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Innovative Strategic Human Resource Management Practices: Determinants

of Competitive Advantage among Selected Firms in the Phillipines

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DEVOTIO Journal of Business and Economic Studies

CopyrightO 2013 by the University of San Carlos

ISSN:2094-8794

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Devotio Joumal of Business and Economic Srudies
YoL7(2): t-21
O 2013, University of San Carlos Press

Innovative Strategic Human Resource Management

Practices: Determinants of Competitive Advantage
among Selected Firms in the Philippines

Divina M. Edralin

Abstract. Strategic Human Resource Management (SHRM) is the alignment

and linking of people with strategic organizational goals and objectives to
gain competitive advantage. In this regard, this paper aims to investigate the
degree lo which the bundle of innovative strategic human resource
management practices are implemented and if these SHRM practices
significantly inJlttence the ability to gain competitive advantage of selected
firms in lhe Philippines. Using a descriptive and causal research designs, a
survq/ wcts conducted among 1,899 emploltees from 30 dffirent Filipino-
owned companies. Survey Jindings show that employees perceitted that each
bundle of the innovative praclices per Human Resource Management
function is extensively implemented lo gain competitive advanlage in the
local and global markets. Statisticql results reveal that, among the five
vqriables wilh significant coelficients, the one with the highest proportional
odds ratio is Training and Development followed by Work-life Balance.
Therefore, innoyative Training and Development in Strategic Httman
Resource Management practices is the most significant determinctnt of
gaining competitive advantage among selectedfirms in the Philippines. It is
recommended that the companies qllocate wbstantial human capilal
investment and continuing innovation in lraining and development as well as
in work-life balance programs to ensure that firms will gain competitive
advantage,

Keywords: slrategic human resource mctnagement, competitiye advcrntage,

innovation, training and development, work-liJb balance
 Devolio Journctl of Business and Economic Studies

INTRODUCTION

People are the core and lifeblood of any organization. lt is human

resources that orchestrate and convert business inputs into marketable
outputs, such as services or products, in order to reap profit and become
sustainable. In order to "compete through people," companies have to do
a good job of managing human capital: the knowledge, skills, and
competencies that have value to an organization, e.g. strategies for
recruiting the best talents available, developing these talents in ways that
are firm-specific, helping them to become innovative, encouraging them
to share ideas, and rewarding their collaboration and teamwork (Snell &
Bohlander, 201 1).
Consequently, firms realized that employers and employees must be
partners in ensuring profitability, sustainability, and global
competitiveness. Using this human resource philosophy, successful
business organizations have adopted an approach where they empower
their workforce so that they could perform their tasks effectively by
themselves and become high-caliber employees. Leading companies
focus on their vision and redesign their organizational structures for their
growth and continued existence. Their primary intervention is to
encourage, support, and train their managers, supervisors, and rank-and-
file employees to improve their competencies for organizational
development. Moreover, leading firms ensure that their companies are
organizations where employees "trust the people they work for, have
pride in what they do, and enjoy the people they work with" (Great Place
to Work Institute, 2006). Specific examples of this are leading business
organizations like those listed in Fortune 100 of the Best Companies to
Work For, such as Google, Starbucks, Microsoft, Procter & Gamble, and
Nike. These firms have established formal Human Resource Units and
have vast experience and ability to support the growth in the number of
their people and the advancement of their existing employees. Their
respective human resource units have dealt with situations of large-scale
entry-level recruitment or with continuing significant support to the
development of first- and second-line management.
With many economies struggling under globalizatton, on one hand,
and increasing recent corporate scandals and resort to "right-sizing" and
outsourcing, on the other, the myth of long-term job security is seemingly
being abandoned. It is, therefore, not surprising to find that many
employees have adapted to survive, at the expense of organizational
commitment, job involvement, and job satisfaction. Acknowledging this
Edralin: Innovative Strategic Human Resource Management 3
Practices: Determinants of Competitive Advantage Among
Selected Firms in the Philippines

