The link between Human Resource Management and competitive advantage is about getting the right people and maximising their performance and potential. Planning for HR involves forecasting demand; working out how many and what type of people a firm needs at a particular point in time, assessing the supply of such people, and formulating fulfillment plans. JOb analysis is the determination of the scope and depth of jobs and the requisite skills, abilities and knowledge that people need to perform their jobs successfuly.

Recruiting is primarily concerned with determining what the desired candidate pool consists of and attracting those individuals to specific positions within the organisation. Job posting is an internal recruiting method where positions are advertised to all current employees. Advertisements, employment agencies, employee referrals and school placement centres are all used for external recruitment. The Internet serves also serves as a powerful recruiting tool.

Selection is a function of effective planning, analysing and recruiting. Valid selection criteria is a screening process that differentiates between those who would be successful in a job and those who would not. An unstructured interview is a selection technique where the interviewers have a general idea of questions but may not ask from a standard set. A structured interview has a standard set of questions. Assessment centres are a work sampling technique whereby candidates perform a number of exercises designed to capture one or more key aspects of their job. Work simulations are when candidates perform work as they would in a work environment. Background checks verify factual information that applicants provide. Physical examinations, if required, must be soundly focussed.

HRM activities that maximise performance include socialisation and training (orientation, on-the-job training, off-the-job training, and training objectives), job design (job sharing, re0engineering) and performance appraisal (e.g., graphic rating scales, behaviourally anchored rating scales, 360-degree feedback - whereby information is gathered from supervisors, co-workers, subordinates and sometimes suppliers and customers - and effective performance feedback noting critical incidents, where an employees behaviour was above or below expectations), compensation such as pay (pay structure as a range, or broadband, where the range is large and cover a wide variety of jobs), at-risk compensation (pay that varies on conditions including company profits, reaching budgets, cost savings or other performance targets), incentive plans, and benefits (e.g., benefit dollars which employees can purchase for their particular needs), career systems and development (career paths, cross-functional job rotation, dual-career couples, where partners work full-time in professional, managerial or administrative jobs and termination/lay-offs) and finally labour relations.

Laws and regulations that affect HRM include affirmative action programs, designed to correct past inequalities, sexual harassment legislation, workforce diversity, and regulations concerning globalisation.