AN assignment of the role of human resource management within an organization and it strategic fit with other departments

Introduction

Human Resources Management (HRM) covers innumerable functional areas which cover huge responsibilities ranging from staffing and recruitment to benefits and compensation or training and development.  During the past 20 years the human resource profession has evolved from the roles being fulfilled by Human Resource (HR) to the value it gets along to the organisations (Benedict, 2008). HR has been mobilised to great extent to offer the organisations much more than just record keeping, employee benefits administration and payroll. IN fact it has been found that the transactional functions which earlier formed the core of HRM and HR department’s responsibilities are now a day’s outsourced (Ulrich et al., 2008) . This is being done so that the organisation can focus on business strategy with the help of talent management and leadership development activities. Then too it is argued that in many organisations HR functions and departments do not engage in strategic roles.

This literature review is mainly designed to examine the role of Human resource management along with responsibilities of HR professionals and their strategic match with the various other departments in the organisation (Ramlall, 2002). Finally the organisations would be able to use the information to find out how these HR practices can result in delivering better results in business, find out the potential areas for expansion, reductions and investments for the organisation. It would also help the organisations in finding how HRM can justify the budget allocations in the organisation and it can be much more accountable for each and every dollar which is spent within the organisation.

Problem Formulation

Since it is found and being discussed that in many organisations HRM and Departments does not play any strategic roles, it becomes crucial to understand how HRM is being approached and what kinds of roles does it play in the context of organisation in which it operates? (The varying roles of HR: A look at HR by organization staff size, 2008)And along with that it is also imperative to find out how it develops strategic fit with other departments of organisation?

Literature Review

HR departments have always been expected to be operational as business within a business not as a disconnected and completely isolated set of HR practices. Just like an organisation they should have a clear vision or simply a strategy to guide them where they are headed towards (Ulrich, Younger and Brockbank, 2008). It should also have a set of goals (objectives, outcomes and deliverables too which will help it in developing a focus on the work which are on priority for them along with right investments to implement these visions. It should also have an organisation structure which allows HR to accomplish these goals.

 Therefore the emerging vision or role of HRM which has been discussed for HR department or HRM is to create value for stakeholders (Ulrich and Brockbank, 2005) in following manner:’

• Employees possess right set of competencies and are committed towards the organisation as well as the organisational goals.
• Line managers should have more confidence on the truth that the business strategies would be formulated.
• Increased value in market thorough investor’s confidence which can be done by proper recognition of growth of organisation which is measured through intangible shareholder value (Ulrich and Smallwood, 2004).
•  More products or services are being bought by external customers which results in higher share of customer and loyalty of customer.
•  The communities in which the organisation is operational show more reliability and confidence in the ability of organisation in delivering its social responsibility.Over the years there has been great emphasis which has been placed on the HR professionals who tend to become strategic business partners and become the value-added source within the organisation (Ulrich, 1995). Furthermore HR functions are being viewed as expense-generators. Along with being an administrative function and not as a value-added partner. To fulfil the roles of HR as business partner the simple concepts should be replaced by evidence, results to replace ideas and assessments to replace perceptions (Ulrich, 1997).

HR as Strategic Player

In the last decade HR has introduced to play a new role that of “business partner”. HR forms the part of the team which supports the business strategy (Ulrich, 1996). However it is found that the stake for Hr are very high for HR because in many contemporary organisations any portion of the firm which is not capable of adding real value to the  organisation can be   easily erased through delaying ,   outsourcing and downsizing (Stewart, 1996).

 The HR  functions along with the processes  becomes a strategic player as the player adds  value or scores (Beatty and Schneier, 1997).If HR can evolve to a role here it can add significantly to the economic value of the firm, the security of HR would be enhanced .

 IN order to understand the way in which HR can score mainly involves finding out how the firm keeps its ‘scorecards’. That is why most of the discussions regarding the organisational scorecards are primarily focussed on operational and financial measures of the organisation   (Kaplan and Norton, 1992).

HR’s Role in building a highly competitive organisation covers following fields like:

• Management of  Strategic Human Resources
• Management of Infrastructure of the firm
• Management of Employee’s contribution
•  Management of Transformation and Change (Ulrich, 1997).

