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SUBMITTED TO: Prof. Anurag Shankar

SUBMITTED BY: Shrishti Mishra (JIML-11-149)

Economic liberalization and policies of globalization have created a hyper-competitive environment, innovation and fierce competitiveness have raised issues of survival, effectiveness, sustainability, etc. Increasing demand for skilled performers and increasing high attrition of capable workforce forced the companies to shift focus on attracting and retaining high-performing employees in the extremely competitive business environment. Companies have recognized the need to enhance the employees opportunity to develop skills and abilities for full performance within the position and for career advancement and growth which would lead to retention of talented workforce in return increase firms performance in terms of profitability and productivity. Companies have realized that in today's competitive business milieu, the quality of people one employs will make all the difference. Lately, human resource management has emerged as an essential factor for sustained competitive advantage. Research highlights that organizations develop sustained competitive advantage through management of scare and valuable resources (Barney,1991). The human resource enables organizations to achieve optimization of resource, effectiveness, and continuous improvement consistently (Wernerfelt, 1984). An organization takes time to nurture and develop human capital in the form of knowledge, skills, abilities, motivation, attitude, and interpersonal relationship, and makes it difficult for competitors to imitate (Becker & Gerhart, 1996).

Competitive advantage is a management concept that has been so popular in the contemporary literature of management nowadays. The reasons behind such popularity include the rapid change that organizations face today, the complexity of the business environment, the impacts of globalization and unstructured markets, the ever changing consumer needs, competition, the revolution of information technology and

communications, and the liberation of global trade (AlRousan and Qawasmeh, 2009). Competitive advantage is simply defined as anything that gives an organization an edge over the competitors in its market. To be effective a competitive advantage must be:. Difficult to mimic, Applicable to multiple situations, Unique, Sustainable and Superior to the competition (Porter, 1998). People are the assets on which competitive advantage is built, whether in the public or private sector, whether in the corporate world or in the

world of education. Human resources are considered the most important asset of an organization, but very few organizations are able to fully harness its potential. Focus on people has become the new mantra for success. The latest theory in human resource management holds that people are an inimitable asset. Workforce and their skills are the one thing that competing organizations cannot imitate. Effective and efficient workforce has been shown to enhance companys performance by contributing to customer satisfaction, innovation, productivity, and development of a favorable reputation of the firm. Therefore a need to retain these talents is the most important thing for an organization today.

Companies derive competitive advantage from training and development. Training and development programmes, as was pointed out earlier, help remove performance deficiencies in employee. This is particularly true when (1) The deficiency is caused by a lack of ability rather than a lack of motivation to perform, (2) The individual(s) involved have the aptitude and motivation need to learn to do the job better, and (3) Supervisors and peers are supportive of the desired behaviors.

Training makes the employees versatile in operations. All rounders can be transferred to any job. Flexibility is therefore ensured. Growth indicates prosperity, which is reflected in increased profits from year to year. Who else but well-trained employees can contribute to the prosperity of an enterprise? Accidents, scrap and damage to machinery and equipment can be avoided or minimized through training. Even dissatisfaction, complaints, absenteeism, and turnover can be reduced if employees are trained well.

For a business to be competitive, it is important that it has the right number of people with the right skills in the right jobs. Well-trained employees provide a number of

benefits that contribute to a business' competitive advantage. Some of them are discussed below:that all training is being used well and for the best interests of the company all staff up-to-date in a fast changing business sure that staff is well motivated feedback from staff on changes Make sure staff is involved in changes.

An organization requires the utilization of a complex array of resources to grow, survive and achieve the ultimate mission or objectives for its existence. The mobilization and deployment of the resources such as human, financial and material in the right resource-mix, gives the organization leverage toward the desired end. Of these resources, the human resource is the most potent and central, contributing significantly to corporate bottom line and competitiveness. The organization therefore gains sustained competitive advantage through people, the organization workforce. Finally, trained employees will lead to high performance which will organizations efficiency and productivity. If time, training and resources are given for the process to evolve, employees are expected to develop feelings of self-efficacy, job satisfaction, security, confidence and job meaningfulness. The size and varied nature of an organization means that it requires many different types of people to fill a wide range of roles across the company. These include skilled factory workers, trade apprenticeships, designers and managers etc. By improving the development opportunities, employees feel the company values them. The motivation theories of Herzberg and Maslow show that staff works better when valued. This delivers long-term commitment and ensures benefits to the company.

To keep its world-leading position and grow in a competitive environment, an organization aims to deliver quality products and services. To do this, it needs people

with first class levels of skill, knowledge and capability. Majority of companies are starting to recognize the important role that training plays in: Improving productivity Quality Competitiveness

Training can: Increase employees knowledge of foreign competitors and cultures, which is critical for success in foreign markets, Help ensure that employees have the basic skills to work with new technology. Help employees understand how to work effectively in teams to contribute to product and service quality. Ensure that the companys culture emphasizes innovation, creativity and learning. Ensure employment security by providing new ways for employees to contribute to the company when their jobs change, their interests change, or their skills become obsolete by hiring and developing talented staff and synergizing their contribution within the resource bundle of the firm. HRM may lay the basis for sustained competitive advantage. The resource-based view of the firm, quite clearly, provides a basis for asserting that key human resources are sources of competitive advantage. It helps to lay the intellectual basis for capabilities. HR practices offers advantages because it forces us to think more clearly about the quality of the workforce skills at various levels and the quality of the motivation climate to be created and maintained to keep the workforce happy and satisfied. Competitive advantage can best be achieved by seeking improvement in the better utilization of human resources. According to Porter (1985), the unique talents among employees, including flexibility,

innovation, superior performance, high productivity and personal customer service are ways employees provide a critical ingredient in developing a firms competitive position. HR practices encourage the growth of the organization as employees after all play a major role in the well-being of a company they deal with enhancing competencies, commitment and culture building. Pfeffer (1998) proposed HR practices which according to the literature, can be expected to influence the firms performance. In his seminal work, Pfeffer (1998) proposed the following seven HRM practices :(1) Employment Security (2) Selective Hiring, (3) Self-managed teams and Decentralization of Decision making (4) Comparatively high compensation contingent on Organizational performance, (5) Extensive Training, (6) Reduced status distinctions and barriers, including dress, language, office arrangements, and wage differences across levels, and (7) Extensive sharing of financial and performance information throughout the organization. Training and Development may be related to firm performance in many ways. Firstly, Training programme increases the firm specificity of employee skills, which, it turn, increases employee productivity and reduces job dissatisfaction that results in decrease in employee turnover. Organizations foster and harness talent by imparting in-house cross functional training to make their professionals multi-skilled and multitalented. Many organizations encourage their employees to be multi-skilled and add value to other functional aspects as well.

Training and development helps the growth of a business. It helps in creating a wellmotivated and trained workforce. A company needs to have motivated and confident staff who have up-to-date skills in order to remain competitive. In addition, well-trained staff is an asset to the business and help to retain customers.

Well-trained staffs who remain with the business mean that customers enjoy continuity. This contributes to customer loyalty and leads to repeat business. Staffs who feel valued stay longer in a company. This means that organizations costs of recruitment can be reduced, resulting in cost savings across the organization.

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