reality, the Best Employers that were listed in the Hewitt Survey - such as
BC Biomedical Laboratories Ltd. and Rothmans, Benson & Hedges Inc.
in Canada; Ritz-Carlton Cancun, Fedex Express Mexico, and 3M de
Chile S.A, in Latin Americal American Express International, Inc., Dell,
and Deageo Australia in Australia,New Zealand; and TNT Express
Worldwide Eesti AS, Microsoft Hungary, and Real Seguros in Europe -
these employers inspire people to do their best work, motivate them to
stay with the company, and cause them to promote the company to their
friends, family, and customers. Essentially, these firms create an
environment in which employees' needs are met and employees are more
engaged (Hewitt Associates, 2004).
Today, the distinctively good experiences and best practices of
many companies in the different parts of the world have become an
inspiration and opened the door to numerous firms, which likewise aspire
to be the "company to work for" or become "a model employer." CEOs
have realized that their common challenges are ensuring sustainability
through a changing environment; creating and delivering high
performance with fewer resources; and retaining and developing high-
quality talent (Hewitt Associates, 2003). The consequence of meeting
these challenges is gaining competitive advantage and ensuring their
long-term success in this globally uncertain world of business.
Generally, human resource management is defined as the utilization
of human resources or individuals to achieve organizational goals (Byars
& Rue, 1996; Snell& Bohlander,20ll; Mondy & Mondy,20l2). Human
resource management also refers to the "policies, practices, and systems
that influence employees' behavior, attitudes, and perfonnance" (Noe,
Hollenbeck, Gerhart, and Wright, 2008). It often involves "people
practices" which include recruitment, selection, training, development,
compensation, performance management, safety, health, and work-life
balance, as well as employee and labor relations. Dessler (2000)
characterizes human resource management as a set of policies and
practices one needs to carry out the "people" or human resource aspects
of a management position, including recruiting, screening, training,
rewarding, and appraising. An online resource page about Human
Resources Management by Smith (2006) considers human resource
management as

. . . the part of a business or company which recruits, develops and

utilizes an organization's personnel in the way which would benefit
the firm's aims and objectives. It creates alignment betrveen an
 Devotio Journal of Business and Economic Studies

organization's human resource management strategy and the core

objectives of a business considered as essential. Human Resource
Management is all about managing people, human capital and
culfure for business success.

The human resources management function includes a variety of

activities. Key among them are deciding staffing needs and whether to
use independent contractors or hire employees to fill these needs;
recruiting and training the best employees, ensuring their high
performance, and dealing with other performance issues; and ensuring
conformity of personnel and management practices to various regulations.
The activities also include management of employee benefits and
compensation, employee records and personnel policies.
On the other hand, strategic human resource management has
emerged as a significant issue in tandem with the increasing attention
being given by the cornpanies to strategy (Kazmi & Ahmad,2001).
Strategic human resource management is the alignment and linking of
people with strategic organizational goals and objectives to gain
competitive advantage and enhance the growth and sustainability of
businesses. It means that it is important to "match HRM activities and
policies to some explicit business strategy." Competitive advantage
implies having an edge over competitors through sorle core competencies
such as innovation, good quality, inimitable skills and price leadership
which clearly set a firm apart from other firms in the industry.
Strategic Human Resource Management (SHRM) began to emerge
"in the early 1990s in the USA, laying more emphasis on an integrative
and value-driven approach to Human Resource Management." (Jimoh &
Danlami, 201 t: p. 46). It focuses on issues such as the fit between human
resource practices and organizational strategic management, the
involvement of the human resources function in senior management
teams, the devolvement of human resources practices to line managers
and the value that is added to organizational performance by human
resource management (Bowen and Ostroff, 2004). lt also "involves
designing and implementing a set of intemally consistent policies and
practices that ensure that employees' collective knowledge, skills, and
abilities contribute to the achievement of its business objectives"
(Huselid, Jackson, & Schuler, 1997: p.172).
Since the concept of "strategic human resource management"
evolved in the USA, businesses in America are known to employ it more
frequently and passionately than Japanese or Taiwanese businesses
Edralin: Management
Innovative Strategic Human Resource 5
Practices: Determinants of Competitive Advantage Among
Selected Firms in the Philippines

(Huang, 1995). In a related study by Collins & Clark (2003), the

relationships between a set of network-building SHRM practices (with
aspects of both the extemal and intemal social networks of the top
management teams) and firm performance was investigated. The results
from a held of 73 high-technology firms showed that the relationships
between the human resources practices and firm performance (sales
growth and stock growth) were mediated through their top managers'
social networks.
Most of the studies on SHRM had been conducted in developed
countries (Huang, 1998; Collins & Clark, 2003; Karami, Analoui, &
Casworth, 2004; Jimoh & Danlami, 2011), revealing little knowledge
coming from transitional economies in Asia, such as the Philippines. It is
to acquire more information and contribute to the body of knowledge
from the latter's perspectives that this paper investigated the innovative
SHRM Practices that significantly predict the ability to gain competitive
advantage among selected firms in the Philippines. Specifically, this
research aims to answer the following questions:

