CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
In the last ten years, organisations especially in Africa have been hit with the undisputable fact that the creation of competitive advantage lies in people. Organisations have increasingly recognised the potential for their people to be a source of competitive advantage. Not too long ago, so called HR functions was the preserve of “Personnel Managers” whose duties were to recruit and select, appraise, promote and demote. These superficial duties could be performed by any manager, it therefore never seemed necessary to employ an expert in the form of a human resource manager let alone create a whole department dedicated to HRM. Little attention was paid to human resource management issues and its impact on organisational performance. The emphasis on traditions and socio-cultural issues injected an element of subjectivity in „personnel manager‟ functions such as recruitment and selection, performance appraisal, promotion, demotion, and compensation.
In today’s competitive and rapidly changing business world, organisations especially in the health service industry need to ensure maximum utilisation of their resources to their own advantage; a necessity for organisational survival. Studies have shown that organisations can create and sustain competitive position through management of non-substitutable, rare, valuable, and inimitable internal resources (Barney, 1991). HRM has transcended from policies that gather dust to practices that produce results. Human resource management practices has the ability to create organisations that are more intelligent, flexible and competent than their rivals through the application of policies and practices that concentrate on recruiting, selecting, training skilled employees and directing their best efforts to cooperate within the resource bundle of the organisation. This can potentially consolidate organisation performance and create competitive advantage as a result of the historical sensitivity of human resources and the social complex of policies and practices that rivals may not be able to imitate or replicate their diversity and depth.
Lately, organisations are focused on achieving superior performance through the best use of talented human resources as a strategic asset. HRM policies or strategies must now be aligned to business strategies for organisational success. No matter the amount of technology and mechanisation developed, human resource remains the singular most important resource of any success-oriented organisation. After all, successful businesses are built on the strengths of exceptional people. HRM has now gained significance academically and business wise and can therefore not be relegated to the background or left in the hands of non-experts. Attention must be paid to the human resources organisations spent considerable time and resources to select.