Creating human‐resource management value in the twenty‐first century : Seven steps to strategic HR

Purpose – The aim of the paper is to discuss specific HR practices that business leaders must embrace to create HR value and competitive advantage for their organizations. Design/methodology/approach – The paper integrates the authors' previous research on critical HR practices. Findings – The paper reveals that HR value creation is driven by: progressive HR thinking and planning; staffing for success; talent development; results‐orientated performance management and appraisal systems; aligned compensation and incentive systems; line‐managers acting as HR managers; and fostering an ethical culture. Practical implications – The paper discusses specific practices directly related to improving an organization's ability to create competitive advantage through its people. Social implications – The paper contends that better HR practices lead to stronger organizational performance and greater use of human‐resource assets. Originality/value – The paper reinforces the importance of taking HR beyond administrative activity.