Human Resource (HR) is one of the hottest topics in business environment, which has attracted many scholars to study (Brauns, 2013) .....

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Table of Content
1. INTRODUCTION ...................................................................................................... 3
2. PART 1: WHAT EXTENT HUMAN RESOURCE IS A DISTINCTIVE DISCIPLINE . 3
2.1. The definition of Human Resource (HR) ............................................................ 3
2.2. The role or model of HR..................................................................................... 4
2.2.1. Human resource as business partner.......................................................... 4
2.2.2. Human resource as strategic partner .......................................................... 5
3. PART 2: WHAT EXTENT IS HUMAN RESOURCE REQUIRED OF ALL
MANAGERS ................................................................................................................... 5
3.1. The importance of HR........................................................................................ 5
3.1.1. HR involves as the supporting activity in organizational value chain ........... 5
3.1.2. HR is the source of competitive advantage ................................................. 6
3.1.3. Empirical research showing the relationship between HRM and
organizational performance ...................................................................................... 7
3.2. HR Expertise of all managers............................................................................. 7
3.2.1. Organizational politics.................................................................................. 7
3.2.2. Motivation .................................................................................................... 7
4. PART 3: THE CONTRIBUTION OF HUMAN RESOURCE TO THE EFFECTIVE
AND PROFITABLE OPERATIONS OF AN ORGANIZATION ....................................... 8
4.1. The relationship HR planning and organizational performance.......................... 9
4.2. The relationship between recruitment and selection and organizational
performance................................................................................................................. 9
4.3. The relationship between training and development and organizational
performance............................................................................................................... 11
4.4. The relationship between recognition, compensation and reward system with
organizational performance........................................................................................ 11

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5. CONCLUSION........................................................................................................ 13
6. REFERENCES ....................................................................................................... 13
List of Figures
Figure 1: HRM Practices ................................................................................................. 5
Figure 2: Value chain framework..................................................................................... 6
Figure 3: Maslow’s Hierarchy of Need theory.................................................................. 8

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1. INTRODUCTION
Human Resource (HR) is one of the hottest topics in business environment, which has
attracted many scholars to study (Brauns, 2013) because HR is defined as the
important process to attract and develop human capital for organizations. Most of
scholars have highlighted the role of HR and the importance of HR to organizational
success. The paper has analyzed the role of Human resources as business partner and
strategic partner and even as the main source of competitive advantage. Moreover, the
paper also identifies the relationship between HR practices such as HR planning,
recruitment and selection, compensation and reward and organizational performance.
For each HRM practice, the paper will illustrate with real examples in business
environment, including both successful and failure case studies. The final part of this
paper is to suggest HR expertise for all managers and leaders, such as organizational
politics and motivation.
The paper is outlined as follows
- What extent is Human resource a distinctive discipline
- What extent is Human resource required of all managers
- The contribution of HR to the effective and operations of the organization
2. PART 1: WHAT EXTENT HUMAN RESOURCE IS A DISTINCTIVE DISCIPLINE
2.1. The definition of Human Resource (HR)
Human resource management (HRM) is defined as the importance organizational
process in which organizations have focused on attracting, developing and sustaining
their human resource to pursue business goals and achieve competitive advantages
(Amstrong, 2009). Summarizing from many scholars, the paper suggests two main roles
of HRM. First, human resource acts as business partner. Second, human resource is
considered strategic partner.

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2.2. The role or model of HR
2.2.1. Human resource as business partner
Human resource function has implemented its role in identifying the way to manage and
service human resource and how human resource can add value to organizations.
According to Lawler III and Boudreau (2012), human resource aims to support business
and provide HR services such as analysis and design of work, HR planning,
recruitment, selection, training and development, performance management and
employee relations (Figure 1). With these HRM practice, HR function helps companies
to achieve some benefits. First, companies can build their performance management
capabilities under the support of employees’ talents and performance. Second, human
resource handles its role in developing managers, thus leading to enhance
organizational change capabilities.
Developing HRM practices and systems shown in Figure 1, HR function has acted as
business partner who emphasizes on developing competencies and motivation of
employees to lead companies to operate effectively and efficiently. Hence, for specific
business strategy, companies have designed HRM systems and practices to support, to
implement changes and to help managers deal with people issues. Singapore Airline is
taken as the example which shows that it has leveraged HRM practices to support
business strategy which focuses on offering excellent services and innovation in cost
effective way. HR plays an important role in helping Singapore Airline to achieve the
success of this strategy. Operating in service industry, Singapore Airline becomes
competitive from its human, the most important asset allowing companies to offer
excellent services to customers. Hence, Singapore Airline has focused on its training
and development to support its business strategy. In detail, it has offered two kinds of
training to employees such as functional training and retaining (Wirtz and Heracleous,
2013). Training Customer Service is the main training and development of HRM in
Singapore. Moreover, it has involved leadership practices into its training and
development. Hence, it can be said that under the support of HR as business partner,
Singapore Airline has been the biggest flag carriers of Singapore and the only airline in
Top Big Companies in Forbes (2014)