1. What is the implementation level of the various innovative

SHRM practices as predictors of the firms for gaining
competitive advantage?
2. What degree of influence of each of the following innovative
SHRM practices will contribute to the firm's goal of gaining
cornpetitive advantage: (1) Recruitment and Selection; (2)
Training and Development; (3) Compensation; (4) Performance
Management; (5) Work-life Balance; and (6) Labor Relations?
3. What SHRM function is the most significant determinant in
gaining competitive advantage?
4. What are the emerging and innovative human resource
practices in the workpiace that attract and retain talents for the
firms?
 Devotio Journal of Business and Economic Studies

LITERATURE REVIEW

Analytical Framework

huror':rtive SHRI\{ f'r'irctices

. Recruitrnent ald Selectiorr
r Traiqilg aud Developmert
. Comperrsatio:r
r Performancellauagerneuf
r \l-ork-life Balarrce
r Labor Relatious

T
Figure 1. Innovative SHRM Practices as Determinants of
Gaining Competitive Advantage

The framework presented in Figure I is developed to guide the

researcher in her work on this interesting topic. In this proposed model,
the following assumptions are embedded:
First, human capital is the core and lifeblood of any organization. ln
order to "compete through people," companies have to do a good job of
managing human capital (Sneli & Bohlander, 201 1).
Second, strategic human resource management is the alignment and
linking of people with strategic organizational goals and objectives to
gain competitive advantage and enhance the growth and sustainability of
businesses. It is therefore important to "match human resource
management activities and policies to some explicit business strategy." It
is a principal mechanism which must align or integrate decisions about
people with decisions about the results an organization is trying to obtain.
Third, SHRM has assumed in recent years a vital and strategic role
in the creation of competitive advantage, as firms try to compete through
people who can develop human resources that are valuable, rare,
inimitable, and organized (Bateman & Snell, 2008).
Edralin: Innovative Strategic Human Resource Management 7
Practices: Determinants of Competitive Advantage Among
Selected Firms rn the Philippines

Fourth, successful strategic human resource management "invoives

designing and implementing a set of intemally consistent policies and
practices that ensure that employees' collective knowledge, skills, and
abilities contribute to the achievement of its business objectives"
(Huselid, Jackson, & Schuler, 1991: p.172).
Fifth. there are emerging innovative human resources practices in
the workplace that are now being r"rsed by the different firms to attract and
retain talents, as weil as to gain competitive edge.
Lastly, innovative strategic human resource management practices
are those implemented, formal and new or evolving bundle of activities
related to the following functions:

(l) Recruitment and selection refer to "any practice or activity

carried on by the organization with the primary purpose of identifoing
and attracting potential employees." However, because of differences in
their strategies, companies may assign different degrees of importance to
recruiting. In generai, all companies have to make decisions in three areas
of recruitment: personnel policies, recruitment sources, and the
characteristics and behavior of the recruiter. These aspects of recruiting
have different effects on who the organization ultimately hires. An
applicant's decision to accept a job offer-and the organization's decision
to make the offer-depend on the match between vacancy and applicant
characteristics (Noe, Hollenbeck, Gerhart, & Wright, 2004).
(2) Training and development. Training is a set of activities
aimed to facilitate leaming of knowledge, attitude, and skills among
people in the organization, which are intended, in tum, to improve their
current job performance and contribution to the achievement of
organizational goa1s. Development, on the other hand, involves long-term
planned efforts to enhance the total growth of the human resources that
will lead to the fulfillment of personal and organizational goals (Edralin,
2007).
(3) Compensation refers to all forms of financial retums and
tangible services and benefits that employees receive as part of an
employment relationship. Employee benefits, in particular, refer to the
part of the compensation package, other than pay for time worked,
provided to employees in whole or in part by employer payments (e.g.,
life insurance, pension, workers' compensation, and vacation). In sum, it
is the total of all rewards given to the workforce in return for their
services (Edralin, 2007; Mondy & Mondy, 2012).
 Devotio Journal ofBusiness and Economic Studies

