Resource-Based Theory: Institutional Factor for Effective Strategic Human Resource Management in Public Organizations

Abstract

The thrust of this study was to examine the contribution of Resource-Based Theory (RBT) on Strategic Human Resource Management (SHRM). Specifically, the study examined the influence of SHRM practices such as recruitment and selection, training and development, compensation, performance evaluation, motivation management, job design, talent management and supervision basing on RBT. This conceptual paper employed a desk review of empirical and theoretical literature where journal articles, textbooks, working papers, conference proceedings and government publications were reviewed. To ensure quality and relevance of the review, selection criteria of literature included relevance, credibility, recency, rigorous studies together with methodological diversity. The findings revealed that effective management of human resources hinges on the basic understanding of the nature of employees as the key resources for public organizations to achieve competitive position and that the understanding is only possible with the adequate knowledge of the basic tenets of RBT. The paper argues that RBT has implications for effective implementation of SHRM practices on enhancing employees’ performance. Therefore, SHRM practices when correctly orchestrated to public organizations’ strategies can make them gain competitive advantage. The paper concludes that the RBT provides a theoretical lens for public organizations to effectively implement SHRM practices to enable public organizations achieve goals.