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Figure 1: HRM Practices
Source: Adapted from Bowen et al (2010)
2.2.2. Human resource as strategic partner
Beyond defining HR strategy to support business strategy, HR function can help
companies identify organizational capabilities and analyze labor market and talents,
thus leading to offer HR decision to the discussion of business strategy and then, to
shape and enhance business strategy (Lawler III and Boudreau, 2012)
3. PART 2: WHAT EXTENT IS HUMAN RESOURCE REQUIRED OF ALL
MANAGERS
3.1. The importance of HR
3.1.1. HR involves as the supporting activity in organizational value chain
As shown in Figure 2, value chain is the process including all activities: primary
activities such as In-bound logistics, operations, outbound logistics, marketing & sales
and services and Supporting activities such as firm infrastructure, human resource
management, technology development and procurement (Porter, 1985). Involving as
one of the important supporting activities, human resources has implement HRM
services which support all functions in value chain. One of the most important trends,
globalization encourages firms to expand their operation internationally, thus making
business bigger and more complex. In this case, HR function has been more important
in offering cultural understanding to employees and in transferring expatriates because

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expatriates can contribute to exchange information and to handle the transmission of
values, rules and cultures (Riusala and Suutari, 2004). Hence, nowadays, in
Conference of Supply Chain Management, Human resource management is discussed
as one of the hottest topics (CSCM, 2015).
Figure 2: Value chain framework
Source: Johnson et al (2012)
3.1.2. HR is the source of competitive advantage
Many scholars have stated that HR is the source of competitive advantage with the use
of Resource-based theory. As mentioned by Barney (1991), resource based theory
stated that companies have become competitive advantage when they own capabilities
and resources which cannot be owned by other competitors. Moreover, to sustain such
competitive advantages, capabilities and resources need to satisfy four factors such as
Valuable, Rare, Non-imitable and non-substitute (Johnson et al, 2012). According to
Lawler (2008), human capital is not only valuable but also rare and difficult to imitate
and to substitute, thus becoming one of the most important sustainable sources of
competitive advantages (Amit and Bilcourt, 1999). Hence, many scholars such as Berry
(2011), D’Netto et al (2014) suggested that organizations should adopt HRM
improvement to generate competitive advantages in any industry and any size of firms.

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3.1.3. Empirical research showing the relationship between HRM and
organizational performance
Instead of explaining the relationship between HRM and organizational performance
with the intermediate factor – competitive advantage, some scholars have handled
some empirical research with the use of usual quantitative and statistic research
techniques (Fleetwood and Hesketh, 2010). For example, based on data which was
collected in different regions of Europe, Stavrou et al (2010) analyzed and stated that all
HRM practices can lead to improve organizational performance. Ogunyomi and
Brunning (2015) also agreed with this relationship between HRM and organizational
performance through handling their study on small and medium enterprises. Singh et al
(2012) have developed the framework showing the link of HRM and organizational
performance and used both primary and secondary data to analyze and give finding that
they are related
3.2. HR Expertise of all managers
With the importance of HR to business strategy and organizational performance,
managers have involved into HR practices such as Training and Development and
Compensation and Reward. Hence, HR expertises for all managers are organizational
politics and motivation.
3.2.1. Organizational politics
As defined by Pfeffer (1981), organizational politics is the activity building and
developing resources which help companies achieve performance in cases which there
is the disagreement and conflict. Power is the most popular kind of organizational
politics (Sonaike, 2013). Managers and leaders have been suggested to adopt
organizational politics through using power to build trust and confidence, thus motivating
employees to integrate their objectives with organizational goals (Drovy and Vigoda-
Gadot, 2010).
3.2.2. Motivation
As suggested by Maslow (1943), employees can be motivated with different levels if
offered with different level of needs, which have been proposed from the lowest to