(4) Performance management is the "process through which

managers ensure that employees' activities and outputs contribute to the
organization's goals" (Noe, et a1., 2004). It is crucial, especially when the
business is complex and goals are constantly changing. Measuring and
rnanaging performance is a challenging task and one of the keys to
gaining competitive advantage. The Hewitt Asia Best Employer study
(2005) was able to identify two performance management practice
characteristics that differentiate the Best Employers in Asia: Regular
feedback and Rigorous/effective performance management.
(5) Work-family balance may be defined as the degree to which
an individual is able to simultaneously balance the ternporal, emotional,
and behavioral demands of both paid work and family responsibilities
(Hill, Hawkins, Ferris, and Weitzman,2001). Firms are able to provide
work-life balance when employees' work is flexible and rotated, long-
hours are avoided, and various forms of wellness programs are offered in
the workplace.
(6) Labor or employee relations pertain to a set of processes and
procedures utilized in the interaction between the employees and
employer to attain their respective goals while accornmodating the needs
of both parties. This interaction can include commtrnication, interpersonal
relationships, participation, discipline, and grievance resolution.
According to Edralin (2003), labor relation is the dynamic process of
interaction between and among workers (represented by their union) and
the employer to achieve their respective goals. The Philippine Labor
Code stipulates that labor relations cover union administration, collective
bargaining, and dispute settlement.
Based on the earlier discussions and the above assumptions, this
theoretical framework has the following hypotheses that were tested:

Hypothesis l: The bundle of innovative practices in each of

the functions of SHRM is moderately (x= 3 50)
implemented to gain competitive advantage.
Hypothesis 2: The bundle of innovative practices tnthe Labor
Relations function of SHRM is the most
significant determinant to gain competitive
advantage.
Edralin: Innovative Strategic Human Resource Management
Practices: Determinants of Competitive Advantage Among
Selected Firms in the Philipprnes

METHODS

Using descriptive and causal research designs, a survey was

conducted among 30 companies in the Philippines. Of these 30
participating firms, 12 are engaged in manufacturing and 18 in the service
sector industry. As registered corporations, they have been operating for
at least ten years. Their employees number from at least 300 to about
2,000. These companies are profitable and have allocated at least 40o/o of
their budget in human resource related strategies on an annual basis.
Moreover, these corporations have formal HRM functions, policies, and
programs which are linked to their business strategies.
The specific item indicators included among the innovative SHRM
practices relate to: (l) recruitment and selection; (2) training and
development; (3) compensation; (4) performance management; (5) work-
life balance; and (6) labor relations. These items were taken from the
survey questionnaire for the Model Employers (which was adapted from
the Hewitt Asia's Model of Best Employers in 2005) conducted by the
researcher in2007.
Depending on the number of total employees of each of the 30
participating companies, a sample size ranging from 50-100 respondent-
employees were randomly selected. The list of the qualified employees
(should be permanent/regular and has been with the company for at least
one year) provided by the Human Resource Unit was used. The data
coilection was completed in a span of five trimesters or 1.5 years. Based
on the survey conducted by the trained research assistants, a total of 1,899
valid responses from supervisory and rank-and-file employees were used
for the data analysis. Using a five-point Likert Scale, the survey
participants indicated their level of agreement or disagreement to the
extent of implementation of different innovative HRM practices by their
company. The levels of ratings on the innovative SHRM practices were
measured using the following conversion score: 1.00 - 1.83: Poorly
Implemented; 1.84 - 2.67 = Fairly Implemented; 2.68 - 3.51
Moderately lmplemented; 3.52 - 4.35 = Extensively Implemented; and
4.36 and above : Very Extensively Implemented. The competitive
advantage variable was also scored similarly by the survey participants
based on the five-point Likert scale.
To test the first hypothesis, the Test About a Population Mean was
done to prove if the overall mean response of the employees in each of
the HRM function differs from the assumed value of x: 3.50. To test the
l0 Devotio Journal of Bttsiness and Economic Studies

second hypothesis, the Ordered Logistic Regression using the Maximttm

Likelihood Estimation was run through EViews 4.0 software.
The data on the emerging innovative human resource management
practices in the workplace were taken from (l) the qualitative responses
given by the key informants such as the CEO, Human Resource
Management Unit Manager, and HRM Officer representing the
management of the firm; (2) Employees'Manual; (3) Annual Report; and
(4) Collective Bargaining Agreement of unionized companies.

