GE has invested billions of dollars to create a human resource management
(HRM) system that allows it to acquire and build a highperforming
workforce that labors to achieve its ambitious goals. For example, GE
expects all its operating divisions to be the leading companies in their respective
industries. Its employees are always in high demand by other companies because
they have received excellent training and have developed extensive job knowledge.
Indeed, its top managers are often recruited to become the CEOs of other leading
companies. GE's goal, however, is that its best performers will never want to leave
the company, which is one more reason why it has created a fair and equitable HRM
system to provide the training, interesting jobs, rewards, and chances for success that
keep its employees motivated to work hard.
In this chapter, we examine how a company's HRM system is used to acquire and
build employees' skills and capabilities. Remember, their skills and abilities create
much of the value in the products a company makes and sells. First, we provide an
overview of the five main components of human resource management: recruitment
and selection, training and development, performance appraisal and feedback, pay
and benefits, and labor relations. Second, we examine each of these components in
turn, focusing on how a company that creates a fair and equitable HRM system can
use it to increase efficiency, quality, innovation, and responsiveness to customers. By
the end of this chapter, you will understand why a company's human resources are
often the ultimate source of its competitive advantage and profitability.
