A (2011) also input in their literature that

A critical literature review analysing the role of strategic HRM in
contributing to sustained competitive advantage

In this literature review I shall be analysing by comparing
and contrasting research on how strategic human resource management (HRM)
contributes to sustaining a competitive advantage. Within this literature
review I will be looking at three themes primarily and discussing how it
contributes to sustaining a competitive advantage; Recruitment & selection,
rewards & appraisals and training and development. This literature review
will develop by making links between the different key themes using the
literature available to show how strategic human resource management
contributes to sustaining a competitive advantage.

One of HRM’s roles is recruitment and selection. On a global
and national perspective, a skill gap is evident regardless of advances in
education and technology therefore it is vital for an organisation to
strategically plan for their work force needs as talent management is fundamental
in replenishing staff in order to sustain a competitive edge (Hunter, 2012). Furthermore
Aravamudhan & Krishnaveni (2015) state that in the present world of
business, talent is at its ultimate and with the competitions for exceptional candidate’s
organisations are required to go all out and ultimately find the best talent
available. Aravamudhan & Krishnaveni (2015) in their journal article ‘Recruitment and Selection Building Scale’ also
highlights that people who work for an organisation are the ones who carry out
tasks therefore they are crucial for an organisations success. Organisations
which are most successful at enticing quality applicants and are heavily
selective in their recruiting decisions can advance ahead of competitors which
will help give a significant control over a firm’s competitors. In Ployhart et
al (2012) say in their book ‘Recruitment and Competitive Advantage’ that
“Leaders care about applicant reactions to their recruitment and hiring process”
this is due to the weighty effect on the future of an organisation arrangements
and “sustained competitive advantage”. In contrast to Boxall (1996) states that
organisations have the possibility of generating the most competitive advantage
through recruitment and retain the most exceptional people, through seizing a
cluster of brilliant human talent, underlying with productive possibilities.
Similarly authors such as Qiu & Largay (2011) also input in their
literature that managing and investing in recruitment and selection in an
efficient manor can support an organisation to achieve its objectives and help
differentiate them from their competitors by gaining a competitive advantage. Brink
et al (2013), highlights a parallel view in his literature addressing that
organisations are more aware of the importance of the right talent therefore
more time and money should be invested in getting the right people rather than
technological/operational innovation in order to gain competitive advantage. It
is very clear to see that the authors show a very analogous trend summarising
that strategic human resources management in recruitment and selection can help
an organisations to sustain competitive advantage over their competitors and
therefore should be a main focus within a business.

On the other hand
several authors also argue that strategic human resource management in
recruitment and selection does not have any significant association to an
organisation sustaining a competitive advantage. In a journal article written
by Russel & Brannan (2016) named ‘Getting the Right People on the Bus’,
they highlight in the literature that the way an organisation recruits is not
effective as an organisation primarily looks at the skills and credentials of a
candidate, they then carry to explain how this is not helpful to an
organisation as a candidate possibly will not adjust to a culture of an
organisation, consequently leading to the departure of an employee; this
suggest that an organisation may not achieve a competitive advantage like
Hunter (2012) suggests previously. An individual would harmonize in an
organisation better if they had good values and better work place moral rather
than someone who is recruited based primarily on skill, this is due to the fact
that it allows an individual to be a better team player and help boost
workforce moral (Wilsher, 2015). Looking from a different perspective Lum
(2017) looks at the lack of work force diversity, she states that the
recruitment and selection process isn’t fair as elder white man statistically
are more likely to be recruited over younger, female or a person of an ethnic
minority. Therefore this could conceivably obstruct an organisations reputation
and performance due to a lack of diversity therefore disagreeing with the
statement that strategic human resource management can sustain a competitive
advantage. Though these authors do not directly disapprove the statement, there
are other aspects of human resource management besides recruitment and
selection which help sustain competitive advantage.

Another role of HRM
is assigning rewards and appraisals. This is a crucial aspect of human resource
management as the purpose is to review and evaluate the performance of an
employee comparing to a pre-set standard, this is in order to motivate an
employee and help reinforce an outcome of performance (Curtis et al, 2005). However
it is important to recognise how this can help sustain a competitive advantage;
several authors suggest that strategic human resource management utilising the
tool of awards and appraisals boost an individual’s productivity which overall
increases efficiency there leading to an organisation achieving competitive
advantage. Putri et al (2017) state in there literature about quality
management that reward and appraisals are crucial to an organisations success
as these are the advocates for productivity and good, as they believe rewards
can motivate an employee to work harder to meet an organisations objectives.
Cravens et al (2015) research in the effectiveness of appraisals in the
workplace highlights that employees are benefit from things such as appraisals
and rewards as this helps make an individual feel more satisfied about their
work as well as work in a more confident manor making them content with their
job role; this research supports the statements made by Purti et al (2017)
previously as rewards and appraisals are supporters to organisational success. Furthermore
Katou (2008) underlines similar thoughts in her literature, she utters that organisations
who aim to improve will implement rewards and appraisals in their human
resource management in order to motivate individuals and in essence acquire the
best from a worker, as his will help reduce the labour turnover of an
organisation consequently helping sustain a competitive advantage.

