HRM AND COMPETENCY BUILDING

      

   Competency building is a recent and widely used term among HRM professionals and among the employees. Michael Porter's book, "Competitive Advantage",
has proposed that the competitive advantage for an organization is dependent on its distinctive capabilities to use the available resources for value creation. One of the fundamental and generic models of competitive advantage is,

  

Resources------------>{Distinctive competencies}------------>Capabilities
                                                 .
                                                 .
                                                \/
                                                \/
                                         Cost advantage or
                                      Differentiation advantage
                                                 .
                                                 .
                                                \/
                                                \/

                                       Value creation

   

    The diagram above shows that a firm's activities are based on the different resources it has- people, funds and materials, and the abilities of firms will differ from one another, A company with unique abilities can have an advantage over others and thereby ensure its stock holders, investors and employees are benefited.