Human Resource Management and the role of its practices in Innovation for Competitive Advantage

In contemporary strategic management the role of human resource management has changed dramatically, where the new concept of HRM sees people as the most important part of the organizations. They do not participate just to make business decisions (for most of its existence), but companies now require HRM to be the main players while fighting to be competitive and stay successful and to find creative ways for adding values to the business. In order to develop the idea, Human Resources as one of the most important sources of sustained competitive advantage, in this research we shall discuss some issues regarding how HRM function can be related to the company strategy to gain desired competitive advantage and aims to show how HRM can contribute towards enhancing the competitiveness of a company. Wilson and Lado (1994) submitted the hypothesis that the most complex HRM system is assumed to be guaranteed as s source of sustainable competitive advantage. In today's world the competitive advantage is not imaginable without innovation, where HR practices have the most significant potential to promote organisational innovation.