Human Resource Management Goals and Competitive Strategy

1 Human Resource Management Goals and Competitive Strategy

Our team developed a unique competitive strategy focussed on recruiting and retaining top

talent instead of just maximizing operational effectiveness (having the lowest cost per unit of output).

Though we considered operational effectiveness (productivity in the context of the simulation) to be

necessary, we did not deem it to be a sufficient strategy to consistently outperform our rivals. We

reasoned that trying to do the same things as our competitors in a more efficient way would be

unsustainable in the long-run, whereas recruiting, developing, and retaining the best talent in the

industry would give us a long-term edge over the rest of the industry.

To measure the success of our strategy, we wanted to set quantifiable goals assessing the

knowledge, skills, and abilities (KSAs) of our employees, our ability to retain employees, and our

operational effectiveness. The latter two were simple: we set a superlative goal of having the lowest

turnover in the industry and a loose goal of consistently having productivity in the top half of all

firms. While being the most productive firm is always ideal, we did not want to focus on being the

most productive because the tradeoffs in other areas would have been too high.

With no official way of quantifying our employees’ KSAs, we struggled to determine a valid

and reliable way to measure them. After some consideration, we agreed that setting another

superlative goal of having the highest employee morale in the industry would be the most accurate

measure of KSAs, because when people feel appreciated and accomplished, they are more likely to

invest their knowledge, skills, and abilities in the company that made them feel that way.

To achieve our three goals of having consistently competitive productivity and the industry’s

highest morale and lowest turnover, we developed a strategy based around the use of intrinsic

motivators to develop the best human capital, and prospect theory to reduce turnover.

We initially struggled to find a way to provide employees with lots of room for growth in the

company,