The Universalistic approach to SHRM has two main tenets. They are the human capital theory and the strategic capital theory. The theory of the strategic resources is based on the organizational practices. These are found to be based on the certain conditions that are of competitive advantages of the firm. This approach is considered to be the main pillar of the Universalist perspective. The combination of these two approaches is used for the increase in the high-performance practices of the company. The initial results show that a qualitative HRM is based on economic performance. The qualitative orientation is based on the links towards skills development, compensation, participation, information, recruitment and the evaluation of performance.
The economic performance was based on the conditioned social performance. The investment in the compensation activity is based on the level of productivity and profit margins of the firm (Daley, 2012). The tangible remuneration that is provided to the employee only resulted in slight improvisation of the results. The intangible HRM practices and fostering of the employee relationship lead towards a better employee satisfaction for the firm. In this model of HRM, there is a need for a resource based view.
Resource Based View (RBV) is considered to be a model that is based on competitive advantage. This has emerged in the 80s and 90s (Analoui, 2007). The supporters of this view argue that the organization needs to look inside company to identify the sources of competitive advantage. They need to have the internal review of the model rather than the external competition. According to the RBV proponents, there is a feasible approach that is used for the purpose of exploiting the external opportunities. These are done by the use of existing resources in a newer method rather than acquiring newer skills for the different opportunity. In the RBV model, resources of the company are the main focal point. These are used by the company to achieve better organizational performance. The RBV model divides the assets of the company into tangible and intangible components.