On the flip side
some authors disregard the importance of recruitment and selection to sustain a
competitive advantage. Authors such as Becton et al (2008) in their literature articulate
that implementation of awards may lead to employee’s being over compensated
while already receiving a salary for doing their job therefore leading to
individuals being demotivated as they may perceive the message of rewards as
their work being above satisfactory; meaning rewards can lead to the decline of
organisational performance consequently not sustaining a competitive advantage.
In a book written by Greene (2011) he speculates that there is a down side to
rewarding individuals as organisations rewarding staff may not be rewarding
individuals the correct amount in comparison to their actual job role. Though
his opinion may not be directly parallel with that of Becton et al (2008), both
parties to share the same view that rewards are not important in strategic
human resource management to sustain competitive advantages. Research by such
authors object the statement of the literature being reviewed, however it is
noticeable that literature in regards to disadvantages of appraisals is very
limited which may suggest that it is primarily advantageous therefore does
sustain a competitive advantage. Likewise there is other aspects of strategic human
resource management which contributes to sustaining a competitive advantage.

A significant role
of HRM is training and development of employees in any organisation. In Hyman’s
(2017) book, he defines training as a function concerned with organisational
activity intended to enhance the performance of individuals in a professional
organisation. He also highlights in his book that training can be “costly”
however it “plays an essential part in a company’s success” as it helps to
exploit “quality and efficiency”; straight of the bat it is clear to see that
training plays a vital part in strategic human resource management therefore
being significant to sustaining competitive advantage. In a literature by
Wescott (2011) he says that “training allows you to be a more flexible
organisation” this is because employees are more skilful and more proactive,
therefore they can assist in an absence of an employee, meaning training is an
investment which in the long term will result with amplified output and larger
employee effectiveness which ultimately help human resource management sustain
competitive advantage. Gardiner et al (2001) talk about in their literature the
significance of employee participation which is developed through training and
that the “learning orientation” should be seen as an organisational wide
responsibility in order to achieve organisational success such as sustaining
competitive advantage. Van Iddekinge et al (2009) journal article which focuses
on performance over time also has a parallel view to the authors above about
training of employees and how critical it is for organisations, due to the
unlimited opportunity it presents for an organisation over a long period of
time, specifically looking at the value of an individual after they have
received training, the more knowledgeable and skilful an individual becomes
they become an important asset to an organisation therefore it is important for
the organisation to retain such talented individuals; suggesting sustaining a
competitive advantage it is vital to a have an assembly of well trained staff
who are vital to the success of an organisation.

Though various
authors suggest that training is vital for organisational success, there is
very little literature which suggests that training in terms of strategic human
resource management decreases chances of competitive advantage, however some
authors do insinuate some disadvantages of training which relates to how
significant it is in human resource management. In a journal article by Kmen
(2011) he suggests that training is important however it is very costly
therefore it is important for an organisation to be aware of if they are
investing their money in the correct function of a business; which suggest that
human resource management may not be the area an organisation should fund
instead such areas as marketing or research and development; signifying
strategic human resource management may not be the reason for overall
organisational success in sustain competitive advantage. Yee et al (2010)
literature on the study of employee loyalty suggests that some organisations
who have a high labour turn over are wasting their time as individuals are
always looking for the next best thing therefore the training they receive may
not be beneficial for an organisation in the long haul, questions the
investment decisions of training. This suggests that rewards and appraisals
maybe the most significant in strategic human resource management in order to
understand if investments in such area is helping to sustain a competitive

In conclusion, it can
be seem from the literature available that strategic human resource management contributes
to sustaining competitive advantage. A vast majority of research exemplifies a sturdy
development in human resource management due to the multiple areas of human resources
available such as training, appraisals and recruitment. In a brief summary I’d
refer to a book written by Jackson et al (2003) in which they highlight broadly
that exploitation of human resource management will increase organizational
performance, suggesting that human resource management is an area of opportunity
which should not be overlooked. One thing which suggests the validity off all
the literatures discussed in this literature review is that all sources used
have been peer reviewed meaning that an expert within that area of discussion
has evaluated the literature and has provided credibility; which helps maintain
a good standard of literature which can be used for references.