Managers and economists traditionally have seen human resource management as a necessary expense, rather than as a source of value to their organizations. Economic value is usually associated with capital cash, equipment, technology, and facilities. However, research has demonstrated that HRM practices can e valuale. HR management and organizational performance !ompanies that attempt to increase their competitiveness y investing in new technology and promoting quality throughout the organization also invest in state"of"the"art sta#ng, training, and compensation practices. $n organization%s employees, descried in terms of their training, experience, &udgment, intelligence, relationships, and insight. 'his view means employees in today%s organizations are not interchangeale, easily replaced parts of a system ut the source of the company%s success or failureHuman Capital HRM is critical to the success of organization ecause human capital has certain qualities that ma(e it valuale.)n terms of usiness strategy, an organization can succeed if it has a sustainale competitive advantage.HR has the aility to create the sustainale competitive advantageHuman resources are valuale. High"quality employees provide a needed service as they perform many critical functions. Human resources are rare in the sense that a person with high levels of the needed s(ills and (nowledge is not common. Characteristics of the resource for sustainable competitive advantageHuman resource cannot e imitated.Human resource does not have a good sustitute.E*ective HR management can for the foundation of high performance wor( system which can e de+ned as an organization in which technology, organizational structure, people, and processes all wor( together to give an organization an advantage in the competitive environment.High performance work systems$dministrative services and transactions such as hiring employees and answering questions aout ene+ts.,usiness partner services such as developing e*ective HR systems that help the organization meet its goals for attracting, (eeping and developing people with the s(ills it needsResponsibilities of HR department -trategic partner such as contriuting to the company%s strategy through an understanding of its existing and needed human resources and ways HR practices can give the company a competitive advantage. .or strategic ideas to e e*ective, HR people must understand the usiness, its industry and its competitors.