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The purpose of this report is to identify the latest trends in the “Role of Human Resource Management”. HRM is defined as “a science which manages the employees in an organization in order to achieve organization objectives.” The ‘Role of HRM’ means the ‘purpose’ for which HRM actually exists in an organization; and the ‘work’ that it is expected to do. This report illustrates how the purpose of HRM has shifted from a ‘support function for senior management’ to being a ‘key player in strategy making and strategy implementation’. The report also considers examples of organizations who have adopted this shift in the roles of HRM, and also considers the benefits and shortcomings of the new roles.
The traditional role of Human Resource Management (or Personnel management) has been as a clerical, support function for senior management. HRM has only been expected to execute policies, deal with paperwork and administration, and do other mundane and mechanical tasks. These tasks have included only the procedural works involved in selection, recruiting, retaining, training and performance evaluation etc. Because of the nature of these tasks, senior management has considered HR to be ‘disconnected’ with the real objectives of the company and a department that does not contribute any value to the Organization. Dissatisfaction with HR in the past has been such that organizations had started thinking of disbanding HRM completely, or outsourcing it (Ulrich 1998).
However academia has argued that, in a globalized world, competition has increased so much that the only true competitive advantage an organization can now have, is its Human Capital, and for this reason doing away with HR is out of the question. At the turn of the millennium, Dave Ulrich (1997; 1998) suggested new roles which he believed could better utilize the potential of Human Capital. These new roles were for HRM to act as ‘Strategic partners’, as ‘Change Agents’, as ‘Administrative Expert’, and as ‘Employee advocates’ for the organization. Ulrich’s model has continued to evolve over time and is still being gradually adopted by organizations (Bowen et al 2002; Ulrich 2005; Wright 2008).
Of the four roles mentioned above, the ‘Strategic Partner’ role has gained most popularity and acceptance. Strategy is defined in the Oxford Dictionary as ‘a plan of action designed to achieve a long-term aim’. It was suggested that HR personnel should focus on delivering results rather than doing tasks; the desired results being to align the employees and HR policies with the organization’s goals (Beer 1997; Ulrich 1997).
In the strategic partner role, HRM is first of all, expected to have both a deeper and broader set of knowledge and skills. They need to have in-depth understanding of particular HR areas (they need to be HR ‘specialists’ rather than ‘generalists’), and they also need to have wider cross-discipline knowledge {for example knowledge of Finance and Marketing}. Being Strategic Partners would also require HRM to have a comprehensive knowledge of the industry, knowledge of Market demands and knowledge of all of the organization’s departments.
Equipped with this knowledge, HRM is to participate in the process of building and implementing business strategy. They are to advise management on the impact of HRM strategies upon the organization as a whole, to identify how to achieve organizational goals through the workforce and to mold HR policies to achieve strategic objectives (Ulrich 1998). Many practical examples of the strategic role have been realized: for example when senior management at Colgate was working on a strategy to increase Revenues, their HRM implemented a compensation system that depended upon ‘growth in sales’, arguing that workforce will increase productivity and quality in order to achieve the growth.
Next, the ‘employee champion’ role of HRM will be explained. As has been stated before, in the current state of globalization, cut-throat competition, economic downturn and technological advancement, Human Capital is the only competitive advantage that an organization can sustain. However to take advantage of Human capital, HRM must ensure a committed, productive, satisfied and motivated workforce that is aligned with the interests of the organization (Ulrich 1998). An example of the lack of alignment can be a dissatisfied, hourly paid, worker who (acting in his own interest) will only wish to ‘pass time’ to make his salary; on the other hand an ‘aligned’ worker will think of the betterment of the company and will work to the full of his ability. To achieve this alignment, HRM needs to attend to employee needs, solve their problems, avoid confrontations and convey employee concerns to senior management. A practical example of HRM in the ‘employee champion’ role is Hewlett Packard (HP) which carries out regular surveys of employees to hear their concerns and then takes step to address them.
More recent trends in the ‘employee champion’ role includes things like: HRM introducing flexible working-hours policies so that workers can achieve better work-life balance by enhancing communication between management and employees so that issues and concerns can be quickly realized and solved, before they have any detrimental effect on workforce morale. HRM is also attempting to create a social culture in the organization that is desirable, friendly and fair so that people can fit into it more readily and feel a sense of belonging to the organization, helping employees to develop their careers independently of the organization. With these measures in place, employees would believe that the Organization is sincere and beneficial to them, and so they would be motivated to work for organizational benefits rather than in their own interests (increased productivity). (Ulrich 2005)
Now the ‘Change Agent’ role of HRM will be considered. The world is moving at a tremendous pace and to keep up with competition organizations need to cope with continuous change. Unfortunately people always have a natural ‘fear’ and ‘reluctance’ to change and this can hamper progress. Ulrich proposed that HR personnel should be made responsible for creating a framework and strategy to allow for ‘change’ to happen easily and smoothly at an organization. To do this, HRM must take the workforce into trust, it must illustrate to them that change is actually beneficial, and that company values will always kept in mind while accepting change.