RESULTS AND DISCUSSION

The change in the leadership style and governance principles of the

national executive and legislative branches of the Philippine government
has brought about some substantial growth in the economy as shown in
the increase in the GDP, employment rate and trade, as well as the
increase in the confidence of the business sector to invest in the country.
The demand and export of overseas Filipino workers (OFWs) is an
indication that the competent and committed human resources are among
our sources of competitive advantage globally. Therefore, the Department
of Labor and Employrnent in partnership with the local govemment units
and the academe has included it as a priority in its Development Plan, the
long-term manpower training and the development of the local Philippine
labor force to meet both the local and intemational demands.
Particularly the owners and managers of the respondent companies
have realized that in order to succeed and become sustainable, they have
to implement and execute effective business growth strategies through
innovation, change management, more investment in human capital, and
utilization of information technology coupled with a high risk stance.
They have learned of the vital strategic role in creating a competitive
advantage of competing through people, because they have to develop
their human resources by making them valuable, rare, inimitable, and
organized (Edralin, 2008). Management also realized that new and
creative programs and practices that concern people in the organization
have to be developed and implemented to iure and keep a pool of highly
committed, productive, and competent workforce. Thus, through their
HRM units, companies have adopted on a continuing basis various
innovative people-related practices to gain competitive advantage in the
locai and global markets.
Edralin: Innovative Strategic Human Resource Management 1 1

Practices: Determinants of Competitive Advantage Among

Selected Firms rn the Philippines

4.1 Innovatiye SHRM Prcrctices and the Level of their lmplementution

to Gain Competitive Advantage

Table I. Overall Mean Scores of each of the SHRM Function

and their p-value

HRM Functions Survey Results Hypothesized p-value

Mean Mean two-tai
Recruitment and 3.6204 3.5000 0.0000 ***
Selection
Training and 3.8293 3.5000 0.0000 *:r'r
Development
Compensation 3.8037 3 ,5000 0.0000 *'t't
Performance 3.6540 3.5000 0.0000 ,'"r*
Management
Work-life Balance 3.6987 3.5000 0.0000 *+*
Re 3.5000 0.0000 **r.
* Significant at a = .005

There are four or five specific innovative practices in each SHRM

function that were rated by the employees as determinants in the gaining
of competitive advantage. The data reveal that the Training and
Development SHRM function has the highest survey mean score (x :
3.8293), while Recruitment and Selection garnered the lowest overall
mean rating (x = 3.6204). The overall mean rating on each of these
bundles of HRM practices differs with the hypothesized mean of 3.50.
The results of the Test of Mean against a hypothesized value indicated
that there is a significant difference befween the survey mean and the
hypothesized mean. Thus, the null hypothesis that each of the HRM
functions is moderately implemented (x : 3.50) is not accepted. This
indicates that employees perceived that each bundle of the innovative
practices per SHRM function is extensively implemented in order to gain
competitive advantage in the local and global markets. lt also shows that
Filipino firms recognize the value of investing in creative, new, and
responsive people management practices such as one-on-one mentoring,
wellness programs, tailor-fit fringe benefit packages, talents recruitment
based on the right fit, attractive variable incentive pay scheme, and
transparent succession planning. These firms believe in valuing their
people in many different ways so that the latter will feel equipped,
empowered, engaged, respected and cannot be easily copied by
t2 Detolio Journal of Business and Economic Sludies

competitors. Moreover, the present study has a higher mean score than
the study of Jimoh and Danlami (2011), which showed that "strategic
HRM was moderately practiced by the companies operating in the
Nigerian manufacturing sector."

4.2 Innovative SHRM Prctctices as Determinants of Caining

C ompet it ive A dvcrntcrge

Table 2. Estimation output for execution of innovative SHRM

strategies for gaining competitive advantage

HRM Coefficient Std. Error Chi-square Prob.

Functions Statistic
Recruitment 0.3636 0.r401 6.7367 0.0094*
and Selection
Training and 1.1456 0.0970 39.4965 <0.0001 *
Development
Compensation 0. r 860 0.0920 4.0832 0.0433*
Performance -0.0716 0.0872 0.6745 0.41 I 5
Management
Work-life 0.5644 0.0905 38.9214 <0.0001 *
Balance
Employee 0.33 r 7 0.1174 7.9833 0.0047*
Relations
* Significant at a : .05

