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Abstract

HRD has been seen as an issue that is critical for U.S. corporations so that they can remain competitive. Yet little has been known about the strategic role of HRD and how it may influence corporate performance. In this study, we have argued that HRD plays an immensely strategic role when combined with effective recruitment and compensation policies. These three activities together contribute to the company's human resource (HR) orientation and create sustainable competitive advantages for organizations. Data from fourteen manufacturing industries supported the proposition that companies with a strong HR orientation performed significantly better than firms with a weaker HR orientation. Suggestions were offered with respect to the strategic and developmental role of HR management.