All the above listed roles are very, much valid and have proved to be adding value to organisation but there is very critical need for HRM to go ahead of the basic the strategic business partner role and become the ‘players’ in the business (Ulrich and Beatty, 2001).Players are major contributors towards the profitability of the organisation and they mainly do the things which make major difference and help in delivering better results too. Some of the major roles of the players are:

• Coaching
•  Designing
•  Construction
•  Creating the followers
• Playing as per the rules
•  Bring change in the organisation (Ramlall, 2002)

However there is also another perspective on the role of HRM which has been noticed in the leading-edge companies. It has been found that the HR professionals play four major role sin firms which are:

a)      Strategic Business Partners

b)       Collaborators

c)       Innovators, And

d)      Facilitators (Schueler and Jackson, 2000)

HR Professionals when assuming the roles of strategic business partners should understand the business’s nature from the financial, strategic and operational and various other aspects which are very vital from the effective team management point of view for the organisation. While when HR professionals act as Facilitators, they should continuously search for strategies which are value creating for the firm rather than acting simply as functions of reactionary mode for organisation.

 Furthermore HR professionals assume the role of Collaborators by functioning in proper conjunction with the whole staff and senior leaders of the organisation, in order to implement the business strategies which are acting as important business links between the various portions of organisation. AS Facilitators the HR professionals act as change agents who provide support, readiness and rationale needed for implementing the planned changes which have been created to support the business strategies (Ramlall, 2002).

Thus from above discussion it is evident that the  fundamental role which is being played by HRM is to  maximise the profitability for organisation and to  enhance the quality of work life along with increasing profits which can be done through effective management of manpower in organisation (Cascio, 2003). The figure 1 below depicts the management of HR professional’s role to drive the organisational performance.

Methodology

To find out the roles of Human Resource Management in the organisations and their strategic fit with other departments of the organisation as survey was being conducted amongst the HR professionals who are being employed by the Organisations operating mainly in the U.S. The survey instrument mainly contained various kinds of questions which were related organisational practices and HRM related to HR functions within the organisation of the respondent (Benedict, 2008).

From the SHRM‘s membership database random selection of HR professionals sample was being selected and the database consisted of approximately 250,000 member as when thes survey was conducted. IN the sample frame just the members who did not participate in any poll or survey for the past six months were included. Along with that the members who did not have any email address, or who were academics, students, consultants or were located internationally were also excluded from the sampling frame (Benedict, 2008).

 Starting from September an e-mail containing the link to the HR in Organisational Context Survey was being sent to 3,000 members of SHRM. The response rate was found o be 21%as out of 2744 surveys which were successfully delivered, 589 HR professionals gave response. This survey was being fielded continuously for three weeks.

Data Evaluation

It was found that the top three critical HR functional areas which contributed to the current business strategies of the organisation were:

·         Staffing, employment and recruitment

·          Training and  Development

·           Employee benefits

Half of the respondents amongst the HR professionals said that organisation’s business strategy played part in decision making of whether it should outsource staff or eliminate various HR roles and responsibilities. Thus indicating that HR function staffing decisions are completely aligned with the operating plans of business.

 There is maximum percentage of HR professionals from organisations which wanted to expand their HR departments within the coming 12 months and they said that they wanted to hire new staff in the HR department because they felt the HR department was understaffed for the number of employees in the organisation.

Analysis and Interpretation

From the results and data evaluation it is evident that HR professionals and most of them considered the role of HR department or function of MRM in their organisation to be both strategic as well as transactional and that too equally. It has been noticed that two-thirds HR professionals believed that HRM’s is equally transactional and strategic. However one-third of the respondents that is 33% felt that HR functions role is primarily of transactional type. This indicates that one amongst the three HR Professionals served transactional HR role in their organisations. To surprise just 6% HR professionals amongst the respondents believed that their HR department’s role is primarily strategic in the organisation. The results can be analysed from the figure 2 shown below:

However it is also noticed that there is difference in the HR professional’s perceptions based upon the organisation sector as well as staff size of the organisation. The smaller organisations do not see the role of HRM as strategic and the reason being they do not have budget which can support an advanced level of HR professional. Therefore they have mainly the HR professionals without much experience and that is why they have HRM in transactional role only. Therefore numerous HR professionals have to enhance and augment their focus through transactional activities on the strategy (Benedict, 2008). This can be studied form the table attached as Appendix A in the report.

