selecting staff in an effective manner can both avoid undesirable costs – for example those associated with high staff turnover, poor performance and dissatisfied customers – and engender a mutually beneficial employment relationship characterized, wherever possible, by high commitment on both sides.” Becker and Huselid, 1992; Schmidt, Hunter, McKenzie and Muldrow, 1979 found out that “selectivity in staffing is positively related to organizational performance” (Delaney & Huselid, 1996; p. 951). According to Huselid (1995, p. 637), “recruiting procedures that provide a large pool of qualified applicant, paired with a reliable and valid selection regimen” will have progressive influence on organizational performance. The vice-versa in the recruitment and selection processes will reduce the performance of organization. The flaw in recruitment and selection will open way for self-interest to dominate over organizational interest. Knowledge Development Guest (1997) model of HRM proposes the “performance at individual level depends on … possession of necessary skills and abilities.” Developing knowledge of the employees have direct impact on the organizational performance. Training, experiences guiding and teaching can have progressive impact on the performance of the organizations (. Improving and upgrading knowledge has become must in the changing work environment. Boxall holds that knowledge development can “create firms which are more intelligent and flexible than their competitors” achieving ‘sustained competitive advantage’ over other companies (Armstrong, 2009; p. 31). Firms need to have “technology infrastructure, organizational structure and [conducive] organizational culture which are linked to a firm’s knowledge infrastructure capability; and knowledge acquisition, knowledge conversion, knowledge application and knowledge protection which are linked to the firm’s knowledge process capability” (Alavi and Leidner, 2001; Gold et al., 2001, as cited in Mills & Smith, 2010, p. 156). Comprehensive knowledge management can make human capital unique, inimitable and rare. Companies such as Tesco believe in firm’s knowledge via employees to enhance its productivity and gain competitive human capital advantage .
Rewards Rewards can be either in tangible or intangible. Reward is a tool to motivate employees of the firm. Harakiewicz’s model states that the “performance-contigent reward causes individuals to care more about doing task well” than a performance feedback without reward (Eisenberger, et al., 1999; p. 1027). Another interesting relation is drawn by Stockholm School of Economics. The study found out that when employees are highly motivated, they work harder, resulting in superior performance . Establishing performance-based reward can literally transform organization for “it can unlock employee potential, retain and motivate…high performers, and ultimately deliver healthier financial results” (Qikker, n.d; p. 2). The success of Whistler and Blackcomb company is associated with the motivational rewards. The company compensates employees with paid vacation, get together party, recognizing the services rendered to the company, low cost child care, medical and career benefits . Reward is a sort of incentives and compensation to the employees. It can create a positive energy in the employees to perform the job entrusted effectively by motivating the employees. Organizations implementing “merit pay or incentive compensation systems [can] provide rewards to employees for meeting specific goal” (Delaney & Huselid, 1996; p. 951). Motivation and rewards also enables employees to contribute to value addition and competitive advantage . Internal Communication Organizations have started to give importance to internal communication. Fey, et al (2007, p. 8) believes that “sharing of information on, for example, strategy and company performance conveys to the employees that they are trusted.” This motivates employees to work towards achieving organizational goals. For instance, in Finland internal communication has facilated in motivating employees . This view is further valiadated by Argenti, arguing that organizations have “become more focused on retaining a happy workforce with changing values and different demographics” by improving internal communication to achieve competitive advantage (cited in Sincic & Vokic, n.d, p. 7).