In the “administrative expert” role, HRM personnel are expected to perform its functional role (traditional role) more efficiently by taking responsibility of the results and impact on the organization. HRM should also undertake activities to reengineer the work processes and to increase the efficiency by hiring, training and rewarding those workers who achieve the desire goals of organization. (Ulrich 1997)
More recent advancements in the strategic role involve actually measuring the outcomes of HR strategies and adapting to improve the results. For example, Huselid, Becker and Beatty devised a variation of the Balance score card method, which is called the HR or Workforce Scorecard (Husseild et al 2005). This method involves judging a certain set of categories: ‘Workforce Mindset’, ‘Workforce Competencies’, ‘Workforce Behavior’ and ‘Workforce Success’, by looking at several more readily measurable qualities. These measurable qualities could include for example, the extent to which employees identify with organization objectives (a measure of Workforce Mindset), or the percentage of employees with the most demanded skills (a measure of Workforce Competencies), or the percentage decrease in customer complaints (a measure of Workforce Success). By answering several of these questions, HRM can get an idea of where it stands in the respective categories and can then focus its effort to improve in those areas (Huselid et al 2005). For example if workers do not personally feel for the organization’s objectives then measures should be taken to increase loyalty and sense of belonging; these can include culture building activities and rewards based upon company performance. Similarly if Workforce Competency score is low, HRM needs to focus on providing training in the most demanded skill areas.
Further to facilitate the strategic role of HRM, another contemporary trend is the wide adoption of technology such as e-HRM, Human Resource Information Systems (HRIS), Software as a Service (SaaS) and Virtual HRM (V-HRM). The idea mainly is for automated systems and networks to take over the old functional and operational tasks and hence allow HR management more time to focus on the strategic side of their work, additionally these systems also save costs and time for the organization as a whole and boost productivity.
Additionally technology can also contribute more directly to the strategic activities. For example databases and spreadsheets can make available more accurate and relevant data on costs and value which can be used by HR management in decision making (for example doing Cost-Benefit analysis of Training.}. Similarly IT solutions exist for efficient implementation of strategy through ‘software assisted’ organization and planning.
Surveys show that in the current age, majority of the companies have adopted some form of electronic solution for HRM (CIPD 2005). For example Cancer Research UK
Nearing the conclusion of this report, we will note that the new roles of HRM have several benefits. The new roles, unlike the traditional ones, create respect, credibility and acceptance for HRM and ensure that Organizations no longer consider HRM to be expendable. By helping with framing strategies and achieving results through the workforce, they benefit Senior Management. By adding value to the organization and by improving productivity, they benefit shareholders. By ensuring that HR strategy is focus on Market demands, they benefit for customers. And finally by providing fair and desirable work-environment they benefit employees.
However whereas the new roles introduce several; benefits, they also have several disadvantage associated with them. For example, senior and line management is not always welcoming to the idea of HRM participating in strategy making; indeed they might have prejudices against the department and may tend to disagree with the HRM’s opinions. Conflicts might also arise between the ‘strategic partner’ and ‘employee champion’ role of HRM; employee interests and management interests can sometimes conflict and so confusion and suspicion can arise among the workforce as to ‘whose side is HRM taking’. Finally with so much focus on a cross-discipline knowledge, HR specialists and a strategic role for HRM, the question invariably arises as to who is left to deal with the old operational and administrative tasks of HRM, which still need to be done to keep the organization running. This is what happened in Unisys (IT services provider) when too much strategic approach was used and management found it difficult to consult the concerned HR personnel when issues relating to employees arose. Indeed several observes have reported the deficiency in operational roles that is being created by assigning new Strategic roles to HRM (Francis Keegan 2006)
Although technology is slowly proving helpful in taking over the procedural roles, but problems exist with it as well. One of the issues is that the benefits of technology are perhaps largely theoretical and the results, especially strategic ones, have not been properly quantified, measured or researched. In the few cases in which results have been measures the findings sometimes go against expectations: showing relatively minor cost saving and indeterminate effect on achieving strategic goals. (Parry Tyson 2011) It has been suggested that difficulty of use and resistance to accept change are some of the causes of the causes behind this lack of results. (Huub Tanya Mandy 2007).
Human Capital is the most valuable and most under-utilized asset of any organization. Human talent is the only competitive advantage by which an organization can address to new challenges of change, globalization and workforce diversity and increase the productivity not only in the short-run but also in the long-run. The contemporary trends listed above can enable management to make better use of this asset in order to increase value for all stakeholders of the organization if carried out efficiently.
Now coming to HRM perspective in Pakistan, the science of HRM only came known in Pakistan after the incident of 9/11.During the last decade huge amounts of foreign aid flowed into the country resulting in the rapid growth of economy. Thus the private sector expanded exponentially and Pakistan
The culture generally prevalent in Pakistani organizations is of centralized decision making with uneven power distribution in favor of top executive management. Moreover employees avoid confrontation with seniors and resort to sycophancy in order to get good performance appraisals and promotions. This type of culture has certainly hampered the development of HRM in Pakistan .
A female HR manager in an organization recounts her experience in this manner:
“I faced resistance from old employees and from top management too. Resistance from top management as they do not understand the true nature of HR. At one place the top management used to forward every problem to HR whether it had a link with HR or not. Production is not up to the mark, problem comes to HR. Security cameras not working, and problem comes to HR”
But even after all such limitations, the GLOBE research explains that employees in Pakistan desire more egalitarian culture and the organizations are generally moving towards the strategic role of HRM with a slow pace. Ms. Sanam Mujeeb Sheikh, Manager HR, KSB Pumps, explains:
“Scope of HR Management in Pakistan is very bright. Operationally HR has become very strong now as almost every organization is following the basic practices of HR Management. However, from a global perspective we are still at the primary stage of HR Management. The HR department of any organization should be a strategic business partner for the company. Human Resource is the bridge between the employer and employee and this makes the role of HR department important.”
The above statements of professional managers attests to the fact that the private sector in Pakistan have come to realize the importance of a fully functional HRM department in an organization. Therefore we can conclude that the role of HRM in Pakistan is still in the developing stage but the future looks promising and organizations are more willing to adopt new strategic functions of HRM.
Written By: Asim Ali Dogar (Bsc LUMS)