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highest level (Figure 3). Hence, leaders and managers have offered reward and
compensation, thus leading to offer social benefits and esteem to employees. To
achieve the highest level of self actualization, leaders or managers are suggested to
adopt more activities and actions such as understanding skills, experience, capabilities,
etc, leaders have given challenging assignments or projects to employees (Hannam
and Narayan, 2015), assigning tasks to employees (Reinhard and Dickauser, 2011) and
appreciate successes and retain employees’ willingness during working time (Issaac et
al, 2012)
Figure 3: Maslow’s Hierarchy of Need theory
Source: Maslow (1943)
4. PART 3: THE CONTRIBUTION OF HUMAN RESOURCE TO THE EFFECTIVE
AND PROFITABLE OPERATIONS OF AN ORGANIZATION
Organizational performance is considered the important element used to evaluate the
effectiveness and efficiency of activities. Instead of evaluating the relationship between
HR and the efficiency and effectiveness of activities, this section will focus on analyze

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the relationship between each HRM practice and organizational performance. As the
evidence, this section has taken some real companies as case studies.
4.1. The relationship HR planning and organizational performance
Actually, not many scholars have studied the relationship between HR planning and
organizational performance, even some scholars stated that there was no difference
between leveraging HR planning and not doing so. However, defining human resource
as more and more important asset and identifying challenges from globalization and
instable context and the need in maintaining competitive advantage, leaders in
organizations started to adopt HR planning and involve into their business strategy
(Johnson et al, 2012). Following the increase of using HR planning technique, many
scholars have involved into studying the relationship between HR planning and
organizational performance. For example, Huang and Hsu (2011) studied that ERP
(Enterprise Resource Planning) of nearly 400 Taiwanese companies have positively
impacts on such organizations’ performance, under the support of leadership in
resource management. The same result is confirmed by many recent scholars, such as
Akca et al (2013).
4.2. The relationship between recruitment and selection and organizational
performance
There are some reasons which are used to explain the importance of recruitment and
selection to enhance organizational performance. First, globalization, technological
development and intensive competition require organizations to have employees with
knowledge, skills, competencies and capabilities to enter new markets and achieve the
success under many challenges (Dessler, 2011). Second, under external challenges
from business environment, organizations are forced to choose candidates with high
level and standard of knowledge and competencies (Schramm, 2012). Aiming to attract
and choose the most suitable employees for business strategies, HR functions such as
recruitment and selection play more important role in creating competitive advantages
and enhancing competitive advantages (Almeida et al, 2012).

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First Data Corporation is taken as the example showing the contribution of recruitment
and selection to organizational success. As mentioned in Annual report (2014),
excellent recruitment and selection is one of the most important drivers which make this
company become Top biggest provider of a range of payment services and e-
commerce solutions in different regions for over 1,400 institutions and 400 million
consumers. Its competitive advantage in the market is high technology and innovation.
To maintain this competitive advantage, FDC has handled the adoption of young
workforce, thus leading to focus on recruiting and selecting persons who have
possessed diversified skills such as strategic thinking, team working, innovation,
leadership and result orientation. As stated by FDC (Annual report, 2014), the higher
quality of services which FDC’s recruitment and selection have adopted, the higher
quality of services which FDC offers to customers, thus increasing organizational
performance.
Besides identifying the relationship between good recruitment and selection and high
organizational performance, some scholars also stated that the limitation in recruitment
and selection can negatively impact on organizational performance (Almeida et al,
2012). In national context, these limitations are (i) identify suitable candidates with
technical skills but ignore other soft skills, (ii) handle the same question list for all
interviews (Harris, 2000). In international context, the biggest challenge for recruitment
and selection is to choose the suitable expatriates which can do business well in
international business context (Kang and Shen, 2010). It is difficult to choose
expatriates who can be well adapted with different cultures and work closely and
smoothly with local employees (Van den Born and Peltokorpi, 2010). This difficulty can
lead to some negative outcomes such as ethical dilemma and the opposite with
organizational culture. “Western expatriate in emerging countries” is the popular
example of limitations on recruiting and selecting expatriates, the limitations which lead
to create negative result for organizational performance (Kang and Shen, 2013).
Emerging countries have operated close-knit network (Peng, 2011) and the lack of
corporate mechanism (Peng and Sauerwald, 2012) and have different cultures with
Western countries, thus making HR function difficult to decide whether they can select