The ordinal logistic regression model generated a Likelihood Ratio

(LR) statistic equal to 453.1530, with a probability less than 0.0001. The
p-value of this LR statistic is very low, which leads to the conclusion that
at least one ofthe predictors'regression coefficient is not equal to zero in
the model.
In the logit parameter estimates, each of the six strategic human
resource management practices has a positive effect (except
compensation) on the ordered log-odds of a higher response category,
while the other variables in the model are held constant. The variable with
the highest ordered log-odds regression coefficient is Training and
Development (1.1456), followed by l4tork-life Bqlance (0.5644).
Performance Management, on the other hand, has the lowest ordered log-
odds regression coefficient (-0.0716). The coefficient of all the variables,
except for Performance Managetnent, is all significant at the 0.05 level of
significance.
Edralin: Innovative Strategic Human Resource Management l3
Practices: Determinants of Competitive Advantage Among
Selected Firms in the Philippines

Table 3. Odds ratios for execution of innovative SHRM strategies

for gaining competitive advantage

HRM Functions Odds Ratio

Training and Development

Work-life Balance 1.758

Recruitment and Selection

Labor Relations

Compensation 1.204

Among the five variables with significant coefficients influencing

gaining competitive advantage, the one with the highest proportional odds
ratio is Training and Development. The variables lltork-life Bctlance
(1.758), Recruitment and Selection (1.438), Labor Relations (1.398) and
Compensation (1 .204) have less influence than Training and
Development, but significant nonetheless. Thus, the null hypothesis that
the bundles of innovative practices in the Lctbor Relations function of
SHRM is the most significant determinant for competitive advantage is
not accepted. As such, innovative Training and Development is found to
be the most significant determinant among the selected firms in the
Philippines.
It is interesting to klow that the innovative training and
development programs of these Filipino firms focus both on the technical
and behavioral competencies of the workforce. The emerging technical
skills trainings are mostly on research and development; operations
management; business process improvementsl use of IT in finance and
HRM; greening the environment; sustainability strategies; and use of
social nelworks in marketing. On the other hand, current behavioral skills
trainings are concentrated on critical and creative thinking for problem-
solving; visioning and strategic mind-set; empowering leadership;
building effective teamwork; work ethics, cultural behaviors, and values
enhancement; and managing change for the common good. The mode of
training is not confined to the training room but many companies
implement one-on-one mentoring programs and continual coaching. In
these instances, the managers and supervisors act as the teachers/trainers
t4 Devotio Joltrnal of Business and Economic Studies

to their subordinates. Overall, management considers that the

combination of these training programs on a regular basis has contributed
in the firm's profitability, positive social impact, and environment-
friendliness, aside from gaining in competitiveness.
Lastly, the statistical results reveal that, among the five variables
with significant coefficients, the one with the highest proportional odds
ratio is Training and Development followed by l(ork-life Balqnce. This
means that when people in the workplace are given training on both the
technical and behavioral competencies on a continuing basis using one-
on-one mentoring and coaching system, in addition to a balanced work
and family life condition, they will make for the inimitable competitive
advantage of the Filipino firms.
Moreover, these firms should become more aware that through the
execution of various innovative strategic HRM practices related to
training and development and work-life balance functions, they can gain
competitive advantage amidst stiff competition in the local and global
markets. Concretely, strategic training activities should be geared towards
facilitating leaming of knowledge, attitude, and skills among all
employees in the organization, which are intended, in tum, to improve
their current job performance and contribution to the achievement of
organizational goals. Strategic development activities, on the other hand,
should be focused on long-term planned efforts to enhance the total
growth of the employees that will lead to the fulfillment of their personal
ar,d organizational goals. It is therefore imperative for the companies to
have adequate training and development programs that are proactive and
aligned with the personal goals of employees as well as the company.
This will result to having a pool of highly motivated, committed,
satisfied, and productive workforce who can make the customers huppy.
On work-family balance as a significant function, strategic efforts
should be able to simuitaneously balance the temporal, en.rotional, and
behavioral demands of both paid work and family responsibilities of
individual employees. Specifically, firms are able to provide work-life
balance when employees' work is flexible and rotated, long-hours are
avoided, and various forms of wellness programs such as sports, athletics,
stress management seminars, and proper health and nutrition programs
are offered in the workplace. When employees are relaxed and healthy,
they are able to perform better and relate with others more harmoniously.
This will lead to having a set of cooperative and team-player talents in the
workplace.
Edralin: Innovative Strategic Human Resource Management 15
Practices: Determinants ol Competitive Advantage Among
Selected Firms rn the Phi)rppines

Finally, with a creative strategic mindset, management needs to

ensure that programs of their HRM units are aligned to the company's
objectives, policies and programs, that the various innovative people-
related practices are well-formulated, and that adequate resources are
allocated and implemented on time, and assessed on a regular basis for
the common good of all the stakeholders. These companies thus should
adopt a vision-mission statement which their employees can also identify
with.