Regarding HRM’s strategic fit with other departments of organisation if we trace the historical background of HRM it will be seen that earlier Industrial Welfare was considered to be the first form of HRM. Later recruitments and selection was also incorporated when during 1^st World War Mary Wood started engaging girls which led to the increased personnel development areas in HRM.

 It was found that during 2^nd World War  earlier the main focus was on  recruitment and selection which later on shifted to  training , enhancing and improving morale and  motivation, discipline , health and safety, wage policies and  joint consultation. This lead to the establishment of personnel staff which was required for a trained staff in an organisation.

 Since consultation at greater level was established between the workforce and management during the war it led to the focus on health had safety and requirement of specialists in an organisation. The industrial relations gained importance in the 1970’s in the organisations. Thus personnel manager was given authority to negotiate deals regarding pay scales and various other collective issues. At the same time in 1970’s employment legislation was also increased this led to HRM taking the role of personnel advisor too and handle all the legal matters of the organisation. The personnel manager had to ensure that their managers do not violate any laws and the cases should not end-up in the industrial tribunals and courts (Franklyn, n.d.).In 1990’s when the traditional work practices started turning useless and people wanted more flexibility in their work as with the growth of internet the employees seek  24×7 working society (Franklyn, n.d.). This led to tremendous and new job creations in ecommerce and loss of traditional jobs. This caused changes in the role of HR managers in organisations because now the employees had more potential to work from home.

Therefore a symbiotic relationship developed between the  Information Technology department and HRM where IT assisted HRM in many ways like :  systems for e-recruitments development,  Online Training strategies development,  Payroll systems,  Recruitment Administration,  pre-employment checks,  Online short listing of applicants,  Psychometric training programs,  Gathering employment data,  and References . HRM managers worked strategically with the It departments to offload their routine tasks so that HRM department can get extra time to solve complex tasks (Franklyn, n.d.).

 In fact in recent times it has been noticed that the health care systems worldwide have enhanced and become focussed on the Human resource management which has become the one of the three most important health systems inputs along with the other two inputs that are physical capital and the consumables (World Health Organization World Health Report 2000 Health Systems: Improving Performance Geneva, 2008). Thus in relation to health systems HRM is being referred to as the various kinds of non-clinical and clinical staff which are responsible for individual as well as public health intervention (Kabene et al., 2006). It has turned out to be the most important input in the health system that is the performance and benefits which can be delivered by the system are dependent mostly on the skills, motivation and knowledge of the individuals who are held responsible for delivering the health services (World Health Organization World Health Report 2000 Health Systems: Improving Performance Geneva, 2008).

Conclusions

Thus from the above discussion and literature review it is quite evident that the role of HRM in the recent times has been enhanced and is not just the traditional one in which it simply did the traditional speciality work of training and development, Compensation and benefits, employee and industrial relations, employment and Recruiting, Safety, health and wellness, EEO Compliance and Affirmative Action,.  HRM research. Rather it has evolved and now performs several new HRM functions in organisation like the function of business partner and strategic player. It has new specialty functional areas like the work and family programs, Managed Care, Cross-cultural training, Managing Diversity too.

 So the HRM does not have just the administrative role rather now it has more strategic roles to play.  In the organisation the strategic roles do not just involve keeping an eye on the value of HR contributions towards the organisation rather it also covers HR’s responsibilities to go beyond the simple focus on the administrative responsibilities and assume a directive role so as to make them realise that it has impact on the business strategies and the financials too. This can be done through HR Metrics and Mentoring (Benedict, 2008).

 ON the other hand it has been found that HRM is related to various departments of the organisation too strategically like the IT department, the Personnel Department and the Operations department. In the health care system it plays very vital role and forms strategically vital part. Same way HRM also plays very important role in organisational Development by being part of Corporate Social Responsibility (CSR) department too of the organisation (Strandberg, 2009)