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expatriate to local country or localize HR recruitment in for host country nationals (Kang
and Shen, 2013)
4.3. The relationship between training and development and organizational
performance
As defined by Armstrong (2001), training is the system which is leveraged to
develop skills and attitudes for one person to complete tasks while development is to
acquire more knowledge, skills and behaviors to handle current or future tasks (Karthik,
2012). Subba (2012), training and development is really important because these
functions help employees improve performance, knowledge and skills and avoid
obsolescence. Recognizing the importance of training and development, companies
have been more focused on these functions in their HR strategy and business
strategies so it is not easy to find one company without offering training and
development programs for employees (Welch & Bjorkman, 2015). The example of
Singapore Airline is the example for the importance of training and development to help
to offer excellent services with reasonable price to customers. Walmart is also the good
example for the importance of training and development in creating competitive
advantage. First, Walmart has developed programs which focus on encouraging
employees to adopt behaviors which are suitable for business strategy – offer low price
products with reasonable quality. Besides training program, Walmart has offered some
development strategies such as “lock in” of night time shift and cancelling cigarette
breaks and offering quick trip home. Moreover, to reduce training cost but still to offer
good services, Walmart has developed its training program: from store level up. It can
be said that Walmart has focused on developing training and development programs
which are consistent with business strategy – Cost leadership (Needle, 2012).
4.4. The relationship between recognition, compensation and reward system
with organizational performance
Recognition, compensation and reward systems have brought some benefits.
First, they are the sources of motivation increase (David et al, 2006). The importance of
motivation has been the hot topic in business environment with many studies or
motivation theories developed by scholars such as Maslow’s Hierarchy of Needs theory

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(Maslow, 1943), Herzberg Motivation/Hygiene theory and Alderfer’s ERG theory
(Alderfer, 1969), Expectation theory and Lawler and Porter’s Expectancy theory (1968)
and Equivalence theory. The feeling of motivation can be adopted by offering payment
increase and promotion (Armstrong, 2012), receiving rewards (Vroom, 1964). Hence,
employees feel satisfied when offered recognition, compensation and reward, thus
leading to be motivated to contribute and use all efforts to achieve higher performance.
Moreover, recognition and reward system is also the way of management related to
employee commitment (Meyer and Herscovitch, 2001), which can reduce employee
turnover with the organization (Richer et al, 2002). As defined by Rusbult & Farrell
(1983), employee commitment is the feeling of employees in sticking with their jobs and
is enhanced with the employee contract and reward system (Griego et al, 2000). With
reward and recognition system, employees feel satisfied and committed as well as
avoid leaving out of the organizations which always highly evaluate them (Harrison et al,
1996). From the above analysis, the author can summarize that reward and recognition
system can be leveraged to increase staff motivation and reduce staff turnover to
achieve sustainable performance.
To evaluate the relationship between reward and organizational performance,
this section will take two examples. The first example is that Goldman Sach has
adopted good reward and compensation to achieve high organizational performance.
The evidence of high performance is that Goldman and Sachs is one of Top 100
companies which are defined as the most valuable and interesting working place all
over the world (Fortune, 2015). To achieve this success, Goldman Sachs has handled
some programs such as (i) offer its employees 100% compensation, 75% coverage of
health care and for its part time employees who have worked over 20 hours per week
and (ii) offer health service (Annual report, 2014)
Unlike Goldman Sachs, BMW has failed to increase organizational performance
because it has not emphasized on benefits of reward and compensation. In details,
BMW handled “Reward employee mistakes” which means that even though employees
met some mistakes, BMW still rewarded to offer chances for employees to continue

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their research. However, the failure of this system is that it is not fair when BMW itself
cannot explain and determine the criteria used to evaluate.
5. CONCLUSION
In summary, the paper handles the analysis of the importance and the role of human
resources to organizations such as business partners, strategic partners, and the
source of competitive advantage with literature review including empirical studies.
Moreover, this paper also stated that there is close relationship between each HRM
practices such as HR planning, recruitment and development, compensation and
reward and organizational performance. The real examples in Walmart (Training and
Development), First Data Corporation (Recruitment and Development), Goldman Sachs
and BMW (compensation and reward) are evidences for this relationship. Importantly,
this paper ends with some suggestions on HR expertise for all managers and leaders,
such as motivation and organizational politics.
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