1.3 Emerging Innovative l4/orkplace HRM Practices

Based on the experiences of the surveyed participating companies,

several emerging innovative workplace human resource management
practices can be identified, as presented below:

Table 4. Emerging innovative workplace HRM practices

Recruitment . right . Competency-

Select . Extens;ve . Bayanihan placement
and Selection on based (includes
people based on- boarding/ o Balanced Scorecard
and
culture professional orientation of . lnvolvement of
fit
personality training and new, Managers and future
. Focus on qualiflcations) employees supervisors and peers tn
Global EmPloYer recruitment and . Hiring the screening process
Branding selection flrst-line . Use of modern
. Use of . Online managers rnterviewinq approaches
multiple recruitment 1r0m wrtnin
sourcing of . Automated employee
applicants assessment ranks
activities lnteractive
simulation
Training and . Customized . Training & . Extensive . Use of ICT for
Development training development are and well- training
. Extensive aligned with the planned
. Developing
use firm's mission, training and
employees continually
strategy,& culture development
of external
. pr0gram
. lndividual coaching
consultants Core
/mentoring of managers &
o On-the-job
curriculum as . Adequale
supervisors
guideline for investment in
training developing both technical . Conduct of training on
. Assessment employee and cultural behaviors and
of employees competencies values.
behavioral
skills and Sendlng trainings
behavior before employees for
and after the training abroad
training to
gauge its impact
16 Devotio ..lotrrnal of Business crt'rtl Econ<tmic Studies

Performance . Providing
' Competency- . Linking
' Singular performance
Management clear, based perlormance management system
measurable, performance with career . Use of a systematic
and specifrc management development on-line 360-degree
performance . Regular system performance management
indicators feedback on an . Use of mechanism
. Linking pay annual or ['1BO for . Electronicperformance
with quarterly basis Performance monitoring
performance appraisal
Compensation r Use of the . Cafeteria- . Benefits . Use of Employee
and Benefits "Star Model" for style/ above industry Owners' Council
merit pay flexible benefits standards . lmplementation of
decisions
. Linking . Flexible Profilsharing and Gain-
. Career performance team-based sharing schemes
clusler pay/ appraisal system and skills-
pay banding with based pay
compensation
system

Labor . Creation . Recognltion . OPen- . Working closely with

Relations and regular of workers' right door policy the union
meetings to unionize . Provision . Monthly forum or
of the Labor- . Use of of Newsletters dialogue with employees
Management Grievance and . Use of information
Council [/achinery Handbooks technology like emaal and
. Formation . Annual . Bayanihan intranet
of autonomous Workplace system

Work Life . Wellness . Paternity . Creation . Plant-wide safety

Balance pr0grams leave that is of a Safety, program
. Job above the Health, & . Flexible workplace
protected statutory Environment
Program
minimum Committee
maternity leave
. . . Paid Sabbatical leave
that is above the Holistic OPen
statutory activities which office
minrmum include spiritual, . Birlhday
. Flexible family, health, celebrations
and sports
work hours
pr0grams
. Famity
pr0gram Day

There are emerging innovative worklorce lnanagentent practices

that are irnpiemented in each of the human resource functions. Hurnan
resource strategies and programs now focus on the use of information
technology particularly for recruitment and training. Another practice is
the creation of structures and systems (autonomous work teams,
workplace forums, mentoring, and competency-based training) that
intentionally enable individual employees and teams to translate the
Edralin: Innovative Strategic Human Resource Management 17
Practices: Determinants of Competitive Advantage Among
Selected Firms in the Philippines

firm's larger strategic goals into actual day-to-day work and thereby
achieve the corporate goals. With management fully performing their
leadership roles, companies have been increasingly focusing on their
corporate vision-mission-goals, effectively communicating to the
employees their business strategies, and ensuring that people will stay in
the company (by providing competitive compensation and benefits
package and quality of work life conditions). The labor relations trend
that is evolving through the adoption of employee participation
mechanisms (such as the union, labor-management council, grievance
machinery, "bayanihan" or cooperative teamwork) seems to be moving
towards a productive social partnership between labor and management.

