AN INVESTMENT PERSPECTIVE OF HUMAN RESOURCE MANAGEMENT A. OVERVIEW This chapter introduces the concept of treating human resource management processes, practices and procedures from a strategic point of view. The skills and knowledge possessed by individuals can be valuable assets to any organization, and should be treated as such. Organizations should understand how to value/measure and manage from an investment point of view all assets, including those related to their employees. However, many factors can influence the investment orientation of an organization. Understanding the risks and benefits to the organization of investing in human capital is of great importance. B. LECTURE OUTLINE 1. OPENING CASE - NORDSTROM A strategic competitive advantage for Nordstrom includes a successful human resource (HR) approach, involving heavy investment in their sales force of associates. Nordstrom consistently produces above-industry-average profits and has continued to be profitable when its competitors have declined or fallen flat. 2. INTRODUCTION 1. The human element is often the most important element of performance. Thus, appropriate resources and investments must be committed by any organization to facilitate systems for attracting, motivating and managing human resources. Adopting a strategic view of HR involves considering employees as “human assets,” and developing appropriate policies and procedures to manage them as valuable investments. 2. See Exhibit 1-1: SOURCES OF EMPLOYEE VALUE 1. Technical Knowledge 2. Ability to Learn and Grow 3. Decision Making Capabilities 4. Motivation 5. Commitment 6. Teamwork 3. ADOPTING AN INVESTMENT PERSPECTIVE 1. Characterizing employees as human assets implies the strategic management of human resources should include considering HR from an investment perspec