AUTHORS:

PHD STUDENT LORENA PARA GONZÁLEZ

(University Centre of Defence at the Spanish Air Force Academy) PHD ÁNGEL RAFAEL MARTÍNEZ-LORENTE

(Technical University of Cartagena) PHD DANIEL JIMÉNEZ-JIMÉNEZ (University of Murcia)

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INTRODUCTION

Human resources: competitive advantage for

companies. Continuous improvement and TQM. EFQM model “People criterion”. Relationship between “People criterion” and

organizational performance.

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AIM

Analyze the role of the personnel function on the organizational performance, contextualizing this research on EFQM model of excellence, emphasizing the task of human capital on it.

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EFQM MODEL OF EXCELLENCE Aim: to help European companies to be more competitive and to

demonstrate that Excellence is essential.

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HUMAN RESOURCES ON THE EFQM MODEL (I)

Positive empirical evidence: effect of HRM on performance and results.

People criterion is divided in subcriteria: 1.- Planning, management and improvement of HR 2.- Identification, development and maintenance of knowledge and capability of persons. 3.- Implication and assumption of liability. 4.- Existence of dialogue among people. 5.-Compensation, acknowledgment and attention. Relationship among enablers and results supported.

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HUMAN RESOURCES ON EFQM MODEL (II)

EFQM model helps to get a major effectiveness of the job.

A company could achieve a superior satisfaction of their employees provided that it is concentrated on the improvement of the completion of each worker (Eskildsen & Dahlgaard, 2000):

H1: People criterion in the EFQM model is positively related to organizational performance.

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HUMAN CAPITAL AND THE COMPETITIVE ADVANTAGE OF THE FIRM (I)

Human capital: people possess skills and abilities that provide a major performance to firms.

Human resources can add value to the company, since they are unique and difficult to replicate or substitute.

Human capital value: capacity to improve the

efficiency and effectiveness of the firm. Human capital uniqueness: unique routines and

procedures that have limited value outside the firm.

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HUMAN CAPITAL AND THE COMPETITIVE ADVANTAGE OF THE FIRM (II)

“Core employees”: firm- specific human capital. Positive impact of human capital on performance (Hitt

et. al., 2001), especially valuable and specific human capital:

H2: Firm-specific human capital is positively related to organizational performance.

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HUMAN CAPITAL AND THE COMPETITIVE ADVANTAGE OF THE FIRM (III)

Valuable human capital relates to the capability to develop a better efficiency of the firm. This perspective asserts that in order to obtain a higher firm performance, the abilities, competences and skills of the employees have a key role (Buller and McEvoy, 2012).

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HUMAN CAPITAL AND THE COMPETITIVE ADVANTAGE OF THE FIRM (IV)

An appropriate personnel recruitment and selection policy, along with a workforce that is trained, involved and committed to quality and to the improvement of the activities of the organization must have an effect on its human capital and the improvement of the organization’s key processes.

H3: Valuable human capital is positively related to organizational performance.

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HUMAN CAPITAL AND THE COMPETITIVE ADVANTAGE OF THE FIRM (V)

Excellent companies should count with personnel, that have knowledge and competences valuable and specific for each company.

Design every organizational system paying attention to attracting, developing and motivating the best people (Lawler III, 2009): COMPETITIVE ADVANTAGE.

Nabitz et. al. (2009) show that some measures for people

criterion of EFQM model affect positively human capital: H4: People criterion in the EFQM model is positively related to human capital.

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HUMAN CAPITAL AND THE COMPETITIVE ADVANTAGE OF THE FIRM (VI)

Buller and McEvoy (2012) found in their research that certain HRM practices suggested by the People criterion of the EFQM model, such as an incentive compensation or performance assessment, contribute positively to create distinctive competences.

Firm-specific human capital is considered as an essential intangible resource of an organization, because is difficult to imitate due to the complexness of the creation of distinctive competences (Chisholm and Nielsen, 2009).

H5: People criterion in the EFQM model is positively related to firm-specific human capital.

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PROPOSED MODEL

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METHODOLOGY (I) Population and Sample: 3.814 companies from SABI

database with more than 100 employees. Structured questionnaire via webpage led to

following managers: quality, production, human resources and marketing.

Significant correlation of 0.823 (p=0.01) between

number of companies at each sector in the sample and population.

Likert scale of 5 points. 14

METHODOLOGY (II)

Measures: - EFQM people criterion: 10 items from the subcriteria. - Value and uniqueness of human capital: human resource architecture of Lepak and Snell (2002). - Performance: 4 items for each four results criteria of EFQM performance criteria. - Control variables: organizational size and antiquity.

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METHODOLOGY (III) Analysis: structural equations modeling to test the

hypotheses, using EQS 6.1 software.

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Mean SD Lowest

t-value

Cronbach

alpha SCRa AVEb

Personnel criteria 4,0756 ,44165 - ,862 - -

Human capital value 3,7085 ,53102 6,647 ,809 ,824 ,501

Human capital uniqueness 3,2736 ,69811 11,151 ,912 ,911 ,672

Performance 3,9956 ,40776 5,982 ,788 ,798 ,510

χ2(74)=110.280, NNFI=0.968, CFI=0,974, IFI=0,974, GFI = 0,927, RMSEA=0,050

a Scale composite reliability (qc=(Aki)2 var (n)/[(Aki)2 var (n) +Ahii]; (Bagozzi and Yi, 1988)

b Average variance extracted (qc=(Aki)2 var (n)/[(Aki)2 var (n) +Ahii]; (Fornell and Larcker, 1981)

RESULTS H1 supported: companies that follow HR policies mentioned in people

criterion of EFQM will obtain better results. H2 and H3 supported: human capital value and uniqueness are

important to obtain better results. EFQM model incoporates HR policies that help to generate human capital in organizations.

Value and uniqueness human capital will play a mediator role for

emphasizing the effects of human management policy in EFQM over organizational performance.

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Paths Standardized coefficient Td Hypothesis

People criterion → Performance ,418 4,705 Supported People criterion→ HC value ,393 4,307 Supported People criterion→ HC uniqueness ,355 4,685 Supported HC value → performance ,149 2,049 Supported HC uniqueness→ performance ,248 3,270 Supported

RESULTS (II) H4 and H5 supported: for a successful

implementation of an excellence model, it is crucial that the executives acquired a role of “executives of persons”. The aim is to create HRM practices aligned with strategy, connecting effective and motivated employees with the organizational strategy, improving, therefore, performance

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CONCLUSIONS - HRM play a key role in firm’s competitive advantage. - Human capital value and uniqueness create a

competitive advantage for the firm. - Positive relation among personnel management and

organizational results. - An application of the principles included in the

“people criterion” of EFQM model increases the satisfaction of employees.

- HC value and uniqueness play a mediation role in the relationship between people and performance criteria in the EFQM model.

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CONCLUSIONES (II) FUTURE RESEARCH

Examine which HRM practices are linked to the model and their impact to organizational performance.

Analyze what type of organizational culture is

required to foster the relationships of the model. Compare which HRM practices are derived from

EFQM and TQM or ISO norms.

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