CONCLUSION
Human resource management performs an integral and strategic
function in managing firms. It is a key management tool since human
resources are considered essential in the continued existence and success
of any business. It is, therefore, not surprising that management
continuously invests in its human capital. Since management
acknowledges that, aside from the allocation of adequate financial
resources to specific workforce management practices, human resource
management is critical to the success of their respective organizations,
they have also exerted much effort to develop innovative strategic human
resource practices to attract and retain their talents in the organization and
ensure competitive edge.
These finns in the Philippines are cognizant of the fact that, through
the execution of various innovative strategic HRM practices, they can
gain competitive advantage amidst stiff competition in the local and
global markets. With a creative strategic mindset, management has
ensured that their HRM units are aligned to the company's objectives,
policies and programs, that the various innovative people-related
practices are well-formulated, and that adequate resources are allocated
and implemented on time, and assessed on a regular basis for the common
good of all the stakeholders. These companies thus adopt a purpose,
mission or vision statement which their employees can also identify with.
The survey findings show that the employees perceived that each
bundle of the innovative practices per HRM function is exlensively
implernented to gain competitive advantage in the local and global
markets. Statistical resuits reveal that, among the five variables with
18 Devotio Journol of Btrsiness and Econontic Studies

significant coefficients, the one with the highest proportional odds ratio is
Training and Developmenl followed by llork-life Bctlance. As such, of
the SHRM practices, innovative Training and Developrnent is singled out
as the most significant determinant in the gaining of cornpetitive
advantage among the selected firms in the Philippines. This means that
when people in the workplace are given training on both the technical and
behavioral competencies, in addition to a balanced work and family life
condition, they will make for the inimitable competitive advantage of the
Filipino firms.
There are emerging innovative workforce management practices
that are implemented in each of the human resource functions. Human
resource strategies and programs now focus on the use of information
technology particularly for recruitment and training. Another practice is
to create structures and systems (autonomous work teams, workplace
forums, mentoring, and competency-based training) that intentionally
enable individual employees and teams to translate the firm's larger
strategic goals into actual day-to-day work and thus achieve the corporate
goals. The labor relations trend that is evolving through the adoption of
employee participation mechanisms is the labor-management council in
which "bayanihan" or cooperative work teams between labor and
management seern to be engaging in productive social partnership. There
are emerging workplace trends and best HRM practices related to
recruitment, training and development, compensation, performance
management, quality of work life, and labor relation activities, but their
types and comprehensiveness depend largely on the financial capacity
and size of the company. It appears that the bigger companies have more
variety and comprehensiveness in their HRM practices.

RECOMMENDATIONS

Although the findings of this study show that the practices of many
leading companies in the Philippines are mostly consistent with those of
the companies in other countries, it is suggested that further studies be
undertaken to focus on the formuiation and evaluation of innovative
SHRM practices as they relate to gaining competitive advantage and
other variables like patents registration and new products/new
designs/new processes. Case studies of longitudinal nature may be
interesting to pursue to supplement cross-sectional studies. In addition,
examining important potential mediators of the link between SHRM
Edralin: Innovative Strategic Human Resource Management 19
Practices: Determrnants ol Competitrve Advantage Among
Selected Frrms rn the Philippirrcs

practices and firm performance remained unmeasured in this study. In

particular, future research should examine the potential mediators
between SHRM practices and competitive advantage like government
regulation, globalization, infomation technology, and culture of society.
Based on the findings, it is imperative that the companies allocate
substantial human capital investment for continuing innovation and long-
term plans especially in training and developrnent, in addition to work-
life balance programs, to ensure that firms will continue to gain
competitive advantage. Some specific programs that should be aligned
with strategies and shor-rld be given priority are: (1) training programs in
the areas that cannot be easily transferred and copied when an employee
leaves the finn; (2) work-life balance prograrns such as faniily bonding
and welfare activities as well as stress management and sports activities
that will enhance personal wellness but also foster camaraderie among
co-employees; (3) programs that will create a humanistic workplace
environment in order to stimulate creativity and bring out the best among
people; and (4) programs to improve the recruitment and selection
strategies so that the people hired will match the organization's vision and
mission.
As a final note, people responsible for SHRM must ensure that there
is a well-alignment in the formulation, implementation, and evaluation of
these innovative people-focused strategies in the company.

Acknowledgement
I would like to acknowledge the research assistance provided by my
doctoral students E,dgar Nierras, Pamela Resurrecion, and Corazon
Magpayo of the De La Sallc University-RVR College of Business.

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