfare to one of managing people in a way so as to obtain the best and highest productivity possible from the employee, through methods that provide the employees with both intrinsic and extrinsic reward.
Human Resources Management is the strategies and coherent approach to the management of an organization’s most valued assets; the people working there who individually and collectively contribute to the achievement of the objectives of the business. The term “Human Resources Management” has largely replaced the term “Personnel Management” as a description of the processes involved in managing people in organizations. In simple words, Human Resources Management means employing people, developing their capabilities, utilizing, maintaining and compensating their services in tune with the job and organizational requirements.
According to Lake (1990), Human Resources Management system can be the source of organizational capabilities that allows firms to learn and capitalize on new opportunities. The main characteristics of Human Resources Management approach is that it meets the needs for a strategic approach to Human Resources Management which achieves “fit” between the business and the human resources strategy.
